U.S. v. JG-24

FINDINGS OF FACT AND CONCLUSIONS OF LAW

INTRODUCTION

Plaintiff, the United States of America, on behalf of theUnited States Environmental Protection Agency ("EPA") institutedthis suit involving two sites, the J&G Site in Vega Alta, PuertoRico, and the Cataño facility in Cataño, Puerto Rico.

With respect to the J&G Site, the United States claims asfollows: (a) Claim for cost recovery under Section 107(a) of the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9607(a) (hereinafter "CERCLA"), for the costs of actions the United States has taken in response to the release or threatened release of CERCLA hazardous substances at the J&G Site; (b) Several claims for failure to comply with a statutory provision of and regulations promulgated under the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. § 6901, et seq., for which the United States seeks injunctive relief in the form of continuation post-trial of the provisions of paragraph 2 of the Stipulation endorsed by the Court on January 31, 2003 herein (docket #84) and civil penalties pursuant to Section 3008 of RCRA, 42 U.S.C. § 6928; and (c) Claim for civil penalties under Section 104(e) of CERCLA, 42 U.S.C. § 9604(e), for failure to comply with the EPA Administrative Order requesting access for sampling and investigative activities.

With respect to the Cataño facility, the United States' claimis for injunctive relief and civil penalties under Section 3008of RCRA, for failure to respond to an EPA information requestpursuant to Section 3007 of RCRA, 42 U.S.C. § 6927.

FINDINGS OF FACT1

A. Defendant Jorge Ortiz2

1. Defendant Jorge Ortiz' middle name is Joaquin, and hissurname from the maternal side is Romany. (Stipulated Fact No. 4)

2. Defendant Jorge Ortiz' Social Security Number is583-01-2227. (Stipulated Fact No. 226)

3. Defendant Jorge Ortiz' address is Calle Diez de Andino 111,Santurce, PR. (Plaintiff Exh. 176, p. 8; Stipulated Fact No. 238)

B. J&G Site

1. Location

4. The J&G Site is approximately 40 acres in size and islocated at PR Road #675, Km. 4.0, Barrio Bajuras, Sector LosChorros, Vega Alta, Puerto Rico. (Stipulated Fact No. 7)

2. Manufacturing Operations

5. Fiberglass products were made at the J&G Site. Theoperations involved fiberglass, solvents, resins, and catalysts,and also acetone, styrene and methyl ethyl ketone peroxide.(Stipulated Fact No. 235)

6. Acetone, styrene, and methyl ethyl ketone peroxide areCERCLA hazardous substances. (Michael Ferriola Direct and MichaelMercado Direct testimony; 40 C.F.R. § 302.4)

7. The fiberglass product manufacturing operations at the J&GSite began in approximately 1992 and continued through at leastJuly 2000 (when the Answer to the initial Complaint in thisaction was filed). Defendant JG-24 used the J&G Site tomanufacture fiberglass products such as swimming pools, watertanks, boats, and horse carriages. (Answer, ¶ 11, and Complaint, ¶ 11,3Plaintiff Exh. Exhibit 14,4 p. 2.)5

8. Jorge J. Ortiz personally went to the supplier or suppliersto buy materials including resins, solvents, and catalysts usedin the production at the J&G Site and took them personally to theJ&G Site. The usual procedure was to buy these materials usingcash. The quantities of the materials used depended on the demandfor finished products (boats, water tanks, car tops, swimmingpools, etc.). (Stipulated Fact No. 10)

9. During the manufacture of fiberglass products at the J&GSite, the operations at the Site included molding, cutting andfinishing various fiberglass products. The manufacturingprocedure included the following steps: 1) preparing the mold forthe specific product; 2) spreading a first layer of resinsolution over the molding and covering it with fiberglass; 3) thefiberglass layer is dried in the mold, and additional layers ofresin solution are spread to get the appropriate thickness.(Stipulated Fact No. 11)

10. The manufacture of fiberglass products at the J&G Siteinvolved the spraying of resins on products being made. Gelcoatwas also sprayed on some products being made, such as pools andcar tops. The pools were painted with blue gelcoat, and the cartops were painted with white gelcoat. (Alberto Mendez DepositionExcerpt, p. 42, lines 23-25, p. 43, ln. 1-25, p. 44, ln. 1-10,16-25, p. 45, lines 1-3, admitted into evidence through grant ofthe Motion Designating Deposition Excerpts; Michael MercadoDirect testimony) C. Cataño Facility

1. Location

11. There is a property of approximately two (2) acres in sizethat is located at PR Road 165, Km. 2.5, Cataño, Puerto Rico00963 (the "Cataño property" or "Cataño facility" or"Distribuidora K-Aribe facility"). (Stipulated Fact No. 8)

2. Facilities

12. The Cataño property includes a showroom for fiberglassproducts, a sales area, and an administrative office. (StipulatedFact No. 122)

13. The Cataño facility also includes a mixing room in whichtransfer activities of raw materials from bulk to smallercontainers are performed. The Cataño facility also includes abackyard area. Some fiberglass products are sometimesmanufactured in the backyard area. (Plaintiff Exh. 119)

14. Signs have been posted at the Cataño facility at varioustimes, including 1997, with the names "Distribuidora K-Aribe"and "DuraMas." (Francisco Claudio Direct testimony)

D. Defendant Jorge Ortiz' Companies

1. Defendant JG-24, Inc. ("JG-24")

a. Incorporation

15. Defendant JG-24, Inc. ("JG-24") was at one point acorporation incorporated under the laws of the Commonwealth ofPuerto Rico, and JG-24 has had a principal place of business atthe J&G Site. (Stipulated Fact No. 1)

16. Defendant Jorge Ortiz was one of the incorporators ofJG-24, Inc. (Stipulated Fact No. 5)

17. JG-24, Inc. was incorporated by Jorge J. Ortiz, YanetteMaldonado, and Francisco Vizcaíno. (Stipulated Fact No. 210)

18. The incorporation papers for JG-24, Inc. list YanetteMaldonado as the registered agent for JG-24, Inc. Theincorporation papers for JG-24, Inc. state that her address isCarr. 860, Lizette Apt. #906, Carolina, P.R. 00630. No change tothe registered agent for JG-24, Inc. or the address of theregistered agent for JG-24, Inc. has been filed with theSecretary of State's office. (Stipulated Facts No. 211, 212) b. JG-24 Has Not Been Operated As a Corporation

19. To the best of the knowledge of Jorge Ortiz, no stock wasever issued by JG-24, Inc. (Stipulated Fact No. 244)

20. JG-24 never issued any bylaws. (Stipulated Fact No. 213)

21. There are no such things as minutes, meetings of Board ofDirectors, or shareholders regarding JG-24, Inc. (Stipulated FactNo. 214)

22. JG-24 does not have directors or a board of directors.(Stipulated Fact No. 215)

23. To the best of the knowledge of Jorge Ortiz, no annual (orother periodic) reports of JG-24, Inc. exist for any timesbetween 1990 and the present. (Stipulated Fact No. 245)

24. There is no record of any annual reports required to befiled by corporations having been filed by JG-24, Inc. with theoffice of the Secretary of State of Puerto Rico. (Stipulated FactNo. 219)

25. There is no record of any annual fees required to be paidby corporations having been paid by JG-24, Inc, to the office ofthe Secretary of State of Puerto Rico. (Stipulated Fact No. 220)

c. JG-24 Lost Its Corporate Status and is a Proprietorship

26. There is a letter from the Secretary of State's office,dated December 8, 1999, on file at the Secretary of State'soffice, addressed to Yanette Maldonado, the registered agent forJG-24, at her address as listed in the incorporation papers,which states that JG-24 has failed to file more than two years ofannual reports and that if such annual reports are not filedwithin 60 days, JG-24 will be canceled. No annual reports werefiled after the date of this letter. (Stipulated Fact Nos. 220,221; Plaintiff Exh. 184; Reinaldo Cestero Direct testimony)

27. There is a certificate from the Secretary of States'soffice of Puerto Rico stating that JG-24, Inc.'s corporate statuswas cancelled on February 8, 2000. (Reinaldo Cestero Directtestimony; Plaintiff Exh. 236) d. Jorge Ortiz is the Proprietor and Person in Control ofJG-24

28. Defendant Jorge Ortíz has represented himself to be the"President" of JG-24. (Answer, ¶ 9), in excerpt of Answer toinitial Complaint (admitted into evidence through grant of MotionDesignating Deposition Excerpts")

29. Jorge Ortiz decided what products were to be manufacturedat the JG-24 facility. (Alberto Mendez Deposition excerpt, p. 33,lines 15-17)

30. The JG-24 workers took directions from Jorge Ortiz, andthere were no other supervisors who gave work instructions at theJG-24 facility other than Jorge Ortiz. (Alberto Mendez Depositionexcerpt, p. 22, lines 22-25 through p. 23, lines 1-7)

31. Jorge Ortiz hired workers for JG-24. For instance, JorgeOrtiz hired Alberto Mendez and Carmelo Mejia. Carmelo Mejiaworked at the J&G Site, making fiberglass tanks and swimmingpools, starting in 1997 or 1998. Carmelo Mejia continues to workfor Jorge Ortiz. He works on construction projects along withAlberto Mendez. (Stipulated Fact Nos. 109-111, 118-121)

32. Efrain Vazquez worked for Jorge Ortiz at the J&G Sitebetween approximately 1990 and 2000. Efrain Vazquez continues towork for Jorge Ortiz in construction and did such work in2000-2003. Efrain Vazquez understood Jorge Ortiz to be the personin charge of JG-24. (Stipulated Fact Nos. 115, 116, 117)

33. There is a bank account in the BBVA with account number061-1110005698 in the name of J&G 24 Corp. This account was061-6194-206 when it was opened. It was opened with Royal Bank ofPuerto Rico. BBVA is the successor of Royal Bank de Puerto Rico.(Stipulated Fact No. 216)

34. The card on file with BBVA stating the names of the holdersof the BBVA account with the title of J&G 24 Corp. list twoholders. One holder is listed as J&G 24 Corp. The other holder islisted as Jorge Ortiz Romany. (Stipulated Fact No. 217)

35. Jorge Ortiz Romany is the only individual authorized tocontrol BBVA account number 061-1110005698. Although the accountis in the name of J&G 24 Corp., it is a joint or commingledaccount of the two holders. (Plaintiff Exhs. 144, 147, 148)

36. BBVA produced checks written on this account of $1,000 ormore in 2001-2003. All of the checks produced are signed by JorgeJ. Ortiz. (Stipulated Fact No. 218; Plaintiff Exhs. 154, 157) 37. Defendant Jorge Ortiz is the proprietor of JG-24, which isno longer a corporation.

38. When JG-24 had corporate status, Jorge Ortiz was the alterego of that corporation, which was not operated as a corporation.

2. Distribuidora K-Aribe /D.T. Karibe, Inc.

a. Incorporation

39. The Secretary of State's office has a record of a companycalled D.T. Karibe, Inc. (Stipulated Fact No. 192)

40. The incorporation papers for D.T. Karibe, Inc., were signedin 1992 by Carlos Capre Martinez, Frank Hichez, and PedroSantiago Andino. (Stipulated Fact No. 193)

41. Carlos Capre Martinez was employed up to 1994 withdifferent enterprises related to Jorge Ortiz. Carlos CapreMartinez was a salesman at the Cataño property until 1994.(Stipulated Fact Nos. 194, 196)

42. Jorge Ortiz asked Carlos Capre Martinez to sign theincorporation papers for D.T. Karibe, Inc. (Stipulated Fact No.195)

43. When Carlos Capre Martinez worked at the Cataño property,Frank Hichez did handyman and mechanic work at the Catañoproperty. (Stipulated Fact No. 197)

b. Distribuidora K-Aribe Has Not Been Operated As aCorporation

44. No stocks were ever issued by Distribuidora K-Aribe (D.T.Karibe, Inc.), and Distribuidora K-Aribe does not havestockholders or stockholders' meetings. (Stipulated Fact Nos.198, 242).

45. Distribuidora K-Aribe (D.T. Karibe, Inc.) never issuedbylaws. (Stipulated Fact No. 199)

46. No documents, including but not limited to minutes,concerning meetings of the board of directors and/or meeting ofthe shareholders of Distribuidora K-Aribe at any times betweenthe time of incorporation and the present exist. (Stipulated FactNo. 200) 47. Distribuidora K-Aribe does not have any Board of Directorsor officers, such as a president or a secretary. (Stipulated FactNo. 224, 243)

48. There is no record of any annual reports (filed bycorporations) having been filed by D.T. Karibe, Inc. with theoffice of the Secretary of State of Puerto Rico. (Stipulated FactNo. 201)

49. There is no record of any annual fees required to be paidby corporations having been paid by D.T. Karibe Inc. to theoffice of the Secretary of State of Puerto Rico. (Stipulated FactNo. 202)

50. No annual (or other periodic) reports of DistribuidoraK-Aribe (D.T. Karibe, Inc.) exist for any times between 1990 andthe present. (Stipulated Fact No. 203)

c. Distribuidora K-Aribe/D.T. Karibe's Corporate StatusExpired

51. D.T. Karibe's (Distribuidora K-Aribe's) 1992 incorporationpapers provide that D.T. Karibe was incorporated for a period oftwo years. There are no certificates of renewal on file at thePuerto Rico Secretary of State's office of D.T. Karibe as acorporation. (Reinaldo Cestero Direct testimony; Plaintiff Exh.224, p. 2, Article 6; 14 L.P.R.A. § 3102 (temporary corporationsexpire at the end of their term unless certificate of renewal isfiled with the office of the Secretary of State prior to the endof the term and other conditions are met))

d. Distribuidora K-Aribe is a Proprietorship and Jorge Ortizis the Proprietor

52. Jorge Ortiz has been dealing with the operation at theCataño facility since 1986 (more or less). (Plaintiff Exh. 176,p. 5; Francisco Claudio Direct testimony)

53. On December 3, 1997, EPA inspectors Francisco Claudio Riosand Eduardo Gonzalez visited the Cataño facility. There were twoladies who appeared to be sales persons who identified themselvesas Gloria Alvarez and Rodes [Rothes] Gonzalez. On December 3,1997, Rodes [Rothes] Gonzalez told the EPA inspectors that"Joaquin Román" was the manager and was in charge and that hewill answer any question. (Francisco Claudio Direct testimony,Plaintiff Exh. 121)

54. Jorge Ortiz visited the Distribuidora K-Aribe facilityperiodically. When Jorge Ortiz visited the facility he used one of the offices. (Betzaida ("Betsy") Ortiz Direct testimony;Stipulated Fact No. 133)

55. Jorge Ortiz has been involved with purchasing products thatare to be sold at Distribuidora K-Aribe. (Stipulated Fact No.132)

56. Jorge Ortiz has interviewed people seeking jobs withDistribuidora K-Aribe. Jorge Ortiz has offered employment topeople seeking jobs at Distribuidora K-Aribe. (Betsy Ortiz Directtestimony)

57. Jorge Ortiz supervised Betsy Ortiz. He supervised all theemployees at Distribuidora K-Aribe. If Jorge Ortiz askedemployees at Distribuidora K-Aribe to do something, they followedhis directions. (Betsy Ortiz Direct testimony)

58. Distribuidora K-Aribe employees were paid by check. JorgeOrtiz signed the pay checks for the Distribuidora K-Aribeemployees. (Stipulated Fact No. 134; Betsy Ortiz Directtestimony)

59. Sometimes Distribuidora K-Aribe had to return money to acustomer or client, if the client returned something hepurchased. When Distribuidora K-Aribe paid the money back forreturned items with a check, the check was signed by Jorge Ortiz.(Stipulated Fact No. 137; Betsy Ortiz Direct testimony; PlaintiffExh. 98)

60. Betsy Ortiz, an employee at the Cataño facility for overfive years, says that Jorge Ortiz is the manager in overallcontrol of Distribuidora K-Aribe. (Stipulation No. 236; BetsyOrtiz Direct testimony)

61. Distribuidora K-Aribe uses a checking account in the BancoBilbao Vizcaya ("BBVA") number 061-1060007300. (Stipulated FactNo. 135)

62. Jorge Ortiz is entitled to write checks and withdraw moneyfrom the Account of Dtstribuidora K-Aribe at the Banco BilbaoVizcaya. (Stipulated Fact No. 227)

63. Jorge Ortiz signs the checks to pay the invoices formaterials purchased by Distribuidora K-Aribe. (Stipulated FactNo. 136)

64. On occasion, Jorge Ortiz receives checks made out to himpersonally. Sometimes the checks made out to Jorge Ortizpersonally were deposited into the Distribuidora K-Aribe account.(Stipulated Fact Nos. 138, 139; Plaintiff Exh. 100). 65. Jorge Ortiz has the authority to withdraw money fromDistribuidora K-Aribe bank accounts. (Stipulated Fact No. 140)

66. The signature card for BBVA account number 061-1060007300says that the title of the account is DT Karibe. (Stipulated FactNo. 204)

67. There are two holders listed on the signature card for BBVAaccount number 061-1060007300. One holder is listed as DT Karibe.The other holder is listed as Jorge Ortiz Romany. (StipulatedFact No. 205)

68. Jorge Ortiz Romany is the only individual named asauthorized to control BBVA account number 061-1060007300.Although the account is in the name of DT Karibe, it is a jointor commingled account of the two holders. (Plaintiff Exh. 148)

69. Jorge J. Ortiz signs checks on the DT Karibe BBVA accountnumber 061-1060007300. (Stipulated Fact No. 206)

70. Jorge J. Ortiz made payments to an attorney, BenjaminOrtiz, in July 2000 and on other dates, through checks issued onthe account of DT Karibe BBVA account 061-1060007300. (StipulatedFact No. 207; Plaintiff Exh. 155, e.g. pp. BBV 0219, BBV 0455)

71. Checks made out to Jorge Ortiz have been deposited into theDistribuidora K-Aribe account (DT Karibe BBVA account number061-1060007300). (Stipulated Fact No. 208)

72. Jorge J. Ortiz signs checks for condominium fees for hiscompanion Gloria Alvarez Nieves' apartment issued on the accountof DT Karibe BBV account 061-1060007300. (Plaintiff Exh. 158,e.g., p. BBV 1114)

73. BBVA produced checks of $1,000 or over on DT Karibe accountnumber 061-1060007300 in 2001-2003. These checks are all signedby Jorge J. Ortiz. (Stipulated Fact No. 209; Plaintiff Exhs. 155,158).

74. Defendant Jorge Ortiz is the proprietor of DistribuidoraK-Aribe, which is no longer a corporation.

3. Fiberglass Dura Mas/Dura Mas a. Incorporation

75. There are no incorporation papers for Fiberglass Dura Masavailable at the Secretary of State's Office. (Stipulated FactNo. 178) 76. Banco Popular has a copy of the incorporation papers forFiberglass Dura Mas on file. (Stipulated Fact No. 176; PlaintiffExh. 140)

77. The incorporation papers for Fiberglass Dura Mas, Inc. onfile with Banco Popular indicate that it was incorporated in 1976by three incorporators. Jorge J. Ortiz was one of theincorporators and owned 13 out of the 15 shares of stock.(Plaintiff Exh 140, p. 2; Stipulated Fact No. 177)

78. The incorporation papers for Fiberglass Dura Mas on filewith Banco Popular indicate that it was originally incorporatedunder a different name, which is scratched out and changed inhandwriting to Fiberglass Dura Mas. with the handwritten changemade by Jorge J. Ortiz. (Plaintiff Exh. 140, p. 1 (originalSpanish version))

b. Fiberglass Dura Mas Has Not Been Operated As a Corporation

79. Fiberglass Dura Mas, Inc., has not filed annual reportswith the Secretary of State of Puerto Rico that are required ofcorporations. (Stipulated Fact No. 179)

80. Fiberglass Dura Mas, Inc, has not paid annual fees to theSecretary of State of Puerto Rico that are required ofcorporations. (Stipulated Fact No. 180)

81. There are no annual (or other periodic) reports ofFiberglass Dura Mas, Inc. and/or Dura Mas. (Stipulated Fact No.181)

82. Fiberglass Dura Mas does not have any bylaws. (StipulatedFact No. 182)

83. There are no documents, including but not limited tominutes, concerning meetings of the board of directors and/orshareholders of Fiberglass Dura Mas, Inc., and/or Dura Mas at anytimes between the time of incorporation and the presentavailable. (Stipulated Fact No. 183)

84. Fiberglass Dura Mas, Inc, does not currently have directorsor board of directors, has not had a board of directors for manyyears, has not held board of director meetings for many years,and has not prepared minutes of board of directors meetings ever.(Stipulated Fact No. 184)

85. There are no financial statements, including but notlimited to balance sheets, income statements, and/or profit andloss statements, of Fiberglass Dura Mas at any times between 1990and the present. (Stipulated Fact No. 185) 86. There are no income tax returns, including but not limitedto Puerto Rico income tax returns, filed on behalf of FiberglassDura Mas, Inc., and/or Dura Mas between 1990 and the present.(Stipulated Fact No. 186)

87. Fiberglass Dura Mas, Inc. does not currently have anyshareholders. (Stipulated Fact No. 191)

c. Fiberglass Dura Mas Is Not a Corporation

88. Dura Mas, or Fiberglass Dura Mas, does not exist as acorporation. (Stipulated Fact No. 189)

d. Fiberglass Dura Mas is a Proprietorship and Jorge Ortiz isthe Proprietor

89. In the Puerto Rico Telephone/Verizon Area Metro 2002-2003and 2003-2004 telephone books, white pages, commercial section,there is a listing under the name of "Dura MasTanques/Fiberglass" at the address of the Cataño facility. Thereis no listing of Distribuidora K-Aribe. (Plaintiff Exh. 127;Reinaldo Cestero Direct testimony; judicial notice)

