Jurisdictional Statement — National Wood Preservers, Inc. v. Pennsylvania Department of Environmental Resources

| * j++ 24 B24 24 4

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INTHE MICHAEL RODAK, JR., CLERK

SUPREME COURT OF THE UNTIED STATES

October Term, 1980

NATIONAL WOOD PRESERVERS, INC., Appellant

VU.

COMMONWEALTH OF PENNSYLVANIA,

DEPARTMENT OF ENVIRONMENTAL RESOURCES

and

CLIFFORD ROGERS and VIRGINIA ROGERS

Appellees

and

TOWNSHIP OF HAVERFORD, Intervenor

ON APPEAL FROM

THE SUPREME COURT OF PENNSYLVANIA

JURISDICTIONAL STATEMENT

OF APPELLANT

NATIONAL WOOD PRESERVERS, INC.

STEPHEN R. BOLDEN, ESQUIRE

MICHAEL S. LUBLINE, ESQUIRE

ALEXANDER N. RUBIN, JR., ESQUIRE*

Counsel for Appellant, National

Wood Preservers, Inc.

FELL, SPALDING, GOFF & RUBIN

1800 Penn Mutual Tower

510 Walnut Street

Phila., PA 19106

(215) 925-8300

“Counsel of Record

THE LEGAL INTELLIGENCER, 66 NORTH JUNIPER STREET, PHILA. PA. 19187 (215) 561-4050

TABLE OF CONTENTS

Page

QUESTION PRESENTED FOR REVIEW ...... l

Pr Ore EE oa eee es ov eee oe es ]

PE ak aos acon koe wok ae nee ee 2

STATEMENT OF THE CASE .. ......6.6854445 5

The Land, Waters, Parties and Polluting Condi-

a ss eae 5 Seen ole een —~6

The Adjudication of the Environmental Hear-

TN oo co oe ee a 10

The Commonwealth Court Decision ....... 13

The Pennsylvania Supreme Court’s Decision 15

-THE ISSUES ARE SUBSTANTIAL ........... 18

(1) The government is not merely regulating past

or present “use” of the property by the party to

be charged with liability, but instead is taking

resources from the most expedient source at.

Re nko sk eo 5 oe ce eee eee 23

(2) The Statute imposes strict liability upon a land

owner or occupier for the illegal act of a third

person without any requirements on the State

to proceed against that person ............ 25

(3) The strict vicarious liability is being imposed

ONIN noonp hk de ok Se 26

(4) The statute as applied has harsh consequences

which impair the contractual expectations of

occupiers of land such as short term tenants

and will have serious impact on the expecta-

tions of past purchasers of the property ..... 28

(5) The provision of the Statute which gives unlim-

ited discretion to the law enforcement agency

TABLE OF CONTENTS (Continued )

Page ©

with respect to what may be required by way of

compliance is subject to abuse ............ 29

(6) The selective enforcement techniques being

used in the enforcement of this Statute, as il-

justrated to this case are onerous and oppres-

sive and may well rise to a level of denial of

equal protection under the law. ........... 30

NS 6d soa gis 5) 0-50 59d oi a's 04-4. Fa 6-08 ae 31

APPENDIX — [See separately presented Appendix

to Jurisdictional Statement pursuant

to Rule 15.1(j)]

TABLE OF CITATIONS

Allied Structural Steel Co. v. Spannaus (1978) 438

U.S. 234, 57 L.Ed.2d 727, 98 S.Ct. 2716, Reh.

Den. Allied Structural Steel Co. v. Spannaus

(1978) 439 U.S. 886, 58 L.Ed.2d 201, 99 S.Ct.

airs ab 8 as ook 6 aw bb lks 9 owe Os 27, 28

Atchison, T. & S. F. R. Co. v. Public Utilities Com.

(1953) 346 U.S. 346, 98 L.Ed. 51, 74S.Ct.92 . 20

Calero-Toledo v. Pearson Yacht Leasing Co. (1974)

416 U.S. 663, 40 L.Ed.2d 452, 54 S.Ct. 2080,

Reh. Den. Calero-Toledo v. Pearson Yacht Leas-

ing Co. (1974) 417 U.S. 977, 41 L.Ed.2d 1148,

so ale go as gone arg Poh onG ao 22

Cohen vs. California (1971) 403 U.S. 15, 29

L.Ed.2d 284, 91 S.Ct. 1780, Reh. Den. Cohen v.

ii

TABLE OF CITATIONS (Continued)

Page

California (1971) 404 U.S. 876, 30 L.Ed.2d

I I Sas op oy alae 4g se 5

Commonwealth v. Barnes & Tucker Co. (1977) 472

Pa. 115, 371 A.2d 461, App. Dismd. Barnes &

Tucker Co. v. Pennsylvania (1977) 434 U.S.

OCi. Oe L246. ge Go, CS GAA. SS occas 26

Curtin v. Benson (1911) 222 U.S. 78, 56 L.Ed. 102,

i rahe are ea Ny Wk keds acd > 29

Goldblatt v. Hempstead (1962) 369 U.S. 590, 8

L.Ed.2d 130, 82 S.Ct. 987 United States v.

General Motors Corp., 403 F.Supp 1151 (D.

Ege RRS 2 ORs Soar i eee lear oa ea 20

Hadacheck v. Sebastian, 239 U.S. 394, 60 L.Ed.

ce Pe 2a). | ar rr rr 19, 23

Hancock National Bank v. Farnum (1900) 176 U.S.

640, 44.14..06. 619, 20 S.Ct SOG ........... 5

Henderson Bridge Co. v. Henderson City (1899)

173 U.S. 592, 43 L.Ed. 823. 19S.Ct.553 ... 5

Lichter v. United States (1948) 334 U.S. 742, 92

L.Ed. 1694, 68 S.Ct. 1294, Reh. Den. Pownall

v. United States (1948) 335 U.S. 836, 92 L.Ed.

yk 8 ie TS a ar ra Nee 27

Miller v. Schoene (1928) 276 U.S. 272, 72 L.Ed.

ee rE ener re 20, 23

National Wood Preservers, Inc. v. Commonwealth

Department of Environmental Resources, Pa.

O74 fae ae (tee) 2 fhe ss }. 15. 16. 17. 18

iil

TABLE OF CITATIONS (Continued)

Page

In re National Wood Preservers, Inc. v. Common-

wealth, Department of Environmental Re-

sources, 64 D.&C.2d 78 (1974). 1, 13, 19, 25

Penn Central Transportation Co. v. New York City

(1978) 438 U.S. 104, 57 L.Ed.2d 631, 98 S.Ct.

2646, Reh. Den. Penn Central Transportation

Co. v. New York (1978) 439 U.S. 883, 58

ine SO Ps kc bh dee cess

Philadelphia Chewing Gum Corporation v. Com-

monwealth, Department of Environmental Re-

sources (1978) 35 Pa. Common. 443, 387 A.2d

Rene en gee ae ae rte aati

Pennsylvania Coal Co. v. Mahon (1922) 260 U.S.

393, 67 L.Ed. 322, 43 S.Ct 158, 28 A.L.R. 1321

Queenside Hills Realty Co. v. Sarl (1946) 328 U.S.

80, 90 L.Ed. 1096, 66 S.Ct. 850 ...........

Robinson v. California (1962) 370 U.S. 660. 8

L.Ed.2d 758, 82 S.Ct. 1417, Reh. Den., Robin-

son v. California (1962) 371 U.S. 905 9

i, Sane Be, GS CE Be ei eee as

United States v. General Motors Corporation, 403

F. Supe. 1161 (D. Connm.. 1975) ......... 20,

United States v. Johns-Manville, 245 F.Supp. 74

Ce a OUR ob oe Caicedo s Wea orelneis ee bs

United States v. Marathon Pipeline, 589 F.2d 1310

ae le RR Neo ary eat ae, ee 20.

