KINZUA RESOURCES, LLC, an Oregon limited liability company; Frontier Resources, LLC, an Oregon limited liability company; ATR Services, Inc., an Oregon corporation; and Gregory M. Demers, an individual, Respondents on Review, v. OREGON DEPARTMENT OF ENVIRONMENTAL QUALITY, an agency of the State of Oregon; and Oregon Environmental Quality Commission, an agency of the State of Oregon, Petitioners on Review.
SC S066676
Supreme Court of Oregon
July 9, 2020
366 Or 674, 468 P3d 410 (2020)
Argued and submitted January 13; decision of Court of Appeals reversed, case remanded to Court of Appeals for further proceedings July 9, 2020
KINZUA RESOURCES, LLC, an Oregon limited liability company; Frontier Resources, LLC, an Oregon limited liability company; ATR Services, Inc., an Oregon corporation; and Gregory M. Demers, an individual, Respondents on Review, v. OREGON DEPARTMENT OF ENVIRONMENTAL QUALITY, an agency of the State of Oregon; and Oregon Environmental Quality Commission, an agency of the State of Oregon, Petitioners on Review.
(LQSWER11108) (CA A161527) (SC S066676)
468 P3d 410
If a landfill has become inactive and the permit holder has failed to properly close it, then other persons “owning or controlling” the landfill site must fulfill obligations related to proper closure.
The decision of the Court of Appeals is reversed. The case is remanded to the Court of Appeals for further proceedings.
En Banc
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On review from the Court of Appeals.*
Inge D. Wells, Assistant Attorney General, Salem, argued the cause and filed the briefs for petitioners on review. Also on the briefs were Ellen Rosenblum, Attorney General, and Benjamin Gutman, Solicitor General.
Julie A. Weis, Haglund Kelley LLP, Portland, argued the cause and filed the brief for respondents on review. Also on the brief was Michael E. Haglund, Portland.
FLYNN, J.
The decision of the Court of Appeals is reversed. The case is remanded to the Court of Appeals for further proceedings.
______________
* On judicial review from a final order of the Environmental Quality Commission. 295 Or App 395, 434 P3d 461 (2018), adh’d to on recons, 296 Or App 487, 437 P3d 331 (2019).
676 Kinzua Resources v. DEQ
FLYNN, J.
I. FACTS
For purposes of our review of the legal issue, we take our statement of relevant facts from those found by the commission. Kinzua Resources LLC was both the permitholder for Pilot Rock Landfill and the owner of the landfill site. Petitioners are the two members of Kinzua—Frontier Resources, LLC and ATR Services, Inc.1—as well as Gregory Demers, who is a member of Frontier and
Cite as 366 Or 674 (2020) 677
Kinzua obtained a permit from the Department of Environmental Quality (DEQ) in 2006 to operate the landfill as a disposal site for waste from an adjacent sawmill. Both the terms of the permit and
Later in 2010, the landfill accepted its last delivery of waste, but Kinzua failed to fulfill the requirements for closing a landfill that has stopped receiving waste. Also in 2010, Frontier and ATR determined that Demers should respond to inquiries from DEQ about the landfill, and Demers acted as the exclusive contact with DEQ regarding issues related to the financial assurance violation and issues related to surface fires that erupted on the landfill site in the summers of 2010 and 2011.
In July 2011, Kinzua was administratively dissolved by the Secretary of State and remained dissolved until September 2013, at which point the Secretary of State retroactively reinstated the LLC to active status. During the time period that Kinzua was in dissolved status, DEQ issued an Amended Notice of Civil Penalty Assessment and Order charging Kinzua, as well as the three petitioners, with violations of both the financial assurance requirement and the landfill closure requirements.
Following a contested case hearing, the Environmental Quality Commission issued an order concluding that Kinzua violated
against Kinzua. We use the term “petitioners” to refer to ATR, Frontier, and Demers, each of whose liability is in dispute.
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assessed a total penalty of $782,862; the vast majority of that amount came from DEQ’s calculation of the economic benefit “gained by Kinzua in avoiding the cost of closing the landfill.”
In addition, the commission concluded that Frontier, ATR, and Demers were responsible for the same violations as persons “controlling” the landfill, and it assessed a civil penalty against them “in the same amount and manner as Kinzua Resources LLC.” The commission reasoned that “controlling” includes having authority to control and found that all three petitioners met that test. With respect to Demers, the commission found that he “had actual control of matters relating to the landfill site and that he exercised that control.” With respect to ATR and Frontier, the commission found that they had the authority, as the members of Kinzua, “to control the property of the company, including the landfill.”
