NOTICE OF FILING
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
AND REPLY TO RESPONDENT COMMUNITY LANDFILL COMPANY'S RESPONSE
I. MOTION FOR LEAVE TO FILE REPLY INSTANTER
II. REPLY
CERTIFICATE OF SERVICE

BEFORE 

TEE ILLINOIS 

POLLUTION 

CONTROL 

BOARD

PEOPLE OF 

THE STATE OF 

ILLINOIS,

Complainant,

VS.)               

PCB

No. 03-191

(Enforcement-Land)

COMMUNITY 

LANDFILL 

COMPANY, INC.,

an

Illinois corporation, 

and

the CITY OF 

MORRIS, an Illinois

municipal 

corporation,

Respondents.

to:

Mr. Mark La 

Rose           

Mr. Bradley 

P. Halloran

La Rose 

& Bosco           

Hearing Officer

200 N. 

La Salle Street, 

#2810     

Illinois 

Pollution

Chicago, IL 

60601

Control Board

100 W. Randolph 

Street

Chicago 

IL 60601

Mr. Charles 

Heisten

Hinshaw & 

Culbertson

100

Park Avenue

Rockford 

IL 61105-1389

NOTICE OF 

FILING

PLEASE 

TAKE NOTICE 

that we have 

today, October 

18, 2005,

filed 

with the 

office of the 

Clerk of the 

Illinois Pollution

Control Board, 

by electronic 

filing, 

Complainant's 

Motion for

Leave to 

File Reply 

instanter, 

and

Reply to Community 

Landfill

Company's Response, 

a copy 

of which is 

attached and 

herewith

served upon you.

Respectfully 

Submitted,

PEOPLE OF THE 

STATE OF ILLINOIS

ex rel. 

LISA 

IAN

BY:AA4

istant 

Attorneys 

General

Evronmental 

Bureau

188

W. Randolph 

St., 

2 0

Flr.

Chicago, IL 

60601

(312) 814-5388

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, OCTOBER 18, 2005

BEFORE 

THE ILLINOIS 

POLLUTION CONTROL 

BOARD

PEOPLE 

OF THE STATE OF 

ILLINOIS,

Complainant,

VS.)               

PCB No. 03-191

(Enforcement-Land)

COMMUNITY LANDFILL 

COMPANY, INC.,

an Illinois 

corporation, 

and

the CITY 

OF MORRIS, an 

Illinois

municipal corporation,

Respondents.

COMPLAINANT'S 

MOTION FOR LEAVE 

TO FILE REPLY 

.TNSTANTER

AND REPLY 

TO RESPONDENT 

COMMUNITY LANDFILL 

COMPANY'S RESPONSE

TO MOTION

FOR SUMMARY JUDGMENT

NOW COMES the Complainant, 

PEOPLE 

OF THE STATE OF 

ILLINOIS,

through its attorney, 

LISA MADIGAN, 

Attorney General 

of the State

of Illinois, and 

hereby moves the 

Board to accept 

its Reply to

Respondent 

COMMUNITY LANDFILL 

COMPANY'S Response 

("1CLC Response")

to its 

Motion for Summary 

Judgement 

instanter. 

In support

thereof, 

Complainant 

states as follows:

I. MOTION FOR LEAVE 

TO FILE REPLY 

INSTANTER

The

Board's procedural 

rules do not provide 

the right to

file 

a Reply except 

by Motion, and for 

the purpose of preventing

material 

prejudice. 

Respondent CLC has 

confused the issue 

of the

relief sought 

by Complainant in 

its Motion for Summary 

Judgment

("Complainant's 

Motion") 

Complaint 

believes 

that this

misrepresentation 

could result 

in material prejudice 

and

therefore requests 

that the Board grant 

it leave to file its

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, OCTOBER 18, 2005

Reply.

II.

REPLY

COMPLAINANT HAS NOT REQUESTED 

PENALTIES OR 

FINES IN 

ITS

MOTION FOR SUMMARY

JUDGEMENT

In this

case, Complainant is seeking both

affirmative

relief

and the assessment

of civil penalties against

the

Respondents. However, 

in its

Motion for Summary Judgment,

Complainant only seeks the following:

1. A finding that the 

Respondents have violated 415

ILCS 5/21(d) (2) (2002), and 35 Ill. 

Adm. Code

Sections 811.700(f) 

and 811.712;

2. A finding 

that the Respondents' violations 

were

wilful, knowing, 

and/or repeated;

3. Ordering the Respondents 

to cease and desist from

transporting 

and depositing any additional

material 

at the Landfill until they 

are in full

compliance 

with their Permits, and the Board's

financial assurance regulations;

4. Requiring the Respondents 

to immediately provide

financial 

assurance as required by 

the Act, Part

811, Subpart 

G of the Board solid waste

regulations, 

and the Respondents' permits;

5. Requiring 

the Respondents to update 

the

closure/postclosure 

costs in accordance 

with

Permits No. 2000-155-LFM, 2000-156-LFM 

and

modifications thereto;

6. Ordering the Respondents to 

initiate closure of

parcels A & B of 

the Landfill; and

7. Setting 

a date for hearing on the 

issue of civil

penalty.

