Environmental Law; Hazardous Sites Cleanup Act; De Facto Taking; Pa Const. Art. I, Sec. 27

Gibraltar Rock, Inc. v. Pennsylvania Dep’t of Env’t Prot., 258 A.3d 572 (Pa. Cmwlth. 2021), allocatur granted Nov. 2, 2021, appeal dockets 78 & 79 MAP 2021

The Pennsylvania Environmental Hearing Board (Board) rescinded permits issued by the Department of Environmental Protection (DEP) for the operation of Gibraltar’s rock quarry based on the Board’s conclusion that the quarry’s proximity to another property designated as hazardous under the Hazardous Sites Cleanup Act made it unlikely that the quarry could be operated without drawing the contaminants towards Gibraltar’s property. Therefore, the Board held that until DEP remediates the contamination on the adjacent property, Gibraltar cannot operate a quarry on its property. The Pennsylvania Supreme Court granted allocatur to consider the Commonwealth Court’s conclusion that the Board exceeded its authority in rescinding Gibraltar’s permits based on DEP’s inaction and that such rescission effected a taking of Gibraltar’s lawful use of its land without due process of law.

Background

Commonwealth Court summarized the background of the 15+ year dispute as follows:

On April 15, 2005, DEP issued permits under the Noncoal Surface Mining Conservation and Reclamation Act to allow Gibraltar to operate a quarry on its 241-acre property in New Hanover Township (Township) in Montgomery County, Pennsylvania. By regulation, such mining permits are permanent but must be activated within three years of issuance. See 25 Pa. Code § 77.128(b). Also on April 15, 2005, DEP issued Gibraltar a National Pollutant Discharge Elimination System (NPDES) permit. Such permits are issued for five-year terms. 25 Pa. Code § 77.128(a). Neither permit was appealed to the Board by an interested third party.

In the meantime, Gibraltar sought a special exception under the Township’s zoning ordinance to operate a quarry on that part of its property located in the district zoned for heavy industry. Gibraltar also filed a substantive validity challenge to the zoning ordinance as exclusionary of a rock quarry use and challenged the requirement in the Township’s Subdivision and Land Development Ordinance (SALDO) that conditioned approval of an industrial land development plan upon the donation of land or cash in lieu thereof.

In 2007, the zoning hearing board granted Gibraltar a special exception subject to the condition, inter alia, that it construct berms and screening around the perimeter of the quarry prior to commencement of quarrying. Gibraltar appealed and, with the consent of DEP, deferred commencement of mining while the zoning litigation was ongoing.

In 2008, DEP advised Gibraltar that it would not grant another permit extension, and Gibraltar began construction of berms at the quarry. The Township obtained a preliminary injunction to stop Gibraltar’s activity until it secured all zoning approvals. DEP then approved a series of temporary cessations of operations under the mining permits because of the injunction.6 The Township appealed DEP’s grant of temporary cessations to the Board.

In 2011, while the Township’s appeals of the temporary cessations were pending with the Board, DEP discovered that a residential water well in the Township contained levels of contaminants that exceeded safe drinking water standards. DEP’s investigation revealed the source to be the “Hoff VC Site,” which is short for Hoffmansville Road and vinyl chloride. As an interim response, DEP funded the construction of a waterline main, the laterals to each affected residential property and the connection of the laterals to the plumbing in each affected property. The residential water wells were closed, and the construction was completed in 2014. The Hoff VC Site is located on land adjacent to Gibraltar’s property.

In 2013, this Court upheld the Township’s condition in Gibraltar’s special exception that required the installation of berms and screens prior to the commencement of quarry operations. In re Gibraltar Rock, Inc., 2013 WL 5614244 (Pa. Cmwlth., No. 2287 C.D. 2011, filed October 11, 2013) (unreported). However, this Court reversed the Township’s condition that Gibraltar dedicate 80 acres of land to the Township or pay a $2,183,375 fee in lieu thereof.

On October 10, 2014, Gibraltar applied for a renewal of its NPDES permit, as is required by regulation. A few weeks later, on November 3, 2014, the Board issued an adjudication sustaining, in part, the Township’s appeal of DEP’s grant to Gibraltar of a cessation of its surface mining permit. In so doing, the Board opined that “Gibraltar Rock is required to apply for a permit renewal to allow [DEP] to review the application to ensure that the 2005 permit is still up-to-date from a noncoal surface mining regulatory perspective.” Board Adjudication, 11/3/2014, at 37.

