ALJ Recommendation for Assessment of Civil Penalty Under the EPCA
Office of Hearings and Appeals
August 8, 2023
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On August 8, 2023, an Office of Hearings and Appeals' (OHA) Administrative Law Judge recommended that a civil penalty of $3,092,580 be assessed against Chigo Electrical Appliances ( USA), Inc. (Chigo) and Guangdong Chigo Air Conditioning Co., Ltd. (Guangdong) for violations of the Energy Policy and Conservation Act, 42 U.S.C. § 6291 et seq. (the EPCA) and its implementing regulations.
Chigo is a manufacturer of doors for coolers and walk -in freezers which are covered industrial products under the EPCA and DOE's energy conservation standard regulations. Guangdong is Chigo parent corporation. The DOE regulations require that manufacturers of such doors submit to the DOE a report certifying that such doors meet the energy conservation standards required under 10 C.F.R. § 102(a)(1) and 10 C.F.R. §429.12.
Upon failure of its model doors to pass the energy efficiency standards or to submit mandated at 10 C.F.R. Part 429., the Office of the Assistant General Counsel for Enforcement (OGCE) issued a Notice of Proposed Civil Penalty (NPCP) to chigo failed to provide any response to the NPCP . Subsequently, OGCE filed a complaint (Complaint) with OHA against Chigo. Chigo failed to file any response to the Complaint.
On February 27, 2023, OCGE filed an amended complaint (Amended Complaint) in which it added Guangdong as an additional Respondent. The Amended Complaint alleges that after it issued the NPCP to Chigo, Chigo was dissolved by its foreign parent corporation, Guangdong, on May 23, 2022, to avoid liability under the EPCA and that Guangdong should be jointly liable for any violations . Neither Chigo nor Guangdong (Respondents) filed a response. On April 13, 2023, 15 days after the Respondents' answer to the Amended Complaint was due, OGCE filed the MFD seeking a ruling deeming each of the allegations set forth in the MFD as admitted. The ALJ determined that because of the Respondents failure to respond to the Amended Complaint or the Motion for Decision, OGCE's allegations against the Respondents were deemed admitted. The ALF also found that it was appropriate to assess joint and several liability on both Respondents. Therefore, the ALJ recommended that the Respondents be jointly and severally assessed a civil penalty of $ 3,092,580. ( OHA Case No. EEE-23-0001, Cronin)