# Kinzua Resources v. DEQ

> Oregon Supreme Court · July 9, 2020 · 366 Or. 674

URL: https://www.frixlaw.com/law-library/cases/10627327

## Case

- **Court:** Oregon Supreme Court
- **Decided:** July 9, 2020
- **Citations:** 366 Or. 674; 468 P.3d 410
- **Precedential status:** Published
- **Opinion:** Opinion
- **Judges:** Flynn
- **Cited by:** 19 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10627327

## How later opinions describe it (automated extraction)

- stating that, if petitioners’ argument made that assump- tion, their “challenge as to Demers [would be] within the scope of * * * remand”
- discussing “operational relationship” that Demers had with Kinzua and communications and efforts that Demers engaged in regarding the landfill

## Opinion text

674

Argued and submitted January 13; decision of Court of Appeals reversed, case
remanded to Court of Appeals for further proceedings July 9, 2020

KINZUA RESOURCES, LLC,
an Oregon limited liability company;
Frontier Resources, LLC,
an Oregon limited liability company;
ATR Services, Inc., an Oregon corporation;
and Gregory M. Demers, an individual,
Respondents on Review,
v.
OREGON DEPARTMENT
OF ENVIRONMENTAL QUALITY,
an agency of the State of Oregon;
and Oregon Environmental Quality Commission,
an agency of the State of Oregon,
Petitioners on Review.
(LQSWER11108) (CA A161527) (SC S066676)
468 P3d 410

If a landfill has become inactive and the permit holder has failed to prop-
erly close it, then other persons “owning or controlling” the landfill site must
fulfill obligations related to proper closure. ORS 459.205; ORS 459.268. The
Environmental Quality Commission found that petitioners had the legal author-
ity to control an inactive landfill site, and on that basis held that petitioners were
persons “controlling” the site. Accordingly, the commission had imposed liabil-
ity on petitioners for failing to perform the statutory closure requirements. The
Court of Appeals reversed, holding that persons “controlling” a landfill site are
limited to those persons actively involved in the operation or management of the
site, and petitioners were not in that class. The Department of Environmental
Quality sought review. Held: (1) The legislature intended the category of persons
“controlling” a site to include persons having the authority to control the site,
regardless of whether that authority has been exercised; (2) if a limited liability
company (LLC) member meets the statutory test of being a person “controlling”
the site, then it can be directly liable for its own omissions without conflict with
the LLC statutory liability shield of ORS 63.165(1); and (3) the matter should be
remanded for the Court of Appeals to consider an alternative argument that the
record lacks substantial evidence to support the commission’s findings.
The decision of the Court of Appeals is reversed. The case is remanded to the
Court of Appeals for further proceedings.

En Banc
Cite as 366 Or 674 (2020) 675

On review from the Court of Appeals.*
Inge D. Wells, Assistant Attorney General, Salem, argued
the cause and filed the briefs for petitioners on review. Also
on the briefs were Ellen Rosenblum, Attorney General, and
Benjamin Gutman, Solicitor General.
Julie A. Weis, Haglund Kelley LLP, Portland, argued the
cause and filed the brief for respondents on review. Also on
the brief was Michael E. Haglund, Portland.
FLYNN, J.
The decision of the Court of Appeals is reversed. The case
is remanded to the Court of Appeals for further proceedings.

______________
* On judicial review from a final order of the Environmental Quality
Commission. 295 Or App 395, 434 P3d 461 (2018), adh’d to on recons, 296 Or App
487, 437 P3d 331 (2019).
676 Kinzua Resources v. DEQ

