U.S. v. Pozsgai, 92-1454

• Decision Date: 10 August 1993
• Docket Number: No. 92-1454,92-1454
• Citation: 999 F.2d 719
• Parties: , 23 Envtl. L. Rep. 21,012 UNITED STATES of America v. John POZSGAI, Gizella Pozsgai, Mercer Wrecking & Recycling Corporation, J. Vinch & Sons, Inc. John Pozsgai and Gizella Pozsgai, Appellants.
• Court: U.S. Court of Appeals — Third Circuit

Page 719

999 F.2d 719

62 USLW 2024, 23 Envtl. L. Rep. 21,012

UNITED STATES of America v. John POZSGAI, Gizella Pozsgai, Mercer Wrecking & Recycling

Corporation, J. Vinch & Sons, Inc.

John Pozsgai and Gizella Pozsgai, Appellants.

No. 92-1454.

United States Court of Appeals, Third Circuit.

Argued Jan. 8, 1993.

Decided June 25, 1993.

Order Denying Amendment and Rehearing Aug. 10, 1993.

Paul D. Kamenar (Argued), Washington, DC, for appellants.

Vicki L. Plaut (Argued), J. Carol Williams, U.S. Dept. of Justice, Land & Natural Resources Div., Washington, DC, for appellee U.S.

Robert S. Goldsmith, Greenbaum, Rowe, Smith, Ravin & Davis, Woodbridge, NJ, for appellee Mercer Wrecking and Recycling Corp.

David I. Bookspan, Wolf, Block, Schorr & Solis-Cohen, Philadelphia, PA, for appellee J. Vinch & Sons, Inc.

Before: HUTCHINSON and SCIRICA, Circuit Judges and STANDISH, District Judge ^*

OPINION OF THE COURT

SCIRICA, Circuit Judge.

In this civil enforcement action, John and Gizella Pozsgai appeal the district court's judgment finding them strictly liable for discharging fill material into wetlands on their property in violation of the Clean Water Act. Defendants also appeal various orders granting the government injunctive relief, finding John Pozsgai in contempt of the injunction, and denying the Pozsgais' motion for relief from judgment. We will affirm.

I.

In April 1987, the U.S. Army Corps of Engineers received information that fill material was being dumped into wetlands on a 14-acre site in Morrisville, Pennsylvania. The Corps investigated the site, determined that nearly the entire property constituted wetlands, and found that concrete rubble, earth, and building scraps had been dumped onto one-half to three-quarters of an acre of the wetlands portion of the property. Corps biologist and field investigator Martin Miller described the site as "a forested wetland dominated by arrowwood" and noted "areas of standing water were scattered throughout the site," and "a stream flows along the east border of the property and wetland and is a tributary to the Pennsylvania Canal." Miller also observed several species of vegetation on the site which require a saturated environment to survive, including skunk cabbage, sensitive fern, red maple, sweet gum, ash, and aspen. Soil borings taken by Miller and other Corps biologists confirmed the initial determination of wetlands, revealing water either at or within one inch of the surface of the soil. This so-called hydric soil takes 100 years or more to develop.

Unpermitted discharge of dredged or fill materials into certain wetlands ¹ violates a regulation promulgated under the Clean Water Act, 33 U.S.C. § 1251 et seq. (1988). Miller's field report stated that "[t]he violation consists of the placement of fill (concrete rubble, earth, and building scraps) in three portions of the wetland for the purpose of raising the elevation for construction of a garage." The report identified the violator as John Pozsgai.

At the time of the Corps investigation, John and Gizella Pozsgai were considering purchasing the property to expand their truck repair business. John Pozsgai planned to build a garage on the property, a project which would require filling a significant amount of the area. In preparation for this purchase, Pozsgai hired the engineering firm of J.G. Park Associates to examine the suitability of the property for building. On December 12, 1986, J.G. Park President Nicholas Moran advised Pozsgai by letter of the results of its site investigation of the property. The letter stated:

Based upon this investigation, it is my professional opinion that the entire site meets the criteria set forth by the Army Corps of Engineers as "wetlands." This is based upon soils, hydrology and vegetation.

Please be advised that any further development that might be considered on this site would have to be approved and reviewed by the Army Corps of Engineers, and it has been our experience in the past that the Corps is most reluctant to issue permits for sites that have conditions such as this.

This advice turned out to be accurate. Corps biologist Miller spoke to Pozsgai by telephone and advised him not to place fill in the wetlands until he had obtained a permit. Pozsgai told Miller a previous prospective buyer was responsible for at least some of the filling but that Pozsgai planned to fill enough area to build a garage. Pozsgai also agreed to stop his filling activities until he had complied with the permit requirements and said his engineer would call Miller to discuss these requirements.