In response, on January 16, 2015, Gibraltar submitted a permit renewal application to DEP that addressed the contamination at the nearby Hoff VC Site. DEP issued technical deficiency letters that directed Gibraltar to address the possible groundwater migration of contaminants from the Hoff VC Site. In response, Gibraltar proposed increasing the frequency of sampling at its own monitoring wells and at those located on the Hoff VC Site, once it opened the quarry. Assuming that final remediation of the Hoff VC Site would not be completed before quarry operations began, Gibraltar explained that repeated sampling at its wells and at the Hoff VC Site would detect migration of contaminants. Gibraltar agreed to treat any contaminants that appeared in the groundwater on its property.

In February 2016, the Township and “Ban the Quarry,” a citizens group, formally objected to Gibraltar’s permit renewal application and requested a public hearing. DEP held a public hearing and issued a report. Gibraltar responded to each point made in the report.

Thereafter, DEP discovered a concrete vault at the Hoff VC Site containing hazardous compounds. DEP emptied the vault. On January 4, 2017, DEP directed Gibraltar to address the potential for the contaminants in the concrete vault to migrate onto Gibraltar’s property. Gibraltar again responded that it would monitor its groundwater for contaminants and, if discovered, remediate them. On March 2, 2017, DEP notified Gibraltar that it had completed its technical review of Gibraltar’s permit renewal application but required a new mining and reclamation bond. Gibraltar provided the new reclamation bond.

On August 11, 2017, the Township, which objected to the permit renewal application, requested DEP to require Gibraltar to produce a fate and transport analysis that would measure the extent and movement of contaminants in groundwater, i.e., the “plume” of discharge from the Hoff VC Site. Joint Stipulation, filed 10/17/2019, ¶45, Notes of Testimony, 10/23/2019, at 657. In response, Gibraltar’s expert prepared a “Fate and Transport Analysis and Assessment of Hoff VC Site Contaminant Migration.” Id. at 89. This assessment, called the EarthRes Model, concluded that the plume would not enter the quarry mining area. Specifically, the pumping of water from the quarry was unlikely to draw contamination from the Hoff VC Site. Groundwater generally flows south and west from the Hoff VC Site; Gibraltar’s quarry will be located south and east of the Hoff VC Site. Because the quarry footprint would develop slowly, Gibraltar would not do significant pumping for approximately 15 years, by which time the contaminants at the Hoff VC Site would have been resolved, either by remediation or by natural degradation.

Gibraltar provided updated background monitoring reports; responded to each objection letter; provided DEP additional and updated information; and posted a $1,422,935 reclamation bond. On July 2, 2018, DEP renewed Gibraltar’s surface mining and NPDES permits.

Slip op. at 2-7 (footnotes omitted).

 

Appeal to the Board & Adjudication

The Township appealed DEP’s renewal of the permits to the Board. Before the Board, the Township offered testimony of Charles McLane that the Gibraltar EarthRes Model was flawed and that his model showed pumping water at the quarry would draw contaminated groundwater at the Hoff VC Site towards the quarry and that one contaminant reported by Gibraltar in a monitoring well had originated at the Hoff VC Site. Gibraltar presented testimony of licensed geologists in support of the EarthRes Model, who opined that even with conservative assumptions, the contaminants at the Hoff VC Site would not have any impact on the quarry’s discharge limits over the 50-year life of the quarry. Three DEP employees testified. The supervisor of the Hoff VC Site explained that the remediation of the concrete vault was completed, DEP will continue sampling its monitoring wells at the site, and DEP has initiated a pilot program to evaluate the groundwater contamination for remediation; the permits chief at the Pottsville Office, and a geologist specialist testified that DEP accepted the EarthRes Model when it reviewed Gibraltar’s permit renewal application. The DEP witnesses agreed with the conclusion in the EarthRes Model that the groundwater at the Hoff VC Site would not migrate to the quarry, but alleged that, had they learned of McLane’s criticisms of the report prior to renewing Gibraltar’s permits, they would have required Gibraltar to respond before rendering their decision.

