Clean Streams Law Discharge Penalties: Is the Violation Limited to the Initial Discharge into Water, or Continuing Until no Water Anywhere is Affected?
EQT Production Co v. DEP, 153 A.3d 424 (Pa. Cmwlth. 2017), 6 MAP 2017 (Direct appeal)
This case involves the reach of The Clean Streams Law when industrial waste is discharged into the ground and initially affects groundwater. Section 301 of The Clean Streams Law prohibits a person or municipality from permitting industrial waste to flow or continue to flow “into any of the waters of the Commonwealth.” The question presented is whether that prohibition applies only when waste first enters one of the types of waters enumerated in the definition of “waters of the Commonwealth,” such that movement of the industrial waste from one water to another water is not a violation that could produce a penalty, as the Commonwealth Court found and appellee EQT contends, or whether, following an initial release of industrial waste into a water of the Commonwealth, the natural flow of the waste from that water into another water of the Commonwealth or part thereof also constitutes a violation, such that a continuing violation occurs until completion of cleanup of all waters contaminated by the initial release, as appellant Department of Environmental Protection (DEP) and its many amici curiae contend.
Also at issue under the facts presented is the Commonwealth Court’s limitation of the analysis to Section 301. DEP contends that whenever 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 of Section 301, 307, and/or 401 of The Clean Streams Law.” 153 A.3d at 433. The Commonwealth Court, however, held that because the waste involved is “considered industrial waste, regulated under Article III of The Clean Streams Law, and not Article IV (relating to other forms of pollutants),” only Article III is implicated. The court then further limited the analysis to Section 301, the general section of the statute relating to discharges, because EQT’s discharge infiltrated groundwater, whereas, the court held, Section 307 applies only to surface water discharges.
EQT owns and operates natural gas wells on a gas well pad where it uses hydraulic fracturing or “fracking” to extract natural gas. EQT built a subgrade impoundment to contain the impaired water generated from fracking. When EQT concluded that it was likely that the impoundment was leaking into the subsurface beneath the impoundment, it notified DEP of the leak. EQT acted quickly to empty the impoundment of impaired water and sludge, patch the impoundment liner and install sumps and trenches at five locations downgradient from the impoundment to collect and/or intercept groundwater potentially affected by the release. EQT also entered into a formal cleanup process under the governing remediation statute (Act 2)(the Environmental Remediation Standards Act, 35 P.S. §§ 6026.101–.908), excavated the affected soils, attained the required remediation standards for the soil beneath the impoundment, and continued its efforts to attain the required standards for the groundwater.
Thereafter, EQT and DEP could not come to agreement on a consent order and penalty for violation of The Clean Streams Law, because EQT viewed its liability to be solely under Section 301 and limited to the initial release, whereas DEP maintained that EQT had liability under Sections 301, 307, and/or 401 and that it extended to all waters eventually contaminated by EQT’s initial release. Anticipating that DEP would initiate an action for civil penalties before the Environmental Hearing Board (which DEP later did), EQT filed a declaratory judgment action in the Commonwealth Court to resolve the statutory interpretation dispute. The Commonwealth Court dismissed EQT’s declaratory judgment action on grounds the dispute was speculative, but the Supreme Court reversed. 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). On remand, the Commonwealth Court granted summary relief to EQT.
In deciding for EQT’s interpretation, the Commonwealth Court reasoned:
The Department’s interpretation of Section 301 of The Clean Streams Law as providing that a violation occurs when industrial waste flows from one water of the Commonwealth into another and continues to constitute a violation until remediation is completed is not supported by the statutory provisions and framework or the rules of statutory construction. The Department’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. Moreover, if a new violation occurs as industrial waste moves from one water of the Commonwealth to another water or part thereof, it would be impossible for the Department to prosecute a case without the Commonwealth of Pennsylvania first delineating all of the boundaries for each water and each part thereof. 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.
Slip Op., at 20 (emphasis in original).
On appeal, DEP argues that the Commonwealth Court’s reading of The Clean Streams Law constricts DEP’s efforts to protect the Commonwealth’s water resources in a way never intended, and that The Clean Streams Law provided for the comprehensive protection of water resources from industrial activities through Sections 301, 307(a), and 401, which function together in a unified scheme. Section 301 prohibits any discharge or continued flow of industrial wastes into the waters of the Commonwealth, except as authorized by the statute. Section 307(a) establishes that discharge and continued flow may occur only when authorized by regulation or a permit. Section 401 provides that, with or without a permit, no one may discharge any substance that results in any pollution of the waters of the Commonwealth. Thus, DEP argues, Section 301, 307(a), and 401 prohibit the initial discharge of industrial waste or pollution as well as the unpermitted continuing or indirect flow of industrial waste or other forms of pollution into any part of a water of the Commonwealth. Accordingly, DEP argues, the prohibitions work together to cover the flow of EQT’s waste from soil or bedrock into groundwater, then the flow from groundwater into a stream – even after the initial discharge has ended. The Commonwealth Court’s interpretation, DEP argues, eviscerates the protections of Pennsylvania water resources provided by the statute, and frustrates the General Assembly’s intent.
EQT urges for affirmance, arguing, as it argued before the Commonwealth Court, that the key to interpreting Section 301 is the meaning of the phrase “into any waters of the Commonwealth.” The dictionary definition and common meaning of ”into” is ”expressing entrance, or a passing from the outside of a thing to its interior parts; following verbs expressing motion; as . . . one stream falls or runs into another.” As used in Sections 301, 307 and 401, EQT argues, an industrial waste or polluting substance must pass from its location outside the waters of the Commonwealth into surface water or groundwater. According to EQT, there is nothing to indicate that the General Assembly intended any meaning other than the common meaning in using the word “into.” Sections 301, 307 and 401, EQT argues, each prohibit specified actions that cause an industrial waste or a substance resulting in pollution to enter “into any of the waters of the Commonwealth.”
EQT also argues, in response to the claim that the Commonwealth Court erroneously excluded application of Sections 307 and 401, that the Commonwealth Court’s reasoning, that Section 301 prohibits acts or omissions resulting in the initial active discharge or entry of waste into waters of the Commonwealth and does not authorize ongoing penalties for the continuing presence or dispersal of contaminants in waters, applies equally to Sections 307 and 401. The phrase “into any of the waters of the Commonwealth” is used in all three sections, and must be interpreted in the same way in each.
EQT also supports the Commonwealth Court’s interpretation as one supported by a reading of the statute as a whole, and the legislative history of The Clean Streams Law’s penalty provisions, and criticizes DEP’s interpretation as unsupported by a plain reading of the statute, lacking in a limiting principle (resulting in potentially limitless penalties for a single discharge) and unworthy of deference.
EQT maintains that declaratory relief was necessary “so that the Department, the public, and the Pennsylvania Environmental Hearing Board would have clear notice of when violations occur, and more importantly, when they end,” and that the Commonwealth Court’s interpretation is faithful to the statute.