Argued: November 15, 2016
BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge
HONORABLE ROBERT SIMPSON, Judge HONORABLE P. KEVIN BROBSON,
KEVIN BROBSON, Judge
the Court for disposition is an Application for Summary
Relief in this original jurisdiction matter. Petitioner EQT
Production Company (EQT) seeks relief under the Declaratory
Judgments Act with respect to the Department of
Environmental Protection's (Department) interpretation of
certain penalty provisions under The Clean Streams
For the reasons set forth below, we grant EQT's
Application for Summary Relief.
purposes of this Application for Summary Relief, the
undisputed material facts are as follows. EQT owns and
operates natural gas wells in Duncan Township on a gas well
pad known as "Phoenix Pad S." EQT built a subgrade
impoundment (Pad S Impoundment), which included an impervious
synthetic membrane liner to contain the impaired water
generated from hydraulic fracturing (i.e.,
fracking). EQT concluded that it was likely that the Pad S
Impoundment was leaking into the subsurface beneath the
30, 2012, EQT notified the Department of the leak. On June
11, 2012, within twelve days after notifying the Department,
the Pad S Impoundment had been completely emptied of the
impaired water and sludge. By June 15, 2012, EQT patched the
liner and installed sumps and trenches at five locations
downgradient from the Pad S Impoundment to collect and/or
intercept groundwater that may be affected by the release.
EQT also then entered into a formal cleanup process under the
Land Recycling and Environmental Remediation Standards Act,
commonly referred to as Act 2. On September 27, 2012, EQT
excavated the affected soils. EQT attained the Act 2
remediation standards for the soil beneath the Pad S
Impoundment and continued its efforts to attain the Act 2
standards for the groundwater.
9, 2014, the Department proposed a Consent Assessment of
Civil Penalty for the leak, alleging violations of Sections
301, 307, and 401 of The Clean Streams Law. The majority of
the Department's $1, 270, 871 proposed settlement offer
was based on "new, continuing, and ongoing impacts to
the multiple waters of the Commonwealth" after the
initial discharge from the Pad S Impoundment.
September 19, 2014, EQT filed a Complaint in Action for
Declaratory Judgment with this Court, seeking a declaration
that the calculation of civil penalties under The Clean
Streams Law by the Department was unlawful, to which the
Department responded by filing preliminary objections. On
7, 2014, the Department also filed a Complaint for Civil
Penalties with the Environmental Hearing Board (Board). On
February 20, 2015, this Court sustained preliminary
objections by the Department and dismissed EQT's
declaratory judgment action filed in this Court's
original jurisdiction, reasoning that the harm was
speculative because the Board had not yet made its penalty
determination. EQT Prod. Co. v. Dep't of Envtl. Prot.
of Com., 114 A.3d 438 (Pa. Cmwlth.) (EQT I),
rev'd, 130 A.3d 752 (Pa. 2015).
this Court dismissed the Complaint in Action for Declaratory
Judgment in EQT I, EQT appealed to the Supreme
Court. On December 29, 2015, the Supreme Court reversed and
remanded the matter for further proceedings. EQT Prod.
Co. v. Dep't of Envtl. Prot., 130 A.3d 752 (Pa.
2015) (EQT II). The Supreme Court concluded that the
potential exposure to EQT, particularly given the lack of an
administrative remedy for challenging the Department's
interpretation when EQT filed this action, "was
sufficiently direct, immediate, and substantial to create a
case or controversy justifying pre-enforcement judicial
review via a declaratory judgment proceeding."
Id. at 758-59.
remand in this matter, on February 19, 2016, EQT filed with
this Court an Application for Interim Relief in the Form of a
Stay of the action before the Board for the penalty
determination. EQT argued that the resolution of the pending
legal question regarding the validity of the Department's
interpretation of Sections 301, 307, and 401 of The Clean
Streams Law bore directly on the Board's decision for
EQT's penalty amount and required a stay.
order dated April 8, 2016, this Court denied the Application
for Interim Relief. EQT Prod. Co. v. Dep't of Envtl.
Prot. (Pa. Cmwlth., No. 485 M.D. 2014, filed April 8,
2016) (Colins, J.) (EQT III). The Court reasoned
that a hearing before the Board was still necessary, because
EQT will still be subject to penalties for the original
discharge of fracking water and EQT had failed to show that a
decision in this case would significantly alter the evidence
at the Board hearing. The Court also reasoned that a stay in
the Board's proceeding would seriously and indefinitely
delay the Department's penalty complaint. Finally, this
Court noted, "[i]f EQT wishes to obtain a resolution of
the legal issue in this action from this Court prior to the
[Board] hearing, it should file an application for summary
relief in time to allow the [C]ourt to rule prior to the
[Board] hearing and request that the matter be
expedited." Id., slip op. at 5.
4, 2016, EQT filed with this Court its Application for
Summary Relief, challenging the Department's
interpretation of Sections 301, 307, and 401 of The Clean
Streams Law. In support of its application, EQT attached as
an exhibit a response by the Department to a discovery
request by EQT filed in the matter before the Board, where
the Department elaborated on the penalty amount that the
Department is currently seeking from EQT. The Department
provided the following answer regarding the calculation of
the penalty for the leak by EQT:
Penalties for continuing violations were assessed under The
Clean Streams Law for the continuing pollution to
groundwater. Assuming the violations began on 4/30/2012 (the
first date on which the Department has data showing the
presence of pollution in groundwater), the continuing
violations penalties began to accrue on the next day,
5/1/2012, up to and including the point at which the
calculation was completed on 9/25/2014, a period of 878 days.