Pozsgai continued his efforts to purchase the property. Apparently dissatisfied with J.G. Park's opinion, Pozsgai hired a second engineer, Ezra Golub, to evaluate the property. Golub, too, advised Pozsgai the property was wetlands and the Corps would have to approve any building. Seeking yet a third opinion, Pozsgai hired Majors Engineers, who concurred in the views expressed by the previous two engineers.

After receiving the engineers' reports, Pozsgai renegotiated the sale contract for the property. The original sale contract, for a purchase price of $175,000, made the sale contingent on Pozsgai obtaining building permits for his proposed garage. The revised contract replaced the contingency provision with an "as is" clause and included a $32,000 reduction in the purchase price, from $175,000 to $143,000. Under this revised sale contract, Pozsgai purchased the property on June 19, 1987.

In the meantime, Corps investigator Miller continued to monitor activities at the property. Following his April 1987 visit, Miller had several telephone conversations with Pozsgai. Each time, Miller told Pozsgai to stop his filling activities and explained the permit requirements. Additionally, the Corps issued a cease and desist letter to the Cassalias, the prior owners of the property. The Cassalias responded by letter, stating they had sold the property to Pozsgai but had never given him permission to place fill on the property. Miller returned to the site in August 1987 and observed that fill had been placed on an additional two acres of the property. He reiterated to Pozsgai that he would need a permit to discharge the fill and indicated the Corps would issue a cease and desist order if Pozsgai did not stop filling the wetlands. Pozsgai told Miller that township officials and the police had visited him and shown him the cease and desist letter sent to the Cassalias. He also told Miller he had stopped work on the property.

On September 3, 1987, the Corps sent John and Gizella Pozsgai a cease and desist letter. The letter stated fill was being placed on the Pozsgais' property in federally regulated wetlands without a permit in violation of the Clean Water Act and directed the Pozsgais to stop "conducting, contracting, or permitting any further work of this nature." In response, the Pozsgais' counsel wrote the Corps on September 24, reporting that John Pozsgai had conferred with engineers regarding the cease and desist letter and expressing Pozsgai's opinion that the site did not "naturally" contain wetlands but had only become saturated as a result of construction of an overpass near the property.

Miller visited the site again on October 6 and observed additional fill. On this visit, Miller determined almost the entire property constituted wetlands. He ordered Pozsgai not to do any more filling on the property. Pozsgai said he believed the area was not wetlands because he had excavated the stream on the property. Miller returned to the site in November, again observing new fill since his last visit. Miller reiterated the need for Pozsgai to obtain a permit. On December 17, the Corps sent the Pozsgais a second cease and desist letter, directing them to stop filling, and offering them two options to resolve the violation--removing all fill material and restoring the site to its former condition, or obtaining a Water Quality Certification from the Pennsylvania Department of Environmental Resources.

In May 1988, the Corps again discovered that John Pozsgai was continuing to fill the wetlands. Subsequent investigation revealed Pozsgai had received several hundred truckloads of fill from at least five different hauling companies. On August 18, 1988, following a complaint from a neighbor about the dumping, the U.S. Environmental Protection Agency installed a video camera in the neighbor's house. The video camera recorded dumping on the property.

On August 24, 1988, the United States filed a civil complaint in federal district court, alleging that John and Gizella Pozsgai, and two of the hauling companies hired by the Pozsgais, had violated the Clean Water Act by filling the wetlands on the Pozsgais' property without a permit. ² The government sought an order to restore the property to its original state, as well as civil penalties. It simultaneously moved for a temporary restraining order and a preliminary injunction to stop further discharge. The district court entered the TRO. Two days later, on August 26, the video camera recorded 25 truckloads of dirt dumped on the site, and a man, identified by witnesses as John Pozsgai, operating a bulldozer leveling the fill.

On September 2, the government obtained an Order to Show Cause why Pozsgai should not be held in contempt for violating the TRO. The district court held a hearing on the contempt proceeding and the preliminary injunction on September 9 and September 16. After the hearing, the court granted the preliminary injunction and held Pozsgai in contempt, ordering him to pay $5,000 within 48 hours.

In the meantime, the government initiated a parallel federal criminal proceeding against John Pozsgai. On December 30, 1988, a jury convicted Pozsgai of 40 counts of unpermitted discharge. The district judge sentenced him to three years for the pre-Sentencing Guideline counts and twenty-seven months for post-Guideline counts, to run concurrently, placed him on...