FLYNN, J.
If a landfill has become inactive and the permit
holder has failed to properly close it, then other persons
“owning or controlling” the landfill site must fulfill obli-
gations related to proper closure. ORS 459.205; ORS
459.268. The dispute in this case arises out of an order of
the Environmental Quality Commission, which concluded
that petitioners were persons “controlling” an inactive land-
fill site and imposed liability on them for failing to per-
form the statutory closure requirements. At issue here is
whether the legislature intended that the category of per-
sons “controlling” the landfill site would extend to those
having the legal authority to control the site—as the com-
mission concluded—or would be limited to “those persons
actively involved in the operation or management of a land-
fill site”—as the Court of Appeals concluded in this case.
Kinzua Resources v. DEQ, 295 Or App 395, 408-09, 434 P3d
461 (2018), adh’d to on recons, 296 Or App 487, 437 P3d 331
(2019). We allowed review of the decision of the Court of
Appeals, and we now conclude that the legislature intended
the category of persons “controlling” the site to include per-
sons having the authority to control the site, regardless
of whether that authority has been exercised. We remand
to the Court of Appeals to consider petitioners’ remaining
challenges to the order in light of the correct legal standard.
I. FACTS
For purposes of our review of the legal issue, we
take our statement of relevant facts from those found by the
commission. Kinzua Resources LLC was both the permit-
holder for Pilot Rock Landfill and the owner of the landfill
site. Petitioners are the two members of Kinzua—Frontier
Resources, LLC and ATR Services, Inc.1—as well as Gregory
Demers, who is a member of Frontier and the president of
ATR.2
1
A “limited liability company,” or LLC, is “an entity that is an unincorpo-
rated association that has one or more members and is organized under” the
provisions of ORS chapter 63. ORS 63.001(17). Some LLCs are managed by the
members and others are managed by one or more managers. ORS 63.130. The
evidence is that Kinzua was managed by its members.
2
Although Kinzua has also been identified as a “petitioner” throughout the
appeal, petitioners have raised no challenge regarding the liability assessed
Cite as 366 Or 674 (2020) 677

Kinzua obtained a permit from the Department
of Environmental Quality (DEQ) in 2006 to operate the
landfill as a disposal site for waste from an adjacent saw-
mill. Both the terms of the permit and OAR 340-095-0090
required Kinzua to maintain financial assurance (com-
monly insurance or a bond) in an amount sufficient to cover
the anticipated costs of eventual closure and post-closure
maintenance of the landfill. But Kinzua failed to secure
the required financial assurance. As a result, DEQ issued
a Notice of Civil Penalty Assessment and Order to Kinzua
for the financial assurance violation in July 2010, while the
landfill was still operating.
Later in 2010, the landfill accepted its last deliv-
ery of waste, but Kinzua failed to fulfill the requirements
for closing a landfill that has stopped receiving waste. Also
in 2010, Frontier and ATR determined that Demers should
respond to inquiries from DEQ about the landfill, and
Demers acted as the exclusive contact with DEQ regard-
ing issues related to the financial assurance violation and
issues related to surface fires that erupted on the landfill
site in the summers of 2010 and 2011.
In July 2011, Kinzua was administratively dis-
solved by the Secretary of State and remained dissolved
until September 2013, at which point the Secretary of State
retroactively reinstated the LLC to active status. During
the time period that Kinzua was in dissolved status, DEQ
issued an Amended Notice of Civil Penalty Assessment and
Order charging Kinzua, as well as the three petitioners,
with violations of both the financial assurance requirement
and the landfill closure requirements.
Following a contested case hearing, the Environ-
mental Quality Commission issued an order concluding that
Kinzua violated ORS 459.268 by failing to close the landfill,
violated OAR 340-095-0090 by failing to secure sufficient
financial assurance, and violated OAR 340-095-0050(1)
by failing to apply for a “closure permit.”3 The commission

against Kinzua. We use the term “petitioners” to refer to ATR, Frontier, and
Demers, each of whose liability is in dispute.
3
The Environmental Quality Commission, which issued the order, con-
sists of five appointed members and is charged with establishing policies for the
678 Kinzua Resources v. DEQ

