Source: http://www.epa.gov/aljhomep/orders/navyking.htm
Timestamp: 2015-01-31 07:41:14
Document Index: 778407792

Matched Legal Cases: ['§ 2601', 'art 745', 'art\n745', 'art 745', '§ 2615', '§ 2689', 'art 745', '§ 4852', '§\n745', 'art 745', 'art 745', 'art\n745', '§\n7571', '§ 2688', 'art 745', 'art 745', 'art 745', '§ 22', '§\n205', '§ 202', '§ 202', '§ 4852', 'art 745', '§ 7571', '§ 202']

In the Matter of                     )
The United States                    )   TSCA Docket No. VI-736C(L)
Department of the Navy,          )
Kingsville Naval Air Station,    )
Respondent     )
Order on Respondent's Motions for Accelerated Decision and for Discovery; and on
Complainant's Motions for Accelerated Decision and to Strike
Toxic Substances Control Act (TSCA), 15 U.S.C. § 2601 et seq. This proceeding involves a
Complaint filed by the U.S. Environmental Protection Agency, seeking $408,375 in civil
penalties against Respondent for six counts of alleged violation of Section 409 of the Toxic
Substances Control Act, 15 U.S.C. Section 2689. Complainant asserts that Respondent failed to
comply with the Real Estate Notification and Disclosure Rule requirements of 40 C.F.R. Part 745 Subpart F, a federal regulation promulgated pursuant to Section 1018 of the Residential
Lead-Based Paint Hazard Reduction Act of 1992, 42 U.S.C. Section 4852d. Respondent has filed a total of seven Motions for Accelerated Decision and a Motion for
Discovery. Complainant has filed a total of five Motions for Accelerated Decision and four
Motions To Strike Respondent's Affirmative Defenses. Respondent, in assigning military family
housing to military members is found, under the undisputed facts presented, to be a "person" and
a "lessor" which entered into "contracts to lease" "target housing" under Section 1018 and Part
745 Subpart F. Such regulations are deemed to be effective and penalties against Respondent are
not barred under the Paperwork Reduction Act.
Held: Complainant's Motions For Accelerated Decision on the issues addressed are Granted; Respondent's Motions For Accelerated Decision and Motion for Discovery are Denied; and
Complainant's four Motions To Strike are Denied. As the absence of genuine issues of material
fact involving Respondent's liability under 40 C.F.R. Part 745 Subpart F and any penalty
assessment therein are not yet established, these issues are reserved for further proceedings.
Before:  Stephen  J.  McGuire       Date: February 18, 1999
For Complainant:   Richard H. Bartley, Esq.
U.S. EPA Region VI
For Respondent:    Peter M. Kushner, Esq.
Counsel for the Southern Division
2155 Eagle Drive, P.O. Box 190010
James Lucas, LT, JAGC, USN
554 McCain Street Suite 312
The Complaint initiating this proceeding was filed on July 28, 1998, pursuant to Section
16 of the Toxic Substances Control Act (TSCA), 15 U.S.C. § 2615. The Complaint alleges that
Respondent violated Section 409 of TSCA, 15 U.S.C. § 2689, by failing to comply with the
Real Estate Notification and Disclosure Rule requirements of 40 C.F.R. Part 745 Subpart F, a
federal regulation promulgated pursuant to Section 1018 of the Residential Lead-Based Paint
Hazard Reduction Act of 1992 (the Act), 42 U.S.C. § 4852d. Complainant, EPA, charges
Respondent with six counts of violation of the Rule, specifically: failure to provide a copy of an
EPA approved lead hazard information pamphlet to lessees; failure to include in contracts to
lease housing a Lead Warning Statement; disclosure of known lead-based paint or paint hazards;
a list of pertinent records or reports available; the lessees' statements of receipt of such
information; and the lessors' and lessees' signatures certifying accuracy of statements. For
these alleged violations, Complainant proposes a penalty of $408,375.
