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MFS, Inc. v. Dilazaro

September 25, 2009


The opinion of the court was delivered by: Slomsky, J.


Before the Court is a Motion for Reconsideration of the Order of August 3, 2009 denying Defendants' Motion for Summary Judgment (Docket No. 30) filed by Defendants Thomas DiLazaro, the former Program Manager for the Northeast Regional Office Air Quality Program of the Pennsylvania Department of Environmental Protection ("PaDEP"); Mark Wejkszner, the current Program Manager; Sean Robbins, an attorney for the Northeast Regional Office of PaDEP; and Michael Bedrin, Regional Director of the Northeast Regional Office. In the Complaint, Plaintiff MFS, Inc. ("MFS") alleges a retaliation claim under 42 U.S.C. § 1983 in Count I, procedural and substantive due process and equal protection claims under 42 U.S.C. § 1983 in Count II, and a claim under Pennsylvania law for intentional interference with prospective contractual relations and prospective advantage in Count III. Defendants argue that the Court's August 3, 2009 Order Denying Summary Judgment (Docket No. 28) contains clear errors of law and seek reconsideration. Specifically, Defendants argue that: (1) MFS has failed to establish its First Amendment Claim; (2) any First Amendment claim based on events prior to May 29, 2006 is time barred*fn1; (3) Defendant DiLazaro was not personally involved in the actions giving rise to this suit; (4) they are entitled to sovereign immunity on MFS's state law claim; and (5) as government officials sued in their individual capacity, they are entitled to qualified immunity.*fn2 On September 8, 2009, the Court held oral argument on the Motion for Reconsideration and afforded all parties the opportunity to provide supplemental briefing. For the reasons detailed below, the Motion for Reconsideration is granted in part and denied in part. The following facts are contained in the record and viewed in the light most favorable to Plaintiff as the party opposing summary judgment.


A. Mineral Wool Production and Malodors

MFS owned a mineral wool manufacturing facility ("Mineral Wool Plant") in Bethlehem Pennsylvania. MFS began operating the Mineral Wool Plant in 1988. The mineral wool produced by the plant was shipped to manufacturers of ceiling tile, insulation and fireproofing products.

During the mineral wool production process, the plant emitted a clear smoke, which MFS classifies as pure steam. PaDEP asserts, however, that the plant emits a malodor which caused neighbors to complain. MFS has never admitted that it was the cause of a malodor and does not believe that it ever emitted a malodor. (Trans. Sept. 8, 2009 Oral Arg. at 59:8-60:2.) To the contrary, Defendant's argue that air monitor readings, neighbor complaints and a letter from MFS in 2001 show that MFS was emitting malodors.*fn3 (See Complaint and Answer at 30(A); Trans. Sept. 8, 2009 Oral Arg. at 79:16-80:24.)

PaDEP has legal authority to regulate all malodors, but not all odors are malodors. After properly investigating claims of malodors, PaDEP has the authority to issue a Notice of Violation ("NOV") against the owner of the source of the malodor. As Ronald Mordosky, the Bethlehem District Supervisor for the Air Quality Program in the Northeast Regional Office for PaDEP testified, it is PaDEP policy that there must be three residences simultaneously complaining about malodor before a NOV can be issued. (See Plaintiff's Amend. Response in Opp. to Mot. For Sum. Judg., (hereinafter "Docket No. 23"), Ex. 7, Mordosky Dep. 19:11-13; see also Ex. 13, Section 5.9.3 of Guidance Manual; Ex. 14, Com. Of Pa. Dep't of Env't Resources v. Franklin Plastics Corp. at p. 10.) The occupants must detect the malodor from their residence; an inspector must then be present at each residence and detect the odor; the inspector must determine that it is in fact a malodor; and the inspector must determine the source from which it is emanating. (See Docket No. 23, Ex. 7, Mordosky Dep. 18:17-19:24.) A NOV is merely an allegation; it is not a final action by PaDEP and is not appealable. PaDEP bears the burden of proof that the odor rises to the level of a malodor and, in turn, that the malodor rises to the level of a public nuisance. (See Complaint and Answer, at ¶ 30(A).)

