BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
BROADUS OIL,
)
Petitioner,
)
V .
)
PCB 04-31
PCB 05-43
ILLINOIS ENVIRONMENTAL PROTECTION
)
(UST Appeal)
AGENCY,
)
(Consolidated)
Respondent.
)
RECEIVED
CLERKS
OFFICE
SEP 2 2 2006
Pollution
STATE OFControl
ILLINOIS
Board
RESPONSE TO MOTION FOR SUMMARY JUDGMENT AND CROSS-MOTION FOR
SUMMARY JUDGMENT
NOW COMES Petitioner, BROADUS OIL ("Broadus"), through its undersigned
attorney, and pursuant to Section 101 .516 of this Board's procedural rules, 35 Ill
. Adm. Code
Section 101 .516, hereby responds to the Motion for Summary Judgment filed by Respondent
ILLINOIS ENVIRONMENTAL PROTECTION AGENCY ("Illinois EPA"), and submits its
own cross-motion for summary judgment
. Broadus states as follows :
INTRODUCTION
This is a consolidation of two actions filed by Broadus challenging related decisions of
the Illinois EPA with respect to a LUST remediation project of Broadus' LaSalle County facility
.
PCB 04-31 concerns the IEPA's August 6, 2003 denial of Broadus's High Priority Corrective
Action Plan Budget amendment, and PCB 05-43 concerns the IEPA's September 8, 2003 denial
of Broadus's request for reimbursement of the costs of the remediation work associated with that
amendment . The sole reason for denial of reimbursement was that the budget amendment had
not been approved, and the sole reason the budget amendment had not been approved was the
Illinois EPA's contention that the budget amendment had been submitted subsequent to issuance
of a No Further Remediation
("NFR")
letter, and therefore the amended budget could not be
approved, and reimbursement could not be approved, both as,a matter of law
. Accordingly, both
PCB 04-31 and 05-43 turn exclusively on the issue of whether the Illinois EPA correctly denied
the budget amendment .
FACTS
The facts before this Board are undisputed, and Broadus accepts as accurate the statement
of facts set forth in the Illinois EPA's motion for summary judgment
; Broadus hereby
incorporates those facts as its own, in support of both its response to the Illinois EPA's motion
for summary judgment, and of its own cross-motion for summary judgment
. Broadus would
emphasize, however, several facts not drawn out in the Illinois
. EPA's motion
.
Prior to the submittals at issue in this case, Broadus had submitted previous plans and
budgets for Illinois EPA approval, and had conducted remedial work and obtained
reimbursement for some of that work . (AR 37 ; AR 64)
. The most recent submittals prior to
those at issue in this case were an amended corrective action plan and budget submitted March
12, 2002, and approved on March 27, 2002
. (AR 37)
. A previous request for reimbursement had
been submitted on August 29, 1996, to which the deductible was applied
. (AR 64) .
The budget amendment at issue in this case sought to add the costs of an engineered
barrier which had been constructed at the site, and which was necessary to assure that no
exceedances of inhalation objectives would occur at the site, as well as personnel costs
associated with CACR completion
. (AR 41 - AR 42)
. In reviewing the budget amendment, the
Illinois EPA did not question that the engineered barrier was necessary to address inhalation
exceedances, but instead denied only on the basis of 35 III
. Adm. Code Section 732
.405(d) : the
reviewer stated
: "Amendments will not be reviewed following
.issuance of nfr letter
." (AR 58).
Z
The letter from the Illinois EPA to Broadus denying the budget amendment also only cited
Section 732 .405(d) :
"Pursuant to 35 111 . Adm. Code 732 .405(d), plans submitted to the Illinois EPA]
for review and approval, rejection or modification in accordance with the
procedures in Subpart E must be submitted prior to the issuance of a No Further
Remediation Letter. This budget was received after the December 17, 2002
issuance of the No Further Remediation Letter
."
(AR 59).
Broadus separately submitted a reimbursement application, seeking a total of $62,299
.21 .
The Illinois EPA allowed payment of $37,989.23, but denied $24,289.70 that was associated
with the denied budget amendment
. (AR 66). (The Illinois EPA also denied $19 .02 for
unreasonable costs . Broadus hereby waives argument with respect to that $19
.02 denial, and
seeks no further reimbursement of that amount .)
