EQT Production Co. v. DEP (majority)Annotate this Case
Through Pennsylvania’s Land Recycling and Environmental Remediation Standards Act, ("Act 2"), the General Assembly created a scheme for establishing “cleanup standards” applicable to voluntary efforts to remediate environmental contamination for which a person or entity may bear legal responsibility. Appellant EQT Production Company (“EPC”), owned and operated natural gas wells in the Commonwealth. In May 2012, the company notified Appellee, the Department of Environmental Protection (the “Department” or “DEP”), that it had discovered leaks in one of its subsurface impoundments containing water that had been contaminated during hydraulic fracturing operations. Subsequently, EPC cleared the site of impaired water and sludge and commenced a formal cleanup process pursuant to Act 2. In May 2014, the agency tendered to EPC a proposed “Consent Assessment of Civil Penalty,” seeking to settle the penalty question via a payment demand of $1,270,871, subsuming approximately $900,000 attending asserted ongoing violations. EPC disputed the Department’s assessment, maintaining that: penalties could not exceed those accruing during the time period in which contaminants actually were discharged from the company’s impoundment; all such actual discharges ended in June 2012; and the Act 2 regime controlled the extent of the essential remediation efforts. The issue this case presented for the Supreme Court's review centered on whether ECT had the right to immediately seek a judicial declaration that the DEP's interpretation of the Act was erroneous. The Court held that the impact of the Department’s threat of multi-million dollar assessments against EPC was sufficiently direct, immediate, and substantial to create a case or controversy justifying pre-enforcement judicial review via a declaratory judgment proceeding, and that exhaustion of administrative remedies relative to the issues of statutory interpretation that the company has presented was unnecessary.