Arsenal Coal Redux – Doctrine of Exhaustion of Administrative Remedies Trumped by the Pa Declaratory Judgment Act

By John R. Embick, Esq.

Chair, Environmental Law Section

12/30/2015

In late December, 2015, the Pa Supreme Court issued an interesting decision that relates to the Doctrine of Exhaustion of Administrative Remedies, in the case of EQT Production Company v.  PaDEP, No. 15 MAP 2015, decided December 29, 2015, (“EPC”).  The case also addressed an important issue related to the interpretation of the civil penalty provisions of the Clean Streams Law, 35 P.S. §§ 691.1, et seq. (“CSL”), §§ 602(d) and 605.

The case was decided by the currently decimated Pennsylvania Supreme Court on a 3 to 1 vote.  The decision was authored by Chief Justice Saylor, with Justices Todd and Stevens concurring, and Justice Baer dissenting.  Justice Eakin, recently suspended by the Pa Court of Judicial Discipline, did not participate in the decision.

EPC, a natural gas producer, owned and operated an underground storage facility for containing spent fracking fluid.  The underground storage facility leaked, and pollutants, as defined by the Clean Streams Law, were released into the soil underlying the storage facility, and thence were discharged into the waters of the Commonwealth.

EPC notified PaDEP of the release, stopped the leak, and sought to address the remaining contamination under the Pa Brownfields Remediation Act, 35 P.S. §§6026.101 et seq., also known as “Act 2”.  PaDEP also threatened to assess a civil penalty under the CSL for the release.  Act 2 specifically allows the imposition of civil penalties assessable under other laws.  Under section 605(a) of the CSL, each day on which a violation occurs can be considered a separate offense, and each violation carries a maximum penalty of $10,000 per day.

PaDEP took the position that the release of pollutants continued, even after the discrete leak was plugged, because pollutants continually are released from contaminated soil, into the ground water, the latter which is part of the waters of the Commonwealth.  Further, PaDEP also took the position that each day that contamination continued to be present in the water of the Commonwealth is a continuing violation. This can be a very heavy enforcement stick.

Accordingly, EPC would remain at risk for the imposition of continuing, daily penalties until the pollution was cleaned up, or arguably until an Act 2 release was obtained.  There is no safe harbor which would toll or suspend the accrual of penalties pending the outcome of the litigation.  EPC took the position that civil penalties could be assessed only so long as contaminants were discharged from the underground storage impoundment.

PaDEP could, in the exercise of its enforcement discretion, limit the imposition of civil penalties both in terms of amount and duration.  For decades, PaDEP has utilized a civil penalty assessment procedure to determine the amount of civil penalties in CSL matters, and the procedure takes into account such factors as duration, concentration, harm, and cooperation, etc. 

Under the provisions of the CSL, PaDEP must file a complaint for civil penalties under the CSL before the Pa Environmental Hearing Board (“EHB”) for a determination.  The EHB then holds a hearing at which PaDEP must prove the violations and the basis for the assessment of civil penalties.  Depending on the outcome, the parties may then take an appeal to Commonwealth Court, and possibly beyond.

EPC elected to test PaDEP’s interpretation of the Clean Streams Law penalties by initiating a Declaratory Judgment Act action in Commonwealth Court.  See, 42 Pa.C.S. §§7531-7541 (“DJA”).  EPC had an administrative opportunity to test PaDEP’s legal theory by defending against a CSL civil penalty complaint, which PaDEP filed with the EHB (the civil penalty complaint was filed with the EHB two weeks after the DJA action was initiated by EPC).  The EHB has jurisdiction to hear appeals from final actions taken by PaDEP, including civil penalty complaints filed under the provisions of the CSL.

In preliminary objections, PaDEP asked Commonwealth Court to dismiss the DJA complaint, arguing that EPC possessed ample administrative remedies which EPC must first exhaust before EPC initiated a DJA action.  Section §7541(c)(2) of the DJA indicates thatdeclaratory relief is unavailable with respect to proceedings within the exclusive jurisdiction of administrative tribunals.

Notwithstanding §7541(c)(2) of the DJA, the courts have established a number of prerequisites, which seemingly have carved out a number of exceptions.  See generally, Commonwealth, Office of the Governor v. Donahue, 626 Pa. 437, 448, 98 A.3d 1223, 1229 (2014).  EPC averred that its cause was similar to that addressed in Donahue in that the legal question that it posed was adequately developed and ripe for judicial review; it would suffer direct, immediate, and substantial hardship if review was delayed; the question was purely legal (and not factual) and the action would settle immediate controversies.

So, the Court had to consider whether the case presented the kind of issues which warrant the by-passing of the available administrative remedies. It looks that the Pa Supreme Court felt that the factors of: (1) large and continuing civil penalties; (2) a pure issue of law; (3) EPC’s inability to initiate an administrative remedy (at the time EPC filed the DJA action, PaDEP had not initiated a civil penalty action before the EHB); and (4) existence of by-pass case precedent, all combined to trump the available administrative remedy.

The Court seemed to agree that the EPC matter was analogous to the issue presented in Sackett v. EPA,  566 U.S. __, 132 S. Ct. 1367 (2012). In Sackett, the U.S. Supreme Court ruled that U.S. EPA (“EPA”) compliance orders, issued under the authority of the Federal Clean Water Act (“CWA”) may be immediately appealed under the provisions of the Administrative Procedures Act (“APA”).  Prior to this holding, the EPA, and many courts, held the view that such compliance orders could only be reviewed at the time when the agency sought to enforce the order.  During this time prior to enforcement, heavy civil penalties assessable under the CWA presumably would accumulate.  Sackett raised an issue often viewed as companion to the exhaustion-of-administrative-remedies issue, i.e., the pre-enforcement review doctrine.

The Pa High Court also turned to the Arsenal Coal pre-enforcement review doctrine for support. See, Arsenal Coal Co. v. Commonwealth, 505 Pa. 198, 200-01, 477 A.2d 1333, 1335 (1984).  The Arsenal Coal case involved an attack by the coal mining industry on then newly promulgated rules and regulations governing the extraction and processing of underground coal. Arsenal Coal is the seminal case in the pre-enforcement review doctrine line for evaluating matters which may be filed within Commonwealth Court’s original jurisdiction and which may thus by-pass the available administrative remedies. 

In Arsenal Coal, the Pa. Supreme Court allowed a challenge to the coal mining regulations to proceed in Commonwealth Court prior to the time when the agency might seek to enforce the regulations (and any challenges would subsequently be heard before the EHB).

In remanding the EPC case to Commonwealth Court, the Pa. High Court stated:

“We hold that the impact of the Department’s threat of multi-million dollar assessments against EPC was sufficiently direct, immediate, and substantial to create a case or controversy justifying pre-enforcement judicial review via a declaratory judgment proceeding, and that exhaustion of administrative remedies relative to the issues of statutory interpretation that the company has presented was unnecessary.”

Slip Op. at 12.

It looks to me like the three justices were primarily motivated by the specter of big civil penalties and the seeming unfairness of allowing the penalties to mount up while the company challenged the legal theory of the regulatory agency. 

Justice Baer penned a dissent in which he opined that under established principles, EPC’s case had not yet matured into an actual case or controversy, since PaDEP’s legal position on penalties associated with continuing violations is not determinative, and the EHB must decide the issue.  Justice Baer found that the administrative remedy was adequate and suitable, and therefore should be followed.

So, it appears as if the Pa Supreme Court has created another limited means to challenge PaDEPaction (or, in this case, a legal position held by PaDEP) outside of the path of available administrative remedies.  Money talks.

EPA’s Bay TMDL Permit (the New Chesapeake Bay Pollution Diet) Upheld in 3d Circuit Decision: Farm Bureau Challenge is “Long on Swagger, but Short on Specifics”

By John R. Embick, Esq.

Chair, Environmental Law Section

10/1/2015

Two years ago, I wrote about the Pa Middle District federal court decision that relates to the Obama Administration’s (and the states’) renewed efforts to improve water quality in the Chesapeake Bay, and reduce the pollution that enters the Bay from various sources (air deposition, point-source discharges, and non-point water discharges).

The main effort involved the establishment of a “pollution diet” for the Bay, and the “diet” affects all of those six states (and D.C.) which are tributary to the Bay.  A huge part of Pennsylvania, extending from the Maryland border all the way north to the New York border, is located in the Chesapeake Bay watershed.  The watershed is so vast (encompassing 64,000 square miles) than even a portion of western Chester County lies in the watershed basin (you can see watershed boundary signs on the Pennsylvania Turnpike, for instance).  And, of course, many Chester County Bar members recreate in and upon the Bay waters (and in doing so probably add “point source” pollution) especially during Bar Sail.

On December 29, 2010, U.S. EPA issued a permit setting “Total Mass Daily Loading” or (“TMDL”) loading limits for the Bay, and asserted its authority to take such action under the Federal Water Pollution Control Act (“Clean Water Act,”or “CWA”).  The TMDL permit establishes pollution loading shares for the Bay tributary states (Maryland, Virginia, West Virginia, Pennsylvania, New York, and Delaware (as well as D.C.)), and addresses pollution loadings of sediment, phosphorus and nitrogen. This TMDL permit constitutes the “pollution diet.”   

The “meat and potatoes” of the Chesapeake Bay TMDL permit are the limits for pollutants, and the states’ plans to control the discharge of pollutants. The Bay TMDL requires, overall, a 25 % decrease in nitrogen loadings, 24% reduction in phosphorus loadings, and 20% reduction in sediment loadings, and allocates reductions between point sources and non-point sources of pollution.  EPA leaves to the states the problem of attaining the reductions, and the states’ attainment plans are called “Watershed Implementation Plans” or “WIPs”.  The loading allocations are, in part, the product of a very complex, mega-sized water quality model of the Bay.

One key feature of the TMDL process is the legal underpinning for EPA’s authority to establish a TMDL permit with pollution allocations.  EPA takes the position that when a state reports that waters are “impaired” (i.e., not meeting water quality standards), EPA is authorized to set a TMDL permit for the impaired waters (if the state does not take action). The Bay and many of its tributaries are impaired waters.

Less than two weeks after the Bay TMDL was issued, a broad challenge was filed on January 10, 2011, by the American Farm Bureau Federation (and the Pennsylvania Farm Bureau) at Docket No. 1:11-cv-00067 SHR, in the Federal District Court for the Middle District of Pennsylvania (the case was assigned to Judge Sylvia Rambo).   A number of parties were permitted to intervene, including the home builder associations, and several environmental groups.  Interestingly, no participant state (or D.C.) challenged the TMDL permit.  Farmers and agricultural groups are particularly upset because the pollution allocations likely will require far more effort and expense to reduce non-point discharges (e.g., run-off) from agricultural operations and fields.

The suit raised challenges, among other things, to: (1)  EPA’s authority to set pollution loading allocations in TMDL permits (i.e, the U.S. may only ask for implementation plans from the states, and does not have the authority to impose limits); (2) the underlying science justifying the pollution reductions (i.e., the Bay water quality model is defective); and (3) the length of the public comment period (i.e., the public comment period was too short for meaningful public participation).

On September 13, 2013, ruling on cross summary judgment petitions, Judge Sylvia Rambo ruled in favor of EPA on every issue. In providing a detailed background of the case, she wrote that “The ecological and economic importance of the Chesapeake Bay is well-documented. As the largest estuary in the United States, the Chesapeake Bay is essential for the well-being of many living things.”

On July 6, 2015, the 3d Circuit upheld the lower court.  Writing for a unanimous three-judge 3d Circuit panel, in the case of American Farm Bureau Federation, et al. v . U.S. EPA, et al., Doc. No.  13-4079, Judge Ambro upheld the “careful and thorough opinion of the District Court.” Slip Op. at p. 60.