B. NOVs and Field Enforcement Order

On November 8, 2001, Defendant DiLazaro caused a NOV for alleged malodor to be issued to MFS. (See Docket No. 23, Ex. 15, Notice of Violation.) This was the first NOV issued to MFS in the thirteen years it had run the Mineral Wool Plant. (See Complaint and Answer, at ¶56(c).) Defendant Dilazaro did not comply with PaDEP policy noted above in issuing this NOV. (See Docket No. 23, Ex. 15, NOV, dated Nov. 8, 2001.) MFS requested background information that led to the issuance of the NOV, but PaDEP ignored this request. (See Complaint and Answer at 56(B).) MFS was not able to appeal the issuance of the NOV because it is not a final action.

On January 24, 2003, based solely on the November 8, 2001 NOV, Defendant Dilazaro, with knowledge and consent of Defendant Robbins, issued a Field Enforcement Order to MFS. Unlike a NOV, a Field Enforcement Order is a final action and can be appealed. The Field Enforcement Order was issued after 5:00 p.m. on a Friday evening and required a response from MFS by the next business day, Monday January 27, 2003. (See Complaint and Answer, at ¶ 56(c).) Thereafter, on January 28, 2003, MFS began petitioning state legislators to complain about this treatment by Defendant DiLazaro and his staff. (See Docket No. 23, Exs. 17, 18, and 19.) On or about February 21, 2003, in response to MFS's petitioning of legislators, a Pennsylvania State Representative sent a letter to PaDEP expressing concern about Defendant DiLazaro and his staff's treatment of MFS. (See Docket No. 23, Ex. 4, Letter, dated Feb. 21, 2003.)

On February 24, 2003, MFS filed an appeal of the Field Enforcement Order. (See Complaint and Answer at ¶ 56(M).) During a telephone conference on MFS's appeal, an Administrative Law Judge: (1) questioned Defendant Robbins about issuing the Field Enforcement Order at 5:10 p.m. on a Friday; (2) stated that the actions evidence hostility; (3) cautioned Defendant Robbins that he should not take similar actions in the future; and (4) stated that Defendant DiLazaro and his staff were acting like "little children." (See Complaint and Answer at ¶ 56(O).) In early 2004, PaDEP withdrew the Field Enforcement Order and MFS's appeal became moot. (See Docket No. 23, Ex. 9, 40:12-17.)

Soon after MFS petitioned state legislators, PaDEP began issuing NOVs to MFS. Despite receiving at this point just one NOV from PaDEP in fifteen years, MFS received thirteen NOVs from February 5, 2003 to February 24, 2004. (See Docket No. 23, Ex. 10, Hauff Aff. at ¶ 7.) Of these thirteen NOVs, ten were based on a single complainant. (See Docket No. 23, Ex.16, Email, dated Nov. 26, 2003.) None of the NOVs contained any information about the location of the complainant in relation to the Mineral Wool Plant. (See Docket No. 23, Ex. 6, DiLazaro Dep. 48:11-49:12.) PaDEP's complaint log demonstrates that the majority of these complaints came from one single residence. (See Docket No. 23, Ex. 26, Complaint Log.) Defendants DiLazaro and Robbins knew that each NOV was based on the one complaining residence. (See Docket No. 23, Email dated November 26, 2003, at Ex. 16.) Defendant DiLazaro, with the assistance of Defendant Robbins, caused all of the NOVs in question to be issued to MFS. (See Docket No. 23, Ex. 9, Robbins Dep. 38:15-19.)

In addition to the timing of the NOVs, MFS has put forth other evidence which supports the inference that this influx of NOVs may have been in retaliation for MFS petitioning state representatives. Defendant DiLazaro admitted in a meeting with James Hauff, the Operations Manager at MFS, that he was "pissed off" at MFS "going over his head" while he pounded the table with his fist. (See Docket No. 23, Ex 5, Hauff Dep. 125:3-23.) Defendant DiLazaro publicly declared that "MFS is definitely a nuisance" and attributed concentrations of benzene, a commonly known carcinogen, to MFS. (See Docket No. 23, Ex. 27, Newspaper Article, dated May 22, 2003.) These comments appeared in a newspaper article.

