STATE OF MICHIGAN IN THE 30™ JUDICIAL CIRCUIT COUNTY OF INGHAM MICHIGAN DEPARTMENT OF ENVIRONMENTAL QUALITY, and STEVEN E. CHESTER, Director of the Michigan Department of Environmental Quality, Plaintiffs, v VREBA-HOFF DAIRY, LLC, Defendant. File No. 03-1662-CE Hon. James R. Giddings Mediator Lawrence Glazer Alan F. Hoffiman (P24079) Assistant Attomey General Atiomey for the Plaintiffs Environment, Natural Resources, and Agriculture Division P.O. Box 30755 Lansing, MI 48909 (517) 373-7540 Jack A. VanKley (Ohio #0016961) Attomey for Defendant VanKley & Walker, LLC 132 Northwoods Blvd,, Ste. C-1 Columbus, OH 43235 Francis J. O'Donnell (P48126) Attomeys for Defendant Honigman Miller Schwartz & Cohn LLP 222.N Washington Sq Ste 400 Lansing, MI 48933, ($17) 377-0737 MICHIGAN DEPARTMENT OF ENVIRONMENTAL QUALITY'S STATEMENT OF THE CASEIntroduction In its Opening Statement, Vrebs-Hoff admits to many of the violations of the Interim Order and Consent Judgment identified by the MDEQ within its September 26, 2007," demand letter (Exhibit A] and the numerous letters and site inspections that preceded that demand for stipulated penalties and cow removal. Unfortunately, after years of litigation, Vreba-Hoff continues to downplay the MDEQ’s concerns, the conditions of the 2004 Consent Judgment and 2007 Interim Order, and this Dispute Resolution process. Although ‘Vreba-Hoff has taken a position of ‘no harm, no foul,’ there are very real environmental consequences to the continued mismanagement of wastes at the two Vreba-Hoff dairy operations that are the subject ofthe Interim Order. Sadly, contrary to Vreba-Hof?'s claims, those consequences are not mere concems for the future, but are very real, adverse, impacts to local water quality that have already occurred. Vreba-Hoff, in its Opening Statement, frequently points to changes in personnel at the Dairy Operations as a viable excuse for the continued violations and mismanagement observed by the MDEQ. The MDEQ notes that during the mediation process that culminated in the entry of the Interim Order, Mr. van Bakel of Vreba-Hoff ardently maintained that he was newly in control of the Dairy Operations and could be relied upon to assure compliance with state environmental regulations in the future. In its demand for compliance with the Interim Order, the MDEQ is merely asking that Mr. ‘van Bakel and Veebe-Hoff live up to the terms of the agreement. ‘The MDEQ specifically demands the following stipulated penalties and sanctions in accordance with the terms of the Interim Order: ‘Interim Ne aie Order ee Demand Requirement Missing or out-of | VIILN.I 143 days $71,000" date Phosphorus Data (16107-11/26/07) Failure to Install | VAT 92 days 345,500" Proper Markers (7/21/07-10/21/07) Missed Deadline for | IXB26 SI days 315,000" Completion of Treatment Building (8/20/07-9/20/07) Construction at Vreba-Hoff It Missed Deadline for |IXB3 Bi days S15 000" ' After meeting with Vreba-Hoff during the “informal” resolution stage of the Dispute Resolution process, the MDEQ issued another letter on October 17, 2007 [Exhibit B] that eliminated one previously demanded stipulated penalty. Also, on October 24, 2007, Vreba- Hoff paid stipulated penalties for certain violations alleged in the September 26 and October 17 letters.Construction Sand Separation Dairy Operations at the (8/20/07-9/20/07) Hoff 1) Failure to Properly Operate Primary Treatment Cells by Deadline (Vreba- IXB2.g 170 days (6/15/07- present) 384,500"* Hoff) Failure to Properly Operate Primary Treatment Cells by Deadline (Vreba- 1XB2h 7D days (9115/07 - 12/3/07) $39,000 July 27, discharge Drain Agricultural Waste to South Medina 2007, of, XIXA3D Tday $5,000 General Description Interim Order Requirement Noncompliance Period Demand ‘August 22, ground overflow of storage structure onto the 2007 XIK.A3.a Tay $1,000 September Drain 2007, discharge of Agricultural Waste to South Medina 9-10, XIXA3.c T day $10,000 waste. to violation freeboard requirements Failure to transport cure of VET & XC3.6 T days (918/07 - 9/14/07) lactating cows Removal of animals equivalent to 350 I * Stipulated penalties for missed deadlines are set forth at Paragraph XIX.A.2 of the Original Consent Judgment, providing for $200 for the first day of violation; $300 for the second consecutive day of violation; and $500 for the third consecutive day of violation and every consecutive day thereafter. ® MDEQ staff first observed the marker installed on the underbam pit at Vreba-Hoff I during an October 25, 2007, and believe the installation must have occurred sometime during that week. October 21, 2007, a Sunday, is the first day of that week.