A. Lester v. DEP , 153 A.3d 445 ( 2017 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Andrew Lester, :
Petitioner :
:
v. : No. 1778 C.D. 2015
: Argued: November 15, 2016
Department of Environmental :
Protection, :
Respondent :
BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge
HONORABLE ROBERT SIMPSON, Judge
HONORABLE P. KEVIN BROBSON, Judge
OPINION
BY JUDGE SIMPSON FILED: January 13, 2017
Andrew Lester petitions for review from an order of the
Environmental Hearing Board (EHB) that dismissed his appeal of a Department of
Environmental Protection (DEP) administrative order requiring him to permanently
close underground storage tanks pursuant to the Storage Tank and Spill Prevention
Act (Storage Tank Act).1 The EHB determined that both “owners” and “operators”
were subject to the Storage Tank Act’s closure requirements. Further, it
determined DEP reasonably found that Andrew Lester was an “operator” under the
Storage Tank Act and its regulations where he identified himself as the operator on
various forms and took actions consistent with exercising control and
responsibility for the underground storage tanks at issue.
In this appeal, Andrew Lester asks whether the EHB erred in
determining he was an “operator” under the Storage Tank Act and its regulations
1
Act of July 6, 1989, P.L. 169, as amended, 35 P.S. §§6021.101-6021.2104.
and, therefore, financially liable for removal of the tanks. He also questions
whether the imposition of such financial responsibility constitutes a “taking” of
property or violates his right to substantive due process. Upon review, we affirm.
I. Background
The EHB made the following findings. Kenneth D. Lester owns
property located at 10417 State Route 6, Mead Township, Warren County, which
formerly operated as a retail petroleum fueling station and an automobile repair
service station known as Ken’s Keystone (the property). Ken’s Keystone was a
full-service gas station consisting of a garage, convenience store and gas pumps.
The following four underground storage tanks are located on the
property (collectively, the tanks):
Tank Number Date of Installation Contents Capacity (gallons)
005 Unknown Diesel 1,000
006 3/9/1999 Diesel 10,000
007 3/9/1999 Gasoline 8,000
008 3/9/1999 Gasoline 4,000
The tanks are registered with DEP. They are “underground storage
tanks” as that term is defined in Section 103 of the Storage Tank Act, 35 P.S.
§6021.103. Kenneth D. Lester is the “owner” of the tanks as that term is defined in
Section 103 of the Storage Tank Act. The tanks generally meet the performance
standards for underground storage tank systems set forth in 25 Pa. Code §245.421.
In November 2009, Certified Inspector Daniel Galvin inspected the
tanks and found that all four tanks were non-compliant as to tank construction and
2
corrosion protection, tank release detection and piping release detection. The
November 2009 inspection also reported that Tank No. 008 was noncompliant as
to piping construction and corrosion protection, and Tank Nos. 007 and 008 were
noncompliant as to overfill prevention.
In February 2010, Andrew Lester, the owner’s son, attended a
meeting with Phil Smith, Arthur Meade and Dan Peterson of DEP’s Environmental
Cleanup Program to discuss “each of the violations and what it would take to
resolve or abate the violations” regarding the tanks. EHB Adj., 6/24/15, Finding of
Fact (F.F.) No. 13 (citing EHB Hr’g, Notes of Testimony (N.T.), 1/15/15, at 210-
11, Dep’t Ex. N); Reproduced Record (R.R.) at 52a-53a.
Andrew Lester subsequently submitted a Storage Tank Registration
Amendment Form to DEP, registering the tanks as temporarily out-of-service as of
June 23, 2010. Andrew Lester signed the form and checked the box for “facility
operator.” F.F. Nos. 14-15; Joint Stip. of Facts at ¶¶11, 12; Dep’t Ex. A; R.R. at
27b-28b, 65b.2 The tanks have been temporarily out-of-service since June 23,
2010, and have not been operated. The tanks were required to be permanently
closed if they were not put back into service by June 23, 2013.
In May 2011, DEP issued an administrative order to Kenneth Lester
and Andrew Lester revoking the permit-by-rule for operation of the tanks and
ordering Kenneth Lester and Andrew Lester to, among other things, empty and
2
The page numbers of Volume 2 of Petitioner’s Reproduced Record, in which he started
over at page 1, were followed by a small “b.”
3
cease operations of the tanks until DEP reinstated the permit-by-rule. The Court of
Common Pleas of the 37th Judicial District (Warren County Branch) subsequently
granted DEP’s petition to enforce its 2011 order.
Thereafter, in August 2013, DEP inspected the property and observed
the tanks were not permanently closed. A few weeks later, DEP sent a notice of
violation to Kenneth Lester at the property’s mailing address, informing him the
tanks had not been closed and that the registration fees and Underground Storage
Tank Indemnification Fund (USTIF) fees were not paid. Andrew Lester received
this notice of violation.
In November 2013, Certified Inspector Wray DeLarme inspected the
tanks and found that none of the tanks were compliant with respect to overfill
prevention or registration certificate display.
In February 2014, DEP issued an administrative order (the “closure
order”) to Kenneth Lester and Andrew Lester requiring: (a) Kenneth Lester to pay
$400 in registration fees to DEP for the tanks within 30 days; (b) Kenneth Lester
and Andrew Lester to pay a total of $280.95 to the USTIF for fees owed on Tanks
Nos. 005 and 006 and simultaneously provide proof of payment of the fees to DEP
within 30 days; (c) Kenneth Lester and Andrew Lester to submit a completed
Underground Storage Tank System Installation/Closure Notification Form to DEP
in accordance with 25 Pa. Code §245.452, within 30 days; (d) Kenneth Lester and
Andrew Lester to permanently close the tanks in accordance with 25 Pa. Code
§§245.452-53, within 90 days; (e) Kenneth Lester and Andrew Lester to measure
4
for the presence of a release of a regulated substance by sampling in a manner
consistent with a DEP technical document titled “Closure Requirements for
Underground Storage Tank Systems” and as required by 25 Pa. Code § 245.453(a),
before permanent closure was completed; (f) Kenneth Lester and Andrew Lester to
begin corrective action in accordance with 25 Pa. Code, Subchapter D, and as
required by 25 Pa. Code § 245.453(b), if contaminated soils, contaminated
groundwater or free product as a liquid or vapor was discovered; and, (g) Kenneth
Lester and Andrew Lester to submit to DEP a copy of a properly completed
closure report in accordance with the DEP technical document entitled “Closure
Requirements for Underground Storage Tank Systems,” and as required by 25 Pa.
Code §245.452(f), within 45 days of the permanent closure of the tanks.
In March 2014, Andrew Lester, representing himself, filed a notice of
appeal of the closure order with the EHB. Kenneth Lester did not appeal the
closure order.3
In December 2014, about a month before the EHB hearing, counsel
entered an appearance on behalf of Andrew Lester and attempted to file an
amended notice of appeal to add a claim that DEP’s order constituted a taking of
property in violation of the Pennsylvania and U.S. Constitutions. DEP filed a
motion to strike the amended notice of appeal. The EHB subsequently issued an
opinion and order in which it granted DEP’s motion to strike.
3
Thereafter, the 2013 and 2014 registration fees and the USTIF fees were paid.
5
A hearing on the merits of Andrew Lester’s appeal ensued before the
EHB. DEP presented the testimony of David Hall, a DEP Water Quality Specialist
Supervisor in its Storage Tanks Program, and Arthur Meade, who formerly served
as a DEP Water Quality Specialist. Andrew Lester testified on his own behalf.
After the hearing, the EHB issued an adjudication in which it
dismissed Andrew Lester’s appeal of DEP’s closure order. In its adjudication, the
EHB set forth the following discussion. This appeal concerns a DEP
administrative order requiring Andrew Lester and Kenneth Lester, jointly and
severally, to take certain actions directed toward permanently closing four
underground storage tanks located on the property. DEP bears the burden of proof
to show its issuance of an administrative order is supported by a preponderance of
the evidence, is authorized by statute, and is a proper exercise of its authority. 25
Pa. Code §1021.122. The EHB’s review is de novo: it is not limited to considering
the facts that were available to DEP at the time it issued its order. Warren Sand &
Gravel Co., Inc. v. Dep’t of Envtl. Res., 341 A.2d 556 (Pa. Cmwlth. 1975) (en
banc).
At the outset, the EHB acknowledged DEP’s observation that, under
the EHB’s rules, any issues not argued in post-hearing briefs are waived, as well as
DEP’s contention that Andrew Lester only raised a single issue in his post-hearing
brief. The EHB agreed that one issue for resolution was whether Andrew Lester
was an “operator” under the Storage Tank Act and its regulations; however, it
otherwise declined to construe Andrew Lester’s post-hearing brief so narrowly. To
be sure, the EHB stated, Andrew Lester took the term “brief” quite literally, but he
6
nevertheless raised additional issues such as whether DEP staff directed or misled
him to improperly characterize himself as an “operator” and whether he could be
liable for closure of the tanks when he had no ownership interest in them. EHB
Adj. at 7.
