434 P.3d 461
Or. Ct. App.2018Background
- Kinzua Resources, LLC owned and operated a sawmill and adjacent wood-waste landfill in Pilot Rock, Oregon; Kinzua held a DEQ disposal-site permit requiring financial assurance for closure/post-closure.
- Kinzua sold the property in 2006 but later reacquired the landfill; operations ceased after a large delivery in 2010 and the site was not closed as of 2014.
- DEQ found Kinzua lacked sufficient financial assurance, assessed a penalty, and later named additional parties (Demers, ATR Services, Inc., and Frontier Resources, LLC) as "owning or controlling" the site and proposed large civil penalties.
- The Environmental Quality Commission concluded Demers personally exercised control and held ATR and Frontier liable as Kinzua's members (despite no evidence they actually exercised control), applying ORS 459.205 and ORS 459.268.
- Petitioners sought judicial review, arguing the commission misinterpreted "controlling" to include mere authority or communication rather than active exercise of control.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Meaning of "controlling" in ORS 459.205 and ORS 459.268 | "Controlling" requires active participation in operation/management (akin to operator); mere authority or communications insufficient | "Controlling" is broader: includes persons with the authority to control (even if they did not exercise it) | "Controlling" means exercising restraining or directing influence over the site — active involvement, not mere authority; court reversed and remanded for application of correct meaning |
| Sufficiency of evidence that petitioners were "controlling" persons | Demers, ATR, Frontier lacked the type of active control required; commission relied on status or communications | Commission/DEQ relied on Demers' communications and ATR/Frontier's membership authority to impose liability | Court did not decide whether evidence sufficed under the correct standard; remanded for agency to reassess applying the correct interpretation |
Key Cases Cited
- Polacek and Polacek, 349 Or. 278 (use text and context as primary evidence of legislative intent)
- State v. Gaines, 346 Or. 160 (text and context are primary in statutory construction)
- Martin v. City of Albany, 320 Or. 175 (legislative choice of verb tense is purposeful)
- Stevens v. Czerniak, 336 Or. 392 (context includes related statutes and preexisting framework)
- PSU Association of University Professors v. PSU, 352 Or. 697 (federal precedent may inform parallel state statutes)
- McKean-Coffman v. Employment Div., 312 Or. 543 (federal legislative history can inform similar state statutes)
- Badger v. Paulson Investment Co., Inc., 311 Or. 14 (federal decisions may guide but are not binding when state statute differs)
- State v. Meek, 266 Or. App. 550 (different statutory terms within same statute may bear different meanings)
- State v. Cox, 219 Or. App. 319 (ordinary meaning of undefined statutory words determined by dictionary and part of speech)
- Karjalainen v. Curtis Johnston & Pennywise, Inc., 208 Or. App. 674 (words of common usage given plain, ordinary meaning)