United States v. Tera-Tow, Inc. (1978, CA 7 Ill) 589

ee en te a aL 20. 21.

24

23

20

26

21

25

TABLE OF CITATIONS (Continued)

Page

Usery v. Turner Elkhorn Mining Co. (1976) 428

U.S. 1, 49 L.Ed.2d 752, 96 S.Ct. 2882 ...... 27

Statutes:

Pennsylvania Clean Streams Law, Act of June

22, 1937 P.L. 1987 as amended July 31, 1970

P.L. 653, No. 222 §12, 35 Pa. Stat. Ann.

§691.316 ..... “sees dep My a Ou Say EO Oe BO

; 21, 23, 25, 26, 27, 28, 30

ae Pe. BO. A Se aaa pceeccvec cues 26

ee re. ED REPO 40 cael oes ewes 4

ek Bes SR ENE 5.9 oe Se wee eee 21

Legal Encyclopedias:

16A C.J.S. “Constitutional Law” §661 ...... 22

QUESTIONS PRESENTED FOR REVIEW

1. Is there an unduly oppressive exercise of the

State’s “police power” in violation of the due process

‘clause of the 14th Amendment to the United States Con-

stitution, where a State statute enacted into law subse-

quent to the time a land occupier goes into possession of

property, imposes liability upon him based solely on his

status as a land occupier, to eradicate, at unlimited cost,

a polluting condition partially under the property occu-

pied by him, created by the unlawful acts of a third per-

son, prior to his occupancy, which he has not contrib-

_ uted to and which has no reasonable nexus to his use of

the property.

OPINIONS BELOW

The Opinion of the Supreme Court of Pennsylvania,

dated April 24, 1980, affirming the Orders of the Com-

monwealth Court of Pennsylvania, is reported at — Pa.

— , 414 A.2d 37 (1980) and is found in the Appendix at

A-1. The opinion of the Commonwealth Court of Penn-

sylvania, dated May 24, 1978, affirming in part and re-

versing in part the Adjudication and Order of the Envi-

ronmental Hearing Board, is reported at 35 Pa.

Commonwealth Ct. 443, 387 A.2d 142 (1978) and is

found in the Appendix at A-25. The Adjudication and

Order of the Environmental Hearing Board, dated July

30, 1976, is unreported and is found in the Appendix at

A-48. A pre-hearing Opinion of the Environmental Hear-

ing Board denying a Petition to Join Samuel Jacoby as an

Additional Defendant, In Re National Wood Preservers,

Inc., 64 D&C2d 78 (1974) and is found in the Appendix

at A-91,

2

JURISDICTION

The Pennsylvania Clean Streams Law was enacted

in 1937 (Act of June 22, 1937 P.L. 1987). Section 316

became a part of that law in 1965. As originally written,

this section gave the State power to order a landowner or

occupier to grant access to the land to permit the Com-

monwealth or an appropriate agency of the Common-

wealth to eliminate a polluting condition.

Section 316 was amended on July 30, 1970. The

1970 Amendment which is the current language of the

statute, drastically altered the scope of this section of the

law so as to place responsibility for eliminating a pollut-

ing condition on landowners and occupiers. It now pro-

vides in part as follows:

Ҥ$691.316 Responsibilities of Landowners and

Land Occupiers

Whenever the Sanitary Water Board finds that pol-

lution or a danger of pollution is resulting from a

condition which exists on land in the Common-

wealth, the Board may order the landowner or occu-

pier to correct the condition in a manner satisfactory

to the Board or it may order such owner or occupier

to allow a mine operator or other person or agency of

the Commonwealth access to the land to take such

action. For the purpose of this section, “landowner”

includes any persons holding title to or having a pro-

prietary interest in either surface of subsurface

rights.” (Act of June 22, 1937, P.L. 1987 Article III,

§316 as amended July 31, 1970, P.L. 653, 35 P.S.

§691.316) (full text at A-113)

On July 12, 1973, Appellee, Commonwealth of

Pennsylvania, Department of Environmental Resources

(hereinafter “DER”) issued identical knforcement Or-

ders to Appellant, National Wood Preservers, Inc.

(hereinafter “Wood”), Shell Oil Company (hereinafter

“Shell”) and Philadelphia Chewing Gum Corporation

3

(hereinafter “Gum”").' The persons and entities to whom

these orders were issued all had the status of being land-

owners or occupiers of property located in the area of

Eagle Road and Penn Central Railroad in Haverford

Township, Delaware County, Pennsylvania.

These Orders stated that a contaminant consisting

of creosote containing pentachlorophenol was causing a

serious problem to the ground and surface waters of the

Commonwealth known locally as “Naylor's Run” in the

area of Eagle Road and Penn Central Railroad in Haver-

ford Township, Delaware County, Pennsylvania (R 25 -

30).* By these Orders, Appellant Wood and other entities

and persons to whom they were issued, were directed to

expend the funds needed to conduct tests, define the

specific area of the contamination, develop engineering

plans to remove same and to then, in fact, remove the

contaminant from the ground and surface waters “.

to such a degree as to restore the waters to their natural

quality”. (See Orders of DER dated July 12, 1973, found

in the Appendix at A-101)

From these Orders, Wood and all other entities and

persons to whom they were issued filed timely Appeals

to the Pennsylvania Environmental Hearing Board

(hereinafter “Board”) which ordered all such Appeals

consolidated,

By Adjudication and Order dated July 30, 1976, the

Board sustained in part and dismissed in part the various

Appeals. (See Adjudication of Environmental Hearing

Board dated July 30, 1976, Appendix at A-48)

From this Adjudication and Order, Wood and all

other entities and persons to whom the original Entorce-

1. On September 21, 1973, a similar Order was issued to Clif-

lord A. and Virginia Rogers (hereinafter “Rogers”). (R 31, 32. A-

107)

2. These and subsequent page references referred to

hereinatter in this Jurisdicational Statement, which are preceeded

with the letter “R", are found in the three (3) volume Reproduced

Record in this matter. Those which are preceeded by the letter “A”,

are found in the Appendix submitted herewith.

4

ment Orders had been issued, filed timely Appeals to the

Commonwealth Court of Pennsylvania. Once again, the

various Appeals were ordered consolidated by the Court

for the purpose of the proceedings before it.

On May 24, 1978, the Commonwealth Court issued

its Opinion and Order sustaining the Appeals of Gum

and Shell and dismissing the Appeals of Wood and Rog-

ers. (Appendix at A-25)

On June 16, 1978, Wood filed with the Supreme

Court of Pennsylvania, a Petition for Review of the Opin-

ion and Order of the Commonwealth Court. Petitions for

Review were also filed with the Pennsylvania Supreme

Court by Rogers and by the DER with respect to that

portion of the Commonwealth Court's Opinion and Or-

der which dismissed Shell and Gum from the proceed-

ings.

On February 16, 1979, the Supreme Court of Penn-

sylvania granted these Petitions for Review and ordered

the matters consolidated for argument on appeal.

On April 24, 1980, the Supreme Court of Pennsylva-

nia issued its Opinion and Final Judgment in this case,

affirming the Orders of the Commonwealth Court as to

Wood and Rogers and dismissing the Appeal of the DER

because not filed timely.

At all stages of the proceedings, Appellant Wood ar-

gued that the 1970 Amendment to §316 of the Pennsyl-

vania Clean Streams Law, Act of July 31, 1970, P.L. No.

222, 35 Pa. Stat. Anno. §691.316, created an unconstitu-

tional burden upon Appellant in violation of the due

process clause of the 14th Amendment to the United

, States Constitution.

Notice of Appeal to this Court was filed with the

Prothonotary of the Supreme Court of Pennsylvania on

July 3, 1980, and is found in the Appendix at A-101.

