Pennsylvania Department of Environmental Protection (DEP) may see new challenges in negotiating settlements with purported violators of Pennsylvania’s Clean Stream Law.  A recent Pennsylvania appellate court ruled that ongoing penalties are impermissible for a single waterway leak from fracking activities under the state’s Clean Streams Law.  The Clean Stream Law punishes violators for pollution released into state waters.

In EQT Production Co. v. DEP, a natural gas production company sued the DEP for interpreting the Clean Stream Law to allow the DEP the ability to impose a minimum $1.2 million penalty for a leak from a gas well pad that entered a state waterway.  The $1.2 million penalty was proposed as a settlement in lieu of what the DEP asserted as the “continuing violation theory”; under this theory,  the DEP argued that the Clean Stream Law permitted larger, on-going penalties for each day the contamination remained in state waters.

The company, which has fixed the site of the leak and is engaging in ongoing cleanup efforts, rejected the settlement amount and sought to litigate the issue.  In response, the DEP filed a complaint with the state’s Environmental Hearing Board seeking a $4.5 million penalty instead.

The company fought back, arguing that this ongoing penalty theory was unfair and unlawful—the Clean Stream Law authorized punishing the “entr[y]” of wastes into state waters, not its movement after initial entry.  The appellate court agreed, stating:

“[A] violation of Section 301 occurs when a person or municipality does what is prohibited—i.e., allows industrial waste to enter into the waters of the commonwealth—and once it ceases that conduct, violations cease.”

This ruling is important, because instead of fearing never-ending and unquantifiable liability, companies can concentrate more on cleanup efforts and improving industrial procedures.

The DEP has the right to appeal the appellate court’s decision to the Pennsylvania Supreme Court.  For more information on this issue, please follow the Hydraulic Fracking Blog.