On appeal, the court found that the Farm Bureau challenge presented a classic case of Congressional intent and statutory interpretation, and turned on the meaning of “TMDL”.  Unfortunately, “TMDL” is not defined in the CWA (the TMDL provision is found at 33 U.S.C. § 1313(d)(1)(C)), and  the Act does not provide any guidance as to how a TMDL is to be created.

The Farm Bureau interprets the words “total maximum daily load,” as unambiguous.  The Farm Bureau contends that a TMDL can consist only of a number representing the amount of a pollutant that can be discharged into a water body.  In issuing the Chesapeake Bay TMDL, the EPA (1) included in the TMDL allocations of permissible levels of nitrogen, phosphorous, and sediment among different kinds of sources of these pollutants (including point-sources and non-point sources of pollution), (2) promulgated target dates for reducing discharges to the level the TMDL envisions, and (3) obtained assurance from the seven affected states that they would hit the targets.  These latter actions exceeded EPA’s authority under the CWA, according to the Farm Bureau.

Circuit Court Judge Ambro turned to Chevron v. NRDC, 467 U.S. 837 (1984), for guidance in establishing whether EPA had the authority to “fill in the gaps” left by Congress.  Slip Op. at p. 29.

Following Step 1 (is the intent of Congress ambiguous?) of the Chevron analysis (Chevron, 467 U.S. at 842–43) Judge Ambro found that the term “TMDL” was sufficiently ambiguous.  In particular, the court found that the word “total” was susceptible to numerous interpretations, and that EPA was authorized to “fill in the gaps.”  Accordingly, EPA legally could (1) account for point and nonpoint sources of pollution, (2) set forth schedules in states will progress toward achievement of water quality standards and (3) assess whether a state will meet the goals of pollution reduction. Slip Op. at. p. 53.

In assessing Step 2 (is the agency’s interpretation arbitrary, capricious, or manifestly contrary to the statute? (Chevron, 467 U.S. at 844)), Judge Ambro reviewed a host of supporting material (e.g., statutory provisions, legislative history, case precedents, etc.) to find that EPA’s approach satisfied Step 2 of the Chevron test.

“The Chesapeake Bay TMDL will require sacrifice by many, but that is a consequence of the tremendous effort it will take to restore health to the Bay—to make it once again a part of our “land of living,” Robert Frost, The Gift Outright line 10—a goal our elected representatives have repeatedly endorsed.” Slip Op. at P. 60.

In describing the Farm Bureau’s continuing struggle (they have indicated that they will request a review by the U.S. Supreme Court), representatives of the Farm Bureau stressed that the Farm Bureau is not challenging EPA’s power to set the limit, but rather they are resisting the limits EPA placed on the various pollution sources (i.e., the substantial pollution burden derived from non-point pollution sources, largely attributed to agricultural activities).

Curiously, John Mueller, Farm Bureau vice president of litigation, was quoted as conceding that the current clean-up plan for the Bay must be implemented: “It’s the only way the bay is going to get cleaned up.” York Dispatch, 9/28/2015, by David Weissman (http://www.yorkdispatch.com/breaking/ci_28888705/farm-bureau-challenging-epa-authority-chesapeake-bay-pollution).

EPA Issues Jurisdictional Waters Regulatory Definition: WOTUS Reaches a Rolling Boil

By John R. Embick, Esq.

Chair, Environmental Law Section, Chester County Bar Association

6/30/2015

On May 27, 2015, the U.S. Environmental Protection Agency (“EPA”) and the U.S. Army Corps of Engineers (“ACE”) announced final rule-making on a definition of “Waters of the United States” (“WOTUS”). The final rule was subsequently issued in the Federal Register on June 29, 2015 (80 F.R. 37054 - 37127).  The WOTUS rule is effective on August 28, 2015.

The agencies dubbed the new rule “The Clean Water Rule.”  Opponents have called it a breathtaking (and unconstitutional) regulatory overreach. Sixteen states have already filed suits challenging the new regulation: one in Texas (State of Texas v. U.S. Environmental Protection Agency, No. 15-cv-162 (U.S.D.C.S.D. Tex.)), and the other in North Dakota (North Dakota v. U.S. EPA, No. 15-59 (U.S.D.C. N.D.). Farmers have gathered pitchforks and torches, according to the American Farm Bureau Federation.  Environmental advocacy groups (including a group of beer manufacturers!) have praised the new rule with messianic fervor.

What’s all the fuss about?  The problem arises from the Clean Water Act, 33 U.S.C.  §§ 1251 et seq. (“CWA”).  When describing what waters are subject to federal regulation (e.g., for the purposes of the National Pollution Discharge Elimination System (“NPDES”) permit requirements), the CWA uses the term “navigable waters,” which the CWA in turn defines as “waters of the United States, including the territorial seas.”  Unfortunately, the term “waters of the United States” is not further defined in the CWA.

In most situations, the determination of whether WOTUS is involved is not controversial.  Navigable waters (and this includes some traditionally non-navigable waters) are widely understood to cover most: (1) inland seas, rivers, streams, and lakes that are used in, or could be used in interstate commerce; (2) interstate waters and wetlands; (3) the territorial seas; and (4) impoundments.

A controversy has arisen in determining federal jurisdiction over isolated waters (which are not directly connected to navigable waters) or wetland areas or waters which are adjacent to navigable waters.  These latter two issues were presented to the U.S. Supreme Court (“SCOTUS”) in two cases: Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers (“SWANCC”), 531 U.S. 159 (2001), and Rapanos v. United States, 547 U.S. 715 (2006).

At issue in SWANCC were isolated, intrastate wetlands which a group of local municipalities near Chicago, IL had selected for construction of a municipal landfill.  These wetlands clearly met the biological definition of wetlands, but were not located in or adjacent to open waters traditionally considered to be navigable waters of the United States. The wetlands had formed over time on the site of an abandoned sand and gravel quarry site, and were home to a wide variety of migratory waterfowl. In a holding which turns on the statutory construction of the term “waters of the United States,” the Courtnarrowed the Corps’ interpretation of the term “ waters of the United States.”

In Rapanos, the matter involved the filling of wetlands that were located miles from traditional WOTUS.  Justice Scalia’s plurality opinion decried ACE’s excessive and over-broad interpretation of jurisdictional wetlands.  In order to be a proper subject for regulation, he said, a wetland had to be permanently and directly attached to traditional navigable waters.  In an opinion concurring in the judgment, Justice Kennedy, outlined a “significant nexus” standard, which must be determined on an ad hoc basis (hence his concurrence in the remand decision).  The agencies ended up trying to use both tests on a water-by-water basis.

After SWANCC and Rapanos, the agencies developed guidance (not rulemaking) documents (2003 and 2008) which were designed to explicate how the agencies would proceed in determining whether jurisdictional waters existed, and in complying with the High Court rulings.  In an effort to clarify the scope and ambit of WOTUS, in 2011, the agencies published new draft guidance to help clarify the manner in which WOTUS jurisdiction would be determined.  This proposed guidance was controversial and was never adopted.  Several bills were introduced in Congress, which would have forbidden the agencies from implementing the proposed guidance.

On April 21, 2014, the agencies published a draft WOTUS definitional rule in the Federal Register, which also has proved to be very controversial.  In the rulemaking process involved with the development of the new WOTUS rule, thousands of public comments were received, and the EPA Science Advisory Board (“SAB”) reviewed hundreds of scientific articles and texts, in an effort to evaluate the scientific basis for identifying and classifying WOTUS, and therefore for the exercise federal jurisdiction over those waters.

The scientific effort was aimed at understanding current understanding of the connections (or lack of connection) of streams, marshes and wetlands relative to large water bodies such as rivers, lakes, estuaries, and seas, as well as the factors which create the connections, such as frequency, duration, magnitude, timing, and rates of change of water, material, and biotic fluxes to downstream waters.

In those cases where the extent of WOTUS is not clear, this is a big deal since the regulatory consequences can be significant (and expensive).  For example, the applicability of the Endangered Species Act (“ESA”) could be triggered, because the ESA requires federal agencies to evaluate potential impacts to threatened or endangered species, when federal permits are required.  In our current political climate there is a great deal of controversy about almost any proposed extension of regulatory control or power.

The result of this regulatory history is a new final rule which stretches for over 75 pages in the Federal Register.  The agencies hope that the new definition, since it is based on extensive public comment and scientific analysis, will help clarify the scope of WOTUS.

In the two key areas involving current political, legislative, scientific and jurisprudential controversy (isolated waters, and adjacent waters), the new rule seems to expand federal jurisdiction and clarify what waters are WOTUS.   In all other respects, the rule does not change the regulatory landscape to any great degree, and in fact appears to expand the list of exclusions to WOTUS (e.g., stormwater management structures and systems, water distribution structures and wastewater recycling structures, groundwater recharge basins, and “puddles”).

With respect to “adjacent waters,” the new rule seems to define by rule these waters as a category of WOTUS based on distance limits.

With respect to “isolated waters,” the new rule appears to express a protocol for determining whether the isolated waters are WOTUS, and therefore is expected to reduce the number of case-by-case investigations which would otherwise be necessary. The final rule identifies two sets of waters for which a site specific “significant nexus” analysis to determine if CWA jurisdiction applies.  The first set involves five specific subcategories of waters (prairie potholes, Carolina bays and Delmarva bays, pocosins, western vernal pools, and Texas coastal prairie wetlands). The second set are waters located in the 100-year floodplain of a traditional navigable water, interstate water, or the territorial seas, and within 4,000 feet of the high tide line or ordinary high water mark of a jurisdictional water.

The agencies estimated that the new rule will extend CWA jurisdiction over 3%-5% more waters, when compared to prior practice and experience. 

Farmers are upset because they assert that the rule adds uncertainty (and possibly regulatory control) over lots of agricultural activities (e.g., irrigation and run-off control).  They (or their representatives) say that farmers are already excellent stewards of their lands and additional control is not necessary.  However, it is clear that agricultural run-off remains a significant problem and continues to contribute to the contamination of many rivers, streams and lakes.  The development of the Chesapeake Bay TMDL permit certainly seems to confirm that this continues to be a problem.

The new rule, if it survives, is not expected to cause many ripples in Pennsylvania, since the Commonwealth already exercises more extensive jurisdiction over the “waters of the Commonwealth,” the latter which includes virtually all waters (surface and subsurface) in the state.

Stream Buffers May be Breached -- Amendments to Section 402 of the Pa Clean Streams Law Signed into Law

By: John R. Embick, Esq.

Chair, Chester County Bar Association, Environmental Law Section

3/31/2015

On October 22, 2014, former Governor Corbett signed into law amendments to Section 402 (Potential Pollution) of the Clean Streams Law, 35 P.S. §§ 691.1 et seq.   Act 162 of 2014 adds a new subsection (c) to § 402, 35 P.S. § 691.402(c).  The new amendments became effective 60 days thereafter, on December 21, 2014.

New section 402(c)(1) specifies that in instances where a riparian buffer or forested riparian buffer is required by the relevant administrative rules and regulations set forth in 25 Pa. CodeChapter 102 (Control of Erosion and Sedimentation), an applicant for an NPDES construction stormwater permit may seek to demonstrate that other best management practices (“BMPs”), design standards, or other alternatives may be used in lieu of a riparian buffer, so long as the BMP or other alternatives has “substantially equivalent” effect.

25 Pa. Code § 102.14 (a) (1) indicates that where an earth disturbance activity is proposed in a high quality or special protection watershed, the buffer distance shall be 150 feet.