90. In the Puerto Rico Telephone/Verizon Area Metro 2002-2003and 2003-2004 telephone book, yellow pages, there is a listingunder the heading of Fiberglass/Products of the name "Dura Mas"at the address of the Cataño facility. There is no listing ofDistribuidora K-Aribe. (Plaintiff Exh. 127; Reinaldo CesteroDirect testimony; judicial notice)

91. Customers write checks to Dura Mas. (Jorge Ortiz DepositionExcerpt, Deposition, Exhibit 15, p. 2, third check (admitted intoevidence by grant of the Motion Designating Deposition Excerpts);Stipulated Fact No. 237)

92. Invoices for equipment and materials purchased aresometimes addressed to Dura Mas Fiberglass. (Plaintiff Exh. 88(last twelve pages, invoices from Land `n' Sea Distributing,Inc., year 2003); Betsy Ortiz Direct Testimony)

93. Dura Mas received an invoice for seminar materials JorgeOrtiz ordered in April 2000. (Plaintiff Exh. 108)

94. There is a bank account number 170-001555 in the BancoPopular of Puerto Rico, Levittown branch, under the name DuraFiberglass Dura Mas. (Stipulated Fact No. 164) 95. The authorized signature card on file for Banco Popular170-001555 account has one signature, that of Jorge J. Ortiz.(Stipulated Fact No. 165; Plaintiff Exh. 136)

96. The agreement under which Banco Popular 170-001555 accountis opened is signed on June 12, 1986 by Jorge J. Ortiz, and JorgeJ. Ortiz has been authorized to sign checks on that account since1986. (Plaintiff Exh. 137; Stipulated Fact No. 168)

97. Banco Popular has on file a certificate of resolution byFiberglass Dura Mas, dated in Cataño, Puerto Rico, in 1986authorizing only the signatory Jorge J. Ortiz to access theFiberglass Dura Mas account. (Stipulated Fact No. 166; PlaintiffExh. 138)

98. The certificate of resolution by Fiberglass Dura Mas, datedin Cataño, Puerto Rico, in 1986, on file with Banco Popular,authorizing only Jorge J. Ortiz to sign checks for FiberglassDura Mas, is signed by Gloria Alvarez, "Secretary" and Jorge J.Ortiz, "Presidente." (Plaintiff Exh. 138 (original Spanishversion), p. 2)

99. The certificate of resolution is on behalf of FiberglassDura Mas, and the address given of Fiberglass Dura Mas at time ofthe certificate of resolution is Diez de Andino 111, Santurce,Puerto Rico. (Stipulated Fact No. 167; Plaintiff Exh. 138)

100. The certificate of resolution is stamped with the stamp ofthe previous name of the company, Fiberglass de Puerto Rico.(Plaintiff Exh. 138 (original Spanish version), p. 2))

101. As of 1986, Jorge J. Ortiz was authorized to sign checksfor Fiberglass Dura Mas on Banco Popular account 170-001555.(Stipulated Fact No. 168)

102. All the checks from 2001-2003 produced by Banco Popular reaccount 170-001555 are signed by Jorge J. Ortiz. (Stipulated FactNo. 169; Plaintiff Exh. 142)

103. The periodic bank statements for account 170-001555 areaddressed to Dura Fiberglass Dura Mas at 111 Calle Diez deAndino, San Juan, PR. (Plaintiff Exh. 142, e.g. p. BP 0019)

104. Jorge J. Ortiz signs checks for Fiberglass Dura Mas.(Stipulated Fact Nos. 170, 171; Distribuidora K-Aribe 30(b)(6)Deposition excerpt (admitted into evidence by the grant of theMotion Designating Deposition excerpts), pp. 76-77 and attachedDeposition Exhibit 11) 105. Jorge J. Ortiz signs checks for "cash" on checks issued onthe account of Fiberglass Dura Mas. (Stipulated Fact No. 172;Plaintiff Exh. 142, e.g. p. BP 0230)

106. Jorge J. Ortiz has made payments to an attorney, BenjaminOrtiz, for Attorney Ortiz' representation of Jorge J. Ortiz inthis litigation, through checks issued on the account ofFiberglass Dura Mas and signed by Jorge J. Ortiz. (StipulatedFact No. 173; Plaintiff Exh. 142, e.g. p. BP 0156)

107. Jorge J. Ortiz has made payment to Yoruba Figueroa forrepairs to Jorge Ortiz's traxcavator that was used at the J&GSite through check(s) issued on the account of Fiberglass DuraMas and signed by Jorge J. Ortiz. (Stipulated Fact No. 174)

108. Jorge Ortiz wrote Yoruba Figueroa a check for $3,500.00 onthe Dura Fiberglass Dura Mas Marketing Industries Account lendingFigueroa the money for the purchase of a car for himself.(Stipulated Fact No. 175)

109. Jorge J. Ortiz signed checks for payment to DistribuidoraK-aribe on checks issued on the account of Fiberglass Dura Mas.(Plaintiff Exh. 142; e.g., p. BP 0251)

110. Jorge J. Ortiz signed checks for payment to JG-24 onchecks issued on the account of Fiberglass Dura Mas. (PlaintiffExh. 142; e.g. p. BP 0250)

111. Fiberglass Dura Mas, Inc. a/k/a Dura Mas or Duramas doesnot have employees. (Stipulated Fact No. 187)

112. Credit card transactions for purchases by customers ofDistribuidora K-Aribe or Dura Mas at the Cataño facility areprocessed through an account in the name of Dura Mas or Dura MasFiberglass, which is assigned the Merchant Account # 231068.(Plaintiff Exhs. 94, 95, 135, 205, 208, 210, 213, 214; StipulatedFact No. 146)

113. GM Group, Inc. handles credit card transactions involvingcustomer purchases using credit cards at the Cataño facilityutilizing Merchant Account # 231068. (Plaintiff Exh. 135)

114. Credit card sales drafts of merchant account number 231068are deposited into Banco Popular checking account number170-001555 which has the name Dura Mas Fiberglass or DuraFiberglass Dura Mas, to which Jorge J. Ortiz is the solesignatory. Plaintiff Exh. 94, 95, 135, 205, 208, 210, 213, 214;Stipulated Fact No. 14) 115. The credit card impression machine used by DistribuidoraK-Aribe (and by Dura Mas) a the Cataño facility impressed thename "Dura Mas" on credit card transaction forms. (Plaintiff Exh.95)

116. Documents on file with GM Group, Inc. show that the creditcard arrangement for Merchant Account # 231068 was initiated withFiberglass Dura Mas, and that the person representing FiberglassDura Mas was a Jorge Ortiz Romany who had an address at 111 Diezde Andino Street, San Juan, PR, and a Social Security Number of583-01-2227. (Plaintiff Exh. 205, 208, 210, 213, 214)

117. Periodic statements on file with GM Group, Inc. includeMerchant Statements for Merchant Account # 231068, which isassociated with Banco Popular Account # 170-001555. Thesestatements are addressed to Distribuidora Caribe, P.O.Box 475,Cataño, PR 00963. (Plaintiff Exh. 222)

118. Periodic statements on file with the GM Group, Inc. alsoinclude statements associated with account # 170-001555, whichare addressed to Dura Fiberglass Dura Mas Marketing Industries,111 Calle Diez de Andino, San Juan, PR 00911-2118. (PlaintiffExh. 223)

119. Jorge Ortiz continues to conduct business as FiberglassDura Mas or Dura Mas, including transactions with suppliers,advertisements in the phone book, sales of products, credit cardtransactions, and checking account transactions. Fiberglass DuraMas is a proprietorship, and Jorge Ortiz is the proprietor ofFiberglass Dura Mas. Since there are no employees of Dura Mas,Jorge Ortiz is the sole operator of Dura Mas. Since he is theonly person authorized to sign checks on the Dura Mas account, heis the sole beneficiary of Dura Mas.

4. Jorge Ortiz' Companies are Commingled and Linked

120. Dura Mas is a trade name for some of the products ofDistribuidora K-Aribe. (Stipulated Fact No. 141)

121. When invoices are received for products that DistribuidoraK-Aribe buys, the invoices are sometimes addressed toDistribuidora K-Aribe. (Stipulated Fact No. 142)

122. When invoices are received for products that DistribuidoraK-Aribe buys, the invoices are sometimes addressed to Dura Mas.(Stipulated Fact No. 143)

123. Sometimes checks that are made out to Dura Mas bycustomers are deposited into the Distribuidora K-Aribe checkingaccount. (Stipulated Fact No. 237; Plaintiff Exh. 97) 124. Customer credit card transactions at the Cataño facility,including those of Distribuidora K-Aribe, are processed through acredit card machine that uses the name "Dura Mas," and theproceeds thereof are deposited into the Dura Fiberglass Dura Masbank account. (Stipulated Fact Nos. 144-147)

125. At the direction of Jorge Ortiz, fiberglass productsmanufactured at JG-24 were taken to Distribuidora Karibe.(Alberto Mendez Deposition excerpt, p. 12, lines 20-25 through p.13, lines 1-9)

126. Supplies and materials used in the fiberglassmanufacturing process at JG, such as resin, gelcoat, acetone andMEK Peroxide were supplied to JG-24 by Distribuidora Karibe.(Alberto Mendez Deposition excerpt, p. 68, lines 20-25 through p.69, lines 1-4)

127. Alberto Mendez would bring about five or six drums ofresin to the J&G Site weekly. (Stipulated Fact No. 113)

128. At the request and direction of Jorge Ortiz, AlbertoMendez went to the J&G Site several times during the period ofthe EPA removal action to get fiberglass product molds and tookthem to the Cataño facility. (Alberto Mendez Deposition excerpt,p. 83, lines 16-23)

E. Facts Relating to United States' Claims re J&G Site

1. Ownership of the J&G Site

129. Defendant Jorge Ortiz is a current owner of the J&G Siteand has been an owner of that real property since 1988. DefendantJorge Ortiz has been the owner, along with Gloria Alvarez Nieves,who is described in the recorded deed as his wife, since 1988.(Stipulated Fact No. 234; Plaintiff Exhs. 75 and 76)

2. December 3, 1997 Inspection — J&G Site6

130. On December 3, 1997, EPA inspectors Francisco Claudio Riosand Eduardo Gonzalez visited the J&G Site to conduct apreliminary inspection. During the December 3, 1997 inspection atthe J&G Site, EPA inspector Francisco Claudio Rios spoke withvarious employees at the Site to obtain preliminary informationabout the J&G Site operations and ownership. None of theemployees was willing to provide information as to the person incharge. (Francisco Claudio Direct testimony; Plaintiff Exh. 185) 131. During the December 3, 1997 inspection at the J&G Site,EPA inspectors observed: a. Many 55-gallon drums haphazardly stored throughout the J&G Site and dumped into areas of vegetation at the periphery of the property. Many of the drums were in severely deteriorated condition including being rusted, corroded, dented, collapsed, bulged, inflated, and/or leaking and stained. Some of these drums were labeled "Acetone" and "Resin Solution." Many of these deteriorated drums were exposed to the elements. b. Many 55-gallon drums dumped into or near two sinkholes at the Site. The drums dumped into one sinkhole were in various stages of deterioration including being rusted, severely corroded, dented, collapsed, bulged and/or leaking and stained. Some of these drums were labeled "Acetone" or "Resin Solution." Approximately 10 drums were in close proximity (about 10 meters) to the other sinkhole at the Site. c. Several areas of dark stained soils at the Site, including areas of staining near or next to deteriorated, leaking or stained drums, some of which were labeled "Acetone" or "Resin Solution." Stained soils were also observed in the areas of the manufacturing operations. d. Workers applying fiberglass materials in an open structure. e. An electrical box at the Site located in a wood and aluminum structure surrounding pig houses where several feed bags were stored. (Francisco Claudio Direct testimony; Eduardo Gonzalez Direct testimony; Plaintiff Exhs. 185, 189 (including photo captions))

132. During the December 3, 1997 inspection, the EPA inspectorsalso identified a strong odor of solvents. (Francisco ClaudioDirect testimony; Eduardo Gonzalez Direct testimony; Plaintiff'sExh. 185)

133. EPA inspector Eduardo Gonzalez testified that he saw drumswith flammable material labels. Some of the drums were bulging,as a result of expansion of volatile organic substances withinbeing left out in the heat. He handled the drums carefullybecause a spark might cause an explosion. (Eduardo GonzalezDirect testimony) 134. EPA inspector Francisco Claudio testified that he thoughtthe electrical wiring presented a hazard because it washaphazard, there were vapors, and the ventilation was poor.(Francisco Claudio Direct testimony; see also Eduardo GonzalezDirect testimony; Plaintiff Exh. 189, p. 189-23 (photo 45caption))

135. The EPA inspectors observed that there were no safetynotices and no safety equipment, such as fire extinguishers.(Francisco Claudio Direct testimony)

136. EPA inspector Eduardo Gonzalez talked to some of theworkers and asked it they knew they were working with hazardouschemicals and they were very surprised at what he was tellingthem. They had no training, no knowledge about the hazards. Theydid not have any protection equipment or clothes to deal with thehazards; they were just operating with their bare hands and noair respirators. (Eduardo Gonzalez Direct testimony)

3. February 1998 Initial Sampling and Inspection

137. Between the December 3, 1997 inspection and January 28,1998, EPA made various attempts to obtain voluntary access to theJ&G Site to undertake sampling and further inspection activities.These efforts were unsuccessful. (Plaintiff Exh. 12, ¶¶ 10-19;Stipulated Fact Nos. 15, 16)

138. On January 28, 1998, the United States sought and receivedan Ex Parte Warrant for Entry for the purposes of conducting aninventory of the hazardous substances stored at the J&G Site andsampling activities thereon, which was executed during the weekof February 3, 1998. (Plaintiff Exh. 12, ¶¶ 19-20; FranciscoClaudio Direct testimony)

139. EPA inspected the J&G Site during the week of February 3,1998, and took samples of soils, surface water, and wastes at theSite. EPA also conducted an inventory of containers that werevisible at the manufacturing area at the J&G Site in February1998, which included some partially buried drums, as well assurficial drums and containers. Some of the drums and containersinventoried were empty; others were not empty. Stained soils werealso observed. (Plaintiff Exh. 6, pp. 5-6; Stipulated Fact No.17)

140. The analytical results of the February 1998 samplescontained in a report dated March 12, 1998, regarding the SiteAssessment at the J&G Site, showed that some samples taken at theJ&G Site contained hazardous substances, including styrene andacetone. (Plaintiff Exh. 6, pp. 6-7) 141. During the February 1998 inspection, EPA inspectors alsoobserved that the Site had no storm water runoff control, causingstorm water to flow through waste piles where it would leach outand ultimately flow into sinkhole areas that are a groundwaterrecharge area. (Plaintiff Exh. 7,7 p. 5)

142. As a result of the February 1998 inspection, EPAdetermined that additional sampling and investigation activitiesat the J&G Site were necessary to assess the extent of thecontamination at the Site and to determine whether a removalaction under CERCLA would be required. (Plaintiff Exh. 7, p. 6)

4. Access

143. After the February 1998 inspection, EPA again made effortsto obtain voluntary access to the J&G site for investigation andsampling activities. These efforts included returning to the J&GSite to seek entry and making numerous phone calls and leavingphone messages for Jorge Ortiz which were not returned. Suchefforts were made on various dates, including in June of 1998 andOctober of 1998. (Plaintiff Exh. 12,8 ¶¶ 24-27)

144. For instance, EPA On Scene Coordinator Michael Ferriolaand other EPA representatives and contractors attempted to visitthe J&G Site in late June 1998. The iron gate across the entranceroad was locked at the time of EPA arrival. After about 15minutes, a JG employee was found leaving the Site, and EPA askedhim for permission to enter. He denied access and locked the gateupon departure. A second employee, working on a barbed wirefence, was also asked for permission to enter. He stated that hewould ask the person in charge for permission to admit them. Theywaited another 15-20 minutes, but he did not return. OSC MichaelFerriola and other EPA representatives also attempted to visitthe J&G Site in October 1998, but once again the gate was locked.(Michael Ferriola Direct testimony, Francisco Claudio Directtestimony; Plaintiff Exh. 8)

145. Following these efforts, EPA issued an AdministrativeOrder Directing Compliance With Request For Access to JG-24,directing JG-24 to comply with EPA's request for access. TheAdministrative Order avers that Jorge Ortiz is the president,owner and/or manager of JG-24. The Administrative Order was sentby certified mail, with a transmittal letter of February 23, 1999, addressed to Mr. Jorge Ortiz (or) Manager (or)President, J&G 24 Corporation, at both the J&G Site and theCataño facility. While the address for the J&G Site wasincorrect insofar as it referred to Vega Baja instead of VegaAlta, the address for the Cataño facility was correct.(Stipulated Fact No. 18; Plaintiff Exhs. 12, 72)

146. On March 3, 1999 EPA inspector Francisco Claudio Rios handdelivered the Administrative Order Directing Compliance WithRequest for Access, with the February 23, 1999 transmittalletter, to Rodes [Rothes] Gonzalez, an employee at the Catañofacility, who signed for the letter. (Francisco Claudio Directtestimony; Plaintiff Exhibits 12, 72, 73; Stipulated Fact No. 13)

147. On March 11, 1999, copies of the Administrative Order werealso left at the front gate to the J&G Site and inserted into anopen window at Jorge Ortiz' residence in Santurce, Puerto Rico.(Francisco Claudio Direct testimony; Plaintiff Exhibits 12, 72,74)

148. JG-24 failed to comply with, or even respond to, EPA'sAdministrative Order Directing Compliance With Request ForAccess. (Francisco Claudio Direct testimony)

149. The Administrative Order became effective on March 11, six(6) business days after it was received and signed for by JorgeOrtiz' employee Rodes Gonzalez at the Cataño facility.(Plaintiff Exh. 12, p. 9)

150. Since EPA did not obtain access through the AdministrativeOrder, the United States sought and obtained an access warrantfrom the United States District Court for additional sampling andinvestigation activities, which was sought on April 13, 1999 andexecuted with the assistance of the Marshal's Service on April14, 1999. (Plaintiff Exh. 14, p. 1; Stipulated Fact No. 20;Michael Ferriola Direct testimony)

151. There were 34 days of noncompliance with theAdministrative Order between its effective date, March 11, 1999,and the date EPA was able to access the J&G Site for theadditional sampling and investigation activities on April 14,1999.

152. Obtaining access without delay was important for EPA to beable to ascertain whether there was a release or threat ofrelease of hazardous substances that would impact public healthor the environment. (Michael Ferriola Direct testimony) 5. April 1999 Sampling Investigation

153. Pursuant to the second warrant for access to the J&G Site,which was executed between April 14 and April 17, 1999, EPAconducted additional drum, soil, and water sampling at the J&GSite. (Stipulated Fact No. 21)

a. Site Conditions

154. There were several structures at the J&G Site in the areawhere the fiberglass products were manufactured, some of themroofed and all of them open to the environment on the sides. Someof the structures in the manufacturing area, including open airsheds, were in poor condition, with roof pieces falling down.(Michael Ferriola Direct testimony; Plaintiff Exh. 13,9p. 7; Plaintiff Exh. 14 (also contained in the AdministrativeRecord, Plaintiff Exh. 134, at tab 2), pp. 2, 3; Plaintiff Exh.191, including pp. 191-3, -4, -5, -48)

155. Raw material drums, including those with hazardous labels,were haphazardly stored. Deteriorated used drums, many leaking,were stored or disposed of in piles or lying on their side.(Plaintiff Exh. 14, p. 4, Plaintiff Exh. 191, Plaintiff Exh.15,10 p. 2)

156. There was one section of the pole barn sheds in themanufacturing area at the Site that had previously been in afire, as evidenced by charred material on the roof. (MichaelFerriola Direct testimony; Plaintiff Exh. 15, p. 2)

b. Site Practices

157. During the April 1999 EPA investigation and samplingactivities, JG-24 employees were using the Site to producefiberglass products such as swimming pools, water tanks, boats,and carriages. (Stipulated Fact No. 22)

158. During manufacturing of fiberglass products, the workerswere spraying styrene resins onto the fiberglass. JG-24 employeeswould punch holes in drums of resin to put the hoses to thesprayers in. The employees would cut into the drum instead of using the bungholes that came with the drum. (Michael MercadoDirect testimony; Michael Ferriola Direct testimony)

159. EPA employee Michael Mercado observed workers in April1999, spraying a blue-colored spray inside of the pools beingmanufactured at the site without protective equipment (MichaelMercado Direct testimony)

160. Employees of JG-24 sometimes did not use protective gear,like face masks, when performing fiberglass manufacturing workbecause they did not like to use them. (Alberto Mendez Depositionexcerpt, p. 142, lines 2-18)

c. Chemicals Used

161. During the April 1999 EPA investigation and samplingactivities, JG-24 was using acetone, styrene resins, and methylethyl ketone (MEK) peroxide in its operations in themanufacturing area at the J&G Site. The MEK peroxide was a CookComposites and Polymers product that came in a solution ofdimethyl phthalate. (Plaintiff Exh. 13, pp. 1, 49; Plaintiff Exh.191, pp. 191-16, -28, -29, -36, -50, Plaintiff Exh. 14, p. 2;Plaintiff Exh. 33, item 33-BO12, p. 1; Michael Ferriola Directtestimony).