This Court has jurisdiction over this Appeal pursu-

ant to 28 U.S.C. §1257(2).

This Appeal lies because the highest Court of the

Commonwealth of Pennsylvania has sustained the pro-

i)

visions of §316 of the Pennsylvania Clean Streams Law

against a challenge that it is unconstitutional on its face

and as applied to Appellant Wood. (See, Cohen vs. Cali-

fornia, 403 U.S. 15, 29 L.Ed.2d 284, 91 S.Ct. 1780

(1971).

In upholding the validity of this statute, the Penn-

sylvania Supreme Court refused to rule on an inde-

pendent state ground for reversing or affirming the deci-

sion of the Court below and has instead based its

decision squarely upon the constiiutional question pre-

sented to it by Appellant. Since the State court, after en-

tertaining this constitutional question, has decided it ad-

versely to the claim of unconstitutionality asserted by

Appellant, this Court has jurisdiction to hear an appeal

of this case. 28 U.S.C. 1257(2); Hancock National Bank

vs. Farnum,176 U.S. 640, 20 S.Ct. 506, 44 L.Ed 619

(1900); Henderson Bridge Co. vs. City of Henderson,

Ky., 173 U.S. 592, 19 S.Ct. 553, 43 L.Ed. 823 (1899).

STATEMENT OF THE CASE

Trial on the merits of these consolidated matters

commenced on November 20, 1974, before Board-Ap-

pointed Hearing Examiner, Louis A. Salamon, Esquire,

and encompassed thirteen (13) days of testimony.

At the outset of the trial, all parties, including Ap-

pellee DER entered into a Stipulation providing that the

sole basis for the issuance of the Enforcement Orders by

DER against the persons or entities to whom they were

issued, was based upon the language contained in §316

of the Clean Streams Law. (35 Pa. Stat. Anno. §691.316,

See R 187(a) and Adjudication of Environmental Hear-

ing Board dated July 30, 1976, at A-52).

The testimony and exhibits introduced at the Hear-

ing before the Examiner established the following facts,

substantially, all of which are contained in the Board's

Adjudication and were alfirmed by the Commonwealth

Court and Supreme Court of Pennsylvania.

6

The Land, Waters, Parties and Polluting Condition

For over thirty four (34) years Rogers owned a piece

of land located at Eagle and Lawrence Roads in Haver-

ford Township, Delaware County, Pennsylvania. (See

Adjudication of Environmental Hearing Board dated

July 30, 1976, Finding of Fact #1, A-52) On January 10,

1947, Rogers leased this property to Samuel T. Jacoby

and C. David Jacobs. They, in turn, assigned the lease to

National Wood Preservers, Inc., a corporation which had

been incorporated by Jacoby on January 24, 1947, and

all of the stock of which was owned and controlled by

him. (See Adjudication of Environmental Hearing

Board, dated July 30, 1976, Finding of Fact #2, Footnote

3, A-51, 52; and Stipulation Between Counsel for all Par-

ties, R 136a, 137a)

Thereafter, for a period of sixteen (16) years from

March 28, 1947 until July 30, 1963, Jacoby, through this

corporate entity which he owned and controlled, oper-

ated a wood preservation business at the above-referred

to leased location. (See Adjudication of Environmental

Hearing Board dated July 30, 1976, Finding of Fact #3,

A-53) During this period of time, Jacoby, while conduct-

ing this business, used a chemical substance known as

pentachlorophenol to treat and preserve wood, which he

disposed of by pumping it into a thirty (30') foot deep

well located on the leased premises. (See Adjudication of

Environmental Hearing Board dated July 30, 1976,

Finding of Fact #4, A-53)

During the course of Jacoby’s tenure as owner of

this business, from at least 1953 until the Goldstein fam-

ily purchased it from Jacoby on July 30, 1963, neighbors

in the area surrounding the physical location of Jacoby's

business, complained of the pollution of Naylor’s Run

Creek, complaining about an oily brownish liquid float-

ing on the surface of the creek. (R 862, 863) As a result

of these complaints, Haverford Township officials and

the State Sanitary Water Board personnel investigated

Jacoby’s operation. (R 862-873) In the summer of 1956,

7

Jacoby discontinued the use of the well into which he

had pumped the pentachlorophenol. (R 883)

By agreement dated July 30, 1963, (exactly seven

years before §316 in its present form was enacted), the

Goldstein family, through a Pennsylvania corporation,

NWP, Inc. purchased from Jacoby, all of his outstanding

stock in Wood. (Exhibit E-12, R 70 - 85, 189; Stipulation

Between Counsel for all Parties, 136, 137)°

Approximately one (1) month prior to purchasing

the business from Jacoby, on July 30, 1963, Harris

Goldstein came upon the premises and remained there

continuously for that month in order to determine if he

and his son would buy the business. (R 962, 963) While

he was there, he observed the generally dirty nature of

the operation. He inquired of Jacoby as to whether he

had any pollution problem. (R 966, 967; 1032, 1033) He

was assured at this time that although there had pre-

viously been a pollution problem, it had been cured. (R

966, 967; 1032, 1033) Goldstein’s concern at thai time

about a pollution problem was not based upon any

knowledge of a specific polluting condition, but rather

was based upon his general concern due to the dirty na-

ture of the operation and an awareness of pollution

problems in general from his reading of newspapers. (R

1032, 1033; 1048-1050) In particular, he had not seen

the stream (Naylor’s Run) at this time, and he had no

knowledge of long term complaints about the pollution

of the stream created by Jacoby’s activities over the

years he had operated the business. (R 1047)

3. NWP, Inc. is a Pennsylvania Corporation formed by Harris

and Alan Goldstein, on July 9, 1963. On August 30, 1963, the Penn-

svivania Corporation, known as National Wood Preservers, Inc..

which had been incorporated by Jacoby on January 24, 1947.

changed its name to Eagle Wood Preservers, Inc., and filed an Out-

Ot-Existence Certificate with the State on September 11, 1963. On

September 9, 1963, NWP. Inc., amended its Articles of

Incorporation to change its name to National Wood Preservers, Inc..

the present Appellant. (See Stipulation Between Counsel for All

Parties, R 136, 137).

8

As a result of his general concern that any pollution

problem had been cured, he insisted that a clause be in-

serted in the July 30, 1963 stock purchase agreement

(Examiner's Exhibit 12, paragraphs 8h, R 70-85) to war-

rant that any pollution problem had, in fact, been cured.

(R 966, 967; 1048-1050)"

Following the Goldstein’s purchase of the stock of

Wood from Jacoby, they continued as a tenant of Rogers,

to run the business on the same physical site previously

used by Jacoby. Under the arrangement, whereby the

Goldsteins purchased the stock of Wood from Jacoby, it

was agreed that Jacoby would remain for a year to aid

them in operating the business. (R 967) However, a little

less than two (2) months later, on September 17, 1963,

Jacoby was arrested by the Pennsylvania State Police tor

polluting.’ (R 873, 874, 886, 967)

As a consequence of the arrest of Jacoby and the

revelations to Goldstein of a pollution problem, Goldstein

and the Township Health Supervisor, as well as repre-

sentatives of the Pennsylvania Sanitary Water Board met

at or around September 20, 1963, to discuss steps to be

taken by the Goldsteins to clean up the business prem-

ises formerly run by Jacoby. (R 886, 887, 892-894, 968,

969 )°

As a result of the conference, it was agreed that the

Goldsteins would hire a consultant to prepare a report

4. Paragraph 8(h) of the Agreement of July 30, 1963, between

NWP, Inc. and Jacoby, reads as follows:

“8 Jacoby represents and warrants that

(h) There is no litigation pending or threatened against it by

any agency or instrumentality of the Fe? ral, State or local gov-

ernments, except for a change of stream pollution since cured.”

