PennEnvironment and Sierra Club v. DEP & PPG Industries, Inc. (EHB)

CourtCommonwealth Court of Pennsylvania
DecidedMarch 11, 2025
Docket566 C.D. 2024
StatusPublished

This text of PennEnvironment and Sierra Club v. DEP & PPG Industries, Inc. (EHB) (PennEnvironment and Sierra Club v. DEP & PPG Industries, Inc. (EHB)) is published on Counsel Stack Legal Research, covering Commonwealth Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
PennEnvironment and Sierra Club v. DEP & PPG Industries, Inc. (EHB), (Pa. Ct. App. 2025).

Opinion

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

PennEnvironment and Sierra Club, : Petitioners : : v. : : Department of Environmental : Protection and PPG Industries, : Inc. (Environmental Hearing Board), : No. 566 C.D. 2024 Respondents : Argued: February 4, 2025

BEFORE: HONORABLE ANNE E. COVEY, Judge HONORABLE CHRISTINE FIZZANO CANNON, Judge HONORABLE MARY HANNAH LEAVITT, Senior Judge

OPINION BY JUDGE FIZZANO CANNON FILED: March 11, 2025

Before the Court is a petition for review by two nonprofit environmental organizations, PennEnvironment and Sierra Club (jointly, PennEnvironment), asserting error by the Department of Environmental Protection (Department), Environmental Hearing Board (Board), in determining that a letter of credit (LOC) provided to the Department by PPG Industries, Inc. (PPG) was sufficient financial assurance of PPG’s ability to fund environmental cleanup, monitoring, and related costs (Costs)1 at a waste site in Armstrong County (Site) in perpetuity. The crux of PennEnvironment’s argument is that a contractual provision in a Consent Order and Agreement (COA) between PPG and the Department, as amended (Amended COA), expressly requires PPG to provide financial assurance,

1 As set forth more fully below, Costs at the Site include “implementation and post-closure care, including without limitation long-term monitoring, operation and maintenance and replacement costs necessary to effectuate and maintain the remedy required by the [Consent Order and Agreement (COA), as amended (Amended COA)], or a revision of the remedy should the original fail.” Reproduced Record (R.R.) at 62a. i.e., the LOC, in an amount sufficient to fund Costs at the Site in perpetuity, but that the Department accepted insufficient financial assurance, largely because it improperly defined “in perpetuity” as being only 30 years. After careful review, we disagree and affirm the Board’s order.

I. Background From roughly 1953 until 1970, PPG used the Site to dispose of glass polishing slurry waste and solid waste from its glass manufacturing plant in Ford City, Pennsylvania. PennEnvironment, Docket No. 2022-032-B Pa. Env’t Hearing Bd., Apr. 9, 2024) (Bd. Dec.) at 4. The area where PPG disposed of slurry waste is known as the Slurry Lagoon Area (SLA). Id. The area where PPG disposed of solid waste is known as the Solid Waste Disposal Area (SWDA). PPG’s disposals in both areas created risks to the environment; precipitation and groundwater in contact with slurry waste in the SLA form a high-pH leachate containing dissolved metals and silica, and the soil in the SWDA contains lead and arsenic. R.R. at 472a & 479a. The contaminated leachate in the SLA will continue to form until all of the slurry waste has leached out, which could take centuries. R.R. at 370a-71a & 487a-88a; PennEnvironment v. PPG Indus., Inc., 587 F. Supp. 3d 285, 292 & n.11 (W.D. Pa. 2022) (PennEnvironment I). In 2012, PennEnvironment sued PPG in federal court under the federal Clean Water Act, 33 U.S.C. § 1365(a)(1); the federal Resource Conservation and Recovery Act, 42 U.S.C. § 6972(a)(1)(B); and Section 601(c) of the Pennsylvania Clean Streams Law (Clean Streams Law),2 35 P.S. § 691.601(c). PennEnvironment