162. EPA consulted Material Safety Data Sheets ("MSDSs") andNational Institute for Occupational Safety and Health ("NIOSH")information sheets to determine what kinds of hazards wereassociated with the materials JG-24 was using in its fiberglassproduct manufacturing operations, e.g., acetone, styreneresins, and MEK peroxide. (Michael Ferriola Direct testimony;Plaintiff Exhs. 23-29, 31-32)

163. In addition to the MSDSs reviewed by EPA in April 1999,MSDSs later produced by Defendants' former employee Betsy Ortizand Defendants' expert witness Neftali García also provideinformation on the hazards associated with acetone, styreneresins, and MEK peroxide solutions. The MSDSs indicate that thematerials pose a fire or explosion hazard, as well as anenvironmental hazard. (Plaintiff Exhs. 33, 34)

164. The Material Safety Data Sheet for acetone says thatacetone is "Extremely Flammable. Vapors are heavier than air.Vapors may travel across the ground and reach remote ignitionsources causing a flashback fire danger." (Plaintiff Exh. 33,item 33-B09, BO9, p. 1)

165. The Material Safety Data Sheet for MEK peroxide solutionsays "Keep containers tightly closed and isolate from heat,electrical equipment, sparks and flame. Never use welding orcutting torch on or near drum (even empty) because product (even just residue) can ignite explosively." (Plaintiff Exh. 33, item33-BO12, p. 3)

166. The Material Safety Data Sheet for the Polyester ResinSolution in Styrene "17" says "Flammable in the presence of openflames, sparks, or heat. Can react with oxidizing materials.Explosive in the form of vapor when exposed to heat or flame."(Plaintiff Exh. 33, item 33-BO16, p. 2)

d. Releases and Threatened Releases

167. During the April 1999 EPA investigation and samplingactivities, EPA observed that there were hundreds of used drumsat the Site in various states of deterioration scatteredthroughout the Site, many of which were lying on their sides.Some of them had waste materials leaking onto the ground. Many ofthese drums were open, rusted, crushed, or otherwise not in goodcondition. Many had holes punched in them. Each of the drumsamples were taken from such waste drums. (Michael FerriolaDirect testimony; Plaintiff Exh. 191 (photos); Plaintiff Exh. 13,pp. 2-8, 24-30; Plaintiff Exh. 14, p. 6; Plaintiff Exh.17,11 p. 1)

168. The drums with waste materials in them were not markedwith the date on which each had begun being stored or accumulatedat the J&G Site. (Michael Ferriola Direct testimony)

169. In April 1999, EPA also observed stained soils at variouslocations at the J&G Site, and several of the soil samples weretaken at those locations. (Plaintiff Exh. 13, pp. 31-38;Plaintiff Exh. 14, p. 4)

170. There is a sinkhole at the manufacturing area at the J&GSite that is located in the northeastern part of themanufacturing area. The sinkhole located in the northeastern partof the manufacturing area is about 40 feet deep. (StipulatedFacts No. 12, 23; Mike Ferriola Direct testimony)

171. In April 1999, there were many drums that had been pushedinto the main sinkhole. The drums were piled haphazardly on topof each other and resembled a wall of drums. (Mike FerriolaDirect testimony; Plaintiff Exh. 191 (photos), pp. 191-11, -12)

172. There were no erosion or stormwater management controls inthe manufacturing area. Storm water runoff would flow throughwaste piles and transport waste material on the ground into thesinkhole. Sinkholes are groundwater recharge areas. (Plaintiff Exh. 13, p. 1; Plaintiff Exh. 14, p. 3; Plaintiff Exh.15 (also contained in the Administrative Record, Plaintiff Exh.134, at tab 15), pp. 3, 4; Mike Ferriola Direct testimony)

173. During the April 1999 EPA investigation and samplingactivities, there were strong chemical odors of solvents andresins at the J&G Site. (Plaintiff Exh. 14, p. 5; MichaelFerriola Direct testimony; Michael Mercado Direct testimony)

174. EPA employees Michael Ferriola and Michael Mercado alsotestified that they got headaches from breathing the chemicals inthe air at the Site. (Michael Ferriola Direct testimony; MichaelMercado Direct testimony)

175. In April 1999, neighbors to the North complained to EPAthat there were chemical odors from the J&G Site, depending uponthe wind direction. (Plaintiff Exh. 14, p. 5, and Plaintiff Exh.15, p. 3; Michael Mercado Direct testimony)

176. The neighbors to the North of the J&G Site lived about 1/4to ½ mile away from the J&G Site (in a direct line). (MichaelMercado Redirect testimony; Michael Ferriola testimony)12

e. Sample Results — Superfund Support Team Sampling Report

177. The results of the April 1999 EPA sampling activities atthe J&G Site were reported in the Superfund Contract Support TeamSampling Report for the April 12-19, 1999 sampling. (StipulatedFact No. 24; Plaintiff Exh. 13 (text and some appendices ofPlaintiff Exh. 13 are also contained in the AdministrativeRecord, Plaintiff Exh. 134, at tab 8))

178. The drums sampled during the April 1999 sampling eventcontained RCRA13 hazardous waste because the samples hadflash points of less than 140 degrees Fahrenheit, whichestablishes that the waste is a RCRA hazardous waste for thecharacteristic of ignitability. (Mike Ferriola Direct testimony;Plaintiff Exh. 13, p. 10 and Appendix C pp. EPA 00772-EPA 00776) 179. CERCLA hazardous substances, including acetone andstyrene, were found in drum samples, including some with highlevels. Some of the drum samples taken in April 1999 had over180,000 mg/kg (parts per million) of styrene. One of the drumsamples taken in April 1999 had 4100 mg/kg (parts per million) ofacetone. (Plaintiff Exh. 13, pp. 14-16 (Table 3); MichaelFerriola Direct testimony; Michael Mercado Direct testimony)

180. Dimethyl phthalate and arsenic are also CERCLA hazardoussubstances, as well as acetone, styrene, and MEK peroxide.(40 C.F.R. § 302.4; Michael Mercado Direct testimony;40 C.F.R. § 302.4)

181. CERCLA hazardous substances, including styrene, arsenic,and dimethyl phthalate, were found in soil samples. One of thesoil samples taken in April 1999 had 48,000,000 ug/L (parts perbillion) of styrene, and one of the soil samples taken in April1999 had 1,400,000 ug/L (parts per billion) of styrene.(Plaintiff Exh. 13, pp. 17-19 (Table 4); Michael Mercado Directtestimony; Michael Ferriola Direct testimony)

182. As is standard operating procedure, EPA did not take itssoil samples from the top of the ground surface. Rather, the EPAsampling personnel scraped off the top layer of soil or debrisand took the soil samples from the soils beneath the surface.(Plaintiff Exh. 13, Appendix A (QAPP)'s Appendix I (soil samplingprocedures), p. 6; Michael Mercado Cross testimony).

183. Defendants' expert Neftali Garcia was not present when EPAtook the soil samples. Defendants' expert Neftali Garcia'spostulation that the high styrene levels found in some of the"soil samples" were the result of sampling gelled material thathad leaked out of the drum onto the ground surface, rather thanactual soils, has no basis and is erroneous. (Neftali GarciaDirect testimony)

184. Many of the soil samples taken in April 1999 had dimethylphthalate in them. Dimethyl phthalate was a major ingredient inthe MEK peroxide solution used at the J&G Site. No dimethylphthalate was present in the soil background sample. (PlaintiffExh. 13, pp. 10, 17-19, 49; Plaintiff Exh. 33, item 33-BO18, p.1; Michael Mercado Direct testimony)

185. Paints sometimes include metals for pigmentation. (MichaelMercado Direct testimony)

186. While EPA decided that one background soil sample wassufficient for the April 1999 soil sampling at the J&G Site, EPAdid not attribute inorganic compounds, such as arsenic or othermetallic inorganic compounds, found in the samples of soils at the Site tothe JG-24 operations at the Site unless the levels found were atleast 3 times the level found in the soil background sample.(Plaintiff Exh. 13, p. 10; Michael Mercado Cross testimony)

187. The National Contingency Plan (NCP) does not specify thenumber of background soil samples to be taken. EPA's decisionthat one background soil sample was sufficient for the April 1999soil sampling at the J&G Site was not inconsistent with theNational Contingency Plan.14 (40 C.F.R. Part 300)

188. Several of the soil samples had arsenic levels greaterthan 3 times the level in the soil background sample. One of thelocations where a soil sample that had high levels of arsenic wastaken was visibly stained with pigments from the JG-24 fiberglassproduct manufacturing operations. (Michael Mercado Directtestimony; Plaintiff Exh. 13, pp. 10, 17-19, 38)

f. Soil Boring Results

189. In addition to investigating the lateral extent ofcontamination at the Site by taking drum and soil samples atvarious locations in the manufacturing area, EPA also undertooksome investigation of the vertical extent of contamination usinggeoprobe techniques in April 1999. (Plaintiff Exh. 1615and 17)

190. EPA, through its Weston contractor, collected samples fromsoils in the sinkhole areas at the J&G Site using geoprobe coringrods and monitored the air in the boreholes from which the coreswere extracted. This work is described in a trip report datedApril 28, 1999, regarding "Soil Sampling at the J&G 24Corporation site," and in an Analytical Report, J&G CorporationSite, dated May 1999, both prepared by Weston for EPA. (PlaintiffExh. 16 and 17; Stipulated Fact No. 25)

191. Laboratory results of soil core samples showed thatacetone was detected in soils taken at 11.5 feet deep and 6 feetdeep. Using field screening devices, organic vapors were alsodetected in the air in the boreholes from which cores wereextracted in the main sinkhole at various depths. The organicvapors detected included acetone and styrene. (Plaintiff Exh. 16,pp. 00013 and 00017; Plaintiff Exh. 17, Table 1 (pp. EPA 01423-EPA01424))

g. Attempt to Sample Local Groundwater

192. In addition, in April 1999, EPA also tried to take samplesfrom local groundwater wells, but found out from local neighborsthat almost all of the neighbors obtained their water from PRASA(Puerto Rico Water Authority) and not from local groundwater,except for a tree nursery whose well was not functional at thetime. (Plaintiff Exh. 14, p. 5; Michael Mercado Direct testimony)

193. Based on the facts stated above, there were releases andthreatened releases of CERCLA hazardous substances into theenvironment at the J&G Site.

6. Decision to Conduct Removal Action

194. After evaluation of the results of the April 1999 samplingand investigatory activities, EPA determined that there werereleases and threats of releases of CERCLA hazardous substancesat and from the J&G Site, including a leaking of hazardoussubstances into the soil with the potential to leach into theunderlying groundwater aquifer through the on-site sinkhole,airborne releases of organic solvents containing hazardoussubstances, and a fire and explosion hazard. Therefore, EPAdetermined that a removal action at the Site was appropriate,including the excavation, characterization, and off-sitetransportation and disposal of the drums and underlying soils, asdocumented in the Action Memorandum for the removal action whichwas approved at EPA on September 30, 1999. (Plaintiff Exh. 15(also contained in the Administrative Record, Plaintiff Exh. 134,at tab 15))

195. As shown in the Action Memorandum, EPA considered therelevant factors specified in the removal action portion of theNational Contingency Plan, 40 C.F.R. § 300.415(b)(2). EPAdetermined that seven (7) of the factors referred to in the NCPwere applicable to the J&G Site based on facts summarized in theAction Memorandum, and thus that a removal action wasappropriate. (Plaintiff Exh. 15, pp. 7-9; Michael Ferriola Directtestimony)

196. As set forth in the Action Memorandum, EPA selected aremoval action that included the excavation and characterizationof the drums at the Site and the off-Site transportation anddisposal of hazardous wastes and substances. Removal of drums,barrels, tanks, or other bulk containers that contain or maycontain hazardous substances is a standard type of removal actionunder the NCP, 40 C.F.R. § 300.415(e)(7). (Plaintiff Exh. 15, pp.10-11)

197. Bioremediation, referred to by Defendants' expert NeftaliGarcia, is not listed in the list of standard types of removalactions under the NCP, 40 C.F.R. § 300.415(e).

198. Defendants' expert Neftali Garcia said that, under certaincircumstances, releases of acetone or styrene can cause a fire orexplosion hazard. He agreed that, under certain conditions, evenan empty container of acetone with some residue in it couldexplode. (Neftali Garcia Cross Testimony)

199. Causing a fire or explosion hazard can imperil people andthe environment. (Stipulated Fact No. 34)

200. Defendants' expert Neftali Garcia opined that there was alow risk of fire at the J&G Site because it was not a "confinedarea." The Material Safety Data Sheets for acetone, polyesterresin solution in styrene, and MEK peroxide state that thesechemicals pose a threat of fire and explosion. They do not statethat these chemicals only pose a threat of fire or explosion in"confined areas." Defendants' expert Neftali Garcia's opinion isalso contradicted by the evidence that there had already been afire in a portion of the metal pole barn sheds at the J&G Sitebefore EPA's sampling investigation in April 1999. (NeftaliGarcia Direct testimony; Plaintiff Exh. 33, items B09, B012, andB016; Michael Ferriola Direct testimony)

201. Based on the facts set forth above, EPA's determination toconduct a removal action at the J&G Site, including theexcavation and characterization of the drums at the Site and theoff-Site transportation and disposal of hazardous wastes andsubstances, was not arbitrary or capricious and was notinconsistent with the NCP.

7. March 2000 Overflight

202. In March 2000, in order to determine if conditions hadchanged at the J&G Site, EPA OSC Michael Ferriola arranged for anoverflight because of the problems that had been previouslyexperienced in obtaining access to the Site. (Michael FerriolaDirect testimony; Plaintiff Exh. 192)

203. During the March 2000 fly over, EPA OSC Michael Ferriolaobserved that there were many more drums stored at the J&G Sitethan had been observed during the April 1999 investigation andsampling activities. (Stipulated Fact No. 26) 204. During the March 2000 fly over, EPA OSC Michael Ferriolaalso observed individuals at the J&G Site unloading 55 gallondrums from a flatbed truck directly into a sinkhole at the Site.Then, as the March 2000 fly over continued and workers looked up,EPA OSC Michael Ferriola observed individuals that had unloadedthe drums into the sinkhole proceeding to remove the drums fromthe sinkhole and load them back onto the flatbed truck. (MichaelFerriola Direct testimony)

8. May/June 2000 Inspection

205. On or about April 19, 2000, the United States filed theoriginal Complaint in this case, seeking access to the J&G Sitefor the removal action and determining the need for and selectingany additional response actions, and on May 4, 2000 (entered onMay 9, 2000), this Court issued an order granting the UnitedStates' motion for an immediate order in aid of access to the J&GSite. (Stipulated Fact Nos 27 and 28)

206. After the May 4, 2000 Order of this Court, providing foraccess to the J&G Site, EPA On Scene Coordinator Michael Ferriolavisited the J&G Site on May 31, 2000 and June 1, 2000.(Stipulated Fact No. 29)

207. In that visit, he observed that the several hundred drumsthat he had previously observed within and around the sinkholeappeared to have been crushed, moved, and/or buried within thearea that previously comprised the sinkhole. The vegetation onone side of the sinkhole was no longer there. He also observedthat there were several areas where burning of drums and wasteshad taken place. The areas were still smoldering and there werevapors coming off which emitted chemical odors. (Michael FerriolaDirect testimony; Plaintiff Exh. 193, e.g. pp. 193-4, -5, -7,-8, -11, -12 -20, -23, -25, -32).

208. Defendants' expert Neftali Garcia testified that openburning of polymerized styrene will result in releases ofstyrene. (Neftali Garcia Cross testimony)

209. Following the EPA On Scene Coordinator's observations atthe J&G Site on May 31, 2000 and June 1, 2000, the United Statessought further assistance from the Court through a motion seekinga revised order in aid of access to require the owners andoperators to cease and desist from operations and activities atthe J&G Site. (Stipulated Fact No. 30)

9. Access and Cease and Desist Stipulation

210. A hearing on the United States' motion for a revised orderin aid of access was set for August 30, 2000. In lieu of the hearing, the parties entered into a Stipulation dated August 30,2000, approved by the Court, which enjoined Defendants JorgeOrtiz and JG-24, Inc. from moving around soils, crushing and/orburying drums, and burning waste at the J&G Site. The Stipulationalso specified that EPA would have access to the J&G Site for theremoval action through August 30, 2001. (Stipulated Fact No. 31)

211. Access for the EPA removal action, along with theinjunction requiring Defendants to cease moving around soils,crushing and/or burying drums, and burning waste, was laterextended to December 31, 2001, by Order of the Court dated August15, 2001. (Stipulated Fact No. 32)

10. RCRA Violations

212. Acetone and styrene each have a flashpoint of under 140degrees Fahrenheit. Wastes with a flashpoint of under 140 degreesFahrenheit are RCRA hazardous wastes. (Stipulated Fact Nos. 124,125)

213. As a result of JG-24's manufacturing operations, wasteswere generated at the J&G Site, including RCRA hazardous wastes.(Plaintiff Exh. 13, pp. 2-10; Plaintiff Exh. 14, p. 7; PlaintiffExh. 15, pp. 2, 5; Michael Ferriola Direct testimony)

214. Deteriorated, open drums containing RCRA hazardous wasteswere stored or disposed of at the J&G Site. JG-24 employees letleftover resins with ignitable materials in drums with holesvolatilize at the J&G Site. (Plaintiff Exh. 13, pp. 2-10 andTable 3; Plaintiff Exh. 14, pp. 5-6; Plaintiff Exh. 15, pp. 2-3)

215. There was evidence that drums with flammable chemicalwastes were burned at the J&G Site during Defendants' period ofoperations at the J&G Site, including in May-June 2000 and August2000. (Michael Ferriola Direct testimony)

216. Drums were buried and partially buried at the J&G Site,some with labels showing they were of the same type of drums usedin the JG-24 fiberglass product manufacturing operations. Laterexcavation showed that drums with RCRA hazardous wastes had beenburied at the J&G Site. (Plaintiff Exhs. 13, 14, 46, 47, 48, 50;Michael Ferriola Direct testimony)

217. Under RCRA, EPA is the implementing agency for facilitiesin the Commonwealth of Puerto Rico. (66 Fed. Reg. 27257)

218. Under the RCRA regulations, owners and operators of anyfacility at which RCRA hazardous wastes are treated, stored, ordisposed must obtain a RCRA facility identification number.Neither JG-24 nor Jorge Ortiz obtained an RCRA facility identification numberfrom EPA for the J&G Site, and the J&G site does not have and hasnot had a RCRA generator or treatment, storage, or disposalfacility identification number. (Eduardo Gonzalez Directtestimony; 40 C.F.R. § 262.12, 264.11)

219. The purpose of the RCRA facility identification numberrequirement is to assist in achieving one of the objectives ofRCRA, which is to provide from beginning to end management ofhazardous wastes in order to prevent harm to human health and theenvironment. (Philip Flax Direct testimony)

220. Under the RCRA regulations and statute, owners andoperators of facilities that treat, store, or dispose of RCRAhazardous wastes must obtain a RCRA permit. Neither JG-24 norJorge Ortiz obtained a RCRA permit allowing for the treatment,storage, or disposal of RCRA hazardous wastes at the J&G Site,and the J&G Site does not have and has not had a permit for thetreatment, storage or disposal of hazardous waste under RCRA.(Eduardo Gonzalez Direct testimony; 40 C.F.R. Part 270 and RCRASection 3005)

221. Failure to obtain an RCRA permit is a serious violation asthe purpose of the permitting process is to assure that nohazardous wastes are treated, stored or disposed of unless theywill be adequately managed to avoid adverse effects on the publicand the environment. (Eduardo Gonzalez Direct testimony; PhilipFlax Direct testimony)

222. Under the RCRA regulations, owners and operators offacilities that treat, store, or dispose of RCRA hazardous wastesare required to submit biennial reports to EPA. Neither JG-24 orJorge Ortiz submitted biennial reports for the J&G Site to EPA,as there is no record of any biennial reports having beensubmitted for the J&G Site at EPA, and there were also none atthe Puerto Rico Environmental Quality Board ("EQB"). (EduardoGonzalez Direct testimony; 40 C.F.R. § 264.75)

223. Under the RCRA regulations, owners and operators offacilities that treat, store, or dispose of RCRA hazardous wastesare required to assure that: (1) whenever a container which hashazardous waste is severely rusting, has an apparent structuraldefect, or is beginning to leak, the hazardous waste istransferred to a sound container, and (2) containers withhazardous waste are always kept closed, except when necessary toadd or remove waste. JG-24 and Jorge Ortiz did not follow thesepractices as there were numerous drums that were rusting,defective, and/or leaking at the Site, some of which containedRCRA hazardous wastes, and many of the drums were open, includingones that had RCRA hazardous wastes. (Michael Ferriola Direct testimony, Plaintiff Exhs. 13, 14, and 15;40 C.F.R. § 264, Subpart I)

224. Under the RCRA regulations, owners and operators offacilities where RCRA hazardous wastes are being landfilled,i.e., buried, are required to provide a liner and leachatecollection and removal system. JG-24 and Jorge Ortiz did notprovide a liner and leachate collection and removal system inconnection with their land disposal of drums, some of whichcontained RCRA hazardous wastes. (Michael Ferriola Directtestimony; Plaintiffs' Exhibits 46-50; 40 C.F.R. § 264, Subpart N)

225. Under the RCRA regulations, owners and operators offacilities where RCRA hazardous wastes are treated, stored, ordisposed of, are required to prevent the unknowing entry oflivestock into such facilities to prevent physical contact withor disturbance of waste. JG-24 and Jorge Ortiz did not preventthe unknowing entry of livestock into the manufacturing area atthe J&G Site where drums, some of which contained RCRA hazardouswastes, were being stored or disposed of, as livestock could beseen grazing in the area and there were cattle droppings in thearea. (Michael Ferriola Direct testimony; Plaintiff Exh. 192,e.g. pp. 192-21, -22, -43, -53; 40 C.F.R. § 264.14)

226. Under the RCRA regulations, owners and operators offacilities where RCRA ignitable hazardous wastes are treated,stored, or disposed of are required to prevent accidentalignition of ignitable materials, including the requirement ofconspicuously placing "No Smoking" signs. JG-24 and Jorge Ortizdid not comply with this requirement as there were no "NoSmoking" signs conspicuously placed in the manufacturing area atthe Site. (Michael Ferriola Direct testimony; 40 C.F.R. § 264.17)

227. Under the RCRA regulations, in order to allow access in anemergency, owners and operators of facilities where RCRAhazardous wastes are treated, stored, or disposed of are requiredto maintain adequate aisle space between storage containers. TheJ&G Site was not in compliance with this requirement. (MichaelFerriola Direct testimony; 40 C.F.R. § 264.35)

228. Under the RCRA regulations, owners and operators offacilities where RCRA hazardous wastes are treated, stored, ordisposed of are required to maintain liability insurance forbodily injury or property damage to third parties caused bysudden or nonsudden accidental occurrences arising from theoperations at the facility. Neither JG-24 nor Jorge Ortiz had orhave liability insurance for the J&G Site. They did not havecasualty, general liability, or excess insurance for the J&GSite. (Stipulated Fact Nos. 33, 108; 40 C.F.R. § 264.147 (a), (b)) 229. There was ongoing storage or disposal of RCRA hazardouswastes by the Defendants without an RCRA permit and withoutliability insurance, as well as other RCRA violations, as of atleast April 14, 1999. This storage or disposal of RCRA hazardouswastes by the Defendants without a permit and without insurance,as well as other RCRA violations, continued through at leastAugust 30, 2000, when the access and cease and desist Stipulationwas signed and JG-24 ceased manufacturing operations at the Site.The ongoing storage and disposal is confirmed by the fact thatRCRA hazardous waste was found in drums collected and excavatedby EPA during the removal action. The period from April 1999through August 2000 constitutes approximately 500 days of RCRAviolations.