For its part, DEP argued that it properly determined Andrew Lester
was an operator of the tanks. The term “operator” is defined in Section 103 of the
Storage Tank Act and its regulations as: “Any person who manages, supervises,
alters, controls or has responsibility for the operation of a storage tank.” Id.; see 25
Pa. Code §245.1. The EHB noted DEP relied on two different lines of argument in
support of its determination.
First, it argued the 2011 order of the Court of Common Pleas of the
37th Judicial District (Warren County Branch) collaterally estopped Andrew Lester
from denying he was an operator of the tanks. Second, DEP argued that the way
Andrew Lester filled out certain forms, and the actions he took, supported its
finding that he was an operator. In particular, DEP asserted, in 2009, 2010 and
2013, Andrew Lester specifically identified himself as the tanks’ manager or
operator on various DEP forms. DEP further argued Andrew Lester’s actions from
2009 through 2014, including submission of the forms, were sufficient to constitute
management or supervision of the tanks and to show responsibility for operation of
the tanks.
7
Responding to these assertions, the EHB declined to find Andrew
Lester was collaterally estopped from claiming he was not the operator of the
tanks.4
Nevertheless, the EHB ultimately found Andrew Lester was an
“operator” of the tanks under the Storage Tank Act. While no single piece of
evidence or action taken by Andrew Lester was dispositive, the EHB stated, in the
aggregate, DEP met its burden of proving Andrew Lester “manages, supervises,
alters, controls or has responsibility for the operation” of the tanks. Section 103 of
the Storage Tank Act. The EHB noted it was sympathetic to the difficulties
Andrew Lester encountered in trying to reopen or sell Ken’s Keystone, whether for
his own benefit or that of his father. Nevertheless, it credited the testimony of
DEP’s witnesses, and it found the weight of evidence was against Andrew Lester.
The EHB also noted that DEP relied heavily on various forms that
Andrew Lester signed to support its belief that he met the definition of an operator
of the tanks under the Storage Tank Act and its regulations.
4
In particular, the EHB explained Andrew Lester’s status as an operator at the time of the
2011 orders of the common pleas court and DEP was not the issue before the EHB. Rather, the
issue was whether Andrew Lester was an operator when DEP issued the closure order. The EHB
stated, if it were to accept DEP’s argument, a person’s status as an operator under the Storage
Tank Act would be static—that is, once a person becomes an operator, that person is thereafter
always an operator. The EHB declined to make such a finding here. Further, the EHB
explained, neglecting to evaluate whether circumstances arising after the court order resulted in a
change in Andrew Lester’s status not only abdicated the EHB’s duty to review cases de novo, but
would also fall short of satisfying the criteria of the doctrine of collateral estoppel. The EHB’s
determination on this point is not challenged in this appeal.
8
To that end, in November 2009, a third-party inspection of the tanks
was performed. On the DEP form documenting the inspection, Andrew Lester was
listed as the representative present during the inspection. Andrew Lester checked
the box on the form identifying himself as “Operator” instead of the other possible
choices of “Owner,” “Employee,” or “None.” EHB Adj. at 9. On the signature
line of the same form, Andrew Lester listed his title as “Manager.” Id.
In June 2010, after Arthur Meade, a DEP Water Quality Specialist,
contacted Andrew Lester regarding violations related to the tanks, Andrew Lester
submitted a Storage Tank Registration Amendment Form, on which he checked
two boxes identifying himself as “Facility Operator” rather than “Facility Owner,”
“Responsible Official,” or “Property Owner.” Id.
Finally, in November 2013, another third-party inspection was
performed. On the inspection form, Andrew Lester again marked the box
identifying himself as “Operator” rather than “Owner,” “Employee,” or “None.”
Id. at 10. On the November 2013 inspection form, however, Andrew Lester listed
his title as “Operator” on the form’s signature line as opposed to “Manager”—the
designation he used on the November 2009 inspection form. Id.
The EHB explained it was not clear that Andrew Lester truly
understood the nature of the forms or that his designation on the forms would
impose legal obligations on him. Andrew Lester testified that both DEP and the
third-party inspectors induced him to, or at least suggested that he, mark his status
as “Operator.” Id. at 10. However, the EHB stated, Andrew Lester’s explanations
9
of why he identified himself as an “Operator” or “Manager” when he believed
himself to be merely an employee were not convincing. Id. The record revealed
that Arthur Meade highlighted a box for Andrew Lester to check that would
designate him as “facility operator” on the Storage Tank Registration Amendment
Form in June 2010. Id. Nevertheless, Andrew Lester already represented himself
as the “Operator” on the Operations Inspection Form completed approximately
seven months earlier. Id. The EHB did not find the various forms indicating
Andrew Lester to be “Manager” or “Operator” of the tanks to be dispositive, but on
the whole, it stated, the evidence from these forms weighed in favor of DEP. Id.
In addition to the forms, the EHB stated, there were several pieces of
written communication by DEP over a several-year time-period involving the tanks
at the property that were submitted as exhibits. The EHB explained a review of
these communications showed DEP was not consistent in how it communicated
with Andrew Lester about issues with the tanks.
To that end, in December 2009, DEP sent a notice of violation relating
to the November 2009 inspection. The notice of violation was addressed to
Kenneth Lester only and was not clearly directed to Andrew Lester. Despite
executing the November 2009 inspection form as the facility operator, Andrew
Lester was only copied on the December 2009 notice of violation. A follow-up
notice of violation, however, issued in February 2010, was addressed to both
Kenneth Lester and Andrew Lester. DEP stated that the failure to fully comply
with these two violation notices led to DEP issuing an un-appealed 2011 order in
which it identified Andrew Lester as operator of the tanks.
10
The EHB further stated, despite the fact that DEP clearly identified
Andrew Lester as the operator of the tanks in that order, subsequent
communications in 2013 about the ongoing tank issues were addressed only to
Kenneth Lester. Neither a January 2013 letter about the temporary out-of-service
deadline for the tanks nor a September 2013 notice of violation resulting from a
compliance evaluation conducted by DEP were addressed or copied to Andrew
Lester.
However, the EHB stated, when DEP issued the closure order in
February 2014, which is currently under appeal, it once again asserted Andrew
Lester was the operator of the tanks. The final piece of written correspondence
from DEP, a Storage Tank Registration/Permit Invoice dated October 6, 2014
listed “Andy Lester” as the “Owner/Contact” of Ken’s Keystone. Id. at 11. The
EHB stated it found the inconsistencies in DEP’s written communications
troubling, given the serious consequences that can result from a determination that
a party is an operator. It stated that individuals who are potentially subject to the
Storage Tank Act and its regulations and obligations deserve clear communication
from DEP regarding their status. Nevertheless, when viewed in conjunction with
the evidence as a whole, the EHB explained, these inconsistencies were
insufficient to outweigh other evidence supporting its decision regarding Andrew
Lester’s status as an operator.
The EHB explained that DEP identified various actions undertaken by
Andrew Lester after 2009 to support its contention that he was the operator of the
11
tanks. From 2009 until 2014, it appeared DEP only spoke with Kenneth Lester
once; all other verbal communication about the facility was with Andrew Lester.
In February 2010, Andrew Lester, on his own, attended a meeting
with DEP at its Regional Office in Meadville to discuss the resolution of violations
with the tanks. Additionally, the EHB stated, there was testimony from both
Andrew Lester and DEP witnesses that, on more than one occasion over the years,
Andrew Lester attempted to obtain delivery of gasoline from a wholesale fuel
provider to restart gasoline sales at Ken’s Keystone. He was ultimately
unsuccessful in those efforts, but in the EHB’s opinion, this supported a
determination that Andrew Lester exercised a certain degree of control over, and
responsibility for, the tanks consistent with that of an operator.
The EHB explained there was no question that Andrew Lester’s
course of conduct was consistent with having greater control over the tanks and the
facility than that of a mere employee. The main issue regarding his actions was
whether he acted in his own interest or for his father’s interest as a representative.
The EHB explained it generally found the testimony of DEP’s witnesses, David
Hall and Arthur Meade, credible on this point. Neither witness recalled any
statement from Andrew Lester indicating he was merely acting on his father’s
behalf. Andrew Lester testified to the contrary, but, the EHB stated, there was
nothing in the written record to support his contention that he acted solely on his
father’s behalf. Overall, the EHB did not find sufficient evidence to support a
conclusion that Andrew Lester’s actions were only undertaken as a representative
of his father. Reviewing the record as a whole, the EHB concluded DEP
12
reasonably determined Andrew Lester exercised sufficient control over and
responsibility for operation of the tanks such that he met the Storage Tank Act’s
definition of an “operator.” See Section 103 of the Storage Tank Act.