assessed a total penalty of $782,862; the vast majority of
that amount came from DEQ’s calculation of the economic
benefit “gained by Kinzua in avoiding the cost of closing the
landfill.”
In addition, the commission concluded that Frontier,
ATR, and Demers were responsible for the same violations
as persons “controlling” the landfill, and it assessed a civil
penalty against them “in the same amount and manner as
Kinzua Resources LLC.” The commission reasoned that
“controlling” includes having authority to control and found
that all three petitioners met that test. With respect to
Demers, the commission found that he “had actual control
of matters relating to the landfill site and that he exercised
that control.” With respect to ATR and Frontier, the com-
mission found that they had the authority, as the members
of Kinzua, “to control the property of the company, including
the landfill.”
Petitioners sought review of the commission’s deci-
sion in the Court of Appeals, arguing that the statutory
phrase “controlling the disposal site” should be construed as
“akin to being an operator” and that none of the petitioners
factually met that test. The Court of Appeals agreed with
petitioners’ statutory construction argument. That court
held that “controlling” in ORS 459.205 and ORS 459.268
“means actually exercising ‘restraining or directing influ-
ence’ over a landfill site or the property on which it is located,
and not merely having the authority to do so or communi-
cating on behalf of an entity exercising such control.” Kinzua
Resources, 295 Or App at 397 (footnote omitted). The court
then remanded to the commission to consider the evidence
in light of that definition of “controlling.” Id. at 409.
II. DISCUSSION
As set out above, the issue in this case requires us
to determine whether the Court of Appeals and petitioners
are correct that the legislature, in imposing duties on the
person “controlling the disposal site,” intended to reach only
operation of DEQ. ORS 468.010; ORS 468.015. DEQ is a department under the
commission and is charged with investigating and commencing enforcement pro-
ceedings for violations of rules or standards adopted by the commission. ORS
468.030; ORS 468.090.
Cite as 366 Or 674 (2020) 679

persons “actually exercising” control over the site.4 The dis-
puted phrase appears in two statutes that we construe in
this case. The first statute, ORS 459.205, imposes various
obligations on a “person owning or controlling” a disposal
site to obtain permits. The second statute, ORS 459.268,
requires “the person owning or controlling the property”
to close and maintain the disposal site appropriately, if
the permit holder has failed to comply with the closure
requirements.5
A. Standard of Review
Our review of the commission’s final order in this
contested case is governed by the Administrative Procedures
Act. ORS 183.480(2). If—as the Court of Appeals concluded
here—an agency has “erroneously interpreted a provision
of law,” and a correct interpretation “compels a particular
action,” then we must set aside or modify the order or remand
the case to the agency for further action. ORS 183.482(8)(a).
Our standard of review requires us to first determine
whether “controlling” is an exact term, an inexact term, or a
delegative term, because the answer to that question deter-
mines whether the court gives weight to the commission’s
construction of the term. See, e.g., Penn v. Board of Parole,
365 Or 607, 627, 451 P3d 589 (2019) (discussing framework
for when court will and will not defer to agency interpreta-
tion of statute); Coos Waterkeeper v. Port of Coos Bay, 363 Or
354, 360-61, 423 P3d 60 (2018) (setting out framework). The
parties agree, as do we, that “controlling” is an inexact term:
It expresses a complete legislative meaning, albeit with less
precision than is true of an exact term. See Penn, 365 Or at
627 (“ ‘Inexact’ terms embody a complete expression of the
legislature’s intentions, but those intentions are not evident,
and it is for the courts to interpret them and the legislative
policy they convey, and then to decide whether the agency
4
Petitioners’ legal challenge to the commission’s order has been categorical.
They have not advanced separate legal challenges to the different violations or to
the commission’s penalty calculation. Accordingly, we address only the question
of what the legislature intended by “person * * * controlling” the disposal site.
5
The commission did not allege or find a violation of ORS 459.205, but the
Court of Appeals understood the commission to have been acting under the
authority of both statutes in imposing the fine. Kinzua Resources, 295 Or App at
397. The parties appear to share that understanding, so we assume for purposes
of this case that the order implicates both statutes.
680 Kinzua Resources v. DEQ