11. Removal Action

230. Following a period in which Defendants Jorge Ortiz andJG-24, Inc. removed equipment and other material used in theiroperations, EPA's mobilization for the removal action at the J&GSite began on October 10, 2000. Mobilization activities includedrepair of the access road, installing an equipment fence, set-upof trailers, and installation and activation of electric servicefor the office trailers. (Michael Ferriola Direct testimony)

231. After the mobilization, EPA conducted a clean-out of themetal pole barn structures and other building structures and afloor scrape to remove gross build up of styrene resin and otherwaste fiberglass materials at the J&G Site. (Michael FerriolaDirect testimony)

232. During the removal action at the J&G Site, EPA stockpiledcontaminated soil and debris for characterization for off-sitedisposal. Approximately 700 cubic yards of this material wasshipped to the BFI landfill in Ponce. These materials containedCERCLA hazardous substances, such as styrene, although they werenot RCRA hazardous wastes. (Michael Ferriola Direct, Cross, andRedirect testimony; Plaintiff Exh. 45, e.g. pp. EPA06978 — EPA06979)

233. During the removal action at the J&G Site, EPA collectedseveral hundred drums in a surficial drum collection. Some of thedrums contained styrene type materials. (Michael Ferriola Directtestimony)

234. During the clean-out of the metal pole barn structures andother buildings at the J&G Site, EPA discovered that drums hadbeen buried within the earthen floors of these structures andbetween the various terraced levels. (Michael Ferriola Directtestimony) 235. In order to identify the extent of the buried drum areas,EPA arranged for the conduct of geophysical survey work at theJ&G Site. To minimize interferences from metal during the conductof the geophysical survey and to remove exposed drums andpartially buried drums, EPA removed the metal pole barnstructures at the J&G Site. During the conduct of the geophysicalsurvey at the J&G Site, a total of six anomalies indicating thelikely presence of buried drums were identified. (MichaelFerriola Direct testimony; Stipulated Fact Nos. 35, 36)

236. EPA conducted the excavation of the six anomalies at theJ&G Site in May and June 2001 and the sinkhole area at that Sitein July and August 2001. (Stipulated Fact No. 37)

237. During the removal action, a total of approximately 2500drums were excavated during the removal action at the J&G Site.(Michael Ferriola Direct testimony)

238. Many of the drums unearthed during the removal action atthe J&G Site had been severely burned, charred, broken, crushed,rusted, and/or had holes in them. (Michael Ferriola Directtestimony)

239. The empty drum carcasses, along with other scrap metal(such as from the dismantling of the pole barn structures), wererecycled as scrap metal through Scorpio Recycling. Scorpiocharged only for the transportation of the rolloff containers inwhich the scrap metal was placed. The cost of the transportationwas $200 per load for 22 rolloff loads, or $4400. (MichaelFerriola Cross testimony). However, under the Court'squestioning, Mr. Ferriola acknowledged that the drums werenon-hazardous material and that the drums were not required to beremoved but that it was to make the area "look neat".Consequently, the cost of $4,400 is disallowed. (Michael Ferriolatestimony)

240. Numerous drums unearthed during the removal action at theJ&G Site exhibited elevated readings on air monitoring equipment,the Foxboro total vapor analyzer (TVA 1000), indicating thepresence of solvent vapors. (Michael Ferriola Direct testimony)

241. EPA placed drums containing waste materials that werecollected or excavated at the J&G Site during the removal actioninto a drum storage area. (Michael Ferriola Direct testimony)

242. Solid and liquid flammable wastes from the drums collectedand excavated at the J&G Site during the removal action wereshipped off-site under the DOO1 waste code (RCRA ignitablehazardous waste code) to an incinerator that was licensed toincinerate RCRA hazardous wastes. (Michael Ferriola Directtestimony) 243. Approximately 100 drums excavated and collected at the J&GSite had RCRA hazardous waste materials in them that had to beshipped off-site for proper disposal through licensedincineration. (Michael Ferriola Cross testimony)

12. Groundwater Monitoring

244. EPA conducted the installation of four groundwatermonitoring wells in proximity to the sinkhole area at the J&GSite in August 2001. (Michael Ferriola Direct testimony)

245. Following removal of the buried drums, EPA conducted threegroundwater sampling events at the J&G Site. The first event wasin the week starting October 29, 2001; the second event was inthe week of March 11, 2002; and the third event was in the weekof July 22, 2002. (Michael Ferriola Direct testimony; MichaelMercado Direct testimony; Plaintiff Exhs. 83, 84, and 87)

246. Groundwater monitoring is conducted after source removalto see if removal of the source is sufficient to protect thegroundwater or whether additional long term groundwatermonitoring and remediation is necessary. In the first groundwatersampling event, acetone was detected in the groundwater. In thesecond groundwater sampling event, acetone was again detected inthe groundwater, but at lower concentrations. In the thirdgroundwater sampling event, acetone was detected again, but atstill lower levels. EPA concluded that the groundwater wasimproving after the removal of the drums and no further actionwas needed to remediate groundwater. (Michael Mercado Directtestimony; Plaintiff Exh. 83, pp. 10-12, Plaintiff Exh. 84, pp.5-11; and Exhibit 87, pp. 6-10, especially p. 6)

13. Costs

247. EPA has expended Superfund monies to pay variousgovernmental response costs associated with the J&G Site in VegaAlta, Puerto Rico. (Stipulated Fact No. 38)

248. The Financial Services Section of EPA generates reportsregarding the amount of response costs incurred at a Superfundsite using a computer program known as the Superfund CostRecovery Package Imaging and On-Line System ("SCORPIOS"). Thereports generated using this computer system are known as"SCORPIOS Reports." (Stipulated Fact No. 39)

249. The SCORPIOS Reports for an individual Superfund sitecontain a listing of each response cost incurred and paidregarding that site. The costs listed in the SCORPIOS Reports aredocumented by the cost documentation package prepared by the FinancialManagement Branch. These site-specific costs are organized intocategories such as EPA payroll, travel, and contractual costsassociated with response actions. This information is containedin EPA's accounting system. (Jo-Ann Velez Direct testimony;Plaintiff Exhs. 159, 160, 161, and 162)

250. EPA has incurred costs in connection with response actionsat the J&G Site for labor of EPA personnel, travel by EPApersonnel, and EPA indirect costs. These costs are detailed insite-specific payroll reports, site-specific travel reports, andindirect cost reports. Some of these costs were incurred forlabor of employees of EPA's Regional offices in Edison, NewJersey, New York, and Puerto Rico, and some were incurred forlabor of EPA's headquarters employees in Washington, D.C. (Jo-AnnVelez Direct testimony)

251. EPA requires a number of controls to ensure the accuracyof the labor hours billed by its employees, includingcertification by each employee of time sheets and review by EPAsupervisors. (Jo-Ann Velez Direct testimony)

252. EPA also incurred costs at the J&G Site for responseactions performed by persons other than EPA employees, such ascontractors. These costs were incurred by EPA through agreementswith individual contractors. (Stipulated Fact No. 40)

253. EPA expenditures for contractor services are documented bycontract vouchers/invoices, which are issued periodically by acontractor for work charged under the contract for that timeperiod. (Stipulated Fact No. 41)

254. The U.S. Treasury then makes the payments to thecontractor for the services they provide to EPA on responseactions, which is business to the contractor. (Stipulated FactNo. 42)

255. EPA requires a number of controls to ensure the accuracyof costs billed by its contractors, including requiring theapproval of a contract or project officer. (Jo-Ann Velez Directtestimony; Charles Young Direct testimony)

256. For most of EPA's contractors, in addition to thesite-specific charge, there is an annual allocation rate appliedto the site-specific charge. This annual allocation rate coversnon-site specific contractor costs. These non-site specificcosts, which are reflected in the contractor's annual allocationrates, are allocated to sites proportionally and included in theamounts paid to the contractors. (Stipulated Fact Nos. 43, 44,and Charles Young Direct testimony) 257. The first SCORPIOS Report for the J&G Site is based on theinformation contained in the underlying cost documentationmaintained by EPA for the J&G Site and accurately reflects costsincurred and paid by EPA in connection with the J&G Site betweenJune 7, 1998 and June 15, 2002 which had been documented as of8/12/02. (Jo-Ann Velez Direct testimony; Exhibits 159 and 160)

258. The supplemental SCORPIOS Report for the J&G Site is basedon the information contained in the underlying cost documentationmaintained by EPA for the J&G Site and accurately reflects costsincurred and paid by EPA in connection with the J&G Site betweenJune 16, 2002 and September 30, 2003, as well as some earliercosts incurred and paid by EPA for the J&G Site which had notbeen documented in the first J&G SCORPIOS package. (Jo-Ann VelezDirect testimony; Exhibits 161 and 162)

259. EPA has not been reimbursed by anyone for the costs it hasincurred for response activities relating to the J&G Site.(Jo-Ann Velez Direct testimony)

260. EPA personnel performed work relating to the J&G Site,including conducting the site assessment, removal evaluation,removal action, and groundwater monitoring activities, andperforming associated efforts to obtain access and cost recovery.(Michael Ferriola Direct testimony; Jo-Ann Velez Directtestimony)

261. EPA has incurred at least $165,131.04 in Regional PayrollCosts relating to the J&G Site, including $140,916.02 documentedin the 1st J&G SCORPIOS report and package and $24,215.02documented in the 2nd SCORPIOS report and package. (Jo-AnnVelez Direct testimony; Plaintiff Exhs. 159-162)

262. EPA has incurred at least $25,255.62 in HeadquartersPayroll Costs relating to the J&G Site, including $20,073.56documented in the 1st J&G SCORPIOS report and package and$5,182.06 documented in the 2nd SCORPIOS report and package.(Jo-Ann Velez Direct testimony; Plaintiff Exhs. 159-162)

263. EPA has incurred at least $89,967.29 in Regional TravelCosts relating to the J&G Site, including $82,564.05 documentedin the 1st J&G SCORPIOS report and package and $7,403.24documented in the 2nd SCORPIOS report and package. (Jo-AnnVelez Direct testimony; Plaintiff Exhs. 159-162)

264. EPA has incurred at least $20,330.98 in Headquarterstravel costs relating to the J&G Site, including $15,932.78documented in the 1st J&G SCORPIOS report and package and$4,398.20 documented in the 2nd SCORPIOS report and package.(Jo-Ann Velez Direct testimony; Plaintiff Exhs. 159-162) 265. WRS Infrastructure and Environment, Inc. ("WRS") wasemployed by EPA under an Emergency and Rapid Response Service("ERRS") contract to perform removal response activities at theSite. These activities included mobilization for the removalaction, clean up of metal pole barn structures, surficial drumcollection, excavation of buried drums, and transportation andoff-site disposal of hazardous wastes and substances. (MichaelFerriola Direct testimony; Plaintiff Exhs. 159, 161; Jo-Ann VelezDirect testimony)

266. EPA has paid at least $830,444.38 to WRS for its workunder ERRS contract No. 68-S2-9906 relating to the J&G Site,including $813,536.87 documented in the 1st J&G SCORPIOSreport and package and $16,907.51 documented in the 2ndSCORPIOS report and package. (Jo-Ann Velez Direct testimony;Plaintiff Exhs. 159-162)

267. Lockheed Environmental Systems & Technologies was employedby EPA under an Environmental Monitoring Systems Laboratory("EMSL") contract for aerial photographs of the J&G Site in 1999.(Stipulated Fact No. 46)

268. EPA has paid at least $510.95 to Lockheed EnvironmentalSystems & Technologies for its work under EMSL contract No.68-C5-0065 relating to the J&G Site. (Jo-Ann Velez Directtestimony; Plaintiff Exh. 159)

269. Lockheed Environmental Systems & Technologies was employedby EPA under an Environmental Services Assistance Teams ("ESAT")contract to analyze drum samples collected at the J&G Site in1999 and to perform data validation regarding drum, water andsoil samples collected there in 1999. (Stipulated Fact No. 47)

270. EPA has paid at least $33,997.37 to Lockheed EnvironmentalSystems & Technologies for its work under ESAT contract No.68-D6-0002 relating to the J&G Site. (Jo-Ann Velez Directtestimony; Plaintiff Exh. 159)

271. Lockheed Martin Services, Inc. was employed by EPA underESAT contract No. 68-W0-1016 to analyze groundwater samplescollected from the four groundwater monitoring wells at the J&GSite following the removal action. (Michael Ferriola Directtestimony; Plaintiff Exhs. 159, 161; Jo-Ann Velez Directtestimony)

272. EPA has paid at least $56,129.54 to Lockheed MartinServices, Inc. for its work under ESAT contract No. 68-W0-1016relating to the J&G Site, including $26,690.77 documented in the1st J&G SCORPIOS report and package and $29,438.77 documentedin the 2nd SCORPIOS report and package. (Jo-Ann Velez Directtestimony; Plaintiff Exhs. 159-162) 273. Lockheed Martin Services, Inc. was employed by EPA undercontract No. 68-C9-9223 to conduct the geophysical survey work,installation of groundwater monitoring wells, and closure ofgroundwater monitoring wells at the J&G Site. (Michael FerriolaDirect testimony; Jo-Ann Velez Direct testimony)

274. EPA has paid at least $283,043.36 to Lockheed MartinServices, Inc. for its work under Contract No. 68-C9-9223relating to the J&G Site, including $264,708.48 documented in the1st J&G SCORPIOS report and package and $18,334.88 documentedin the 2nd SCORPIOS report and package. (Jo-Ann Velez Directtestimony; Plaintiff Exhs. 159-162)

275. GRB Environmental Services, Inc. was employed by EPA undercontract No. 68-S2-0017 for organizing and filing of documentsregarding the J&G Site. (Stipulated Fact No. 48)

276. EPA has paid at least $8,006.65 to GRB EnvironmentalServices, Inc. for its work under Contract No. 68-S2-0117relating to the J&G Site, including $920.25 documented in the1st J&G SCORPIOS report and package and $7,086.40 documentedin the 2nd SCORPIOS report and package. (Jo-Ann Velez Directtestimony; Plaintiff Exhs. 159-162)

277. Roy F. Weston, Inc. was employed by EPA under a Response,Engineering & Analytical Contract ("REAC") contract to conductsinkhole sampling and analysis at the J&G Site in April 1999.(Stipulated Fact No. 49)

278. EPA has paid at least $15,350.77 to Roy F. Weston, Inc.for its work under REAC contract No. 68-C4-0022 relating to theJ&G Site. (Jo-Ann Velez Direct testimony; Plaintiff Exh. 159)

279. Roy F. Weston, Inc. was employed by EPA under SuperfundTech Assessment and Response Team ("START") contracts to providetechnical assistance to EPA at the J&G Site in performance ofremoval site assessment activities, the removal action, andpost-removal action activities, including inspection of drums andair monitoring, sampling of liquids and solids, providingphoto-documentation of site activities, health and safetymonitoring, and administrative record compilation. Prior toAugust 2000, this work was performed by Roy F. Weston, Inc. underSTART contract No. 68-W5-0019, and beginning in August 2000, thiswork was performed by Roy F. Weston, Inc. under START contractNo. 68-W0-0113. (Stipulated Fact No. 50)

280. EPA has paid at least $60,218.90 to Roy F. Weston, Inc.for its work under START contract No. 68-W5-0019 relating to theJ&G Site. (Jo-Ann Velez Direct testimony; Plaintiff Exhs. 159) 281. EPA has paid at least $235,754.78 to Roy F. Weston, Inc.for its work under START contract No. 68-W0-0113 work relating tothe J&G Site, including $211,983.34 documented in the 1st J&GSCORPIOS report and package and $23,771.44 documented in the2nd SCORPIOS report and package. (Jo-Ann Velez Directtestimony; Plaintiff Exhs. 159-162)

282. EPA utilized the Contract Laboratory Program (CLP) for theanalyses of surficial water and soil samples collected at the J&GSite during the removal site assessment in 1999. DynCorp, Inc.managed the samples for the Contract Laboratory Program, and thesamples were analyzed by Southwest Laboratory of Oklahoma, Inc.,and Sentinel, Inc. (Stipulated Fact No. 51)

283. EPA has paid at least $37,657.44 for CLP costs for workrelating to the J&G Site, including $37,577.89 documented in the1st J&G SCORPIOS report and package and $79.55 documented inthe 2nd SCORPIOS report and package. (Jo-Ann Velez Directtestimony; Plaintiff Exhs. 159-162)

284. The United States Coast Guard provided technicalassistance to EPA at the J&G Site, pursuant to InteragencyAgreement DW69941665, during the performance of the removalaction, including inspection of drums, air monitoring, samplingof liquids and solids, providing photo-documentation of siteactivities, and health and safety monitoring. (Stipulated FactNo. 52)

285. EPA has paid at least $82,764.96 to the United StatesCoast Guard for its work under Interagency Agreement DW69941665relating to the J&G Site. (Jo-Ann Velez Direct testimony;Plaintiff Exh. 161)

286. EPA has paid at least $1,944,564.03 in direct costsrelating to the J&G Site, including EPA personnel and travelcosts and contractor costs, including $1,724,982.00 documented inthe 1st J&G SCORPIOS report and package and $219,582.03documented in the 2nd SCORPIOS report and package. (PlaintiffExhs. 159-162)

287. EPA's indirect costs are calculated for each Superfundsite. EPA's indirect costs are EPA costs necessary to operate theSuperfund program but which are not directly attributable tospecific sites. They support site-specific cleanup efforts. EPA'sindirect costs include such expenses as overall programmanagement, administrative support, rent, utilities, and employeefringe benefits. (Stipulated Fact Nos. 45, 53; Charles YoungDirect testimony) 288. The process of allocating or distributing indirect coststo the Superfund program is accomplished through an indirect costmethodology prepared by EPA. (Stipulated Fact No. 54)

289. The Federal Financial Management Improvement Act requiresfederal agencies to comply with published Federal AccountingStandards in their activities. One such standard is the Office ofManagement and Budget's Statement of Federal Financial AccountingStandard #4, "Managerial Cost Accounting Concepts and Standardsfor the Federal Government" (SFFAS #4). (Stipulated Fact No. 55)

290. EPA has implemented a full-cost indirect cost methodologyto comply with SFFAS #4, as mandated by the Federal FinancialManagement Improvement Act. Both KPMG and GAO concluded thatEPA's indirect cost methodology is in compliance with SFFAS #4.(Charles Young Direct testimony)

291. Pursuant to that full-cost indirect cost methodology, EPAhas identified the indirect costs associated with the Superfundprogram and has developed full-cost indirect cost rates in orderto allocate those costs to particular Superfund Sites within eachEPA Region. (Stipulated Fact No. 56)

292. Indirect cost rates applicable to the J&G Site, beginningin Fiscal Year 1999, were computed in accordance with EPA'sfull-cost indirect cost methodology, and are as follows: FY 1998 (10/1/97-9/30/98): 28.97% FY 1999 (10/1/98-9/30/99): 28.32% FY 2000 (10/1/99-9/30/00): 23.46% FY 2001 (10/1/00-9/30/01): 28.18% FY 2002 (10/1/01-9/30/02): 28.18% FY 2003 (10/1/02-9/30/03): 28.18%

(Stipulated Fact No. 57; Plaintiff Exh. 159; Charles YoungDirect testimony)

293. EPA followed standard cost accounting practices indeveloping its full-cost indirect cost rates. For example, EPAcalculated indirect cost rates by fiscal year for each EPARegion. Computing indirect cost rates by fiscal year is agenerally accepted practice. (Stipulated Fact No. 58; CharlesYoung Direct testimony)

294. EPA's full-cost indirect cost methodology has beenreviewed and deemed acceptable by the international accountingfirm of KPMG and by the General Accounting Office (GAO).(Stipulated Fact No. 59; Charles Young Direct testimony) 295. In developing EPA's full-cost indirect cost methodology,EPA identified its direct costs, its indirect costs, and a mannerto distribute the indirect costs to the direct costs. (StipulatedFact No. 60)

