What a $1,031 Fine Actually Means for Memphis

Memphis sits on the banks of the Mississippi River. The people who live there, mostly working class, disproportionately Black, already carry the health burden of living in one of the most polluted stretches of inland waterway in the country. The Wolf River, a tributary that cuts directly through the city before feeding into the Mississippi, runs close enough to 3901 Outland Road that a significant spill from a 46,250-gallon oil site could reach navigable water before any alarm was ever triggered. And according to the EPA’s own inspection form, there was no adequate alarm system. There was no emergency contact list on file. There were no documented spill response procedures. Nobody had been trained on what to do if something went wrong.

This is not a story about a company that had a plan and executed it poorly. This is a story about a company that held nearly half a million pounds of oil in an industrial facility in a Southern city with a long history of environmental injustice, and did not bother to write down what would happen if any of it escaped. The Clean Water Act has required SPCC plans for facilities like this since 1973. That law exists because of real disasters: rivers that caught fire, coastlines destroyed by crude, communities that lost drinking water. The plan requirement is not bureaucratic overhead. It is the minimum structural commitment that you have thought about your neighbors before something goes wrong.

The penalty Agrileum paid, $1,031, does not cover the cost of drafting the SPCC plan they were supposed to have. It does not cover a single hour of legal counsel. It does not represent, in any meaningful financial sense, a deterrent. It is less than two months of a minimum-wage worker’s rent in Memphis. For a company that operates a bulk oil storage facility, it is noise. What gets buried in the legal language of an “Expedited Settlement Agreement” is the fact that for years, nobody in the surrounding area of the 38118 zip code, a community where the median household income is well below the Tennessee state average, could know whether the oil tanks near them had any failsafe at all.

The people who live within plume distance of a facility like this are not consulted when an expedited settlement is reached. They do not receive a copy of the agreement. Their names do not appear in the docket. They are the ones who would have been downstream.

Directly From the Government Documents

These are the words of the EPA’s own enforcement documents. Nothing below is paraphrased.

“EPA determined that Respondent, as owner or operator of the Facility, violated the Oil Pollution Prevention regulations as noted on the attached ‘Spill Prevention Control and Countermeasure Plan (SPCC) Inspection Findings, Alleged Violations, and Proposed Penalty Form.'”

— EPA Region 4, Docket No. CWA-04-2024-1103(b), ESA Body

• This language confirms that EPA conducted a direct inspection and made a formal legal finding of violations. This was not a self-reported compliance issue; it was discovered by federal authorities.
• The reference to the attached Form means every line of violations itemized on Pages 1 through 5 of the inspection document carries the legal weight of EPA’s formal determination, not merely an allegation from a complainant.

“Respondent admits it is subject to the Oil Pollution Prevention regulations and that EPA has jurisdiction over Respondent and Respondent’s conduct as described in the Form. Respondent does not contest the inspection findings and neither admits nor denies the allegations in the Form.”

— EPA Region 4, Docket No. CWA-04-2024-1103(b), ESA Terms and Conditions

• Agrileum admits the law applies to them while simultaneously declining to admit or deny the specific findings. This is standard legal maneuvering in expedited settlements and means no factual record of guilt was ever formally established in a proceeding. The company paid, the case closed, and the specific facts remain legally contested.
• This construction protects Agrileum from the inspection findings being used against them in any future civil litigation by a third party who might claim harm from their operation.

“Respondent certifies, subject to civil and criminal penalties for making a false submission to the United States Government, that the violations identified in the Form have been corrected and the Facility is now in full compliance with the Oil Pollution Prevention regulations.”

— EPA Region 4, Docket No. CWA-04-2024-1103(b), ESA Terms and Conditions

• Sunny Sethi, CEO, signed this certification on February 10, 2024. That is nearly two years after the April 2022 inspection, meaning the facility operated under these cited deficiencies for approximately 22 months before the settlement was certified as resolved.
• The certification relies entirely on Agrileum’s self-reporting. There is no language in the document confirming that EPA conducted a follow-up inspection to verify compliance before finalizing the order.