5. As of this date, Goldstein had already paid to Jacoby. the

sum of Two Hundred Forty Four Thousand ($244,000.00) Dollars

toward the full purchase price of Five Hundred Eighty Thousand.

Seven Hundred and Twenty ($580,720.00) Dollars. (See RK 70, 86).

6. The Sanitary Water Board was the predecessor state agency

to DER, the present Appellee.

9

recommending the steps to be taken by them to satisfy

the state and township officials about the pollution prob-

lems. (R 968-970; Exhibits NWP 4 and NWP 5, R 116-

129)

The Goldsteins completed every step set forth in the

report in accordance therewith; finished all such steps

by the required target date of june 1, 1964, advised the

Sanitary Water Board of each step in the process as it

was completed and received approval for the work after

inspection by the Board after the completion of each

step, as well as an overall approval of the work. (R 968-

978; 1027-1032; Exhibits NWP 6, 7, 8, 9 and 10; R 103-

134)

The overall cost incurred by the Goldsteins in mak-

ing all of the State required and State approved changes

set forth in 1964 was approximately Seventy Five Thou-

sand ($75,000.00) Dollars. (R 1030)

As a further part of the agreement with the State in

1964, the Goldsteins agreed on a going forward basis to

police the creek every day by collecting any oil floating

on the surface. The cost to Appellant Wood of policing

the creek on a daily basis since 1964 and of making the

above changes has cost appellant One Hundred Forty

Five Thousand, Two Hundred ($145,200.00) Dollars as

of the date D.E.R. issued its enforcement order.

As a result of Jacoby’s arrest, the Goldsteins con-

sulted their attorney about attempting to force him to

buy back the stock of the business. However, they were

advised that because of the costly and protracted nature

of such legal proceedings, they would be better off if they

met with State and township officials in order to correct

the pollution problem. (R 967, 968)

By Agreement dated December 31, 1964, the

Goldsteins in consideration for receiving from Jacoby the

sum of Thirty Five Thousand ($35,000.00) Dollars, re-

leased Jacoby from the warranty in the July 30, 1963

stock purchase agreement that the pollution problem

had been incurred. (Exhibit K-13, R 86-89; 183-185)

10

This Agreement (Examiner’s Exhibit 13, R 86-89) states

that although the Goldsteins “have made certain de-

mands and claims upon Jacoby including a claim that

stream pollution exists in breach of paragraph 8H of the

stock purchase agreement” said claims “have been

disputed by Jacoby. (R 86-87) The Agreement further

points out that the Thirty Five Thousand ($35,000.00)

Dollar reduction in the purchase price of the business

was only partially for t.e cost expended by the

Goldsteins in correcting and curing the alleged stream

pollution problem and partly for claims related to the fi-

nancial conditions and affairs of the company. (R 87)

On February 10, 1967, Appellant Wood gave up a

portion of its leasehold interest or: the leased premises so

that Rogers could, in turn, lease same to Shell. (Adjudi-

cation of Environmental Hearing Board, dated July 30,

1976, Finding of Fact #6 A-53) and Shell has operated

and maintained a gasoline station on that parcel ever

since leasing the premises on February 10, 1967. (Adju-

dication of Environmental Hearing Board, dated July 30,

1976, Finding of Fact #7 A-54)

Gum occupies a parcel of land on the opposite side

of Eagle Road from the parcels owned by Rogers and oc-

cupied by Shell and Wood. (See Adjudication of Envi-

ronmental Hearing Board, dated July 30, 1976, Finding

of Fact #8 A-54) .

On July 12, 1973, the DER issued the Orders above

mentioned.

From these Orders, all parties appealed to the Envi-

ronmental Hearing Board.

The Adjudication of the Environmental Hearing Board

In its Adjudication and Order of July 30, 1976, the

Environmental Hearing Board found as a fact that the

pollution problem in question had been caused by the

conduct of Jacoby in pumping pentachlorophenol into

11

the well above referred to. (See Adjudication of Environ-

mental Hearing Board, dated July 30, 1976, Finding of

Fact #4 A-53, and Footnote 13, A-84)

The Board further found as fact that the present

Appellent Wood, under the operation of the Goldstein

family “. . . has not discharged or permitted the dis-

charge of industrial waste into the waters of the Com-

monwealth” (see Adjudication of Environmental Hear-

ing Board, dated July 30, 1976, Finding of Fact #5, A-

53); and also found that Wood by its present

management, the Goldstein family, has cooperated with

the DER and its predecessor entity, the Pennsylvania

Department of Health, Sanitary Water Board, in the

earlier efforts to remedy this pollution problem on and

off the property which Appellant Wood occupies. (See

Adjudication of Environmental Hearing Board, dated

July 30, 1976, Finding of Fact #80 A-72)

The Board found that the pentachlorophenol in

question was under the surface of the property leased by

Appellant Rogers, to Appellee Shell and Appellant Wood;

that this pentachlorophenol flowed southwesterly under

Eagle Road, a highway owned and maintained by the

Commonwealth of Pennsylvania and that thereafter it

infiltrated under the surface of property owned by Appel-

lant Gum into a storm sewer pipe on the property of Gum

maintained by appellee, Township of Haverford, and

that the pentachlorophenol traveled through the storm

sewer pipe and was discharged at its terminus into

Naylor’s Run. (See Adjudication of Environmental

Hearing Board, dated July 30, 1976, Finding of Fact #72

A-70)

The Board determined that the pentachlorophenol

is under the property owned and maintained by the

Commonwealth of Pennsylvania and the Township of

Haverford and by landowners or occupiers, the identity

of whom or which were not disclosed in the proceedings

before it. (See Adjudication of Environmental Hearing

Board, dated July 30, 1976, Finding of Fact #74(b) A-

70, 71)

12

It found also that in order to determine the volume

of pentachlorophenol under the surface of the property

owned or leased to Appellants, including Appellant

Wood and how widely the pentachlorophenol was dis-

bursed thereunder, many more wells would have to be

drilled on the property to the water table and additional

samples from these wells taken. (See Adjudication of En-

vironmental Hearing Board, dated July 30, 1976, Find-

ing of Fact #76 A-71)

It found finally that it was impossible to assess the

cost of the removal program until further drillings, test-

ing and sampling was completed; and, the participation

of landowners and occupiers, in addition to the Appel-

lants, would be necessary in order to complete the drill-

ing, testing and removal program. (See Adjudication of

Environmental Hearing Board, dated July 30, 1976,

Finding of Fact #78 and #79 A-72)

All Appellants challenged the constitutionality of

§316 of the Clean Streams Law on the basis that it was

unconstitutional since it punishes a “status” and re-

quired them to assume responsibility to correct a condi-

tion which none of them caused, created or were at fault

in continuing. (R 192-197; 33-35). They also challenged

the constitutionality of §316 on the grounds that it was

invalid ex post facto legislation. (R 192-197; 33-35)

As to all such attacks on the constitutionality of

§316 of the Clean Streams Law, the Environmental

Hearing Board ruled that it did not have the authority to

pass upon the constitutionality of §316 of the Clean

Streams Law and that it would assume the constitution-

ality thereof for the purposes of its Adjudication. (See

Adjudication of Environmental Hearing Board, dated

July 30, 1976, A-74)

Appellants also argued and tontended that the DER

was applying §316 in an unconstitutionally discrimina-

tory fashion particularly because of its failure to include

in the proceedings, Jacoby as the party who had created

the polluting condition and other property owners, in-

13

cluding the Township of Haverford and the State De-.

partment of Highways, under whose property the pollut-

ing condition was also found to exist. Prior to the

hearings before the Environmental Hearing Board, Shell

had petitioned to join Jacoby as an additional defendant,

pursuant to the State Civil Procedural Rules, on the ba-

sis that he was the party responsible for causing the con-

‘dition. DER opposed this joinder and the Board sus-

tained that position, denying the Petition on the grounds

that only DER had the authority to bring Jacoby upon

the record. In re National Wood Preservers, 64 D&C2d

78 (1974), A-91. DER at no time sought to join Jacoby in

those proceedings.