296. Indirect costs are allocated among the individualSuperfund sites. To determine the indirect costs associated withany particular Superfund site, each region identifies the direct,or site-specific, costs EPA incurred at a particular Superfundsite each fiscal year, and multiplies the appropriate indirectcost rate for that fiscal year by the direct costs for that site.The product is the amount of indirect costs allocated to thatsite — equivalent to that site's proportionate share of theprogram's supporting costs. Adding together the direct(site-specific) costs and the indirect costs results in the fullcosts to EPA of the response action at that site. (StipulatedFact No. 61)

297. EPA incurred at least $546,381.19 in indirect costs forthe J&G Site between June 7, 1998 and September 30, 2003,including $484,502.96 documented in the 1st J&G SCORPIOSreport and package and $61,878.23 documented in the 2ndSCORPIOS report and package. (Jo-Ann Velez Direct testimony;Plaintiff Exhs. 159-162)

298. Between 06/07/1998 through 09/30/2003, EPA incurred atleast $2,490,945.22 in total direct and indirect costs for theresponse activities relating to the J&G Site, including$2,209,484.96 documented in the 1st J&G SCORPIOS report andpackage and $281,460.26 documented in the 2nd SCORPIOS reportand package. (Jo-Ann Velez Direct testimony; Plaintiff Exh. 163)

299. The SCORPIOS Reports for the J&G Site does not include EPAcosts incurred prior to June 7, 1998 or after September 30, 2003,relating to the J&G Site. (Jo-Ann Velez Direct testimony)

300. The SCORPIOS Reports for the J&G Site does not include anypre-judgment interest with respect to the J&G Site. (Jo-Ann VelezDirect testimony)

301. The SCORPIOS Reports for the J&G Site does not include anyDepartment of Justice costs expended with respect to the J&GSite. (Jo-Ann Velez Direct testimony)

302. Rubino & McGeehin, Chartered ("R&M") is under contractwith the United States Department of Justice Environment andNatural Resources Division ("ENRD") to assist in theaccumulation, processing, and reporting of information relatingto costs incurred by the ENRD in the prosecution of cases underthe Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA" or "Superfund"), as amended.(Stipulated Fact No. 62)

303. R&M has accumulated, summarized and reported costsincurred by ENRD for the J&G Site between October 1998 andSeptember 2003. (Stipulated Fact No. 63)

304. The costs which ENRD has incurred and paid are segregatedinto three areas — Direct Labor Costs, Other Direct Costs, andIndirect Costs. (Stipulated Fact No. 64)

305. Direct Labor Costs of attorneys and paralegals of ENRD arecalculated using information summarized from time data input byENRD employees and bi-weekly salary information supplied to R&Mby ENRD. (Stipulated Fact No. 65)

306. R&M uses all hours (including non-case hours) accountedfor by a particular employee of ENRD for the biweekly period andthe employee's biweekly salary cost to calculate an effectivehourly rate for the biweekly period. (Stipulated Fact No. 66)

307. Other Direct Costs of ENRD are expenses specificallyidentified to a case through ENRD's accounting system. Theseitems include, but are not limited to, costs paid for travel,expert witnesses, special masters, deposition and trialtranscripts, and litigation support costs. (Stipulated Fact No.67)

308. ENRD also incurs indirect costs which support all ENRDcases. ENRD indirect costs, include, but are not limited to,indirect labor (e.g., attorney and paralegal administrative time,secretarial support, accounting support, record keeping, and timekeeping), compensated absences (e.g., vacation, holiday, and sicktime), fringe benefits, office space and utilities. (StipulatedFact No. 68)

309. The indirect cost rate for ENRD is calculated by dividingthe total of the indirect costs for a fiscal year by a baseconsisting of the total ENRD direct labor costs for that fiscalyear to produce a division-wide indirect cost rate by fiscalyear. Thus, if .5% of the total ENRD direct labor costs areincurred on a particular case, then .5% of the total ENRDindirect costs would be allocated to the case. (Stipulated FactNo. 69)

310. Based on the R&M system of accumulating costs, R&M hasprepared a summary of ENRD's costs relating to the Site under DOJ#90-11-3-1778/1, which is the initial DOJ number that wasassigned to the J&G Site. (Stipulated Fact No. 70) 311. Based on the R&M system of accumulating costs, R&M hasprepared a summary of ENRD's costs relating to the Site under DOJ#90-11-3-1778/2, which is the second DOJ number that was assignedto the J&G Site. (Stipulated Fact No. 71)

312. The summary relating to DOJ's costs for the J&G Site underDOJ # 90-11-3-1778/1 is based on the information contained in theunderlying costs documentation maintained by R&M for the J&GSite, and accurately reflects the costs incurred by ENRD for thatSite under DOJ # 90-11-3-1778/1. (William Kime Direct testimony;Plaintiff Exh. 165)

313. The total costs incurred by ENRD regarding the J&G Site,exclusive of interest, under DOJ # 90-11-3-1778/1 are$162,390.15. These costs were incurred in federal Fiscal Years("FY") 1999, 2000, 2001, and 2002. (William Kime Directtestimony; Plaintiff Exh. 165)

314. The summary relating to DOJ's costs for the J&G Site underDOJ # 90-11-3-1778/2 is based on the information contained in theunderlying costs documentation maintained by R&M for the J&GSite, and accurately reflects the costs incurred by ENRD for thatSite under DOJ # 90-11-3-1778/2 through September 30, 2003.(William Kime Direct testimony; Plaintiff Exh. 166)

315. As of September 30, 2003, the costs incurred by ENRDregarding the J&G Site, exclusive of interest, under DOJ #90-11-3-1778/2 are $500,717.40. These costs were incurred in FY2001, 2002, and 2003. (William Kime Direct testimony; PlaintiffExh. 166)

316. The total costs incurred by ENRD regarding the J&G Site,exclusive of interest, under DOJ # 90-11-3-1778/1 and #90-11-3-1778/2 in FY 2001 through FY 2003 is $663,107.55.(William Kime Direct testimony; Plaintiff Exh. 164)

317. Additional costs continue to be incurred by ENRD regardingthe J&G Site after September 30, 2003 under DOJ # 90-11-3-1778/2.(William Kime Direct testimony)

14. In Rem Claim Facts

318. In May 2001, EPA Region II sent a letter containing aNotice of Potential Liability and Notification of Intent toPerfect a Lien, pursuant to the Comprehensive EnvironmentalResponse, Compensation, and Liability Act,42 U.S.C. § 9601, et seq., to Jorge Ortiz and Gloria Alvarez Nieves, with acopy to Jorge Ortiz' attorney Benjamin Ortiz. This letternotified Jorge Ortiz and Gloria Alvarez Nieves of their potentialliability, as well as the potential liability of JG-24, Inc., forresponse costs incurred by the United States relating to the J&G Site, and also notified them of EPA's intention to file aNotice of Federal Lien in the Registry of Property. (StipulatedFact No. 72)

319. On May 16, 2001, Jorge Ortiz and his attorney at thattime, Benjamin Ortiz, received a copy of the letter containingthe Notice of Potential Liability and Notification of Intent toPerfect a Lien Under CERCLA, 42 U.S.C. § 9601, et seq.,sent by EPA Region II. (Stipulated Fact No. 73)

320. On or about June 26, 2001, EPA filed a Notice of FederalLien on the J&G Site in the Registry of Property, Third Section,in Bayamón, Puerto Rico. The Notice of Federal Lien states thatthe United States holds a lien on the J&G Site pursuant toSection 107(1) of CERCLA to secure the payment of responsecosts incurred by the United States for which Jorge Ortiz andGloria Alvarez Nieves are liable under Section 107(a) of CERCLA.The Notice of Federal Lien states that the lien applies to thereal property located at Bajuras Ward, Vega Alta, Puerto Rico,shown on the Registry of Property, Third Section of Bayamón asProperty No. 3327, which is registered at page 171 of Volume 56of Vega Alta. (Stipulated Fact No. 74)

321. On June 13, 2002, this Court issued an Order granting theUnited States' motion for issuance of a warrant of arrest of theJG Site (Order entered on June 17, 2002). (Stipulated Fact No.75)

322. On or about July 31, 2002, the United States Marshal'soffice executed the warrant of arrest on the J&G Site.(Stipulated Fact No. 76)

323. Notice of this case, the arrest of the J&G Site, and thein rem claim against the J&G Site in this case, was publishedin E1 Nuevo Dia on August 28, September 4, and September 11,2002. (Stipulated Fact No. 77, 78)

324. Other than Defendants Jorge Ortiz and JG-24, Inc., noperson has filed a claim, answer to the Amended Complaint, orapplication for intervention in this action claiming an interestin the J&G Site. (Stipulated Fact No. 79)

15. Injunctive Stipulation

325. On January 27, 2003, Defendants Jorge Ortiz and JG-24stipulated that "Defendants Jorge Ortiz and JG-24, Inc. shall notconduct fiberglass product manufacturing or other activitiesinvolving CERCLA hazardous substances, including, but not limitedto, acetone, styrene, methyl ethyl ketone peroxide, and ignitablesolvents, at the Real Property of approximately 40 acres locatedat PR Road #675, KM 4.0, Barrio Bajuras, Sector Los Chorros, Vega Alta, Puerto Rico, unless authorized by the Court. ThisStipulation was approved by the Court and entered on January 31,2003 (Docket No. 84).

F. Facts Relating to United States' Claim re CatañoFacility

1. Ownership of the Cataño Property

326. The Cataño property is, and has been since December 1,1986, owned in the name of "Fiberglass Dura Mas, Inc."(Stipulated Fact No. 239; Plaintiff Exh. 176, pp. 1-2)

327. There is a deed of purchase and sale of the Catañoproperty from the Puerto Rico Industrial Development Company,dated December 1, 1986, transferring the Cataño property to"Fiberglass Dura Mas, Inc." (Stipulated Fact No. 9; PlaintiffExh. 78)

328. Carlos Capre Martinez was the authorized representative of"Fiberglass Duramas, Inc." for the purpose of signing the deedwhich transferred the Cataño property to "Fiberglass Duramas,Inc." (Stipulated Fact No. 163)

329. According to Carlos Capre Martinez, in 1986, Jorge Ortizasked Carlos Capre Martinez to sign the purchase and sale paperson behalf of "Fiberglass Duramas, Inc." which transferred theCataño property to "Fiberglass Duramas, Inc." (Stipulated FactNo. 240)

330. Carlos Capre Martinez says he has never been an owner,officer, or director of Fiberglass Dura Mas. (Stipulated Fact No.241)

331. There were no leases of the Cataño facility or rentalpayments concerning the use of the Cataño facility at any timebetween 1985 and the present. (Plaintiff Exh. 177, p. 2 (alsoadmitted into evidence with the Motion Designating DepositionTranscripts))

332. Thus Defendant Jorge Ortiz' Distribuidora K-Aribeproprietorship has been using the property held in the name ofDefendant Jorge Ortiz' Fiberglass Duramas proprietorship withoutpaying any rent to Fiberglass Dura Mas since the inception ofDistribuidora K-Aribe in 1992, and the fiberglass productmanufacturing work being done for Jorge Ortiz by his JG-24employees at the Cataño facility since the year 2000 has alsobeen conducted without paying any rent to Fiberglass Dura Mas.

333. As the entity named on the deed, Defendant Duramas, Inc.(a/k/a Fiberglass Dura Mas) is the owner of the Cataño property.Since Jorge Ortiz is the proprietor of Fiberglass Dura Mas, healso is the owner of the Cataño property. 2. Chemicals Stored and Used at the Cataño Facility

334. A Material Safety Data Sheet tells people who use productswhat chemicals are in the product and what to do in the case ofemergency. (Stipulated Fact No. 148)

335. Betsy Ortiz, an employee of Distribuidora K-Aribe untilrecently, a business that operates at the Cataño property, wrotein her own handwriting on top of various MSDS forms the name inSpanish by which she refers to the product. (Stipulated Fact No.149; Plaintiff Exh. 33)

336. Distribuidora K-Aribe keeps MSDS forms on hand becausecustomers wanted them. (Stipulated Fact No. 150)

337. Distribuidora K-Aribe keeps on hand MSDS forms foracetone, styrene, MEK peroxide, and polyester resin solution.(Stipulated Fact Nos. 151, 152, 154, 156)

338. Distribuidora K-Aribe keeps on hand MEK peroxide andpolyester resin solution and has had on hand styrene. (StipulatedFact No. 153, 155, 157)

339. There was a fire at the Cataño facility in the 1990s.(Jorge Ortiz Direct testimony)

340. Acetone, styrene, and methyl ethyl ketone peroxide wereand are used at the Cataño facility, including in themanufacture of fiberglass products. (Carmelo Mejia Depositionexcerpt, p. 17, lines 13-22 (resin, secante); (Efrain VazquezDeposition excerpt, p. 14, lines 11-14, 24-25, through p. 15,lines 1-2 (acetone, gelcoat, secante, resin polyester); PlaintiffExh. 33 (resins contain styrene; secante is MEK peroxide))

3. Current Fiberglass Product Manufacturing at the CatañoFacility for Jorge Ortiz

341. Fiberglass products are currently being made at theDistribuidora Karibe facility. The fiberglass manufacturing workbeing performed at the Distribuidora Karibe facility by formerJG-24 employees is being and has been performed at the request ofJorge Ortiz. (Alberto Mendez Deposition Excerpt, p. 37, lines14-19)

342. Efrain Vazquez's main duties at the J&G Site were tolaminate the boats. Efrain Vazquez has been going to the Catañofacility to make fiberglass products, such as boats and/or topsof pickup trucks, since the year 2000. When he works at theCataño facility making fiberglass products, Efrain Vazquez isworking for Jorge Ortiz, and Jorge Ortiz pays him for that work. (EfrainVazquez Deposition Excerpt (admitted with grant of Motion toDesignate Deposition Transcripts), p. 6, line 23-25, p. 7, lines19-25, p. 8, lines 1-6, 16-21, p. 9, lines 8-24m p. 12, lines16-24; Stipulated Fact No. 129)

343. Sometimes Carmelo Mejia and Manuel Rodriguez go to theDistribuidora K-Aribe location in Cataño to make swimmingpools. When he works at the Cataño property, Carmelo is workingfor Jorge Ortiz and Jorge Ortiz pays him for that work, in cash.Carmelo Mejia has been going to the Cataño facility on anaverage of about 3-4 times per month. Generally he goes there tomake two or three swimming pools at a time. Generally it takesabout two days to make a swimming pool. He and another workermake about 4 swimming pools or maybe more a month. (Carmelo MejiaDeposition Excerpt (admitted with grant of Motion to DesignateDeposition Transcripts), p. 10, line 13-25, p. 11, lines 1-25, p.12, lines 1-10, p. 15, line-25, p. 16, lines 1-6; Stipulated FactNo. 130)

344. Fiberglass product manufacturing is also being done on acustom basis at the Cataño facility by Frank Hichez. (CarmeloMejia Deposition excerpt, p. 12, lines 23 through p. 13, lines1-4)

345. Jorge Ortiz, doing business as Dura Mas and/orDistribuidora K-Aribe, has been using the Cataño facility fromat least June 2001 forward for the conduct of fiberglass productmanufacturing operations. Those operations use resins and othermaterials which include acetone, styrene, and methyl ethyl ketoneperoxide.

4. Inspections and RCRA Information Request

346. In December 1997, EPA inspector Eduardo Gonzalez inspectedthe Cataño facility and observed deteriorated drums, includingbulging drums, and smelled strong solvent odors. (Eduardo Directtestimony; Plaintiff Exh. 198, e.g. 198-4, 198-7)

347. On June 8, 2001, in response to a complaint by aneighboring facility, EPA inspector Eduardo Gonzalez conducted aninspection at the Cataño facility. During the inspection, theEPA inspector observed over one hundred 55-gallon drumshaphazardly placed throughout the facility, of which some weredumped into areas of vegetation at or near the periphery of theproperty. Many of the drums were in severely deterioratedcondition, including rusted, corroded, dented, collapsed,bulging, inflated, and/or leaking and stained drums. Some ofthese deteriorated drums were labeled "Acetone" and "ResinSolution." Many of the drums were placed directly onto theearthen floor. (Eduardo Gonzalez Direct testimony; Plaintiff Exh.119) 348. In the June 8, 2001 inspection, EPA inspector EduardoGonzalez observed several areas of dark stained soils at thefacility, including areas of staining near or next todeteriorated, leaking or stained drums, some of which werelabeled "Acetone" or "Resin Solution," and some stained soilswere located in areas of the manufacturing operations. He alsoobserved three piles of discarded fiberglass mats impacted withresin solution and solvents that were mixed with domesticgarbage, as well as three 55-gallon drums containing such wastes.In addition, he observed leaks in many places over the floor areaof the Cataño facility. He also observed many bags of organicperoxide powder labeled methyl ethyl ketone peroxide. (EduardoGonzalez Direct testimony; Plaintiff Exh. 119)

349. In the June 8, 2001 inspection, EPA inspector EduardoGonzalez also smelled strong odors of solvents in themanufacturing areas where the resin solution is used. Several55-gallon drums labeled "Resin Solution" were opened at the top.(Eduardo Gonzalez Direct testimony; Plaintiff Exh. 119)

350. On June 8, 2001, Jorge Ortiz and Gloria Alvarez Nieveswere at the Cataño facility. EPA inspector Eduardo Gonzalezspoke with both of them. At the end of Eduardo Gonzalez'inspection of the Cataño facility on June 8, 2001, Eduardo had adiscussion with Jorge Ortiz and Gloria Alvarez Nieves, told themthat there were many questions that remained unanswered, and toldthem that a Notice of Violation/RCRA § 3007 Request forInformation letter concerning Duramas (Distribuidora K-Aribe)would be sent to them. (Eduardo Gonzalez Direct testimony;Plaintiff Exh. 119)

351. In August 2001, EPA sent a Notice of Violation of RCRA anda RCRA § 3007 Information Request concerning the generation,storage, and disposal of wastes at the Cataño facility, bycertified mail, return receipt requested, to Mr. Jorge Ortíz,Duramas (Distribuidora K-Aribe), P.O. Box 475, Cataño, PuertoRico 00963. EPA employee Eduardo Gonzalez wrote this RCRA NOV andInformation Request, and it was mailed to the specific addressgiven to him personally by Jorge Ortiz. The Post Office returnedthe letter in September 2001 to EPA, marked "UNCLAIMED" after thethird notice was given to Jorge Ortíz, Duramas (DistribuidoraK-Aribe) to pick up the letter and the letter had not been pickedup. (Eduardo Gonzalez Direct testimony; Plaintiff Exhs. 79, 228)

352. Gloria Alvarez Nieves is Jorge Ortiz's companion. (BetsyOrtiz Direct testimony)

353. Gloria Alvarez Nieves sometimes comes to DistribuidoraKaribe facility. When Gloria Alvarez Nieves comes to theDistribuidora Karibe facility, she sometimes watches the cashier area. Shesometimes watches the employees. She sometimes asks the employeeswhat they are doing. When she asks Betsy Ortiz to do something,Betsy would follow her directions. (Betsy Ortiz Direct testimony)

354. On October 2, 2001, Gloria Alvarez Nieves was working atthe Catano facility. On that date, EPA inspector FranciscoClaudio Rios hand delivered a copy of this Notice of Violation ofRCRA and the RCRA § 3007 Information Request to Gloria AlvarezNieves at the Cataño facility. (Francisco Claudio Directtestimony; Plaintiff Exhs. 79, 80, 186)

355. Ms. Gloria Alvarez Nieves signed the first page of theNotice of Violation of RCRA and the RCRA § 3007 InformationRequest. (Francisco Claudio Direct testimony; Plaintiff Exh. 80)

356. Betsy Ortiz' testimony, on cross-examination byDefendants, that the signature of Gloria Alvarez Nieves onPlaintiff Exh. 80 is not the handwriting of Gloria Alvarez Nievesis not credible. The signature of Gloria Alvarez Nieves onPlaintiff Exh. 80 is very similar to that of Gloria AlvarezNieves on other documents, e.g. the 1986 Certificate ofResolution on file with Banco Popular (original version inSpanish), Plaintiff Exh. 138. (Betzaida Ortiz Cross testimony,Plaintiff Exhs. 80 and 138)

357. The RCRA § 3007 Information Request requested that JorgeOrtiz, Duramas (Distribuidora K-Aribe) provide the requestedinformation in writing, within thirty (30) calendar days ofreceipt of the request. It directed that the responses be mailedto Eduardo Gonzalez at EPA's Caribbean Environmental ProtectionDivision in San Juan. (Plaintiff Exhs. 79, p. 2-3 (EPA 09931-EPA09932))

358. A complete response to the RCRA § 3007 Information Requestwas due on November 1, 2001, thirty calendar days after theOctober 2, 2001 delivery.

359. On October 16, 2001, EPA inspector Eduardo Gonzalezvisited the Cataño facility. He observed that the floor in themixing room was heavily impacted with resins and pigments andseveral 55 gallon drums with a smelly solvent solution in thebackyard. On that date, he spoke with Jorge Ortiz and theydiscussed the RCRA § 3007 Information Request. (Eduardo GonzalezDirect testimony)

360. The discussion of the RCRA § 3007 Information Request onOctober 16, 2001 with Jorge Ortiz shows that Jorge Ortiz wasaware of the RCRA § 3007 Information Request at that time. 361. No response to the RCRA § 3007 Information Request hasbeen received. (Eduardo Gonzalez Direct testimony)

362. A true and accurate response to all of the questions inthe RCRA § 3007 Information Request has been due and owing formore than 888 days.

