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JOHN E. KAITES AND JOHNSTOWN COAL AND COKE v. COMMONWEALTH PENNSYLVANIA (08/06/87)

decided: August 6, 1987.

JOHN E. KAITES AND JOHNSTOWN COAL AND COKE, INC., PETITIONERS
v.
COMMONWEALTH OF PENNSYLVANIA, DEPARTMENT OF ENVIRONMENTAL RESOURCES, RESPONDENT



Appeal from the Order of the Pennsylvania Environmental Hearing Board in the case of John E. Kaites, et al. v. Commonwealth of Pennsylvania, Department of Environmental Resources, Docket No. 84-104-G.

COUNSEL

George G. Mahfood, with him, Gregg M. Rosen and Regis J. Schnippert, Rosen & Mahfood, for petitioners.

Michael E. Arch, Assistant Counsel, with him, Marc A. Roda, Assistant Counsel, for respondent.

John M. Elliott, with him, Stephen C. Braverman, Baskin, Flaherty, Elliott & Mannino, P.C., for Amicus Curiae, Pennsylvania Coal Mining Association.

Judges MacPhail and Colins, and Senior Judge Narick, sitting as a panel of three. Opinion by Judge MacPhail.

Author: Macphail

[ 108 Pa. Commw. Page 269]

John E. Kaites (Petitioner)*fn1 has appealed from an order of the Environmental Hearing Board (Board) which, inter alia, denied his petition to reopen the record and entered summary judgment in favor of the Department of Environmental Resources (DER) thereby upholding DER's suspension of coal refuse and industrial waste permits issued to Johnstown Coal and Coke, Inc. (Johnstown) and finding Petitioner, as president and chief executive officer of Johnstown, individually responsible for complying with an abatement order issued by DER. The only aspect of the Board's decision which is challenged in the instant appeal is its conclusion that Petitioner, as an individual corporate officer, may be the subject of an abatement order.

The relevant facts in this matter have been agreed to by stipulation. The mining site here involved is known as the Bear Run mining complex in Indiana County and includes two mines, a processing plant, coal refuse disposal area and coal storage area. Bear Run No. 1 mine and the coal storage area were established in 1965 by another mining company. Johnstown bought the mine and storage area in 1966 or 1967 and DER issued a permit authorizing operation of the complex in 1968.

In 1972, Petitioner purchased Johnstown, having served as a mine superintendent prior to that time. In that same year, the Bear Run No. 1 mine was sealed following the cessation of mining operations at that location. Despite oral approval of the seals by a DER official, acidic discharges have occurred from the mine. A marked increase in the amount of discharges followed backfilling activity by the Benjamin Coal Company,

[ 108 Pa. Commw. Page 270]

    which included blasting over the approximate location of the mine seals in 1973. Subsequent attempts, pursuant to two consent orders with DER,*fn2 to reseal the mine and remedy discharges from the site have proven unsuccessful.

On February 10, 1984, DER issued the abatement and suspension order which is the subject of the instant appeal. The order named both Johnstown and Petitioner individually as responsible for abating the nuisance which admittedly continues to exist at the facility. On appeal, the Board ruled that the imposition of individual liability on Petitioner was proper. As noted previously, Johnstown has not pursued a challenge to the Board's ruling regarding its liability to abate the nuisance and the suspension of its permits.

Petitioner has presented three issues for our consideration: (1) whether or not he is a "person" to whom an abatement order may be issued under applicable statutes; (2) whether the record supports "piercing the corporate veil" so as to render Petitioner directly liable for abating the existing nuisance; and (3) whether Petitioner may be found liable under the "participation" theory of joint tortfeasor liability.

Before addressing the merits, a procedural matter which has not been briefed by the parties deserves our mention. The Board has issued two decisions in this matter. The first, dated August 7, 1985, entered partial summary judgment on the issue of Petitioner's individual liability and the joint responsibility of Johnstown and Petitioner to ...


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