Opinion ID: 3029917
Heading Depth: 2
Heading Rank: 3

Heading: Development of the ES-40 Standard

Text: In 1988, the United States Environmental Protection Agency (“EPA”) promulgated regulations under the Resource Conservation and Recovery Act mandating the upgrading of all underground storage tanks (“USTs”) by December 22, 1998. 40 C.F.R. § 280.21(a). The regulations permit the use of the following three alternative methods for upgrading USTs: (1) complete replacement; (2) replacement of the USTs’ interior lining only; or (3) corrosion prevention through cathodic protection in appropriate circumstances.2 See id. at § 280.21(b). Prior to 1994, the only method for assessing USTs over ten years of age that the EPA and states adhering to EPA regulations had approved involved manned-entry internal inspections. Such inspections most often led to the replacement of the USTs’ interior lining, rather than to cathodic protection. In July 1993, Randall Nelson (“Nelson”), an EPA employee, not of itself create a presumption that the person did not act in good faith and in a manner that he reasonably believed to be in, or not opposed to, the best interests of the corporation and, with respect to any criminal proceeding, had reasonable cause to believe that his conduct was unlawful. 2 In its brief ASTM explains that cathodic protection is: a process through which a low-voltage electrical charge is administered into the soils surrounding the UST. Metal rods are driven into the soil several feet from the UST, and wires are installed to connect the rods to the UST, establishing an electrical circuit. The flow of electricity through this circuit retards corrosion of the metallic UST. Because cathodic protection only slows future corrosion, and does not repair corrosion that has already occurred, it is not an appropriate upgrade for tanks that have already experienced threshold levels of corrosion. Appellant’s br. at 6 n.1 (citing J.A. at 949-50); see also appellees’ br. at 5 n.1. 5 invited a number of persons, including Baach and Rogers, to a preliminary meeting regarding the development of an ASTM standard3 which would permit alternate methods of UST assessment, including the evaluation of soil conditions around USTs to assess whether and when those USTs would corrode (which, in turn, would determine the most appropriate form of upgrade for a particular UST). Notably, in the late 1970s, Rogers had developed a statistical method for assessing and predicting when USTs would corrode and fail by evaluating variables in the soil surrounding them. The method that Rogers developed came to be known as “meantime to corrosion failure” or “MTCF.” In the mid-1980s, WRA began regularly 3 As the district court explained: [A] standard first begins to be developed through the formation of a task force or group, which is a small group of members who work to develop an initial consensus and first draft of something and then move it forward. . . . After the completion of the task group’s work, the proposed standard will move to the subcommittee level, where it is first officially balloted. There is a percentage affirmative requirement and any negative votes that are submitted must be considered by the originating subcommittee. From there, the proposed standard moves to the main committee, which can vary in size from 50 to over 1,000 members with every member receiving a ballot. There are percentage return requirements, i.e., a certain percentage of committee members must cast their ballots and a certain percentage must vote affirmatively. From there, all 22,000 members of ASTM working on technical committees have the opportunity to review the proposed standard and then it’s reviewed by the 9-member Committee on Standards, which looks to see whether or not the process of ASTM has been followed and that the committee which developed the standard was balanced (i.e., that the committee was made up of individuals with diverse areas of expertise and divergent economic, business, etc. interests). ASTM, 2005 WL 1941653, at  (internal citations omitted). 6 subcontracting with Corrpro for it to do the field work necessary for WRA to make its storage tank assessments. Most of the major oil companies retained WRA to implement Rogers’ procedure so that the removal and replacement of existing USTs could be prioritized. Nelson also invited Derick Sharp (“Sharp”), President of Armor Shield Corporation (“Armor Shield”), to attend the meeting. Armor Shield was in the business of providing equipment, materials, and installation services with respect to the interior linings of USTs, as well as manned-entry internal inspections of USTs. According to the defendants, at that time, given the lack of approved alternatives, Armor Shield enjoyed a “virtual de facto monopoly for UST assessments and upgrades.” Appellees’ br. at 6.4 Nelson’s meeting resulted in the creation of an ASTM task group charged with developing a draft standard regarding alternative methods of assessing USTs. The task group’s membership included Baach and Thomas Mehalick (“Mehalick”), who represented Corrpro; Rogers and William Jones (“Jones”), who represented WRA; Tony Rieck, who represented the National Leak Prevention Association; and Sharp and Hirsch Caudill (“Caudill”), who represented Armor Shield. The task group’s work resulted in ASTM promulgating an emergency standard (“ES-40”) in November 1994 that recognized, among other things, that Rogers’ MTCF statistical method was a viable, non-invasive method for evaluating whether the use of cathodic protection could result in a successful upgrade of a UST. But because it was an emergency standard, ES-40 had a “life span” of only two years at which time it would expire. Not surprisingly, according to a finding the district court made, Sharp and Caudill were “adamantly opposed” to the creation of ES-40 and “frequently endeavored to disrupt and impede” the group’s progress. ASTM, 2005 WL 4 Even if defendants overstate Armor Shield’s position in the market, our result would not be different as it does not turn on this point. In any event, regardless of Armor Shield’s market share, it is obvious that the adoption of a standard recognizing MTCF as a viable, nonevasive method for evaluating USTs was not in its interest. 7 1941653, at . Additionally, the court indicated that Sharp “frequently threatened to sue various individuals and companies on numerous occasions throughout the standard development process.” Id. As will be seen these threats were not idle.