The Board credited the Township’s expert on groundwater modeling and rejected Gibraltar’s expert, leading it to find that pumping water out of the quarry would draw the plume of contaminated groundwater at the Hoff VC Site toward the quarry. Thus, the Board concluded that DEP erred in renewing Gibraltar’s mining permits because (1) DEP was mistaken in its finding that Gibraltar’s quarry would not adversely impact the quality of the water; (2) Gibraltar’s sentinel well program was not adequate because two sentinel wells were already contaminated and therefore not able to detect contamination migrating from the Hoff VC Site; (3) DEP did not establish a mechanism to ensure that NPDES permit limits will be honored and the bond did not serve this purpose because it covered the cost of land reclamation, not the cost of remediation of groundwater contamination from the Hoff VC Site; and (4) DEP did not act with prudence and impartiality as the trustee of Pennsylvania’s public natural resources, as required by the Environmental Rights Amendment in Article I, Section 27 of the Pennsylvania Constitution. The Board rescinded the permits, explaining that:

[DEP] has issued the Gibraltar permits prematurely in light of the unanswered questions regarding the Hoff VC Site. As investigation and remediation of that hazardous site evolves, it may become clear that quarrying can be accomplished in harmony with the cleanup. However, given the lack of momentum on that site, we are concerned that a remand pending [hazardous site cleanup] activities would drag on indefinitely, again giving rise to the staleness concerns that required a remand in our first Adjudication. Therefore, we will rescind the permits but without prejudice to Gibraltar’s right to reapply for the permits if remediation of the Hoff VC Site matures to the point that it becomes apparent that there will be no presumptive evidence of potential pollution and quarrying will not unreasonably interfere with the [hazardous site] cleanup.

Slip op. at 10 (emphasis added by Commonwealth Court).

Gibraltar appealed the Board’s recission to Commonwealth Court, arguing that by basing its rescission of Gibraltar’s mining permits on reasons not related to Gibraltar, the Board exceeded its authority under the Noncoal Surface Mining Conservation and Reclamation Act. Thus, Gibraltar requested that Commonwealth Court remand the matter of its renewal permits to the Board for further remand to DEP.

 

Commonwealth Court Opinion

Commonwealth Court reversed the Board’s order rescinding Gibraltar’s mining permits and remanded the matter to the Board with instructions to return the matter to DEP to address the concerns identified by the Board in its adjudication and, if necessary, amend Gibraltar’s permits. Commonwealth Court concluded that the Board abused its discretion and exceeded its authority under Noncoal Surface Mining Conservation and Reclamation Act by tying Gibraltar’s lawful use of its land to DEP’s action, or inaction instead of deficiencies in Gibraltar’s renewal application or conduct of its non-coal surface mining activities on its property. Commonwealth Court analogized the Board’s denial with the Department of Environmental  denial of a residential landowner’s application for an on-lot sewage treatment system permit based on a municipality’s inaction in amending municipal plans as required by the applicable regulation in Department of Environmental Resources v. Trautner, 338 A.2d 718 (Pa. Cmwlth. 1975). In Trautner, Commonwealth Court rejected DER’s argument that the denial did not amount to a taking because the regulation provided a remedy where a property owner is prejudiced by municipal inaction, reasoning that “[t]he landowner is still not free to use his land until such time as another party, over whom he has absolutely no control, acts in a manner satisfactory to DER. There is no guarantee that such action will occur within a reasonable time, or for that matter, ever occur.” Slip op. at 18, quoting Trautner, at 721 (emphasis added by Commonwealth Court). Likewise in Gibraltar’s case, the Court reasoned, “DEP has not identified any remedy that Gibraltar can employ to push DEP to overcome its sloth with respect to the Hoff VC Site.” Slip op. at 18. Commonwealth Court explained:

By tying Gibraltar’s mining permit to DEP’s remediation of the Hoff VC Site, the Board gave DEP unfettered control over Gibraltar’s property. DEP can stop the quarry by delaying the cleanup of the Hoff VC Site. In the meantime, the Board has authorized DEP to refuse to act on any permit application, new or renewal, from Gibraltar until the Hoff VC Site is declared safe. As in Trautner, the Board has effected a taking of Gibraltar’s lawful use of its land without due process of law. See also PBS Coals, Inc. v. Department of Transportation, ––– Pa. ––––, 244 A.3d 386, 398 (2021) (providing that a de facto taking applies to “any governmental action that interferes with property rights”); accord M.A. Rosenhouse, J.D., et al., 7 SUMMARY OF PENNSYLVANIA JURISPRUDENCE 2D PROPERTY § 11:57 (2d ed. 2021) (a de facto taking occurs when a government entity exercises regulatory powers to “substantially” interfere with the owner’s beneficial use of his property).