Respondent filed an Answer to the Complaint, requesting dismissal and accelerated
decision in its favor. On August 25, 1998, Respondent filed a motion for discovery, which
Complainant opposed, and Respondent submitted a rebuttal. On October 16, 1998, the
undersigned was designated to preside in this proceeding. On November 17, 1998, Respondent served a First and Second Motion for Accelerated
Decision (First and Second Motion). On December 2, Complainant responded to those motions,
and moved for Accelerated Decision in its favor and to Strike Affirmative Defenses (December
2 Opposition). On December 17, Respondent responded to Complainant's motion (December
17 Reply). On December 9, 1998, Respondent submitted a Third and Fourth Motion for
Accelerated Decision (Third and Fourth Motion). On December 21, 1998, Complainant
responded thereto, filed a Second and Third Motion for Accelerated Decision and Second
Motion to Strike (December 21 Opposition). On January 4, 1999, Respondent responded
thereto (January 4 Rebuttal), and on January 11, 1999 , filed a Fifth and Sixth Motion for
Accelerated Decision (Fifth and Sixth Motion). On February 1, 1999, Complainant filed an
opposition thereto, including a fourth and fifth motion for accelerated decision in its favor, and a
third and fourth motion to strike (February 1 Response). II. Respondent's First and Second Motions for Accelerated Decision, Complainant's First Motion for Accelerated Decision and Motion to Strike
The Complaint alleges that Respondent is the "lessor", as defined in 40 C.F.R. §
745.103, of military housing units for eleven enlisted personnel, and as such is subject to the
requirements of 40 C.F.R. Part 745 Subpart F. In its First Motion for Accelerated Decision,
Respondent argues that it is not a "lessor" under Part 745, because: it is a military department
of the United States Government; the housing units are property belonging to the United States; the eleven active duty military members were "assigned" to their military housing units as part
of their pay and allowances; and Respondent lacked legal authority to lease the housing units to
active duty military members. Citing to a U.S. Attorney General Opinion, Respondent asserts
that it cannot "dispose of" property belonging to the United States, by deed, lease or other
instrument, unless Congress specifically provides for such authority. 34 U.S. Op. Att. Gen. 320,
322 (Oct 28, 1924) (Attorney General Opinion). Respondent argues that the Secretary of the Navy is only given the authority to
"assign" active duty military members to public quarters which does not create a landlord-tenant
relationship, citing 10 U.S.C. Section 7571 and 37 U.S.C. Section 403. Respondent supports
its argument with copies of documents indicating assignment of Navy quarters to the eleven
military members (Respondent's First Motion for Accelerated Decision, Exhibit 2). Respondent
also submits a declaration of David Michael Miller, a Supervisory Housing Management
Specialist employed by Respondent, to the effect that all housing units at Respondent's facility
were considered "adequate," and attached housing inventory sheets (Respondent's First Motion
for Accelerated Decision, Exhibit 1). In its Second Motion for Accelerated Decision, Respondent asserts that it did not enter
into "contracts to lease" which would subject it to the regulatory requirements of 40 C.F.R. Part
745 Subpart F. Respondent argues that the Residency Occupancy Agreements (ROAs) between
Respondent and the eleven military members were not contracts because they lack consideration
(Respondent's Second Motion for Accelerated Decision, Exhibit 1). Respondent argues further
that their employment by the Government is not by contract, but by appointment. Respondent
asserts that active duty military personnel are entitled to housing by statute, under 10 U.S.C. §
7571 and 37 U.S.C. Section 403; that Respondent lacks authority to provide such entitlement
by contract; and that the fulfillment of the entitlement to housing is not valid consideration to
establish the existence of a contract. In its December 2 Opposition, Complainant asserts that Respondent has the authority to
enter into "contracts to lease;" that the ROAs are contracts to lease; and that therefore,
Respondent is a "lessor" with regard to the eleven military housing agreements at issue. Complainant supports its argument by reference to the cited Attorney General Opinion, stating that although the Constitution prohibits the alienation of Government property without
