Agency might issue penalty to EQT before Supreme Court can hear case

By Carrie Salls | Jan 27, 2017

HARRISBURG – A planned state Department of Environmental Protection appeal related to penalties under the Clean Streams Law could be potentially rendered moot after the Environmental Hearing Board sets a penalty amount early this year.

In its Jan. 11 ruling in EQT Production Company v. Department of Environmental Protection, the Commonwealth Court held that an entity is no longer in violation of the law after any unpermitted discharges stop, even if the affected waters are still polluted as a result of previous discharges.

“The interesting twist – while the Commonwealth Court’s decision was pending, the Environmental Hearing Board held a hearing on DEP’s civil penalty complaint, and the parties have just about wrapped up their briefing to the EHB,” Saul Ewing LLP partner Andrew Bockis told the Pennsylvania Record.

“This means that the EHB will be in a position to adjudicate a penalty amount early this year, as opposed to the months it will take for the parties to brief DEP’s appeal to the Supreme Court.”

The DEP said following the Commonwealth Court ruling that it intended to take its legal battle against EQT to the Pennsylvania Supreme Court.

Although he feels “the Commonwealth Court provided a well-articulated basis for its decision,” Bockis said the DEP has an automatic right to appeal the decision to the commonwealth’s high court, since EQT originally chose to file its case in the Commonwealth Court’s jurisdiction.

The Supreme Court ruled in November 2015 that EQT had the right to seek an immediate judicial declaration in Commonwealth Court regarding the DEP’s interpretation of the law, instead of having to first take its argument to the state Environmental Hearing Board.

However, Bockis said the current state Supreme Court looks much different than the November 2015 one did.

“Here, the Supreme Court has added four new justices in the last dozen or so months, so the parties will be addressing a court that has a very different makeup than the November 2015 Supreme Court,” Bockis said. “That was a 3-1 decision, with only two of the justices that ruled with the majority remaining on the court. That means there will be four new sets of eyes weighing in on this issue.”

Bockis said the Commonwealth Court’s ruling affects “any industry subject to regulation by the Department of Environmental Protection under the Clean Streams Law, which is to say, many, many industries.”

“It runs the gamut from municipal wastewater facilities to oil and gas activities to manufacturing operations,” he said.

In addition, Bockis said the ruling “reinforces the importance of performing a reality check on proposed penalties.”

“The Commonwealth Court provided a meaningful counterbalance to the strict cleanup liability that Pennsylvania courts have otherwise found to exist under The Clean Streams Law,” he said.

“In other words, while DEP has the authority to require certain entities to remediate pollution regardless of fault, the Commonwealth Court held that in assessing penalties, violations ‘require some culpable action or inaction by the polluter.’”

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EQT Production Company Pennsylvania Department of Environmental Protection Pennsylvania Supreme Court Saul Ewing LLP

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