363. Failure to respond in a timely and truthful manner to RCRAinformation requests is a very serious violation. EPA relies to asubstantial extent on accurate self-reporting. EPA only has twoRCRA inspectors for Puerto Rico and the Virgin Islands — an areathat includes thousands of facilities potentially subject to theRCRA regulations. (Eduardo Gonzalez Direct testimony; Philip FlaxDirect testimony)

364. Without timely and accurate information, EPA is severelyand unduly impaired in its ability to determine a facility'scompliance with the RCRA regulations and to undertake anenforcement action to protect the public and the environment ifthe facility is not in compliance. (Eduardo Gonzalez Directtestimony; Philip Flax Direct testimony)

365. EPA believes that it would continue to be useful to obtaina full and accurate response to the RCRA § 3007 InformationRequest. (Eduardo Gonzalez Direct testimony)

366. On December 3, 2002, EPA inspector Eduardo Gonzalez wentto the Cataño facility to perform a RCRA inspection. On thatdate, he observed numerous open containers with wastes, someincluding liquids and some emanating strong solvent odors. Healso saw a partially finished swimming pool under construction.(Eduardo Gonzalez Direct testimony; Plaintiff Exh. 120)

367. On September 9-10, 2003, EPA inspector Eduardo Gonzalezwent to the Cataño facility. EPA took samples. Samplingconfirmed that some of the waste material at the Cataño facilitywas RCRA hazardous waste. Specifically, analyses of three samplesDS-L-1, DS-L-2, and DS-L-3 showed that the wastes these sampleswere taken from at the Cataño facility had a flashpoint below140 degrees Fahrenheit and were therefore RCRA ignitablehazardous wastes, and analyses of two other samples DS-S-3 andDS-S-4 showed that they were RCRA toxic hazardous wastes forlead. (Eduardo Gonzalez Direct testimony; Plaintiff Exhs. 179,180 (pp. CAT 02144 and CAT 02145).

5. Control Over Environmental Decisionmaking at the CatañoFacility

368. In the mid 1980's, Francisco Claudio Ríos, while employedby the Puerto Rico Environmental Quality Board ("EQB"), met withJorge Ortiz and Gloria Alvarez Nieves at EQB offices. Jorge Ortiz andGloria Alvarez Nieves were there to discuss environmental mattersconcerning the Cataño facility, then known as Dura Mas. The EQBair program had issued a Notice of Violation under the airregulations. (Francisco Claudio Direct testimony)

369. When Eduardo Gonzalez inspected the Cataño facility inJune 2001, Jorge Ortiz was the person who authorized EduardoGonzalez to inspect the facility. (Eduardo Gonzalez testimony;Plaintiff Exh. 119)

370. In October 2001, EPA inspector Francisco Claudio Riosvisited the Cataño facility. The purpose of the visit was todiscuss the need for compliance of the Cataño facility withcertain regulations under the Clean Air Act. The person he metwith and discussed this matter with at the facility was JorgeOrtiz. Following the meeting, Mr. Claudio faxed Mr. Ortiz a listof regulated substances under the Clean Air Act. (FranciscoClaudio Direct testimony; Plaintiff Exh. 227)

371. On May 13, 2002, Jorge Ortiz signed a "Notification ofRegulated Waste Activity" on behalf of Distribuidora K-Aribe,certifying under penalty of law that the document was preparedunder Mr. Ortiz' direction or supervision. Stipulated Fact No.158; Plaintiff Exh. 103)

372. The Notification of Regulated Waste Activity concerns theCataño property and identifies "Distribuidora K-Aribe" as thename of the installation (company) at that location. (StipulatedFact No. 159)

373. Jorge Ortiz asked Monserrate Santiago to fill out theNotification of Regulated Waste Activity. (Stipulated Fact No.160)

374. Monserrate Santiago testified that when she completed theEPA Notification of Regulated Waste Activity form (Plaintiff Exh.103), she listed Pedro Santiago as the owner solely because JorgeOrtiz told her that Pedro Santiago was the owner. She had nevermet Pedro Santiago, never spoken to him, and never seen anydocumentation indicating he was the owner of DistribuidoraK-aribe. (Monserrate Santiago Cross testimony)

375. The Notification of Regulated Waste Activity was submittedto EPA. The box for treatment, storage, or disposal facility onthe document was checked. The Notification said the Catañoproperty had zero RCRA listed hazardous waste. The Notificationdid not fill in any information concerning RCRA characteristichazardous waste. (Stipulated Fact No. 161) 376. The Notification of Regulated Waste Activity does notanswer the many specific questions contained in the RCRAInformation Request. It does not say it is submitted as apurported response to the RCRA Information Request. It was sentto EPA's New York office and not to Eduardo Gonzalez, the EPAemployee who sent out the request, at the EPA CaribbeanEnvironmental Protection Division in San Juan. It was not aresponse to the RCRA Information Request and does not respond tothe RCRA Information Request. (Plaintiff Exh. 79; Plaintiff Exh.103; Eduardo Gonzalez Cross testimony)

377. Following unsuccessful attempts to contact the personslisted in the Notification of Regulated Waste Activity to obtainfurther information, EPA's New York office sent a letter toMonserrate Santiago notifying her that EPA had revoked the RCRAidentification number for the Cataño facility for lack ofverification. (Monserrate Cross testimony; Plaintiff Exh. 183;Stipulated Fact No. 162)

378. When EPA inspector Eduardo Gonzalez went to the Catañofacility to perform a RCRA inspection on December 3, 2002, he wasinitially delayed because the Cataño facility employee, BetsyOrtiz, was uncertain whether to provide access for a walk throughinspection. Eduardo Gonzalez contacted Jorge Ortiz who authorizedthe access. (Eduardo Gonzalez Direct testimony; Plaintiff Exh.120)

379. Jorge Ortiz has been and is the person in charge of makingdecisions regarding environmental matters concerning the Catañofacility. Since he is the overall person in charge of the Catañofacility and is the person in charge of making decisionsregarding environmental matters, he is directly operating theCataño facility with respect to environmental matters.

380. Jorge Ortiz is the operator of the Cataño facility bothbecause he is the proprietor of Distribuidora K-Aribe, the mainbusiness operating at the Cataño property, and because he isalso directly operating the Cataño facility with respect toenvironmental matters.

381. Jorge Ortiz is both the owner and the operator of theCataño property.

II. CONCLUSIONS OF LAW

A. Defendants are Liable for the United States Costs underCERCLA Relating to the J&G Site

To establish liability under Section 107 of CERCLA, the UnitedStates need only establish that: (1) the site at issue is a "facility"; (2) there was a "release" or "threatened release" ofa "hazardous substance" at the facility; (3) such release orthreatened release caused the United States to incur responsecosts; and (4) the defendant falls into one of the fourcategories set forth in Section 107(a)(1)-(4).42 U.S.C. § 9607(a); Dedham Water Co. v. Cumberland Farms Dairy, Inc.,889 F.2d 1146, 1150 (1st Cir. 1989).16

Two of the four categories of parties upon which CERCLA imposesliability are: (1) the current owner or operator of the site or"facility"; and (2) an owner or operator of a "facility" at thetime hazardous substances were disposed of there.42 U.S.C. § 9607(a); Dedham Water Co., 889 F.2d at 1150-51; United Statesv. Cannons Eng'g Corp., 720 F. Supp. 1027, 1031-32 (D.Mass.1989), aff'd, 899 F.2d 79 (1st Cir. 1990).

Those falling within the scope of Section 107(a) are liable for"all costs of removal or remedial action incurred by the UnitedStates . . . not inconsistent with the national contingencyplan." 42 U.S.C. § 9607(a).17 The standard of liability underSection 107(a) of CERCLA is strict, joint, and several. UnitedStates v. Kayser-Roth Corp., 910 F.2d 24, 26 (1st Cir. 1990);O'Neil v. Picillo, 883 F.2d 176, 178-80 (1st Cir. 1989).

In addition to the statutory scheme concerning liability inpersonam under Section 107(a), Section 107(1) of CERCLA providesa basis for the United States to recoup all or a portion of itsresponse costs through an action in rem against property thatis the subject of a cleanup effort. 42 U.S.C. § 9607(1). Section107(1)(2) provides that the United States' response costs are alien on the property which becomes effective either at the timethe United States first incurs response costs with respect to theproperty or the time the owner is provided with written notice ofpotential CERCLA liability, whichever is later.42 U.S.C. § 9607(1)(2). Once the lien becomes effective, the United States isentitled to a judgment in rem upon a showing that (A) thesite is owned at the time of filing of the complaint by a personwho is liable to the United States under Section 107(a) ofCERCLA; and (B) the site has been subject to or affected by aremoval or remedial action.

Regarding the first element of liability, under Section 101(9)of CERCLA, 42 U.S.C. § 9601(9), "facility" is defined to include"any site or area where a hazardous substance has been deposited, stored, disposed of, or placed, or otherwise come to be located."See United States v. Tropical Fruit, S.E., 96 F. Supp.2d 71,84 (D.P.R. 2000) ("`facility' includes every conceivable placewhere hazardous substances come to be located"), citing DedhamWater Co., 899 F.2d at 1151.

As set forth in Section B.2, D.1.d., D.4, E.2, E.3, E,5, andE.11 of the Findings of Fact above, Defendants used acetone,styrene, and other CERCLA hazardous substances in theirfiberglass product manufacturing operations at the J&G Site; EPAinspectors saw piles of deteriorated, open, and/or leaking drumsand stained soils, and sampling results confirmed that there wereCERCLA hazardous substances in such drums and in the soils.Accordingly, the J&G Site is a "facility" within the meaning ofCERCLA.

Regarding the second element of liability, under Section101(22) of CERCLA, 42 U.S.C. § 9601(22), the term "release" isdefined as: any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the environment, (including the abandonment or discarding of barrels, containers, and other closed receptacles containing any hazardous substance or pollutant or contaminant). . . .The term release or threatened release of hazardous substances ata site is very broad. See Tropical Fruit, 96 F. Supp.2d at85-86. The Courts have interpreted the term "release" to includeleaking drums or other containers, and the term "threatenedrelease" to include corroded or otherwise deteriorated drums.Dedham Water Co., 889 F.2d at 1152; New York v. Shore RealtyCorp., 759 F.2d 1032, 1045 (2d Cir. 1985). The definition of "hazardous substances," within the meaning ofCERCLA, includes all the hazardous substances referred to in40 C.F.R. § 302.4, including those listed in Table 302.4.18Tropical Fruit, 96 F. Supp.2d at 84. There is no quantitativethreshold in the definition of "hazardous substances."19United States v. Alcan Aluminum Corp., 964 F.2d 252, 259-63 (3dCir. 1992); Johnson v. James Langley Operating Co.,226 F.3d 957, 962 (8th Cir. 2000). Similarly, there is no minimumquantity or concentration threshold regarding whether there hasbeen a "release" of a hazardous substance. United States v.Western Processing Co., 734 F. Supp. 930, 936 (W.D. Wash. 1990);HRW Sys., Inc. v. Washington Gas Light Co., 823 F. Supp. 318,340 (D. Md. 1993).20

As set forth in Section E.2, E,3, E.5, E.6, E.7, E.8, and E.11of the Findings of Fact above, during the period that JG-24operated the J&G Site, there were many deteriorated, open, broken, and/orleaking drums at the Site. Some of them contained waste material.

Analyses showed that the waste material contained CERCLAhazardous substances, such as styrene and acetone, and that thewaste material was also RCRA ignitable hazardous waste.21There were piles of such drums and many drums were stacked up andpartially buried many feet high in a sinkhole at the Site. Therewere also stained soils. Analyses of the soil samples identifiedhigh levels of styrene, as well as dimethyl phthalate andarsenic, which are all CERCLA hazardous substances. Strongchemical odors were also perceived at the Site, and neighbors wholived approximately 1/4 to ½ mile to the North of the Sitecomplained of chemical odors from the Site, depending on the winddirection. There was evidence that a fire had occurred in an openair metal pole barn shed in the manufacturing area at the Siteprior to April 1999. There were no stormwater runoff controls toprevent contamination in the soils from being carried to thesinkhole, which was a conduit to the underlying groundwater.Drums with waste materials were also burned in the open at theSite, releasing chemical odors. All of this shows that there wasa release or threatened release of CERCLA hazardous substances tothe environment at the Site.

Regarding the third element of liability, the term "responsecosts" is very broad and includes not only actual cleanup orremoval activities, but also sampling, investigative, monitoring,oversight, and enforcement activities. 42 U.S.C. § 9601(23),(25), 9604(b). To satisfy the third element of liability, theCourt need not determine the specific amount of recoverableresponse costs, but only need determine that the United Stateshas incurred some response costs at the site. See Kelley v.Thomas Solvent Co., 727 F. Supp. 1532, 1551 (W.D. Mich. 1989);United States v. Mottolo, 695 F. Supp. 615, 630 (D.N.H. 1988).Plainly, the United States incurred some response costs at theJ&G Site.

Regarding the fourth element of liability, since CERCLA is astrict liability statute, Section 107(a)(1) of CERCLA,42 U.S.C. § 9607 (a)(1), imposes liability on current owners of a facilityregardless of when disposal occurred and regardless of causation.United States v. Manzo, 182 F. Supp.2d 385, 397 (D.N.J. 2001);New York v. Shore Realty Corp., 759 at 1042-44.22 AlsoSection 107(a)(2) imposes liability on both the owner and theoperator at the time of disposal of hazardoussubstances.23 "Operator" is defined at42 U.S.C. § 9607(20)(A) as any person operating the facility. JG-24 is liable as an operator at the time of disposal becauseJG-24 employees carried out fiberglass product manufacturingactivities in the 1990s through mid-2000 when disposal ofhazardous substances occurred. As set forth in Sections B.2,D.1.d, D.4, E.2, E.3, E.5, E.8, and E.11 above, JG-24'sfiberglass product manufacturing operations resulted in piles ofdeteriorated and/or leaking drums, some containing CERCLAhazardous substances, being deposited on the ground, in wastepiles, and in the sinkhole, along with discharges of organicresin solvent vapors, burning of wastes, and burial of drums.

Jorge Ortiz is liable as (a) current owner, (b) an owner at thetime of disposal, and (c) an operator at the time of disposal.Jorge Ortiz is liable both as a current owner of the J&G Site andas an owner at the time of disposal because Jorge Ortiz, alongwith Gloria Alvarez Nieves who is listed on the deed as his wife,purchased the J&G Site property in 1988 and continue to own theJ&G Site property (see Section E.1 of the Findings of Fact).

Jorge Ortiz is also liable as an operator at the time ofdisposal because JG-24 is now a proprietorship, not acorporation, and therefore Jorge Ortiz is liable for JG-24 whichwas an operator at the time of disposal. A person operating abusiness that is not a corporation, but a proprietorship, ispersonally liable for that business' liability. United States v.Mottolo, 695 F. Supp. at 623 (citing H. Henn & J. Alexander,Laws of Corporations and Other Business Enterprises § 18, at 58(West Pub.3d ed. 1983)); F. Gevurtz, Corporation Law, at 2-3 (West Group ed. 2000); W.M. Fletcher,Fletcher Cyclopedia of the Law of Private Corporations, §§2:05, 2:06 (West Group ed. 1999). As set forth in Section D.1.cand d, JG-24 has lost its corporate status and has become aproprietorship, and Jorge Ortiz is the proprietor of JG-24.

Moreover, even when JG-24 was nominally a "corporation," JorgeOrtiz was the alter ego of JG-24. A person who is the alter egoof a corporation, or the individual behind the corporate veilwhen pierced, is also personally liable for the corporation'sliabilities.

The general rule is that a corporate entity may be disregardedin the interests of public convenience, fairness, and equity.Brotherhood of Locomotive Engrs. v. Springfield Terminal Ry.,210 F.3d 18, 26 (1st Cir. 2000); South Puerto Rico SugarCorp. v. Sugar Board, 88 P.R.R. 42, 55 (1963).24 Factorsfrequently considered by the courts in making the determinationas to whether to disregard the corporate entity areundercapitalization, nonpayment of dividends, nonfunctioningofficers and directors, failure to observe corporate formalities,absence of corporate records, commingling of funds, and use ofcorporate funds for non-corporate uses. Satellite BroadcastingCable v. Telefonica de Espana, 786 F. Supp. 1089, 1102 (D.P.R.1992); United States v. Pisani, 646 F.2d 83, 87 (3rd Cir.1981). The inability to accurately assess the assets andliabilities or capitalization of the corporation due to an absence of corporaterecords is an element of unfairness or injustice supportingpiercing the corporate veil. Labadie Coal Co. v. Black,672 F.2d 92, 99 (D.C. Cir. 1982).

The nonissuance of stock by a "corporation" is a factorsupporting piercing the corporate veil. GM Leasing Corp. v.United States, 514 F.2d 935, 939-40 (10th Cir. 1975);Automotriz Golfo de California v. Resnick, 47 Cal.2d 792(1957). The individual who is the alter ego is the person incontrol and need not be a stockholder, e.g., where no stock hasbeen issued. GM Leasing Corp. v. United States, 514 F.2d at939-40; Labadie Coal Co., 672 F.2d at 97.

Here, the facts set forth in Sections D.1.b. and d. and D.4show that even when JG-24 had "corporate status," the corporateform should be disregarded and Jorge Ortiz found liable as anoperator at the time of disposal as the alter ego of JG-24.Specifically, JG-24 was not a real corporation as there were nostockholders, no payment of "dividends" (since no stockholders),nonfunctioning officers and directors, failure to observecorporate formalities, absence of corporate records, andcommingling of Jorge Ortiz and JG-24 funds through a joint bankaccount. Moreover, Jorge Ortiz hired the workers, decided whatproducts would be produced, supervised the workers, andpersonally arranged for the raw materials for the fiberglassmanufacturing operations. Thus, in the interests of publicconvenience, fairness, and equity, Jorge Ortiz was an operator at the time of disposal at the J&G Site as the alter ego of JG-24and is also liable under CERCLA § 107 on that basis.

The J&G Site is also liable under CERCLA § 107 in rem.Since a lien has been recorded on the Site pursuant to CERCLA §107(1) and it is now established that Defendant Jorge Ortiz isliable under CERCLA § 107, the J&G Site is liable in rem.Since the notice procedures of CERCLA § 107(1) have been followed(see Section E.14 of the Findings of Fact), the United States isentitled to a judgment in rem against the J&G Site.

Recoverable response costs include not only the costs of actualcleanup or removal activities, such as excavation and removal ofdrums and other wastes, cf. United States v. Mottolo,695 F. Supp. at 618-19, but also the costs of sampling, siteassessment, investigations, monitoring, oversight, and litigationand other enforcement costs. See, United States v. Hardage("Hardage II'), 982 F.2d 1436, 1441 (10th Cir. 1992); UnitedStates v. American Cyanamid Co., 786 F. Supp. 152, 157 (D.R.I.1992). Moreover, recoverable response costs include indirectcosts, as well as direct costs. United States v. NorthernairePlating Co., 685 F. Supp. 1410, 1420 (W.D.Mich. 1988), aff'd subnom. United States v. R.W. Meyer, 889 F.2d 1497 (6th Cir.1989); United States v. Findett Corp., 75 F. Supp.2d 982 (E.D.Mo. 1999) (awarded EPA personnel and travel costs, indirectcosts, contractor costs, costs pertaining to technical assistanceprovided by other agencies through inter-agency agreements,prejudgment interest, and DOJ payroll, travel and indirect costs), aff'd, 220 F.3d 842 (8th Cir.2000).25 The United States is also entitled toprejudgment interest on its past response costs. United Statesv. R.W. Meyer, 889 F.2d at 1505; B.F. Goodrich v. Betkoski,99 F.3d 505, 528 (2d Cir. 1996).

The United States is entitled to recover all costs of responseactions incurred not inconsistent with the National ContingencyPlan ("NCP"), 40 C.F.R. Part 300. United States v. Kramer,757 F. Supp. 397, 435 (D.N.J. 1991); United States v. Marisol,725 F. Supp. 833, 845 (M.D.Pa. 1989).

In a cost recovery action, the burden of proof is on thedefendant to establish that response actions were inconsistentwith the NCP. Hardage II, 982 F.2d at 1442; NEPACCO, 810 F.2dat 747-48. In order to establish that EPA response actions wereinconsistent with the NCP, the defendant must demonstrate thatEPA acted arbitrarily and capriciously in selecting the responseactions, based on the administrative record that was before theagency when making the selection. 42 U.S.C. § 9613(j); HardageII, 982 F.2d at 1442; United States v. Mexico Feed and SeedCo., 729 F. Supp. 1250, 1255-56 (E.D. Mo. 1990); cf.Conservation Law Foundation v. Evans, 360 F.3d 21, 27 (1st Cir. 2004).26 Thus, unless the defendantsatisfies this significant burden, all EPA response costs are notinconsistent with the NCP and therefore recoverable.27

Defendants did not demonstrate that EPA acted arbitrarily andcapriciously in investigating the Site or selecting the removalaction. To the contrary, based on the abysmal condition of theSite in the December 3, 1997 inspection, followed by similarabysmal conditions seen in later inspections, EPA's efforts toinvestigate the Site and conduct sampling and analyses were notarbitrary or capricious. EPA's selection of the removal actionwas also not arbitrary or capricious. As set forth in the ActionMemorandum for the removal action, EPA considered the relevantfactors specified in the removal action section of the NCP (see 40 C.F.R. § 300.415(b)(2)), and found that many were applicable, includingthe threat of fire and explosion, hazardous substances in drumsor other containers that may pose a threat of release, and highlevels of hazardous substances in soils largely at or near thesurface. Then EPA selected the removal, including excavation, ofdrums that contain or may contain CERCLA hazardous substances, aswell as the removal of soils contaminated with CERCLA hazardoussubstances,28 as the removal action. The removal actionselected fits squarely within the types of actions consideredstandard removal actions under the removal action section of theNCP (see 40 C.F.R. § 300.415(e)). Thus, EPA's selection of theremoval action was not arbitrary and capricious. Similarly, EPA'sdecision to conduct limited groundwater monitoring following drumremoval to see if active groundwater remediation might berequired was also not arbitrary and capricious. Accordingly, theUnited States' response costs incurred were not inconsistent withthe NCP.29 Defendants' expert, Neftali Garcia, criticized certain aspectsof EPA's investigations. Primarily he differed with EPA on somemethodological issues, such as the number of background soilsamples to be taken and the desirability of taking a localgroundwater sample from an off-site well that was out ofoperation. However, "nothing in the NCP indicates that the PA[preliminary assessments] or SI [site investigation] must beperformed in a particular way, or using a particularmethodology." HRW Sys. v. Washington Gas Light Company, 823 F. Supp. 318, 333-34 (D. Md. 1993). Nothing in the NCP stateswhether EPA needs to obtain samples of groundwater from off-sitesources or the number of background soil samples to be taken.There is no requirement in the NCP that EPA find actualgroundwater contamination to have already occurred off-sitebefore performing a removal action, whether it be a removalaction to mitigate the threat of fire or explosion, a removalaction to remove the source of potential groundwatercontamination, or any other kind of removal action. Thuscriticisms of methodology do not bear on consistency of responseaction selection with the NCP. Reasonable scientists can differon methodology, and EPA must have the discretion to rely on itsown scientists' determinations. See, Marsh v. Oregon NaturalResources Council, 490 U.S. 360, 377-78 (1989).