Finally, the EHB examined whether, as an operator, Andrew Lester
was responsible for closure of the tanks. The EHB noted Andrew Lester appeared
to argue that, because he had no ownership interest in the property, he could not be
liable for the costs of closing the tanks. He relied on two cases, one of which was
Lehigh Gas & Oil v. Pennsylvania Department of Environmental Resources, 671
A.2d 241 (Pa. Cmwlth. 1995). There, the EHB explained, Lehigh Gas & Oil
appealed the EHB’s determination that the company did not overcome the Storage
Tank Act’s statutory presumption that an owner or operator of an underground
storage tank is liable for all damages, contamination, or pollution within 2,500 feet
of the facility, without proof of fault, negligence or causation. This Court affirmed
the EHB’s adjudication, determining that “Lehigh [Gas & Oil] failed to overcome,
by clear and convincing evidence, the rebuttable presumption.” Id. at 247.
The EHB found it difficult to decipher the purpose of Andrew
Lester’s citation to Lehigh Gas & Oil—at this stage, neither damages, nor
contamination, nor pollution was at issue. Rather, the EHB was concerned with
whether Andrew Lester was responsible for closure of the tanks. The EHB noted
the Storage Tank Act clearly holds owners and operators responsible for closure of
tanks. See Section 502(c) of the Storage Tank Act, 35 P.S. §6021.502(c); see also
Section 501(a)(6), (9), (10) of the Storage Tank Act, 35 P.S. §6021.501(a)(6), (9),
(10) (requiring DEP to adopt and implement an underground storage tank program
13
which includes, among other things, “requirements for the closure of tanks,”
“methods and procedures for the removal of reporting underground storage tanks
from service,” and, “requirements for intended and completed closure of tank
facilities by owners and operators.”).
The EHB noted Andrew Lester also cited Luther P. Miller, Inc. v.
Underground Storage Tank Indemnification Board, 965 A.2d 398 (Pa. Cmwlth.
2009), for the proposition “that the owner of the underground storage tank is
presumptively the one required to register” with DEP. Andrew Lester’s Post-
Hearing Br. at 3. The EHB stated this was hardly a controversial position—both
the Storage Tank Act and its regulations provide that the owner of an underground
storage tank is required to register the tank. See Section 503(a) of the Storage
Tank Act, 35 P.S. §6021.503(a); 25 Pa. Code § 245.41. The EHB explained the
question in Miller, which is not at issue here, was whether a corporation was
eligible to receive indemnification from the USTIF after it failed to comply with
DEP’s registration requirements.
In contrast, the case presently before the EHB concerned whether
Andrew Lester could be held responsible for closing the tanks at Ken’s Keystone,
with the answer turning on whether he was an “operator” under the Act and its
regulations. Having found Andrew Lester was an “operator” of the tanks, the EHB
explained, he was responsible under the Storage Tank Act, along with his father
(the owner), for their closure.
14
In its conclusions of law, the EHB stated, both an “owner” and an
“operator” are responsible for closure of underground storage tank facilities in
conformance with the Storage Tank Act. Section 502 of the Storage Tank Act.
The EHB explained DEP proved by a preponderance of the evidence that Andrew
Lester was an “operator” of the tanks as that term is defined in Section 103 of the
Storage Tank Act and its regulations. Thus, it dismissed Andrew Lester’s appeal.
This appeal followed.5
II. Issues
On appeal,6 Andrew Lester states two issues:
1. Is an individual with no ownership interest in a closed
gasoline station and real estate or to the empty storage
tanks situated thereon who was induced to sign a
document by an agent of [DEP] as an ‘operator’
financially liable for the removal of the storage tanks?
2. Does the imposition of a financial responsibility for
the removal of empty gasoline storage tanks on a person
with no ownership interest therein constitute a taking of
his property in violation of Article 1, Section 1 of the
Pennsylvania Constitution to enjoy and defend life,
liberty, and acquiring, possessing, and protecting
property and Amendment 5 of the United States
Constitution prohibiting depriving a person of property
without due process of law?
5
In a single-judge memorandum opinion and order, the undersigned permitted Andrew
Lester’s appeal to this Court nunc pro tunc, or “now for then,” on the ground that his failure to
timely appeal from the EHB’s adjudication was caused by non-negligent circumstances resulting
from confusion caused by the EHB’s email notification of its adjudication to Andrew Lester’s
counsel.
6
Our review of an EHB order is limited to determining whether the EHB’s findings were
supported by substantial evidence and whether constitutional violations or errors of law were
committed. Leatherwood, Inc. v. Dep’t of Envtl. Prot., 819 A.2d 604 (Pa. Cmwlth. 2003).
15
Pet’r’s Br. at 4 (Statement of Questions Involved).
III. Discussion
A. “Operator” Responsibility
1. Contentions
Andrew Lester first asserts DEP is attempting to impose financial
responsibility for removal of underground storage tanks and remediation of any
spillage against him despite the fact that he has no ownership interest in the
property or the underground storage tanks. Rather, they are owned by his father,
Kenneth Lester, who is the owner by deed and holder of the mortgage on the
property. Andrew Lester argues the basis of DEP’s action against him is its
Storage Tank Registration Amendment Form, which was completed by Arthur
Meade, a DEP employee, and presented to Andrew Lester who signed the contact
information, which Meade highlighted. Andrew Lester contends Meade testified
he did this in an attempt to give guidance to individuals such as Andrew Lester
who needed assistance completing the form.
Andrew Lester maintains the tanks were placed out of service and
were pumped down by their owner as required by DEP. He asserts the tanks
contained a de minimis amount of product and the service pumps were
disconnected from the tanks. As such, there was nothing to operate. Andrew
Lester argues it is solely on the basis of DEP’s Storage Tank Registration
Amendment Form that liability is sought against him. He contends this was a
misrepresentation and fraud committed on him by an individual with superior
knowledge of the law and the consequences of his execution of the form to his
detriment.
16
Andrew Lester argues that at the EHB hearing, he and DEP entered
into a stipulation of facts. He asserts it is undisputed that he is not the owner of the
gas station or the underground storage tanks. Additionally, the stipulation
establishes: (1) Kenneth D. Lester is an adult with a mailing address of 892 Lance
Street, Sebastian, Florida, 32958; (2) Kenneth D. Lester owns the property, which
was formerly operated as a retail fueling station; (3) at the property, Kenneth D.
Lester owns and operated underground storage tanks; (4) Kenneth D. Lester is the
owner of the tanks; and, (5) the tanks have been temporarily out-of-service since
June 23, 2010 and have not been operated.
Andrew Lester contends that at the hearing David Hall, a DEP Water
Quality Specialist Supervisor, testified that between November 2009 and
December 2014, the tanks were pumped and contained less than an inch of
product. N.T. at 85. Andrew Lester testified his father emptied the tanks and
nothing further was done because there was no need to do so given that he pumped
the tanks down. N.T. at 140. Andrew Lester asserts that, what should be readily
apparent is that DEP is attempting to hold him financially responsible for removal
of the underground storage tanks that have been out of service on the basis that he
is an “operator.” He argues his father, who owns the tanks and the gas station,
lives in Florida and was declared bankrupt. As a result, he contends, it is easier to
proceed against him for the cost of removing the tanks than his father.
If DEP is concerned the tanks may be leaking and causing an
environmental hazard, of which there is absolutely no evidence, Andrew Lester
argues, it already has an order permitting it to remove the tanks. It has not done so
17
and apparently it does not intend to do so until it can find someone financially
responsible. As testified to by Hall, Andrew Lester maintains, the owner and
operator would be responsible for out-of-pocket costs of remediation rather than
the taxpayers.
Andrew Lester further maintains the tanks have less than an inch of
product in them which is de minimis. See 25 Pa. Code §245.1. Andrew Lester
also argues it is obvious from the statutory definitions of “owner” and “operator”
that Kenneth D. Lester is the owner and the question becomes how Andrew Lester
is an operator when there was nothing to operate in light of the fact that the tanks
were out of service in 2010 and were emptied in 2011.
Andrew Lester asserts there is no question that at various times, at the
instruction of DEP representatives, he was induced to sign as facility operator or
operator, on forms prepared by DEP representatives.
Andrew Lester argues DEP offered Meade’s testimony in his capacity
as Water Quality Specialist. He inspected the tanks beginning in 2002 and
interacted with Kenneth Lester. He was well aware of the fact that between 2006
and 2009, Kenneth Lester did not respond to written communications. Meade
testified in 2009 after Kenneth Lester left the state, he met with Andrew Lester.
Andrew Lester indicated he was the contact person as Kenneth Lester was not in
the area. In 2009, DEP sent a notice of violation to Kenneth Lester with a courtesy
copy to Andrew Lester. All interaction was with Andrew Lester because Kenneth
Lester did not respond.
