BEFORE THE ILLINOIS POLLUTION CONTROL BOARDDCLLER 'S
Ovl
SEP 1 8 2006
Pollution
STATE OF
Control
ILLINOIS
Board
PCB
07-- o
12
(UST Fund Appeal)
FEDEX GROUND PACKAGE SYSTEM, INC,
Petitioner,
V
.
ILLINOIS ENVIRONMENTAL
PROTECTION AGENCY,
Respondent .
NOTICE OF FILING AND_
PROOF OF SERVICE
TO: Bradley P. Halloran
Hearing Officer
Illinois Pollution Control Board
100 W. Randolph Street, Suite 11-500
Chicago, Illinois 60601
Division of Legal Counsel
Illinois Environmental
Protection Agency
1021 North Grand Avenue East
P.O . Box 19276
Springfield, IL 62794-9276
PLEASE TAKE NOTICE that on September 18, 2006, 1 filed with the Clerk of
the Illinois Pollution Control Board the original and nine (9) copies of the attached (1)
RESPONSE AND MEMORANDUM OPPOSING IEPA'S MOTION FOR
SUMMARY JUDGMENT in this action
. I hereby certify that true and accurate copies
of that document and this Notice are being served upon the Hearing Officer and the
Respondent at the addresses shown above, by depositing it in the U.S
. Mail in Chicago,
IL, with First Class Postage prepaid, on this day, September 18, 2006
.
/ 1elvLC&-)
Thomas W . Daggett
Attorney for Petitioner FedEx
DAGGETT LAW FIRM
Chicago Title Tower, Suite 4950
161 North Clark Street
Chicago, Illinois 60601
(312) 960-1600
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
FEDEX GROUND PACKAGE SYSTEM, INC., )
Petitioner,
)
v.
)
PCB 07-012
(UST Fund Appeal)
ILLINOIS ENVIRONMENTAL
)
PROTECTION AGENCY,
)
Respondent .
)
RESPONSE AND MEMORANDUM OPPOSING
IEPA'S MOTION FOR SUMMARY JUDGMENT
Petitioner, FEDEX Ground Package System, Inc . ("Petitioner"), by its attorney,
Thomas W. Daggett of the Daggett Law Firm, respectfully submits this Response and
Memorandum opposing the Illinois Environmental Protection Agency's (IEPA) Motion
for Summary Judgment ("Response"), as authorized by Board rules at 35 Ill . Adm.
Code 101 .504 & 101 .516, and states as follows :
STANDARD OF REVIEW
Summary judgment is proper only when the pleadings, affidavits,
admissions and other items in the record demonstrate that there is no genuine issue of
material fact and that the moving party is entitled to a judgment as a matter of law
.
Waste Management of Illinois v . IEPA, PCB 94-153 (July 21, 1994) at p . 2;
Solomon v.
American Nat'l Bank & Trust Co ., 243 III .App.3d 132, 612 N .E .2d 3 (1st Dist
. 1993) .
The [EPA's denial letter frames the issues on this appeal ; therefore, in deciding this
motion for summary judgment, the Board must determine as a matter of law whether the
RECEIVED
CLERK'S OFFICE
SEP 1 8 2006
Pollution
STATE
OF
Control
ILLINOIS
Board
Agency's denial reasons contained in its letter of July 17, 2006, require the disapproval of
Petitioner's May 30, 2006 Budget Amendment
. See Kathe'sAuto Service Center v .
IEPA, PCB 96-102 (Aug . 1, 1996) at p. 27.
ISSUES BEFORE THE BOARD
The issues before the Board are:
(1)
whether IEPA's approval of Petitioner's May 30, 2006 Budget
Amendment for an Underground Storage Tank Fund (UST Fund) reimbursement is
controlled by 35 III . Adm . Code 734
.335(d), which addresses the situation where an
owner has elected to proceed with corrective action before submitting a Corrective
Action Plan (CAP) or budget, or by 35 III
. Adm. Code 734.335(e), which explicitly
addresses amended budgets
; and
(2)
whether IEPA's July 17, 2006 final action, which rejected Petitioner's
May 30, 2006 Budget Amendment and associated reimbursement request solely because
it was submitted twenty (20) days after IEPA issued Petitioner a No Further Remediation
(NFR) letter, was required by applicable provisions of the Illinois Environmental
Protection Act and Board regulations
.