25 Pa. Code § 102.14(a)(2) states that where the earth disturbance is proposed, and the project contains or is along or within 150 feet of protected waters in a high quality or special protection watershed, and where the waters fail to attain certain uses contained in Category 4 (waters impaired for one or more designated uses but not needing a total maximum daily load (TMDL)) or Category 5 (waters impaired for one or more designated uses and needing a total maximum daily load (TMDL)) on Pennsylvania’s Integrated Water Quality Monitoring and Assessment report, then a forested riparian buffer must be protected or created.

The riparian buffer standards contained in 25 Pa. Code Chapter 102 were adopted in 2010 after an extensive period of public comment and response. There are some exceptions, and the rules regarding the location and composition of the riparian forested buffer are detailed. 

In addition, section 402(c)(2) of the new amendments basically provides that if a project is within 100 feet of a protected water, then an applicant must provide offsetting buffers in a one-to-one ratio somewhere else nearby.

On March 21, 2015, Pa DEP published proposed guidance documents relating to the manner in which the regulated community could demonstrate “substantially equivalent” performance.

In a proposed guidance document entitled: “Riparian Buffer or Riparian Forest Buffer Equivalency Demonstration,” DEP ID: 310-2135-002, the Department provides interim final technical guidance and outlines the equivalency demonstration criteria and process related to the riparian buffer or riparian forest buffer equivalency demonstration required by Act 162 of 2014.

In a companion proposed guidance document entitled: “Riparian Buffer or Riparian Buffer Offsetting,” DEP ID: 310-2135-003, the Department provides interim final technical guidance relating to the offsetting criteria and process related to the riparian buffer or riparian forest buffer offsetting required by Act 162 of 2014.

The amendments to the Clean Streams Law reportedly were supported by the Pennsylvania Builders Association, and were opposed by virtually every environmental advocacy group in the Commonwealth, including PennFuture, the Pennsylvania Environmental Council and the PA Fish & Boat Commission.

The instances in which the amendment to sec. 402(c) (1) applies seem fairly narrow: the project must be near special protection waters, and require a NPDES stormwater construction discharge permit.  However, these waters are arguably the most sensitive and deserving of a high level of protection.

A forested riparian buffer is considered to be the gold standard of stream and wetland protection in connection with preventing pollution associated with earth disturbance or development.  The buffers act as a highly efficient filter and treatment system for sediment and other pollution that runs off development sites and also help prevent flooding downstream and protect water quality.

It remains to be seen whether there actually are pollution control alternatives or BMPs which are “substantially equivalent” to the 150 foot riparian forested buffers.  Many conservation groups felt that strong protection represented by riparian buffers was required for Pennsylvania’s most valuable, sensitive and high quality waters, and that the new amendments are a step backwards.

The new amendments to the Clean Streams Law do not mandate or specify what control alternatives are “substantially equivalent,” and none may currently exist. The amendments nevertheless will afford an applicant the ability to make the demonstration.

The guidance document published by PaDEP regarding the “substantial equivalency” demonstration suggests that the PaDEP thinks that the demonstration theoretically can be achieved, at least with utilization of the “capture and reuse” BMP.  What this means is that runoff from the development site must be captured and reused somehow on site.

A lot of people were upset by the cost and effort associated with complying with the riparian buffer zone requirement, and felt that the 150 foot buffer requirement was arbitrary and did not adequately accommodate site-specific conditions.  It is clear that many people also viewed the forested riparian buffer requirements to be an unreasonable restriction on their rights to use their property as they saw fit.  The new amendments may provide some relief, but how much is not clear as yet. 

The Pa Environmental Rights Amendment: Lycoming CCCP Weighs In

John R. Embick, Esq.

Chair, Chester County Bar Association, Environmental Law Section

10/14/2014

Earlier, I wrote about the Pa Supreme Court’s interesting decision in the case of Robinson Township v. Commonwealth, 83 A.2d 901 (Pa. 2013).  The most intriguing part of this complicated decision, was Chief Justice Castille’s plurality opinion, in which he broke new ground on the meaning and interpretation of Article 1, Section 27 of the Pa Constitution (also known as the Environmental Rights Amendment).

In Gorsline, et al v. Board of Supervisors of Fairfield Township, Docket No. 14-000130, (Lycoming County Court of Common Pleas, August, 2014), Judge Mark Lovecchio was called upon to review an appeal taken by neighbors from a conditional use approval for the construction of gas wells on property owned by Donald and Eleanor Shaheen. 

The property in question was located a zoning district labeled Residential Agricultural (RA).  Only one residence was located within 1,000 feet of the proposed gas development site, but many homes were located within a 3,000 foot radius of the site.  It has been reported that the Shaheens are retired, and were counting on the royalties that would be generated by the gas lease they had signed with the gas producer, Inflection Energy, LLC (“Inflection”).

The court first addressed a dispute about whether the proceeding should be considered under the provisions of the Local Agency Law, or the Municipalities Planning Code (“MPC”).  Judge Lovecchio found that the proceeding clearly was a matter governed by the provisions of the MPC.  This ruling was of particular importance because certain issues raised by the Gorslines in the appeal were not raised in the conditional use matter before the Board of Supervisors below.  The court held that the MPC did not limit the issues that could be raised on appeal.  Judge Lovecchio went on to mention that he would have allowed argument on some of the constitutional issues anyway, since they were significant in his view.

The court then decided that the local zoning ordinance permitted the desired use in the RA district because the ordinance allowed the placement in the RA district of all uses which were neither specifically permitted nor denied in the zoning ordinance.  The ordinance did not address natural gas operations, and the court found that natural gas operations were not included in the definition of surface mining.

The Fairfield Township zoning ordinance permits approval of a conditional use, only if the proposed use is similar to and compatible with other uses permitted in the RA district. The court found that the township abused its discretion in finding that Inflection satisfied this burden, because the decision was not supported by relevant evidence that a reasonable mind might accept as adequate to support a conclusion.

In addition, the Fairfield Township zoning ordinance permits approval of conditional use, only if the proposed use is not in conflict with the general purposes of the ordinance.  The Court found that the natural gas operations were in conflict with the general purposes of the ordinance, since it generally discourages industrial uses in the RA district, among other things.  In his discussion, Judge Lovecchio was clearly concerned about the substantial impacts that the development and operation of a natural gas well would entail, at least during an initial period of 2 to 3 years.

Finally, the Fairfield Township Zoning ordinance places a burden on the applicant to demonstrate that the proposed use would not be detrimental to the public health, safety and welfare of the neighborhood where the use is to be located.  The court found that despite the clear wording of the ordinance as to the applicant’s burden, that the case law places the burden upon the appellants (the Gorslines).  After reviewing the evidence, the court found that the appellants presented substantial evidence that there is a high degree of probability that the proposed use will adversely affect the health, safety and welfare of the neighborhood.

Citing Robinson with approval, the court noted that natural gas development inevitably does violence to the landscape, and that the township has a substantial and immediate interest in protecting the environmental and the quality of life in its jurisdiction.  Judge Lovecchio went on to say that the constitution obligation must be respected by all levels of government.  The court then vacated the conditional use approval.

In this decision, the implications of Robinson only crept in at the end of the opinion, and you might argue that Judge Lovecchio’s decision squarely rests on the evidentiary record made in the tribunal below.  However, environmental law practitioners are wondering if there will be more cases like Gorsline and what it means. 

Pa Supremes Breathe New Life into Article 1, Section 27 of the Pennsylvania Constitution

by: John R. Embick, Esq.

Chair, Chester County Bar Association, Environmental Law Section

1/14/2014

The recent and long-awaited decision of the Pennsylvania Supreme Court concerning the validity of the new Pa Oil and Gas Act (Act 13 of 2012), was rendered on December 19, 2013, in the case of  Robinson Township, et al. v. Commonwealth of Pennsylvania, et al. No. 63 MAP 2012.

The Robinson Township case raised many interesting issues related to standing, ripeness, separation of powers, due process, statutory and constitutional interpretation, and the scope of the authority of the General Assembly and Pennsylvania municipalities.

From an environmental law standpoint, however, the main opinion, authored by Chief Justice Castille, was striking in its treatment of Article 1, Section 27 of the Pennsylvania Constitution.  Art. 1, Sec. 27 is also known as the Environmental Rights Amendment.  Ratified by voters in a 1971 referendum, the Environmental Rights Amendment grants citizens certain environmental rights, and appoints the Commonwealth as the trustee of various natural resources:

“The people have a right to clean air, pure water, and to the preservation of the natural, scenic, historic and esthetic values of the environment. Pennsylvania’s public natural resources are the common property of all the people, including generations yet to come. As trustee of these resources, the Commonwealth shall conserve and maintain them for the benefit of all the people.”

The Robinson Township case pitted the Commonwealth against a group of citizens, elected officials and municipalities (the latter will be referred to collectively as “Citizens”) regarding the development of the Marcellus Shale Gas deposits. One of the main effects of Act 13 of 2012, was to severely limit municipalities’ zoning rights with respect to shale gas development.

In the decision below, Commonwealth Court had dismissed the Citizen’s claims (for failure to state a claim) premised on the Environmental Rights Amendment by concluding that Act 13 had relieved municipalities from balancing gas development with environmental concerns in zoning matters.  The revival of those claims and the extensive treatment and reliance of Chief Justice Castille on the Environmental Amendment was surprising, and largely unexpected by many.  Justice Castille wrote:

“To describe this case simply as a zoning or agency discretion matter would not capture the essence of the parties’ fundamental dispute regarding Act 13. Rather, at its core, this dispute centers upon an asserted vindication of citizens’ rights to quality of life on their properties and in their hometowns, insofar as Act 13 threatens degradation of air and water, and of natural, scenic, and esthetic values of the environment, with attendant effects on health, safety, and the owners’ continued enjoyment of their private property. The citizens’ interests, as a result, implicate primarily rights and obligations under the Environmental Rights Amendment -- Article I, Section 27. We will address this basic issue, which we deem dispositive, first.”

The Court placed the environmental rights and responsibilities afforded by Art. 1, Sec. 27 on the same level as other political rights granted by Art. 1 of the Pa. Constitution.  

The Court also declined to construe the extent of the personal and individual rights of citizen afforded by the first sentence of the Environmental Rights Amendment, finding the arguments of the Citizens to be not sufficiently developed.

The Court, therefore, focused on the obligations of the Commonwealth as trustee of the Commonwealth’s natural resources.  The central question presented, according to Chief Justice Castille, is whether the General Assembly performance of its legislative function in enacting Act 13 is consistent with the constitutional mandate of the Environmental Rights Amendment.  Chief Justice Castille specifically related the development of the Environmental Rights Amendment as a response to past industrial activities which wreaked widespread and long lasting environmental pollution in the Commonwealth, such as the early deforestation of Pennsylvania, and the extraction of anthracite coal in the 19th and 20th centuries.

In short, the Court found that the limitation of local municipal zoning authority and the ability of the Commonwealth to waive certain set back limitations as contained in Act 13 were inconsistent with the Commonwealth’s role as trustee of natural resources and its duty to preserve and maintain them for generations to come.

This all happened, in my view, because some of the justices thought more in depth, after over 40 years, about what exactly is the meaning of the Environmental Rights Amendment, and how is that meaning applied in the evaluation of Act 13 of 2012. This was all possible because, rightly or wrongly depending upon your perspective, the rights described by the Environmental Rights Amendment were placed into the Commonwealth’s Charter.

U.S. Supreme Court “Lays to Rest” Private Party Superfund Tort Suit – The Statute of Repose Awakens (at least in the Old North State)

By: John R. Embick, Esq.