Complainant's 

Motion, 

pp. 15-16

2

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, OCTOBER 18, 2005

2. Respondent CTJC makes two points in its Response. First,

it absurdly claims that Illinois EPA has recognized the Frontier

Bonds as acceptable financial assurance. However, CLC's main

argument relates only to the issue of the appropriate civil

penalty, and an 'unjust' recovery by Complainant.

3. On May 27, 2005, Illinois EPA made a demand on Frontier

Insurance Company in Rehabilitation, 

the successor entity to

Frontier Insurance Company. The 

New York State Superintendent of

Insurance assumed control of Frontier Insurance Company on August

25, 2001 through the filing of a rehabilitation proceeding. See:

Mountain Funding, Inc. v. Frontier -Insurance Co. 

329 F. Supp.2d

994 (Attached hereto as Exhibit 1] 

Illinois EPA is listed as

obgligee on the various Frontier Bonds and Riders submitted 

by

the Respondents during 2900. The expiration dates listed on the

Bonds ranged from May to July, 2005. See: 

Complainant's Motion,

Exhibit C. Illinois EPA's Bond claim is based on the

Respondents' failures to comply with closure and post-closure

requirements contained in their Permits, as well as their failure

to provide substitute financial assurance. 

See: CLC Response,

Exhibit N.

4. CLC describes its attempts to obtain the release of

'collateral' from Frontier Insurance Company, and Illinois 

EPA's

refusal to provide Frontier with a waiver so that the unspecified

'collateral' could be returned to CLC. First, Illinois EPA has

3

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, OCTOBER 18, 2005

no

knowledge of the nature 

or amount of 'collateral' 

provided by

CLC to Frontier. 

Prior to Frontier's request 

that Illinois EPA

waive its right 

to recovery on the Frontier 

Bonds, the Agency had

no knowledge that any 

'collateral' had been 

supplied, or that CLC

and Frontier 

had agreed between 

themselves that CLC was not

required 

to make payments on the bonds. 

Also, the bonds by their

own terms were to last 

for five years, with Illinois EPA 

as

beneficiary. The 

Respondents never substituted 

financial

assurance once the 

Frontier Bonds were deemed 

noncompliant, and

continued to operate the 

Landfill. Illinois EPA 

was certainly

not required to accommodate 

the financial interests 

of the

Respondents by prematurely 

waiving its rights 

under these bonds.

5. Whether 

or not Illinois EPA has 

exercised its right to

make a claim 

under the Frontier Bonds 

is irrelevant to the relief

sought in Complainant's 

Motion. Moreover, 

at this point,

Illinois EPA has no assurance 

that any recovery 

will be

forthcoming.

6. Respondent 

can not seriously 

make the claim that the

Frontier 

Bonds meet the requirements 

of Subpart G of the 

Board's

waste regulations. 

That issue was 

settled, once and for all 

by

the Appellate Court 

in

Community Landfill Company 

and the City of

Morris v. Pollution 

Control Board [Complainant's 

Motion, 

Exhibit

F]

Illinois 

EPA has not changed its position-the 

bonds do not

meet the requirements of Subpart 

G, and are noncompliant.

4

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, OCTOBER 18, 2005

Complainant's 

Motion, 

Brian 

White 

Affidavit, 

Exhibit 

G. par. 

11.

No

substitute 

financial 

assurance 

has

ever 

been provided.

Complainant's 

Motion, 

Exhibit 

G, par. 

12.

7.

In the 

event 

that Illinois 

EPA is 

able 

to recover 

any

funds 

from 

Frontier 

Insurance 

Company 

in

Rehabilitation, 

this

fact could 

only 

be

material, 

if

at all, 

to the 

issue 

of civil

penalty. 

For

example, 

if

Frontier 

performs 

closure 

requirements

at

the Morris 

Community 

Landfill, 

or

if it 

provides 

funds

sufficient 

to

cover third-party 

costs, 

this 

fact 

may

affect 

the

Board's 

evaluation 

of the 

gravity 

of the 

violations.

8.

However 

payment 

or

performance 

by Frontier 

(if

any

is

obtained), 

does 

not

relate 

to the 

relief 

sought 

by Complainant 

in

its

Motion 

for

Summary 

Judgment. 

If, as 

asserted 

by

Complainant,

the

Respondents 

have 

conducted 

landfill 

operations 

without

meeting 

the

Subpart 

C financial 

assurance 

requirements, 

they 

have

violated 

415

ILCS 5/21(d) 

(2)

(2004), 

and

35 Ill. 

Adm. 