Despite DiLazaro's public statements targeting MFS, there is evidence in the record that, as early as 2002, he was aware of other potential causes of malodor in the area. (See Docket No. 23, Ex. 29, Inspection Report, dated March 6, 2002.) Specifically, PaDEP files for publicly owned and operated Bethlehem Sewage Treatment Plant reveal that officials at PaDEP were aware that the sewage plant was emitting malodors. (See id.; Ex. 9, Robbins Dep. 197:14-21.) In January 2007, Bethlehem Sewage Treatment Plant even admitted publicly that it has been a source of hydrogen sulfide malodor in the Bethlehem area for years, and they had been trying to correct the problem since 2005. (See Docket No. 23, Ex. 30 Inspection Report, dated April 7, 2006.) However, no NOVs were issued to the Bethlehem Sewage Plant. (See Docket No. 27, Ex 29; Ex. 30.) Moreover, Defendant Robbins admitted that PaDEP was aware of a malodor issue at the IESI Bethlehem Landfill, but despite receiving several complaints, PaDEP did not issue any NOVs.*fn4 (See Docket No. 23, Ex. 9, Robbins Dep. 197:5-13.)

C. MACT Compliance and Consent Decree

In April 2003, MFS had applied for a renewal of its Title V Operation Permit with PaDEP. In order to be eligible for renewal of its Title V permit, MFS had to meet compliance standards set forth by the Environmental Protection Agency ("EPA"). EPA requires all mineral wool production facilities to meet a Maximum Achievable Control Technology ("MACT") standard. Due to the unique configuration of the MFS facility, it was impossible for MFS to meet the standard required to comply with MACT. (See Docket No. 23, Ex. 5, Hauff Dep. 35:3-40.) In July 2001, MFS submitted a request to EPA and PaDEP for either an alternative test standard or method. (See Docket No. 27, Ex. 35, Letter dated July 31, 2001). On April 9, 2003, EPA notified MFS and PaDEP that it would not grant MFS's request for an alternative test standard, but MFS's request for an alternative test method would remain under consideration. (See Docket No. 23, Ex. 6, DiLazaro Dep. 40:18-41:17.) Because MFS was unable to comply with MACT standards, PaDEP would not approve MFS's application to renew its Title V permit. On December 20, 2005, EPA filed suit against MFS in the Eastern District of Pennsylvania seeking enforcement of compliance with MACT. (See Complaint ¶ 22.) In 2006, while awaiting a decision on its Title V permit application, MFS ceased all operations at the plant.

On August 10, 2006, MFS wrote Defendant DiLazaro to inform him that MFS and EPA had reached an agreement in principle permitting MFS to use an alternative testing method in compliance with MACT. (See Complaint and Answer, at ¶ 24.) On March 23, 2007, the Consent Decree between MFS and EPA was published in the Federal Register at Volume 72, Number 56, advising that EPA would receive comments on the Consent Decree for a period of thirty days. (See id., at ¶ 26.) Defendants were aware that the Consent Decree was published and was open to public comment. (Id.; see also Docket No. 23, Ex 9, Robbins Dep. 156:4-9.) Defendants were also aware that MFS intended to resume operations. (Id.)