“Any payment made pursuant to this ESA is a penalty within the meaning of Section 162(f) of the Internal Revenue Code, 26 U.S.C. §162(f), and, therefore, Respondent shall not claim it as a tax-deductible expenditure.”

— EPA Region 4, Docket No. CWA-04-2024-1103(b), ESA Terms and Conditions

• EPA explicitly blocks the company from writing off the $1,031 fine as a business expense. This is the only financial sting in the entire agreement, and it applies to a sum so small that the tax impact is effectively zero.

“Total Storage Capacity: 46,250 gallons”

— SPCC Inspection Findings Form, Page 1, Facility Data

• This single number establishes why SPCC regulations apply at all. Federal rules at 40 C.F.R. Part 112 trigger for facilities with aboveground oil storage capacity above 1,320 gallons in aggregate or any single container above 660 gallons. At 46,250 gallons, Agrileum exceeds the threshold by a factor of more than 35, placing them firmly in the regulated tier requiring a full, professionally certified plan.

Who Gets Hurt When a Safety Plan Doesn’t Exist

Public Health

The documented violations at this facility create specific, traceable vectors for petroleum contamination to reach the public, particularly communities in the 38118 zip code.

• The inspection form cites inadequate secondary containment under 40 C.F.R. 112.8(c)(2), carrying a proposed penalty of $850. Secondary containment is the physical barrier, typically a berm or lined basin, that catches oil if a tank fails. Without it, a rupture sends oil directly into surrounding soil and storm drainage systems, the same systems that channel water toward the Wolf River and the Mississippi.
• The facility had no documented training for personnel on spill response procedures, discharge protocols, or applicable pollution laws, violating 40 C.F.R. 112.7(f)(1) across three separate sub-requirements. A spill at a site where workers do not know the emergency procedures is a spill that grows larger before anyone calls the right number.
• There was no adequate contact list or phone numbers for response and reporting discharges, violating 40 C.F.R. 112.7(a)(3)(vi). If a valve failed on a weekend, workers would have no documented chain of notification to trigger a regulatory response.
• The facility lacked a high liquid level alarm or automatic pump cutoff on bulk storage containers, violating 40 C.F.R. 112.8(c)(8). This is the most basic overfill protection technology. Its absence means a tank truck could overfill a storage container with no automated stop.
• Aboveground tanks were not subject to documented visual inspections or periodic integrity testing, violating 40 C.F.R. 112.8(c)(6) twice under separate provisions. Tanks that have not been inspected are tanks with unknown internal conditions, including corrosion, seam stress, and seal degradation.
• The inspection found no inspection records available for review under 40 C.F.R. 112.7(e), the $225 line item. There is no paper trail showing anyone at the facility ever walked the grounds looking for signs of leakage or equipment deterioration before the federal inspection forced the issue.

Economic Inequality

The financial structure of this enforcement action illustrates how environmental regulations fail communities that can least afford to absorb pollution costs.

• The $1,031 total penalty was calculated by multiplying a subtotal of $825 in base violation fines by a multiplier of 1.25. The base penalty across more than 30 cited violations averaged roughly $27 per violation before the multiplier. For an oil storage operation, these are not meaningful financial deterrents.
• The 38118 zip code, where the facility sits, is a predominantly Black, lower-income Memphis neighborhood. Environmental law scholars and EPA’s own environmental justice frameworks acknowledge that facilities with inadequate spill infrastructure are disproportionately sited in or near such communities. The financial penalty structure does not account for the community’s elevated vulnerability.
• The expedited settlement process used here, authorized under 40 C.F.R. § 22.13(b), is designed for smaller, lower-risk violations and closes cases quickly with reduced administrative burden. At 46,250 gallons of storage, the use of an expedited mechanism rather than a full administrative hearing means less public scrutiny, no evidentiary record, and a faster path for the company to move on.
• Agrileum bore its own attorney’s fees in this proceeding, as specified in the ESA. For a company that can afford to operate a bulk oil storage facility, this is not an equalizing burden. For the residents near the facility, there is no mechanism for legal representation in the settlement process at all.
• The approximately 22-month gap between the April 2022 inspection and the February 2024 signing of the settlement means the Memphis community near this facility waited nearly two years for even the paper certification that violations were corrected. During that period, there is no public record of a follow-up compliance inspection.

