Late last week, a South Carolina district court reinstated the Obama administration’s 2015 Clean Water Rule (referring to it as “the 2015 WOTUS rule”) in 26 states, including Pennsylvania, Ohio, New York, Maryland, New Jersey and the New England states. The decision overturns a move by the Trump administration earlier this year to delay the applicability date of the 2015 WOTUS rule until early 2020 and brings the Rule’s definition of “waters of the United States” (WOTUS) into effect in these states, at least for the time being. Unless the South Carolina decision is overturned or invalidated, the reinstatement of the 2015 definition of WOTUS could have significant Clean Water Act (CWA) permitting, compliance and enforcement implications for regulated entities in these 26 states, given that the 2015 definition of WOTUS is widely regarded by industry as unreasonably expanding the types of waterbodies under U.S. EPA and U. S Army Corps of Engineers’ jurisdiction.
Please read more about the decision in this Alert.
On January 11, 2017, the Pennsylvania Commonwealth Court held Section 301 of the Clean Streams Law “is a provision that prohibits acts or omissions resulting in the initial active discharge or entry of industrial waste into waters of the Commonwealth and is not a provision that authorizes the imposition of ongoing penalties for the continuing presence of an industrial waste in a waterway of the Commonwealth following its initial entry into the waterways of the Commonwealth.” EQT Production Co. v. Com., Dep’t of Envtl. Prot., 485 MD 2014, slip op. at *24 (Jan. 11, 2017).
This case arose out of a release from an impoundment at a Marcellus Shale well pad site in Tioga County, Pennsylvania. It is undisputed that EQT stopped the source of the release within twelve days of reporting it on May 30, 2012 and thereafter entered the Act 2 program to achieve cleanup standards for soil and groundwater. In May 2014, the Department sought a non-negotiable penalty of $1.2 million for the release. EQT filed a complaint in Commonwealth Court in September 2014 challenging the Department’s use of a “continuing violation” theory to support this penalty calculation. Subsequently, in October 2014, the Department filed a Complaint for Civil Penalties with the Pennsylvania Environmental Hearing Board, seeking a penalty of $4.5 million for the same release. The Department’s post-hearing brief in the EHB proceeding states that a penalty of nearly $470 million is supported by the Clean Streams Law.
The Department argued in the Commonwealth Court that “the illegal activity continues so long as the leaked industrial waste exists in any water of the Commonwealth” and that “the natural flow of waste from that water into another water of the Commonwealth” constitutes a new violation. Id. at *17-18. The Court noted that adopting the Department’s theory “would result in potentially limitless continuing violations for a single unpermitted release” and “would be tantamount to punishing a polluter indefinitely.” Id. at *20-21. The Court stated that the Department’s theory was “not supported by the statutory provisions and framework or the rules of statutory construction.” Id. at *20.
By clarifying the limits of the Department’s penalty authority to the days a waste or pollutant actually enters into groundwater or surface water, this precedential decision prevents the Department from threatening unauthorized civil penalties under the Clean Streams Law to leverage settlements in any context involving the Clean Streams Law, not just in the oil and gas industry.