Code

811.700(f). 

That 

they 

have 

knowingly 

continued 

operations 

since

the

Frontier 

Bonds 

were 

found 

noncompliant, 

and

that 

over three

years 

have 

passed 

without 

alternate 

financial 

assurance 

being

provided, 

shows 

wilful 

and

continued 

violation. 

Under 

these

circumstances, 

Complainant 

is entitled 

to

an order 

requiring 

the

Respondents 

to

stop illegal 

operation, 

and

thereby 

cease 

and

desist 

from 

additional 

violations. 

The

Respondents 

must 

also

provide 

new, 

compliant 

financial 

assurance.

5

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, OCTOBER 18, 2005

9. As described 

in the 

Mountain Funding 

case [Exhibit 

1,

p. 3], Illinois 

EPA's prosecution of 

its claim against Frontier

Insurance 

Company in Rehabilitation will 

be a tedious process.

As of the date 

of this Reply, Frontier's rehabilitator 

has not

even completed 

'step one' by providing Illinois 

EPA with a Notice

of Determination. 

Because dumping continues 

at the Morris

Community Landfill, 

without compliant financial 

assurance, it is

imperative 

that the Board take 

immediate action.

WHEREFORE, Complainant, 

PEOPLE OF THE STATE OF 

ILL'INOIS,

respectfully 

requests that the Board grant its 

Motion for Summary

Judgment 

against the Respondents, COMMUNITY 

LANDFILL COMPANY and

the CITY OF MORRIS, and 

issue an order:

1. Finding that the 

Respondents have violated 415 ILCS

5/21(d) (2) (2002), 

and 35 Ill. Adm. Code Sections 

811.700(f) and

811.712;

2. A finding 

that the Respondents' violations 

were wilful,

knowing, and/or repeated;

3. Ordering 

the Respondents to cease 

and desist from

transporting 

and depositing any 

additional material at the

Landfill until they are 

in full compliance with their Permits,

and

the Board's financial assurance regulations;

4. Requiring the Respondents 

to immediately provide

financial 

assurance as required 

by the Act, Part 811, Subpart 

G

of the Board 

solid waste regulations, and 

the Respondents'

6

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, OCTOBER 18, 2005

permits;

5.

Requiring 

the

Respondents 

to

update 

the

closure/postclosure 

costs 

in accordance 

with 

the Subpart 

regulations, 

Permits 

No.

2OOO-l557LFM, 

2000-156-LFM, 

and

modifications 

thereto;

6.

Ordering 

the Respondents 

to initiate 

closure 

of parcels

A & B 

of the 

Landfill; 

and

7. Setting 

a date 

for hearing 

on the 

issue 

of civil

penalty.

BY:

q~RSTOPHER 

GRANT

~~IFER 

TOMAS

Assistant 

Attorneys 

General

Environmental 

Bureau

188 W. 

Randolph 

St., 

Qth

Flr.

Chicago, 

Illinois 

60601

(312) 

814-5388

(312) 

814-0609

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, OCTOBER 18, 2005

Page 2 of 7

329e

.Sp2d94Pg1

329 F.Supp.2d 994

(iea:329

F.Supp.2d

994

)

substantial

public

import

whose

importance

transcends result

in present case,

and (2) cases

Motions, Pleadings

and Filings

where review

would be disruptive

of state efforts

establish coherent policy

with respect to

matter of

substantial public concern.

United States District

Court,

N.D. Illinois,

131

Federal Courts C£47.1

Eastern Division.

17013k47.I

Most Cited Cases

MOUNTAIiN

FUNDING, INC.,

Plaintiff,

Illinois district

court would abstain

under

Burford

from

deciding action

against insurer

alleging failure

FRONTIER INSURANCE

CO., Defendant.

to pay on surety bond,

in favor of New

York state

No. 01

2785.

insurance

rehabilitation

proceeding

adjudicating

claims against

insurer; rehabilitation

proceeding

Aug.

9, 2004.

was important state

effort of great

public concern,

and

further, rehabilitation

proceeding

was in special

Background:

State-court

action

was brought

relationship

of concentrated

review to surety

bond

against insurer

alleging failure

to pay on surety

claim,

since its purpose

was to facilitate

judicial

bond. Insurer

removed action,

which was

then

review

of all of insurer's

many claimants,

transferred.

The District

Court, 2003 WL

21518556,

expedite resolution of

Guzman,

J., denied

insurer's motion

for stay in

such claims, to

prevent unnecessary

expenditure of

favor

of out-of-state

insurance

rehabilitation

assets,

and to provide

fair, equitable

and unified

proceeding.

Subsequently,

insurer renewed

motion.

procedure for

all claimants.