Chair, Environmental Law Section

6/13/2014

The U.S. Supreme Court recently issued an interesting ruling which addressed whether state statute of limitations and state statutes of repose are pre-empted by the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”, or more popularly known as “Superfund”), 42 U.S.C. § 9601, et seq.

The case is captioned CTS Corp. v. Waldburger, et al., No. 13-339 (Decided June 9, 2014), and the main opinion was written by Justice Kennedy (joined in full, or in part, by Roberts, Scalia, Thomas, Alito, Kagan and Sotomayor).  A dissent was penned by Justice Ginsburg (joined by Breyer).

CTS Corp. (“CTS”), a publicly traded company on the New York Stock Exchange, is a manufacturer of electronic components and sensors.  CTS and a predecessor company operated a manufacturing plant near Asheville, NC (also known as the “Old North State”, or the “Tar Heel State”).  The facility was sold in 1987.  Residents in the area alleged that the groundwater in the vicinity was contaminated by plant operations, and that they suffered damages and injuries as a result.  The residents claim the damage was first discovered in 2009, over twenty years after the sale.

The residents brought various claims against CTS, including claims under Superfund, seeking compensation for the damages and injuries caused by the groundwater contamination.  CTS claimed, among other things, that a Tar Heel State Statute of Repose barred the claims after 10 years.  Since CTS sold the plant in 1987, the claims arguably expired in 1997.

Superfund contains a provision which partly pre-empts statute law statutes of limitations in certain tort actions involving personal injury or property damage arising from the release of hazardous substances into the environment.  42 U.S.C. § 9658.

CTS claimed that the Old North State Statute of Repose was not pre-empted by § 9658, and that the claims were barred.  The federal trial court agreed, but the Fourth Circuit reversed, finding that the provisions of § 9658 were ambiguous and that the remedial purposes of Superfund favored pre-emption.

The High Court reversed, finding that the provisions of § 9658 did not preempt the NC Statute of Repose.

At the core of Justice Kennedy’s opinion is a discussion of statutory interpretation and the pre-emption doctrine.  Justice Kennedy opined that the outcome turned on whether    § 9658 distinguished between statutes of limitation and statutes of repose.  Justice Kennedy explained that the two doctrines, while sharing similarities, have different purposes and objectives.   Statutes of limitation seek to balance the rights and duties of litigants by encouraging the pursuit of claims in a “reasonable” amount of time, and begin to run when a claim accrues.  Statutes of Repose, on the other hand, reflect a legislative judgment that for certain acts, a defendant should be free of liability after a certain period of time passes, regardless of when a claim accrues or is discovered (and the length of time involved in most statutes of repose is much longer, e.g., 10+ years).

Justice Kennedy further indicated that the doctrine of equitable tolling of the statute of limitations helped discern the subtle differences between the two doctrines.  He explained that the purpose of encouraging diligent prosecution of claims under the statute of limitations is not furthered when the plaintiff is prevented from discovering when the claim arises.  Further, claims involving exposure to contaminants frequently are affected by very lengthy latency periods.   Statutes of repose are not informed by this consideration, so that the equitable tolling doctrine does not apply.

Having distinguished between the two concepts involving limitations periods, Justice  Kennedy then turned to the actual language of § 9658.  He found that the section mentioned statute of limitations multiple times, and did not mention statute of repose at all.  He also concluded that the two doctrines were widely recognized as separate and distinct.  Because Congress seemingly did not address the distinct doctrine of the statute of repose, he concluded that Congress did not intent to pre-empt those state statutory provisions.

Justice Ginsburg, in dissent, noted that she disagreed with the effort of the majority to distinguish the two limitations period doctrines.  She also reasoned that because latency periods for the appearance of effects of exposure to contamination often are substantially longer that the periods set forth in statutes of repose, that the purpose for which § 9658 was enacted would be frustrated by the interpretation of the majority justices.

What is the likely effect of the decision with respect to Pennsylvania’s Statute of Repose?  The Commonwealth’s version of the statue of repose is found at 42 Pa. C.S.A § 5536, and seems  to be limited to claims against builders, contractors, engineers and architects relating to the design, planning, supervision, or observation of construction of improvements to real property within 12 yeas after completion of the construction or improvement.

As drafted, therefore, it appears that the Pa Statute of Repose would not have prevented the claims raised by the Tar Heel State plaintiffs, had the site been located in the Keystone State.

Hercules and Hydra, Hofburg, Vienna, Austria, 2014

A New (Wet) Season for Municipal Stormwater Ordinances in Chester County

By John R. Embick, Esq.

Co-Chair, Environmental Law Section

September 10, 2013

On July 2, 2013, the Pa Department of Environmental Protection (PaDEP) approved Chester County’s County-Wide Stormwater Management Plan.  This plan, styled by Chester County as an Addendum to the County’s Watersheds Plan, is required by the Pa. Storm Water Management Act, 32 P.S. §§ 680.1, et seq., the latter colloquially known as Act 167 of 1978.

Act 167 was passed in response to numerous Pennsylvania flood disasters over the years, including the infamous Johnstown Flood (multiple floods, actually: 1889 (dam failure), 1936 and 1977) and the devastation of Hurricane Agnes (1972).  Act 167 requires counties to develop plans to control land use and manage storm water so as to reduce damage and improve public safety, to effectively manage stormwater runoff, control flooding, reduce streambank erosion and sedimentation, promote groundwater recharge, and maintain or improve the water quality of receiving streams.

Act 167 can be viewed as part of a complex mosaic of federal, state, and local laws and regulations addressing problems related to non-point source runoff – the water flow that comes off of fields, lawns, forests, impervious surfaces, and initially is not emitted from a pipe or a point source.  The mosaic includes, but is not limited to: (1) the Federal Water Pollution Act and the NPDES permitting program (which now includes pre and post-construction storm water management on construction sites using storm water best management practices or BMPs), and the Municipal Separate Storm Sewer System permit program (MS4) (which controls discharges from municipal storm water systems); (2) The Federal Rivers and Harbors Act of 1899 (which controls the placement of fill in navigable waters); (3) The Pennsylvania Clean Streams Law (which includes erosion and sedimentation control regulations found at 25 Pa. Code Chapter 102); (4) The Pennsylvania Flood Plain Management Act, 32 P.S. §§ 679.101, et seq., (which controls land use in flood plains) and the companion National Flood Insurance Act of 1968, 42 U.S.C. §§ 4001, et seq.; and (5) the Pa. Dams and Encroachment Act 32 P.S. §§ 693.1, et seq. (covering the construction of dams, wharves and docks in Pennsylvania waters (see also 25 Pa. Code Chapter 105)). Many of these myriad requirements stand alone, but many also are overlapping.

Act 167 was passed in 1978, but many counties ignored its planning mandate.  The approval of Chester County’s County-Wide Act 167 Plan comes almost 35 years after the law’s enactment.

A component of the Act 167 Plan requires all municipalities in Chester County to adopt a Stormwater Ordinance within six (6) months of final approval by PADEP of the County-Wide Act 167 Plan.  Adoption must be complete by January 2, 2014.  Municipalities may chose to adopt a Model Ordinance (contained county-wide Act 167 Plan), or may adopt an ordinance with equivalent or more stringent standards. For those municipalities that choose to amend their existing stormwater management ordinance (rather than adopt the Model Ordinance), a Matrix of Minimum Mandatory Ordinance Standards for Municipal Act 167 Ordinances is presented in Appendix E of the County-Wide Act 167 Plan.

Chester County is recommending that municipalities enact the Model Ordinance as a stand-alone ordinance. In addition, Chester County is recommending that this Model Ordinance be enacted under the provisions of the Municipalities Planning Code, advising that “enactment in this manner is anticipated to provide maximum flexibility and authority for enforcement.”

Each municipality will also have to review zoning, subdivision and development, building code, and erosion and sedimentation ordinances, as are necessary to regulate development within the municipality in a manner consistent with the County-Wide Act 167 Plan. Additional requirements are applicable for municipalities having territory in the Chester Creek, Conestoga River, Crum Creek, Darby Creek, and (East) Valley Creek watersheds.

In general, the Model Ordinance regulates activities that exceed one thousand (1,000) square feet of “Proposed Impervious Surfaces” and more than five thousand (5,000) square feet of “Earth Disturbance.”  A number of exemptions apply, including certain agricultural operations, maintenance of existing landscaping, and certain gardening activities.  However, the ordinance specially states that “[e]xemption shall not relieve the Applicant from implementing such measures as are necessary to protect health, safety, and welfare, property, and water quality.”

Since there is little time remaining between now and the deadline of January 2, 2014, municipal solicitors and engineers should be working now to get the new ordinance reviewed, advertised, commented upon, and adopted.

Westtown Shopping Center, 2014

A Tale of Two Valuations: High Courts in Pa and NJ Issue Just Compensation Rulings in Eminent Domain Proceedings

By John R. Embick, Esq.

Co-Chair, Environmental Law Section

August 13, 2013

The New Jersey Supreme Court and the Pennsylvania Supreme Court recently issued rulings regarding property valuation in eminent domain proceedings.  Both rulings seemingly expand the scope of evidence that may be presented in order to prove property value.

In Borough of Harvey Cedars v. Harvey Karan and Phyllis Karan, Doc. No. A-120-11 (July 8, 2013), the NJ High Court was presented with a just compensation appeal related to a dune development project on that skinny strand of land known as Harvey Cedars on Long Beach Island.  In an effort to protect property on Long Beach Island from storm damage, municipalities commenced dune elevation projects all along the coast line (by the way, most geologists acknowledge that barrier reef islands constantly shift position naturally, and have done so for millennia, and are expected to do so for the foreseeable future).

In order to raise up the dunes, the municipalities sought easements from beach front homeowners in order to perform the dune development work.  In instances where property owners refused to grant easements, the municipalities exercised eminent domain power to condemn the desired easements.  The Karans refused to grant an easement.  Reports indicate that Harvey Cedars offered $300.00 for the easement, and the Karans for their part demanded about $500,000.00.  With so much distance between the offers, this case was doomed to “go up.”

After a jury trial, the Karans were awarded $375,000.00, in recognition that the higher dunes partially obstructed the view of the beach and ocean from the house.  The municipality appealed, complaining that they were precluded from introducing evidence that would have shown that the dune development project benefitted the Karan’s greatly, thus offsetting any diminution in value.  The trial court refused to allow this evidence, holding that the dune replenishment was a general benefit for all residents, as opposed to a specific benefit to the Karans, and could not be counted.

The NJ Supreme Court disagreed, saying that it did not matter that the dune development project benefitted others.  As long as the alleged benefit was not speculative, this evidence could be introduced and considered by the jury.  The case was remanded for a new trial.   Since it is likely that the Karan house would be destroyed or severely damaged by a very strong storm without the fortified dunes, most experts think that the diminution of value will come out closer to the town’s original offer than to the Karan’s initial demand.

In Lower Makefield Township v. Dalgewicz, et al., Docket No. 33 MAP 2011 (May 29, 2013), the Pennsylvania Supreme Court ruled on an eminent domain case in Bucks County.  In 1996, Lower Makefield Township condemned a 166 acre farm for a public golf course development.  A board of view set the value at $3,990,000.00.  The parties were not able to agree on the damages, and the case on valuation went to a jury.

At the trial, the Dalgewiczs introduced evidence about purchase offers that had received for the property, both before and after condemnation, that were millions of dollars higher than the amount granted by the board of view. One of the written offers was from Pulte Homes, Inc., in the amount of $ 8,000,000.00.  The trial court allowed the testimony and admitted the documentary evidence, saying it was relevant.  The jury ultimately determined the fair market value of the property was $5,850,000.00, significantly higher than the board of view.  Commonwealth Court upheld.

