City of Lancaster v. Department of Environmental Resources

WATERS, Chairman, On November 23, 1977, the Department of Environmental Resources (DER) issued an order which [160] prohibited appellant, City of Lancaster, hereinafter “City,” from allowing further connections to the municipal sewage treatment plant, which the DER had determined to be hydraulically overloaded. Appellant moved for summary judgment on two grounds: first, that under the doctrine of Federal preemption the DER and this board are bound by the determination of plant capacity contained in appellant’s National Pollutant Discharge Elimination System (NPDES) permit; second, that regulation 94.21(3) prohibiting sewer connection “except as approved by the department” is unreasonable and invalid in light of regulations governing the imposition of sewer bans. The second issue raised by appellant has also been raised in a number of recent appeals from “prohibitions” issued by the department.1 Oral argument on appellant’s motion was held March 6, 1978. We do not agree with appellant’s first contention, but as we do agree with appellant’s second contention, we deem it unnecessary to discuss the first except to say that the dispute as to plant capacity, to the extent that it remains an issue, will have to be resolved after hearing at which the capacity set forth in the NPDES permit may be offered as evidence.2 Although disputed, we will assume, for the [161] purpose of disposing of the motion before us, that the DER’s figures are accurate and that the permit limitation is 9.49 million gallons per day (mgd). Indeed, appellant does not deny that this figure has consistently been exceeded. The aforesaid prohibition order was issued pursuant to a regulation promulgated by the Environmental Quality Board and adopted on October 25, 1977. The regulation in question, 25 Pa. Code §94.21, 7 Pa. Bull. 1380 (1977), provides among other things that if the department determines that either the hydraulic or organic load on the sewerage facilities is exceeding the capacity provided in the permit, then the permittee shall:3 “(3) Prohibit new extensions of or connections to the sewer system tributary to the overloaded sewerage facilities except as approved by the Department.” [162] It is clear that the DER can employ the above regulation to stop further sewer connections without the necessity of imposing a sewer ban which is provided for under Regulation 25 Pa. Code §94.33. In order to impose a sewer ban, the law provides that: “(b) The Department will publish the order imposing the ban in one newspaper of general circulation in the area affected by the ban beginning no later than 48 hours after the imposition of the ban or as soon thereafter as publication schedules allow for a period of two consecutive weeks. The Department will publish the order imposing the ban, following imposition of the ban, once in the Pennsylvania Bulletin, provided, however, that failure or delay in so publishing by the Department shall not in any way affect the date of imposition or validity of the ban. “(c) The Department, at the time of imposition of the ban, will give notice of the ban to any governmental entity which issues building permits in the area of the ban. No building permit which may result in a connection to the sewer system or increase the waste load to that system shall be issued by such governmental entity after the ban is effective; provided, however, that failure or delay in such notification shall not, in any way, affect the date of imposition or validity of the ban.” We wonder why the DER would ever bother to impose a sewer ban when the same ends could be [163] reached by simply imposing a prohibition? No satisfactory answer has been forthcoming. Intervenor, Home Builders Association of Lancaster County, has raised a question about the constitutionality of the DER’s action under the due process clause. It is true that section 1921-A of the Administrative Code of April 29, 1929, P.L. 177, as amended, 71 P.S. §510-21, does require that no DER action shall be final as to a person “. . . until such person has had the opportunity to appeal such action to the Environmental Hearing Board.” (Emphasis supplied.) Clearly, the due process requirements are met when intervenor came before the board to contest the DER’s action. This opportunity was immediately available: Com. v. Borough of Carlisle, 16 Pa. Commonwealth Ct. 341, 330 A. 2d 293 (1974); and Com. v. Derry Township, 10 Pa. Commonwealth Ct. 619, 134 A. 2d 868 (1973). The real problem that we find with §94.21(3) is the fact that it, in effect, delegates unlimited discretion to the department to do what it must do according to articulated standards under §94.31 and other regulations contained in Chapter 94. Regulation 94.21(3) therefore appears to us to be unreasonable and invalid on its face. If the department determines that an organic or hydraulic overload exists, it may impose the sewer ban under §94.31 or, it appears, it may prohibit connections except as approved by it under §94.21(3). In order to impose a ban under §94.31 the department must find that one or more of thrée conditions exist.4 [164] Under §94.21(3), there are no guidelines for the imposition of a prohibition other than the existence of the same hydraulic overload that is an occasion for the imposition of a ban under §94.31. Thus, there is no discernable basis for an affected party to seek redress for an arbitrary decision. If the DER decides to lift or not to lift a prohibition, to grant or not grant an exception, a party is in the position of not knowing what, if anything, can be done to insure some relief. No doubt the board could simply read the regulations together and construe §94.21 as incorporating the provisions of §94.31, §94.55 and §94.56. This, however, was