action conforms to that policy.”). Accordingly, we construe
the term without deference to the commission’s interpreta-
tion, following the framework described in State v. Gaines,
346 Or 160, 171-72, 206 P3d 1042 (2009). Coos Waterkeeper,
363 Or at 360-61.
B. Statutory Construction
When applying our framework for construing a
statute, the “paramount goal” is to discern the intention of
the legislature. Gaines, 346 Or at 171; ORS 174.020(1)(a). In
pursuing that goal, we give primary weight to the text and
context of the disputed statutory terms. Gaines, 346 Or at
171. As we emphasized in Gaines, “there is no more persua-
sive evidence of the intent of the legislature than ‘the words
by which the legislature undertook to give expression to its
wishes.’ ” Id. (quoting State ex rel Cox v. Wilson, 277 Or 747,
750, 562 P2d 172 (1977)). But we also consider legislative
history “for what it’s worth.” 346 Or at 171.
1. The meaning of “controlling” suggested from its com-
mon usage
The words that give expression to the legislature’s
wishes, at issue here, are set out in ORS 459.205 and ORS
459.268. The first provides:
“(1) Except as provided by ORS 459.215, a disposal
site shall not be established, operated, maintained or sub-
stantially altered, expanded or improved, and a change
shall not be made in the method or type of disposal at a
disposal site, until the person owning or controlling the dis-
posal site obtains a permit therefor from the Department of
Environmental Quality as provided in ORS 459.235.
“(2) The person who holds or last held the permit
issued under subsection (1) of this section, or, if that per-
son fails to comply, then the person owning or controlling a
land disposal site that is closed and no longer receiving solid
waste must continue or renew the permit required under
subsection (1) of this section after the site is closed for the
duration of the period in which the department continues
to actively supervise the site, even though solid waste is no
longer received at the site.”
ORS 459.205 (emphases added).
Cite as 366 Or 674 (2020) 681

The second provides:
“When solid waste is no longer received at a land dis-
posal site, the person who holds or last held the permit
issued under ORS 459.205 or, if the person who holds or last
held the permit fails to comply with this section, the person
owning or controlling the property on which the disposal site
is located, shall close and maintain the site according to the
requirements of this chapter, any applicable rule adopted
by the Environmental Quality Commission under ORS
459.045 and any requirement imposed by the Department
of Environmental Quality as a condition to renewing or
issuing a disposal site permit.”
ORS 459.268 (emphasis added).
As the Court of Appeals observed, the disputed term
“controlling” is not among the terms that the legislature has
defined for purposes of ORS chapter 459. Kinzua Resources,
295 Or App at 403. When the legislature has not specially
defined a term of common usage, we generally assume that
the legislature intended to use the term in a manner consis-
tent with its “plain, natural, and ordinary meaning,” and we
often consult dictionaries for guidance in determining what
the legislature would have understood a term to mean. See,
e.g., Coos Waterkeeper, 363 Or at 363. In this case, however,
consulting a dictionary does not help us to resolve what the
legislature intended the term “controlling” to mean.
The term “controlling” is the “present participle”
construction of the verb “control,” and the common usages of
the verb “control” are sufficiently varied to provide support
for each party’s proposed constructions of the term. Webster’s
Third New Int’l Dictionary 496 (unabridged ed 2002). Those
relevant usages are:
“(1) : to exercise restraining or directing influence over
: regulate, curb (~ one’s anger) (controlling her interest in
the enterprise) (2) : to have power over : rule (a single com-
pany ~s the industry)[.]”
Id. (emphasis in original). Those ordinary meanings do not
assist us in deciding whether the legislature intended only
the first usage—as the Court of Appeals concluded—or
whether the legislature intended to reach the second usage
as well.
682 Kinzua Resources v. DEQ

According to petitioners, it is textually significant
that the legislature used the term “controlling,” rather than
the term “control.” They contend that the construction rep-
resents the “present continuous” conjugation of “control” and
indicates “some current action” (emphasis in original). We
are not persuaded by that argument.
Petitioners may be correct that the legislature’s
use of the present participle form of “control” suggests that
the legislature intended to address the statutory require-
ments to persons currently “controlling” the site. See State
v. Makin, 360 Or 238, 242, 381 P3d 799 (2016) (“Generally,
the progressive aspect of a verb ‘indicates a happen-
ing in progress at a given time.’ ” (Quoting Quirk et al, A
Comprehensive Grammar of the English Language 197
(1985).)). But the usage does not tell us that the legislature
intended to describe a current action rather than a current
status.6 See State v. Gonzalez-Valenzuela, 358 Or 451, 457,
365 P3d 116 (2015) (emphasizing contrast between “sta-
tive verbs, which ‘refer to states of affairs,’ ” and “dynamic
verbs, which ‘refer to actions’ ” (quoting Tom McArthur ed.,
Oxford Companion to the English Language 985 (1992))).
Specifically, the choice of “controlling” does not indicate
whether the legislature intended to reach only persons pres-
ently “exercis[ing] restraining or directing influence over”
the site or whether it also intended to reach persons pres-
ently “hav[ing] power over” the site.7 See Webster’s Third
New Int’l Dictionary at 496. To resolve that dispute, we

