193 A.3d 1137
Pa. Commw. Ct.2018Background
- EQT operated a single‑lined, multimillion‑gallon impoundment (the "S Pit") at Pad S in Tioga County for storage of wastewater from unconventional gas operations; the liner was damaged and wastewater leaked, contaminating groundwater, seeps, springs, and nearby streams (including High Quality/Class A waters).
- DEP sued EQT before the Environmental Hearing Board under The Clean Streams Law, seeking civil penalties; after a 10‑day hearing the Board assessed $1,137,295.76, including $10,000 daily penalties over specified periods and $112,295.76 in DEP costs.
- The Board found (1) ongoing contamination and a contamination plume of roughly 2,000 feet and ~35 million gallons collected, (2) EQT acted recklessly in design, construction, supervision, and response (single liner, poor subbase, no leak detection, slow remedial action), and (3) remediation and cooperation increased over time, so the daily penalty was reduced for later intervals.
- EQT appealed only the penalty amount and related legal rulings, advancing four principal challenges about (a) evidentiary support for daily violations after June 15, 2012, (b) burden shifting, (c) the Board's consideration of Section 605(a) factors (willfulness/damage), and (d) whether findings violated this Court’s earlier EQT decision.
- The Commonwealth Court reviewed for substantial evidence on factual findings and de novo on legal issues, and it affirmed the Board’s penalty in full.
Issues
| Issue | Plaintiff's Argument (EQT) | Defendant's Argument (DEP) | Held |
|---|---|---|---|
| Duration of violations / daily entries after June 15, 2012 | DEP failed to prove active daily releases after EQT drained and patched pit; mere presence of contaminants is insufficient | Expert hydrogeological testimony and monitoring data support daily release via vadose zone to groundwater through Sept. 27, 2012 | Court held substantial evidence (expert testimony/reports) supports finding of daily releases June 15–Sept. 27, 2012; penalty days sustained |
| Burden of proof (whether Board shifted burden to EQT) | Board improperly shifted burden to EQT to show when releases ceased | DEP met its burden via expert proof; EQT could rebut but Board did not require it to carry burden | Court held Board did not shift burden; DEP met its burden and EQT had opportunity to rebut |
| Consideration of Section 605(a) factors (willfulness/recklessness and damage) | Board lacked record basis to find recklessness or "severe" damage; penalty excessive | Board reasonably weighed evidence (prior warnings, construction defects, delayed response, large persistent contamination) to find recklessness and severe harm | Court found Board’s recklessness and damage findings supported by substantial evidence and penalty reasonably fits violations |
| Legal effect of prior EQT rulings (Sections 307/401) | Court should limit or vacate findings under EQT III (earlier decision) that mere presence is insufficient to show violation | Supreme Court vacated portions of EQT III relied upon; Board’s findings stand | Court rejected EQT’s challenge; EQT IV (Supreme Court) does not invalidate Board’s findings; violations of 307 and 401 sustained |
Key Cases Cited
- EQT Production Co. v. Dep’t of Envtl. Prot., 181 A.3d 1128 (Pa. 2018) (Supreme Court decision addressing scope of prior rulings and presence‑vs‑movement issues)
- U.S. Steel Corp. v. Dep’t of Envtl. Res., 300 A.2d 508 (Pa. Cmwlth. 1973) (standard that penalty must reasonably fit violations)
- Pines at W. Penn, LLC v. Dep’t of Envtl. Prot., 24 A.3d 1065 (Pa. Cmwlth. 2011) (consideration of water classification and duration in assessing harm)
- Stambaugh v. Dep’t of Envtl. Prot., 11 A.3d 30 (Pa. Cmwlth. 2010) (definitions and proof required for willful/reckless conduct)
- Al Hamilton Contracting Co. v. Dep’t of Env’t Resources, 659 A.2d 31 (Pa. Cmwlth. 1995) (expert opinion on causation admissible when reasonably certain)