Opinion
EHB 2022-038-CP-B
12-04-2023
COMMONWEALTH OF PENNSYLVANIA, DEPARTMENT OF ENVIRONMENTAL PROTECTION v. RANDY J. SPENCER
DEP, General Law Division: Attention: Maria Tolentino For the Commonwealth of PA, DEP: Carl D. Ballard, Esquire Michael A. Braymer, Esquire Kayla A. Despenes, Esquire Jennifer N. McDonough For Defendant: Randy J. Spencer, Pro se
DEP, General Law Division: Attention: Maria Tolentino
For the Commonwealth of PA, DEP: Carl D. Ballard, Esquire Michael A. Braymer, Esquire Kayla A. Despenes, Esquire Jennifer N. McDonough
For Defendant: Randy J. Spencer, Pro se
OPINION AND ORDER ON THE DEPARTMENT'S MOTION FOR SANCTIONS
Steven C. Beckman Chief Judge
Synopsis
The Board grants in part the Department's motion for sanctions by entering a default judgment as to the liability of the defendant but reserves its ruling regarding the amount of civil penalties until an evidentiary hearing is held.
OPINION
The present matter before the Environmental Hearing Board ("Board") is a Complaint filed by the Department of Environmental Protection ("the Department") requesting the Board to asses $123,459.80 in civil penalties against the Defendant, Randy J. Spencer ("Mr. Spencer). The Complaint follows our earlier resolution of Mr. Spencer's appeal of the Department's Administrative Order issued on September 30, 2019 ("September 2019 Order"). Mr. Spencer filed his notice of appeal of the September 2019 Order on October 31, 2019 and the appeal was docketed at EHB No. 2019-121-B ("2019 Appeal"). The Department's September 2019 Order alleged violations of the Clean Streams Law and the Dam Safety and Encroachments Act and required Mr. Spencer to, among other things, cease placement of campers and vehicles in the floodway on two parcels he owns on Lower Twomile Run in Cranberry Township, Venango County (Tax Map Parcel Numbers 08-01-66 and 08-01-67); not place any material substance or object in the floodway that will diminish the course, cross-section, or current of the floodway without first obtaining the written approval of the Department; and within 30 days, remove from the floodway all of the items, campers and vehicles located on his property. The Board granted the Department's motion for summary judgment in the 2019 Appeal when Mr. Spencer failed to file a response to the motion and, in addition, found that there was no genuine dispute of material facts. Spencer v. DEP, 2020 EHB 416, 420. Mr. Spencer did not appeal the Board's ruling in the 2019 Appeal.
On June 7, 2022, the Department filed a Complaint for Civil Penalties ("the Complaint") requesting that the Board assess a civil penalty pursuant to Section 605 of the Clean Streams Law 35 P.S. § 691.605, 25 Pa Code§ 1021.71 and Section 21 of the Dam Safety and Encroachments Act, 32 P.S. § 693.21, in the amount of $123,459.80. The Board received Mr. Spencer's Answer to the Complaint ("the Answer") on July 12, 2022 and issued a Prehearing Order No. 2, setting deadlines for discovery and dispositive motions. On January 30, 2023, the Board granted the Department's motion to extend discovery after Mr. Spencer failed to respond to the Department's motion asserting that Mr. Spencer had not responded to the Department's written discovery or served any discovery upon the Department. On March 9, 2023, the Board granted another extension of discovery and dispositive motions after receiving a joint request from the Parties to extend the prehearing deadlines. On April 14, 2023, the Department filed a Motion to Compel Discovery Responses after Mr. Spencer again failed to fully respond to the Department's discovery requests. When we received no response to the Motion to Compel from Mr. Spencer, the Board granted the Department's motion on May 8, 2023, and ordered Mr. Spencer to complete the answers to the Department's first set of interrogatories and to produce all documents related to the Department's first request for production of documents, on or before May 22, 2023. On September 13, 2023, the Board granted the Department's Motion to Set Deadline for Filing Sanctions Motion. The Department filed its Motion for Sanctions ("the Motion") on October 13, 2023. Mr. Spencer has not responded to the Motion. The Board is now ready to rule on the Department's Motion.
In its Motion, pursuant to Rule 161 of the Board's Rules of Practice and Procedure, the Department asks the Board to enter an adjudication against Mr. Spencer and assess a civil penalty in the amount of $123,459.80 as a sanction in the form of default judgment. The Department argues that it is within the Board's authority to render a default judgment in this instance on both liability and the assessment of civil penalties and invokes the Board's rules on sanctions and default judgment, as well as Pennsylvania's Rules of Civil Procedure in support of its position. We will address each of these arguments in turn.
The Board's rule on sanctions provides that:
[t]he Board may impose sanctions upon a party for failure to abide by a Board order or Board rule of practice and procedure. The sanctions may include dismissing an appeal, entering adjudication against the offending party, precluding introduction of evidence or documents not disclosed, barring the use of witnesses not disclosed, or other appropriate sanctions including those permitted under Pa.R.C.P. 4019 (relating to sanctions regarding discovery matters).25 Pa. Code § 1021.161.