Holding:

The

Court,

Denlow,

United

States

[41

Federal

Courts t=43

Magistrate Judge,

held that

Burford

abstention was

l70B3k43 Most

Cited Cases

appropriate

given

nature

rehabilitation

Case

may be appropriate

for

Burford

abstention,

proceeding,

which was

shown to be in

special

avoid

disrupting

state

efforts

establishing

relationship

of concentrated

review to surety

bond

coherent

public policy,

only if state offers

some

claim.

forum in which

claims may be

litigated, and only

Motion

granted.

forum stands in

special relationship

of technical

oversight

or concentrated review

to evaluation

West Headnotes

those claims.

*995

Howard

L. Teplinsky,

Seidler & McErlean,

Ill

Federal Courts

C~65

Chicago, IL, Counsel

for Plaintiff.

17018k65 Most

Cited Cases

Abstention

principles can be

raised and revisited

Cornelius

Riordan,

Michael

Palermo,

Jr.,

any time during

a proceeding.

Riordan,

Donnelly, Lipinsky

& McKee,

Ltd.,

Chicago, IL,

Counsel for Defendant.

[21 Federal Courts

@'~43

17011k43

Most Cited Cases

MEMORANDUM

OPINION

AND

ORDER

Under

Burford

abstention

doctrine, federal court

should

abstain from deciding:

(I) difficult

questions

DENLOW, United

States Magistrate Judge.

of state law bearing

on policy problems

2005 Thomson/West.

No Claim to

Orig. U.S. Govt.

Works.

http://print.westlaw.com/delivery.html?dest=atp&format=HTMLE&dataid=BOO05580000...

10/18/2005

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, OCTOBER 18, 2005

Page 3 of 7

329 F.Supp.2d 994

Page 2

329 F.Supp.2d 994

(Cite as: 329

F.Supp.2d

994)

This case

comes before this

Court on a motion

May 15,

2002, Judge Guzman

lifted the Stay

Frontier

Insurance Co. (."Frontier"

or "Defendant")

Proceedings and

permnitted discovery

to proceed.

to stay this proceeding

in favor of a New

York state

court

insurance rehabilitation

proceeding that

Defendant then

filed a motion to

reconsider the

adjudicating all claims--including

claim from

May 15, 2002 order

lifting the Stay of Proceedings.

Mountain

Funding,

Inc.

("Plaintiff')--against

Defendant argued that

the district court

should

Defendant.

See In the Matter

of the Rehabilitation

abstain

from this action

because New York's

of Frontier Ins. Co.,

No.

1357/03 (N.Y.

Sup.Ct.

rehabilitation

court is the proper

court to handle

order dated May 10,

2004). For the reasons

set

Plaintiffs

underlying surety

bond dispute *996

forth below,

Defendant's motion

to stay is granted.

because the

court stands in a "special

relationship"

with the facts

and issues involved

in the case.

BACKGROUND

FACTS

However,

on June 30, 2003,

Judge Guzman denied

The facts of this

case have been recited

in great

the

motion to reconsider.

Mountain Funding. Inc.,

detail in Judge

Ronald A. Guzman's

opinion in

No. 01 C2785, 2003

WL 21518556,

*5, 2003 U.S.

Mountain Funding,

Inc. v. Frontier

Insurance Co.,

Dist. LEXIS 11274, at

*15 (N.D. III. June 30,

2003)

No. 01 C

2785, 2003 WL 21518556,

2003 U.S.

Judge Guzman explained

that abstention

the

Dist.

LEXIS 11274 (N.D.

111. June 30, 2003).

exception

to the norm in federal

court and that

Therefore,

what follows are the

facts materially

Defendant failed to

establish that the New

York

pertinent

to a decision on Defendant's

motion to

rehabilitation court

stands in a "special relationship"

stay proceedings,

which is now

before the Court.

with the

facts and issues involved

in this case.

Id.,

2003

WL 21518556, *5,

2003 U.S. Dist.

LEXIS

PROCEEDINGS

BEFORE

JUDGE

11274,

14. Judge Guzman

ffirther noted

that

GUZMAN

"there is an absence

of information concerning

the

nature

the

[New

York

rehabilitation]

November 29, 2000,

Plaintiff filed this lawsuit

proceedings,

what types 'of claims

are being

in the Superior Court

of New Jersey as a result

litigated,

and a schedule for

the completion of

Defendant's alleged failure

to pay on a surety

bond

rehabilitation."

Id.

The parties

then consented to

issued by Defendant.

Defendant then removed

this

have this

case fried before this

Court pursuant to 28

case to federal district

court in New

Jersey.

U.S.C.

§ 636(c)(1). The case then

proceeded to the

Subsequently, the

case was transferred

to the

verge of trial before

Defendant brought this

motion

Northern District

of Illinois and assigned

to Judge

for a stay, claiming

that the concerns raised

Guzman.

