Court Opinion

ID: 4184290
Source: CourtListenerOpinion
Date Created: 2017-07-07 13:12:49.33329+00
Date Added: 2024-06-11T14:39:30.379821
License: Public Domain

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