In its Adjudication, the Board in dismissing the

contentions of discriminatory enforcement, alluded to

the fact that §316 of the Clean Streams Law permitted

DER to ignore the issue of fault in proceeding to recover

clean-up costs. It stated:

ia

. . Section 316 clearly authorizes the Depart-

ment to ignore the issue of fault, as it is done here,

and proceed against whoever owns or occupies land

so as to remedy a pollution problem as quickly as

possible. We might perfer a more delicate balancing

of responsibility in the Department’s actions, but

we cannot say their approach is unauthorized.

(Adjudication of Environmental Hearing Board,

July 30, 1976, Footnote 13, A-84)

The Board also ruled that it would restrict any Order

against the Appellants so that they would be required to

take corrective measures only upon property owned or

‘occupied by them.

After disposing of all of the arguments raised by the

various Appellants in the proceedings before it, the

Board issued its Adjudication.

The Commonwealth Court Decision

On appeal, the Commonwealth Court ruled that

§316 could not constitutionally be applied to any of the

14

parties before the Board based solely upon their owner-

ship or occupancy of land.

The Court went on, however, to point out that

where a statute can be given two constructions, one of

which will render it constitutional and the other uncon-

stitutional, the former construction must be invoked.

Relying on this principle, the Court held that there

was a construction of §316 which both comports with

the law of public nuisance and renders that section con-

stitutional as applied to the factual situation present in

this case.

As stated by the Court, where a polluting condition

has been created by the conduct of an individual other

than an owner or occupier of the land, that owner or oc-

cupier can be ordered to take corrective measures if

after knowing of the existence of the condition on his

land, he engages in some affirmative conduct indicating

his adoption of the condition.

In discussing this theory, as it related to Appellant

Wood, the Court found that in not “divesting” itself of

the business after Jacoby’s arrest, by accepting a Thirty

Five Thousand ($35,000.00) Dollar credit from Jacoby

in reduction of the purchase price for his stock, together

with its actions in taking “measures to correct the pollu-

tion problem”, it engaged in such “affirmative conduct”

as would be an “adoption” of that condition.

As a result of determining that Wood engaged in

such affirmative action, the Court held that it had

adopted the polluting condition and dismissed Appel-

lant’s appeal and affirmed the Order of the Board. The

Court also dismissed the appeal of Rogers, the owner of

the property leased to Shell and Wood on the grounds

that they had adopted the condition as well. With respect

to Gum and Shell, however, the Court found that neither

of those entities had engaged in “affirmative conduct”

constituting an adoption of the polluting condition and

therefore sustained their appeals and dismissed the mat-

15

ter as to them. (Commonwealth Court’s Opinion, A-40,

41)

From the Order and Opinion of the Commonwealth

Court, Appellant Wood filed a Petition for Review to the

Pennsylvania Supreme Court which was granted as No.

66 January Term 1979 and consolidated for argument

with the Appeals filed by Clifford and Virginia Rogers

(No. 67 January Term 1979) and an Appeal filed by DER

(No. 68 January Term 1979), from that portion of the

Commonwealth Court’s Opinion and Order which dis-

missed the matter as to Gum and Shell.

The Pennsylvania Supreme Court’s Decision

The Pennsylvania Supreme Court in its Opinion of

April 24, 1980, acknowledged that this was “a case of

first impression”, calling for the construction and a de-

termination of the constitutionality of §316 of the Clean

Streams Law. (National Wood Preservers, Inc. vs. Com-

monwealth of Pennsylvania, Department of Environ-

mental Resources, __. Pa. ___, 414 A.2d 37 (1980),

see Appendix, A-1)

“This is a case of first impression. At issue is the

construction and constitutionality of Section 316 of

The Clean Streams Law, Act of July 31, 1970, P.L.

653, §12, amending 35 P.S. §691.316.” (414 A.2d at

pg. 38; Appendix at A-2)

“The principal questions presented by this appeal

are whether Section 316 authorizes the Department

of Environmental Resources to remedy water pollu-

tion resulting from conditions other than mine

drainage, and whether Section 316 is a constitu-

tional exercise of the Legislature’s police power.”

(414 A.2d at page 39; Appendix at A-2)

The Court first found that this section properly ap-

plied to pollution from conditions other than mine drain-

age. It then took up the question of the Statute’s consti-

tutionality, stating,

16

“Appellants’ second contention is that Section 316

of The Clean Streams Law is an impermissible exer-

cise of the police power, in violation of the Four-

teenth Amendment of the United States Constitu-

tion and Article I, Section 10 of the Pennsylvania

Constitution.” (414 A.2d at page 42; Appendix at A-

9)

The Court stated Appellant’s position as follows:

“Appellants do not argue that Section 316 is ‘unduly

oppressive’ because of its economic impact or its in-

terference with their use of the property. Rather,

Appellants advance the somewhat unique argu-

ment that Section 316 is unduly oppressive because

it imposes liability upon Appellants solely on the ba-

sis of their ownership or occupancy of the land in

question.” (414 A.2d at page 45; Appendix at A-16)

The Court then made clear that it would not decide

the case on State law concepts of “fault”, causation or

the theory of “adoption” articulated by the Common-

wealth Court, but rather would deal directly with the

constitutional question presented. Said the Court:

“16. Appellants assume that they have acted with-

out ‘fault’ and have not ‘caused’ the pollution. In

light of our disposition of this case, we need not con-

sider this assumption.” (414 A.2d page 45, Footnote

16; Appendix at A-16)

The Court, stating that it disagreed with Appellant’s

argument, held §316 to be a constitutional exercise of

the State’s police power:

“We disagree. First it is absolutely clear that the cor-

rective orders here are based on much more than

mere ownership or occupancy. As discussed above,

they are based upon legislation designed to elimi-

nate all water pollution, and the Environmental

Hearing Board’s findings that a substance, deter-

17

mined to be pollution, resides under appellant's land

and can feasibly be removed. There is thus a reason-

able and concrete basis for the corrective orders

here.” (414 A.2d at page 45; Appendix at A-16)’

The concurring opinion of Justice Flaherty stated

that the majority opinion was actually providing for an

unconstitutional imposition of liability, based solely on

ownership or occupancy of property. He, therefore, con-

curred only in the result since he accepted the theory of

“adoption” articulated by the Commonwealth Court. He

said:

“A reading of the majority opinion might lead to the

belief that we adopt the strict liability construction

of Section 316 which would compel the expenditure

of financial sums by an owner or occupancy (sic) of

land based on no other factor but the ownership or

occupancy of the land.” (414 A.2d at page 47, Con-

curring Opinion, A-21)

Justice Flaherty then stated his belief that an

excercise of the police power had to be associated

with the use to which one puts his property and not

his mere ownership or occupancy. He said:

a a a

“It has always been recognized that the ‘right’ of

property ownership carries with it a concurrent

7. The Court's statement that the Environmental Hearing

Board had found that the pollution “can feasibly be removed” was

apparently referring to technical or scientific feasibility rather than

economic feasibility. The Environmental Hearing Board specifically

found as a fact that there was insufficient testing performed to de-

termine the total volume of material under the property owned or

leased by Appellants or how widely it was disbursed under the sur-

face of Appellant's property. (Adjudication of Environmental Hear-

ing Board, July 30, 1976, Finding of Fact No. 73 (a) and (b), A-70).

Accordingly, it found that it was “impossible to assess the cost of

such a removal program until further drilling. testing and sampling

is completed.” (Adjudication of Environmental Hearing Board, July

30, 1976, Finding of Fact. No. 78. A-72).