Judge Guzman

now have

been addressed and

resolved by an

order entered by the

New York

August

25,

2001,

the Superintendent

rehabilitation

court.

Insurance

for the State of New

York filed a

rehabilitation proceeding

against Defendant

in the

NEW

YORK

REHABILITATION

Supreme

Court of New

York.

In the Matter

of the

PROCEEDINGS

Application

of Gregory V.

Serio,

No. 405090/01

(N.Y. Sup.Ct. order

dated Oct. 10, 2001).

The New

May 10, 2004, the

New York rehabilitation

York rehabilitation

court entered

an order enjoining

court entered

a formal order approving

an interim

and restraining

any person from

commencing or

procedure for judicial

review of the rehabilitation

prosecuting

lawsuits

proceedings

against

proceedings for adjudication

of claims,

In the

Defendant for 180

days. Pursuant to that

order,

Matter

of the Rehabilitation of

Frontier Ins. Co,,

Defendant

moved Judge Guzman

to stay these

No. 1357/03 (N.Y.

Sup.Ct. order dated

May 10,

proceedings,

which he did on

November 13, 2001.

2004).

The

purpose

the

rehabilitation

Six months

later, Judge Guzman

accepted briefs

proceedings

is to facilitate judicial

review of

and heard

oral arguments on the

issue of continuing

Frontier's claimants,

to expedite

the resolution of

the stay

indefinitely, which he

declined to do; on

such claims, to prevent

the unnecessary

expenditure

No Claim

to Orig. U.S. Govt.

Works.

http

://print.westlaw.conldelivery.html?dest=atp&formnat=HTMLE&dataid=B0055

80000...

10/18/2005

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, OCTOBER 18, 2005

Page 4 of 7

329

F.Supp.2d 994

Page 3

329 F.Supp.2d 994

(Cite as: 329

F.Supp.2d

994)

of assets, and

to provide a fair, equitable,

and

depending

on the underlying

facts of the federal

unified procedure

for all claimants

of Frontier.

See

case at issue.

See

Colorado River Conservation

Def. Mot. to

Stay, Ex. BI1, at 6. "The

procedure will

Dist. v. United States,

424 U.S. 800, 96 S.Ct.

1236,

enable the Rehabilitator

to dispose of surety

claims,

L.Ed.2d 483 (1976);

Younger v. Harris, 401

which would

not be covered by

the majority of

U.S. 37, 91 S.Ct. 746,

27 L.Ed.2d 669

(1971);

Guaranty

Associations, and

other claims as

the

Burford

v. Sun Oil Co.,

319

U.S. 315, 63 S.Ct.

Court

deems appropriate

...

while offering due

1098, 87 L.Ed.

1424 (1943). The

principles

process to

all claimants who

object to his

espoused by the United

States Supreme Court

recommendations.'

Def. Mot.

to Stay, Ex. B32, at 2.

Burford v. Sun

Oil

provide the analytical

framework

within which

to decide whether abstention

in favor

The rehabilitator

will examine

each claimant's

of the state rehabilitation

proceedings is

appropriate

claim and

make a determination

regarding

that

in this case.

claim, which will act as

a recommendation to the

claimant.

Id.

The rehabilitator

then must serve the

In Burford,

the Supreme Court determined

that a

claimant a "Notice

of Determination"

for each

federal court's abstention

is appropriate

when

claim,

which

advises

the

claimant

the

judicial

review in the designated

state fornm is

recommendation

amount.

Id.

The claimant

may

"expeditious

and adequate,"

in order to avoid

object

to the amount by serving

a written objection

review in the

federal courts that could

cause "delay,

upon the rehabilitator

within sixty

days.

Id.

The

misunderstanding of

local law and federal conflict

rehabilitator must

contact the claimant

and attempt

with

state policy." 319 U.S.

at 327-34, 63 S.Ct. 1098

to resolve any objection.

Id.

at 3. In the

event the

Additionally,

the Supreme

Court held that federal

objection is

not resolved, the matter

is referred to a

courts could give rise

to 'intolerable confusion"

that

court-appointed

referee who hears

the claimant's

a specialized state

forum seeks to avoid.

Id.

objection

and reports on its validity.

Id.

Upon the

issuance

of the referee's report,

either the claimant

[2]

Subsequently,

the

Seventh

Circuit

has

or the

rehabilitator may petition

the court for an

interpreted

Burford

to hold that abstention

order confirming the

report.

Id.

In the event

that no

appropriate

in two circumstances.

Prop. & Cas.

objection is

received, the rehabilitator

shall make an

Ins. Ltd.,

936 F.2d

at 322. First, courts

should

parte

motion no earlier

than seventy-five days

abstain from

deciding "difficult questions

of state

after the

date of the Notice of

Determination for an

law bearing on

policy problems of

substantial

order approving

and confirming the

adjudications of

public import whose

importance transcends

the

the claim.