18
Andrew Lester asserts that the operative document is the Storage Tank
Registration Amendment Form. Meade testified he completed Section I, Facility
and Client Information, Section II, Purpose of Submittal, and Section III, Tank
Information. In Section IV, Contact Information, Meade testified as follows in
response to a question from DEP’s counsel:
Q. Did you direct Andrew Lester in any way to check the
boxes that are checked in – well, the box particularly
checked facility operator in section four?
A. Well, I didn’t direct him. It was an option for him to
resolve the violations. I highlighted the sections that he
should complete; and on the form, I highlighted facility
operator.
R.R. at 56a. When asked why he did so, Meade responded that he assists many
tank owners with the forms and the information requested. He testified he “might
highlight facility operator.” R.R. at 57a. Meade further testified that when tanks
are temporarily out of service they have to be emptied, and Kenneth Lester called
him in 2011 and told him he pumped the tanks down and found one tank still had
two inches of product in it, and he told Andrew Lester it needed to be emptied.
Andrew Lester argues his counsel searched diligently for any reported
decision imposing liability on a person who is not an owner for remediation and
removal of tanks merely because he signed a form as “operator” or “facility
operator” at the suggestion of a DEP agent. He believes this is a case of first
impression in this regard because there is a lack of authority to support the action
taken by DEP. Rather, he maintains, this case is more akin to one of material
misrepresentation or fraud, which contains the following elements: (1)
19
misrepresentation of a material fact; (2) made falsely with knowledge of its falsity
or recklessness as to whether it is true or false; (3) intent of misleading another into
relying on it; and, (4) justifiable reliance on the misrepresentation resulting in
injury with proximate cause by reliance. Gibbs v. Ernst, 647 A.2d 882 (Pa. 1994).
Here, Andrew Lester argues, Meade was in a position of superior
knowledge. He worked for DEP as a water quality specialist and dealt with
Kenneth Lester since at least 2006. Andrew Lester naturally wanted to protect his
father if possible and merely operated an automobile repair shop on the same
property with the tanks still in the ground. Andrew Lester asserts it was obvious
that Meade knew what a “facility operator” or “operator” entailed, and, as Meade
previously stated, he highlighted the words “facility operator” on the form.
Andrew Lester asserts it is clear that Meade highlighted the sections
to involve Andrew Lester who ran an automobile repair shop at his father’s now
closed gas station that had underground storage tanks that were in violation of the
statute. Thus, he argues the elements of material misrepresentation or fraud are
met.
2. Analysis
Questions of resolving conflicts in the evidence, witness credibility
and evidentiary weight are within the exclusive discretion of the EHB, the fact
finding agency, and are not matters for a reviewing court. Leatherwood, Inc. v.
Dep’t of Envtl. Prot., 819 A.2d 604 (Pa. Cmwlth. 2003). Thus, we will examine,
but not weigh evidence because the EHB, as fact-finder, is in a better position to
20
find facts based on the testimony and demeanor of the witnesses. Id. Additionally,
we may not substitute our judgment for that of the EHB. Id.
Section 502(c) of the Storage Tank Act states (with emphasis added):
(c) Discontinued use.--Upon abandonment or
discontinuance of the use or active operation of an
underground storage tank, the owner and operator shall
remove the tank and its contents or shall seal the tank,
and restore the area in a manner that prevents any future
release, and shall remedy any adverse impacts from any
prior release in a manner deemed satisfactory to
[DEP].[7]
In turn, Section 103 of the Storage Tank Act defines an “Operator” as:
“Any person who manages, supervises, alters, controls or has responsibility for the
operation of a storage tank.” The Storage Tank Act’s regulations contain the same
definition. 25 Pa. Code §245.1.8 Further, the Storage Tank Act and its regulations
7
See also Section 1311(a) of the Storage Tank Act (“Except as provided in subsection
(b), it shall be presumed as a rebuttable presumption of law in civil and administrative
proceedings that a person who owns or operates an … underground storage tank shall be liable,
without proof of fault, negligence or causation, for all damages, contamination or pollution
within 2,500 feet of the perimeter of the site of a storage tank containing or which contained a
regulated substance of the type which caused the damage, contamination or pollution. …)
(emphasis added).
8
In addition, the Storage Tank Act regulations define a “Responsible party” as:
A person who is responsible or liable for corrective action under
the act. The term includes: the owner or operator of a storage tank;
the landowner or occupier; a person who on or after August 5,
1990, knowingly sold, distributed, deposited or filled an
underground storage tank regulated by the act which never held a
valid registration, with a regulated substance; and a person who on
or after August 5, 1990, knowingly sold, distributed, deposited or
filled an unregistered aboveground storage tank regulated by the
(Footnote continued on next page…)
21
“shall be liberally construed in order to fully protect the public health, welfare and
safety of the residents of this Commonwealth.” Section 109 of the Storage Tank
Act, 35 P.S. §6021.109.
Here, based on the credited evidence, the EHB determined DEP met
its burden of proving Andrew Lester was an “operator” as that term is defined in
the Storage Tank Act. In particular, the EHB explained (with emphasis added):
After careful consideration, we find that Andrew
Lester is an operator of the [t]anks at Ken’s Keystone
under the Storage Tank Act. While no single piece of
evidence or action taken by [Andrew Lester] is
dispositive, in the aggregate, we find [DEP] met its
burden of demonstrating that [Andrew Lester] ‘manages,
supervises, alters, controls or has responsibility for the
operation’ of the [t]anks. 35 P.S. § 6021.103. The
[EHB] is sympathetic to the difficulties Andrew Lester
encountered trying to reopen or sell Ken’s Keystone—
whether for his own benefit or that of his father, Kenneth
Lester. Nevertheless, we found the testimony of [DEP’s]
witnesses to be credible and that the weight of evidence
is against [Andrew Lester].
Forms/Written Communication
[DEP] relies heavily upon various forms signed by
[Andrew Lester] to support its belief that Andrew Lester
meets the definition of an operator of the [t]anks under
the Storage Tank Act and regulations. In November
(continued…)
act, with a regulated substance, prior to the discovery of the
release.
25 Pa. Code §245.1 (emphasis added). Further, federal regulations governing underground
storage tanks define the term “operator” as “any person in control of, or having responsibility
for, the daily operation of the [underground storage tank] system.” 40 C.F.R. §280.12.
22
2009, a third party inspection of the [t]anks was
completed. On the [DEP] form documenting the
November 2009 Inspection, Andrew Lester is listed as
the representative present during the inspection. Andrew
Lester checked the box on the form identifying himself as
‘Operator’ instead of the other possible choices of
‘Owner,’ ‘Employee,’ or ‘None.’ On the signature line
of the same inspection form, Andrew Lester listed his
title as ‘Manager.’ In June 2010, after being contacted
by Arthur Meade … about violations related to the
[t]anks, [Andrew Lester] submitted a Storage Tank
Registration Amendment Form, on which he checked
two boxes identifying himself as ‘Facility Operator’
rather than ‘Facility Owner,’ ‘Responsible Official,’ or
‘Property Owner.’ Finally, in November 2013, another
third party inspection took place. On the November 2013
Inspection form, [Andrew Lester] again marked the box
identifying himself as an ‘Operator’ rather than ‘Owner,’
‘Employee,’ or ‘None.’ On the November 2013
Inspection form, however, [Andrew Lester] listed his title
as ‘Operator’ on the form’s signature line as opposed to
‘Manager’—the designation he used on the November
2009 Inspection form. …
Andrew Lester testified that both [DEP] and the third-
party inspectors induced him to, or at least suggested that
he, mark his status as ‘Operator.’ However, [Andrew
Lester’s] explanations of why he identified himself as an
‘Operator’ or ‘Manager’ when he believed himself to
merely be an employee were not convincing. The [EHB]
notes that the record demonstrates that Arthur Meade
highlighted a box for Andrew Lester to check that would
designate him as the ‘facility operator’ on the
Registration Amendment Form from June, 2010.
Nevertheless, [Andrew Lester] had already represented
himself as the ‘Operator’ on the Operations Inspection
form completed approximately seven months prior in
November 2009. The [EHB] does not find the various
forms entered into the record indicating [Andrew Lester]
to be ‘Manager’ or ‘Operator’ of the [t]anks to be
dispositive, but on the whole, the evidence from these
forms weighs in favor of [DEP]. …
23
Actions
[DEP] next identifies various actions undertaken
by [Andrew Lester] after 2009 to support its contention
that Andrew Lester was the operator of the [t]anks. From
2009 until 2014, it appears that [DEP] only spoke with
Kenneth Lester once; all other verbal communication
about the facility was with Andrew Lester. In February
2010, [Andrew Lester], on his own, attended a meeting
with [DEP] at the Regional Office in Meadville to
discuss resolving violations with the [t]anks. In addition,
there was testimony at the hearing from both Andrew
Lester and [DEP] witnesses that, on more than one
occasion over the years, [Andrew Lester] attempted to
get a delivery of gasoline from a wholesale fuel provider
to restart gasoline sales at Ken’s Keystone. He was
ultimately unsuccessful in those efforts, but in the
[EHB’s] opinion, it supports a determination the Andrew
Lester exercised a certain level of control over, and
responsibility for, the [t]anks consistent with that of an
operator.
