In light of the recent Superior Court decision affirming the Clary Lake Water Level Order [WLO], people are quite justified in asking “What’s next?” regarding the DEP taking enforcement action. The Water Level Order after all was issued over 4 years ago and we have been waiting way too long for the court case to conclude. Winning this hugely important battle was a crucial step towards bringing the Clary Lake dam into compliance with the WLO, but the war isn’t over yet. While I don’t know exactly how things are going to play out, I do firmly believe (and have believed all along) that we will ultimately prevail in our battle to restore Clary Lake, and I will continue to do everything in my power to bring about a satisfactory resolution of our water level crisis as quickly as possible. But what’s next, and how long do we have to wait for a resolution?
First off, AquaFortis Associates LLC [AQF] has 21 days from the date of the Order (February 26th) to appeal the decision to the Maine Supreme Court (a.k.a. the Law Court) and until that grace period expires, DEP will not be taking any enforcement action. Because Paul Kelley is currently in Chapter 7 bankruptcy, should AQF choose to appeal the recent order to the Law Court, they will have to do so without the benefit of Pleasant Pond Mill LLC [PPM] joining in the appeal. If AQF does file an appeal with the Supreme Court within the next 3 weeks then sadly, enforcement action will once again be put on hold pending the outcome of that appeal. Cases tend to move quickly through the Law Court compared to lower court proceedings because they’re not retrying the case from the start, they’re only reviewing the lower court ruling. Time estimates that I’ve heard for the Law Court to review a case like this range from 8 months to a year.
How likely is it they will appeal? Well your guess is as good as mine. Keep in mind I’ve been trying to second guess Paul Kelley and Richard Smith for years now, and they usually have managed to surprise me, but I’ll go out on a limb and say that an appeal at this point is not likely. First, I suspect Kelley and Smith are losing their appetite for litigation. They’ve been embroiled in this mess as long as we have, and they’ve got to be getting tired of fighting a losing battle; one wonders why they’ve persisted this long. Second, I’ve spoken to a number of people with experience in evaluating Court decisions and after reading the Decision and Order recently issued by Justice Billings, they all say it is well written and ironclad solid, that the State is on solid ground with the law behind them, and that if appealed to the Law Court, the likelihood of the decision being overturned is virtually nil. Even their chances going in are not good, given that on average only 1 in 9 appeals to the Law Court result in a lower court decision being overturned. In my humble opinion, AQF and their counsel would be foolish to seek redress from Justice Billings’ ruling. They put up a good fight. They lost. Move on.
DEP has a variety of options available to them to bring someone into compliance with an order. The Water Level Law (Title 38 Chapter 5 §840) also provides for fines ranging from a minimum of $100 per day up to a maximum of $10,000 per day with each day being considered a separate violation. Fines can add up quickly! Be advised that DEP hasn’t told me a thing about what they’re planning to do so what follows here is pure (though well informed) speculation on my part. That said, I do know from past discussions with the DEP and the Attorney General’s Office that they don’t plan to let this matter sit idle: if AQF doesn’t appeal the recent order, the State WILL pursue enforcement. I just don’t know exactly what that will look like or exactly when it will happen. With that in mind…
If AQF does NOT file an appeal with the Supreme Court by March 19th, then I expect DEP will quickly initiate enforcement action against Pleasant Pond Mill LLC which they can do even though PPM is in administrative dissolution. They can’t at this time take enforcement action against Paul Kelley individually because, as mentioned above, he is in bankruptcy. This however is a temporary reprieve. I would also think the DEP will take enforcement action against AQF as well, though I don’t know if that’s something they’re planning to do at this time. They certainly can enforce against AQF: the Water Level Law allows DEP to enforce a WLO against “the owner, lessee, or person in control” of the dam, and the State in their November 15, 2018 Reply Brief (see page 16) made a compelling argument for AQF being a party “in control” of the dam. However, whether or not AQF is such a party is an issue that was NOT decided by Justice Billings in his recent ruling:
“As for enforcement, this is a separate issue that is not on appeal at this time and AquaFortis is required to commence a separate lawsuit if the DEP attempts to enforce the WLO against it. Therefore, since notice was given to PPM as the owner, lessee, or person in control of the Dam, and enforcement is not ripe for discussion, there is no need for the Court to determine if Aquafortis is the “person in control” of the Dam at this point.” (Decision & Order, page 10)
It would have been nice if Justice Billings had ruled on this question but I can see why he didn’t. While I sincerely hope the DEP will take enforcement action against AQF, it is likely that this action would result in AQF filing their own lawsuit in response to the State’s action. This would likely stay the State’s action against AQF, but it would not stay the WLO itself, or any independent action proceeding against PPM.
The bottom line is I really don’t know how the DEP is going to approach enforcement of the Clary Lake WLO, but I know they’re going take assertive action, and I can’t wait. Since the WLO was issued, they have already issued several letters of warning and in late September 2015 they issued a Notice of Violation to Paul Kelley and his company PPM and to Richard Smith and his company AQF. This leaves few enforcement options going forward: while they can attempt to negotiate an Administrative Consent Agreement I suspect they’ll conclude after what has already transpired, that such an effort would be a waste of time and money: it’s pretty clear neither Paul Kelley nor Richard Smith have any intention of willingly complying with the WLO. The DEP’s other alternative is to pursue an 80K civil action in District Court. How effective a civil suit would be against PPM is unclear as PPM filed for bankruptcy last spring and is presumably broke. While an 80K action would undoubtedly result in significant fines being levied against PPM, collecting those fines might be a challenge. What additional means the DEP has to coerce PPM and/or AQF into complying with the WLO remain to be seen. The DEP is certainly motivated to resolve this mess, they’re as tired of this matter as we are. Time will tell how this scenario plays out.