On April 24, 2007, Defendant Robbins wrote to EPA and objected to the Consent Decree, "strongly" recommending that it be revised to require MFS to address alleged malodor issues from 2001 and 2003. (See Docket No. 23, Ex. 9, Robbins Dep 60:22-61:5.) Defendants Bedrin, DiLazaro and Wejkszner were aware of the substance of Defendant Robbins letter to EPA and agreed to the representations made therein. (See Docket No. 23, Ex. 9, Robbins Dep. 59:21-60:8; Ex. 6, DiLazaro Dep. 69:20-70:5.) EPA disregarded Defendants' objections and would not incorporate suggested changes about malodor into the Consent Decree. (See Docket No. 23, Ex. 9, Robbins Dep. 60:22-62.) On July 19, 2007, Defendant Robbins informed EPA that PaDEP would withdraw its objections to the Consent Decree. (Id. at 65:8-67:16.) On August 13, 2007, the Consent Decree was entered by a U.S. District Court and did not address any of the concerns raised by PaDEP. (See Complaint and Answer, at ¶ 36.)

D. PaEPA Does Not Renew Title V Operational Permit

On August 28, 2007, in anticipation of reopening its Mineral Wool Plant, MFS wrote to Defendants DiLazaro and Robbins advising in part:

With respect to the alleged malodor issue, MFS did not receive any alleged malodor violations during the last two years of its operation. Moreover, and as we have discussed in the past, the eight or so violation notices for alleged malodor, that were issued to MFS for alleged violations in 2002-2003, were legally deficient in various respects including, for example, a notice being issued to MFS for a time that MFS was not even operating and therefore, could not have been the source of any odor. In addition, earlier this year, the Bethlehem Wastewater Treatment Plant, which is located in close proximity to MFS, acknowledged that it has been emitting a hydrogen sulfide odor for years in that area. Accordingly, MFS trusts that its Title V permit will be reissued promptly since MFS is continuing to be prejudiced by the continued delay. (See Docket No. 23, Ex. 41, Letter dated August 28, 2007.)

Soon after sending this letter, MFS began receiving correspondence from Thermafiber, Inc. ("Thermafiber"), another mineral wool manufacturing company, which was interested in purchasing the Mineral Wool Plant. (See Docket No. 27, Ex. 5, Hauff Dep. 82:2-83:21.) During negotiations, Thermafiber expressed concern about the status of the pending Title V permit renewal. (Id.) Prior to Thermafiber expressing its concern, Defendant Robbins had informed Armstrong World Industries, a purchaser of both MFS and Thermafiber products, that MFS had malodor and compliance issues. (See Docket No. 23, Ex. 5, Hauff Dep. 138:11-25.)

In response to MFS's August 28, 2007 letter, MFS received a letter from Defendant Robbins on September 27, 2007, informing MFS that PaDEP was not renewing its Title V permit. The letter claimed that MFS could still be emitting malodors even though it had not received a NOV in over two years. (See Docket No. 23, Ex. 42, Letter, dated Sept. 27, 2007.) Moreover, the letter placed the burden of proof on MFS because MFS had presented no evidence that it did not produce malodor. (See id.)

On October 3, 2007, MFS representatives met with Defendants Robbins and Wejkszner at a PaDEP office in Wilkes-Barre, Pennsylvania. (See Complaint and Answer, at ¶ 40.) At the meeting, MFS representatives detailed how Defendants' conduct, under the color of state law, was unfairly prejudicing MFS by preventing it from reopening and/or selling their plant. Defendant Robbins suggested that MFS could continue its operations under a "permit shield,"-- the terms and duration of which were determined at Defendants' discretion--while a decision on the Title V permit was pending. (See Docket No. 23, Ex. 9, Robbins Dep. 164:23-165:6.) MFS responded that enduring the costs of reopening the plant only to be subject to the risk that Defendants continued their ongoing pattern of wrongful conduct was not a realistic business option. (See Docket No. 23, Ex. 8, Wejkszner Dep. 17:14-18:3.) Defendant Robbins admitted that MFS's concerns regarding the permit shield were "valid concerns." (See Docket No. 23, Ex. 9, Robbins Dep. 164:23-165:6.)*fn5

On October 24, 2007, Defendant Robbins sent a letter to MFS denying MFS was being prejudiced and stating that the Title V permit would not be reissued because of the alleged malodor and MACT compliance issues. (See Docket No. 23, Ex. 44, Letter, dated October 24, 2007.) Following its receipt of this letter, MFS petitioned the Secretary of PaDEP (the "Secretary") for a meeting to discuss Defendants' pattern of wrongful conduct. On December 17, 2007, the Secretary held a meeting with MFS. Defendants Bedrin and Robbins were ordered to attend. (See Docket No. 27, Ex. 9, Robbins Dep. 104:5-13.) The Secretary informed MFS that Defendants had briefed her prior to the meeting and that she was leaving it to Defendants to address the matter. (See Docket No. 27, Ex. 12, Bedrin Dep. 60:1-22.)

