EQT Production Co. v. Department of Environmental Protection
130 A.3d 752
| Pa. | 2015Background
- EPC (EQT Production Co.) discovered contaminated water leaking from a subsurface impoundment in May 2012, cleaned the site, and began remediation under Pennsylvania’s Act 2.
- DEP asserted violations of the Clean Streams Law and proposed a consent assessment seeking about $1.27 million in May 2014, including large sums for alleged continuing daily violations; later DEP filed a civil-penalty complaint seeking over $4.5 million plus daily penalties before the Environmental Hearing Board (EHB).
- EPC filed an original-jurisdiction declaratory judgment action in the Commonwealth Court challenging DEP’s “continuing-violation” interpretation (i.e., that mere continued presence of contaminants generates daily penalties) and argued administrative remedies were inadequate or unavailable.
- DEP objected, asserting exclusive EHB jurisdiction, exhaustion requirements, and that any alleged harm was speculative until the EHB imposed penalties.
- The Commonwealth Court sustained DEP’s preliminary objections; the Pennsylvania Supreme Court reversed, holding EPC’s pre-enforcement challenge presented an actual controversy warranting declaratory relief and that exhaustion of administrative remedies was unnecessary under these facts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Availability of pre-enforcement declaratory relief to challenge DEP’s statutory interpretation | EPC: DEP’s continuing-violation interpretation imposes immediate, substantial, multi‑million‑dollar exposure — courts should decide legal questions now | DEP: EHB has exclusive jurisdiction; declaratory relief is barred while administrative remedies are available; harm is speculative | Court: Allowed pre-enforcement declaratory review — actual controversy existed and administrative exhaustion unnecessary here |
| Nature of the legal question (pure law vs. factual) | EPC: Dispute is primarily a question of statutory interpretation, not factfinding | DEP: Application involves factual development and EHB expertise; review belongs to EHB first | Court: Found the dispute predominantly a legal question suitable for judicial review |
| Effect of agency’s nonbinding position and timing of EHB filing | EPC: DEP’s threat of accumulating penalties and inability to obtain relief administratively before DEP filed makes judicial review necessary | DEP: DEP cannot impose penalties without EHB; until EHB acts harm is speculative; EHB later filed its own complaint | Court: Timing did not defeat EPC’s jurisdiction; DEP’s later EHB filing did not cure the hardship or render EPC’s suit premature |
| Scope of precedent limiting pre-enforcement review (Donahue/Arsenal Coal) | EPC: Donahue and Arsenal Coal support pre-enforcement review where administrative positions inflict direct, immediate burdens | DEP: Those cases do not apply because DEP cannot itself impose penalties and EHB has exclusive adjudicatory role | Court: Applied Donahue/Arsenal Coal line — formality of agency action is not dispositive where burdens are direct and immediate |
Key Cases Cited
- Donahue v. Office of Open Records, 626 Pa. 437, 98 A.3d 1223 (Pa. 2014) (framework for declaratory relief, actual controversy, and pre‑enforcement review)
- Arsenal Coal Co. v. Commonwealth, 505 Pa. 198, 477 A.2d 1333 (Pa. 1984) (pre‑enforcement challenges allowed when regulations have direct and immediate burdens)
- Bayada Nurses, Inc. v. DLI, 607 Pa. 527, 8 A.3d 866 (Pa. 2010) (pre‑enforcement review justified to avoid substantial operational burdens and piecemeal enforcement)
- Sackett v. EPA, 132 S. Ct. 1367 (U.S. 2012) (federal pre‑enforcement review principles and concerns about agency power to impose escalating penalties without timely judicial redress)