Broadus submitted all information necessary for issuance of the NFR on November 21,
2002, and the Illinois EPA issued the NFR letter on December 17, 2002 . (AR 1)
. The request
for a budget amendment was dated May 12, 2003, and received by the Illinois EPA on July 24,
2003 (AR 59), and the request for reimbursement that included .the budget amendment items was
received by the Illinois EPA on August 12, 2003 . (AR 64) . The budget amendment was denied
by letter dated August 6, 2003 (AR 59), and the reimbursement request was denied by letter
dated September 8, 2003 . (AR 64) .
All work reflected in both the requested budget amendment and the reimbursement
request was conducted prior to the issuance of the NFR letter on December 17, 2002
. (AR 37 -
AR 58).
3
STANDARD
Although the Illinois EPA accurately sets forth certain standards applicable to this
Board's determinations in underground storage tank fund reimbursement cases, the Illinois EPA
has failed to recognize a number of other salient factors .
First, the Illinois EPA has recognized that "the facts in this case are undisputed" (Illinois
EPA motion, at 2) . Indeed, the Illinois EPA even acknowledges that "[t1he question in this case
is not one of fact, but rather of law
." (Illinois EPA motion, at 6) . As this Board has noted, " It)he
law is well settled that when reviewing a question of law the reviewing court should use the
de
nova standard of review ." City of Kankakee v . County of Kankakee,
PCB 03-125, 03-133, 03-
134, and 03-135 (cons .), 2003 III . ENV LEXIS 462, at *34 (III
. PCB, Aug . 7, 2003) (citing
Panhandle Eastern Pipe Line Co . v
. IEPA, 314 Ill . App. 3d 296, 734 N .E. 2d 18 (4'h Dist. 2000)) .
Because there is no factual issue in this case, there is no question as to whether Broadus
met is burden of proof in its underlying submittal
. Factually, there is no question as to what
information Broadus submitted, and as to whether, other than the issue identified by the Illinois
EPA, that information would have qualified Broadus for reimbursement . The only issue is
whether the regulatory provision cited by the Illinois EPA, 35 III
. Adm . Code 732 .405(d),
constitutes a basis for rejecting both the budget amendment and the request for reimbursement
.
The standard of review for this Board, proceeding pursuant to Section 40 of the Illinois
Environmental Protection Act, 415 ILCS 5/40, is to determine whether the application, as
reviewed by the Illinois EPA, would not violate the Act and this Board's regulations
. Only
information considered by the Illinois EPA at the time its rendered it decision can be considered,
and the Illinois EPA's denial letter frames the issues on appeal
.. Swif-T Food Mart v
. Illinois
EPA, PCB 03-185, slip op . at I I (May 20, 2004) .
y
ANALYSIS
The Illinois EPA rejected Broadus's budget amendment, and subsequently denied
reimbursement, based upon the second sentence of 35 III
. Adm. Code Section 732
.405(d). That
subsection concerns the right of owners/operators to proceed with remediation prior to submittal
or approval of a corrective action plan or budget, and the sentence in question provides
:
"However, any such plan and budget plan shall be submitted to the [Illinois EPA] 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."
A Board Note following the subsection advises
: "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
."
The sum total of the Illinois EPA's argument in this case consists of a single paragraph at
page 6 of its motion, in which the Illinois EPA defines the ssue presented as "whether the
Illinois EPA can consider a High Priority Corrective Action Plan Budget Amendment after the
issuance of a No Further Remediation Letter," and cites Section 732
.405(d) as the only basis for
answering that question in the negative
: "The Illinois EPA is prohibited from reviewing the
High Priority Corrective Action Plan Budget Amendment pursuant Section 732
.405(d)."
(Illinois EPA motion, at 6)
.
The Illinois EPA is completely misconstruing the language specifically at issue at Section
732.405(d),
and in fact misconstrues the entirety of that section
. The Section is entitled "Plan
Submittal and Review
." Subsection (a) of Section 732
.405 concerns the general requirement that
remediation plans be submitted for Illinois EPA review prior to, conducting any remediation
S
activities pursuant to those plans . Subsection (b) provides that, if an owner/operator intends to
seek reimbursement for remediation, the owner/operator shall also submit budget plans for the
remediation work being proposed
. Subsection (c) confirms that the Illinois EPA has authority to
review, approve, reject or require modification of any plans submitted to it
. Subsection (e)
provides that whenever an owner/operator realizes after approval of any plan or budget that
modifications are necessary to comply with the Illinois Environmental Protection Act or this
Board's regulations, the owner/operator "shall submit, as applicable, an amended groundwater
monitoring plan, corrective action plan or associated budget plan for review by the [Illinois
EPA] ." Subsection (f) of Section 732
.405 concerns the Illinois EPA's authority to require
revised corrective action plans in the event an approved plan is not working as anticipated
.