Id.

result in the present

case."

Id.

Second,

courts

should abstain from

deciding cases

where the

As a result

of the new information

detailed in the

review would be "disruptive

of state efforts

May 10, 2004

order, Defendant filled

the present

establish

a coherent policy

with respect to a matter

Motion to Stay Proceedings

under the principles

of substantial

public concern."

Id.

abstention, arguing that this

Court now has enough

information

to conclude

that

the New York

III. DISCUSSION

rehabilitation court is

in a special relationship

[3] In this

case, the Court first

must determine if

technical oversight

or concentrated review

either

of the two

Burford

circumstances

are

Plaintiffs claims.

present.

It is clear that there

is no "difficult

question of

state law" present, as

this case involves

*997 II. LEGAL

STANDARD

a surety

bond dispute to

which well-established

[1]

Abstention

principles

can be

raised and

legal

principles apply.

Consequently,

the first

revisited

at any time during

a proceeding.

Prop.

Burford

circumstance

is not present.

However, the

Cas. Ins. Ltd. v.

Cent. Nazi Ins. Co. of

Omaha, 936

second

Burford

circumstance

is present. State

F.2d

319, 321 (7 th Cir.1991).

There are three

insurance rehabilitation

proceedings

are important

accepted abstention

doctrines that

can be applied

state efforts and are

of great public concern.

See

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Page 4

329 F.Supp.2d 994

(Cite

as: 329

F.Supp.2d 994)

generally

Prop. & Cas. Ins. Ltd.,

936

F.2d at

319;

appeal,

the Seventh Circuit could not

determine

Hfartfford Cas. Ins. Co. v". Borg-Warner Corp.,

913

if the rehabilitator

commenced

the

type

E.2d

419

(7th

Cir.1990).

Pursuant

the

proceeding

that

warranted

abstention

under

McCarran-Ferguson

Act, 15 U.S.C. §§

1011-1015,

Burford.

Id.

There was no indication that the

states have a great interest in maintaining a

uniform

rehabilitator attempted to commence a proceeding

insurance rehabilitation process and have assumed

in any special relationship of technical oversight

primary

responsibility for regulating the insurance

concentrated

review to the evaluation of creditor

industry.

Hartford,

913 F.2d at 426. As a result,

claims against Central

National.

Id.

The Seventh

the New York rehabilitation process

is a "matter of

Circuit then investigated the

possible types of

substantial public concern" and

therefore abstention

rehabilitation

proceedings

available

to Central

may be appropriate

in this case.

See Prop. & Cas.

National and found

that there were three possible

Ins. Ltd.,

936 F.2d at

322.

types of rehabilitation

proceedings available, noting

three examples to help determine what

types of

[4] This abstention

inquiry arises because federal

rehabilitation proceedings

warranted abstention:

court

review may disrupt a New York State's efforts

[The rehabilitation of Insurer] A

may involve

to establish

a coherent public policy. Therefore,

nothing

more than a change in management. The

two essential

elements are necessary for this Court

rehabilitation

of Insurer B may involve nothing

to abstain.

Prop. &

Cas. Ins. Ltd.,

936 F.2d at 323.

more than a merger

with another insurer to take

First,

the state must offer some forum in which

advantage

of needed economies of scale. The

claims may be litigated.

Id.

Second, that forum

rehabilitation of Insurer C may involve, by itself

must be "special--it

must stand in a special

or in combination

with some other response, a

relationship of technical oversight or concentrated

specialized claims proceeding for the purpose of

review

to the evaluation of those claims."

Id.

There

centrally and uniformly resolving

the claims of

is no

dispute that New York has provided a state

Central

National's creditors. All of these actions

forum in which Plaintiff's claims may be litigated.

are classified as 'rehabilitation proceedings,'

yet

As a *998 result, the issue in this case is

whether

not all of them involve a specialized proceeding;

the New York rehabilitation

proceeding has -a

only the rehabilitation

of Insurer C implicates

special relationship of technical

oversight or

Burford.

concentrated review to evaluate

Plaintiffs claims.

Id.

at 320, 324, 63 S.Ct. 1098.

The Seventh

Circuit held that the record contained no

plan of

The Seventh Circuit

addressed this issue in the

rehabilitation

and

that the rehabilitator openly

factually

similar

case,

Properey & Casualty

expressed

uncertainty as to how Central National's

Insurance, Ltd. v. Central

National Insurance Co. oJ

rehabilitation would

progress.

Id.

at 325, 63 S.Ct.