There is no question that [Andrew Lester’s] course
of conduct is consistent with having greater control over
the [t]anks and facility than that of a mere employee.
The main issue regarding his actions is whether Andrew
Lester was acting in his own interest or for his father’s
interest as a representative. We generally found [DEP’s]
witnesses, David Hall and Arthur Meade, to be credible
on this point. Neither recalled any statement from
Andrew Lester indicating he was just acting on his
father’s behalf. [Andrew Lester] testified to the contrary
at the hearing, but there is nothing in the written record to
support his contention that he was acting solely on behalf
of his father. Overall, we did not find sufficient evidence
to support a conclusion that Andrew Lester’s actions
were only undertaken as a representative for his father.
Reviewing the whole record before us, [EHB] concludes
that [DEP] reasonably determined that Andrew Lester
exercised sufficient control over and responsibility for
the operation of the [t]anks such that he meets the Act’s
definition of an ‘operator.’
24
EHB Adj. at 9-10, 12-13. The record supports the EHB’s necessary factual
determinations. See R.R. at 27b, 28b, 30b, 38b; N.T. at 196-97, 206, 210-11.
In turn, the EHB’s factual determinations support its ultimate
conclusion that Andrew Lester was an “operator” of the tanks in that he
“manage[d], supervise[d], alter[ed], control[led] or ha[d] responsibility for the
operation of [the] storage tank[s]” in 2009, before taking action to temporarily take
them out of service in 2010. Section 103 of the Storage Tank Act. Further, after
2009, he continued to manage, exercise control or take responsibility for the tanks.
Also, contrary to Andrew Lester’s assertions, and as set forth in the
above-quoted excerpt of the EHB’s analysis, the EHB did not rely solely on the
2010 Storage Tank Registration Amendment Form, which he claims a DEP agent
induced him to sign as “operator.” Rather, as the EHB explained, its determination
rested on a review of the record in its entirety, including documentary evidence
and proof of Andrew Lester’s actions since 2009, prior to the time he registered the
tanks as temporarily out of service.
Further, the EHB rejected Andrew Lester’s claim that Arthur Meade
induced him to sign the 2010 registration form as “facility operator.” In particular,
the EHB stated, although Meade highlighted the box for “facility operator” on that
form, Andrew Lester previously represented himself as the “Operator” on the
operations inspection form he completed approximately seven months prior in
November 2009. EHB Adj. at 10; R.R. at 30b. Moreover, Meade testified that,
although he highlighted the box for “facility operator” on the 2010 registration
25
form, he did not direct Andrew Lester to sign it. R.R. at 22b. Also, as set forth
above, the EHB did not rely exclusively on the 2010 Storage Tank Registration
Amendment Form in determining Andrew Lester was an “operator” of the tanks.
Thus, his assertions on this point fail.
In addition, contrary to Andrew Lester’s assertions that there was
“nothing to operate,” the operation of the tanks did not end merely because
Andrew Lester registered the tanks as temporarily out-of-service. To that end,
operation of the tanks does not end when they are temporarily taken out of service.
Indeed, the Storage Tank Act’s regulations define “operational life” as: “The
period beginning when installation of the tank system has commenced until the
time the tank system is properly closed.” 25 Pa. Code §245.1 (emphasis added).
Here, the tanks were not properly closed.
As set forth above, according to Section 502(c) of the Storage Tank
Act, upon abandonment or discontinuance of the use or of an underground storage
tank, the owner and operator shall remove the tank. Further, after underground
storage tanks are temporarily taken out-of-service, owners and operators are
required to continue operation and maintenance of corrosion protection systems
and release detection until the tanks are empty. 25 Pa. Code §245.451(b). The
tanks must be emptied within 30 days. 25 Pa. Code §245.451(c). A tank is
considered empty when less than an inch of residue remains in the tank. Id.
Further, although considered “empty” when containing less than an inch of residue,
underground storage tanks are not actually empty of regulated substances. Thus,
after the tanks are emptied, owners and operators must still ensure that vent lines
26
are open and functioning and must inspect to ensure lines, pumps, manways and
ancillary equipment are capped and secure. 25 Pa. Code §245.451(f).
Moreover, while the Storage Tank Act’s regulations allow an
underground storage tank to be taken temporarily out-of-service for a period before
it must be closed, Andrew Lester’s submission of the 2010 Storage Tank
Registration Amendment Form delayed removal of the tanks by registering them as
temporarily out-of-service. To that end, underground storage tanks that are placed
temporarily out-of-service cannot remain in that status indefinitely. Instead, they
are required to be permanently closed within three years of being placed
temporarily out-of-service, unless DEP grants an extension to this temporary
closure period. 25 Pa. Code §245.451(h). Here, Andrew Lester temporarily took
the tanks out of service in June 2010; thus, they were required to be permanently
closed by June 2013 if they were not put back into service. This did not occur
here. And, DEP did not grant an extension to the temporary closure period.
For all the reasons set forth above, we reject Andrew Lester’s
assertions that the EHB erred in determining that he was an “operator” of the
underground storage tanks on the property and, therefore, that he was responsible
for closure of the tanks under the Storage Tank Act.
B. Substantive Due Process/”Taking” Claims
1. Contentions
Andrew Lester next argues that, in his pro se appeal to the EHB, he
attempted to raise constitutional issues under Article 1, Section 1 of the
Pennsylvania Constitution and the 5th Amendment of the U.S. Constitution for the
27
taking of his property, namely his financial resources, to remediate the
underground storage tanks. After he retained counsel, his counsel attempted to
amend his notice of appeal to raise constitutional claims. However, on DEP’s
motion, the EHB denied the request. Andrew Lester asserts he has challenged the
statute in this appeal as permitted by Section 703 of the Administrative Agency
Law, 2 Pa. C.S. §703.
Andrew Lester contends that during the period in which he proceeded
pro se, he filed a notice of appeal and a pre-hearing memorandum. See R.R. at 7a-
17a. In his notice of appeal, he objected to being held jointly and severally liable
for the tanks when he was not the owner of the tanks or the property. R.R. at 10a.
He also stated he did not operate a petroleum fueling station, but rather only agreed
to be a contact person. Id.
Andrew Lester further points out that in his pre-hearing memorandum,
he claimed he was being deprived of his personal property contrary to the
protections of the 5th Amendment to the U.S. Constitution. R.R at 13a. After he
retained counsel, he filed his amended notice of appeal in December 2014. DEP
objected to the amendment by filing a motion to strike, which the EHB granted
through a January 2015 opinion and order.
Andrew Lester maintains that, in its opinion, the EHB correctly
pointed out that DEP has an order that is binding on Kenneth Lester, who owns the
gas station and the tanks. The EHB concluded Kenneth Lester was not a party to
the appeal; as such, it lacked jurisdiction to address any “taking” claim by Kenneth
28
Lester. The EHB further stated, “[w]hile it is not necessary to our decision to grant
[DEP’s] motion, we additionally note that it is undisputed that Andrew Lester has
no property interest in the tanks or the land on which they are situated.” EHB Op.,
1/15/15, at 3. The opinion also states: “Where [Andrew Lester] asserts no
ownership interest in the property subject to a [DEP] administrative order, it is
difficult to conceive how [Andrew Lester] would have standing to challenge the
order as an unconstitutional taking of private property.” Id. (citation omitted).
Additionally, the opinion rejected Andrew Lester’s attempt to file an amended
notice of appeal as he did not seek leave to do so. The opinion further stated that,
to allow the amendment would unduly prejudice DEP, primarily because discovery
closed in July 2014. Andrew Lester asserts that was a time when he did not have
counsel.
He further contends the EHB’s statement that he did not have an
ownership interest in the property should be dispositive here. He asserts that if he
is not the owner of the property, DEP should not have pursued this action against
him, especially where it has an order against Kenneth Lester, and it has every right
to go onto the property and remove the tanks and remediate any contamination,
which Andrew Lester denies exists on the property.
Andrew Lester further argues the EHB was incorrect in its reasoning
as to the constitutional issues he raised in his appeal. To that end, Section 703 of
the Administrative Agency Law states that a party who proceeded before a
Commonwealth agency under the terms of a particular statute shall not be
precluded from questioning the validity of that statute on appeal. He asserts it is
29
readily apparent that he was a party to a proceeding before a Commonwealth
agency, namely the EHB. Thus, under Section 703, he is not precluded from
questioning the validity of the statute on appeal. See, e.g., In re Friedman, 457
A.2d 983 (Pa. Cmwlth. 1983). Here, he contends he is certainly challenging the
constitutional validity of the Storage Tank Act as applied to him where he has no
ownership interest in the tanks or the property subject to the Storage Tanks Act.