What the Penalty Translates To

The EPA calculated a base penalty subtotal of $825, then applied a 1.25 multiplier to reach the final figure. Here is what that number looks like in the real world.

What the Law Assumed Existed vs. What the EPA Found

Who Is Accountable and What You Can Do

The settlement is signed and the penalty is paid, but the question of ongoing compliance belongs to the public, to regulators, and to anyone who lives or works near bulk oil storage in the Memphis area.

Named Parties in This Case

• CEO, Agrileum Collections: Sunny Sethi (sunny@agrileumsolutions.com) signed the settlement certifying compliance on February 10, 2024.
• EPA Region 4 Water Enforcement Branch Chief: Mary Jo Bragan ratified the inspection findings and signed the ESA on behalf of EPA.
• EPA Region 4 Regional Judicial Officer: Tanya Floyd issued the Final Order on July 23, 2024.
• EPA Region 4 Wastewater Enforcement Section: John C. Goodwin (goodwin.john@epa.gov, 404-562-8488) is the enforcement contact of record.
• EPA Region 4 Water Law Office: Tyler Sniff (sniff.tyler@epa.gov, 404-562-9499) served as counsel.
• Inspector of Record: Ted Walden conducted the April 7, 2022 site inspection.

Regulatory Watchlist

These are the agencies with jurisdiction over facilities like Agrileum Collections. They accept public tips and complaints.

• EPA Region 4 (Atlanta, GA): Primary enforcement authority for Clean Water Act SPCC violations in Tennessee. File a complaint or request a follow-up inspection at epa.gov/enforcement or contact the Region 4 office directly.
• Tennessee Department of Environment and Conservation (TDEC): State-level environmental oversight authority for oil spill prevention and water quality protection in Tennessee. TDEC can conduct independent inspections and has authority to impose additional state-level penalties.
• EPA Office of Inspector General (OIG): Accepts complaints about inadequate EPA enforcement actions, including concerns that penalties are insufficient to deter violations. oig.epa.gov/hotline.
• City of Memphis / Shelby County Health Department: Has a role in monitoring environmental conditions in the 38118 area. Community members can file environmental health complaints with local authorities that may trigger state referrals.

What You Can Do Right Now

• Request the follow-up compliance inspection record. File a Freedom of Information Act (FOIA) request with EPA Region 4 asking for any post-settlement compliance verification at Facility ID TN2203-001 at 3901 Outland Road, Memphis, TN. If EPA never verified compliance in person, that is a story.
• Connect with Memphis-area environmental justice organizations. Groups like Protect Our Aquifer, Memphis Community Against Pollution, and the Sierra Club Tennessee Chapter track industrial pollution risks in the city. Share this document with them.
• If you live or work near this facility and observe oil odors, discoloration in storm drains, or spill conditions, call the National Response Center immediately at 1-800-424-8802. That call triggers a federal notification requirement and creates an official record.
• Demand stronger SPCC penalty structures from your federal representatives. The base penalties in 40 C.F.R. Part 112 enforcement have not kept pace with industrial scale. Contact your U.S. House representative and both Tennessee senators and ask specifically about updating Clean Water Act Section 311 civil penalty floors for bulk storage facilities.
• Support mutual aid environmental networks in the 38118 area. Environmental enforcement is slowest in the communities that can least afford to wait. Local organizations doing water quality monitoring, community health outreach, and direct legal support for low-income residents affected by industrial sites are doing the work federal agencies defer.