18

‘obligation’ which is inherent in the basic relation-

ship of an ‘owner’ of property to society. These

‘obligations’, however, have always related to the

use one puts to property, not mere ownership. The

ancient maxim of the common law is, ‘Sic utere tuo

ut alienum non laedus’, 9 Coke 59—So use your

own property as not to injure your neighbor. Where

society requires, the property of another can be

taken, but only with due compensation. To construe

the subject Aci as providing for strict liability,

based on nothing more than the ownership or occu-

pation of land, would be to impose on innocent indi-

viduals, the burden which should be borne by soci-

ety as a whole, thus, an unconstitutional taking. I,

thus, concur only in the result.” (414 A.2d at page

48; Concurring Opinion, emphasis added, A-23, 24)

Notice of Appeal from the Court’s Judgment to the

Supreme Court of the United States was filed with the

Lower Court on July 3, 1980.

THE ISSUES ARE SUBSTANTIAL ap

Section 316, which has been declared constitution-

ally valid by the highest court in the State of Pennsylva-

nia, appears to be strongly rooted in the desire to ad-

vance social purposes by restoring the environment.

Nevertheless, in its sweep, by imposing liability on noth-

ing more than status and geographical proximity to a

polluting condition, it so drastically infringes on personal

and property rights as to raise anamolous visions of op-

pressive results that defeat the very essence of the social

aims which apparently inspired this legislation.

For example, consider the possibility for injustice if

this law existed in the State of New York. The media

constantly reminds us of the families who own or rent

property built over the toxic dump which is Love Canal.

These people live in fear of cancer, deformed infants and

19

other health horrors created by the chemical dumping

there years ago. Yet, under the statute here at issue,

these peopie who did not create this problem and who

suffer drastically from it, could be forced to clean up the

pollution at unlimited cost and without any attempt at all

by the government to first seek restoration from the

chemical companies who created the problem. This is

not a mere abstract hypothetical possibility in light of

what happened in this case.®

An environmentally awakened society is discover-

ing new “Love Canal” type dump sites every day. Should

the cost of this problem be borne by the government as a

whole or by the poor unfortunate people located over the

geographical confines of such a dump?

If the problems at the “Three Mile Island” nuclear

generating plant in Harrisburg, Pennsylvania, created

an escape of radioactive material which seeped into local

water supplies, thie families most harmed by the problem

could be expected under this legislation to clean it up.

The Statute here at issue pushes the use of the

State’s “police power” to a new horizon which it is sin-

cerely believed has not yet been judicially considered by

this Court.

To focus in sharply on what is at stake herein, it is

perhaps wise to point out what Appellant sincerely be-

lieves is not involved in this case.

This is not a situation in which the State has exer-

cised its “police power” to place a mere prohibition or re-

striction upon a lawful use of property, which reduces

the economic value of the property. (See Hadacheck vs.

Sebastian, 239 U.S. 394, 60 L.Ed. 348, 36 S.Ct. 143

8. The Statute at issue in this case has no provision which re-

quires the State to first proceed against the party responsible for cre-

ating the polluting condition before seeking to hold landowners or

occupiers effected thereby responsible to climinate it. In this very

case, the DER resisted efforts to join the party responsible while at

the same time proceeding against the innocent Appellants. In re

National Wood Preservers, Inc., 64 D&C2d 78 (1974) at A-91).

20

(1915); Goldblatt vs. Town of Hempstead, 369 U.S. 590,

8 L.Ed.2d 130, 82 S.Ct. 987 (1962))

Nor, is this a case in which a State, through the ex-

ercise of its “police power”, orders a property owner to

destroy a portion of his property in order to preserve

other property. Miller vs. Schoene, 276 U.S. 272, 48 S.Ct.

246, 72 L.Ed. 568 (1928)°

It is also not a case in which a State, through the

exercise of its “police power”, imposes affirmative cost

obligations on a property owner in connection with some

business or other justifiable use by the property owner of

his property. See, Queenside Hills Realty Co., Inc. vs.

Saxl, 328 U.S. 80; 90 L.Ed. 1096 (1946); Atchison, To-

peka & Santa Fey R. Co. vs. Public Utilities Commis-

sion, 346 U.S. 346, 74 S.Ct. 92, 98 L.Ed. 51 (1953)!°; or

in which a limited fine, as distinguished from unlimited

clean-up costs, is imposed upon a property owner for the

negligent or criminal act of a third person, but which

could only have occurred because of the property own-

er’s use of its property or operation of. its business.

United States vs. General Motors Corporation, 403

F.Supp. 1151 (D. Conn. 1975); United States vs. Mara-

thon’ Pipe Line Co., 589 F.2d 1305 (7th Cir. 1978);

United States vs. Tex-Tow, Inc., 589 F.2d 1310 (7th Cir.

9. Even in Miller vs. Schoene, supra, the property owner was

reimbursed for the cost of removing and destroying the ornamental

red cedar trees which he had been ordered to destroy because of

rust disease.

10. In Queeenside Hills Realty, supra, the police power was

used to require a property owner to install a sprinkler system in a _

lodging house in accordance with a state law which required the in-

stallation of such systems in all multiple dwelling lodging houses.

There, the imposition of new costs was placed upon the property

owner in connection with his continued use of the property as a

lodging house renting it to boarders who should be protected from

the hazard of fire as much as possible. In Atchison, Topeka, Santa

Fey Ry Co. vs. Public Utilities Co., supra, the costs were imposed in

connection with the railroad’s continued use of the grade crossing

in question.

21

1978)'' In the present case, the findings of the Environ-

mental Hearing Boaid, affirmed on appeal, establish that

the condition was created by the unlawful activities of

Jacoby years before the business was purchased by the

Goldstein family, and that Wood, through the manage-

ment of the Goldstein family, has not discharged or

permitted the discharge of industrial wastes into the wa-

ters of the Commonwealth. Under these circumstances,

the polluting condition created before Wood acquired

possession of the property, occurs without its interven-

tion, is unrelated to its use of the property and will con-

tinue on from day to day, irrespective of its presence or

11. An examination of the various provisions of §311 of the

Federal Water Pollution Control Act (33 U.S.C.A. §1321), discussed

by the Court United States us. Tex-Tow, Inc., supra, as contrasted

with §316 of the State law in the present case, is instructive in

dealing with the issue of the oppressive nature of §316. The Federal

Water Pollution Control Act is considerably less oppressive in its op-

eration than §316 of the Pennsylvania Clean Streams Law here un-

der attack. Under the Federal Stctute, unlike §316 of the State law.

clean-up costs, which are unlimited, cannot be assessed against an

operator of a facility if the spill or discharge resulted from an act or

omission of a third party. (33 U.S.C.A. §1321(F); United States vs.

Tex-Tow, Inc., supra). On the other hand, the limited civil penalty

provisions of the Federal Act. permit a penalty to be assessed

against the operator of a facility even if it does result from the act or

omission of a third person. In that case, however, liability is based

on causation which is found to exist because the Defendant engages

in-an enterprise or activity that of necessity may result in spills,

irrespective of his use of all precautions. See United States us. Ter-

Tow, Inc., supra, 589 F.2d at page 1314; United States vs. Mara-

thon Pipe Line Co., supra, 589 F.2d at page 1309. Additionally, in

dealing with the limited civil penalty provision of the Federal Act.

the Defendant's culpability and his ability to pay a limited fine must

all be considered in determining the amount of the civil penalty

See, United States vs. Tex-Tow, Inc., 589 F.2d at page 1313. Under

$316 of the law, however, liability is unlimited, does not depend

upon on whether the activity, enterprise or use to which the land

owner or occupier puts his property might result in a risk of pollu-

tion and is not limited by his degree of culpability or ability to pay. it

simply rests upon mere ownership or occupancy of the property

itself.