6
In general, the label “present progressive,” or “present continuous,”
describes a verb construction that consists of the present participle (“-ing”) form
of the verb preceded by a “to be” verb and indicates “something ongoing, in prog-
ress.” Rodney Huddleston & Geoffrey K. Pullum, The Cambridge Grammar of
the English Language 116-17 (2002). Although the commission seemingly accepts
petitioners’ assumption that the legislature used “controlling” in that “present
progressive,” or “present continuous,” form, we note that the statutory phrase
uses the present participle construction of a verb without a “to be” auxiliary. That
usage of the present participle may simply suggest that “controlling” modifies the
noun, “person.” See id. at 80 (describing present participle used in way that “is
functionally comparable to an adjective in that it is head of an expression modi-
fying a noun”).
7
Petitioners do not contend that the legislature’s reference to “the person”
should be understood as referring only to a single person for any one disposal
site, and we do not understand the usage to convey that significance. See ORS
174.127(1) (instructing that, as used in the Oregon statutes, “[t]he singular num-
ber may include the plural and the plural number, the singular”).
Cite as 366 Or 674 (2020) 683

must consider the context in which the term “controlling” is
used.
2. The meaning suggested by relevant statutory context
The Court of Appeals did not find any context that
was “particularly helpful in clarifying the meaning of ‘con-
trolling’ as that term is used in ORS 459.205 and ORS
459.268.” Kinzua Resources, 295 Or App at 405. We dis-
agree. At least two aspects of the statutory context suggest
that the legislature intended “controlling” to reach persons
presently “hav[ing] power over” the site.
First, it is significant that the legislature has
addressed the same obligations to persons “owning” the
site as it has to persons “controlling” the site. We have
often explained that “the meaning of words in a statute
may be clarified or confirmed by reference to other words
in the same sentence or provision.” Goodwin v. Kingsmen
Plastering, Inc., 359 Or 694, 702, 375 P3d 463 (2016); see
also Johnson v. Gibson, 358 Or 624, 629-30, 369 P3d 1151
(2016) (explaining that the maxim noscitur a sociis “tells
us that the meaning of an unclear word may be clarified
by the meaning of other words used in the same context”).
Here, giving the term “owning” its ordinary meaning,
the statutory obligation arises from a person’s status—
possessing legal authority over the land on which the
landfill is located—without regard for whether the person
has actively participated in the operation of the landfill.
See Gonzalez-Valenzuela, 358 Or at 457 n 5 (“To say that
someone ‘owns’ a house is not to describe an action but to
describe that person’s status as a homeowner.”); Webster’s
Third New Int’l Dictionary at 1612 (defining the verb “own”
to mean “to have or hold as property or appurtenance
: have a rightful title to, whether legal or natural”); Black’s
Law Dictionary 1280 (10th ed 2009) (defining the verb
“own” to mean “[t]o rightfully have or possess as property;
to have legal title to”). Thus, the pairing of persons “own-
ing” the site with persons “controlling” the site is some
indication that the legislature intended—in both cases—to
reach persons who possess authority over the site regard-
less of whether they are actively participating in landfill
operations.
684 Kinzua Resources v. DEQ

