MFS, Inc. owned a mineral wool manufacturing facility in Bethlehem, Pennsylvania. After thirteen years without a single violation, a DEP air official in the Northeast regional office issued MFS a notice of violation in 2001 for the alleged emission of malodor. After the same official issued an enforcement order late one Friday afternoon that required MFS to report by the following Monday actions it would take to abate the odor problem, MFS complained to state legislators, at least one of whom wrote to the DEP Secretary expressing concern. Shortly thereafter, the regional DEP staff issued thirteen separate violation notices to MFS, ten of which were based on a single complaint. Despite other evidence to suggest that such alleged malodors may have been coming from a nearby landfill and a sewage treatment plant, the DEP regional employees continued to issue violations only to MFS, even when the sewage treatment plant publicly admitted that it had been a source of malodor for years.
In 2003, MFS applied to the DEP for a renewal of its Title V air quality operating permit, which required MFS to meet several EPA standards. After entering into a consent decree with the EPA to address these standards, MFS again requested that DEP issue it an operating permit. However, DEP regional air program staff informed MFS that they would not reissue a permit. MFS requested a meeting with the DEP Secretary. Prior to the meeting, the same regional staff gave the Secretary a summary of the MFS matter containing several allegedly misleading statements, and the Secretary ultimately decided to leave the issue of a permit up to the regional officials. The DEP regional officials offered to issue the permit on some 91 conditions, including an absolute right to shut the facility down, and compliance standards that one of the DEP employees admitted re-wrote an earlier EPA consent decree in an effort to impose more stringent standards on MFS. When another mineral wool manufacturing company expressed interest in purchasing the MFS facility, one of the DEP officials wrote a mutual customer of the two companies indicating that MFS had malodor and compliance issues. With the hope of any resolution looking dim, MFS sold off its machinery and liquidated in March 2008.
In May 2008, MFS instituted suit in federal court against four DEP staff members (including the regional director, a staff attorney, and regional air program managers) alleging that their various involvement in the actions described above amounted to violations of MFS's constitutional rights of due process and equal protection, intentional interference with a prospective contract, and retaliation.
The jury found that the four DEP employees had retaliated against MFS for exercising its First Amendment rights in requesting a meeting with the DEP Secretary.[1] In response to MFS's state law claim for interference with a prospective contract, the state employees asserted protection under Pennsylvania's Sovereign Immunity Act. The Court, however, stripped their sovereign immunity because there was sufficient evidence for a jury to find that in their actions, the employees' intent was not to do their jobs, but instead to do harm to MFS. The jury agreed and found that the state employees had both interfered with a prospective contract and acted outside the scope of their employment. On the constitutional challenges, the Court also denied the employees protection at the summary judgment stage under the doctrine of qualified immunity, which protects government officials from civil suits for damages where their conduct does not violate clearly established statutory or constitutional rights that would have been known to a reasonable official. The jury found violations of due process and equal protection, and made further findings of fact which denied the officials immunity.[2] The jury verdict ordered the four government employees to pay MFS $6.5 million in damages.
Although the employees are asking the Court to throw out the verdict, it has sent shock waves through the DEP. DEP officials have expressed concern that the verdict may undermine the enforcement efforts of its employees for fear of personal liability.
Notes:
[1] One employee was excused from this count on statute of limitations grounds.
[2] One employee was found to have not violated MFS’s procedural due process and equal protection rights.
by Walter A. Bunt, Jr., Mark D. Feczko, Brent W. Jacobson
March 26, 2010
Contacts:
Walter A. Bunt, Jr., 412.355.8906, walter.bunt@klgates.com
Mark D. Feczko, 412.355.6274, mark.feczko@klgates.com
Brent W. Jacobson, 412.355.8917, brent.jacobson@klgates.com