Borough of St. Clair v. DEP ( 2017 )


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  •             IN THE COMMONWEALTH COURT OF PENNSYLVANIA
    Borough of St. Clair,                          :
    Petitioner                  :
    :
    v.                              :
    :
    Department of Environmental                    :
    Protection,                                    :   No. 1026 C.D. 2016
    Respondent                    :   Argued: April 20, 2017
    BEFORE:        HONORABLE MARY HANNAH LEAVITT, President Judge
    HONORABLE JOSEPH M. COSGROVE, Judge (P)
    HONORABLE JAMES GARDNER COLINS, Senior Judge
    OPINION NOT REPORTED
    MEMORANDUM OPINION
    BY JUDGE COSGROVE                                  FILED: July 7, 2017
    Borough of St. Clair (Petitioner) petitions for review of an order of the
    Environmental Hearing Board (Board) which upheld the issuance of a solid waste
    management permit to Blythe Township (Township) and dismissed Petitioner’s
    appeal. Upon review, we affirm.
    On February 26, 2004, the Township filed with the Department of
    Environmental Protection (Department) a Phase I and Phase II application for a
    solid waste management permit for development of the Blythe Recycling and
    Demolition Site (BRADS) landfill pursuant to the Solid Waste Management Act
    (SWMA).1 In furtherance of the goal of developing and operating the BRADS
    1
    Act of July 7, 1980, P.L. 380, as amended, 35 P.S. §§ 6018.101-6018.1003.
    landfill, the Township entered into an agreement with FKV, LLC (FKV) to provide
    technical and financial expertise to the Township, assist in securing all necessary
    approvals, and market the BRADS landfill to potential customers. The site of the
    proposed BRADS landfill is approximately 400 acres and located on an abandoned
    coal mine. The BRADS landfill would be comprised of six cells.
    After twice denying the Township’s application, the Department
    issued an approval of the environmental assessment review on August 5, 2011,
    concluding the Township had demonstrated the benefits of the project clearly
    outweighed the potential harms it might cause. Petitioner, a neighboring borough,
    filed an appeal of the permit issuance with the Board and a trial was held in
    September 2013. While the majority of Petitioner’s objections were rejected, the
    matter was remanded for further review of the proposed Cell 4 area after additional
    mine subsidence data was submitted by the Township, for reassessment of the
    Township’s nuisance minimization and control plan, and for a reevaluation of
    Phase I to ensure that the revised analyses did not change the Department’s
    ultimate conclusion on the environmental assessment. Following review of the
    supplemental reports provided by the Township, the Department reissued the solid
    waste permit for the BRADS landfill. Petitioner once more appealed the issuance
    of the permit and a trial was held in February 2016. The Board upheld the issuance
    of the permit by the Department and dismissed Petitioner’s appeal. This appeal
    followed.2
    2
    Our review of a decision of the Board is limited to determining whether the Board
    committed an error of law and violated constitutional rights, or whether substantial evidence
    supports its findings of fact. Joseph J. Brunner, Inc. v. Department of Environmental Protection,
    
