Tire Jockey Serv. V. Com., Dep

• Decision Date: 20 February 2007
• Citation: 915 A.2d 1165
• Parties: TIRE JOCKEY SERVICE, INC., Appellee, v. COMMONWEALTH of Pennsylvania, DEPARTMENT OF ENVIRONMENTAL PROTECTION, Appellant.
• Court: Pennsylvania Supreme Court

915 A.2d 1165

TIRE JOCKEY SERVICE, INC., Appellee, v. COMMONWEALTH of Pennsylvania, DEPARTMENT OF ENVIRONMENTAL PROTECTION, Appellant.

Supreme Court of Pennsylvania.

Argued April 11, 2005.

Decided February 20, 2007.

Anderson Lee Hartzell, Esq., William H. Blasberg, Esq., PA Department of Environmental Protection, Conshohocken, for Department of Environmental Protection.

Douglas Maloney, Esq., Begley, Carlin & Mandio, L.L.P., Langhorne, for Tire Jockey Service, Inc.

BEFORE: CAPPY, C.J., and CASTILLE, NIGRO, NEWMAN, SAYLOR, EAKIN and BAER, JJ.

OPINION

Justice CASTILLE.

Two inter-related questions are presented for review in the instant appeal: (1) Whether the Commonwealth Court erred by failing to give the Pennsylvania Department of Environmental Protection's ("DEP") interpretation of subparagraph (ii) of the definition of "waste" in 25 Pa. Code § 287.1 the deference to which the DEP's reasonable interpretation of environmental regulations is entitled under Department of Environmental Protection v. North American Refractories Co., 791 A.2d 461 (Pa.Cmwlth.2002) and (2) Whether the Commonwealth Court erred by finding that Tire Jockey Service, Inc. ("TJS") does not "process" or "reclaim" the whole discarded tires at its facility, when the Pennsylvania Environmental Hearing Board ("EHB") had not had a previous opportunity to make findings of fact and conclusions of law with regard to that issue and a contrary finding would produce a different result?¹ For the following reasons, we reverse the order of the Commonwealth Court.

TJS, a New Jersey corporation, operates a used tire processing facility located at USX Industrial Park in Fairless Hills, Bucks County, Pennsylvania (the "Facility"). Alfred J. Pignataro, Jr. is the president chief operating officer and majority shareholder of TJS.² Pignataro is also responsible for the day-to-day operations of TJS. Environmental Hearing Board Adjudication and Order, Docket No. 2001-155-K (Consolidated with No.2001-041-K), December 23, 2002 ("EHB Op.2002") at 2, 4-5.

In September 1999, Pignataro and two associates contacted the DEP about the prospect of relocating Tire Derived Products, Inc., ("TDP"), a New Jersey waste tire processing corporation and facility, from New Jersey to Pennsylvania.³ At that time, DEP officials informed them that a residual waste processing facility permit issued pursuant to Pennsylvania's Solid Waste Management Act, the Act of July 7, 1980, P.L. 380, as amended, 35 P.S. § 6018.101 et seq. ("SWMA"), would be needed for the establishment and operation of a waste tire processing and recycling facility in Pennsylvania. Pignataro and his associates then submitted an application to the DEP for an Industrial Development Grant for Waste Tires to fund the establishment of a waste tire processing/recycling facility in Pennsylvania based upon the model set forth in Pignataro's patent. TJS claimed that the paperwork to operate the facility pursuant to a General Permit for Processing/Beneficial Use of Residual Waste, specifically, Residual Waste General Permit No. WMGR038 ("DEP Permit"), was being submitted to the DEP. EHB Op.2002 at 6-7.⁴

While awaiting a response on the requested DEP grant, Pignataro and his associates began negotiations for a lease on the Fairless Hills site in November 1999. That same month, DEP officials met with Pignataro at the TDP facility in Elizabeth to view the type of facility Pignataro and his associates proposed. During that visit, the DEP again informed Pignataro that a DEP Permit would be necessary to conduct such an operation in Pennsylvania. In February 2000, the DEP notified Pignataro and his two associates that their venture did not qualify for a grant.

Notwithstanding the grant denial, TJS entered into a five-year lease for the Fairless Hills Facility with USX Corporation and assumed occupancy on May 1, 2000. Despite the fact that it had not applied for nor had it obtained any permits required by the DEP or Falls Township, TJS began accepting discarded used whole tires at the facility in early June 2000. Additionally, TJS failed to register to do business in Pennsylvania with the Pennsylvania Department of State. DEP Order and Civil Penalty Assessment, January 22, 2001 ("DEP January 2001 Order") at 1. As the Commonwealth Court explained:

Tire Jockey's fully-implemented operation was to consist of three parts: (1) the sale of serviceable tires, i.e., tires which can be re-used as tires; (2) the sale of cut component pieces of non-serviceable tires, i.e., tires which can no longer be used as tires; and (3) the manufacturing of rubber mats and crumb rubber (Percofill), which is used as a playground safety covering. The serviceable tires would be identified, categorized by size, branded, stored as inventory and made available for sale. The non-serviceable tires would be cut into five component pieces: the tread section; two sidewalls; and two intact metal beads. The tread sections and metal beads would be sold for the manufacture of recycled rubber products, for tire-derived fuel or for scrap. The steel-free sidewall sections would be retained and used by Tire Jockey as raw material for the manufacture of Percofill or rubber mats.

