ARGUED: November 28, 2017
from the Order of the Commonwealth Court at 485 MD 2014,
SAYLOR, C.J., BAER, TODD, DONOHUE, DOUGHERTY, WECHT, MUNDY,
SAYLOR, CHIEF JUSTICE.
direct appeal, we consider the scope of a civil penalty
applicable to violations of environmental protection statutes
regulating the entry of contaminants into any of the waters
of the Commonwealth.
the Clean Streams Law,  the unpermitted release of industrial
waste and other contaminants into any of the waters of the
Commonwealth is prohibited. Section 301 of the enactment
No person or municipality shall place or permit to be placed,
or discharged or permit to flow, or continue to discharge or
permit to flow, into any of the waters of the Commonwealth
any industrial wastes, except as hereinafter provided in this
35 P.S §691.301. Section 307 restates this prohibitory
language in somewhat different terms, forbidding persons and
municipalities from "discharg[ing] or permit[ting] the
discharge" of industrial wastes "in any manner,
directly or indirectly" into any of the waters of the
Commonwealth, absent authorization under DEP rules and
regulations or without a permit. See id.
§691.307. Section 401 -- which begins with an
introductory title "[p]rohibition against other
pollutions" -- makes it unlawful for persons or
municipalities to "put or place" or "allow or
permit to be discharged from property owned or occupied by
such person or municipality" into any of the waters of
the Commonwealth "any substance of any kind or character
resulting in pollution." Id. §691.401.
Clean Streams Law, the term "Waters of the
Commonwealth" is defined very broadly to encompass
"any and all" of an extensive series of waters,
including rivers; streams, creeks, springs and rivulets;
lakes and ponds; water courses; and ditches, as well as
"all other bodies or channels or conveyance of surface
and underground water, or parts thereof, whether natural or
artificial." Id. §691.1. Per Section 605,
violators are subject to civil penalties of up to $10, 000
per day for each violation. See id.
present litigation is a declaratory judgment proceeding
initiated by Appellee EQT Production Company
("EQT"), which became exposed to the civil
penalties under the Clean Streams Law in 2012 on account of
leaks from an impoundment used to contain impaired water
flowing back from hydraulic fracture gas wells. According to the
complaint, much of the penalty exposure asserted by the
regulatory agency, the Department of Environmental Protection
("DEP" or the "Department"), which is the
appellant herein, was premised on a "continuing
violation" theory predicated on passive migration of
contaminants from soil into water. EQT asserted:
DEP's articulated legal position to support this proposed
penalty is that every day that contaminants from the
[impoundment] remain in the subsurface soil and
passively enter groundwater and/or surface water constitutes
a "continuing violation" of sections 301, 307 and
401 of the Clean Streams Law, for which a separate civil
penalty may be assessed for each day of alleged violation.
in EQT Prod. Co. v. DEP, No. 485 M.D. 2014 (Pa.
Cmwlth.), at ¶21 (emphasis in original). The company
expressed the concern that DEP's soil-to-water theory
"means that civil penalties may be asserted against
[EQT] as long as any contaminant remains in the
environment, " creating significant uncertainty and
potentially unending civil liability. Id. at
¶35 (emphasis in original). EQT contended that such
position was contrary to the plain wording of the governing
statutes, was not supported by any judicial precedent, and
defeated the legislative intent of Act 2 of 1995,
separate enactment centered on environmental remediation.
terms of an affirmative statement of its own interpretation
of the statutory overlay, EQT indicated:
Sections 301, 307 and 401, in conjunction with section 605 of
the Clean Streams Law, 35 P.S. §691.605 (establishing
civil penalty amounts for violations) grant DEP authority to
assess a civil penalty only for the days that
pollutants were actually discharged from the
[impoundment], not for any days that previously released
constituents passively migrate through the environment into
groundwater or surface water.
in EQT Prod. Co., No. 485 M.D. 2014, at ¶32
(emphasis in original).
after the filing of the complaint, the Department lodged a
civil penalty complaint against EQT in the Environmental
Hearing Board (the "EHB" or the "Board"),
seeking imposition of a sanction of at least $4, 532, 296.
Relevant to the progress of the declaratory judgment
litigation as discussed below, various paragraphs of the
complaint asserted that penalties continued to accrue for
each day that a contaminant deriving from the impoundment
"continues to be present in any waters of the
Commonwealth." Complaint in In re EQT Prod.
Co., No. 2014-140-CP-L (EHB), at ¶¶60, 89.
answer and new matter addressing EQT's complaint for
declaratory relief, the Department observed that the relevant
provisions of the Clean Streams Law do not employ the phrase
"actual discharge" and highlighted EQT's
failure to provide a definition for the term that it
employed. See Answer and New Matter in EQT Prod.