UNDISPUTED MATERIAL FACTS
The undisputed facts in the administrative record that was before the IEPA at the
time of its final action, and that are material to IEPA's motion and this Response, are as
follows
:
Petitioner is owner of a facility at 6767 West 75' Street, Bedford Park, Cook
County, Illinois, 60638 (the Facility .)
2
On April 3, 2003, Petitioner notified the Illinois Emergency Management
Agency (IEMA) of a leak from an underground tank at the Facility, and was assigned
Incident No . 20030468
; on April 26, 2004, Petitioner made another notification
concerning this leaking tank and was assigned Incident No . 20040575
. (both referenced
at AR . p . 78.)
On May 23, 2003, the Illinois State Fire Marshal granted Petitioner's May 6,
2003 application for a determination of reimbursement eligibility for corrective action
to address IEMA Incident 20030468 . (AR
. 72-73 .)
On June 20, 2005, the Illinois State Fire Marshal granted Petitioner's May 6,
2005 application for a determination of reimbursement eligibility for corrective action
to address IEMA Incident 20040575
. (AR . 75-76.)
On June 22, 2005, Petitioner submitted to IEPA a proposed CAP (AR
. 2 - 20)
and a proposed Budget with a budget certification by a licensed professional engineer
(L.P .E.) (AR
. 21-56), for IEMA Incident Nos
. 20030468 and 20040575 .
On July 17, 2005, IEPA approved Petitioner's proposed CAP without
modification, and approved Petitioner's Budget for six categories of costs totaling
$325 .151 .37. (AR . 57-61 .)
On April 20, 2006, Petitioner submitted a Corrective Action Completion
Report, with a certification from a L
.P.E
. that the corrective action had been completed
in compliance with the CAP and all legal requirements
. (Referenced at AR . 62 .) This
included the removal of the subject diesel underground storage tank, for which
Petitioner obtained additional Incident No
. 20060145 .
3
On May 10, 2006, IEPA accepted the Corrective Action Completion Report as
indicating the satisfactory completion of the CAP, and granted Petitioner a No Further
Remediation ("NFR") letter covering LUST Incidents Nos . 20030468, 20040575, and
20060145 (AR . 62-68) which was received by Petitioner on May 15, 2006 . (AR
. 69-
70.)
On May 30, 2006, Petitioner sent IEPA reimbursement claims with
documentation, and a proposed Budget Amendment (AR
. 71-98), with a certification
from a L .P.E . that all costs in the Budget Amendment are necessary costs for work
under the CAP, that they are not for corrective action beyond the minimum
requirements, and that none of the costs included are ineligible for reimbursement from
the UST Fund under applicable law
. (AR . 99) The proposed Budget Amendment
requested IEPA approval for $72,878
.75 of additional costs, but the proposed new total
was only $39,122
.55 higher than the total in the previously approved budget because
Petitioner had completed certain CAP tasks under budget
. (AR . 80-81 .)
On July 17, 2006, IEPA issued its final action rejecting Petitioner's request,
stating as its sole reason that :
"The budget was submitted after the issuance of a No Further Remediation
Letter . Pursuant to 35 III . Adm
. Code 734 .335(d), any corrective action plan or
budget must be submitted to the Illinois EPA for review and approval, rejection,
or modification in accordance with procedures contained in Subpart E of 35 III
.
Adm
. Code 734 prior to the issuance of a No Further Remediation Letter ."
(AR. 107-111) .
4
35111
.
Adm . Code 734.335
d)
Notwithstanding any requirement under this Part for the submission of a
corrective action plan or corrective action budget, except as provided at Section
734.340 of this Part,
an owner or operator may proceed to
conduct corrective action
activities in accordance with this Subpart C
prior to the submittal or approval
ofan
otherwise
required corrective action plan or budget .
