Judge Nixes $6.5M Verdict Against State Regulators

     (CN) – A Pennsylvania federal judge overturned a $6.5 million jury verdict against state environmental regulators found liable for violating the constitutional rights of an industrial factory in attempting to control odor pollution. U.S. District Judge Joel Slomsky said that allowing the verdict to stand amounted to a “miscarriage of justice.”




     The conflict dates back to 2001, when the first odor complaint was filed against MFS Inc., a company that runs a mineral wool plant near Bethlehem, Pa. Mineral wool, used as insulation including in noise-reducing ceiling tiles, is produced from a steel byproduct containing sulfur. Sulfur, when released in the air, smells like rotten eggs.
     From 2003 to 2004, the facility received 64 more confirmed complaints, resulting in six notices of violation from the Pennsylvania Department of Environmental Protection. The department is in charge of implementing state and federal air quality programs.
     MFS claimed that individuals within the department singled it out for hostile actions, carrying out a pattern of retaliation for questioning the department’s decisions. A unique industrial configuration had apparently prevented the factory from being able to implement typical odor-testing protocols.
     The company claimed that four workers for the environmental protection, including a former and current program manager and an attorney, violated its rights to free speech, due process and equal protection. A meeting between MFS and department officials allegedly drew retaliation. The company said the department treated it differently from other polluters and forced it to shut down in 2006. Two years later, MFS filed suit.
     A jury trial last year returned a $6.5 million guilty verdict, including awards of $2.6 million in damages against a former air quality program manager, $1.63 million against an attorney who represented the agency, and large judgments against two other employees.
     Judge Slomsky vacated the judgment in Philadelphia last week and dismissed the case entirely, finding that the company couldn’t weave a “gossamer thread of evidence” into such a huge verdict. He ruled that no violations of the U.S. Constitution occurred at all.
     Though the draft permit contained provisions that would have prevented the company from operating if the odor problem persisted, Slomsky noted in a 142-page opinion that such action was a reasonable exercise of regulatory power.
     There was no First Amendment retaliation, since a meeting between regulators and the company actually broke a permit impasse, the judge found.
     And an agency briefing memo, though containing an error, otherwise presented a concise and accurate history of the problems, he continued.
     As to MFS’ claim that its 14th Amendment due process rights were violated, Slomsky pointed out that the company failed to exhaust its administrative options before making the business decision in 2006 to close operations, amid the threat of incurring fines for operating without a permit.
     The department also did not violate the Equal Protection clause, since it could not defend its actions using interactions with neighboring facilities, the ruling states. A wastewater treatment center, for example, had a history of odor problems but didn’t fall under the air-quality program’s jurisdiction.
     In addition to throwing out the company’s constitutional claims, Slomsky ruled that the officials acted in a reasonable agency capacity and, as such, should be immune from prosecution.
     “Defendants acted appropriately in a ‘charged atmosphere,'” Slomsky wrote, defending the officials against allegations that they deliberately antagonized MFS.
     A draft permit allowed the company to resume operations in January 2009

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