IN 1984, THE UNITED STATES ENVIRONMENTAL PROTECTION AGENCY (U.S. EPA) ISSUED A COMPLAINT ALLEGING THAT THE WOODLAND MEADOWS NORTH LANDFILL, LOCATED IN WAYNE COUNTY, MICHIGAN, AND OPERATED BY MICHIGAN WASTE SYSTEMS, INC. (MICHIGAN WASTE), DID NOT MEET THE REQUIREMENTS FOR GROUND WATER MONITORING WITH REPECT TO 40 DFC 265.90, 91, 92 AND 93. A TRIAL WAS HELD IN DECEMBER 1986. ON SEPTEMBER 30, 1991, ADMINISTRATIVE LAW JUDGE J. F. GREENE ISSUED AN INITIAL DECISION ASSESSING AN ADMININSTRATIVE PENALTY OF $9,825 AND ORDERING MICHIGAN WASTE TO TAKE CERTAIN ACTIONS TO BRING IT- SELF INTO COMPLIANCE WITH THE APPLICABLE REGULATIONS. THE INITIAL DECISION REDUCED TO $9,825 THE $35,300 PENALTY THAT U.S. EPA REQUESTED BE ASSESSED AGAINST MICHIGAN WASTE. ON OCTOBER 22, 1991, U.S. EPA FILED AN APPEAL OF JUDGE GREENE'S PENALTY DETERMINATION. THE APPEAL ASSERTED THAT THE JUDGE GREEN MISAPPLIED CERTAIN CRITERIA OF THE U.S. EPA RCRA CIVIL PENALTY POLICY, MAY 8, 1984, AND ERRED IN DISMIS- SING CERTAIN VIOLATIONS. MORE SPECIFICALLY, THE APPEAL CONTENDS THAT THE PRESIDING JUDGE: (1) MISAPPLIED THE PENALTY POLICY IN REDUCING THE PROPOSED PENALTY FOR THE VIOLATION OF 40 CFR 265.90(A) AND 265.90 (B) TO COMPENSATE RESPONDENT FOR ITS POST-COMPLAINT COMPLIAN CE COSTS THAT WERE NOT SHOWN TO BE UNAFFORDABLE. THE APPEAL REQUESTED THAT THE PRESIDING OFFICER'S ORIGINALLY ASSESSED PENALTY OF $9,000 BE REINSTATED AND