Petitioners sought review of the commission’s decision in the Court of Appeals, arguing that the statutory phrase “controlling the disposal site” should be construed as “akin to being an operator” and that none of the petitioners factually met that test. The Court of Appeals agreed with petitioners’ statutory construction argument. That court held that “controlling” in
II. DISCUSSION
As set out above, the issue in this case requires us to determine whether the Court of Appeals and petitioners are correct that the legislature, in imposing duties on the person “controlling the disposal site,” intended to reach only
operation of DEQ.
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persons “actually exercising” control over the site.4 The disputed phrase appears in two statutes that we construe in this case. The first statute,
A. Standard of Review
Our review of the commission’s final order in this contested case is governed by the Administrative Procedures Act.
4 Petitioners’ legal challenge to the commission’s order has been categorical. They have not advanced separate legal challenges to the different violations or to the commission’s penalty calculation. Accordingly, we address only the question of what the legislature intended by “person * ** controlling” the disposal site.
5 The commission did not allege or find a violation of
680 Kinzua Resources v. DEQ
action conforms to that policy.”). Accordingly, we construe the term without deference to the commission’s interpretation, following the framework described in State v. Gaines, 346 Or 160, 171-72, 206 P3d 1042 (2009). Coos Waterkeeper, 363 Or at 360-61.
B. Statutory Construction
When applying our framework for construing a statute, the “paramount goal” is to discern the intention of the legislature. Gaines, 346 Or at 171;
1. The meaning of “controlling” suggested from its common usage
The words that give expression to the legislature’s wishes, at issue here, are set out in
“(1) Except as provided by
“(2) The person who holds or last held the permit issued under subsection (1) of this section, or, if that person fails to comply, then the person owning or controlling a land disposal site that is closed and no longer receiving solid waste must continue or renew the permit required under subsection (1) of this section after the site is closed for the duration of the period in which the department continues to actively supervise the site, even though solid waste is no longer received at the site.”
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The second provides:
“When solid waste is no longer received at a land disposal site, the person who holds or last held the permit issued under
As the Court of Appeals observed, the disputed term “controlling” is not among the terms that the legislature has defined for purposes of
The term “controlling” is the “present participle” construction of the verb “control,” and the common usages of the verb “control” are sufficiently varied to provide support for each party’s proposed constructions of the term. Webster’s Third New Int’l Dictionary 496 (unabridged ed 2002). Those relevant usages are:
“(1) : to exercise restraining or directing influence over : regulate, curb (~ one’s anger) (controlling her interest in the enterprise) (2) : to have power over : rule (a single company ~s the industry)[.]”
Id. (emphasis in original). Those ordinary meanings do not assist us in deciding whether the legislature intended only the first usage—as the Court of Appeals concluded—or whether the legislature intended to reach the second usage as well.
682 Kinzua Resources v. DEQ
According to petitioners, it is textually significant that the legislature used the term “controlling,” rather than the term “control.” They contend that the construction represents the “present continuous” conjugation of “control” and indicates “some current action” (emphasis in original). We are not persuaded by that argument.
Petitioners may be correct that the legislature’s use of the present participle form of “control” suggests that the legislature intended to address the statutory requirements to persons currently “controlling” the site. See State v. Makin, 360 Or 238, 242, 381 P3d 799 (2016) (“Generally, the progressive aspect of a verb ‘indicates a happening in progress at a given time.’” (Quoting Quirk et al, A Comprehensive Grammar of the English Language 197 (1985).)). But the usage does not tell us that the legislature intended to describe a current action rather than a current status.6 See State v. Gonzalez-Valenzuela, 358 Or 451, 457, 365 P3d 116 (2015) (emphasizing contrast between “stative verbs, which ‘refer to states of affairs,’” and “dynamic verbs, which ‘refer to actions’” (quoting Tom McArthur ed., Oxford Companion to the English Language 985 (1992))). Specifically, the choice of “controlling” does not indicate whether the legislature intended to reach only persons presently “exercis[ing] restraining or directing influence over” the site or whether it also intended to reach persons presently “hav[ing] power over” the site.7 See Webster’s Third New Int’l Dictionary at 496. To resolve that dispute, we
6 In general, the label “present progressive,” or “present continuous,” describes a verb construction that consists of the present participle (“-ing”) form of the verb preceded by a “to be” verb and indicates “something ongoing, in progress.” Rodney Huddleston & Geoffrey K. Pullum, The Cambridge Grammar of the English Language 116-17 (2002). Although the commission seemingly accepts petitioners’ assumption that the legislature used “controlling” in that “present progressive,” or “present continuous,” form, we note that the statutory phrase uses the present participle construction of a verb without a “to be” auxiliary. That usage of the present participle may simply suggest that “controlling” modifies the noun, “person.” See id. at 80 (describing present participle used in way that “is functionally comparable to an adjective in that it is head of an expression modifying a noun”).