As to the merits of this issue, Andrew Lester argues, Article 1, Section
1 of the Pennsylvania Constitution states that all men are equal and have certain
inherent and indefeasible rights in life and property. Here, DEP seeks to impose
financial liability by taking his financial resources to cover the cost of removing
underground storage tanks in which he has no ownership interest. Again, he
asserts, DEP has a valid order against his father, and it can proceed accordingly;
but, it cannot impose financial liability on him. He further maintains it is beyond
dispute that his financial resources are property protected by the Pennsylvania and
U.S. Constitutions. See Commonwealth v. Brown, 8 Pa. Super. 339 (1898). Thus,
the money he earned in pursuit of his business of running an automobile repair
shop is his property and to take his property to pay the cost of removing the
underground storage tanks he neither owns nor has any claim to is taking his
property without due process of law. Andrew Lester asserts he was unable to find
any reported appellate case directly on this point; however, Pennsylvania courts
have addressed analogous situations. See Khan v. State Bd. of Auctioneer
Exam’rs, 842 A.2d 936 (Pa. 2004).
30
Andrew Lester further contends that imposing financial responsibility
on him for removal of the tanks in these circumstances is clearly a taking of
property without due process on a trumped up theory that he was the “operator”
based on a form prepared by a DEP agent. He maintains this violates substantive
due process principles. Taylor v. Pa. State Police, 132 A.3d 590 (Pa. Cmwlth.
2016).
2. Analysis
a. Procedure
Procedurally, in his initial pro se appeal of DEP’s closure order, filed
in March 2014, Andrew Lester did not raise any constitutional issues, including his
present assertion that the imposition of financial responsibility against him
constitutes a taking. See R.R. at 8a-10a. Thereafter, in his pro se pre-hearing
memorandum filed in November 2014, Andrew Lester briefly asserted:
Any statute, law or regulation that deprives citizens of
the United States of America of personal property has to
comply with the United States Constitution. More
specifically but not limited to the fifth and fourteenth
amendments [sic]. Any law that deprives personal
property simply because the property has not been used
for a set amount of time seems unlawful unconstitutional
and therefor[e] null and void.
R.R. at 13a.
Thereafter, Andrew Lester, through counsel, attempted to file an
amended notice of appeal in which he sought to add a claim that the closure order
constituted a taking of property in violation of Article I, Section 1 of the
Pennsylvania Constitution and the 5th Amendment of the U.S. Constitution. R.R.
31
at 56b-57b. DEP filed a motion to strike the amended notice of appeal. Certified
Record (C.R.), Item No. 15. The EHB heard argument on DEP’s motion to strike.
It then issued an order granting the motion to strike, which limited the issues
presented at the EHB hearing to those set forth in Andrew Lester’s original notice
of appeal. C.R., Item No. 16. The EHB subsequently issued an opinion explaining
the reasons for its order in which it set forth “numerous problems which
independently and collectively counseled [it] against adjudicating the proposed
additional [taking] claim.” C.R., Item No. 17 at 2.
First, the EHB stated, by its own terms, the amended notice of appeal
sought to add a claim on behalf of a person who was not a party to the appeal. To
that end, although DEP directed its closure order to both Kenneth Lester and
Andrew Lester, Kenneth Lester did not appeal. Thus, Kenneth Lester was not a
party to the appeal. As a result, the EHB stated it lacked jurisdiction to adjudicate
a “taking” claim on Kenneth Lester’s behalf.
Further, while not necessary to its decision to grant the motion to
strike, the EHB noted it was undisputed that Andrew Lester had no property
interest in the tanks or the property. To that end, DEP’s closure order described
Kenneth Lester as both the owner of the property and the tanks. Additionally,
Andrew Lester specifically denied any ownership interest. Where Andrew Lester
asserted no ownership interest in the property, the EHB stated, it was difficult to
conceive how he had standing to challenge the closure order as an unconstitutional
taking of private property.
32
The EHB set forth two additional reasons to strike Andrew Lester’s
amended notice of appeal. First, it had discretion to permit a party to amend his
appeal after the 20-day period to amend as of right elapsed. 25 Pa. Code
§1021.53(b). However, a party must file a motion for leave to amend. Id. Further,
the party is required to verify and support a motion for leave to amend with
affidavits. 25 Pa. Code §1021.53(c). Here, Andrew Lester neither sought leave to
amend nor supported the amended notice of appeal with an affidavit.
Finally, the EHB stated, its discretion to grant leave to amend was
limited to those situations in which “no undue prejudice will result to the opposing
parties.” 25 Pa. Code §1021.53(b). Here, discovery closed in July 2014, and the
hearing was already rescheduled once. The EHB stated Andrew Lester made no
effort to show DEP would not suffer prejudice by the addition of an entirely new
claim on the eve of the hearing that arguably implicated a person who was not a
party to the appeal. Thus, the EHB found DEP would be severely prejudiced.
As such, the EHB rejected Andrew Lester’s attempt to file an
amended notice of appeal to include a claim that the closure order resulted in a
“taking” of his property. Andrew Lester does not directly and persuasively
respond to all of the various reasons the EHB set forth in its opinion in support of
its denial of his request to amend his notice of appeal. Additionally, in its brief to
this Court, DEP does not address the EHB’s opinion granting DEP’s motion to
strike Andrew Lester’s amended notice of appeal.
33
Nevertheless, we question the appropriateness of the EHB’s opinion
granting DEP’s motion to strike Andrew Lester’s amended notice of appeal. To
that end, contrary to the EHB’s determination, Andrew Lester arguably has
standing to raise a “taking” claim as it pertains to the loss of his financial resources
arising from his compliance with the closure order. Additionally, the EHB’s
finding regarding prejudice to DEP is questionable. Specifically, the EHB
presumed prejudice. However, the EHB did not specify what prejudice DEP
would suffer as a result of Andrew Lester’s requested amendment to his notice of
appeal to add a “taking” claim. Indeed, the issue of whether the closure order
resulted in a “taking” of Andrew Lester’s financial resources appears to be a pure
legal issue, which would not require additional discovery or further factual
development. Because we question the propriety of the EHB’s action on the
amended notice of appeal, we address Andrew Lester’s intertwined substantive due
process and “taking” claims on their merits below.
b. Substantive Due Process
A state’s police power is one of the most essential powers of
government that allows it to promote the public health, morals or safety and the
general well-being of the community. Adams Sanitation Co., Inc. v. Dep’t of
Envt’l Prot., 715 A.2d 390 (Pa. 1998). The state’s police powers are also one of
the state’s least limitable powers. Id. While the state’s exercise of its police power
often causes tension between the Commonwealth and property owners, courts will
not invalidate the Commonwealth’s exercise of its police powers unless it is
performed in an unreasonable and arbitrary manner. Id. Thus,
[a]lthough the police power may, indeed, seem harsh in
its exercise, [and] usually is on some individual … the
34
imperative necessity for its existence precludes any
limitation upon it when not exerted arbitrarily. Therefore
as long as the Legislature exercises that power in a
reasonable and nonarbitrary manner, the judiciary will
not invalidate the enactment.
Nat’l Wood Preservers, Inc. v. Dep’t of Envtl. Res., 414 A.2d 37, 43 (Pa. 1980)
(citations and quotations omitted).
A party challenging the constitutionality of an exercise of the state’s
police power affecting a property interest bears a heavy burden of proof. Id. The
standard to be used by courts when considering whether there has been an
unconstitutional exercise of the state’s police power has been stated as follows:
To justify the State in … interposing its authority in
behalf of the public, it must appear, first, that the interests
of the public generally, as distinguished from those of a
particular class, require such interference; and second,
that the means are reasonably necessary for the
accomplishment of the purpose, and not unduly
oppressive upon individuals.
Adams Sanitation, 715 A.2d at 395 (quoting Lawton v. Steele, 152 U.S. 133, 137
(1894)).
Here, Andrew Lester does not dispute that DEP is acting with a valid
objective when exercising its authority on behalf of the general public to prevent
the proliferation of unused or abandoned underground storage tanks and to protect
the environment from releases of petroleum products in underground storage tanks.
To that end, Section 102 of the Storage Tank Act states (with emphasis added):
(a) Findings enumerated.--The General Assembly of
the Commonwealth finds and declares that:
35
(1) The lands and waters of this Commonwealth
constitute a unique and irreplaceable resource from
which the well-being of the public health and
economic vitality of this Commonwealth is
assured.
(2) These resources have been contaminated by
releases and ruptures of regulated substances from
both active and abandoned storage tanks.