clearly not the intention of the Environmental Quality Board, and we will not construe a regulation in a manner we know was not intended. Secondly, we could write in limitations as we were forced to do in developing case law around the sewer ban orders issued prior to the promulgation of these regulations, incorporating what we deemed to be the minimal requirements to pass the test of reasonableness: [165] Com. v. Borough of Carlisle, 16 Pa. Commonwealth Ct. 341 (1974), supra; Com. v. East Pennsboro Township, EHB Docket no. 73-287, aff'd 18 Pa. Commonwealth Ct. 58, 334 A. 2d 798 (1975); Com. v. Bitner, EHB Docket no. 73-154-W, issued December 12, 1973. We are not so disposed. The DER argues that a “prohibition”as opposed to a “ban” gives it more flexibility to approve connections under certain conditions such as an agreed-upon reduction of flow. However, in response to questions at oral argument as to how the DER would exercise its discretion in considering requests for exceptions to a “prohibition,” the considerations stated seemed to be the same as those set forth for modification and removal of a ban under Regulations 94.41 and 94.42. After the imposition of a sewer ban, there are specific provisions for modifications or removal thereof.5 One such [166] provision permits the DER to lift the ban if steps have been taken which have resulted in “the reduction of the actual loading to less than the capacity provided in the permit....” We note that there is no similar provision for lifting a “prohibition.” Further, we note that a sewer ban may be modified if it appears that the actual capacity of the plant is greater than indicated on the permit and steps are being taken for an amendment to the permit. Again, there is no such provision extended to cover a party foreclosed by a prohibition under §94.21 from connecting to a sewer system. Finally, a ban may be modified where there is no danger to the public health and there is a “public need” for the proposed new connections coupled with a program for reduction of the overload. No related provision applies to a sewer connection prohibition. There is even a priority system for allowing such modifications of sewer bans.6 The most glaring shortcoming in §94.21 is the fact that it provides for no exception — not even the standard ones where a [167] building permit has previously been obtained or where the new source is on the same property, replacing an old one.7 It is now beyond dispute that in order for a rule or regulation promulgated by an administrative agency to be valid and enforceable, it must be reasonable: Erie Lighting Co. v. Pa. Public Utility Commission, 131 Pa. Superior Ct. 190, 198 Atl. 901 (1938). In Jenkins Unemployment Comp. Case, 162 Pa. Superior Ct. 49, 56 A. 2d 686 (1948), the Superior Court, in a per curiam opinion, said: “The exercise by an administrative agency of its rule-making function is however subject to various limitations arising out of the fact that the authority is a delegated legislative power, and one indispensable requirement is that the regulation shall be reasonable. 42 Am. Jur. ‘Public Administrative Law,’ §100.” The authority to review regulations to determine their reasonableness arises not from any specific constitutional or statutory provision, but rather from the inherent review power of courts: Penn Anthracite Min. Co. v. Delaware & H. R. Corp., 16 F. Supp. 732 (M.D. Pa. 1936), aff'd 91 F. 2d 634 (3d Cir. 1937), cert. denied 58 S. Ct. 283. This is well stated in 1 P.L.E. 348, §84. “Generally, the determination of an administrative officer or body is subject to review to ascertain whether the action taken is arbitrary, unreasonable, capricious [168] or unlawful, since the courts exercise a supervisory capacity to protect parties from an arbitrary and capricious exercise of authority.”8 In order to be valid, a rule or regulation should be uniform in operation: Com. Tr. Co. v. First Nat. Bk. of New Kensington, 84 D. & C. 421 (1953). It should be reasonable: Pa. R. Co. v. Driscoll, 336 Pa. 310, 9 A. 2d 621 (1939); Phila. v. Pa. P.U.C., 164 Pa. Superior Ct. 96, 63 A. 2d 391 (1949); and not arbitrary or violative of a statute: Robeson v. Phila. Tax Review Bd., 13 Pa. Commonwealth Ct. 513, 319 A. 2d 201 (1974); or violative of any constitutional provision: Bortz Coal Co. v. DER, 7 Pa. Commonwealth Ct. 362, 299 A. 2d 670 (1973). We are unable to say that 25 Pa. Code §94.21(3) is reasonable when read in the light of §94.31 and the other sewer ban provisions. We believe the regulation in question can stand if it is construed as a method of giving notice to a municipality or sewer authority that the DER believes it to have a hydraulic overload. If the party notified agrees with this determination it can then take immediate steps to reduce the load and, concurring in the findings of the DER, it can properly prohibit further sewer connections. If, however, as in this case, there is a dispute about the applicability of a prohibition, it can refuse to prohibit further connections unless or until the DER issues a sewer [169] ban pursuant to its regulations or takes other legal means9 to accomplish that end. As the DER’s letter of November 23, 1977, contained a direction to appellant to comply with all of the requirements of §94.21, including the filing of a plan to reduce hydraulic overload, the granting of appellant’s motion for summary judgment on the question of the validity of §94.21(3), does not entirely dispose of this appeal. To the extent that a dispute remains as to appellant’s obligations under §94.21(1) and (2), the appeal is continued and will be scheduled for hearing. ORDER And now, April 10,1978, after argument and due consideration of a motion for summary judgment filed on behalf of appellants in the above-captioned