7 Petitioners do not contend that the legislature’s reference to “the person” should be understood as referring only to a single person for any one disposal site, and we do not understand the usage to convey that significance. See
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must consider the context in which the term “controlling” is used.
2. The meaning suggested by relevant statutory context
The Court of Appeals did not find any context that was “particularly helpful in clarifying the meaning of ‘controlling’ as that term is used in
First, it is significant that the legislature has addressed the same obligations to persons “owning” the site as it has to persons “controlling” the site. We have often explained that “the meaning of words in a statute may be clarified or confirmed by reference to other words in the same sentence or provision.” Goodwin v. Kingsmen Plastering, Inc., 359 Or 694, 702, 375 P3d 463 (2016); see also Johnson v. Gibson, 358 Or 624, 629-30, 369 P3d 1151 (2016) (explaining that the maxim noscitur a sociis “tells us that the meaning of an unclear word may be clarified by the meaning of other words used in the same context”). Here, giving the term “owning” its ordinary meaning, the statutory obligation arises from a person’s status—possessing legal authority over the land on which the landfill is located—without regard for whether the person has actively participated in the operation of the landfill. See Gonzalez-Valenzuela, 358 Or at 457 n 5 (“To say that someone ‘owns’ a house is not to describe an action but to describe that person’s status as a homeowner.”); Webster’s Third New Int’l Dictionary at 1612 (defining the verb “own” to mean “to have or hold as property or appurtenance : have a rightful title to, whether legal or natural”); Black’s Law Dictionary 1280 (10th ed 2009) (defining the verb “own” to mean “[t]o rightfully have or possess as property; to have legal title to”). Thus, the pairing of persons “owning” the site with persons “controlling” the site is some indication that the legislature intended—in both cases—to reach persons who possess authority over the site regardless of whether they are actively participating in landfill operations.
684 Kinzua Resources v. DEQ
Second, it is significant that the obligation of those “owning or controlling” the site arises only if the permit holder fails to act. According to the Court of Appeals, given that the person “controlling” the site is stepping into the shoes of a permit holder who fails to comply, “the legislature would reasonably have assigned that role to persons whose involvement with the land disposal site was most comparable to [that of] the permittee.” Kinzua Resources, 295 Or App at 404. That is a reasonable premise, but we disagree with the court’s conclusion that only those actively controlling the operations have involvement comparable to the permit holder. The category of persons who
3. The meaning suggested by legislative history and purpose
Although the legislative history sheds no direct light on what the legislature intended by “person *** controlling” the disposal site, it reveals a purpose that is consistent with an intention to require that those with controlling power over a landfill site step in when the permit holder fails to properly close the site. The legislature added the closure requirements to the solid waste statutes in 1983 when it adopted House Bill 2241, a bill filed at the request of DEQ. Or Laws 1983, ch 766, § 2 (adopting what is now
Cite as 366 Or 674 (2020) 685
drainage” from continuing decomposition and emphasized that the bill’s purpose was to “assure continued protection of public health and safety and the environment” after landfill closure. Exhibit A, House Committee on Environment and Energy, HB 2241, Apr 25, 1983 (testimony of Stan Biles); Exhibit C, House Committee on Environment and Energy, HB 2241, May 20, 1983 (DEQ fact sheet accompanying testimony of Stan Biles). When the bill moved to the Senate, senators similarly were advised that the purpose of the bill was “to prevent environmental and health hazards from occurring during the closure and post-closure period” and that—according to DEQ—closure-related issues within the solid waste industry had left “major problems for the state to correct.” Staff Measure Analysis, Senate Committee on Rules, HB 2241, July 7, 1983.