However, any such plan and
budget must be submitted to the Agency for review and approval, rejection, or
modification in accordance with the procedures contained in Subpart E of this Part prior
to payment for any related costs or the issuance of a No Further Remediation Letter
.
BOARD NOTE
: Owners or operators proceeding under subsection (d) of this
Section are advised that they may not be entitled to full payment from the Fund
.
Furthermore, applications for payment must be submitted no later than one year after
the date the Agency issues a No Further Remediation Letter
. See Subpart F of this
Part.
e)
If,
following
approval of any corrective action plan or associatedbudget,
an owner or operator determines that
arevised plan or bud-get is necessary
in order to
mitigate any threat to human health, human safety, or the environment resulting from
the underground storage tank release, the
owner or operator_ mustsubmit as
applicable, an amended corrective action plan or associated
budget to the Aggncy jFor
RELEVANT LAW
5
review .
The Agency must review and approve, ecy -or-re
tire
modificationof the
amended plan or budget in
accordance with Subpart_ E_of this Part .
BOARD NOTE
: Owners and operators are advised that the total payment from
the Fund for all corrective action plans and associated budgets submitted by an owner
or operator must not exceed the amounts set forth in Subpart H of this Part
. (emphasis
added)
----------------------
415ILCS 5/57 .7. (As amended by P .A
. 92-574, P .A . 92-651 and P .A
. 92-735)
Leaking underground storage tanks
; physical soil classification, groundwater
investigation, site classification, and corrective action
.
(e)
(1) Notwithstanding the provisions of this Section, an owner or operator
may proceed to conduct physical soil classification, groundwater investigation, site
classification or other corrective action prior to the submittal or approval of an
otherwise required plan
. If the owner or operator elects to so proceed, an applicable
plan shall be filed with the Agency at any time
. Such plan shall detail the steps taken to
determine the type of corrective action which was necessary at the site along with the
corrective action taken or to be taken, in addition to costs associated with activities to
date and anticipated costs
.
(2) Upon receipt of a plan submitted after activities have commenced at a
site, the Agency shall proceed to review in the same manner as required under this
Title
. In the event the Agency disapproves all or part of the costs, the owner or
operator may appeal such decision to the Board
. The owner or operator shall not be
eligible to be reimbursed for such disapproved costs unless and until the Board
determines that such costs were eligible for payment .
6
---------------------
415 ILCS 5/57.8
. Underground Storage Tank Fund ; payment
; options for State
payment
; deferred correction election to commence corrective action upon availability
of funds
If an owner or operator is eligible to access the Underground Storage Tank Fund
pursuant to an Office of State Fire Marshal eligibility/deductible final determination
letter issued in accordance with Section 57 .9, the
owner or operator may submit a
co letepplication for final or partial payment
to the Agency for activities taken in
response to a confirmed release
. An owner or operator may submit a request for partial
or final payment regarding a site no more frequently than once every 90 days .
(a) Payment after completion of corrective action measures . The owner or
operator may submit an application for payment for activities performed at a site _after
completion of the
requirements of Sections 57.6 and 57~7__or after completion of any
other required activities at the underground storage tank site .
(5) In
the event that costs are or will be incurred in addition to those
approved by the Agency, or after payment, the owner or operator may submit successive
plans containing amended budgets ._ There
uirements of Section 57.7 shall apply to any
amended plans . (emphasis added)
ARGUMENT
The IEPA argues that the Board should interpret the second sentence of
734.335(d) as prohibiting the IEPA from reviewing a UST Fund Budget Amendment
submitted after the issuance of a NFR Letter
. IEPA presents its interpretation of this
7
sentence as if it is obvious . (IEPA Motion, p . 8 .) In so doing, it ignores the
immediately preceding sentence of that subsection, ignores the entire immediately
following subsection 734.335(e),
and ignores certain provisions of Section 57 .8 of the
Environmental Protection Act (the Act .) As explained below, the IEPA's interpretation
of 734 .335(d) as prohibiting it from approving Petitioner's May 30, 2006 Budget
Amendment is contrary to the interpretation of that provision in the context of Part 734
read as a whole, and read in conjunction with Section 57 .8 of the Act.