The Department assessed continuing violations penalties at a
rate of $5, 000.00 per day (half the statutory maximum rate)
for 878 days, for a total of $4, 390, 000.00. When continuing
violations penalties are calculated for all five of the
existing discharges at the site, at $10, 000.00 per day, for
Sections 301/307 and 401 of The Clean Streams Law, the
proposed assessment through 9/25/2014 is $81, 760, 000.00.
Note that while groundwater continues to be polluted,
continuing violations penalties continue to accrue beyond
(Reproduced Record (R.R.) at 283a.)
STANDARD FOR SUMMARY RELIEF
judgment actions within the Court's original jurisdiction
fall within the scope of Chapter 15 of the Pennsylvania Rules
of Appellate Procedure. See Pa. R.A.P. 1501(a)(3),
1532(b). "Summary relief under Pa. R.A.P. 1532(b) is
similar to the relief envisioned by the rules of civil
procedure governing summary judgment." Brittain v.
Beard, 974 A.2d 479, 484 (Pa. 2009). "'An
application for summary relief may be granted if a
party's right to judgment is clear and no material issues
of fact are in dispute.'" Jubelirer v.
Rendell, 953 A.2d 514, 521 (Pa. 2008) (quoting
Calloway v. Pa. Bd. of Prob. & Parole, 857 A.2d
218, 220 n.3 (Pa. Cmwlth. 2004)).
purpose of the Declaratory Judgments Act is to "settle
and to afford relief from uncertainty and insecurity with
respect to rights, status, and other legal relations, and
[the Declaratory Judgments Act] is to be liberally construed
and administered." 42 Pa. C.S. § 7541(a). An action
brought under the
Judgments Act "'must allege an interest by the party
seeking relief which is direct, substantial and present, . .
. and must demonstrate the existence of an actual controversy
related to the invasion or threatened invasion of one's
legal rights.'" Bowen v. Mount Joy Twp.,
644 A.2d 818, 821 (Pa. Cmwlth.) (quoting Pa.
Institutional Health Servs., Inc. v. Dep't of Corr.,
631 A.2d 767, 771 (Pa. Cmwlth.), aff'd, 640 A.2d
413 (Pa. 1994)), appeal denied, 652 A.2d 1326 (Pa.
1994). Granting or denying an action for a declaratory
judgment is committed to the sound discretion of a court of
original jurisdiction. Gulnac by Gulnac v. S. Butler
Cnty. Sch. Dist., 587 A.2d 699, 701 (Pa. 1991).
challenges the Department's interpretation of Sections
301, 307, and 401 of The Clean Streams Law. The Department
interprets the above sections of The Clean Streams Law as
authorizing a penalty under a continuing violation theory for
every day that industrial waste or a substance resulting in
pollution remains in a water of the Commonwealth
following the initial release of the waste or substance. EQT,
by contrast, argues that a violation only occurs under
Sections 301, 307, or 401 on the days that the industrial
waste or substance resulting in pollution is discharged or
enters from an area outside of the waters of the Commonwealth
(e.g., a factory, industrial site, railcar, etc.)
into a water of the Commonwealth. Once the discharge or entry
stops, no additional violations occur even if the previously
released regulated substance continues to be present in the
water. EQT essentially argues that the Department is reading
language into these provisions to support its position. EQT
further argues that these sections must be construed narrowly
as penalty provisions. EQT also argues that prior cases from
this Court and prior adjudications by the Board support its
interpretation. Finally, EQT argues that the Department's
interpretations would nullify Pennsylvania's Act 2
program for remediation.
defense of its interpretation, the Department argues that
under the statutory language of Sections 301, 307, and 401 of
The Clean Streams Law, a violation occurs when industrial
waste or a substance resulting in pollution flows from one
water of the Commonwealth into another. The Department
argues, alternatively, that if its interpretation is not
supported by the clear language of the statute, then it is
supported by the rules of statutory construction. Namely, the
Department argues that these provisions are remedial, rather
than punitive, and further the legislative intent of The
Clean Streams Law. The Department also argues that the cases
cited by EQT are distinguishable. The Department also avers
that its interpretation is reasonable and, therefore, should
be afforded deference. Finally, the Department argues that
its interpretation is consistent with the Act 2 remediation
scheme in that it only further incentivizes prompt cleanup
after a violation of The Clean Streams Law.
The Clean Streams Law
General Assembly's overarching intent in The Clean
Streams Law is to protect the waters of the Commonwealth from
pollution. See Section 4 of The Clean Streams Law,
35 P.S. § 691.4. Section 1 of The Clean Streams Law, 35
P.S. § 691.1, defines "waters of the
Commonwealth" as follows:
"Waters of the Commonwealth" shall be construed to
include any and all rivers, streams, creeks, rivulets,
impoundments, ditches, water courses, storm sewers, lakes,
dammed water, ponds, springs and all other bodies or channels
of conveyance of surface and underground water, or parts
thereof, whether natural or artificial, within or on the
boundaries of this Commonwealth.
furtherance of the overarching goal, The Clean Streams Law is
organized to address particular types of ...