As the Department points out in its Memorandum of Law in Support of its Motion ("Memorandum"), the Board enjoys broad authority to impose sanctions upon parties for violating its rules and orders. Swistock, Jr. v. DEP, 2006 EHB 398, 400. The Department cites several Board cases where the Board has dismissed appeals as a sanction when a party failed to abide by Board rules and orders, including violations that centered around a party's failure to respond to discovery requests. For example, in Swistock, Jr. v. DEP, 2006 EHB 398, the Board dismissed an appeal as a sanction where the appellant failed to respond to discovery requests and abide by Board orders. In reviewing the history of the appellant's noncompliance with Board rules, the Board found that "[t]he Appellant engaged in a pattern of behavior which amounts to a steadfast refusal to participate in the process." Swistock, Jr. v. DEP, 2006 EHB at 401. Other Board cases cited by the Department are consistent with the holding in Swistock, Jr. and support the Department's assertion that Board rules and Board case law show that "[t]he Board has consistently imposed sanctions, including those as severe as dismissal, where a party has completely failed to comply with the rules of discovery or abide by Board orders." (Memorandum at 7).
Additionally, the Department advances its argument that it is appropriate for the Board to enter a default judgment as to both liability and assess civil penalties in this case in its discussion of the Pennsylvania Rules of Civil Procedure pertaining to sanctions. The Board's rule on sanctions explicitly provide that "sanctions may include [… ] appropriate sanctions including those permitted under Pa.R.C.P. 4019 (relating to sanctions regarding discovery matters)." 25 Pa. Code § 1021.161. Under our rules, it is appropriate for us to consider what guidance Pa.R.C.P. 4019 can provide in this instance where it is clear that Mr. Spencer violated both our discovery rules and our orders respecting discovery. Pa.R.C.P. 4019 authorizes sanctions against a party that fails to comply with discovery rules, including instances where a party fails to answer interrogatories, fails to respond to requests for production of documents, and when a party fails to obey a court order respecting discovery. Pa. R.C.P. 4019(a)(1)(i), (vii), (viii). A court acting under Pa.R.C.P. 4019 may also enter an order for default judgment against a party that violates discovery rules. Pa.R.C.P. 4019(c)(3). The Pennsylvania Supreme Court has stated "where a court imposes a judgment by default against a defendant as a sanction for failure to respond adequately to discovery requests, it is acting well within its discretion and the latitude given it by our Rules of Civil Procedure to enter 'a judgment by default against the disobedient party.'" Fox v. Gabler, 626 A.2d 1141, 1143 (Pa. 1993) (citing Pa. R.C.P. 4019(c)(3)).
The Department's Memorandum cites numerous cases from Pennsylvania's appellate courts that support the proposition that trial courts have broad authority to impose default judgment as a sanction when a party violates the rules of discovery and/or court orders regarding discovery. The Department details the Commonwealth Court's decision in Redek Auto Service, where the Court affirmed an administrative judge's entry of default judgment against the Pennsylvania Department of Transportation ("DOT") for its failure to respond to the appellee's request for production. Com. v. Redek Auto Serv., 458 A.2d 614, 614 (Pa. Cmwlth. 1983). It is notable in Redek that the appellee did not attempt to resolve the discovery dispute by prompting DOT to provide the requested discovery after discovery went unanswered or through a request to the court for the administrative law judge to compel discovery. Redek Auto Serv., 458 A.2d at 615. Instead, the appellee's counsel deferred making any motion for sanctions under Pa.R.C.P. 4019 until the day of the hearing. Id. After the administrative law judge afforded DOT the opportunity to present evidence explaining its nonresponse at the hearing, which DOT did not address, the judge entered default judgment against DOT. Id. The Commonwealth Court affirmed that decision, holding that "we cannot conclude that Administrative Judge Papadakos abused his discretion in settling upon the sanction which he here imposed, expressing his concern and responsibility for the prompt disposition of matters before the court." Id.
The Department points out that in this matter, on multiple occasions, it attempted to obtain responses from Mr. Spencer, including seeking extensions for discovery on two occasions, and moved to compel responses from Mr. Spencer before ultimately filing its Motion for Sanctions.
The Department's invocation of 25 Pa. Code § 1021.161 and Pa.R.C.P. 4019 in conjunction with the cited legal precedents related to those rules, offers support for the proposition that the Board has broad authority to issue a default judgment in this matter. However, none of the cases the Department cites in support of its argument involve our factual scenario where the case was initiated by an agency by a complaint for civil penalties. The Department attempts to bridge that gap by turning to the Board's rule on default judgment, the history behind its adoption, and the change in Board decisions following its adoption. The Department emphasizes that "the Board's authority to enter a full adjudication against Mr. Spencer as a sanction is not foreclosed or otherwise limited simply because this case was initiated by a complaint for civil penalties." (Memorandum at 9).