Omaha,

936 F.2d 319 (7th Cir.1991). In that case,

1098. The

court further noted that the rehabilitator

Property

& Casualty Insurance, Ltd. ("PCIL") tiled

may be

gathering Central National's creditors in one

a complaint against

Central National Insurance Co.

forum to litigate their

claims with uniformity, but

("Central National") because of

a contract dispute

there was no such evidence

contained on that

regarding

a reinsurance agreement.

Id.

at 320. The

record.

Id.

at 326, 63 S.Ct. 1098. As a result, the

parties had conducted

significant amounts of

Seventh Circuit remanded

the case to the district

discovery and had filed cross-motions for summary

court to determine if the Nebraska forum involved

judgment when Nebraska's director

of insurance

the type of specialized

proceeding that warranted

placed

Central National into rehabilitation.

Id.

The

abstention.

Id.

Nebraska

rehabilitator petitioned the district court

to either

stay or dismiss the district court case, and

On June

30, 2003, Judge Guzman shared the same

the district court held that the principles announced

concerns as the Seventh Circuit when he

denied

in Burford

required abstention.

Id.

PCIL appealed.

Defendant's motion to reconsider the, May 15, 2002

Id.

at 320, 63 S.Ct. 1098.

order lifting the stay of proceedings in this case. He

lacked sufficient information

to determine whether

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329 F.Supp.2d 994

Page 5

329 F.Supp.2d 994

(Cite as: 329 F.Supp.2d 994)

the New

York rehabilitation proceedings were in a

considerations that support abstention.

As noted in

special relationship of technical

oversight or

Hartford Casualty Insurance Co. v. Borg-Warner

concentrated review that would warrant abstention

Corp.,

913 F.2d at 426, the importance of

state

under

Burford.

However, with the new information

policies at issue go far beyond the present litigation.

set forth in the May 10,

2004 New York Supreme

Mountain

Funding should not be able to jump

Court order regarding the rehabilitation court,

this

ahead of Frontier's other creditors because

this

Court

now

knows

exactly

what

type

litigation is outside the New York rehabilitation

rehabilitation proceedings the

New York court

proceeding and must not be able

to set a precedent

employs

and is in *999 a better position to

for other

claimants to do the same. Additionally,

determine if those proceedings

are in a special

both this Court and the New York

rehabilitation

relationship of technical oversight

or concentrated

proceeding are faced

with the same surety bond

review.

dispute. The possibility

of inconsistent decisions

between this Court and the New York rehabilitation

After a review of

the New York rehabilitation

proceeding could lead

to confusion. Furthermore,

proceedings, it is

clear that those proceedings are

allowing this case

to proceed would lead to a

identical

to the rehabilitation of "Insurer C" in

system where

the state of New York would not

Property

& Casualty Insurance Ltd.

and therefore

control

the ultimate distribution to Frontier's

satisfies the

Burford

requirements. The New York

creditors.

Id.

This type of federal usurpation would

rehabilitation proceedings clearly are in a special

be inconsistent with the McCarren-Ferguson Act

relationship of concentrated review of Plaintiffs

and general notions of comity.

Id.

surety

bond claim, as their purpose is to facilitate

judicial

review of all of Frontier's claimants, to

Additionally,

Frontier has been defending similar

expedite the resolution

of such claims, to prevent

litigation in the Northern

District of Illinois in

the unnecessary

expenditure of assets, and to

Ma/ion v. Frontier Insurance

Co.,

case number 01

provide a fair, equitable

and unified procedure for

C 2556.

After New York's May 10, 2004 order,

all claimants of Frontier.

See

Def. Mot. to Stay, Ex.

Frontier

filed

a Motion to Stay Proceedings in the

BI.

Ma/Ion

case. On July 16, 2004, Judge Harry

Leinenweber stayed the proceedings because the

It is important to note also that the New York

procedure outlined by the Supreme Court of New

rehabilitation court is adjudicating

thousands of

York comported with the abstention

requirements as

claims made against Defendant, many of which

are

set out in

Burford v. Sun Oil Co.,

319 U.S. 315,

similar

to Plaintiffs surety bond claims alleged in

S.Ct. 1098, 87 L.Ed. 1424 (1943), and

Property &

this lawsuit. At the

inception of the New York

Casualty Insurance

Ltd. v. Central National

rehabilitation

proceedings,

Defendant's

records

Insurance Co. of Omaha,

936 F.2d 319

(7th

showed

more than 12,000 open unresolved claims,

Cir.1991).

Mallon v. Frontier Insurance Co., No.

with estimated indemnity

loses of more than $475

01 C 2556 (N.D. III.

minute order dated July 16,

mrillion

and estimated loss adjustment expenses of

2004).

than $60 million.

See

idt.

Furthermore, "open

surety claim counts at the inception of

the

IV. CONCLUSION

proceeding

were

approximately

2,400

with

For the

above stated reasons,

Defendant's Motion

estimated

surety indemnity and loss adjustment

to Stay Proceedings is granted.

reserves of approximately $55 million."

