As with other EPA fuels programs, the highway and nonroad diesel sulfur regulations utilize a presumptive liability structure. When a violation is found, the party who owns, leases, operates, supervises or controls the facility where the violation is found, and every party upstream of that facility, who supplied the fuel to the facility where the violation is found, is presumed liable, absent a complete defense to the violation.

Under the hypothetical, initially both the carrier and the retailer would be deemed in violation. The carrier who delivers 500 ppm product to a retail outlet tank when15 ppm product has been ordered would not be able to establish it did not cause the violation, and thus would remain liable.

The distributor who hired the common carrier would be liable if the product transfer documents and other paperwork demonstrated that 15 ppm product was ordered and 500 ppm product was delivered, and the distributor failed to take reasonable steps to address the situation.

A retailer may establish its defense by 1) demonstrating it did not cause the violation; and 2) and demonstrating that product transfer documents account for the fuel found to be in violation and indicate that the violating product was in compliance with the standards. A retailer does not have to conduct a quality assurance sampling and testing program to meet its defense requirements. However, a retailer must check the product transfer documents and properly direct deliveries to the proper storage tank. In this hypothetical, the retailer may have been able to detect the misdelivery at the time of delivery if it had checked the PTD provided by the carrier. If the retailer does not check the PTD at the time the misdelivery occurs (and if doing so would have shown that a misdelivery had occurred), and sells the product as 15 ppm fuel, the retailer would not be able to establish a defense.

Question and Answer was originally posted at Questions and Answers on the Clean Diesel Fuel Rules (PDF)(135 pp, 888 K, EPA420-B-06-010, July 2006, About PDF)