Co., No. 485 M.D. 2014, at ¶¶43, 44 ("The
Department does not know what [EQT] views to be an
'actual discharge.'"). The agency also
criticized any suggestion that penalty liability cannot be
based upon "passive migration." Id. at
¶45. Furthermore, the Department charged that EQT had
unfairly characterized the agency's liability theories
and posited that the company's asserted omissions
"compel the Department to articulate its legal position
in full detail." Id. at ¶21.
then described EQT's penalty exposure as follows. The
agency explained that evidence would demonstrate that:
industrial waste from the company's impoundment remained
in bedrock and soil beneath the impoundment's liner for a
period of time longer than EQT contemplated in its portrayal
of an "actual discharge"; industrial waste can bind
to the soil or perch above an aquifer, "continually
polluting new groundwater as groundwater flows through the
column of bound or perched industrial waste"; EQT's
"plume of pollution . . . progressively and over time
moved into regions of uncontaminated areas of surface and
groundwater"; and this would continue for months or
years. Id. ¶¶56-59. In these passages, DEP
appears to have been advancing its soil-to-water migration
theory, the continuing-violation theory such as was the
subject of the complaint. The passages can also be read more
broadly, however, to suggest new infractions as contaminants
spread from discrete bodies of water into new regions of
water, a water-to-water theory of serial violations upon
which the Department would come to focus upon more
specifically. Even more broadly, the Department charged that
EQT was subject to civil penalties for "[e]ach day that
[the company's] impact upon a water of the Commonwealth
constitutes 'pollution'" and on each day that
the industrial waste that was to be contained in the
impoundment impairs waters of the Commonwealth. Id.
proceeded to file an application for summary relief premised
on discounting only the last and broadest formulation by DEP.
See Pa.R.A.P. 1532(b). According to the company,
DEP's pleadings and discovery responses conveyed its
intention to seek civil penalties for every day that any
contaminants deriving from the company's impoundment
"remain in the environment." Application for
Summary Relief in EQT Prod. Co., No. 485 M.D. 2014,
at ¶13. EQT criticized such an interpretation,
indicating that the relevant substantive provisions of the
Clean Streams Law turn upon entry of a contaminant
"into a water of the Commonwealth."
Id. at ¶14 (emphasis in original). It was the
company's position at this stage that:
Under the express text of the [Clean Streams Law], there is
no violation for days on which an industrial waste or a
substance resulting in pollution, after having previously
been discharged into a water of the Commonwealth,
continues to be present in that water.
for Summary Relief in EQT Prod. Co., No. 485 M.D.
2014, at ¶15 (emphasis in original). Ultimately, EQT
asked only for two facially straightforward pronouncements of
declaratory relief. First, the company requested a
declaration that a violation of the relevant substantive
provisions of the Clean Streams Law occur only on a day in
which a person "allows an industrial waste or a
substance resulting in pollution to actually enter into
waters of the Commonwealth." Id. at
¶18(a). Second, EQT asked the court to confirm that the
mere presence of an industrial waste or a substance resulting
in pollution of the waters of the Commonwealth does not, in
and of itself, constitute a violation. See id.
worth pausing at this juncture to consider that there is no
material dispute that the second of these propositions is
true. While DEP has repeatedly declined to squarely confirm
that it will not seek penalties for the mere
presence of contaminants in waters of the Commonwealth, every
theory of a continuing violation or serial violations that
the agency has ever attempted to defend on developed
reasoning contemplates movement of contaminants into
or within water. See, e.g., Brief for Appellant at
18 (couching liability under Sections 301, 307 and 401 in
terms of an initial discharge or "the unpermitted
continuing or indirect ¶ow" of
contaminants (emphasis added)); accord Brief of
Amicus Clean Air Council at 21 (recognizing that
"[t]he 'presence' of water pollutants . . . is
not a legal standard for liability under Section 301.");
Brief for Amici Citizens for Pennsylvania's
Future and Sierra Club at 8 n.8 ("Amici Curiae
do not read [sic] the Department as having taken the position
below that the continued presence of the industrial waste in
a particular water of the Commonwealth, by itself,
is an ongoing violation of Section 301[.]" (emphasis in
original)). Indeed, all of the statutes under review plainly
contemplate such movement as a predicate for violations. 35
P.S. §§691.301 (prohibiting various forms of
releases of industrial waste "into any of the
waters of the Commonwealth" (emphasis added), 691.307
(same), 691.401 (same for substances resulting in
the other proposition advanced in the summary-relief
application -- i.e., that an infraction occurs only
on days when a violator allows a contaminant to actually
enter into waters of the Commonwealth -- the parties'
submissions also suggest a substantial overlap in the common
understanding. The consensus is, again, in the degree to
which movement into water is essential to a violation. The
differences are, first, whereas EQT phrased the act or
omission giving rise to liability as
"allow[ing] a contaminant to actually
enter into waters of the Commonwealth, " DEP supplements
the phrase to encompass a variety of other terms such as
discharges, continued discharges, indirect discharges,
permits to flow, and continuing to permit to flow. See,
e.g., Brief for Appellant at 22, 24-25. Second, DEP has
stressed that the governing statutes contemplate movement not
just "into waters, " but into "any of
the waters" of the Commonwealth. Id. at 24
substance of the application for summary relief, however,
cannot fairly be understood to discount DEP's broader
view in these regards, or, more specifically, either of its
soil-to-water or water-to-water migration theories, both of
which require movement into a water (or a part thereof). For
example, there was no developed suggestion, in EQT's
application or its initial supporting brief, concerning any
distinction between active and passive conduct, or on a
constrained definition of the concept of "allowing"
movement into water. Moreover, EQT asserted that there could
be no violation, once a contaminant has moved into a water,
for mere presence in "that water, "
Application for Summary Relief in EQT Prod. Co., No.