    869 A.2d 1172
     (Pa. Cmwlth. 2005).
    2
    As set forth in Petitioner’s brief, the issues before this Court are as
    follows:
    1. Was the Department’s interpretation of the harms-
    benefits regulation clearly erroneous and inconsistent
    with the plain language of the regulations, was it
    contrary to the law or was it made in bad faith,
    arbitrarily executed, or a manifest abuse of discretion?
    2. Did the issuance of the landfill permit unlawfully give
    [FKV], a private entity, authority to make
    management decisions concerning landfill operation
    or unreasonably limit permittee’s authority to make
    such decisions?
    3. Was the EHB’s finding relative to the excavation of a
    coal vein not in accordance with the laws and was its
    finding of fact necessary to support its adjudication
    not supported by substantial evidence?
    (Petitioner’s Brief at 4.)
    DISCUSSION
    Petitioner first argues the Department erroneously interpreted the
    Harms/Benefit regulation and a fair reading of the plain regulatory language
    requires consideration of potential economic harm.
    The Harms/Benefit test is set forth in Department regulations and was
    held constitutional in Eagle Environmental II, L.P. v. Department of
    Environmental Protection, 
    884 A.2d 867
     (Pa. 2005). The pertinent regulation,
    outlined in 
    25 Pa. Code § 271.127
    , requires first that the permit application include
    a detailed analysis of the potential impact of the proposed facility on the
    environment and public health and safety, including traffic, aesthetics, air quality,
    water quality, stream flow, fish and wildlife, plants, aquatic habitat, threatened or
    endangered species, water uses, land use, and municipal waste plans. 25 Pa. Code
    3
    § 271.127(a). The applicant is to consider a number of enumerated features such
    as scenic rivers, recreational river corridors, local, State, and Federal forests and
    parks, and any other features deemed appropriate by the Department or the
    applicant. Id.
    Once the investigatory aspects of subsection (a) have been satisfied,
    the applicant must, under subsection (b), describe any known and potential
    environmental harms, provide mitigation plans, and identify any known or
    potential unmitigated environmental harms.       
    25 Pa. Code § 271.172
    (b).       The
    Department then reviews the assessment and mitigation plans to determine whether
    there are additional harms and whether all known and potential environmental
    harms will be mitigated. 
    Id.
    After the Department determines the mitigation measures are
    adequate, the next step in the assessment is the Harms/Benefits Test set forth in
    subsection (c). In this step, the applicant must demonstrate the benefits of the
    project to the public clearly outweigh the known and potential environmental
    harms. 
    25 Pa. Code § 271.127
    (c). Benefits of the project shall consist of social
    and economic benefits that remain after taking into consideration the known and
    potential social and economic harms of the project and shall also consist of the
    environmental benefits, if any. 
    Id.
    Petitioner argues the Harms/Benefits analysis performed by the
    Department did not consider any harm that could result if the BRADS landfill did
    not prove profitable or financially viable. The Department previously rejected the
    Township’s application on the basis that the potential costs and liabilities to the
    Township was a harm that outweighed its many benefits.             The Department
    subsequently reconsidered this decision and, in its letter approving the application,
    4
    removed “potential costs/liabilities” as a potential harm of the project.
    (Reproduced Record (R.R.) at 352a-365a.) William Tomayko, Waste Program
    Manager for the Department’s Northeast Region, testified as follows in regards to
    the change in Department interpretation of the regulation:
    [W]e became concerned that the Department didn’t have
    any authority to make judgment on whether or not a
    company, or a township here in this case, can
    successfully operate a business. Our regulations don’t
    have any kind of requirement that they need to submit a
    business plan, or that the Department needs to determine
    whether or not the company or the applicant can make a
    profit… We didn’t think we could defend it and so we
    started having discussions about what happens.
    (R.R. at 304a-305a.)
    Removal of that factor from the Department’s analysis of the
    environmental assessment “turned it to an approval.” (R.R. at 306a.)
    In its June 6, 2016 order and opinion, the Board found the
    Department’s interpretation to be reasonable and consistent with the regulatory
    language. (R.R. at 25a.) The regulation does not facially require a review of the
    landfill’s business plan and existing case law does not require such a review. 
    Id.
     at
    25a-26a.
    The Township, as Intervenor, asserts that Petitioner’s position would
    require an amendment of the regulations to require Department review of
    “financial documents, business plans, pro formas, cost and earnings projections,
    and financing mechanisms” to determine whether a project can obtain financing,
    whether a project will be financially successful or fail, and whether the
    consequences of such failure constitute an economic harm to the permittee
    sufficient to warrant a denial. (Intervenor’s Brief at 19.)
    5
    Our well-settled precedent establishes that courts defer to an
    administrative agency's interpretation of its own regulations unless that
    interpretation is unreasonable. Department of Environmental Protection v. North
    American Refractories Co., 
    791 A.2d 461
    , 464 (Pa. Cmwlth. 2002). The task of
    the reviewing court is limited to determining whether the agency's interpretation is
    consistent with the regulation and with the statute under which the regulation was
    promulgated. 
    Id.
     Contrary to the assertions of Petitioner, the Department did
    consider economic harms when reviewing the application.              Specifically, the
    Department weighed harms and potential harms associated with air quality,