Second, it is significant that the obligation of those
“owning or controlling” the site arises only if the permit
holder fails to act. According to the Court of Appeals, given
that the person “controlling” the site is stepping into the
shoes of a permit holder who fails to comply, “the legislature
would reasonably have assigned that role to persons whose
involvement with the land disposal site was most compara-
ble to [that of] the permittee.” Kinzua Resources, 295 Or App
at 404. That is a reasonable premise, but we disagree with
the court’s conclusion that only those actively controlling
the operations have involvement comparable to the permit
holder. The category of persons who may obtain a permit to
establish operations in the first place also consists of per-
sons “owning or controlling” the site. ORS 459.205(1). Thus,
the legislature viewed persons with sufficient authority
over a site to obtain a permit before landfill operations have
begun as equivalent to persons with sufficient authority
to properly close the landfill after operations have ceased.
In neither case has the legislature required that the per-
son actively participate in landfill operations. That context
suggests that the legislature intended “controlling” to reach
persons currently “hav[ing] power over” the landfill and not
just persons currently operating the landfill.
3. The meaning suggested by legislative history and
purpose
Although the legislative history sheds no direct
light on what the legislature intended by “person * * * con-
trolling” the disposal site, it reveals a purpose that is consis-
tent with an intention to require that those with controlling
power over a landfill site step in when the permit holder
fails to properly close the site. The legislature added the clo-
sure requirements to the solid waste statutes in 1983 when
it adopted House Bill 2241, a bill filed at the request of DEQ.
Or Laws 1983, ch 766, § 2 (adopting what is now ORS 459.268);
id. § 7 (amending ORS 459.205 to add what is now subsec-
tion (2)). The bill was primarily discussed and debated in
sessions before the House Committee on Environment and
Energy, during which a representative of DEQ explained
that post-closure maintenance of landfills is “critical” to pre-
vent the release of “potentially explosive gases and polluting
Cite as 366 Or 674 (2020) 685

drainage” from continuing decomposition and emphasized
that the bill’s purpose was to “assure continued protection of
public health and safety and the environment” after landfill
closure. Exhibit A, House Committee on Environment and
Energy, HB 2241, Apr 25, 1983 (testimony of Stan Biles);
Exhibit C, House Committee on Environment and Energy,
HB 2241, May 20, 1983 (DEQ fact sheet accompanying tes-
timony of Stan Biles). When the bill moved to the Senate,
senators similarly were advised that the purpose of the bill
was “to prevent environmental and health hazards from
occurring during the closure and post-closure period” and
that—according to DEQ—closure-related issues within the
solid waste industry had left “major problems for the state
to correct.” Staff Measure Analysis, Senate Committee on
Rules, HB 2241, July 7, 1983.
That purpose of assuring public protection when
the permit-holder fails to act is more compatible with the
commission’s conclusion that “persons * * * controlling” the
disposal site reaches those having the authority to take the
actions required for proper closure. If those closure obliga-
tions fell only to persons owning or “actively exercising” con-
trol over the landfill operations, it is more likely that critical
post-closure maintenance would be left as a problem for the
state to correct, as this case illustrates. At the point when
DEQ raised concerns that Pilot Rock Landfill needed to be
closed, the landfill had no employees. Moreover, Kinzua,
which was both the permit holder for the landfill and the
owner of the site, had been dissolved and could “not carry
on any business except that which is appropriate to wind
up and liquidate its business and affairs.” ORS 63.637(1).
In such circumstances, if petitioners were correct that only
persons “actively involved in the operation or management
of a landfill site” could be charged with satisfying the clo-
sure requirements, then the “critical” post-closure mainte-
nance likely would remain unaddressed, potentially causing
“major problems for the state to correct.”
Our analysis of the text, context, and purpose of
ORS 459.205 and ORS 459.268 thus persuades us that the
legislature intended the term “controlling” to have its ordi-
nary meaning, a meaning that includes both “exercising
686 Kinzua Resources v. DEQ

power over” and “having power over.” The Court of Appeals
erred in concluding otherwise.
C. Liability Issues Specific to LLC Members
Petitioners’ remaining argument for rejecting the
commission’s construction of “controlling” focuses on an
unrelated statute that limits the liability of LLC members
for debts of the LLC. The statute, ORS 63.165(1), is part
of the Oregon Limited Liability Company Act, a statutory
framework that authorizes and governs LLCs in Oregon.
Or Laws 1993, ch 173, §§ 1, 35. It specifies that an LLC
“member or manager is not personally liable for a debt, obli-
gation or liability of the limited liability company solely by
reason of being or acting as a member or manager.” ORS
63.165(1). According to petitioners, allowing the commission
to impose liability on ATR and Frontier “would create stat-
utory mischief by conflicting with ORS 63.165(1).” To the
extent petitioners are arguing that the statutes themselves
are in conflict, we disagree for the reasons that we explain
below.8 However, to the extent petitioners are challenging
the factual bases for liability in this case, that is a question
that should be resolved in the first instance by the Court of
Appeals on remand.
We have often emphasized that, when multiple,
apparently conflicting statutes are at issue, “this court, if
possible, must construe those statutes in a manner that ‘will
give effect to all.’ ” Powers v. Quigley, 345 Or 432, 438, 198
P3d 919 (2008) (quoting ORS 174.010). Here, we have previ-
ously construed the liability limitation in ORS 63.165 in a
way that harmonizes with our conclusion about the scope
of “controlling” for purposes of liability under ORS 459.205
and ORS 459.268.