485 M.D. 2014, at ¶15 (emphasis added), thus avoiding
any tension with the water-to-water theory. Furthermore, EQT
did not carry over, from its complaint and into the
application for summary relief, the notion of an "actual
discharge" from the impoundment.
these reasons, and otherwise, the application can be
reasonably read only as an effort to confirm that the mere
presence of contaminants in the environment does not, in and
of itself, establish a violation, and that movement into
water is a touchstone. Indeed, had the Department merely
acceded to summary relief on the precise terms advanced by
EQT, it would have been untenable for the company to claim
that the court had confirmed anything other than these modest
Department opposed summary relief. In its response, the
agency observed -- consistent with the above summary of the
EQT's application for summary relief relative to the
soil-to-water and water-to-water theories -- that the
application failed to challenge any portion of the
agency's legal theories. See Answer to
Application for Summary Relief in EQT Prod. Co., No.
485 M.D. 2014, at 6. Notably, in neither the pleadings nor
its response to the application for summary relief did the
Department include a request for a declaratory judgment in
its favor on the theories that it had interjected into the
summary relief proceedings. Rather, the Department merely
asked that relief on the complaint and application should be
denied. See Answer and New Matter in EQT Prod.
Co., No. 485 M.D. 2014, at 26; Answer to Application for
Summary Relief in EQT Prod. Co., No. 485 M.D. 2014,
at 12. Nevertheless, in a supporting brief, DEP proceeded to
reframe, and to greatly broaden, the questions before the
court on summary review to advance its soil-to-water theory
of a continuing violation, as well as the water-to-water
theory of serial violations. See, e.g., Brief in
Opposition to Application for Summary Relief in EQT Prod.
Co., No. 485 M.D. 2014, at 1-2 (presenting a
counter-statement of the questions presented).
reply brief, EQT for the first time contested the
water-to-water theory, characterizing it as a novel,
"revised continuing violation theory." Reply Brief
in Support of Application for Summary Relief in EQT Prod.
Co., No. 485 M.D. 2014, at 1. In this submission, EQT
still did not specifically discuss the soil-to-water theory
that was the subject of its original complaint, but which the
company did not itself carry forward into the summary relief
its review, the Commonwealth Court accepted the
Department's reframing of the issues, at least in part,
centering its decision on the water-to-water theory. See
EQT Prod. Co., 153 A.3d at 433 ("The issue of
statutory analysis presented here, as phrased by the
Department, is whether . . . every time a person
'allow[s] his, her, or its industrial waste or
pollutional substance to flow from one water of the
Commonwealth into another water of the Commonwealth, '
the person is committing a new and separate
violation[.]"). Notably, and presumably in light of the
parties' ultimate focus on that theory, the court also
afforded no specific attention to the soil-to-water theory.
analysis, preliminarily, the Commonwealth Court proceeded
sua sponte to narrow its statutory analysis of
violations to Section 301. In this regard, in terms of Section
307, the court reasoned that the leaks from EQT's
impoundment did not qualify as a "discharge, "
which is the specified concern of Section 307. In support of
this conclusion, the court borrowed a definition of
"discharge" from DEP regulations implementing
programing under the National Pollutant Discharge Elimination
System ("NPDES"), see 33 U.S.C.
§1342. This regulatory definition of
"discharge" -- for purposes of the NPDES program --
concerns "[a]n addition of any pollutant to surface
waters of this Commonwealth from a point source."
25 Pa. Code §92a.2 (emphasis added). Based on this
definition, and because the industrial waste from EQT's
impoundment initially infiltrated groundwater, and not
surface water, the Commonwealth Court found that no discharge
had occurred. See EQT Prod. Co., 153 A.3d at 433-34.
Again, the court's analysis was entirely of its own
accord, as no party had suggested either that Section 307 did
not apply, or that the NPDES-related definition of discharge
was in any way relevant.