    uncompensated losses to local governments, quality of the environment, traffic,
    visual impact, and wetlands. (R.R. at 353a-357a.) While Eagle Environmental II
    does hold that a consideration of economic harm is within the authority of the
    SWMA, Eagle Environmental II, 884 A.2d at 879, it does not stand for the
    proposition that the Department perform an in-depth analysis of the financial
    aspects of the underlying project.      We are aware of no requirement that the
    Department first determine whether a project can be a going concern prior to
    granting a permit under the SWMA. Therefore, we conclude the Department’s
    interpretation of the Harms/Benefit Test is reasonable and we discern no error of
    law, bad faith, arbitrary execution, or abuse of discretion in that regard.
    Petitioner next argues the contract between FKV and the Township
    gives FKV impermissible powers in operating the facility. FKV does not have a
    permit to operate the BRADS landfill. Petitioner asserts the provisions of the
    agreement with the Township essentially grant FKV operational rights over the
    BRADS landfill and, therefore, it must have a permit.
    6
    Petitioner’s argument is based on the following provisions in Section
    11 of the agreement, which require written approval of both parties for the
    following:
    1. Acquisition or disposition of any real property or
    interests therein for the facility;
    2. Determination of any hired operator of the facility;
    3. Determination of any hired marketing and/or sales
    agent for the facility;
    4. Financing for the facility;
    5. Mortgaging or the placing or suffering the placing of
    any encumbrance on the facility; and
    6. Determination of an annual operating budget for the
    facility, including, without limitation, capital
    expenditures.
    (R.R. at 314a-315a.)
    These provisions, according to Petitioner, allow FKV to exercise
    control over the Township for purposes of using government powers, including the
    power to avoid zoning, subdivision, and land development filings, as well as the
    power to apply for a Department permit and the power to finance construction of
    same. In response, both the Department and the Township argue Petitioner lacks
    standing, and that this issue was previously litigated in Borough of St. Clair v.
    Blythe Township, (Pa. Cmwlth., No. 1169 C.D. 2014, filed April 10, 2015), 
    2015 WL 5432784
    .      While unreported, this opinion clearly impacts the present case.
    There also, Petitioner asserted the Agreement between the Township and FKV was
    void and unenforceable because the Township unconstitutionally delegated its
    municipal functions to FKV. This Court concluded the trial court was correct in
    7
    finding Petitioner lacked standing because it had not pleaded facts demonstrating a
    causal connection between the agreements and its alleged injury. Borough of St.
    Clair, slip op. at 3, 
    2015 WL 5432784
     at 3.
    Presently, the Board dismissed Petitioner’s objection in its opinion
    and order issued following the September 2013 hearing, concluding that the
    Township is still required to “comply and ensure compliance by others with the
    terms and conditions of the permit and the applicable regulations, regardless of the
    terms of any contract between [the parties].” (R.R. at 48a.) Any contractual
    obligations with FKV did not override the Township’s duty to comply with the
    law. 
    Id.
     Petitioner failed to provide legal authority that would act to prevent the
    Township from entering into an agreement with FKV for the provision of technical
    and financial expertise necessary to design, permit, and operate the landfill. 
    Id.
    We cannot conclude the right of first refusal in the first offending
    provision of Section 11 of the Agreement grants to FKV ownership rights such that
    it must have a permit. Further, we agree with the Township and Department that
    Petitioner lacks standing. The core concept of standing is that a person who is not
    adversely affected in any way by the matter he seeks to challenge is not
    ‘aggrieved’ thereby and has no standing to obtain a judicial resolution to his
    challenge. Pennsylvania Independent Oil & Gas Association v. Department of
    Environmental Protection, 
    135 A.3d 1118
    , 1124 (Pa. Cmwlth. 2015), quoting
    Office of Governor v. Donahue, 
    98 A.3d 1223
    , 1229 (Pa. 2014). Petitioner has not
    set forth any facts to show it has been aggrieved by the Agreement between FKV
    and the Township, and thus lacks standing to challenge the legality of that
    Agreement.
    8
    Finally, Petitioner argues the BRADS landfill permit must be revoked
    because a mining permit was not issued in conjunction with the landfill permit. In
    support of this assertion, Petitioner cites Section 502(d) of the SWMA 3 which
    requires the permit application set forth the manner in which the operator plans to
    comply with the Surface Mining Conservation and Reclamation Act4 (SMCRA).
    In its June 6, 2016 opinion and order, the Board noted this section does not require
    the simultaneous issuance of a mining permit and the Board has held in prior
    opinions that the Department need only be able to conclude the applicant has a
    reasonable likelihood of securing necessary permits. (R.R. at 92a.) The Board
    found as credible the testimony of Michael John Menghini, the Department’s
    mining manager, who stated that obtaining such a permit is not likely to be an
    issue. 
    Id.
    Clearly, the Township must acquire a mining permit in the event it
    needs to excavate residual coal.           The Board noted that the SWMA requires
    compliance with all other laws and, therefore, should the Township need a mining
    permit, it will have to acquire one prior to removing any coal. (R. R. at 90a.)
    The Township estimates 5-10 years will elapse before the Township
    reaches Cell 4. (Intervenor’s Brief at 18.) Mining permits expire in five years. 
    25 Pa. Code § 86.40
    (a). Such a permit can be extended beyond five years, but would
    terminate if the permittee has not begun mining coal within three years of issuance.
    