Id.

This

detailed and uniformed proceeding is exactly what

329 F.Supp.2d 994

the Seventh

Circuit in

Property & Casualty

Insurance

Ltd.

found would satisfy the

Burford

Motions,

Pleadings and Filings (Back to top)

requirements.

2004 WL 2725406 (Trial Motion, Memorandum

Additionally, this case invokes important policy

and

Affidavit)

Mountain

Funding,

Inc.'s

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Page 7 of 7

329 F.Supp.2d 994

Page 6

329 F.Supp.2d 994

(Cite

as:

329 F.Supp.Zd

994)

Memorandum

of Law in Opposition to Plaintiffs

Rehabilitation's Response to Plaintiffs Motion

fot

Third Motion to Stay Proceedings (Jun. 15, 2004)

Summary

Judgment and Memorandum in Support

Thereof (Oct. 02, 2002)

2004 WL 2725408 (Trial Motion, Memorandum

and Affidavit) Frontier Insurance Company in

2002 WL 32742547 (Trial

Motion, Memorandum

Rehabilitation's Reply

Mountain Funding's

and

Affidavit)

Mountain

Funding,

Inc.'s

Opposition to Frontier's Third Motion to Stay

Memorandum of Law

in Opposition to Plaintiffs

Proceedings

(Jun. 02, 2004)

Motion to Reconsider Order Lifting

Stay of

Proceedings

(Sep. 20, 2002)

* 2004 WL 2725403 (Trial Motion, Memorandum

and Affidavit) Frontier Insurance Company

2002 WL 32742536 (Trial Motion, Memorandum

Rehabilitation's Response to

Plaintiffs Motions in

and Affidavit) Plaintiff Mountain Funding's Motion

Limine (Mar. 02, 2004)

for Summary Judgment (Sep. HI, 2002)

* 2004 WL 2725401 (Trial Motion, Memorandum

-2002 WL 32742522 (Trial

Motion, Memorandum

and Affidavit) Plaintiffs Response to Defendant's

and

Affidavit)

Mountain

Funding,

Inc.'s

Motion in Limine (Feb. 10, 2004)

Memorandum

in Support of Lifting Stay (May. 08,

2002)

* 2003 WL 23910306 (Trial Motion, Memorandum

and Affidavit) Frontier Insurance Company

2002 WL 32742504 (Trial Motion, Memorandum

Rehabilitation's Trial Brief (Dec. 12, 2003)

and

Affidavit)

Frontier

Insurance

Company's

Memorandum of Law

on the District Court's

* 2002 WL 32742601 (Trial Motion,-Memorandum

Jurisdiction

Over Matters Subject to the New York

and Affidavit) Reply Memorandum in Support of

Order of Rehabilitation (May. 07, 2002)

Plaintiffs Motion for Summary Judgment (Oct. 24,

2002)

l:01CV02785 (Docket)

(Apr. 19, 2001)

* 2002 WL 32742609 (Trial Motion, Memorandum

and

Affidavit)

Plaintiff

Mountain

Funding's

END OF DOCUMENT

Response

Frontier

Insurance

Company's

Statement

of Facts Pursuant to Local Rule 56.1(b)

(Oct.

24, 2002)

* 2002 WL 32742589 (Trial

Motion, Memorandum

and Affidavit) Frontier

Insurance Company in

Rehabilitation's

Mountain

Funding's

Response to Frontier's Motion

to Reconsider (Oct.

23, 2002)

- 2002 WL 32742562 (Trial Motion, Memorandum

and

Affidavit)

Defendant

Frontier

Insurance

Company's

Response

Plaintiff

Mountain

Funding's Local Rule 56.1 Statement of Material

Facts as to Which There is No Genuine Issue

(Oct.

02, 2002)

- 2002 WL 32742575 (Trial Motion, Memorandum

and Affidavit)

Frontier Insurance Company in

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ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, OCTOBER 18, 2005

(312) 814-5388

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

PEOPLE OF THE STATE OF ILLINOIS,

Complainant,

VS.)               

PCB No. 03-191

(Enforcement-Land)

COMMUNITY LANDFILL COMPANY, INC.,

an Illinois corporation, and

the CITY OF MORRIS, an Illinois

municipal corporation,

Respondents.

CERTIFICATE OF SERVICE

I, CHRISTOPHER GRANT, an attorney, do certify that I caused

to be served this 18th day of 

October, 2005, the foregoing

Complainant's Motion for Leave to File Reply Instanter, and

Reply to Respondent Community Landfill Company's Response, and

Notice of Filing, upon the persons listed on said Notice by

placing same 

in an envelope bearing sufficient postage with the

United States Postal Service located at 100 W. Randolph, Chicago

Illinois.

CHRISTOPHER GRANT

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, OCTOBER 18, 2005