Section 401, the court posited -- based on the introductory
title and without considering that the operative terms of the
statute can be read more broadly than the title suggests --
that the provision concerned only forms of pollution other
than industrial waste. See id. at 433 ("Because
the release [from EQT's impoundment] emanated from an
industrial site, the waste at issue is considered industrial
waste, regulated under Article III of The Clean Streams Law,
and not Article IV (relating to other forms of
pollutants)." (emphasis added)).
then, on Section 301, the Commonwealth Court highlighted the
statute's proscription against "'plac[ing] or
permit[ting] to be placed, or . . . permit[ting] to ¶ow,
or continu[ing] to . . . permit to flow, into any waters of
the Commonwealth' industrial waste." Id. at
434 (quoting 35 P.S. §691.301) (interlineations in
original). By virtue of this language, the court reasoned
that the General Assembly intended to expand the
statute's coverage not only to discharges (as the court
had narrowly defined the term), but also to instances in
which industrial waste enters into the Commonwealth's
groundwater or surface waters through other means. See
id. ("This interpretation would cover situations
where industrial waste escapes containment and flows over
land into surface waters or leaks into the soil and enters
the Commonwealth's groundwater."). Accordingly, the
court concluded that Section 301's proscription applied
to the leak from EQT's impoundment, based on the
migration of contaminants through soil into groundwater.
Commonwealth Court, however, proceeded to reject the
Department's water-to-water theory of serial violations.
Initially, the court expressed its concern that DEP's
interpretation "would result in potentially limitless
continuing violations for a single unpermitted release of
industrial waste while any of the waste remained in
any water of the Commonwealth, or until Act 2 remediation is
completed." Id. at 435 (emphasis in original).
According to the court, the General Assembly did not intend
for these sections to establish "seemingly endless
violations following but a single release of industrial waste
or other prohibited substances from a point source or
otherwise into a water of the Commonwealth."
Id. at 435-36.
the Commonwealth Court opined that violations of the Clean
Streams Law require some culpable action or inaction by
violators. Thus, it was the court's position that passive
movement of industrial waste cannot establish infractions.
See id. at 436. Instead, the court indicated that
violations are confined according to a concept of an
"initial active discharge or entry of industrial waste
into waters of the Commonwealth." Id. at
437. For this reason, the court found that
authorization was lacking for "ongoing penalties for the
continuing presence of an industrial waste in a waterway of
the Commonwealth following its initial entry into the
waterways of the Commonwealth." Id.
regard, the Commonwealth Court opined that Section 301 simply
was not concerned with the progress of remediation efforts
after the cessation of what the court termed an "initial
active discharge or entry of industrial waste" into
waters. See id. at 436 ("Had the General
Assembly intended that a violation of Section 301 . . . would
result in a continuing violation until remediation is
achieved, [it] would have clearly stated as such.").
Relative to remediation, the court also highlighted DEP's
powers, under the Clean Streams Law, to commence an action at
law or in equity seeking abatement of nuisances in the form
of contamination. See id. at 436-37 (citing 35 P.S.
§691.601(a)). The court additionally alluded to the
agency's authority to issue such orders as may be
necessary to aid in the enforcement of the Clean Streams Law.
See id. at 437 (citing 35 P.S. §691.610).
further support of its construction of Section 301, the
Commonwealth noted that penal statutes are to be strictly
construed. Id. at 436 (citing 1 Pa.C.S. §1928).
Additionally, the court rejected the Department's
position that it was entitled to deference as the
administrative agency charged with interpretation and
enforcement of the Clean Streams Law. Id. at 436
n.23. See generally Seeton v. Pa. Game Comm'n,
594 Pa. 563, 578, 937 A.2d 1028, 1037 (2007) (discussing
deference to agencies' interpretations relative to
ambiguous statutes). In this respect, the court deemed the
language of Section 301 to be sufficiently plain to override
DEP's approach. Furthermore, the court considered the
water-to-water theory to reflect a position developed in
litigation, as to which deference should be constrained.
See generally Huntley & Huntley, Inc. v. Borough
Council of Borough of Oakmont, 600 Pa. 207, 228, 964
A.2d 855, 867-68 (2009).
the issuance of the Commonwealth Court's decision, the
EHB rendered an adjudication imposing a civil penalty upon
EQT of $1, 137, 296. See DEP v. EQT Prod. Co., No.
2014-140-CP-L, 2017 WL 2399756 (EHB May 26, 2017). The Board
offered an extensive recitation of the facts relevant to the
number and duration of the violations and the amount of
penalties, finding EQT's conduct and omissions to have
been reckless both in terms of the leaks and the timeliness
and scope of the company's remediation response. See,
e.g., id. at *21, 48. In terms of the amount of