2 Act of June 22, 1937, P.L. 1987, as amended, 35 P.S. §§ 691.1-691.1001.

2 sought declaratory and injunctive relief regarding the Site under the Clean Streams Law and federal laws, as well as civil penalties under federal law. In 2019, in a separate proceeding related to the federal litigation, PPG negotiated the COA with the Department pursuant to the Land Recycling and Environmental Remediation Standards Act, also known as Act 2,3 which provided for a Sitewide remedy to abate contamination and set forth PPG’s compliance obligations. R.R. at 3a-47a. Following settlement of most of the claims in the federal litigation, PPG and the Department entered into the Amended COA. R.R. at 48a-64a. Pertinent here, Paragraph 13 of the Amended COA required PPG to provide financial assurances for the payment of Costs at the Site, as follows: Within thirty (30) days of the execution of this [Amended COA], PPG shall submit documentation for the provision of financial assurances to the Department in an amount sufficient to secure the implementation and post-closure care, including without limitation long-term monitoring, operation and maintenance and replacement costs necessary to effectuate and maintain the remedy required by the [COA] and this [Amended COA], or a revision of the remedy should the original fail, in perpetuity. Said financial assurances shall consist of an irrevocable [LOC] and a standby trust in favor of the Department that conforms to the requirements of 25 P[a.] Code [§] 287 . . . and/or letter of credit and standby trust provisions established by 40 C[.]F[.]R[.] 264.143(d) and 264.145(d). R.R. at 62a. PPG first submitted its proposal of financial assurances to the Department in December 2020. Bd. Dec. at 11. The proposal included two letters of credit to fund the initial remedies at the SLA and the SWDA, as well as the LOC for Costs at the Site. Id. The proposal included detailed cost estimates covering

3 Act of May 19, 1995, P.L. 4, No. 2, 35 P.S. §§ 6026.101-6026.908.

3 various aspects of construction and subsequent maintenance and monitoring. Id. at 11-14. The estimates also included allowances for inflation, administrative fees, project management fees, and contingencies. Id. at 15. The Department’s approval process for PPG’s submission of financial assurances was a 16-month undertaking. See generally Bd. Dec. at 15-18. In January 2021, following an initial review, the Department requested additional documentation supporting PPG’s projection of Costs, which PPG submitted. Id. at 16. The Department’s initial reviewing engineer, Mr. Strittmatter, was then satisfied that PPG’s “estimates were reliable and that PPG’s proposed financial assurance was sufficient to maintain the Site-Wide [sic] Remedy in perpetuity.” Id. Nonetheless, after Mr. Strittmatter retired in late 2021, his successor, Mr. Martel, conducted his own review of Mr. Strittmatter’s assessment of PPG’s submission. Id. In April 2022, the Department approved PPG’s proffered LOC in the amount of $12,363,864. Id. at 17. Although the Department initially approved PPG’s financial assurances without the required standby trust, PPG subsequently set up the standby trust in November 2022. Id. at 17-18. Actual Costs for 2022 were about $110,000 below PPG’s estimate. Bd. Dec. at 14. Through the week of the 2023 hearing before the Board, actual Costs for 2023 were between 30 and 35% below PPG’s budget. Id. PennEnvironment challenged the Department’s approval of PPG’s financial assurances before the Board, contending that the Department erred in approving the LOC and standby trust as adequate assurances that Costs will be funded in perpetuity. Following a hearing, the Board upheld the Department’s approval of PPG’s financial assurances and dismissed PennEnvironment’s appeal. PennEnvironment’s petition for review in this Court followed.

4 II. Issues In its petition for review in this Court, PennEnvironment first and primarily argues that the Board erred in determining that financial assurances of 30 years of Costs was equivalent to assurance of funding in perpetuity. In a related sub- argument, PennEnvironment contends that projected future revisions were not accounted for and included in calculating the requisite financial assurances. In a second related sub-argument, PennEnvironment posits the Board should not have deemed moot the Department’s initial failure to require a standby trust as provided in the Amended COA.

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PennEnvironment and Sierra Club v. DEP & PPG Industries, Inc. (EHB), Counsel Stack Legal Research, https://law.counselstack.com/opinion/pennenvironment-and-sierra-club-v-dep-ppg-industries-inc-ehb-pacommwct-2025.