(3) Once contaminated, the quality of the affected
resources may not be completely restored to their
original state.
(4) When remedial action is required or
undertaken, the cost is extremely high.
(5) Contamination of groundwater supplies caused
by releases from storage tanks constitutes a grave
threat to the health of affected residents.
(6) Contamination of these resources must be
prevented through improved safeguards on the
installation and construction of storage tanks.
(b) Declaration.--The General Assembly declares these
storage tank releases to be a threat to the public health
and safety of this Commonwealth and hereby exercises
the power of the Commonwealth to prevent the
occurrence of these releases through the establishment of
a regulatory scheme for the storage of regulated
substances in new and existing storage tanks and to
provide liability for damages sustained within this
Commonwealth as a result of a release and to require
prompt cleanup and removal of such pollution and
released regulated substance.
35 P.S. §6021.102.
Further, requiring owners and operators to close abandoned
underground storage tanks is reasonably necessary to accomplish the above-stated
36
purposes. Indeed, an express purpose of the Storage Tank Act is to protect land
and water from contamination by releases and ruptures of regulated substances
from both active and abandoned storage tanks. Id. Additionally, as DEP points
out, where, as here, an owner abandons the underground tanks and leaves the
jurisdiction, the operator’s liability may be the only means of reducing the burden
on taxpayers.
Andrew Lester appears to focus his argument on his claim that the
means must not be “unduly oppressive upon individuals.” In Adams Sanitation,
our Supreme Court observed that there are two general factors of significance in a
judicial determination of whether governmental action is unduly oppressive. The
first consideration is the economic impact of the regulation on the property holder.
Id. The second factor is the character of the governmental action. Id. The greater
the extent to which governmental interference with property can be characterized
as a physical intrusion, the more likely it is that such interference will be
considered an unreasonable exercise of police power. Id.
Here, Andrew Lester claims that application of the Storage Tank Act
is unduly oppressive because it imposes financial responsibility on him despite the
fact that he is not the property owner. Our Supreme Court rejected an analogous
claim in National Wood Preservers. There, the appellants asserted Section 316 of
the Clean Streams Law9 was unduly oppressive because it imposed liability on
them to remedy water pollution damage solely on the basis of their ownership or
9
Act of June 22, 1937, P.L. 1987, added by the Act of August 23, 1965 P.L. 372, as
amended, 35 P.S. §691.316.
37
occupancy of the land at issue. They argued it was unconstitutional for the
Department of Environmental Resources (now DEP) to issue a corrective order to
a landowner or occupier absent a showing of the party’s responsibility for causing
the polluting condition. The Supreme Court rejected this argument, concluding the
corrective order was based on far more than mere ownership or occupancy.
Instead, the corrective order was based on legislation designed to eliminate all
water pollution, and the EHB’s findings that a substance, determined to be
pollution, resided under the appellants’ land and could feasibly be removed. Thus,
there was a reasonable and concrete basis for the corrective order. Additionally,
the Court pointed to U.S. Supreme Court cases, which hold that a property holder’s
responsibility for the condition to be regulated is not an important factor in
assessing the validity of the regulation. Thus, “the validity of an exercise of police
power over land depends little upon the owner or occupier’s responsibility for
causing the condition giving rise to the regulation.” Nat’l Wood Preservers, 414
A.2d 45.
Here, the EHB’s adjudication upheld DEP’s closure order requiring
Andrew Lester to permanently close the underground storage tanks, which he
temporarily removed from service several years earlier. DEP’s closure order
comports with the legislative purpose of the Storage Tank Act, which is to
eliminate contamination and remove abandoned underground storage tanks. The
fact that Andrew Lester must expend financial resources to do so does not render
the requirement unduly oppressive. As set forth above, the Storage Tank Act
expressly imposes such responsibility on owners and operators. Further, the
EHB’s supported factual determinations reveal that Andrew Lester acted as an
38
“operator” of the underground storage tanks; thus, the imposition of financial
responsibility on him for their permanent closure is not so disproportionate to the
degree of responsibility he exercised as to render it unduly oppressive. And, the
character of the governmental action here cannot be characterized as a “physical
intrusion” so as to render any governmental interference with property “an
unreasonable exercise of police power.” Adams Sanitation, 715 A.2d at 395.
Finally, while Andrew Lester briefly references Khan and Taylor for
the general propositions that are relevant when considering a substantive due
process challenge, he does not explain how these cases apply here. See Pet’r’s Br.
at 21-23. Indeed, the Court in Khan ultimately rejected a substantive due process
challenge to a provision of the Auctioneer and Auction Licensing Act (now
referred to as the Auctioneer Licensing and Trading Assistant Registration Act),10
while in Taylor, this Court overruled preliminary objections to an individual’s
claim that the Sexual Offender Registration and Notification Act11 violated his
substantive due process rights by infringing on his fundamental constitutional right
to reputation. In the absence of further explanation by Andrew Lester, it is unclear
how his citations to Khan and Taylor support his substantive due process claim.
c. “Taking”
In addition, to the extent Andrew Lester claims that requiring him to
expend his financial resources in order to permanently close the underground
storage tanks constitutes a “taking,” this argument fails. First, as the EHB
10
Act of December 22, 1983, P.L. 327, 63 P.S. §§734.1-734.34.
11
Sections 9799.10-9799.41 of the Sentencing Code, 42 Pa. C.S. §§9799.10-9799.41.
39
explained, Andrew Lester lacks standing to assert a “taking” claim on behalf of his
father, Kenneth Lester, who did not appeal the closure order.
Moreover, Andrew Lester’s “taking” claim on his own behalf fails.
To that end, “[i]t is well-settled that the exercise of the police power is not a
taking.” Estate of Blose, 889 A.2d 653, 659 (Pa. Cmwlth. 2005) (citing
Commonwealth v. Barnes & Tucker Co., 371 A.2d 461 (Pa. 1977)). However,
when regulation “goes too far,” it will be recognized as a taking. Domiano v.
Dep’t of Envtl. Res., 713 A.2d 713, 716 n.4 (Pa. Cmwlth. 1998) (citation omitted).
In United Artists’ Theater Circuit Inc. v. City of Philadelphia, 635
A.2d 612 (Pa. 1993), the Pennsylvania Supreme Court enumerated three conditions
for determining whether a valid regulatory restriction constitutes a taking requiring
just compensation (which are essentially identical to the factors set forth in our
analysis of the substantive due process claim).
(1) the interest of the general public, rather than a
particular class of persons, must require governmental
action;
(2) the means must be necessary to effectuate the
purpose; and
(3) the means must not be unduly oppressive upon the
property holder, considering the economic impact of the
regulation, and the extent to which the government
physically intrudes upon the property.
In United Artists’, the Court recognized that “action in the form of
regulation can so diminish the value of property as to constitute a taking.” Id. at
40
617 (citations and emphasis omitted). “However, the mere fact that the regulation
deprives the property owner of the most profitable use of his property is not
necessarily enough to establish the owner’s right to compensation.” Id.; see also
City of Pittsburgh v. Weinberg, 676 A.2d 207 (Pa. 1996); In re Silverman, 90 A.3d
771 (Pa. Cmwlth. 2014).
Here, as set forth above in our analysis of Andrew Lester’s
substantive due process claim, the interest of the general public, rather than a
particular class of persons, requires governmental action (with regard to closure of
abandoned underground storage tanks), and the means (requiring owners and
operators to remove or seal abandoned tanks) are clearly necessary to effectuate
this purpose. Additionally, as explained in greater detail above, the fact that
Andrew Lester must expend financial resources to do so does not render the
requirement unduly oppressive. In short, because the action at issue here is not
“unduly oppressive,” the required underground storage tank closure does not
satisfy the elements for a “taking” requiring just compensation.
Moreover, where the Commonwealth validly employs its police
power in a reasonable manner to abate an immediate public nuisance, there can be
no finding of an unconstitutional “taking” through the imposition of an abatement
order despite the impact that this exercise of the police power may have on an
appellant. Barnes & Tucker (abatement of acid mine discharges into streams,
where such discharges were found to be detrimental and a nuisance, was a valid
exercise of the police power, not a taking).
41
Here, as set forth above, the protection of the public from
contamination caused by petroleum products is a valid state objective. Section
101(a) of the Storage Tank Act.
In addition, Section 1304 of the Storage Tank Act makes an owner or
operator’s failure to close an underground storage tank (when required to do so) a
public nuisance. It states (with emphasis added):
A violation of this act or of any order or regulation
adopted by [DEP] or of permits issued by [DEP] shall
constitute a public nuisance. [DEP] shall have the
authority to order any person causing a public nuisance to
abate the public nuisance. In addition, [DEP] or any
Commonwealth agency which undertakes to abate a
public nuisance may recover the costs of abatement in an
action in equity brought before any court of competent
jurisdiction. Whenever such nuisance shall be
maintained or continued contrary to this act or such
orders, regulations or permits the same may be abatable
in the manner provided by this act. Any person who
causes such public nuisance shall be liable for the cost of
abatement.
