United States Obtains Consent Decree Against Gristedes Supermarkets For Violating Refrigerant Management Regulations

 

Defendant Admits and Accepts Responsibility for Violations and Agrees to Injunctive Relief and a Penalty of $400,000

Damian Williams, the United States Attorney for the Southern District of New York announced that the United States filed a civil lawsuit against GRISTEDE’S FOODS NY, INC. (“GRISTEDES”) alleging violations of the Clean Air Act and the Environmental Protection Agency’s (“EPA”) Recycling and Emissions Reduction Rule (“RER Rule”) due to GRISTEDES’ failure to comply with regulations designed to limit the emission of refrigerants from appliances at its store into the atmosphere.  The United States and GRISTEDES simultaneously entered into a Consent Decree resolving that lawsuit.  The Consent Decree requires GRISTEDES to pay a $400,000 civil penalty and to undertake millions of dollars of repairs to reduce its future emissions of refrigerants that are greenhouse gasses. 

U.S. Attorney Damian Williams said: “Between 2019 and 2021, Gristedes systematically violated EPA refrigerant regulations, resulting in greenhouse gas emissions at a rate far higher than others in the industry.  To give a sense of scale, Gristedes’ emissions had a global warming effect equal to driving a car 140,000,000 miles.  As a result of our lawsuit, Gristedes is now required to reduce its emissions by over 70% from their 2020 levels to offset at least some of the damage it has caused, and it will face significant additional penalties under the Consent Decree if it fails to do so.” 

The Clean Air Act and the RER Rule impose requirements on the owners and operators of commercial refrigeration appliances to prevent the emission of regulated refrigerants into the atmosphere.  Many refrigerants (including those utilized in GRISTEDES stores) are powerful greenhouse gases that contribute to global climate change when emitted.  They also deplete the ozone layer and are toxic to humans when present in the air in large quantities.

As alleged in the United States’ Complaint filed in Manhattan federal court:

GRISTEDES has owned and operated a chain of approximately 20 supermarkets in New York City.  Between 2019 and 2021, despite utilizing regulated refrigerants known as hydrochlorofluorocarbons and hydrofluorocarbons at its supermarkets, GRISTEDES systematically failed to comply with key aspects of the RER Rule — failing to calculate the rate at which its appliances were leaking when adding new refrigerants, failing to timely repair leaks, failing to conduct verification testing after repairing appliances, failing to retrofit or retire leaking appliances, and failing to report chronically leaking appliances to EPA. 

As a result, GRISTEDES’ refrigerators have leaked refrigerants into the atmosphere at a rate far higher than industry standards.  These leaks have emitted more than 40,000 pounds of regulated climate-impacting refrigerants, with a greenhouse gas effect equivalent to driving an average, gasoline-powered vehicle an extra 140,000,000 miles.

In the Consent Decree, GRISTEDES admits, acknowledges, and accepts responsibility for the following conduct between 2019 and 2021: 

• Failing failed to adopt or implement refrigerant management practices that were consistent with the RER Rule.

• Failing to calculate the leak rates for appliances upon addition of refrigerants to those appliances and to maintain records of the same. 

• Failing to repair appliances that had leak rates above applicable thresholds under the RER Rule and to maintain records of the same.

• Failing to perform initial and follow-up verification tests to ensure that the repairs were successful, to perform subsequent leak inspections at intervals required by the RER Rule, and to maintain records of the same.

• Failing to implement retrofit or retirement plans for the appliances that had uncontrolled leaks or to maintain records of the same.

• Failing to submit reports to EPA related to chronically leaking appliances.

• Maintaining corporate-wide leak rates of 40%, 59%, and 46% in 2019, 2020, and 2021, respectively, resulting in the emission of 42,094 pounds of refrigerants, in total.

Pursuant to the Consent Decree, GRISTEDES will pay a penalty of $400,000, an amount based on the company’s documented inability to pay the full civil penalty for which it otherwise would be liable.  Further, the Consent Decree requires GRISTEDES to undertake repairs of its commercial refrigeration equipment with an estimated cost of $13,500,000, to adopt a comprehensive refrigerant compliance management plan, to convert three stores to utilize advanced refrigerants with low global warming potential, and to lower its corporate leak-rate below 16%.  Failure to comply with the Consent Decree will give rise to significant additional penalties. 

To provide public notice and afford members of the public the opportunity to comment on the Consent Decree, the Consent Decree will be lodged with the District Court for a period of at least 30 days before it is submitted for the Court’s approval.

Mr. Williams thanked the attorneys and enforcement staff at EPA’s Region 5 for their critical work in this matter.