EPA has set up a standardized system of documenting its CERCLAresponse costs. The documentation of response costs maintained byEPA includes EPA payroll distribution time sheets, EPA travelvouchers and travel authorizations, invoices submitted bycontractors, and related vouchers and payment documents. EPAcompiles cost documentation packages for individual sites andprepares Superfund Cost Organization Recovery Package Imaging andOn-Line System ("SCORPIOS") reports which detail costs accordingto categories, such as EPA payroll, travel, and contractual costsassociated with response actions for a site. Courts haveroutinely held that such cost summaries, when supported byaffidavit or trial testimony, are sufficient to establish theUnited States' response costs. See, e.g., Hardage II, 982 F.2d at 1442-43; UnitedStates v. South Carolina Recycling and Disposal, Inc.,653 F. Supp. 984, 1007 n. 3 (D.S.C. 1984), aff'd in part and vacatedin part on other grounds, sub nom. United States v. MonsantoCo., 858 F.2d 160 (4th Cir. 1988).

As set forth in Section E.13 of the Findings of Fact, theUnited States established that is has incurred a total of$3,154,052.77, as of September 30, 2003, in response costsrelating to the J&G Site, which included the costs of sampling,investigation, analyses, excavation, off-site disposal,groundwater monitoring, access, enforcement, and cost recoveryactivities.30 Defendants did not meet their burden ofestablishing that the United States' response actions wereinconsistent with the NCP.31 Accordingly, the UnitedStates is entitled to recovery of $3,154,052.77 in CERCLAresponse costs through September 30, 2003, less the amount of$4,400.00 as cost for 22 roll off of non-hazardous drums at$200.00 per load.32

Defendants JG-24 and Jorge Ortiz are jointly and severallyliable in personam, and the Defendant J&G Site is jointly and severally liable with them in rem, under Section 107 ofCERCLA, 42 U.S.C. § 9607, to the United States in the amount of$3,149,652.77 for the costs of the United States' responseactions with respect to the J&G Site in Vega Alta, Puerto Rico.

Since Defendant Gloria Alvarez Nieves has defaulted on theUnited States' CERCLA cost recovery claim and the United Statesestablished at trial that it is entitled to the recovery of itsCERCLA costs, it is also appropriate to grant the United States'Motion for Default Judgment Against Gloria Alvarez Nieves (docketentry # 139) at this time. Defendant Gloria Alvarez Nieves isliable, in personam, jointly and severally, with DefendantsJorge Ortiz, JG-24, and the J&G Site.

B. Defendants are Liable for Violations of RCRA at the J&GSite

Subchapter III of the RCRA, 42 U.S.C. § 6921-6939b, and theregulations promulgated thereunder, establish a comprehensiveregulatory program for generators and transporters of hazardouswaste and for owners and operators of facilities that treat,store or dispose of hazardous wastes. RCRA is the main federallaw designed to protect the public from mishandling of hazardouswastes and to guard against the creation of new Superfund sites.See United States v. Ekco Housewares, Inc., 62 F.3d 806, 809(6th Cir. 1995).

The United States has authority pursuant to Section 3008 ofRCRA, 42 U.S.C. § 6928, to enforce the requirements of RCRA andthe regulations promulgated under Subtitle III of RCRA, andpersons who fail to comply with RCRA regulations are subject to injunctiverelief and penalties under Section 3008.

A "facility" under RCRA means "[a]ll contiguous land, andstructures, other appurtenances, and improvements on the land,used for treating, storing, or disposing of hazardous waste.40 C.F.R. § 260.10. "Solid waste" under RCRA means any ". . .discarded material, including solid, liquid, semisolid, orcontained gaseous material resulting from industrial, commercial,mining and agricultural operations, . . ." 42 U.S.C. § 6903 (27)."Hazardous wastes" under RCRA means solid wastes under RCRA whichare identified or listed under Section 3001 of RCRA,42 U.S.C. § 6921; 40 C.F.R. Part 261. These categories of hazardous wastesinclude, inter alia, ignitable wastes (D001),40 C.F.R. § 261.21. The terms "treatment," "storage," and "disposal," forpurposes of RCRA, are defined in 42 U.S.C. § 6903 (3), (33),(34), and in 40 C.F.R. § 260.10. Leaving drums with wastes inthem around is storage or disposal. Open burning of wastes andburial of wastes in the ground are forms of disposal.

As set forth in Sections E.5, E.7, E.8, E.10, and E.11,deteriorated, used drums, many open and leaking, were stored ordisposed of in piles or lying on their side or partially buriedin the sinkhole. JG-24 employees created these conditions in partby punching holes in drums of resin instead of using thebungholes that came with the drum. Some of these discarded drumshad waste materials in them. Analyses confirmed that these wastematerials contained RCRA ignitable wastes. The drums were stored ordisposed of by discarding them into waste piles or the sinkholeor burying them in the ground for years until EPA sought a Courtorder for access to remove them. After that, Defendants disposedof some of the drums by burning, crushing, and burying them inthe sinkhole to reduce the volume of drums and the chemicalswithin them. By the time of the EPA removal action, therecontinued to be some drums with RCRA hazardous wastes stored orburied at the Site. Thus, plainly, the J&G Site was a facilityused for the treatment, storage or disposal of RCRA hazardouswastes.

As required by Section 3002 of RCRA, 42 U.S.C. § 6922, EPApromulgated regulations establishing standards applicable togenerators of hazardous waste, which are contained primarily in40 C.F.R. Part 262 and other provisions referenced therein. Under40 C.F.R. § 262.12, generators of hazardous waste may not treat,store, dispose of, transport, or offer for transport, hazardouswaste without having received an EPA identification number.Generators who treat, store, or dispose of hazardous wastewithout having received an EPA identification number are inviolation of 40 C.F.R. § 262.12.

As required by Section 3005(a) of RCRA, 42 U.S.C. § 6925(a),EPA promulgated regulations requiring owners and operators offacilities at which RCRA hazardous waste are treated, stored,and/or disposed of to obtain a RCRA operating permit andprohibiting treatment, storage, and/or disposal of RCRA hazardouswastes except in accordance with the terms of such a permit.40 C.F.R. Part 270. Owners and operators of facilities where RCRA hazardous wastes are treated,stored, and/or disposed of without a RCRA permit are liable forviolations of Section 3005(a) of RCRA and 40 C.F.R. Part 270."The receipt of a permit and compliance with that permit are atthe core of the federal hazardous waste management system."United States v. WCI Steel, Inc., 72 F. Supp.2d 810, 829(N.D.Ohio 1999).

As required by Section 3004 of RCRA, 42 U.S.C. § 6924, EPApromulgated regulations establishing minimum performancestandards applicable to owners and operators of facilities forthe treatment, storage or disposal of hazardous waste, which areset forth in 40 C.F.R. Part 264. These minimum standards include,inter alia, obtaining an EPA identification number(40 C.F.R. § 262.11), submission of biennial reports to EPA(40 C.F.R. § 264.75), prevention of the unknowing or authorized entry oflivestock (40 C.F.R. § 264.14), specific protections against fireand explosion (40 C.F.R. § 264.17 and Subpart C), maintainingliability insurance (40 C.F.R. § 264.147), proper use andmaintenance of hazardous waste containers (40 C.F.R. Part 264,Sub-part I), and provision of liners and leachate collectionsystem prior to land disposal (40 C.F.R. Part 264, Subpart N).Failure to comply with each of these minimum standards is aseparate violation of the RCRA requirements.

As set forth in Section E.10 of the Findings of Fact,Defendants Jorge Ortiz and JG-24, as the owner and/or operator ofthe J&G Site,33 violated the following provisions of the RCRA requirements at theJ&G Site: 1. Treated, stored, or disposed of hazardous waste at the facility without a RCRA permit in violation of RCRA Section 3005 and 40 C.F.R. Part 270. (They had no RCRA permit.) 2. Treated, stored, or disposed of hazardous waste generated at the facility without having received an EPA identification number under 40 C.F.R. § 262.12, 264.11. (They had no RCRA identification number.) 3. Did not submit biennial reports required under 40 C.F.R. § 264.75. 4. Did not prevent the unknowing or unauthorized entry of livestock as required by 40 C.F.R. § 264.14. (Livestock were allowed to wander and graze in the areas with wastes in drums and on the ground.) 5. Did not comply with requirements of 40 C.F.R. § 264.17 and Subpart C re fire and explosion protection. ("No Smoking" signs were not conspicuously posted, and there was no aisle space to allow emergency access to all waste drums.) 6. Did not comply with requirement under 40 C.F.R. § 264.147 of maintaining liability insurance. (They had no liability insurance for the Site.) 7. Did not comply with 40 C.F.R. Part 264, Subpart I requirements to assure proper use and maintenance of hazardous waste containers. (Hazardous wastes were left in leaking, deteriorated drums, instead of being transferred to drums in good condition and keeping the drums closed.)

8. Did not comply with requirements of 40 C.F.R. Part 264, Subpart N to provide a liner and leachate collection system prior to land disposal. (Drums, including those with hazardous wastes, were buried with no liner or leachate collection systems to protect the soils and the groundwater from contamination.)34 Section 3008(a), 42 U.S.C. § 6928 (a), authorizes EPA tocommence a civil action in the United States District Court inthe district in which a RCRA violation has occurred forappropriate relief. Where there have been past violations, theCourt may issue an injunction enjoining further activities inviolation of RCRA. United States v. T&S Brass and Bronze Works,681 F. Supp. 314, 322-23 (D.S.C. 1988), aff'd in part, vacated inpart on other grounds, 865 F.2d 1261 (4th Cir. 1988).Currently, there is a Stipulation (docket #84), dated January 30,2003, in effect that provides, in paragraph 2, that "DefendantsJorge Ortiz and JG-24, Inc. shall not conduct fiberglass productmanufacturing or other activities involving CERCLA hazardoussubstances, including, but not limited to, acetone, styrene,methyl ethyl ketone peroxide, and ignitable solvents at the [J&GSite], unless authorized by the Court." This prohibition shall becontinued as injunctive relief under RCRA.

Section 3008(g) of RCRA, 42 U.S.C. § 6928(g), and 40 C.F.R.Part 19 provide for civil penalties of up to $25,000 per day perviolation of RCRA requirements ($27,500 per day per violationafter January 30, 1997). The Defendants, as owner and/or operatorof the J&G Site, are liable for civil penalties for violations ofRCRA requirements. Civil liability under RCRA is strict, jointand several. United States v. Vineland Chem. Co., 31 Env't Rep.Cas. (BNA) 1720, 1728, 1990 WL 157509 (D.N. .J. April 30, 1990), aff'd, 931 F.2d 52(3d Cir. 1991).

A central purpose of civil penalties under RCRA is deterrence.United States v. Bethlehem Steel, 829 F. Supp. 1047, 1057 (N.D.Ind. 1993), aff'd in part, vacated in part on other grounds,38 F.3d 862 (7th Cir. 1995); T&S Brass and Bronze Works,681 F. Supp. at 322-23. Although directed in part to the violatorsthemselves,35 the deterrent value of a substantial civilpenalty is focused squarely on others to whom the law alsoapplies: We must be clear to the regulated community that violations of the law are not treated lightly, especially where the regulations protect public health and the environment. . . . Too small a penalty risks being considered by violators as "an acceptable cost of violation, rather than as a deterrence to violation."United States v. Vineland Chem. Co., 31 Env't Rep. Cas. (BNA)at 1728. See also, Ekco Housewares, 62 F.3d at 816 ("Thedistrict court properly considered the deterrence effect not juston Ekco, but on the regulated community as a whole").

The Courts have awarded substantial civil penalties in RCRAcases. See, e.g., United States v. Bethlehem Steel,829 F. Supp. at 1057; United States v. WCI Steel, Inc., 72 F. Supp.2dat 833; T&S Brass and Bronze Works, 681 F. Supp. at 322-23;United States v. Production Plated Plastics, 35 Env't Rep.Cases (BNA) 1517, 1992 WL 397725 (W.D. Mich. Sept. 4, 1992),aff'd, 61 F.3d 904 (6th Cir. 1995); United States v. Environmental Waste Control, Inc.,710 F. Supp. 1172, 1245 (N.D. Ind. 1989), aff'd, 917 F.2d 327 (7thCir. 1990)

Defendants' RCRA violations at the J&G Site were serious. Inparticular, Defendants' ongoing storage and disposal of hazardouswastes without first obtaining a permit is a very seriousviolation as the permit requirement is the central mechanismunder RCRA for assuring that hazardous wastes are not beingmismanaged at facilities without regard to public health and theenvironment. Essentially, all of the Defendants' fiberglassproduct manufacturing operations at the J&G Site have beenillegal since their inception because — with limited exceptionsthe Defendants did not prove — under RCRA, the treatment, storageor disposal of RCRA hazardous wastes is not authorized until aRCRA permit is obtained. See, United States v. Heuer,4 F.3d 723, 730 (9th Cir. 1993). Coupled with the facts that theDefendants' wastes were ignitable, that they did not comply withRCRA requirements to safeguard against fires, and that they hadno liability insurance, Defendants' RCRA violations wereegregious.

Moreover, Defendants did not undertake good faith efforts tocomply. Good faith efforts to comply are those done before theDefendant is caught. Here, Defendants did not undertake effortsto address the piles of leaking, deteriorated drums until theyhad been caught, and, even then, a major part of their effortsconsisted of even worse types of disposal without a permit — openburning, crushing, and burying. In view of the serious nature of the violations, the need fordeterrence to the Defendants and the regulated community, and theDefendants' lack of good faith efforts to comply, this Court willassess the Defendants civil penalties of $1,500 per day for the500 day period of violation which commenced at least by April 14,1999 and continued through August 2000, for a total of $750,000.

C. Defendants are Liable for Failure to Provide Access tothe J&G Site

Under Section 104 of CERCLA, when there is a release or threatof a release of a CERCLA hazardous substance into theenvironment, EPA is authorized to conduct response actions,including, but not limited to investigations, monitoring,surveys, testing, and information gathering. 42 U.S.C. § 9604(a),(b).

Section 104(e)(1) of CERCLA, 42 U.S.C. § 9604 (e)(1),authorizes EPA to enter a vessel, facility, establishment, orother place or property pursuant to Sections 104(e)(3) and (4),42 U.S.C. § 9604(e)(3) and (4), if there is a reasonable basisto believe there may be a release or threat of release of ahazardous substance or pollutant or contaminant. Based on itsDecember 3, 1997 and February 1998 inspections and initialsampling (see Section E.2 and 3 of the Findings of Fact), EPA hada reasonable basis to believe that there was a release or threatof release of a hazardous substance or pollutant or contaminantat the J&G Site when it requested access to the Site foradditional sampling and investigation following the February 1998inspection and initial sampling. Section 104(e)(5)(B) of CERCLA, 42 U.S.C. § 9604(e)(5)(B),authorizes the President, through the Attorney General, tocommence a civil action to compel compliance with a request forentry. Under Section 104(e)(5)(B) and 40 C.F.R. Part 19, theCourt is also authorized to assess civil penalties not to exceed$25,000 per day ($27,500 per day for violations after January 30,1997) for unreasonable failure to provide access in response to arequest for entry.

The United States sought herein civil penalties for Defendants'failure to provide requested access for additional EPA samplingand investigative activities pursuant to an Administrative OrderEPA issued to the Defendants in February 1999. Although theUnited States sought voluntary access unsuccessfully from theDefendants for these additional EPA sampling and investigativeactivities in June and October 1998 also, the United Stateslimited its request for civil penalties to the period followingissuance of an Administrative Order in 1999. Specifically, as setforth in Section E.4 of the Findings of Fact, in February 1999,EPA issued an Administrative Order Directing Compliance WithRequest For Access to JG, pursuant to Section 104(e)(5) ofCERCLA, 42 U.S.C. § 9604(e)(5), that was hand delivered to andsigned for by Rodes (a/k/a Rothes) Gonzalez, an employee of JorgeOrtiz at the Cataño facility, on March 3, 1999. Additionalcopies of the Administrative Order were delivered by hand to theJ&G Site and to Jorge Ortiz' residence. The Administrative Orderbecame effective six (6) business days after receipt. Defendant JG failed to comply with, or even respond to, EPA'sAdministrative Order, making it necessary for the United Statesto go to the United States District Court for a warrant of entryto conduct investigation and sampling activities. The warrant wasexecuted on April 14, 1999. There was a period of approximately34 days between the date the Administrative Order becameeffective and the date EPA gained access to the Site with thewarrant.

Service on an employee, other agent, or business office issufficient service of administrative orders, administrativesubpoenas, or other administrative information requests. SeeUnited States v. Custodian of Records, Southwest FertilityCtr., 743 F. Supp. 783, 787 (W.D.Okla. 1990) (service onreceptionist); United States v. Jolly, 238 F.3d 425 (Table), 51Env't Rep. Cases (BNA) 2083, 2000 WL 1785533 at **5-6 (6th Cir.Nov. 20, 2000) (service sufficient where request was faxed tooffice fax number and there was a fax confirmation that theletter had been successfully delivered); United States v.Ponderosa Fibres, 178 F. Supp.2d 157, 159 (N.D.N.Y. 2001)(request received by telecopier). See also, United States v.Gurley, 235 F. Supp.2d 797, 800-01 (W.D. Tenn. 2002) (employeeand wife). While Rodes Gonzalez was an employee at Jorge Ortiz'Cataño facility, rather than at the J&G Site, service of theAdministrative Order on Ms. Gonzalez was sufficient service,since Jorge Ortiz is and was the proprietor or alter ego of thecompanies that operated at both facilities. Since the activities EPA sought to conduct at the J&G Site wereof the type that are authorized by Section 104(e)(1) of CERCLA,42 U.S.C. § 9604(e)(1), Defendant JG-24's and Defendant JorgeOrtiz' failure to comply with, or even respond to, EPA'sAdministrative Order request for access to conduct investigationand sampling activities was unreasonable. As stated in UnitedStates v. Genzale Plating, Inc., 807 F. Supp. 937, 939 (E.D.N.Y.1992), "[w]ithout access, the EPA cannot act in the firstinstance to identify serious health and environmental hazards andtake steps to remedy them." Therefore, the denial of access to aCERCLA site is one of the most serious types of violations.

In view of the serious nature of the violation and the need fordeterrence, the Court awards the United States $3,000 per day forthe 34 day period of violation, for a total amount of $102,000.Although the Administrative Order was addressed to JG-24, JorgeOrtiz is also personally liable for JG-24's failure to respond,since, as explained above, he is and was the proprietor and/oralter ego of JG-24. Accordingly, JG-24 and Jorge Ortiz arejointly and severally liable for the penalties of this violation.

D. Defendants Jorge Ortiz and Duramas are Liable for Failureto Respond to RCRA Information Request Concerning the CatañoFacility

Section 3007(a) of RCRA, 42 U.S.C. § 6927, provides that anyperson who generates, stores, treats, transports, disposes of, orotherwise handles or has handled hazardous wastes shall, uponrequest of EPA, furnish information relating to such wastes. Bothowners and operators of facilities where wastes are or have been generated,stored, treated, transported, disposed of, or otherwise handledare persons who are subject to the information request authorityof Section 3007(a) of RCRA. United States v. Charles GeorgeTrucking Co., 823 F.2d 685 (1st Cir. 1987); United Statesv. Liviola, 605 F. Supp. 96 (N.D.Ohio 1985).

The First Circuit has recognized that the RCRA informationrequest authority is central to "the government's ability tobattle the polluters and the despoilers." Charles GeorgeTrucking Co., 823 F.2d at 689. The United States is entitled toobtain injunctive relief and civil penalties for noncompliancewith RCRA information requests under Section 3008(a) and (g) ofRCRA, 42 U.S.C. § 6928(a)(g).