That purpose of assuring public protection when the permit-holder fails to act is more compatible with the commission’s conclusion that “persons *** controlling” the disposal site reaches those having the authority to take the actions required for proper closure. If those closure obligations fell only to persons owning or “actively exercising” control over the landfill operations, it is more likely that critical post-closure maintenance would be left as a problem for the state to correct, as this case illustrates. At the point when DEQ raised concerns that Pilot Rock Landfill needed to be closed, the landfill had no employees. Moreover, Kinzua, which was both the permit holder for the landfill and the owner of the site, had been dissolved and could “not carry on any business except that which is appropriate to wind up and liquidate its business and affairs.”
Our analysis of the text, context, and purpose of
686 Kinzua Resources v. DEQ
power over” and “having power over.” The Court of Appeals erred in concluding otherwise.
C. Liability Issues Specific to LLC Members
Petitioners’ remaining argument for rejecting the commission’s construction of “controlling” focuses on an unrelated statute that limits the liability of LLC members for debts of the LLC. The statute,
However, to the extent petitioners are challenging the factual bases for liability in this case, that is a question that should be resolved in the first instance by the Court of Appeals on remand.
We have often emphasized that, when multiple, apparently conflicting statutes are at issue, “this court, if possible, must construe those statutes in a manner that ‘will give effect to all.’” Powers v. Quigley, 345 Or 432, 438, 198 P3d 919 (2008) (quoting
8 We do not understand petitioners to argue that
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As the commission points out, we have construed
We agree with the commission that
The plaintiff in Cortez was injured while working for a lumber mill and sued the member-manager of the LLC that operated the mill, alleging that the member-manager was a person subject to the obligations imposed by the statute and was liable for failing to perform those obligations. 356 Or at 256. The member-manager insisted that, under the liability shield of
688 Kinzua Resources v. DEQ
[the LLC member] only from vicarious liability for the LLC’s obligations,” and not from liability for its own omissions if, “having retained control,
We also concluded that the plaintiff was entitled to proceed to trial on the retained-control theory of liability because the evidence would permit a reasonable juror to infer that the LLC member-manager retained the necessary right to control to give rise to the obligation to provide a safe workplace. Id. at 274. In doing so, we specifically pointed to the legal authority that members and managers of an LLC hold, by statute, “to manage all aspects of [the LLC’s] operation.” Id.; see
Our analysis in Cortez illustrates how
9 Our decision in Cortez relied, in part, on the explanation of limited liability as set out in the commentary to the version of the Uniform Limited Liability Company Act (ULLCA), on which the legislature relied in adopting the current version of
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Petitioners, nevertheless, assert that the liability imposed on Frontier and ATR in this case could not have been direct liability for their own omissions because, in petitioners’ view, the record is “devoid of any evidence that ATR or Frontier, acting alone, had the authority to direct Kinzua’s management or conduct.” Petitioners support that assertion by emphasizing that Kinzua was a two-member LLC and pointing to
We decline to resolve that final dispute. Whether the liability that the commission imposed on petitioners is direct liability for petitioners’ own omissions as persons “controlling” the disposal site is intertwined with an alternative argument that petitioners raised in the Court of Appeals—that the record lacks substantial evidence to support the commission’s findings, even under the commission’s construction of “controlling.” The Court of Appeals did not reach that argument, and neither party has meaningfully addressed petitioner’s evidentiary challenge in light of the statutory framework that we have articulated in this opinion. Under the circumstances, we conclude that it
10 Petitioners also advance a cursory challenge to the commission’s finding that Demers was a person “controlling” the landfill site, which seemingly builds on the evidence that ATR and Frontier designated Demers to communicate with DEQ about the landfill. To the extent the argument is premised on a theory that agency law protects Demers from liability, it is an argument that the Court of Appeals declined to consider because petitioners raised it for the first time on reconsideration in that court, Kinzua Resources, 296 Or App at 488-89, and we also decline to reach that argument. To the extent petitioners’ argument assumes that ATR and Frontier also were not persons “controlling” the landfill, the challenge as to Demers is within the scope of our remand to the Court of Appeals.
690 Kinzua Resources v. DEQ
The decision of the Court of Appeals is reversed. The case is remanded to the Court of Appeals for further proceedings.