congressional sanction, the leasing of military housing does not constitute "disposal" or
"alienation" of federal property, but rather "use" of such property, control over which Congress
has given to the federal agencies of the government. Citing provisions in various treatises, Complainant further argues that the payment of
rent as consideration is not necessary to establish a lessor/lessee relationship, but that the
forfeiture of the military members' entitlement to Basic Allowance for Quarters (BAQ) by
electing free military housing, is in fact, "consideration." Complainant points to pertinent language in the ROAs that it believes indicate a landlord-tenant relationship. Complainant also
notes the legislative history of the Act, which emphasizes the purpose of protecting children
from the dangers of lead-based paint in all housing in America and the application of the Act to
the federal government. Complainant further asserts that the addition of Section 408 to TSCA, 15 U.S.C. § 2688,
requires each department of the federal government having jurisdiction over any property to
comply with all federal requirements respecting lead-based paint. In this regard, Complainant,
in support of its position, presents a Department of Defense memorandum from the Office of
the Under Secretary of Defense to among others, the Assistant Secretary of the Navy
(Installations & Environment), dated February 18, 1997 (DoD Memo), which states:
These rules [Title 40 C.F.R. Part 745 Subpart F] apply to DoD family housing
built before 1978 and to their disposal by lease or sale. Occupancy of DoD
housing by military members and their families is considered to be leasing of
housing, with regard to these rules. . . . Compliance with disclosure rules must be
documented. . . . Disclosure of potential LBP [lead-based paint] hazards to
occupants of military housing is an essential part of a comprehensive LBP
management program. We request that you incorporate the responsibilities and
procedures for implementing these requirements into your Components' LBP
Management Plans. (December 2 Opposition, Attachment I)
Complainant thus requests an accelerated decision finding that Respondent is a "lessor"
within the meaning of 40 C.F.R. Part 745 Subpart F and that the ROAs are "contracts to lease"
as that term is used in 40 C.F.R. Part 745 Subpart F. On the basis of its argument that
Respondent is a "lessor" within the meaning of the Rule, Complainant moves to strike
Paragraphs 40 and 41 of Respondent's Answer which allege, respectively, that Respondent
assigned rather than leased the housing units, and that the Residency Occupancy Agreements are
not contracts. In reply to Complainant's opposition and motions, Respondent argues that the legislative
history of the Act indicating its application to the federal government, refers to federally assisted
housing, not assignment of military members to military housing. Respondent disagrees with
Complainant's interpretation of the Attorney General Opinion, and distinguishes a lease, which
results in the diminution of interest, control or right of the owner, from a license, which does
not. Respondent cites to a Comptroller General Opinion which states, "in the absence of
specific statutory authority therefor, government officers and heads of departments may not
legally rent government-owned property, buildings or parts of buildings to private parties or
private enterprises." 14 Comp. Gen. 169, 170 (1934). Respondent argues that the "use" of
Government property connotes official uses, including licenses. Respondent cites to common-law authority in Texas, where the facility is located,
distinguishing a landlord-tenant relationship from a servant or employee who occupies a house
on the premises of his employer, which is a master-servant relationship. Eaton v. R.B. George
Investments, Inc., 254 S.W.2d 189, 196 (Tex. Civ. App. Dallas 1952), rev'd on other grounds,
260 S.W. 2d 587 (Tex. 1953); Moreno v. Stahmann Farms, Inc., 693 F.2d 106 (10th Cir. 1982). Respondent points out that there can be no lawsuits between Respondent and military members
for breach of contract or wrongful eviction, and that they have no possessory interest in military
housing. Respondent asserts that forfeiture of housing allowance from military members' pay,
for electing military housing, is not valid consideration because it does not confer a benefit on