    25 Pa. Code § 86.40
    (b). Petitioner’s extensive discussion as to what constitutes
    mining fails to respond to the Township’s assertion that mining of coal, if any,
    3
    Act of July 7, 1980, P.L. 380, as amended, 35 P.S. § 6018.502(d).
    4
    Act of May 31, 1945, P.L. 1198, as amended, 52 P.S. §§ 1396.1-1396.19b.
    9
    would not take place for several years. Requiring the Township to obtain a mining
    permit that will, in all likelihood, become null and void years before it is needed
    simply defies logic. As there is no present need to mine Cell 4, the Township is
    not required to have a mining permit.
    At worst, the Township’s application failed to set forth the manner in
    which the operator planned to comply with SMCRA. However, Section 9015 of
    the SWMA provides that the terms and provisions of the Act are to be liberally
    construed to best achieve and effectuate its goals and purposes. As set forth in
    Section 102(5) of the Act, one purpose thereof is to “provide a flexible and
    effective means to implement and enforce the provisions of [the] Act.”6 A reversal
    of the Board’s decision on the basis that the application failed to fully comply with
    Section 502(d), where the Board was satisfied the Township could obtain the
    necessary mining permits if and when required, would fly in the face of the Act’s
    stated goals and purposes.
    For these reasons, the order of the Board is affirmed.
    ___________________________
    JOSEPH M. COSGROVE, Judge
    5
    35 P.S. § 6018.901.
    6
    35 P.S. § 6018.102(5)
    10
    IN THE COMMONWEALTH COURT OF PENNSYLVANIA
    Borough of St. Clair,                 :
    Petitioner         :
    :
    v.                        :
    :
    Department of Environmental           :
    Protection,                           :   No. 1026 C.D. 2016
    Respondent           :
    ORDER
    AND NOW, this 7th day of July, 2017, the order of the Environmental
    Hearing Board is hereby AFFIRMED.
    ___________________________
    JOSEPH M. COSGROVE, Judge
    

Document Info

Docket Number: Borough of St. Clair v. DEP - 1026 C.D. 2016

Judges: Cosgrove, J.

Filed Date: 7/7/2017

Precedential Status: Precedential

Modified Date: 7/7/2017