22

absence from the property. More importantly, the Stat-

ute does not require any nexus between use and

landownership or occupancy before liability can be im-

posed.

This is not even a case involving an innocent own-

er’s forfeiture of property because of the criminal acts of

his Lessee. See Calero-Toledo vs. Pearson Yacht Leasing

Co, 416 U.S. 663, 40 L.Ed.2d 452, 94 S.Ct. 2080

(1974). '?

Finally, this is not a case in which a landowner or

occupier is assessed for improvements made in front of

the property occupied by him. Such assessments are

uniformly upheld only to the extent that special benefits

accrue to the property assessed. See 16A C.J.S. Consti-

tutional Law §661, pgs. 1035-1042 and particularly, at

pages 1037, 1038 and cases therein cited. In the present

case, no claim is made that removal of the pollutant will

benefit the Appellant who is a tenant of the surface land.

Rather, what is at stake in the present case is the

propriety of a State’s raw, naked right through the use of

its “police power” to impose on a land owner or occupier,

the affirmative obligation to eradicate, at unlimited

costs, a polluting condition, based on nothing more than

that land occupier’s status and geographical proximity to

the condition in question.

If the validity of this Statute is affirmed without fur-

ther consideration by this Court, it may signal legisla-

tures in other states desirous of attacking pollution prob-

lems, that they may now abandon previous statutory

enactments designed to strike an acceptable balance be-

tween accomplishing desireable environmental goals

and protecting the rights of private individuals, in favor

of expedient, but oppresive laws which eliminate any

consideration of such rights.

12. In the forfeiture case, the innocent owner's responsibility

is limited to the value of the property forfeited and his liability arises

out of the third party's use of the forfeited property with his consent.

In the present case, however, the owner or occupiers’ liability is un-

limited and unrelated to the use of the property.

23

The Pennsylvania Supreme Court has Misconstrued

Prior Holdings of this and Other Courts in Dismissing

Appellant’s Contention that the Statute is Unduly Op-

pressive

The decision by the Pennsylvania Supreme Court in

this case does not blend neatly with the past holdings of

this Court which dealt with police power legislation. Ap-

pellant’s belief that the Statute is “unduly oppressive”, is

founded upon a multi-faceted combination of factors not

present in the cases cited by the Pennsylvania Supreme

Court as precedents.

It is submitted that the combination of oppressive

features found in Section 316 are sufficient to overcome

any presumption concerning the constitutional validity

of this legislative enactment.

The Government is Not Merely Regulating Past or

Present “Use” of the Property by the Party to be Charged

With Liability, but Instead is Taking Resources from the

Most Expedient Source at Hand

As the Supreme Court of Pennsylvania has correctly

pointed out, reduction of property value due to regula-

tion as to use has to be complete before there is a “tak-

ing.” Hadacheck v. Sebastian, supra.; Pennsylvania

Coal Co. v. Mahon, 260 U.S. 393,43 S.Ct. 158, 67 L. Ed

322 (1922). Even when complete destruction of private

property used in an individual’s business enterprise is

reasonably necessary to protect the rest of the commu-

nity, the destruction of that property does not constitute

a compensable taking. Miller v. Schoene, supra.

If a complete loss of property can be justified for the

purpose of ensuring the safety of the community, does

this mean that there is no limit on the police power?

Even in Miller v. Schoene, supra, the owner of the of-

fending trees which were destroyed for the public good

was not required to pay for the cost of destroying or re-

moving them.

Appellant is not asked to change the method of its

24

wood preserving operation or limit its activities; nor is it

prohibited from putting its property to a more profitable

use because of zoning, or regulation such as was en-

countered in Penn Central Transportation Co. v. New

York, 438 U.S. 104, 98 S.Ct. 2646, 57 L. Ed. 2d 631

(1978), relied on so heavily by the Pennsylvania Court.

The “taking” in this case does not need to be found

through a complex analysis of whether or not the gov-

ernment is prohibiting some valuable use of property, or

is physically occupying it. Here, Appellant is being or-

dered to take affirmative action to eradicate pollution

present under the surface of property which it leases for

its business at enormous expense and without regard to

its use of that property.

The decisions cited by the Pennsylvania Court to

sustain the proposition that the police power can consti-

tutionally require the positive expenditure of funds in-

volve more than mere ownership or occupancy of prop-

erty, i.e. they deal with regulation of activity on the

property related to the use of that property.'* For that

reason, the property owner in those cases had the choice

of incurring the cost or ceasing the activity in question.

Appellant has no such choice between complying

with the Order or ceasing its activities. It has been or-

dered to eradicate a condition which will exist in the

ground waters whether or not Appellant continues to op-

erate its business as before. Additionally, the business

can be carried on with or without the existence of the

polluting condition under the ground.

Appellant’s use of the property leased from Rogers

has continually been confined to the surface of the land.

Appellant’s operation of its wood treatment facility was

made clean at the beginning of its operation, seven years

before the enactment of the present statute. How, then,

can the remedial legislation be connected to Appellant

Wood under the operation of the Goldsteins?

13. These cases are discussed at Footnote 10 above.

25

The State court has alsu cited modern cases impos-

ing liability on landowners for the negligent acts of third

persons. See, i.e., United Staies vs. General Motors Cor-

poration, 403 F.Supp. 1151 (D.Conn. 1975); United

States vs. Tex-Tow, Inc., 589 F.2d 1310 (7th Cir. 1978).

The distinguishing characteristics of those cases is that

the enterprise or activity in which those Defendants en-

gaged of necessity entailed the risk that pollution would

occur even though they took all precautions possible.

Additionally, those cases dealt with a statutory scheme

which imposed a limited fine, not unlimited clean-up

costs, and which considered the Defendant's ability to

pay and culpability in bringing about the polluting con-

dition in question. Those factors are all notably absent

from §316 which imposes unlimited clean-up costs on

blameless parties and without considering their ability to

pay or culpability. (See Footnote 11 above)

The Statute Imposes Strict Liability

Upon a Landowner or Occupier for the

Illegal Act of a Third Person Without any Requirement

on the

State to Proceed Against That Person

It is contrary to all notions of fair play that the State

was free under §316 to ignore Jacoby as the party re-

sponsible for creating the polluting condition. The Stat-

ute does not require the State to proceed against the

party responsible for creating a polluting condition be-

fore it seeks to impose liability on land owners or occupi-

ers effected by the pollution. In this very case it success-

fully resisted Jacoby’s joinder based on the statutory

scheme of prosecutorial responsibility set forth in the

Pennsylvania Clean Streams Law. (In re National Wood

Preservers, 64 D&C2d 78 (1974); A-91)

It was stipulated at the beginning of the hearings in

this case that the sole basis for proceeding against Appel-

26

lant Wood was the language of §316. No effort was made

to proceed against it as an actual polluter under various

provisions of the Clean Streams Law which deal with ac-

tion against polluters.

What Appellant Wood is confronted with, is a Stat-

ute denominated as civil by the Courts, supposedly im-

posing affirmative duties upon innocent landowners and

occupiers, regardless of fault, the enforcement of which

has all of the trappings of a criminal proceeding.'* The

government has been upheld in its statutory right under

§316 to pick and choose Defendants without the usual

right, generally present under modern rules of civil pro-

cedure, of permitting joinder of all parties who are re-

quired for a complete resolution of the matter. If the

matter is criminal, then the Statute must fall because it

punishes status without any act or mens rea require-

ment. Robinson vs. California, 370 U.S. 660, 82 S.Ct.

1417, 8 L.Ed2d 758 (1962).