In its decision, Commonwealth Court noted prior case law holding that mere offers generally should not be admitted into evidence (due to concerns about hearsay, speculation, and introduction of confusing collateral issues), but seemingly created an exception, where “a sufficient foundation was laid to establish that the offer was made in good faith, by a party acquainted with the value of the [p]roperty, and of sufficient intention and ability to pay” so as to make it a bona fide offer and, therefore, admissible. Lower Makefield Twp. v. Lands of Dalgewicz, 4 A.3d 1114, 1120 (Pa. Cmwlth. 2010). 

In sustaining the result, the Pa High Court stated that Commonwealth Court’s creation of an exception to longstanding precedent was unnecessary due to the 1964 amendments to the Eminent Domain Code, 26 Pa.C.S. §101, et seq., the latter which expanded the scope of evidence which could be considered.

The Pa Supreme court concluded by saying:

“Accordingly, we hold there is no bright-line rule prohibiting testimony of bona fide offers into evidence, especially, as in the present case, when a contract has been signed and the offer is used to show that contract’s reasonableness. In so holding, we are guided by the principle that “[t]he admission or exclusion of evidence is within the sound discretion of the trial court[.]” Lehigh-Northampton Airport Authority v. Fuller, 862 A.2d 159, 168 (Pa. Cmwlth. 2004) (citations omitted). Whether an offer is bona fide and whether it should be admitted are questions best left to the trial court as the gatekeeper of the evidence.”  Slip Op. at 9.

So, it looks like unprecedented evidentiary issues made a big winner of one shore town in NJ, and a big loser of a Pennsylvania township.  Municipal solicitors and elected officials must stay cognizant that land valuation for eminent domain matters is not all “cut and dry.”

LBI, NJ, 2014, Dune Replenishment Project

Gasoline Deliveries to Gas Station Do Not a Tank Operator Make – PA Storage Tank Act Decision Refuses Invitation to Expand Definition of Operator

Gasoline Deliveries to Gas Station Do Not a Tank Operator Make – PA Storage Tank Act Decision Refuses Invitation to Expand Definition of Operator

By:  John R. Embick, Esq.

Co-Chair, Environmental Law Section

June, 2013

In the case of Hovis, et al. v. Sunoco, Inc. (R&M), et al., No. 732 WDA 2012, decided on March 18, 2013, by a three judge panel of Superior Court of Pennsylvania, the court was called upon to decide, among other things, whether deliveries of gasoline by Sunoco, Inc. (R&M) (“Sunoco”) , to a leaky gas station once owned (but not currently owned by Sunoco), was sufficient to make Sunoco a tank “operator” under the PA Storage Tank and Spill Prevention Act (“Tank Act”), 35 P.S. §§ 6021.101 - 6021.2104 (2012), and therefore liable for cleanup costs.

The background is somewhat complicated by the fact that the current owners of the gas station, Mr. and Mrs. Hovis, had traded ownership of the gas station with Sunoco several times in the past.  The Hovises originally owned the station, and sold it to Sunoco.  After a number of years, Sunoco sold the station back to the Hovises.   During much of this time, Sunoco supplied the station with gasoline for retail sale.

 In 1999, the Hovises discovered that gasoline was leaking from tanks at the station.  They commenced cleanup operations, and filed a claim with the Pennsylvania Underground Storage Tank Indemnification Board (“USTIF”) for reimbursement of cleanup costs.  The USTIF eventually allowed reimbursement of 43% of the cleanup costs, finding that some of the leakage occurred at an earlier time for which reimbursement would not be available.

The Hovises then commenced an action against Sunoco under section 1305 (c) of the Tank Act, arguing, among other things, that the delivery of gasoline by Sunoco to the station, regardless of station ownership, constituted “operation” of a storage tank. Specifically, the Hovises argued that periodically filling an underground storage tank with gasoline demonstrates a level of supervision or control that would qualify Sunoco as an “operator” for purposes of the Tank Act (the issue of whether Sunoco was an “owner” was resolved by a finding that Sunoco owned the station only prior to the enactment of the Tank Act, and thus was not an “owner”).

The trial court granted summary judgment for Sunoco on the basis that Sunoco could not be a tank operator on this set of facts. 

The Tank Act provides that “[t]he owner or operator of a storage tank and the landowner or occupier on whose land a storage tank is or was located shall not allow pollution resulting from, or a release to occur from, a storage tank.” 35 P.S. § 6021.1310.

The Tank Act also grants a cause of action for any aggrieved person to bring a civil suit against any owner, operator, landowner, or occupier that is in violation of the Act to compel compliance with the statute. 35 P.S. § 6021.1305(c).  See, Juniata Valley Bank v. Martin Oil Co., 736 A.2d 650, 658 (Pa. Super. 1999).  

Section 103 of the Tank Act defines “operator” as: “[a]ny person who manages, supervises, alters, controls or has responsibility for the operation of a storage tank.”

Writing for the Superior Court panel, Judge Wecht, in upholding the trial court’s summary judgment decision, wrote:

“The record demonstrates that, after Sunoco sold the property to Appellants, it continued to deliver gas to the property for a period of several years. However, this alone is insufficient to classify Sunoco as an “operator” for purposes of the Tank Act. There is nothing in the record to suggest that Sunoco managed, supervised, altered, or controlled the tanks during the time that Appellants owned the property. Nor is there any reason we can discern to find that a supplier is an operator solely because it delivers gas to an underground storage tank over which it does not exercise control. For these reasons, we agree with the trial court that Sunoco cannot be an “operator” for purposes of the statute. To hold otherwise would be to hold that, under the Tank Act, an oil company is the “operator” of the storage tanks at every gas station to which it delivers its products. Nothing in the language of the statute, and nothing in our precedent, indicates that the Tank Act was intended to have such broad application.”

So, gasoline suppliers can breathe a little easier.  However, the issue of what level of tank management, supervision, alteration or control constitutes “operation” remains unclear.  Accordingly, gasoline suppliers should probably review their delivery practices with respect to this issue.

Stare Decisis Prevails: Marcellus Shale Gas Not Included as Part of Historical Coal Mineral Estate – Pa Supreme Court Upholds the Dunham Rule

Stare Decisis Prevails: Marcellus Shale Gas Not Included as Part of Historical Coal Mineral Estate – Pa Supreme Court Upholds the Dunham Rule

By: John R. Embick

Co-Chair, Environmental Law Section

May, 2013

Most of us are aware of the enormous energy development boom under way in Pennsylvania as a result of the technological advancements (e.g., hydro-fracking and horizontal drilling) allowing access to the Marcellus Shale deposits underlying extensive terrain in our Commonwealth.

Most of us are also aware that in Pennsylvania, the mineral estate (e.g., coal deposits beneath the surface) can be severed from the ownership of the surface estate.  In cases where the two estates have been severed, the surface owner has a right of “support”, so that the underground activity does not cause, for instance, subsidence of the ground surface.

Surface and mineral estates commonly were severed during historical coal mining booms  in our state in the 19th and 20th centuries (some people say the Marcellus Shale boom is, as Yogi Berra once said, “déjà vu all over again”).  This was usually accomplished by means of a deed granting ownership of the coal beneath a particular parcel to another party.

Interestingly, our Pennsylvania Supreme Court has held that a deed granting rights to coal, also included the rights to methane gas embedded in the coal deposits (see, United States Steel Corporation. v. Hoge, 468 A.2d 1380 (Pa. 1983) (“Hoge”).  Accordingly, depending on the terrain and underlying geology, the ownership of a tract of land could be divided between two or more entities.

Given the age of many deeds and the passage of time, it may be difficult for the surface owner to know who owns the subsurface rights.  This is often not a insignificant problem, as many properties in Pennsylvania are “severed” estates.

So, is Marcellus Shale gas part of the traditional coal mineral estate?  The answer is “no”.

The recent case of Butler, et al. v. Estate of Charles Powers, et al, No. 27 MAP 2012, ___A.3d ___  (Pa. April 24, 2013) provides this answer.

In the Butler case, the successors to owners of certain mineral rights sought a determination that the mineral rights included ownership of Marcellus Shale gas deposits beneath the surface.  Ownership was “cloudy” due to the existence of a deed, recorded in 1881, which reserved to the Char1es Powers Estate, the rights to "minerals and Petroleum Oils."

The trial court ruled in favor of the surface owners, finding that the 19th century Pennsylvania Supreme Court's ruling in Dunham & Shortt v. Kirkpatrick, 101 Pa. 36 (Pa. 1882), held that a reservation of "all minerals" does not in itself constitute a reservation of oil or natural gas, unless expressly stated.  This holding became known as the “Dunham Rule.”

Accordingly, the trial court ruled that the words “minerals and Petroleum Oils” in the Charles Powers Estate deed did not include the rights to Marcellus Shale gas.

On appeal, the Pennsylvania Superior Court caused much uncertainty (a ruling possibly involving property rights worth “Billions of Dollars”) by opining that the successors to the Charles Powers Estate deed might indeed be correct in their argument that Marcellus Shale was a mineral, and that the shale gas should be viewed like methane coal gas (and that Hoge might control). The Superior Court then reversed and remanded the case to the trial court, ordering additional testimony on the question.

The matter was then appealed to the Pennsylvania High Court.  In a decision dated April 24, 2013, the Pennsylvania Supreme Court reversed the Superior Court ruling, and held that the vintage Dunham Rule determined this dispute.  The Court held that the “all minerals” language in the Charles Powers Estate deed did not encompass natural gas.  This is true even though virtually every geologist would certainly refer to Marcellus Shale as “a mineral” and would describe the gas is being embedded in the shale (See, Hoge, above).  But, as often is the case, this is not the way the law developed in Pennsylvania. 

So, the take-away message here is that Stare Decisis is still an important doctrine, and that words matter.  In deeds conveying or reserving interests in mineral estates, scriveners need to describe the rights completely and as accurately as possible.

No NPDES Point Source Discharge Permits Required for Stormwater Runoff from Logging Road Drainage Systems

No NPDES Point Source Discharge Permits Required for Stormwater Runoff from Logging   Road Drainage Systems

By: John R. Embick – April, 2013

Co-Chair, CCBA Environmental Law Section

The Supreme Court of the United States (“SCOTUS”), for the second time in 2013, has issued a ruling which addresses the basic elements of what constitutes a point source discharge under the federal Clean Water Act, 33 U.S.C. §§ 1251, et seq.

The first case involved stormwater runoff in the Los Angeles, CA environs (See, L.A. County Flood Control District v. NRDC, INC., et al, No. 11-460, slip op. (U.S. 1/8/2013 (October Term 2012)).  In the article, Soup Pot and Ladle Rule Wins Again, I discussed the main holding of L.A. County Flood Control District.

The second case, issued March 20, 2013, is Decker, et al, v. Northwest Environmental Defense Center, No. 11-338.  The opinion was written by perennial swing man Justice Kennedy, with six other justices joining.  Justice Scalia concurred in part, but dissented as to the main holding, and Justice Breyer did not participate.

In Decker, SCOTUS was called upon to determine whether permits are required for stormwater runoff from logging road drainage systems into navigable waters located in the Tillamook State Forest near Portland, Oregon.

The Ninth Circuit Court of Appeals had ruled below that NPDES permits were required.  The circuit court decision overturned decades of administrative precedent, and might have doubled the total number of NPDES permits that the agency would have to review and administer.

In Decker, the logging roads are used in connection with the timber harvesting operations.  It was undisputed that runoff from the graded roads enters a system of ditches, culverts and channels and discharges into navigable waters of the United States.   The runoff contains pollution in the form of sediments which is harmful to aquatic organisms.