The Board's rule on default judgment authorizes the Board to enter judgment as to both liability and the assessment of the amount of civil penalties without a hearing. 25 Pa. Code § 1021.76a. The case of DEP v. Wolf, 2010 EHB 611 was the first time the Board considered a motion filed under Section 1021.76a. As Judge Mather explained "prior to the promulgation of Section 1021.76a the Board questioned whether it had the authority to enter default judgment as to both liability and assess the amount of civil penalties without a hearing." Wolf, 2010 EHB at 614. Section 1021.76a made clear that the Board does have the authority to assess civil penalties in the amount of the plaintiffs claim without holding a hearing. Since our decision in Wolf there have been numerous instances where the Board has granted the Department's motion for default judgment and assessed the civil penalties without conducting a hearing. See, DEP v. Froehlich, 2022 EHB 309, 312; DEP v. Jackson Geothermal HVAC and Drilling, LLC, 2016 EHB 397, 398; DEP v. Turnbaugh, 2014 EHB 124, 125; DEP v. Comp, 2012 EHB 343, 344; DEP v. White Oak Reserve Ltd. P'ship, 2012 EHB 75, 76-77; DEP v. Danfelt, 2011 EHB 839, 842; DEP v. Wolf, 2010 EHB 611, 613-15. However, each of these cases involved an important factual distinction from the matter before us. The defendants in each of the above cited proceedings never filed an answer to the Department's complaint for civil penalties, whereas in this case, Mr. Spencer did file an answer. Section 1021.76a(a) provides that "[t]he Board, on motion of the plaintiff, may enter default judgment against the defendant for failure to file within the required time an answer to a complaint that contains a notice to defend. 25 Pa. Code § 1021.76a(a) (emphasis added). Our rules make clear that we may enter a default judgment specifically when the defendant fails to respond to a complaint, which is not the case here where Mr. Spencer filed his Answer with the Board. Additionally, Section 1021.76a further provides that, "[w]hen default judgment is entered in a matter involving a complaint for civil penalties, the Board may assess civil penalties in the amount of the plaintiffs claim or may assess the amount of the penalty following an evidentiary hearing, as directed by the Board, at which the issues shall be limited to the amount of the civil penalties." 25 Pa. Code § 1021.76a(d) (emphasis added). Therefore, even when a defendant fails to respond to a complaint for civil penalties, the Board has the discretion to assess the civil penalties with or without a hearing.
Although Mr. Spencer's participation in this matter has been lackluster at best, he did file an answer to the Complaint demonstrating a modicum of interest in pursuing his defense. In light of the wording in Section 1021.76a that states that we may enter default judgment when a defendant fails to file an answer to a complaint, we find that we cannot rely on that section as a basis for a default judgment under the specific facts of this case. It is clear that we do have the authority to issue a default judgment against Mr. Spencer under our rule on sanctions found at 25 Pa. Code § 1021.161. Our review of the facts of this case convinces us that Mr. Spencer should be sanctioned for his failure to comply with the Department's discovery requests and related Board orders. Therefore, we grant a default judgment against Mr. Spencer as to his liability for the violations identified in the Department's Complaint. However, we decline to grant the Department's Motion requesting a default judgment as to the amount of the civil penalty. The Department is seeking a significant penalty against an individual and we think that the correct course of action is to hold an evidentiary hearing to assess the reasonableness of the Department's civil penalties. While the Department has done a thorough job in supporting the basis for the amount of civil penalties by the averments in the Complaint, the amount remains a suggestion, and the suggestion is purely advisory. DEP v. Keck, 2019 EHB 322, 332; DEP v. Seligman, 2014 EHB 755, 763. "The guidance the Department uses in determining a suggested civil penalty is not binding on the Board. United Refining Company v. DEP, 2006 EHB 846, 849-50. The Board's responsibility is to assess a penalty based upon applicable statutory criteria, any applicable regulatory criteria, and our own precedent." Keck, 2019 EHB at 332; (citing, DEP v. EQT Production Company, 2017 EHB 435, 480).
We will proceed to schedule an evidentiary hearing in this matter. The hearing will be limited to testimony and evidence concerning the amount of civil penalties to award in this case and will not extend to issues regarding liability.
Therefore, we issue the following Order:
ORDER
AND NOW, this 4th day of December, 2023, following review of the Department's Motion for Sanctions and having received no response from Mr. Spencer, it is hereby ORDERED as follows:
1. The Department's Motion for Sanctions in the form of default judgment as to the liability of Mr. Spencer is granted.
2. The Department's Motion for Sanctions as to the assessment of civil penalties is denied. The Board will schedule a hearing to address the reasonableness of the amount of the civil penalty.
BERNARD A. LABUSKES, JR. Judge SARAH L. CLARK Judge