matters, the same is hereby granted. Footnotes [1] Williamsport Area Sanitary Authority et al. v. Commonwealth of Pennsylvania, Department of Environmental Resources, EHB Docket no. 78-011-W. [2] The sewage plant permit is alleged to provide for a capacity of 9.49 million gallons per day, while the plant, which is connected to the storm sewer system, actually has been receiving as much as 11.8 mgd. There is a serious factual dispute as to whether the permit does have such a limitation, inasmuch as the NPDES certification for the plant is for 11.8 mgd under permit no. PA 0026719. [3] 25 Pa. Code, §94.21 provides: “If the annual report establishes or if the Department determines that either the hydraulic or organic load on the sewerage facilities is exceeding the capacity approved by the permit, the permittee shall comply with the following: “(1) Immediately begin work for the planning, design, financing, construction, and operation of such sewerage facilities as may be necessary to provide required capacities to meet anticipated demands for a reasonable time in the future and resulting in a project that is consistent with the applicable official plans approved pursuant to the Pennsylvania Sewage Facilities Act (35 P.S. §§750.1-750.20) and the rules and regulations promulgated thereunder at Chapter 71 of this Title (relating to administration of the sewage facilities program) and consistent with the requirements of the Department and the Federal Government regarding area-wide planning and joint or combined sewerage facilities. “(2) Submit to the Regional Office, for the review and approval of the Department, a written plan, to be submitted with the annual report or within 90 days of notification of the Department’s determination of overload, setting forth the actions to be taken to reduce the overload and to provide the needed [162] additional capacity, including, but not limited to, a schedule showing the dates each step toward compliance with paragraph (1) of this section shall be completed. “(3) Prohibit new extensions of or connections to the sewer system tributary to the overloaded sewerage facilities except as approved by the Department.” [4] 25 Pa. Code, §94.31 provides: “A ban on connections will be imposed by the Department whenever the Department determines that an organic or [164] hydraulic overload exists at the plant or any portion of the sanitary sewer system or that the discharge from the plant causes actual or potential pollution of the waters of the Commonwealth and, in addition, that one or more of the following conditions prevail: “(1) The Department determines that a ban is necessary to prevent or alleviate endangerment of public health. “(2) The permittee has failed to submit a satisfactory plan or has failed to implement the program as required by §94.21 of this Title (relating to existing overload). “(3) The failure of the permittee to provide facilities to prevent an organic or hydraulic overload was not caused soley by the unavailability of Federal construction grants under section 201 of the Federal Water Pollution Control Act (33 U.S.C. §1281) for which the permittee has applied and remains eligible.” [5] 25 Pa. Code, §94.41 provides: “A ban may be modified or removed by the Department, in the exercise of its discretion, in accordance with the following conditions: “(1) If the permittee has demonstrated that steps have been taken which have resulted in the reduction of the actual loading to less than the capacity provided in the permit, the ban may be modified or removed to allow connections up to the permitted capacity. “(2) If it is affirmatively demonstrated, through the submission by the permittee and approval by the Department of an application for an amendment to the permit, that the actual capacity of the plant or the sanitary sewer system or any part thereof, or both, is in excess of the. capacity provided in the permit and is sufficient to prevent an overload until additional capacity is made available, the ban may be modified or removed to allow connections up to the new capacity. “(3) If the permittee has demonstrated that steps have been taken which have resulted in the reduction of the overload and that public health will not be endangered and that downstream [166] uses will not be adversely affected, the ban may be modified to allow for limited approval of connections for the elimination of public health hazards, the elimination of pollution, or the connection of facilities of public need, provided that the program for the reduction of the overload continues in a manner which will result in the overall reduction of overload.” [6] 25 Pa. Code, §94.42 provides: “The Department will not modify or remove a ban if the projected number of new connections may exceed the available capacity if the ban is modified or removed unless the person or municipality upon whom the ban is imposed presents a program, acceptable to the Department, for limited approval of connections in a manner which will prevent further overload. This program shall give priority to connections in the following order: [167] “(1) the ehmination of public health hazards; “(2) the elimination of pollution; and “(3) the connection of facilities of public need.” [7] Both of these exceptions are now specifically provided for in the case of sewer bans under the regulations at §94.55 and §94.56. [8] The discussion on Pa. Administrative Law goes on to state: “ . . . The courts usually will consider only the questions of illegal or arbitrary action, and they will not interfere with the administrative determination unless the administrative officer or body has acted arbitrarily, capriciously, unreasonably, or unlawfully.” [9] Nothing we say here could prevent the DER from seeking an injunction to prohibit sewer connections.