8
We do not understand petitioners to argue that ORS 63.165(1) should inform
our understanding of what the legislature intended “controlling” to mean—in all
cases—when it added the disputed closure requirements to ORS 459.205 and
ORS 459.268. Indeed, there is no reason to view ORS 63.165(1) as pertinent con-
text for ORS 459.205 and ORS 459.268, given that the legislature adopted the
disputed closure requirements ten years before it adopted the Oregon Limited
Liability Company Act and ORS 63.165(1). Or Laws 1983, ch 766, §§ 2, 7; Or Laws
1993, ch 173. See, e.g., Gaines, 346 Or at 177 n 16 (explaining that, “[o]rdinarily,
only statutes enacted simultaneously with or before a statute at issue are perti-
nent context for interpreting that statute”).
Cite as 366 Or 674 (2020) 687

As the commission points out, we have construed
ORS 63.165(1) to mean that members and managers of an
LLC are not “vicariously liable for the LLC’s debts, obliga-
tions, or liabilities,” but that “a member or manager remains
responsible for his or her acts or omissions to the extent those
acts or omissions would be actionable against the member or
manager if that person were acting in an individual capac-
ity.” Cortez v. Nacco Materials Handling Group, 356 Or 254,
268-69, 337 P3d 111 (2014). The commission contends that
ORS 63.165(1) permits it to impose liability based on peti-
tioners’ own failure to perform obligations with which they
were individually charged in their capacity as persons “con-
trolling” the landfill.
We agree with the commission that ORS 459.205
and ORS 459.268 impose obligations directly on each person
“controlling” a landfill and that liability for the person’s own
failure to satisfy those obligations is direct liability, which
ORS 63.165(1) does not prevent. Our decision in Cortez illus-
trates the distinction between vicarious liability and direct
liability in the context of an LLC member. In that case, we
considered a different statute that imposes workplace safety
obligations, including on a person who “ ‘retains the right to
control the manner or method in which the risk-producing
activity was performed.’ ” 356 Or at 273 (quoting Woodbury
v. CH2M Hill, Inc., 335 Or 154, 160, 61 P3d 918 (2003)
(describing standard for liability under ORS 654.305)). We
concluded that ORS 63.165(1) did not shield the member-
manager of an LLC from liability for failing to satisfy the
statutory safe-workplace obligations.
The plaintiff in Cortez was injured while working
for a lumber mill and sued the member-manager of the LLC
that operated the mill, alleging that the member-manager
was a person subject to the obligations imposed by the stat-
ute and was liable for failing to perform those obligations.
356 Or at 256. The member-manager insisted that, under
the liability shield of ORS 63.125(1), it could not be held
personally liable for harm arising out of the LLC’s business
operations based on “merely having the authority to require
the LLC to prevent a workplace accident.” Id. at 263 (inter-
nal quotation marks omitted). But this court agreed with
the plaintiff, who argued “that ORS 63.165(1) immunizes
688 Kinzua Resources v. DEQ