Id.
As Andrew Lester states in his brief, the owner of the underground
storage tanks, his father, left the Commonwealth and filed for bankruptcy. And, as
set forth above, the EHB properly found Andrew Lester was an operator of the
tanks. The failure to permanently close the tanks based on the facts presented here
violates the Storage Tank Act and its regulations, and, therefore, constitutes a
public nuisance. Id. Thus, requiring Andrew Lester, as an operator, to remove the
tanks that were abandoned by their owner, is a proper exercise of the
42
Commonwealth’s police power to address a public nuisance and is not a “taking.”
Barnes & Tucker, 371 A.2d at 467 (“[G]iven our determination that the
Commonwealth is validly employing its police power in a reasonable manner to
abate the immediate public nuisance, there can be no finding of an unconstitutional
‘taking’ by the imposition of the present abatement order, despite the impact this
exercise of the police power may have on the appellant.”) (citations omitted).
For all the foregoing reasons, we affirm.
ROBERT SIMPSON, Judge
43
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Andrew Lester, :
Petitioner :
:
v. : No. 1778 C.D. 2015
:
Department of Environmental :
Protection, :
Respondent :
ORDER
AND NOW, this 13th day of January, 2017, the order of the
Environmental Hearing Board is AFFIRMED.
ROBERT SIMPSON, Judge
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Andrew Lester, :
Petitioner :
:
v. : No. 1778 C.D. 2015
: Argued: November 15, 2016
Department of Environmental :
Protection, :
Respondent :
BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge
HONORABLE ROBERT SIMPSON, Judge
HONORABLE P. KEVIN BROBSON, Judge
CONCURRING OPINION BY
JUDGE COHN JUBELIRER FILED: January 13, 2017
I concur with the Majority’s decision to affirm the Order of the
Environmental Hearing Board (EHB) dismissing Andrew Lester’s appeal of a
Department of Environmental Protection (DEP) administrative order requiring him
to permanently close the underground storage tanks at Ken’s Keystone based upon
his status as an “operator” under the Storage Tank and Spill Prevention Act
(Storage Tank Act).1 I write separately to express my concern, similar to the
EHB’s, that the language on DEP’s storage tank forms does not clearly
communicate the responsibilities and potential liabilities under the Storage Tank
1
Act of July 6, 1989, P.L. 169, as amended, 35 P.S. §§ 6021.101-6021.2104. “Operator” is
defined as “[a]ny person who manages, supervises, alters, controls or has responsibility for the
operation of a storage tank.” Section 103 of the Storage Tank Act, 35 P.S. § 6021.103; see also
25 Pa. Code § 245.1 (same definition).
Act and the applicable regulations that would arise by designating oneself as an
“operator” on such forms, as Andrew Lester did at times in this case.
I agree with the Majority that the record in its entirety supports the EHB’s
conclusion that Andrew Lester was an operator of the tanks. However, I question
whether Andrew Lester understood the nature of the forms he was signing or the
responsibilities and liabilities that would be imposed upon him if he were
determined to be an “operator” under the Storage Tank Act and applicable
regulations.
The 2010 Storage Tank Registration Amendment Form, which Andrew
Lester signed and checked “Facility Operator” below his signature, contains a
certification that the person signing the form represents to DEP that he or she owns
or represents the owner of the storage tank(s) and is “aware of the responsibilities
and potential liabilities as an ‘owner’ arising under the Storage Tank . . . Act . . .
and all applicable regulations.” (Supplemental Reproduced Record (S.R.R.) at 27b
(emphasis added).) The other options on that form were “Facility Owner,”
“Responsible Official,” and “Property Owner.” (Id.) On the 2009 and 2013
Underground Storage Tank Facility Operations Inspection Forms, Andrew Lester
printed his name under “Representative Present During Inspection” and checked
the box below that for “Operator.” (S.R.R. at 30b, 38b.) The other options on the
forms were “Owner,” “Employee,” and “None.” To the right of that on the 2009
form, there is a name and address line for “Operator (if different than owner),”
which was left blank. On the 2013 form, there are lines for “Owner (must be a
person)” and “Operator (if different than owner),” both of which were left blank.
Andrew Lester signed and printed “Manager” as his title on the 2009 form, and
“Operator” as his title on the 2013 form. Above the signature line on both forms,
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there is a certification stating, inter alia, that the person signing the form is “the
representative of the owner or operator” and that the person has reviewed the
completed inspection report. (S.R.R. at 30b, 38b (emphasis added).)
Notably, the 2009 and 2013 inspection forms and the 2010 amendment form,
in particular, say nothing about the responsibilities and potential liabilities of an
“operator,” which I believe is problematic given that both owners and operators
may be held liable under the Storage Tank Act and the applicable regulations.2
Andrew Lester testified that he “really didn’t understand what [checking the box
for “Operator”] meant[,]” that he saw himself as an employee, and further, with
regard to his checking “Facility Operator” on the 2010 amendment form, Andrew
Lester stated that he did so
because directly above that, it states that my signature represents to
[DEP] that I own or represent the owner of the tanks and am aware of
the responsibilities and potential liabilities as an owner . . . [a]nd I
wasn’t the owner. And I did not want to accept liability for the tanks.
So I didn’t want to check owner or owner’s representative.
(Hr’g Tr. at 119, 126.) The EHB recognized that it was not clear “that . . .
[Andrew Lester] truly understood the nature of the forms or that his designation on
the forms would impose legal obligations upon him.” (EHB Adjudication at 10-
11.) The EHB further acknowledged the troubling nature of the many
inconsistencies in how DEP communicated with Andrew Lester, in writing, about
the tanks, “given the serious consequences that can result from a determination
that a party is an operator,” and that “[t]hose persons who are potentially subject
2
Section 502(c) of the Storage Tank Act, 35 P.S. § 6021.502(c), provides that both owners
and operators are responsible for removing an underground storage tank and its contents upon
the tank’s abandonment or discontinuance of use or active operation of the tank.
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to . . . [DEP’s] Storage Tank Act regulations and obligations deserve clear
communication from . . . [DEP] regarding their status.” (Id. at 10-11 (emphasis
added).)
Moreover, despite the fact that Andrew Lester was determined to be an
operator based on his actions dating back to November of 2009, it appears there
was some confusion as to who, exactly, would be considered an “operator” for
purposes of the Storage Tank Act, and new regulations in that regard were
promulgated a month later. While there is no dispute that both owners and
operators are liable for the closure of underground storage tanks, the regulations
provide that owners are required to designate and train operators and that facilities
may not operate after August 8, 2012, unless operators have been designated and
trained. See 25 Pa. Code § 245.436 (adopted Dec. 26, 2009).3 The regulations also
comprehensively explain the responsibilities and duties of each class of operators
3
DEP’s storage tank regulations provide, in pertinent part, as follows:
(a) Requirement for trained operators.
(1) An owner shall designate Class A, Class B and Class C operators for each underground
storage tank system or facility that has underground storage tanks permitted to operate by . .
. [DEP].
(2) A facility may not operate after August 8, 2012, unless operators have been designated
and trained as required in this section, unless otherwise agreed upon by . . . [DEP].
***
(4) Designated operators shall successfully complete required training under subsection (c)
by August 8, 2012.
***
25 Pa. Code § 245.436(a)(1)-(2), (4).
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and the operator training requirements.4 In his pre-hearing memorandum to the
EHB, Andrew Lester claimed that he had not been trained. (Andrew Lester’s Pre-
Hearing Memorandum, R.R. at 14a (asserting that “an operator also is specified as
a class A, B or C operator. [A] class [C] operator must be trained before beginning
their [sic] job duties. I was never trained or certified as a Class A, B or C
operator[.]”).) The EHB did not address this contention in its adjudication. I also
note that the “Operator Training” section on the 2013 inspection form was left
blank, notwithstanding the tanks’ temporarily out-of-service designation. (S.R.R.
at 44b.)
Based on these concerns, if the EHB and the Court would have relied on the
forms Andrew Lester signed as the basis for finding him an “operator” of the tanks,
I would require the EHB to more thoroughly consider the confusing nature of the
forms. However, given the other evidence in this record upon which the EHB
relied in finding Andrew Lester to be an “operator” of the tanks, including that
almost all verbal communication from DEP about the facility was with Andrew
Lester, he attended a meeting on his own with DEP to discuss the tanks’ violations,
and he attempted to get deliveries of gasoline from a wholesale fuel provider on
numerous occasions, I agree that the Order should be affirmed.
________________________________
RENÉE COHN JUBELIRER, Judge
4
See 25 Pa. Code § 245.436(b)(1)-(3), (c)-(e).
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