the government. Respondent argues that the DoD Memo is merely a policy and not a legal
conclusion, which only the Department of Defense General Counsel can issue. B. Discussion
A motion for accelerated decision, as a motion for summary judgment, may be granted
only if there are no genuine issues of material fact and the movant is entitled to judgment as a
matter of law. 40 C.F.R. § 22.20(a). See, Standard for Accelerated decision, Cenex/Land
O'Lakes Agronomy Company, Docket No. 5-EPCRA-076-97 (Order Denying Cross-Motions
For Accelerated Decision)(June 29, 1998). Complainant does not oppose Respondent's First
and Second Motions for Accelerated Decision on the basis that genuine issues of material facts
exist; rather, Complainant's position is that it is entitled to judgment as a matter of law on the
issues raised by Respondent's First and Second Motions for Accelerated Decision. Respondent
asserts that the Complainant's argument as to the content of the ROAs raises factual issues for
which Complainant should be denied relief. December 17 Reply at 11. It is well-settled that the law of the place where the premises are located and where the
lease was executed governs the rights of the parties to the lease. 51 C.J.S. Landlord & Tenant §
205 p. 531 (West 1968). Because the location of Respondent's facility and of execution of the
ROAs is in the state of Texas, case authorities from Texas courts will be referenced herein. In determining whether an instrument is a lease or creates a relation other than that of
lessor and lessee, the intention of the parties as ascertained from the instrument itself will
govern. Id. § 202(5) p. 522-3; National Union Fire Ins. Co. v. CBI Indus., Inc., 907 S.W.2d
517, 520 (Tex. 1995). The question as to the proper construction of an instrument is one of law. 51 C.J.S. Landlord & Tenant § 202(5), p. 522-3. It has been held that when a contract
contains an ambiguity, the granting of summary judgment is improper because the interpretation
of the instrument becomes a fact issue. Coker v. Coker, 650 S.W. 2d 391, 394 (Tex. 1983). Under Texas law, however, mere disagreement over the meaning of a contract provision does
not render the provision ambiguous; it is ambiguous only if after examining the contract as a
whole, its meaning remains uncertain. Riley v. Champion Intern. Corp., 973 F.Supp. 634 (E.D.
Tex. 1997). Applying the rules of construction, certain terms in the ROAs in issue, namely "offer,"
"acceptance," "sublet," "renter's insurance policy," "eviction," the right of Respondent to make
repairs, the requirement to abide by housing rules and regulations, provision of smoke
detectors, and pet clause, indicate to Complainant, a lessor-lessee relationship. Although the
terms are given different legal effect by Complainant and Respondent, they are not ambiguous. It is therefore concluded that there are no genuine issues of material fact on the questions
raised in Respondent's First and Second Motions for Accelerated Decision and Complainant's
First Motion for Accelerated Decision. The central questions of law raised by the Motions however, are whether the housing
units in issue were assigned to the eleven military members pursuant to "contract to lease" by
the Respondent, and whether Respondent was a "lessor," within the meaning of Section 1018
of the Residential Lead-Based Paint Hazard Reduction Act of 1992 , 42 U.S.C. § 4852d, and the
regulations promulgated thereunder. Section 1018 provides as follows, in pertinent part:
(a) Lead Disclosure in Purchase and Sale or Lease of Target Housing.
(1) Lead based paint hazards. Not later than 2 years after the date of enactment
of this Act, the Secretary and the Administrator of the Environmental Protection
Agency shall promulgate regulations under this section for the disclosure of lead-based paint in target housing which is offered for sale or lease. The regulations
shall require that, before the purchaser or lessee is obligated under any contract to
purchase or lease the housing, the seller or lessor shall ­
(A) provide the purchaser or lessee with a lead hazard information pamphlet ***;
(B) disclose to the purchaser or lessee the presence of any known lead-based paint, or any known lead-based paint hazards, in such housing and provide to the purchaser or lessee any lead hazard evaluation report available to the seller or lessor; * * * (b) Penalties for Violations.