[the LLC member] only from vicarious liability for the LLC’s
obligations,” and not from liability for its own omissions if,
“having retained control, [the person] failed to provide (or to
require [the LLC] to provide) a safe workplace.” Id. at 264.
We also concluded that the plaintiff was entitled to
proceed to trial on the retained-control theory of liability
because the evidence would permit a reasonable juror to
infer that the LLC member-manager retained the necessary
right to control to give rise to the obligation to provide a safe
workplace. Id. at 274. In doing so, we specifically pointed to
the legal authority that members and managers of an LLC
hold, by statute, “to manage all aspects of [the LLC’s] oper-
ation.” Id.; see ORS 63.130.9
Our analysis in Cortez illustrates how ORS 459.205
and ORS 459.268 are harmonized with ORS 63.165(1).
Under ORS 63.165(1), Frontier and ATR are shielded from
vicarious liability for Kinzua’s failure to satisfy the closure-
related obligations that ORS 459.205 and ORS 459.268
impose on a permit holder. However, ORS 459.205 and ORS
459.268 separately impose obligations on “persons owning
or controlling” the site when the permit holder fails to act,
regardless of whether those persons have any relationship
to the permit holder. Those obligations are premised on the
person’s own authority—retained or exercised—over the site
at which the permit-holder has failed to act. And liability
for failing to meet those obligations is direct liability for the
person’s own omissions. Thus, if Frontier and ATR meet the
statutory test of persons “controlling” the site, then they can
be directly liable for their own omissions with respect to the
obligations that ORS 459.205 and ORS 459.268 impose, and
ORS 63.165(1) does not shield them from that direct liability
simply because their right to control the site is related to
their right to manage the LLC that owns the site.
9
Our decision in Cortez relied, in part, on the explanation of limited liability
as set out in the commentary to the version of the Uniform Limited Liability
Company Act (ULLCA), on which the legislature relied in adopting the current
version of ORS 63.165(1). 356 Or at 267-68 (citing ULLCA § 303 comment (1996)).
The commentary to the rule of limited liability in the current version of the
ULLCA—although not pertinent legislative history—more explicitly articulates
the distinction that we described in Cortez: “[T]he shield is irrelevant to claims
seeking to hold a member or manager directly liable on account of the member’s
or manager’s own conduct.” ULLCA § 304 comment (2013).
Cite as 366 Or 674 (2020) 689

Petitioners, nevertheless, assert that the liability
imposed on Frontier and ATR in this case could not have
been direct liability for their own omissions because, in
petitioners’ view, the record is “devoid of any evidence that
ATR or Frontier, acting alone, had the authority to direct
Kinzua’s management or conduct.” Petitioners support that
assertion by emphasizing that Kinzua was a two-member
LLC and pointing to ORS 63.130(1)(b), which specifies that
“any matter related to the business of the limited liability
company may be decided by a majority of the members.”
Some aspects of the order suggest that the commission
treated the collective authority of the LLC members to con-
trol Kinzua as if each individual member had full authority
to control Kinzua’s property (the disposal site). The commis-
sion has insisted, however, that its finding that ATR and
Frontier were persons controlling the landfill site relied on
more than just their status as apparently co-equal members
of Kinzua.
We decline to resolve that final dispute. Whether
the liability that the commission imposed on petitioners
is direct liability for petitioners’ own omissions as persons
“controlling” the disposal site is intertwined with an alter-
native argument that petitioners raised in the Court of
Appeals—that the record lacks substantial evidence to sup-
port the commission’s findings, even under the commission’s
construction of “controlling.” The Court of Appeals did not
reach that argument, and neither party has meaningfully
addressed petitioner’s evidentiary challenge in light of the
statutory framework that we have articulated in this opin-
ion. Under the circumstances, we conclude that it is appro-
priate to remand this case to the Court of Appeals to con-
sider petitioners’ remaining challenges to the order in light
of the legal standard that we have identified.10
10
Petitioners also advance a cursory challenge to the commission’s finding
that Demers was a person “controlling” the landfill site, which seemingly builds
on the evidence that ATR and Frontier designated Demers to communicate with
DEQ about the landfill. To the extent the argument is premised on a theory that
agency law protects Demers from liability, it is an argument that the Court of
Appeals declined to consider because petitioners raised it for the first time on
reconsideration in that court, Kinzua Resources, 296 Or App at 488-89, and we
also decline to reach that argument. To the extent petitioners’ argument assumes
that ATR and Frontier also were not persons “controlling” the landfill, the chal-
lenge as to Demers is within the scope of our remand to the Court of Appeals.
690 Kinzua Resources v. DEQ

The decision of the Court of Appeals is reversed.
The case is remanded to the Court of Appeals for further
proceedings.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10627327. Public record. Not legal advice.