These discharges were therefore point sources of pollution for which National Pollution Discharge Elimination System (“NPDES”) permits are required, unless an exemption applies.  The permit requirement is a core provision of the Federal Clean Water Act, designed ultimately to achieve fishable, swimmable waters in our nation.

Under the Clean Water Act, a point source is:

“any discernible, confined and discrete conveyance, including but not limited to any pipe, ditch, channel, tunnel, conduit, well, discrete fissure, container, rolling stock, concentrated animal feeding operation, or vessel or other floating craft, from which pollutants are or may be discharged. This term does not include agricultural stormwater discharges and return flows from irrigated agriculture.” §1362(14).

After the passage of the Clean Water Act, the U.S. Environmental Protection Agency (“USEPA”) struggled with the task of issuing permits for the enormous number of point sources covered by the Act.  Accordingly, USEPA promulgated a series of administrative rules which exempted certain categories of point sources from the permit rule.  Another major way in which the agency attempted to deal with the logistical problem of issuing permits is to devise a set of general permits (as opposed to individual permits), which cover various discharges. Under general permit rules, a person may carry out an activity by giving notice to the government and by complying strictly with the conditions in the general permit.

One of these administrative rules was the so-called Silvicultural Rule.  See, 40 CFR §122.27(b)(1).  The Silvicultural Rule basically exempted runoff from logging roads from the NPDES permit requirement.

In 1987, the Clean Water Act was amended to deal more precisely with pollution caused by stormwater runoff, a pollution issue which earlier had been largely ignored (EPA asserts there were bigger fish to fry).  As part of the effort to regulate stormwater discharges, USEPA enacted what has become known as the Industrial Stormwater Rule.  See 40 CFR 122.26(b)(14) (2006).     The Industrial Stormwater Rule exempted some stormwater discharges, and required permits for stormwater discharges from industrial activity.  Industrial activity was not defined in the Act, and, as you might imagine, could cover quite a bit of territory.

The Industrial Stormwater Rule was enacted to help define the scope of activities for which stormwater discharge permits would be required.   USEPA argued that stormwater runoff from logging roads continued to be exempted under the Industrial Stormwater Rule.  The Plaintiffs in Decker, proceeding under the Citizen Suit provision of the Act, argued that permits were required.

On November 30, 2012, only days before the case was argued before the High Court, USEPA issued its final version of an amendment to the Industrial Stormwater Rule. The amendment was USEPA’s response to the Ninth Circuit’s challenged ruling below, and sought to clarify that NPDEs permits were not required for discharges from logging roads.

With that background, the Court framed the main issue as follows: 

“Under the Act, petitioners were required to secure NPDES permits for the discharges of channeled stormwater runoff only if the discharges were ‘associated with industrial activity,’ 33 U. S. C. §1342(p)(2)(B), as that statutory term is defined in the preamendment version of the Industrial Stormwater Rule, 40 CFR §122.26(b)(14) (2006).”  Slip Op., at 11.

Basically, the High court decided that USEPA’s interpretation of the statutory language was entitled to deference under the principles expressed in Auer v. Robbins, 519 U. S. 452 (1997), and reversed.

Justice Scalia’s dissent basically attacks the reasoning behind Auer and urges reconsideration of the Auer doctrine.  In addition, Justice Scalia evidently would have upheld the Ninth Circuit’s ruling, as follows:

“I would therefore resolve these cases by using the familiar tools of textual interpretation to decide: Is what the petitioners did here proscribed by the fairest reading of the regulations? What they did was to channel stormwater runoff from logging roads without a permit. To decide whether that was permissible we must answer one, and possibly two, questions: First, was the storm water discharged from a “point source”? If not, no permit was required. But if so, we face the second question: Were the stormwater discharges exempt from the permit requirement because they were not “associated with industrial activity”? The fairest reading of the statute and regulations is that these discharges were from point sources, and were associated with industrial activity. “ Scalia Opinion, Slip Op., at 7.

So, this question regarding point source discharge permits is resolved, and it appears this is a win for the logging industry.

The Auer doctrine (deference to agency interpretation) seems secure for now.  However, the written decision of Chief Justice Roberts (with whom Justice Alito joined) and of Justice Scalia, noted above, suggests that reconsideration of the Auer principal (agency deference) is lurking in the minds of several justices.

Soup Pot and Ladle Rule Wins Again

Soup Pot and Ladle Rule Wins Again:  More Specificity for Clean Water Act Definition of Point Source

By John R. Embick, Esq. -- March, 2013

Co-Chair, CCBA Environmental Law Section

A recent decision from SCOTUS has provided more clarification on the definition of a point source, as defined by the federal Clean Water Act, 33 U.S.C. 1251, et seq., (“CWA”).  Under the CWA, a discharge from a point source (pipes, outfalls, ditches, channels, etc.) generally requires a National Pollution Discharge Elimination System (“NPDES”) permit before that discharge enters the navigable waters of the United States (yes, this even includes storm water discharges). 

In L.A. County Flood Control District v. NRDC, INC., et al, No. 11-460, slip op. (U.S. 1/8/2013 (October Term 2012)), Justice Ginsburg delivered the Court’s opinion in which seven other Justices joined, and with which Justice Alito concurred (Justice Alito did not offer an opinion, so this was basically a 9 to zip decision).

The issue involved a suit against the L.A. Flood Control District (“LAFCD”) by a number of environmental groups, alleging that the LAFCD was in violation of its storm water permit obligations relating to the Los Angeles and San Gabriel Rivers, among other waterways.  The LAFCD holds storm water discharge permits covering the discharge of storm water from the municipal separate storm water collection system (“MS4”) in L.A., into the rivers. 

Extensive portions of the rivers are channelized through L.A. for flood control purposes, and these enormous concrete surfaces and structures have taken on cultural and iconic significance. (e.g., remember the movie “Grease” and the car race in the L.A. culvert?).

The environmental groups alleged that the results from “in-stream” (as opposed to “end-of-pipe”) monitoring points in the rivers demonstrated that the terms and conditions of the LAFCD NPDES storm water discharge permits were being violated.  The District Court below found that the evidence of violations was insufficient to prove the case against LAFCD, because there were many, many other discharges to the rivers above the LAFCD’s in-stream monitoring points, in addition to the point source discharges covered by the LAFCD storm water permits. 

The Ninth Circuit reversed, basically holding that where the river flow exited the concrete channel into a natural river channel, constituted a point source discharge.  Since the concrete channels were operated (controlled) by the LAFCD, the district was responsible (liable) for the point source discharges.

SCOTUS granted certiorari on the following question: under the CWA, does a “discharge of pollutants” occur when polluted water “flows from one portion of a river that is navigable water of the United States, through a concrete channel or other engineered improvement in the river,” and then “into a lower portion of the same river”?

Using the “soup pot and ladle” analogy, the High Court held that a point source discharge of pollutants did not occur at those locations.  “As the Second Circuit [aptly] put it. . . , ‘[i]f one takes a ladle of soup from a pot, lifts it above the pot, and pours it back into the pot, one has not “added” soup or anything else to the pot.’” , citing South Fla. Water Management Dist. v. Miccosukee Tribe, 541 U. S. 95, 109–110 (2004) (quoting Catskill Mountains Chapter of Trout Unlimited, Inc. v. New York, 273 F. 3d 481, 492 (CA2 2001)). Slip Op. at 4.  The High Court reversed and remanded.

During the pendency of this case, a new storm water discharge permit was issued to LAFCD.  The new permit requires monitoring at the end of the pipes from which L.A. storm water enters the rivers, as opposed to the old, in-stream monitoring locations.

This is but one facet of a comprehensive effort to address the problem of pollution of the nation’s streams and rivers from storm water run-off.  The storm water regulatory program has become increasing more stringent, and a new, more stringent, draft federal storm water rule is expected to be proposed in 2013, with a planned promulgation date of December, 2014.  

PaDEP Implements Permit Decision Guarantee Policy

PaDEP Implements Permit Decision Guarantee Policy

John R. Embick, Esq. -- November, 2012

Co-Chairman, CCBA Environmental Law Section

On July 24, 2012, Governor Corbett issued Executive Order 2012-11.  EO 2012-11 authorizes PaDEP to adopt policies which improve the permit review and coordination process.  EO 2012-11 rescinded a similar policy issued by Governor Ridge in 1995 (EO 1995-5, entitled “Money-Back Guarantee Permit Review Program for the Department of Environmental Resources”).

The Department issued draft policy guidance on September 1, 2012, which included a 30 day public comment period that expired on October 1, 2012.  On November 3, 2012, PaDEP issued a notice in the Pennsylvania Bulletin, which promulgated the final policy guidance and provided access to the public comment and response documents.  The new Permit Decision Guarantee (“PDG”) policy goes into effect on November 14, 2012.

Almost since its inception in 1970, the environmental agency has wrestled with permit review and coordination, attempting to balance speed and efficiency on the one hand, and careful and transparent review on the other.  Scarce resources, regional office differences, central office control, complex project permit coordination demands, and the vagaries of permit application quality have all led to a series of efforts to improve the permit review and coordination process.

In issuing the new permit review and coordination policies, Secretary Krancer emphasized that the Department is demanding that the quality of applications be increased.  In its press release of November 2, 2012, the Department asserted that 40 percent of permit applications submitted to the agency were deficient in some way (the Department did not disclose how and on what basis the number was calculated).

A centerpiece of the new policy is increased emphasis on pre-application meetings with PaDEP.  In these meetings, applicants and regulators will have an opportunity to discuss various approaches to proposed activities, and feedback can be provided.  In this way, applications are expected to be better in terms of administrative completeness and technical quality.

The new policy requires that a permit application be reviewed for administrative completeness within 10 business days.   Significant errors or omissions will cause the application to be deemed incomplete and the Department will deny the application. Subsequently, if an applicant reworks the permit application and resubmits it to the Department, the agency will treat the revised submission as a new application.

Once an application is deemed to be administratively complete, the application will be reviewed for technical adequacy.  The new policy establishes review time limits for various kinds of permits and prohibits agency technical staff from employing regional interpretations of regulations or laws that are inconsistent with DEP’s statewide interpretation. The new policy indicates that one technical deficiency letter will be sent during the review process. If the applicant receives one technical deficiency

letter, the PDG timetable is voided. If technical deficiencies continue to exist after two technical reviews have been completed, the application may be denied.

The PDG policy also provides for an elevation process which may involve the Regional Director or Bureau Directors in order to resolve problems or to develop a review and decision strategy.

The policy also establishes a new priority system for certain permit reviews.

Please keep in mined that all of these new decision points are likely appealable to the Environmental Hearing Board.  

It will be interesting to see how this new program is implemented and whether it reduces permit review times and improves permitting decisions and outcomes.

Pa. Commonwealth Court Confines Recorder of Deeds to Ministerial Acts

Commonwealth Court Confines Recorder of Deeds to Ministerial Acts

By John R. Embick, Esq. -- December, 2012

Co-Chairman, Environmental Law Section

The rapid development of the Marcellus Shale for the production of gas has increased the activities of various governmental agencies, among them the Recorder of Deeds offices in the affected counties. These offices have seen significant increases in real estate transactions related to natural gas production. Specifically, leasing transactions related to natural gas development have increased. These leases must be recorded in order provide constructive notice of their existence and to be valid against subsequent bona fide purchasers.

The extent of the discretion exercised by the Recorder of Deeds offices has been unclear for decades. In the case of Chesapeake Appalachia, LLC v. Ginger Golden, in her capacity as Wayne County Recorder of Deeds, No. 883 C.D. 2011, (Pa Commw. Ct. Slip Op. 1/27/2012), Senior Judge Friedman has provided some answers.