During discovery in this case, MFS obtained the "briefing" memorandum ("Memorandum"), drafted by Defendant Robbins, and provided to the Secretary for the December 17, 2007 meeting. (See Docket No. 23, Ex. 46, Memorandum). The Memorandum was reviewed by Defendants Bedrin and Wejkszner before it was submitted to the Secretary. (Docket No. 27, Ex. 9, Robbins Dep. 110:2-111:16; Ex. 12, Bedrin Dep. 55:2-23.) The Memorandum contained several false and/or misleading statements concerning: (1) the validity of the 2003 Field Enforcement Order or the underlying NOVs; (2) the truthfulness of MFS's representations that it could not comply with MACT; (3) EPA's adoption of an alternative testing method; and (4) that MFS had an SO2 problem. (Docket No. 23, Ex. 46, Memorandum.) Attached to the Memorandum were several newspaper articles in which scandalous claims were made concerning MFS that were irrelevant to the malodor issue. (Id.)

On January 18, 2008, as directed by the Secretary at the December 17, 2007 meeting, Defendant Robbins, Bedrin and Wejkszner forwarded a draft of a conditional Title V permit to MFS. The draft permit contained 91 conditions. MFS objected to two conditions, 027 and 028, arguing that they were neither legally valid nor reasonable. (See Docket No. 23, Ex. 49, Draft Title V Operating Permit.) Condition 028 granted PaDEP the absolute right to shut down MFS upon the issuance by PaDEP of a NOV. (See Docket No. 23, Ex. 49, Draft V Operating Permit.) Condition 027 imposed an operating permit compliance schedule which, as admitted by Defendant Wejkszner, was an attempt to rewrite the Consent Decree entered in the federal case because Defendants felt that EPA was not "strict enough." (See Docket No. 23, Ex. 8, Wejkszner Dep. 38:5-41:16.)

On January 30, 2008, MFS wrote to Defendant Robbins objecting to these two conditions. MFS argued that Condition 028 interfered with its due process rights because it gave Defendants the power to shut down MFS's Mineral Wool Plant without affording MFS an opportunity to explain or review any charges made against it. (See Complaint and Answer, at ¶ 46.) MFS also argued that the authority Defendants cite in support of the condition did not authorize such action. (Id.) As to Condition 027, MFS argued that it was an improper attempt by Defendants to rewrite the Consent Decree. (Id.) Defendant Wejkszner admitted that, contrary to the Consent Decree, Condition 027 provided Defendants with authority to shut down MFS if it failed to follow a compliance schedule and did not contain any timetable under which Defendants had to review the decision to close the Mineral Wool Plant. (See Docket No. 23, Ex. 8, Wejkszner Dep. 41:4-24.) Defendants also did not include a dispute resolution provision similar to the one in the Consent Decree, which gave MFS the right to contest any action taken thereunder. (See id.)

In late March, 2008, unable to reopen their Mineral Wool Plant and with no indication from PaDEP that their Title V Operation Permit would be reissued, MFS sold its machinery and parts. (See Docket No. 23, Ex. 51, Campbell Aff.) On March 10, 2008, MFS wrote Defendant Robbins explaining that because of Defendants' actions, it had no choice but to liquidate its assets. (See Complaint and Answer, at ¶ 48.) On May 29, 2008, this suit was instituted.

On January 18, 2009, approximately eight months after MFS commenced this suit and ten months after MFS began liquidating assets, Defendants forwarded to MFS a draft Title V Operating permit omitting Conditions 027 and ...

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