There are no drinking wells on Gibraltar’s 241-acre property that are imperiled by the plume of contaminants in the groundwater at the Hoff VC Site. Nevertheless, Gibraltar agreed to participate in the cleanup of the Hoff VC Site plume if and when any contaminants appear in the groundwater on Gibraltar’s property. It installed sentinel wells and committed to remediate any contaminants detected in the well samplings, regardless of origin. Stated otherwise, Gibraltar has agreed, in principle, to remediate groundwater pollution that it did not create. Its proposed remediation included: aeration, oxidation, thermal distraction, filtration, precipitation and carbon polishing. Board Adjudication, 4/24/2020, at 18, Findings of Fact No. 82.

Given Gibraltar’s response, the Board’s adjudication is not consonant with Article I, Section 27 of the Pennsylvania Constitution, which provides that the people have “a right to clean air, pure water, and to the preservation of the natural, scenic, historic and esthetic values of the environment.” PA. CONST. art. I, § 27; Pennsylvania Environmental Defense Foundation v. Commonwealth, 640 Pa. 55, 161 A.3d 911, 931 (2017) (citing Robinson Township v. Commonwealth, 623 Pa. 564, 83 A.3d 901, 951 (2013) (plurality)). Without a permit, Gibraltar cannot be called upon to participate in the remediation of the Hoff VC Site to the extent the contaminants migrate to Gibraltar’s land. Migration of the contaminants is already occurring, according to the Board, even without any quarrying. Board Adjudication, 4/24/2020, at 69 (“The plume of contaminated groundwater appears to be spreading even without the more active migration that quarry pumping will cause.”). Losing Gibraltar’s participation in the cleanup of contaminated groundwater itself may work a harm on the environment, i.e., a violation of Article I, Section 27 of the Pennsylvania Constitution.

Slip op. at 18-19. Based on this reasoning, Commonwealth Court held that Board erred and abused its discretion in rescinding Gibraltar’s permits because (1) its order did not conform to the terms of the applicable statute and arbitrarily tied Gibraltar’s lawful use of its land to the actions of a third party, DEP; and (2) the Board effected a de facto taking without due process and that “[i]nstead of rescinding Gibraltar’s mining permits, the Board should have remanded them to DEP for further consideration consistent with its findings and stated concerns.” Slip op. at 20. Thus, Commonwealth Court reversed the Board’s order rescinding Gibraltar’s mining permits and remanded the matter to the Board with instructions to return this matter to DEP to address the concerns identified by the Board in its adjudication and, if necessary, amend Gibraltar’s permits, concluding that:

The Board’s focus on DEP’s failings and not on Gibraltar’s conduct as a permittee was misplaced. The Board did not find any deficiencies in Gibraltar’s plans for operating its quarry, which will be followed by a land reclamation. Nor did the Board find that Gibraltar would not honor its commitment to remediate contamination from the Hoff VC Site that is captured on its land, regardless of whether it gets there by slow migration or because of pumping water out of Gibraltar’s quarry. The Board opined that the mechanism for ensuring Gibraltar’s commitment is inadequate, but it did not specify how to improve that mechanism. DEP can address that concern on remand.

Slip op. at 20.

The Pennsylvania Supreme Court granted the Township and intervenors Paradise Watchdogs/Ban the Quarry and John C. Auman’s petition for allowance of appeal as to the following issues:

(1) Whether the Commonwealth Court’s decision conflicts with prior Supreme Court decisions that a permit cannot be issued unless it meets the criteria set forth in the applicable statutes?

(2) Whether the Commonwealth Court erred in remanding the permits, when the permit applicant could not prove the requirements set forth by the governing statutes for permit issuance in the first place?

(3) Whether the permit in this case violates the Pennsylvania Constitution Article 1 section 27?

The Supreme Court also granted DEP’s petition for allowance of appeal as to the following issues:

(1) Did the Commonwealth Court exceed its authority in addressing legal questions Sua Sponte in an appeal that raised the narrow issue of whether the EHB’s remedy was supported by substantial evidence?

(2) Did the commonwealth Court err in concluding that the environmental hearing board’s rescission of a permit rather than remand to DEP constituted a De Facto taking?

(3) Did the Commonwealth Court contradict Supreme Court decisions regarding the department’s duties under Article I, Section 27 of the Pennsylvania Constitution?

(4) Did the Commonwealth Court err in interpreting the noncoal surface mining act to preclude permit rescission where the environmental hearing board concluded renewal requirements were not met?

(5) Did Commonwealth Court err in failing to acknowledge the role Pennsylvania remediation statutes in any remediation of a hazardous site in its remand order?

 

For more information, contact Kevin McKeon or Dennis Whitaker.