The Chesapeake Appalachia case involved an attempt by a natural gas producer to record "blanket assignments" of natural gas leases. The assignments contained multiple gas leases that presumably were being assigned from one lessee to another lessee. The Recorder of Deeds argued, among other things, that the form of the blanket assignments made it impossible (or perhaps difficult) to reference the assignments to the lessors. The Recorder of Deeds contended that this affected the integrity of the records, and insisted upon the filing of individual lease assignments.

Commonwealth Court ruled that the Recorder of Deeds did not have this discretion. Senior Judge Friedman held that the Recorder of Deeds is a largely ministerial office, and the office must record all documents within the scope of Pennsylvania's recording statutes which (1) are properly acknowledged; and (2) have had the appropriate fee paid (some county ordinances also require the Uniform Parcel Identifier number). The court recognized that gas leases are real estate conveyances, and have been recorded since the 1890's.

Senior Judge Friedman cited with approval the federal district court case of Woodward v. Bowers, 630 F. Supp. 1205, 1207 (Pa. M.D. Pa. 1986) (emphasis omitted):

"In short, the Recorder is a ministerial officer charged with recording all documents presented to him. The only situations in which a Recorder may refuse to record a document presented to him are where the appropriate fee is not paid, where the document is not of the type that is statutorily entitled to recording . . . and where the document on its face lacks a proper acknowledgment. The Recorder is truly just a "custodian" of documents."

Time will tell whether this truncation of Recorder of Deed's office discretion will enhance or degrade the function of the recording system.

A Citizen's Right to Inititate Environmental Rulemaking in PA

Citizen’s Right to Initiate Environmental Rulemaking in Pennsylvania

By John R. Embick, Esq.  February, 2013

Co-Chair, CCBA Environmental Law Section

The process by which environmental regulations (e.g., 25 Pa. Code Chapter 102 (Erosion and Sedimentation Control rules and regulations)) are promulgated in our Commonwealth is somewhat unusual, in that a separate, independent Board (see 71 P.S. 180-1), known as the PA Environmental Quality Board (“PaEQB ”), and therefore not the PA Department of Environmental Protection (“PaDEP”), is responsible for creating rules and regulations which implement the mandates of our Commonwealth’s environmental statutes (e.g., the Clean Streams Law, 35 P.S. 691.1 et seq.).

The powers and duties of the PaEQB are set forth in section 1920-A of the Administrative Code of 1929, 71 P.S. 510-20.   Were you also aware that rulemaking may be initiated by private citizens by way of a petition process?  Section 1920-A(h), 71 P.S. 510-20(h), provides this right of petition to any person.

The PaEQB has created procedures to manage the petition process, and they are found at 25 Pa. Code Chapter 23.  A format for the petition has been developed, and it can be found on the PaDEP website.

The petition process has been used a number of times by persons and groups seeking to upgrade the classification of streams (e.g., from Cold Water Fishery class to High Quality or Exceptional Value class).  Stream reclassification, if successful, increases the level of protection afforded to those Waters of the Commonwealth.  The mere filing of such a petition (assuming it is accepted) can have significant consequences, as the PaDEP considers that the waters in question actually have the upgraded reclassification until such time as the petition is acted upon (the latter which can take many years).

Under the general petition procedures (there are different, specific procedures for various kinds of substantive rulemaking petitions), proposed petitions are submitted to PaDEP.  The Department then has 30 days to determine whether the petition is complete, or is not appropriate for presentation to the PaEQB.

In the event PaDEP determines that a rulemaking petition does not meet the submission standards, the rulemaking petitioners have 30 days to submit an amended petition.

In the event a rulemaking petition is determined to satisfy the requirements of the rulemaking petition regulations, the rulemaking petitioner is provided an opportunity to make a presentation on the proposed changes to the PaEQB.

The PaEQB then votes whether to accept the rulemaking petition.  The rulemaking petition procedures set forth various reasons for which the PaEQB may reject a rulemaking petition.  For instance, if a related matter is being litigated, or if the petition is not appropriate for rulemaking due to policy or regulatory considerations, or if the rulemaking petition involves an issue previously considered by the Board, or if the PaEQB considered the same issue within the last two years, the rulemaking petition may be rejected.

If the rulemaking petition is accepted by the PaEQB, the petition is then evaluated and the staff of PaDEP has 60 days to return to the Board with a recommendation to draft a regulation making the changes requested by the rulemaking petition, or to deny the requested regulatory change.

PaDEP’s recommendations are shared with the rulemaking petitioner, and the petitioner has an opportunity to respond to the PaDEP’s recommendations prior to the time when the PaEQB considers the PaDEP’s recommendations.

The PaEQB then decides to accept or reject DEP’s recommendations.  If the Department’s recommendations are accepted by the PaEQB, then additional and normal rulemaking procedures ensue (e.g, publication, public comment, etc.).

Is Storm Water A Pollutant?

Is Storm Water A Pollutant? Federal Court in Northern Virginia Says No to EPA Regulatory Effort

By:  John R. Embick, Esq. -- January, 2013

Co-Chair, Environmental Law Section

In a recent decision handed down on January 3, 2013, Judge Liam O’Grady ruled, on a motion on the pleadings, that EPA did not have authority under the Federal Clean Water Act (“CWA”) to set a Total Maximum Daily Load (“TMDL”) for storm water flow rates affecting an impaired stream (the Accotink Creek) in Northern Virginia.  The case is Virginia DOT, et al., v. U.S. EPA, C.A. No. 1:12-CV-775 (USDC ED Va).

The CWA gives states and the federal government the right to impose a “pollution diet” on waters that are chronically impaired and do not meet the CWA standards (i.e., that  waters generally be fishable, swimmable, etc.) set for those waters.  Because the Accotink is on the impaired waters list, Virginia or EPA must develop TMDL limits to achieve the CWA standards. TMDL limits represent extra or additional effluent discharge controls designed to reduce the amount of pollutants and improve water quality.

EPA determined that a problem affecting the Accotink was excess sediment flowing into the creek.  Too much sediment has deleterious effects on a stream ecology and water quality.   In the VaDOT case, EPA chose to control sediment loading by means of regulating storm water flows.  The decision did not discuss the type of storm water flow controls, but we assume that this means that Virginia had to come up with ways of reducing the amount of storm water that discharged into the Accotink, and this usually means the implementation of infiltration systems.  These controls usually are expensive to implement.

Curiously, EPA chose to regulate storm water flows in this case, as opposed to setting a limit for sediment concentration in discharges.   In most prior TMDL permits, EPA chose to impose sediment limits. EPA apparently has only attempted to set storm water flow rates (for sediment control) in only four other TMDL permits.  Of the four permits, all the storm water flow rates limits were challenged, and one case settled.  The other three cases are still pending.

In the VaDOT case, both sides agreed that sediment is a pollutant, and storm water is not a pollutant (under the definition provided in the CWA).  EPA argued that it was permitted to use storm water flows as a “surrogate” for sediment control. 

Using the Chevron analysis standard for resolving questions of statutory interpretation, the court found that that the CWA did not permit EPA to regulate a non-pollutant. The case was remanded to EPA.

This is an interesting dispute about a regulatory technicality.  Most water scientists readily agree that sediment is a pollutant and that storm water flow causes erosion and sedimentation, as well as other pollution.  It stands to reason that reducing storm water flows will reduce sediment pollution.  This issue is whether EPA has the regulatory authority to do so.

We really do not know why EPA is “testing” a storm water flow TMDL, although we suspect that this is related to EPA continuing efforts to exert more control over storm water runoff from non-point sources (a major source of water pollution).  EPA is working on a new federal storm water rule (due in 2014), and some observers believe that EPA is considering using storm water flow controls in amendments to the Post Construction Storm Water permit program (the permits which must be obtained to control runoff from new construct sites after construction is completed).

New Oil and Gas Act Trumps Pennsylvania’s Environmental Amendment at Municipal Level -- October, 2012

New Oil and Gas Act Trumps Pennsylvania’s Environmental Amendment

By John R. Embick, Esq. -- October, 2012

Co-Chair, Environmental Law Section

Earlier this year, Governor Tom Corbett signed into law Act 13 of 2012.  Act 13 repealed Pennsylvania’s Oil and Gas Act, and replaced it with a codified statutory framework regulating oil and gas operations in the Commonwealth, now found at 58 Pa.C.S. §§ 2301 - 3504 .  The Marcellus Shale Gas industry, Governor Corbett, and others pressed for enactment of extensive revisions to the Oil and Gas Act, in order to make the development of natural gas resources more efficient and favorable for the industry.

In the case of Robinson Township v. Commonwealth of Pennsylvania, 2012 W.L. 3030277, ___ A3d ___ (Pa. Cmwlth., July 26, 2012), Commonwealth Court recently reviewed the legality of Act 13 in the context of a challenge by a number of citizens, including a physician and the Delaware River Keeper, and a number of municipalities.  Numerous claims were raised in the litigation.

The main holding in Robinson Township, authored by President Judge Dan Pellegrini, was the issuance of an injunction, barring the Commonwealth from enforcing the provisions of the new Oil and Gas Act, which required municipalities to allow all oil and gas operations in all zoning districts, including residential districts (the matter is on appeal to the Pa. Supreme Court).  The court held that §3304 of the new Act 13, now codified at 58 Pa.C.S. §3304, violates substantive due process because it allows incompatible uses in zoning districts and does not protect the interests of neighboring property owners from harm, alters the character of the neighborhood, and makes irrational classifications.

Judge Pellegrini evaluated the different and competing roles inherent in the exercise of police power in the form of natural resource utilization control on the one hand, and zoning on the other hand:

"However, the interests that justify the exercise the police power in the development of oil and gas operations and zoning are not the same. In Huntley & Huntley, Inc., 600 Pa. at 222-24, 964 A.2d at 864-66, our Supreme Court explained that while governmental interests involved in oil and gas development and in land-use control at times may overlap, the core interests in these legitimate governmental functions are quite distinct. The state’s interest in oil and gas development is centered primarily on the efficient production and utilization of the natural resources in the state. Zoning, on the other hand, is to foster the orderly development and use of land in a manner consistent with local demographic and environmental concerns."

Robinson Township, Slip Op. at 31.

Another interesting feature of the holding in Robinson Township, was the court’s resolution of Petitioner’s claim asserting that Act 13 violated the provisions of the Environment Amendment, found in the Pennsylvania Constitution, at Article I, § 27.  Article I, § 27 provides as follows:

"Natural resources and the public estate

The people have a right to clean air, pure water, and to the preservation of the natural, scenic, historic and esthetic values of the environment. Pennsylvania’s public natural resources are the common property of all the people, including generations yet to come. As trustee of these resources, the Commonwealth shall conserve and maintain them for the benefit of all the people. "

 Petitioners claimed that Act 13 violated Article 1 §27 of the Pennsylvania Constitution because Act 13 denies municipalities the ability to carry out their constitutional obligation to protect public natural resources as required by the Municipalities Planning Act (“MPC”) (Count VI of the Petition for Review).

Judge Pellegrini dismissed this count, indicating that the obligation of municipalities to plan for the protection of natural and historic resources contained in section 301(a)(6) of the MPC, 53 P.S. §10301(a)(6) (section 301 is section of the MPC that requires comprehensive planning and plans), is preempted by Act 13.  Judge Pellegrini went on to say:

"It [Act 13] preempts a municipalities’ obligation to plan for environmental concerns for oil and gas operations. One of the purposes given by the General Assembly in enacting Chapter 32 of Act 13, dealing with oil and gas operations, was to “[p]rotect the natural resources, environmental rights and values secured by the Constitution of Pennsylvania. 58 Pa. C.S. §3202. In Section 3303, the General Assembly specifically stated that all local obligation or power to deal with the environment was preempted because Chapter 32 occupied “the entire field to the exclusion of all local ordinances.” 58 Pa. C.S. §3303. By doing so, municipalities were no longer obligated, indeed were precluded, from taking into consideration environmental concerns in the administration of their zoning ordinances. Because they were relieved of their responsibilities to strike a balance between oil and gas development and environmental concerns under the MPC, Petitioners have not made out a cause of action under Article 1, §27. "

Robinson Township, Slip Op. at 43.

