The opinion of the court was delivered by: Judge George M. Marovich
MEMORANDUM OPINION AND ORDER
Plaintiff the United States of America ("United States" or the "government") filed suit against defendants Capital Tax Corporation ("Capital Tax"), Stephen J. Pedi ("Pedi") and William Lerch ("Lerch") asserting claims arising under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. §§ 9601-9675. Before the Court is the government's motion to approve a consent decree between the government and defendant Pedi. For the reasons set forth below, the Court approves the consent decree.
The Court has already found each defendant liable to the government on Count I, pursuant to CERCLA §§ 107(a) and 113(g)(2). The Court has also granted the government summary judgment with respect to damages as to defendants Lerch and Capital Tax. The Court found Capital Tax and Lerch each to be jointly and severally liable to the government in the amount of $2,681,337.79. The Court found Capital Tax to be liable to the government for civil fines in the amount of $230,250.00 and found Lerch to be liable to the government for civil fines in the amount of $220,500.00 and civil penalties in the amount of $23,100.00.
In the consent decree, in order to resolve the claims against him, Pedi agrees to pay the government $330,000.00 by December 31, 2007. Pedi also agrees to pay interest on that amount from thirty days after the date of entry of the consent decree until the date of payment. The government agrees to release a lien it holds over Pedi's property. The government also agrees not to sue Pedi under §§ 106(a) or 107(a) of CERCLA with respect to the removal action at the Site at issue in this case. The government reserves its right to pursue Pedi for, among other things, criminal liability, liability for future releases at the Site and liability for releases outside of the Site. The consent decree also gives the government certain access rights to portions of the Site owned or controlled by Pedi.
Before signing a consent decree, the Court must satisfy itself that the decree is reasonable. Donovan v. Robbins, 752 F.2d 1170, 1177 (7th Cir. 1985). In Donovan, the Seventh Circuit explained:
A federal judge has the full powers of an equity judge. So if third parties complain to him that the decree will be inequitable because it will harm them unjustly, he cannot just brush their complaints aside. Even if no third party complains, the judge has to consider whether the decree he is being asked to sign is lawful and reasonable, as every judicial act must be.
Although a judge thus must, before signing an equity decree that either affects third parties or imposes continuing duties on him, satisfy himself that the decree is reasonable ('fair, reasonable and adequate,' in the usual formulation, but we think 'reasonable' sums it up fairly and adequately) how deeply the judge must inquire, what factors he must take into account, and what weight he should give the settling parties' desires will vary with the circumstances. The flexible character of the decision makes generalization difficult; but it is safe to suggest that the limitations of judicial competence and the desirability of encouraging outof-court settlements in order to lighten the judicial caseload create a presumption in favor of approving the settlement.
Donovan, 752 F.2d at 1177 (internal citations omitted).
The proposed consent decree in this case requires Pedi to pay the EPA $330,000.00 plus interest. By agreeing to pay $330,000.00 plus interest, Pedi will avoid the fate of the other two defendants, each of whom has been found jointly and severally liable to the government in the amount of $2,681,337.79. Pedi also avoids any additional civil fines and punitive damages.
The amount for which the government is willing to settle with Pedi is based on his ability to pay. Pedi is 74 years old and works as a roofing contractor. The government put forth evidence that Pedi needs the income from his work as a roofing contractor to pay his living expenses.
Pedi's only assets are four pieces of property, which the government believes he fraudulently transferred. Accordingly, they have included those assets in determining his ability to pay. The government put forth evidence that two of the pieces of property could not be sold to raise settlement proceeds. First, Pedi has little equity in his home due to a mortgage and necessary repairs. Second, the government concluded that Pedi could not sell a second property because it is the site of his business, and he needs to operate his business in order to pay his living expenses. The government put forth evidence that Pedi is expecting a distribution payment of $250,000.00 with respect to a third property. Finally, the government concluded that Pedi could sell or mortgage a fourth property, which has a market value of approximately $95,000.00.
The Court concludes, based on Pedi's ability to pay, that the consent decree is reasonable. It requires Pedi to pay $330,000.00 plus interest, which is approximately the same amount as his net assets. Given that Pedi cannot pay ...