ARGUMENT I. PETITIONER HERE OBTAINED IEPA APPROVAL FOR ITS
CORRECTIVE ACTION PLAN AND BUDGET PRIOR TO CONDUCTING THE
CORRECTIVE ACTION, SO SUBSECTION 734 .335(D) DOES NOT APPLY
When interpreting a single sentence in a regulatory subsection, as IEPA has
done here, the sentence must be read as part of the whole regulation, and in light of its
overall purpose . See County of Dupage v . E & E Hauling, PCB AC 88-76, 88-77
(Feb . 8, 1990) p . 3, citing People v . Jordan, 103 III . 2d 192, 469 N
.E
. 2°d 569 (1984 .)
A reading of the entire Section 734 .335 (quoted in full in IEPA's motion, pages 4-7),
shows that most subsections address situations where the owner submits a CAP and
Budget to IEPA for approval before conducting the corrective action, just as Petitioner
did here. Subsection 734 .335(d) is the only exception to this normal situation, as
shown by its introductory language, as follows :
"Notwithstanding any requirement under this Part for the submission of a [CAP]
or a corrective action budget, . . . an owner or operator may proceed to conduct
corrective action activities . . .prior to the submission or approval of an otherwise
required [CAP] or budget
. However, any such plan or budget must . . ."
(emphasis added) .
8
This subsection 734 .335(d) only applies where an owner has elected to proceed with
corrective action before submitting a CAP or budget . This subsection is not triggered
and has no effect in the more common situation where an owner submits its plan and
budget for approval before doing the work, like Petitioner has done
. Notably,
734.335(d)
never mentions amended budgets at all . Amended budgets are explicitly
addressed in 734
.335(e), which is discussed in Argument 11I ., below .
ARGUMENT II . THE SECOND SENTENCE OF 734
.335(D) LIMITS
IEPA'S AUTHORITY TO PAY COSTS OR ISSUE NFR LETTERS,
NOT ITS AUTHORITY TO REVIEW PLANS OR BUDGETS
Even where 734 .335(d) is triggered because an owner has chosen to conduct its
corrective action before it submits any CAP and Budget to IEPA (which are not the
facts here), the second sentence of 734
.335(d) does not prohibit IEPA from reviewing a
Budget Amendment
. Instead, it prohibits IEPA from payment of any costs (even partial
payment), or issuance of a NFR Letter (even a narrowly focused one), until a plan and
budget is submitted in accordance with the Subpart E review process
.
The phrase in the second sentence that IEPA relies upon for its position reads
:
"prior to payment for any related costs or the issuance of a No Further Remediation
Letter." If IEPA's interpretation of 734
.335(d) were correct, then IEPA also would be
prohibited from reviewing any budget amendment after the first partial payment it
makes for any costs related to the corrective action
. Such an interpretation would put
734.335(d)
in direct conflict with the Act .
9
Provisions of the Act explicitly allow owners who have received IEPA approval
for their initial CAP and Budget to seek partial payments as they proceed with
implementation of the CAP . Section 57 .8 of the Act reads in part as follows
:
If an owner or operator is eligible to access the Underground Storage Tank Fund
pursuant to an Office of State Fire Marshal eligibility/deductible final
determination letter issued in accordance with Section 57
.9, the owner or
operator may submit a co mplete ipplicationr final orpartial payment to the
Agency for activities taken in response to a confirmed release .
An owner or
operatormau submita
request for partial or final paymentregarding a
site no
morefrequently than once every 90 days.