On October 2, 2001, EPA served a Notice of Violation ("NOV") ofRCRA and a RCRA Information Request pertaining to the Catañofacility addressed to Jorge Ortiz, Duramas (DistribuidoraK-Aribe) by in-hand service on Gloria Alvarez Nieves at theCataño facility. Gloria Alvarez Nieves was an employee ormanager at that facility and is the companion of Jorge Ortiz. Sheis listed as his wife in the deed to the J&G Site. Service ofinformation requests and other administrative requests on relatedpersons, such as employees or wives, who would be expected toprovide the document to the principal, is sufficient. See,United States v. Gurley, 235 F. Supp.2d at 800-01 (service on employee and wife).36Moreover, in a conversation with Jorge Ortiz on October 16, 2000,EPA employee Eduardo Gonzalez discussed the RCRA InformationRequest with Defendant Jorge Ortiz, and Jorge Ortiz was aware ofthe request.

The RCRA Information Request asked for a complete responsewithin thirty days. The Information Request asked very specificand detailed questions and asked that a reply be sent to RCRAinspector Eduardo Gonzalez in the EPA Caribbean EnvironmentalProtection Division in San Juan. No response was ever received.Defendant Jorge Ortiz and Duramas, Inc. ("Duramas" or "DuraMas"), a/k/a Fiberglass Dura Mas, Inc. ("Fiberglass Dura Mas"),have violated and continue to violate the requirements of Section3007(a) of RCRA by failing to respond to that informationrequest.

Defendant Duramas, a/k/a Fiberglass Dura Mas, is liable as anowner of the Cataño facility, since its name is on the deed tothe Cataño property, and it is stipulated that the property isowned in the name of Fiberglass Dura Mas, Inc.

Defendant Jorge Ortiz is liable as an owner of the Catañoproperty through Fiberglass Dura Mas because Fiberglass Dura Masis another proprietorship of Jorge Ortiz. As set forth in SectionD.3 of the Findings of Fact, Jorge Ortiz continues to conductbusiness as Fiberglass Dura Mas or Dura Mas, including transactions withsuppliers, advertisements in the phone book, sales of products,credit card transactions, and checking account transactions. Heis the proprietor of Fiberglass Dura Mas because he is the soleperson authorized to use the Fiberglass Dura Mas bank account andthe sole beneficiary thereof, he allows Distribuidora K-Aribe touse the Fiberglass Dura Mas property without paying any rent, andhe directs his JG-24 employees Efrain Vazquez, Carmelo Mejia, andManuel Rodriguez to conduct fiberglass product manufacturing atthe Fiberglass Dura Mas property.37 Just as Jorge Ortizand JG-24 are jointly and severally liable as proprietor andproprietorship with respect to the J&G Site, Jorge Ortiz andFiberglass Dura Mas/Duramas are jointly and severally liable asproprietor and proprietorship with respect to the Catañoproperty.38 United States v. Mottolo, 695 F. Supp. 615,623 (D.N.H. 1988) (citing H. Henn & J. Alexander, Laws ofCorporations and Other Business Enterprises § 18, at 58 (WestPub.3d ed. 1983)); F. Gevurtz, Corporation Law, at 2-3 (WestGroup ed. 2000); W.M. Fletcher, Fletcher Cyclopedia of the Lawof Private Corporations, §§ 2:05, 2:06 (West Group ed. 1999).

Defendant Jorge Ortiz is also liable as an operator of theCataño facility because Distribuidora K-Aribe, the main business currently operating at that facility, is yet anotherproprietorship or alter ego corporation of Jorge Ortiz. As setforth in Section D.2 of the Findings of Fact, while DistribuidoraK-Aribe was once incorporated under the name DT Karibe, Inc.,that corporation was a temporary two-year corporation which hassince expired, and no efforts to extend or renew the corporationare on record. Accordingly, Distribuidora K-Aribe is alsopresently just a proprietorship. Jorge Ortiz is also theproprietor of Distribuidora K-Aribe because (1) he is the onlyindividual named authorized to control Distribuidora K-Aribe bankaccount (actually named DT Karibe), which is a joint accountbetween himself and Distribuidora K-Aribe, (2) he is overallmanager in control of the operation, (3) he is involved withpurchasing, (4) he interviews and hires employees, (5) hesupervised all the employees, (6) he writes all the checks,including checks for his personal expenses, such as checks to hisattorney in this litigation39 and payments forcondominium fees on behalf of his companion Gloria AlvarezNieves.40

Even if Distribuidora K-Aribe is still a "corporation," JorgeOrtiz is still liable for failing to respond with regard to RCRAInformation Request because he is the alter ego of DistribuidoraK-Aribe. As with the other companies, the factors for piercingthe corporate veil are present, e.g., no stockholders,nonfunctioning (nonexistent) officers and directors, nonpaymentof dividends, failure to observe corporate formalities, absenceof corporate records, commingling of funds both betweenDistribuidora K-Aribe and other Jorge Ortiz companies and betweenDistribuidora K-Aribe and Jorge Ortiz, and use of funds fornoncorporate uses. See Section D.2, Findings of Fact. Thus,even if Distribuidora K-Aribe were still a "corporation," JorgeOrtiz is liable as an operator of the Cataño facility as thealter ego of Distribuidora K-Aribe.41

Finally, Jorge Ortiz is also liable for failure to respond withregard to the RCRA Information Request because he is directlyliable as an operator of the Cataño facility under theprinciples of United States v. Best Foods, 524 U.S. 51 (1998).In that case, the Supreme Court stated: [A]n operator is simply someone who directs the working of, manages, or conducts the affairs of a facility. To sharpen the definition for purposes of [the statute's] concern with environmental contamination, an operator must manage, direct or conduct operations specifically related to pollution, that is operations having to do with leakage or disposal of hazardous waste, or decisions about compliance with environmental regulations. See also, Browning-Ferris Indus. of Ill. v. Ter Maat, 195 F.3d 953, 955-956 (7th Cir. 1999); United States v. Jones, 267 F. Supp.2d 1349, 1355-56 (M.D.Ga. 2003).

As set forth in Section F.5 of the Findings of Fact, DefendantJorge Ortiz has been the person responsible for making decisionsabout compliance with environmental regulations at the Catañofacility for a long time. Back in the mid-1980s, he representedthe Cataño facility under the name Dura Mas in discussions withthe Puerto Rico Environmental Quality Board about a Notice ofViolation under the air regulations. In December 1997, employeeRodes Gonzalez refused to answer any questions by EPA inspectors,saying the manager "Joaquin Roman" will answer any questions. InJune and October 2001, Jorge Ortiz was the person who authorizedEPA inspectors to inspect the Cataño facility and with whom theyspoke about environmental matters, such as the RCRA InformationRequest and Clean Air Act regulations. In May 2002, Jorge Ortizsigned a "Notification of Regulated Waste Activity" form onbehalf of Distribuidora K-Aribe, certifying under penalty of lawthat the document was prepared under Mr. Ortiz' direction orsupervision. In December 2002 employee Betsy Ortiz would notallow EPA inspector Eduardo Gonzalez to inspect the Catañofacility without obtaining the permission of Jorge Ortiz.Accordingly, because Jorge Ortiz is the manager in overallcontrol of the Cataño facility and has been the person makingdecisions regarding compliance with environmental requirements,Jorge Ortiz is also liable for not responding to the RCRAInformation Request as an operator of the Cataño facility under the principles of UnitedStates v. Best Foods, supra.

Under RCRA, EPA relies to a substantial extent on accurateself-reporting. Because failure to respond completely,truthfully, and timely to information requests stymies EPAenforcement efforts to protect the public and the environment,such violations deserve substantial penalties. Cf. UnitedStates v. Gurley, 235 F. Supp.2d 797 (W.D. Tenn. 2002).

Defendants have failed to provide the responses to the RCRAInformation Request for a period of at least 888 days. In view ofthe importance of obtaining timely and accurate responses to RCRAInformation Requests and the need for deterrence both as to theDefendants and others who might consider ignoring suchinformation requests, the Court awards the United States $400 perday of the first 428 days of violation (from November 2, 2001until January 3, 2003, the date of Defendants' initial responseto the United States' First Set of Interrogatories in thisaction) and $200 per day for the next 460 days of violation (fromJanuary 4, 2003 until April 7, 2004, the last day of trial inthis action), for a total amount of $263,200. Defendants JorgeOrtiz and Duramas (a/k/a Fiberglass Dura Mas, Inc.), as ownerand/or operator of the Cataño facility, are jointly andseverally liable, for the penalties of this violation. CONCLUSION

In view of the above, JORGE ORTIZ and JG-24 are jointly andseverally liable in the amount of $4,001,652.77 and JORGE ORTIZand DURAMAS (a/k/a FIBERGLASS DURA-MAS, INC.) are severally andjointly liable in the amount of $263,200.

Further, although the Defendants' response to the UnitedStates' First Set of Interrogatories included some informationthat had been requested in the RCRA Information Request, most ofthe questions of the RCRA Information Request remain unanswered.Since Defendants remain under the obligation to fully respond, itis hereby ORDERED that defendants Jorge Ortiz and Duramas shallprovide a complete and accurate response to the RCRA InformationRequest to EPA within thirty (30) days.

IT IS SO ORDERED.

EXHIBIT "A"

[EDITORS' NOTE: EXHIBIT A IS ELECTRONICALLY NON-TRANSFERRABLE.]

EXHIBIT "B"

[EDITORS' NOTE: EXHIBIT B IS ELECTRONICALLY NON-TRANSFERRABLE.]

EXHIBIT "C"

[EDITORS' NOTE: EXHIBIT C IS ELECTRONICALLY NON-TRANSFERRABLE.]

EXHIBIT "D"

[EDITORS' NOTE: EXHIBIT D IS ELECTRONICALLY NON-TRANSFERRABLE.]

EXHIBIT "E"

[EDITORS' NOTE: EXHIBIT E IS ELECTRONICALLY NON-TRANSFERRABLE.]

EXHIBIT "F"

[EDITORS' NOTE: EXHIBIT F IS ELECTRONICALLY NON-TRANSFERRABLE.]

EXHIBIT "G"

[EDITORS' NOTE: EXHIBIT G IS ELECTRONICALLY NON-TRANSFERRABLE.]

1. All of the Exhibits referred to herein have been admittedinto evidence.

2. "Jorge Ortiz", "Jorge J. Ortiz", "Jorge Ortiz Romany", and"Joaquin Roman" herein refer to the Defendant Jorge Ortiz in thiscase.

3. See excerpts of Answer and Complaint admitted into evidencethrough the Court's grant of the Motion Designating Portions ofDeposition Transcripts and Certain Statements Made by Defendantsin Answers to the Complaint and to a Document Request ("MotionDesignating Portions of Deposition Transcripts").

4. Plaintiff Exh. 14 is also in the Administrative Record,Plaintiff Exh. 134, at tab 2.

5. Where more than one source for the Finding of Fact iscited, the Finding of Fact is based on a combination of thesources.

6. Exhibits A to G attached hereto are a sampling of numerousphotographs taken at the site which were admitted as evidence.

7. Plaintiff Exh. 7 is also in the Administrative Record,Plaintiff Exh. 134, at tab 1.

8. Plaintiff Exh. 12 is also in the Administrative Record,Plaintiff Exh. 134, at tab 24.

9. The text and some appendices of Plaintiff Exh. 13 is alsoin the Administrative Record, Plaintiff Exh. 134, at tab 8.

10. Plaintiff Exh. 15 is also in the Administrative Record,Plaintiff Exh. 134, at tab 15.

11. Plaintiff Exh. 17 is also in the Administrative Record,Plaintiff Exh. 134, at tab 6.

12. Defendants' expert Neftalí Garcia stated that there wereno neighbors to the North of the J&G Site closer than two milesfrom the Site. (Neftali Garcia Direct testimony) This statementwas in error. (Plaintiff Exh. 187; Michael Mercado Redirect andMichael Ferriola testimony.)

13. RCRA refers to the Resource Conservation and Recovery Act,42 U.S.C. § 6901, et seq.

14. Defendants' expert Neftali Garcia testified that it wouldnot make sense for the National Contingency Plan to specifymethodological details such as the number of background soilsamples to be taken. (Neftali Garcia Cross testimony)

15. Plaintiff Exh. 16 is also in the Administrative Record,Plaintiff Exh. 134, at tab 7.

16. The United States' CERCLA cost recovery was brought underSection 107 of CERCLA. The United States did not bring a claimunder Section 106 of CERCLA, 42 U.S.C. § 9606. Accordingly, therewas no need to show that there may have been an "imminent andsubstantial endangerment" to public health or welfare or theenvironment at the Site from the release or threat of release ofa hazardous substance. Instead, all the United States is requiredto show is that there was a release or threat of a release of aCERCLA hazardous substance into the environment. In any event, inits Action Memorandum authorizing the removal action, EPA didfind, nevertheless, that the conditions at the J&G Site presentedan immediate public health threat and threat to the environment.(See Action Memorandum, Plaintiff Exh. 15 (also contained in theAdministrative Record, Plaintiff Exh. 134, at tab 15), p. 9)

17. "Removal actions" are generally of a short term nature,whereas "remedial actions" are generally of a long term nature.United States v. Northeastern Pharmaceutical and Chem. Co.("NEPACCO"), 810 F.2d 726, 731 (8th Cir. 1986).

18. Acetone, styrene, methyl ethyl ketone, methyl ethyl ketoneperoxide, dimethyl phthalate, and arsenic are each listed in40 C.F.R. § 302.4 and are therefore CERCLA hazardous substances.

19. While listed for convenience therein, the "reportablequantities" referred to in Table 302.4 relate solely tonotification requirements under CERCLA Sections 102 and 103 andare irrelevant to liability under CERCLA Section 107. A&WSmelter and Refiners, Inc. v. Clinton, 146 F.3d 1107, 1110(9th Cir. 1998). Cf. United States v. Alcan AluminumCorp., 990 F.2d 711, 721 (2d Cir. 1993) ("RQs [reportablequantities] and CASRNs are irrelevant for CERCLA liabilitypurposes.").

20. Indeed, the United States does not need to show that therehas been a release at all, as CERCLA provides for response tothreatened releases, as well as releases themselves. DedhamWater Co., 889 F.2d at 1152; United States v. Mirabile, 15Envtl. L. Rep. (Envtl. L. Inst.) 20,992-93, 1985 WL 97 (E.D.Pa. Sept. 6, 1985).

21. As explained in note 28 below, RCRA hazardous wastes areincluded within the definition of CERCLA hazardous substances.

22. Within the meaning of Section 107(a)(1) of CERCLA, thecurrent owner means the owner at the time of filing of thecomplaint. United States v. Fleet Factors Corp., 901 F.2d 1550,1554 (11th Cir. 1990).

23. Under CERCLA, the term "disposal" includes "discharge,deposit, injection, dumping, spilling, leaking, or placing."Section 101(29) of CERCLA, 42 U.S.C. § 9601 (29); Section 1004(3)of RCRA, 42 U.S.C. § 6903(3). The deposit of corroded and leakingcontainers that contain hazardous substances at a siteconstitutes disposal of hazardous substances. United States v.Mottolo, 695 F. Supp. at 623.

24. Each case is "sui generis" and must be decided inaccordance with its own unique facts. F.D.I.C. v. MartinezAlmodovar, 671 F. Supp. 851, 875 (D.P.R. 1987).

25. See also United States v. W.R. Grace & Co. — Conn.,280 F. Supp.2d 1149, 1167-72 (D. Mont. 2003) (discussing in detailand approving EPA's revised indirect cost rate methodology andnoting, at 1169, that federal agencies are allowed flexibility touse different indirect cost methodologies because of differencesin agency objectives and also that it is appropriate for EPA toinclude indirect costs of other agencies and contractors in itsallocation base).

26. EPA's selection of a removal action is not arbitrary andcapricious so long as it has considered the relevant factorsspecified in 40 C.F.R. § 300.415(b)(2) and determined that aremoval action, e.g. removal of drums or other containers thatcontain or may contain hazardous substances or pollutants orcontaminants (40 C.F.R. § 300.415(e)(7)), is appropriate. See,e.g., United States v. Glidden Company, 3 F. Supp.2d 823,835-36 (N.D. Ohio 1997), rev'd in part (on other grounds) andaff'd in part, United States v. 150 Acres of Land,204 F.3d 698 (6th Cir. 2000). Cost-effectiveness is not a factor EPAis required to consider in selecting "removal actions" under theNCP. United States v. American Cyanamid, 786 F. Supp. at 162.

27. Specifically, the United States is not limited to recoveryof only those costs that are "reasonable" or "necessary."Instead, the United States' costs are "presumed" to be reasonableunless Defendant shows that EPA's response actions wereundertaken inconsistent with the NCP. See United States v.NEPACCO, 810 F.2d at 747-48. Defendants' assertions thatgovernment's costs are "grossly exaggerated," excessive,duplicative, not cost-effective, or improper do not establishinconsistency with the NCP and are no basis to denyrecoverability of U.S. costs. See Hardage II, 982 F.2d at1443; United States v. Kramer, 913 F. Supp. 848, 867 (D.N.J.1995).

28. The term "hazardous substances" under CERCLA is muchbroader than the term "hazardous wastes" under RCRA. As explainedin Dedham Water Company v. Cumberland Farms Dairy, 889 F.2d at1151-52 and n. 6, RCRA hazardous wastes are only one of 6categories of CERCLA hazardous substances, which also include,but are not limited to, all of the substances designated ashazardous under the Clean Water Act and the Clean Air Act.Moreover, under CERCLA, hazardous substances need not be wastes.Thus, removal of soils or debris contaminated with CERCLAhazardous substances, such as styrene, plainly serves thepurposes of CERCLA. See also Section 101(14) of CERCLA,42 U.S.C. § 9601(14).

29. Defendants have complained that (a) EPA did not leave themsplit samples during the cleanup phase in the refrigerators theyleft on site and (b) EPA did not offer them the opportunity to"clean up" the Site themselves. Both of these complaints are notpertinent to the United States' CERCLA cost recovery claim. As to the split sampling request, the issue is not pertinentbecause Section 107 of CERCLA provides for recovery of all costsof removal or remedial action incurred by the United States notinconsistent with the NCP, notwithstanding any other provision ofCERCLA, including Section 104 of CERCLA (which contains theprovision relating to split sampling). See, e.g. UnitedStates v. Kramer, 757 F. Supp. at 420-22; New York v. GeneralElec. Co., 592 F. Supp. 291, 302-03 (N.D.N.Y. 1984). In anyevent, Defendants did not request split samples during theinvestigatory stage of EPA's response actions, which were thebasis of EPA's decision to conduct the removal action. Thesamples that were taken during the removal action were takenafter the removal action was already selected and not orientedtowards removal action selection. As to the complaint that EPA did not offer the Defendants theopportunity to "clean up" the Site themselves, Section 104(a)(1)of CERCLA provides that EPA may allow the owner or operator offacility, or other person responsible for the pollution, to carryout the removal or remedial action only when EPA determines thatsuch action "will be done properly and promptly" by suchperson. See United States v. Miami Drum Services, 25 Envt.Rep. Cas. (BNA) 1469, 1986 WL 15327 at **9-10 (S.D. Fla. Dec. 12,1986). Inasmuch as EPA observed that Defendants were attemptingto "clean up" the Site by open burning and crushing and burial ofdrums, all of which was without a permit and illegal under RCRA,EPA could hardly make the determination that the Defendants wouldproperly "clean up" the Site. Indeed, instead EPA sought a cease and desist order from thisCourt and the parties signed a Stipulation that included a ceaseand desist order, which was approved by the Court. (Sections E.9,E.10, and E.11 of the Findings of Fact)

30. These costs do not include costs incurred after September30, 2003, such as the cost of the trial of this action, orprejudgment interest, both of which the United States is alsoentitled to recover. Section 107(a) of CERCLA, 42 U.S.C. § 9607(a).

31. Defendants also failed to show that any of the UnitedStates' costs were not incurred with respect to the J&G Site.Since costs are kept by CERCLA site identification numbers inEPA's accounting system, contractor costs incurred with respectto other sites in Puerto Rico are not included in the SCORPIOScost summaries for the J&G Site. (Jo-Ann Velez Cross testimony)

32. See paragraph 239, page 34 of Removal Action.

33. Defendant JG-24 was an operator and Defendant Jorge Ortizwas both an owner and an operator while treatment, storage ordisposal were ongoing at the J&G Site for the reasons statedpreviously regarding the CERCLA cost recovery claim.

34. There are limited exemptions to portions of the RCRAregulations for facilities that satisfy all of the conditions ofthe exemption. The burden of establishing the applicability of anexemption under the RCRA regulations is on the person claimingthe exemption. United States v. Sims Brothers Constr., Inc.,277 F.3d 734, 741 (5th Cir. 2001); United States v. Easternof New Jersey, Inc., 770 F. Supp. 964, 980-81 (D.N.J. 1991).Defendants did not show or attempt to show that they met all ofthe conditions of any such exemption.

35. Defendant Jorge Ortiz continues to conduct fiberglassproduct manufacturing operations at the Cataño property.

36. The Court in Gurley imposed civil penalties not only forthe period after the information request was served on theemployee and the wife, but also for the period during which theenvelopes containing the information request were being returnedto EPA unaccepted and unopened. United States v. Gurley,235 F. Supp.2d at 800-01, 808-09.

37. The parties agree that Fiberglass Dura Mas is not acorporation. See Finding of Fact D.2-4.

38. There was no need to serve Duramas separately with theAmended and Supplemental Complaint in this action, since JorgeOrtiz is the proprietor of Duramas.

39. The payments to the attorneys are personal expensesbecause Jorge Ortiz is named as an individual in thislitigation.

40. Since a proprietorship is essentially an individual doingbusiness under a business name, Distribuidora K-Aribe is alsoliable. Cf. Mottolo, 695 F. Supp. at 623.

41. Even if Distribuidora K-Aribe were still a "corporation,"Distribuidora K-Aribe would also be liable along with Jorge Ortizas the alter ego because piercing the corporate veil goes in bothdirections. See FDIC v. Martinez Almodovar, 671 F. Supp. at877.