* * * * (5) Prohibited act. It shall be a prohibited act under section 409 of the Toxic
Substances Control Act for any person to fail or refuse to comply with a
provision of this section or with any rule or order issued under this section. * * *
Pursuant thereto, regulations were promulgated at 40 C.F.R. Part 745 Subpart F (Subpart
F), setting forth the above requirements in more detail. Section 745.107(a) requires, in
pertinent part: The following activities shall be completed before the . . . lessee is obligated
under any contract to . . . lease target housing * * * * (1) The . . . lessor shall provide the...lessee with an EPA-approved lead hazard
information pamphlet ****
(2) The . . . lessor shall disclose to the . . . lessee the presence of any known lead-based paint and/or lead-based paint hazard in the target housing being . . leased * * * *
(4) The . . . lessor shall provide the . . . lessee with any records or reports
available to the . . . lessor pertaining to lead-based paint and/or lead based paint
hazards in the target housing being . . .leased * * * *
Section 745.113(b) provides, in pertinent part:
Lessor requirements. Each contract to lease target housing shall include, as an
attachment or within the contract, the following elements . . .:
(1) A Lead Warning Statement . . .
(2) A statement by the lessor disclosing the presence of known
lead-based paint and/or lead based paint hazards in the target
housing being leased or indicating no knowledge of the presence
of lead-based paint and/or lead based paint hazards. * * * *
(3) A list of any records or reports available to the lessor pertaining to lead-based paint and/or lead-based paint hazards in the housing that have been provided to the lessee. * * * *
(4) A statement by the lessee affirming receipt of the information
set out in paragraphs (b)(2) and (b)(3) of this section and the lead
hazard information pamphlet required under 15 U.S.C. 2696* * *
The terms "lease" and "contract to lease" are not defined in Subpart F, but "lessor" is
defined in Section 745.103 as "any entity that offers target housing for lease, rent, or sublease,
including but not limited to . . . government agencies . . . ."
The DoD Memo states that "[o]ccupancy of DoD family housing by military members" -- which would include assignment to free military family housing ­ is considered by the
Department of Defense to be leasing of housing with regard to Subpart F. As a policy of the
Department of Defense, the DoD Memo is not necessarily legally binding, but does offer
guidance. Further analysis is required to consider the legal questions raised by the parties. In arguing that Respondent lacks legal authority to enter into contracts or leases for
"public quarters" (free military housing), Respondent is confusing the separate issues of whether
Respondent, in providing military family housing pursuant to the ROAs is a "lessor" pursuant
to a "contract to lease" for purposes of Section 1018 of the Act and Subpart F, and whether the
terms "contract to lease" and "lessor" encompass Respondent's assignment of public quarters
for purposes of interpreting the statutes that govern military housing and property. The DoD
Memo contemplates the distinction between those issues, acknowledging that occupancy of
DoD family housing is considered to be leasing of housing with regard to Subpart F. Thus,
Respondent's citation to the language in the Comptroller General Opinion, 14 Comp. Gen. 169,
170 (1934), that "in the absence of specific authority therefor, government officers and heads of
departments may not legally rent government-owned property, buildings, or parts of buildings to
private parties or private enterprises," is inapposite, as it pertains to leases to private parties, not
to military personnel.
Respondent's argument, citing to the Attorney General Opinion, 34 U.S. Op. Att. Gen.
320 (October 28, 1924), that the Property Clause of the United States Constitution prohibits the
disposal of federal property without express Congressional authorization, is also without merit. Congress expressly authorized the assignment of military housing, stating that "public quarters . . . may be furnished for personnel . . .who are on active duty," at 10 U.S.C. § 7571(a). The
instruments by which Respondent assigns public quarters, e.g., contract to lease or other
agreement, to its own personnel is not restricted by Congress. Thus, the question of whether or
not public quarters are "disposed of" by assignment or lease is academic.
Respondent elected to assign Navy family housing by an instrument entitled "Residency
Occupancy Agreement." Although not denominated a "lease," an instrument may nevertheless
be given effect as a lease. 51 C.J.S. Landlord & Tenant § 202(5) p. 523; In re Owl Drug Co., 12
F. Supp. 439 (D. Nev. 1935). Generally, a lease means the contract by which the relation of
landlord and tenant is created, for the