(a) Payment after completion of corrective action measures . The owner
or operator may submit an application for payment for activities performed at a
site after completion of the requirements of Sections 57 .6 and 57.7, or_after
completion of any other required activities at the underground
storage tank
site_"_(emphasis added)
415 ILCS 5/57 .8 (excerpt
.) A subsequent subsection of Section 57 .8 explicitly
authorizes an owner to submit amended budgets after receiving payment for parts of the
corrective action work, as follows :
"(5) In the event that costs are or will be incurred in addition to those approved
by the Agency, or after payment, the owner or operator may submit successive
plans containigg-amended budgets .
The requirements of Section 57 .7 shall apply
to any amended plans ." (emphasis added)
415 ILCS 5/57 .8(a)(5) . Under the position advanced by IEPA however, it would be
prohibited from reviewing or approving such successive plans and amended budgets,
because they would clearly be submitted after "payment for any related costs or the
issuance of a No Further Remediation Letter," as referenced in the second sentence of
734.335(d).
There is an alternative interpretation of 743 .335(d) that does not put it in direct
conflict with Section 57 .8 of the Act
. The first sentence of 734 .335(d) authorizes
10
owners to proceed with UST corrective action before submitting a CAP or Budget
without automatically losing all rights to reimbursement ; the second sentence limits this
authorization, however, by declaring that there shall be no payments for any related
costs (even partial costs), nor any NFR Letters issued (even focused ones) before that
CAP and Budget is submitted to IEPA for a review under Subpart E .
The Board should adopt this alternative interpretation of 743 .335(d) that is
consistent with Section 57 .8, and reject IEPA's proposed interpretation that conflicts
with the Act, and with the following subsection 734 .335(e), as explained below .
ARGUMENT III . THE IEPA'S REVIEW OF PETITIONER'S BUDGET
AMENDMENT IS EXPLICITLY CONTROLLED BY SUBSECTION 734.335(E)
AND SUBPART E, WHICH DO NOT MENTION NFR LETTERS
While the subsection relied upon by IEPA, 734 .335(d), does not mention budget
amendments, the immediately following subsection, 734 .335(e), explicitly addresses
them, as follows :
734 .335(e)
If, following approval of any corrective action plan or associated
budget, an owner or operator determines that a revised plan or budget is
necessary in order to mitigate any threat to human health, human safety, or the
environment resulting from the underground storage tank release, the owner or
operator must submit, as applicable, an amended corrective action plan or
associated budget to the Agency for review . The Agency must review and
approve, reject, or require modification of the amended plan or budget in
accordance with Subpart E of this Part .
BOARD NOTE : Owners and operators are advised that the total payment from
the Fund for all corrective action plans and associated budgets submitted by an
owner or operator must not exceed the amounts set forth in Subpart H of this
Part.
In contrast to 734 .335(d), the first sentence of 734 .335(e) matches the facts in
this case . Petitioner obtained approval of a CAP and budget in July, 2005, then later
11
determined that a revised budget was necessary in May, 2006 . The Licensed
Professional Engineer assisting Petitioner certified that the work covered by the Budget
Amendment was necessary and eligible for reimbursement under all UST Fund
requirements . (AR-99) Under this subsection 734 .335(e), the IEPA is explicitly
required to review Petitioner's May 30, 2006 Budget Amendment in accordance with
Subpart E. There is nothing in 734
.335(e) nor in Subpart E (comprised of Board
regulations at 734 .500, 734 .505, and 734 .5 10) that would require
IEPA to reject
Petitioner's Budget Amendment based upon issuance of the May 10, 2006 NFR Letter,
or even allow it to consider the issuance of a NFR Letter in reviewing Petitioner's
Budget Amendment .
Neither (EPA's July 17, 2006 letter, nor its motion for summary judgment,
asserts any basis for its denial of Petitioner's Budget Amendment other than
743
.335(d), which is not triggered under the undisputed facts that are material to
(EPA's motion . The Board regulations that explicitly apply under the facts of this
case, 734 .335(e) and Subpart E, provide no legal basis for (EPA's July 17, 2006
rejection of Petitioner's Budget Amendment or its motion for summary judgment
.