The Strict Vicarious Liability

is Being Imposed Retroactively

It is not unreasonable to impose vicarious liability

upon a party for acts of persons under the dominion and

control of the party held responsible. It also may not be

unreasonable to impose liability retroactively for prior

acts of the very party held liable, or persons subject to

their control. Barnes & Tucker Co. vs. Pennsylvania,

472 Pa. 115, 371 A.2d 461 (1977)

14. Section G02 of the Act (35 P.S. §691.602) provides for stern

lines and jail sentences on a progressively more severe basis. The

full text of the Act is reproduced in the Appendix at A-113. This sec-

tion of the law provides that every day of continued violation of any

Order of the Department shall be a separate offense. [tis not hard to

imagine how fines and jail sentences could Cumulate to an onerous

penalty. In summary, therefore, §316 permits retroactive applica:

tion of the penalty provision of §602 to punish a party solely on the

basis of that party's status and for the acts of a third person conmit-

ted vears before the Statute came into existence and for a status

which was also acquired years before the Statute was enacted

27

However, it is beyond the pale of reason to impose

retroactive liability for the acts of third persons, upon a

party who neither controls such third persons nor had

knowledge of the true nature of their acts, based upon a

Statute passed by a legislature fourteen (14) years after

the occurrence of such acts. United States vs. Johns-

Manville Corporation, 245 F.Supp. 74 (E.D. Penna.

1965); Usery vs. Turner Elkhorn Mining Co., 428 U.S.

1, 49 L.Ed.2d 752, 96 S.Ct. 2882 (1976). This is pre-

cisely what §316 permits and what occurred in this case.

Recent cases have allowed considerable latitude in

permitting retroactive application of regulatory legisla-

tion, but only where the cost of the remedy for a problem

is allocated to the person charged with the liability un-

der the Statute as an “actual, measurable cost of his

business”. Usery vs. Turner Elkhorn Mining Co., supra.

A more recent decision of this Court would indicate that

retroactivity of legislation is not a factor which can be

simply ignored. Allied Structural Steel vs. Spannaus,

438 U.S. 234, 98 S.Ct. 2716, 57 L.Ed.2d 727 (1978).

Retroactive liability for the acts of third persons un-

der §316 does not require that the polluting condition

arise in the course of the landowner or occupier’s busi-

ness and in this respect, does not come under the hold-

ing of Usery vs. Turner Elkhorn Mining co., supra.

Similarly, this case is not one in which retroactive

legislation should be justified based upon an “emer-

gency”. Lichter vs. United States, 334 U.S. 742, 68 S.Ct.

1294, 92 L.Ed. 1694 (1948).

This Statute requires a person who went into pos-

session of property seven (7) years before it was enacted

to clean up a condition created by the illegal activities of

a third party it did not control and carried out by that

party fourteen (14) years before the Statute was enacted.

It passes the bounds of reasonableness under the due

process provisions of the 14th Amendment.

28

The Statute Impairs the Contractual

Expectations of Tenants and

Past Purchasers of Property

One of the serious oppressive features of §316 is

that it tends to introduce new dangers and pitfalls into

common transactions such as buying or leasing prop-

erty. The normal expectation of a purchaser or lessee of

surface rights to property is that he will get good title or

the right to use property for legal purposes.

What can be expected from this statute are vari-

ations of what happened to Wood in this case. The State,

wishing to have instant gratification, will attack the

easiest party to find, be it record owner or the person

who is present on the land, and use quasi-criminal sanc-

tions to compel a recovery for the purpose of abating pol-

luting conditions.

Instead of proper and cooperative efforts with gov-

ernmental agencies to find and correct polluting condi-

tions, owners or occupiers who discover such conditions,

not created by themselves, will be encouraged to conceal

the conditions and pass them off to unsuspecting buy-

ers.

The liability imposed by the Statute is imposed

equally upon owners and occupiers. The definitions sec-

tion of the Statute does not define “occupier”. Since no

warning is provided to would-be renters of surface rights

to property that they will be required to correct polluting

conditions existing under the land, created by a third

party, any enforcement of strict liability against such a

person impairs that person's rental contract with his

landlord. Even if upheld as against the owner of prop-

erty, absent any requirement of culpability or negli-

gence, the Statute unfairly reallocates, even if temporar-

ily, the responsibility for pollution which was created

prior to the Leasee’s occupancy. Allied Structural Steel

Co. vs. Spannous, supra.

No effort is made to classify occupiers on the basis

of the duration of their leasehold interest. A tenant with

29

a six (6) month Lease is subject to the same responsibil-

ity as a landowner who has owned the property for

twenty (20) years.

The Statute Gives Unlimited Discretion

to the Law Enforcement Agency with Respect

to What May be Required by Way of Compliance is Sub-

ject to Abuse

The orders in this case are open ended in that com-

pliance is conditioned upon DER’s “acceptance” of plans

and specifications of work to be done by Appellant, with-

out any indication as to what standard, if any, will gov-

ern the acceptance. Order of Environmental Hearing

Board, July 30, 1976. (A-87)

“It is no answer to say that the power would not be

arbitrarily or unreasonably exercised. It must be judged

by what can be done under it, not by what may be done

under it.” In Curtin vs. Benson, 222 U.S. 78, 32 S.Ct.

31, 56 L.Ed.102 (1911).

Orders in the form upheld by the Court, place Ap-

pellants at the mercy of DER and in a position of corpo-

rate involuntary servitude. At this writing, almost seven

(7) years, to the day, after the issuance of the original

DER Orders, and after an expenditure of approximately

One Hundred and Eighty Thousand ($180,000.00) Dol-

lars on the pollution problem by the Federal govern-

ment, there exists no concrete answer as to how much

expense and effort by Appellant will be required in

complying with the DER orders as modified by the Envi-

ronmental Hearing Board.'? It would appear that the

DER is free to determine whatever it wishes with regard

to the level of compliance expected, without limit.

In addition, DER is in a position to force Appellants

to experiment on methods to solve the problem. The ex-

perimental activity, if determined by Board fiat to be

“feasible”, will mean that Wood will be expending funds

to devise new methods of dealing with the problem

15. See Appendix at A-121-136.

30

which more properly should be borne by the govern-

ment.

The Selective Enforcement Techniques Being Used in

the Enforcement of this Statute, as Illustrated in This

Case are Onerous and Oppressive and May Well Rise to

a Level of Denial of Equal Protection Under the Law

In its Adjudication, the Board found that the pollut-

ing condition not only exists under the property owned

or occupied by other parties to the litigation, Gum and

Shell, but that it also existed under the property owned

and occupied by several other parties, including the

Commonwealth, Haverford township and other persons,

the identification of whom were not disclosed in that

proceeding. The Board also found that the participation

of such landowners or occupiers was necessary to com-

plete the removal program. Finally, the Board held that

as applied to Appellant and other parties then before 11,

Section 316 could require them to correct a polluting

condition “only on the land, which is owned or occupied

by such person or entity and that it would be “unconsti-

tutional to require the Appellant to take action outside

his or its land”.

The Commonwealth Court and the Pennsylvania

Supreme Court have, by silence, affirmed these find-

ings. They have also removed Shell and Gum from these

proceedings. In essence, Wood, together with Rogers,

will be required to attempt to remove a polluting condi-

tion under their property, which cannot be removed

without the cooperation of other landowners or occupi-

ers, who by the lower Court’s decision, cannot be

proceeded against to give such cooperation. Under these

circumstances, requiring it to expend the funds neces-

sary to attempt to remove the pollutant, would be a vain

and wasteful act.

31

CONCLUSION

For all of the foregoing reasons, it is respectfully re-

quested that this Court note probable jurisdiction in this

matter to review and reverse the Order of the Supreme

Court of Pennsylvania.

FELL, SPALDING, GOFF & RUBIN

BY:

STEPHEN R. BOLDEN, ESQUIRE

MICHAEL S. LUBLINE, ESQUIRE

ALEXANDER N. RUBIN, JR., ESQUIRE

1800 Penn Mutual Tower

510 Walnut Street

Philadelphia, Pennsylvania 19106

(2735925-8300