Some attorneys representing parties engaged in natural resource development in industries where partial preemption of local control exists (e.g., quarrying), now advocate that this part of the holding means that zoning provisions that in any respect address the intensity or bulk of such uses, are void.   We think the Pa Supreme Court is likely to further clarify this issue.

Stonehenge, UK

Township Officials Escape Jail for Failure to Implement Sewage Plan – Just Barely -- August, 2012

Township Officials Escape Jail for Failure to Implement Sewage Plan – Just Barely -- August, 2012

By:  John R. Embick, Esq.

Co-Chair – Environmental Law Section

The Pennsylvania Supreme Court has reversed a Commonwealth Court decision which found several township supervisors in contempt for failing to implement the township’s official Sewage Facilities Plan (better known as a “537 Plan”), under the authority of the Pa Sewage Facilities Act, 35 P.S. 750.1, et seq. (also colloquially known as “Act 537”).

The challenged Commonwealth Court order required the incarceration of the recalcitrant township supervisors, and one remained in jail for over a month, until he resigned (the other supervisors resigned before they were incarcerated).  The decision, Commonwealth, DEP v. Cromwell Township, Huntingdon County, 32 A.23d 639, 2011 Pa LEXIS 2822, issued on November 23, 2011, was authored by the now indicted and suspended Justice Orie Melvin, but her decision was joined by three justices and concurred with by three other of the jurists.

Act 537 requires municipalities to adopt and revise plans to provide sewage services to their residents.  The plans must be approved by the PaDEP.  The basic goal of the 537 Plan is to prevent the discharge of untreated or inadequately treated sewage into the Waters of the Commonwealth.

The procedural history of the Cromwell Township case is somewhat complicated, but can easily be summarized:  Cromwell Township adopted a 537 Plan calling for the extension of a public sewer system, which the Department approved.  Cromwell Township failed to implement the plan, concluding that the plan was too expensive.  Cromwell Township received a number of extensions to implement the 537 Plan.  Cromwell eventually reached agreement with a municipal authority to provide sewage services, and submitted a 537 Plan revision to PaDEP.  The 537 Plan revision was approved by PaDEP.  Cromwell Township failed to implement the plan.  PaDEP ordered the Township to implement the approved plan, and the Township failed to appeal, and then refused to implement the plan (there was a municipal regime change along the way – I’m sure you understand).  The Department filed an action to enforce the unappealed order before Commonwealth Court (this is where PaDEP goes to enforce its final, unappealed orders), and eventually sought fines against the township, the township supervisors, and a judgment of contempt, etc.

Here’s where the plot gets interesting.    In a hearing before the Commonwealth Court, the judge, sua sponte, found the individual recalcitrant township supervisors in contempt and ordered their incarceration (PaDEP had not requested that the township supervisors be jailed; the Department only asked for fines and that a schedule be set by which the Township’s contempt could be purged).

On appeal, the Pennsylvania High Court found that Commonwealth Court had appropriate jurisdiction to receive the Department’s petition to enforce its order, and that Cromwell Township had failed to comply, and that the Department had moved appropriately for contempt sanctions in the face of continuing non-compliance.

However, the Court found that the Commonwealth Court did not use less onerous means prior to ordering the incarceration of township supervisors.  Justice Orie stated:

“Our sole focus is on the propriety of the contempt sanctions imposed by Judge Quigley on the individual supervisors. “Courts possess an inherent power to enforce their orders by way of the power of contempt.” Commonwealth v. Bowden, 838 A.2d 740, 760 (Pa.2003) (quoting Brocker v. Brocker, 241 A.2d 336, 338 (Pa.1968)). While it goes without saying that the courts possess the inherent power to enforce their orders for noncompliance through imposition of penalties and sanctions, Commonwealth ex rel. Beghian v. Beghian, 184 A.2d 270 (Pa.1962), we hold that the Commonwealth Court's failure herein to utilize less restrictive means prior to imposing sentences of incarceration compels reversal.” Slip Op. at 11.

The Pennsylvania Supreme Court reversed the Commonwealth Court's order sentencing Township Board members to imprisonment, and remanded the case for further proceedings.

Given the length of the proceedings and the number of opportunities provided to the Township to achieve compliance, I conclude that Commonwealth Court Judge Quigley had reached the end of his patience after the township steadfastly refused to comply with the Department’s orders.  However, the Pa Supreme Court said the township deserved one or possibly more chances before its supervisors had to go to jail.  Municipal solicitors, take heed of this decision.

​City of Philadelphia, Streets Department Collection Vehicle, Mural Arts Program

Unanimous U.S. Supreme Court Tells U.S. EPA that Clean Water Act Compliance Orders are Subject to Pre-Enforcement Review --- April, 2012

Unanimous U.S. Supreme Court Tells U.S. EPA that Clean Water Act Compliance Orders are Subject to Pre-Enforcement Review

John R. Embick, Esq. -- April, 2012

On March 21, 2012, a unanimous High Court told U.S. EPA (“EPA”) that its compliance orders, issued under the authority of the Federal Clean Water Act may be immediately appealed under the provisions of the Administrative Procedures Act (“APA”).  Prior to this holding, the EPA, and many courts, held the view that such compliance orders could only be reviewed at the time when the agency sought to enforce the order.  The case is Sackett v. EPA, 566 U.S. __(2012).

The background of Sackett is as follows.  The Sacketts (captioned as wife et vir!) owned a building lot near Priest Lake in northern Idaho.  The Sacketts’ lot, a little more than a half acre in size, was not located on the lake shore, and was separated from the water by a several lots and permanent structures.  The Sackett’s applied for and received local permits to build a home and brought in gravel to serve as fill material in order to prepare the site for construction.

According to a number of reports, the Sacketts had consulted a number of experts early on to determine if their property had wetlands on it.  One wetlands expert reportedly advised the Sacketts that the property contained wetlands. The Sacketts dispute that the property contains wetlands, and also dispute that the wetlands are “jurisdictional” wetlands, subject to the jurisdiction of the EPA and the U.S. Army Corps of Engineers.  If the wetlands (assuming that there are some) are not jurisdictional wetlands, then the wetlands would only be subject to state or local regulation. 

After the property was filled, EPA issued a compliance order under section 309 of the Clean Water Act, 42 U.S.C. §1319, to the Sacketts alleging that the placement of fill into navigable waters (wetlands associated with navigable waters (Priest Lake) may be waters of the United States and therefore may be subject to federal regulation) without a permit violated the Clean Water Act, and ordered the removal of the fill and submission of a remediation plan.  The issue of exactly what waters and wetlands are subject to federal control is still somewhat unclear. See, Rapanos v. U.S., 547 U.S. 715 (2006).

Until the Sackett decision by SCOTUS, EPA compliance orders (under the Clean Water Act) could not be judicially reviewed until the agency moved to enforce the order.  The problem with this (for the recipient of a compliance order), is that the Clean Water Act currently permits the agency to seek a maximum penalty of $37,500.00 per day per violation of the Clean Water Act.  The Sacketts actually were in jeopardy of the imposition of a penalty of $75,000.00 per day (one penalty for violating the Clean Water Act, and another penalty for violating the compliance order).

The Sacketts sought a hearing before EPA, but were turned down.  The Sacketts then went to federal court to seek relief.  Neither the District Court, nor the Ninth Circuit Court of Appeals provided any support to the Sacketts. The Sacketts argued that the issuance of the EPA compliance order deprived them of life, liberty or property without due process, in violation of the Fifth Amendment.  The Ninth circuit adopted the view of four other Courts of Appeal and found that the Clean Water Act precludes pre-enforcement judicial review of compliance orders.

Justice Scalia wrote the opinion for the Supreme Court, and Justices Ginsburg and Alito each wrote a concurring opinion.

Justice Scalia’s opinion holds that the compliance order constituted final agency action as defined by the APA (although the Ninth Circuit did not address this issue), and that the Clean Water Act did not bar pre-enforcement review of Clean Water Act compliance orders.  The Court did not address the constitutional due process issue.

The Clean Water Act does not contain an express bar to pre-enforcement review (compare the express bar against pre-enforcement review which is contained in the Superfund law, 42 U.S.C. § 9613(h) (“[n]o Federal court shall have jurisdiction . . . to review any order issued under section 9606 (a) of this title.”)).

EPA argued that the Clean Water Act authorizes the agency to proceed against violators either by judicial action, or by administrative order.  To allow immediate judicial review of an administrative order would render meaningless the distinction between the two enforcement options provided for in the Clean Water Act.   Further, the agency argued, judicial review was available once EPA sought to enforce the administrative order (which was not self-executing), so that due process was assured (eventually).

The decision of the High Court basically seemed to turn on its sense of umbrage at the  magnitude of the risk faced by recipients of an administrative order and the timing of judicial review.    

In her concurring opinion, Justice Ginsburg agreed in the result, but with the understanding that the decision of SCOTUS only addressed pre-enforcement review, and not the underlying merits of the dispute.

In his concurring option, Justice Alito railed at the continuing unclear state of the law regarding the determination of just what are waters of the U.S., and urged Congress and the agencies to come up with a definitive test.

To reiterate, the decision did not address the merits of the underlying dispute (i.e., are wetlands present on the Sacketts’ property, and, if so, are they jurisdictional wetlands?).

The decision has generated much heat in the environmental community, with a number of commentators trumpeting the decision as a huge defeat for EPA, a triumph of liberty and due process, a victory for little citizen David over the agency Goliath, and a serious curb on the authority of the agency. These views are probably frothy and overdone, in our opinion.

The Sackett decision only deals with pre-enforcement review.  The decision certainly takes away a heavy stick which the agency uses to get “voluntary” compliance, but it has been our experience that the agency rarely issues fully unsupported administrative orders.  EPA will now have to anticipate mounting a strong defense of its orders upon their issuance.  Given the huge risk to the recipient of a Clean Water Act compliance order heretofore not subject to pre-enforcement review, the High Court decision seems reasonable and correct.

Compare EPA’s enforcement approach to the customary procedure that the Pennsylvania Department of Environmental Protection (“PaDEP”) currently follows in many enforcement scenarios.  PaDEP usually issues a Notice of Violation (“NOV”) in response to a violation.  The NOV usually (but not always) is not a final action of the agency, does not compel any action on the part of the recipient, and cannot be appealed (to the Environmental Hearing Board (“EHB”)).  Basically, it’s a warning shot.  Frequently, the issuance of an NOV is enough to resolve an issue or dispute.  When PaDEP issues a compliance order (which is final, and directly affects the rights and responsibilities of the recipient), the order may be immediately appealed to the EHB, and PaDEP normally is prepared quickly to defend the order.  We think EPA will move more towards this mode of action, and the enforcement activities of the agency will not be significantly curtailed.   Note, however, that there is a significant structural difference affecting enforcement matters between EPA and the U.S. Department of Justice (“DOJ”) on the one hand, and PaDEP on the other.  In order to initiate court action in most instances, EPA must refer the matter to DOJ for prosecution.  In contrast, PaDEP attorneys are authorized to represent PaDEP in court directly.

We think the most significant impact of Sackett will be that other, similar pre-enforcement review bans (e.g., the Federal Clean Air Act, and the Resource Conservation and Recovery Act), also will be undone.