ARGUMENT IV
. NI THE ONLY PREVIOUS BOARD OPINION
MENTIONING THIS ISSUE, THE WPA APPROVED A BUDGET
AMENDMENT, IN
PART, AFTER ISSUING A NFR LETTER
The IEPA does not cite any previous Board or judicial decisions supporting its
proposed interpretation of 734 .335(d) . Part 734 became effective only recently, and
Petitioner's research similarly has not located any decisions interpreting 734
.335(d) .
12
The preceding Board regulations on the UST program at Part 732, however, were in
effect for several years, and included a very similar provision, as follows :
732 .405(d) "Notwithstanding subsections (a), (b), (e), and (f) of this Section
and except as provided at Section 732 .407 of this Part, an owner or operator
may proceed to conduct Low Priority groundwater monitoring or High Priority
corrective action activities in accordance with this Subpart D prior to the
submittal or approval ocean otherwise required groundwater monitoring plan or
budget plan or corrective action plan or budget plan. However, any
such plan
and budjeet plan shallbe submitted to the Agency for review and approval,
rejection, or modification in accordance with the procedures contained in
Subpart E of this Part prior to payment for any related costs or the
issuance of a
No Further Remediation Letter ." (emphasis added)
35 III . Adm . Code 732 .405(d)
. It is important to note that the second sentence of
732 .405(d) contains the same exact language as that found in the second sentence of
734.335(d), which the IEPA relies upon for its position in the current case
. Petitioner's
research located only one prior Board Opinion that mentions this earlier analogous
provision in a context similar to the current case, as follows :
"The Agency reiectedMidwest's budget amendment in a letter datedMay
23, 2002
(AR, at
128),
because it was submitted after the Agency issued a No
Further Remediation
(NFR) letter for the site . Pet. at Exh . B ; AR, at 128 . The
budget rejection letter indicated that, pursuant to 35 Ill . Adm
. Code 732 .405(d), a
budget must be submitted before issuance of an NFR letter . Id.
Midwest and the Agency discussed the Agency's rejection and the Agency
indicated in a memo dated June 3, 2002, that it would reconsider the budget
amendment denial if it received a written request to do so . Pet. Br. at 2 ; AR, at
13 1 . Midwest submitted a request for reconsideration the next day, on June 4,
2002, and the Agency, on June 7, 2002, approved part
ofthe amendment and
rejected the rest . Pet. Exh . D. Specifically, the Agency approved $2,806
.08 of the
$7,483 .58 requested ." (emphasis added)
Todd's Service Station v. /EPA, PCB 03-2 (January 22, 2004) p . 2
. The budget
amendment that IEPA reviewed and partially approved in that case was submitted to
IEPA four and one half months after IEPA issued the NFR Letter
. Id. Significantly, in
13
Todd's Service Station, the IEPA specifically focused on the same exact language it
relies upon in the current case and ultimately determined that it was
not prohibited from
reviewing a budget amendment submitted after the issuance of a NFR Letter, or from
approving it in part
. Even though the sentences read exactly the same, the (EPA's
interpretation of the second sentence of 734
.335(d) which the IEPA is currently
advocating to the Board in its motion for summary judgment directly conflicts with its
interpretation, in
Todd's Service Station, of the same language contained in the second
sentence of 732 .405(d)
. Therefore, the IEPA's interpretation of 734 .335(d) in the
current case is not entitled to any deference that the Board might otherwise be inclined
to give.
CONCLUSION
The IEPA is not prohibited from reviewing and approving Petitioner's May 30,
2006 Budget Amendment by 734
.335(d), which does not apply under the facts of this
case. To the contrary, it was required to review it under 734
.335(e), under Subpart E,
and under Section 57 .8 of the Act
. For these reasons, the (EPA's motion for summary
judgment should be denied .
Respectfully submitted,
FEDEX Ground Package System, Inc .
By DAGGETT LAW FIRM
Thomas
to iMu'
W . Daggett
Thomas W. Daggett
DAGGETT LAW FIRM
Chicago Title Tower, Suite 4950
161 N . Clark Street
Chicago, IL 60601
(312) 960-1600
14