Tire Jockey Ser., Inc. v. Dep't of Envtl. Prot., 836 A.2d 1026, 1027 (Pa.Cmwlth. 2003); see also EHB Op.2002 at 10.

Via letter dated June 27, 2000, TJS advised the Falls Township Manager that it intended to occupy the Facility in Fairless Hills. Falls Township responded that, prior to occupying the building, TJS was required to complete a Township Use and Occupancy Permit and have various inspections performed by Falls Township. Despite receipt of the Falls Township communication, TJS continued to operate the Facility with none of the required permits or inspections. TJS received a Notice of Violation ("NOV") on July 26, 2000 from the Falls Township Code Enforcement Officer for operating the Facility without a license and the Falls Township Fire Marshall noted numerous code violations, which were required to be cured before issuance of a Use and Occupancy Permit. On July 28, 2000, TJS finally applied to Falls Township for a Use and Occupancy Permit and paid the fees for the license and inspections. EHB Op.2002 at 9.

The DEP first conducted an on-site inspection of the Facility on August 1, 2000 at which time the DEP observed: approximately 1,500 to 3,000 whole used tires at the Facility; numerous cut, processed and baled used tires inside and outside the building; and TJS employees operating machinery that processed the used tires. EHB Op.2002 at 10; see also DEP January 2001 Order at 2. During the inspection, the DEP informed Pignataro that the operations conducted at the Facility constituted residual waste processing which required a permit. The DEP also advised Pignataro that conducting such operations without a permit was a violation of the law and provided him with a copy of the SWMA and the applicable Residual Waste Regulations ("RWR"). The DEP official then told Pignataro to cease operations until TJS obtained a permit. Id.

Following the inspection, the DEP issued a NOV on August 16, 2000 for violations observed during the August 1, 2000 inspection. Specifically, the NOV cited TJS for processing used tires without a residual waste processing facility permit in violation of the SWMA and 25 Pa.Code §§ 293.201(a) and 297.201(a) of the DEP's RWRs.⁵ The NOV also requested that TJS submit to the DEP, within fifteen days, a proposed plan and schedule for the correction of the violations. EHB Op.2002 at 10-11; see also DEP January 2001 Order at 2.

By letter dated August 28, 2000, TJS responded to the DEP claiming that, while it intended to comply with the DEP RWRs, it could not begin the DEP permit application process until it was certain TJS would receive municipal approval. Following a request from TJS, Pignataro and the DEP met to discuss permitting and compliance with DEP Rules and RWRs on September 20, 2000. During the meeting, DEP officials informed TJS that all of the used tires, whole or cut, must be removed from the Facility immediately in order to comply with DEP Rules and RWRs, because a DEP permit was needed before TJS could lawfully begin operations at the Facility. The DEP officials also advised TJS that its compliance with DEP Rules and RWRs would have a direct impact on the permitting process. The DEP officials then provided TJS with application materials for a determination of applicability under a DEP Permit. EHB Op.2002 at 10-11; see also DEP January 2001 Order at 2-3.

The DEP performed a second inspection on September 25, 2000 at which time DEP officials observed approximately one-hundred pallets of stacked tire pieces outside the Facility and numerous whole tires stored both inside and outside the Facility.⁶ The DEP conducted a third inspection on October 26, 2000. The DEP again observed pallets of stacked tire pieces outside the Facility, a considerable number of whole tires on the loading dock and inside the Facility, and noted that more tires had been brought onsite since the August 1, 2000 inspection. DEP personnel also observed TJS employees receiving and sorting whole used tires. EHB Op.2002 at 11-12. During this inspection, Pignataro informed the DEP officials that he did not view the tires at the Facility as waste tires, and he therefore believed that TJS was not storing waste tires in violation of DEP Rules and RWRs. Environmental Hearing Board, Opinion and Order on Petition for Supersedeas, Docket No. 2001-155-K (Consolidated with 2001-041-K), December 17, 2001 ("EHB Op.2001") at 6. On October 27, 2000, the DEP issued a second NOV for violations observed the day before and requested that TJS submit, within fifteen days, a plan and schedule for correction of the violations. DEP January 2001 Order at 3.

The DEP conducted a fourth inspection of the Facility on November 2, 2000 wherein the same violations as found in the previous inspections were...