It is against this backdrop that this Board included subsection
(d), which begins
:
"Notwithstanding subsections (a), (b), (e),
and (f) of this Section and except as provided at
Section 732
.407 of this Part [pertaining to alternative technologies, and prohibiting
reimbursement for conventional technology following unsuccessful alternative technology for
which no pre-approval has been received], 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 of an otherwise required groundwater
monitoring plan or budget plan or corrective action plan or budget plan
." In other words,
Subsection (d) concerns those instances where an owner/operator submits no remediation plan or
budget for approval prior to conducting remedial activities, and the regulation allows the
owner/operator to nevertheless proceed with that remediation
. The sentence in question then
follows
: "However, any such plan and budget plan shall be submitted to the Illinois EPA for
review and approval, rejection, or modification in accordance with the procedures contained in
6
Subpart E of this Part prior to payment for any related costs or-the issuance of a No Further
Remediation Letter." Hence, the work can be completed without a remediation plan, but the
remediation plan must be submitted before reimbursement can be obtained for that work, and/or
before an NFR is issued as a result of that work
.
Nothing in this language prohibited the Illinois EPA from considering Broadus's budget
amendment proposal, and consequently denying the associated reimbursement costs
. Simply
put, Broadus was not "proceeding under subsection (d) of this Section," as indicated in the Board
Note following that subsection, but instead Broadus was proceeding under subsection (a),
having
submitted the appropriate High Priority corrective action plan and budget in advance of
conducting the work, and Broadus also was proceeding pursuant to subsection (e),
which allows
amendment of any swch budget
. Nothing in subsections (b) or (e) requires that such amendments
be requested prior to issuance of an NFR, but to the contrary the
only
such restriction is with
respect to subsection
(d), and its consideration of remediation conducted without any advance
approval whatsoever.
Read correctly, the regulatory scheme makes perfect sense
. Clearly an NFR should not
be issued for a site before the corrective action plan for that site has been reviewed and compared
with finalization of remediation, nor should any reimbursement be approved for a site for which
no budget whatsoever has ever been submitted
. On the other hand, where as here a site has
already received Illinois EPA review and scrutiny, including both for corrective action and for
budget, and in fact where the corrective action for which reimbursement is sought has been
determined to have been effective, no reason exists, and none was inserted in this Board's
regulations, limiting budgetary amendments only to those requested prior to issuance of the
NFR.
7
Again, subsection (d) simply does not apply to this site, or to Broadus's request
.
It is notable that the Illinois EPA has attempted to identify the source of regulatory
authority for its action in Subpart D of Part 732, concerning Corrective Action, rather than in
Subpart E, concerning the review of plans, budget plans and reports, or in Subpart F, concerning
payment to owners/operators from the fund . Section 732
.505(c) concerns full financial reviews
of submitted plans, but says nothing about rejecting budget plans that were submitted after the
issuance of an NFR for work completed prior to issuance of the NFR
. Similarly, Section
732.606
provides a lengthy list of costs that are ineligible to be considered corrective action and
thus are not reimbursable, yet not a one of these even suggests that costs associated with an
amended budget, for which the work was completed prior to issuance of the NFR but for which
the budget amendment was not submitted until after issuance of the NFR, is ineligible
. Notably,
though, Section 732
.606 does include reference to costs incurred after an owner/operator
receives the NFR letter (732
.606(kk)) and also includes a blanket prohibition on recovery for
"[c]osts submitted more than one year after the date the [Illinois EPA] issues a No Further
Remediation Letter pursuant to Subpart G of this Part ." (732.606(rr))
. Presumably had this
Board intended to impose a blanket prohibition against reimbursement for costs incurred prior to
NFR issuance but subject to a budget amendment submitted after that, this Board would clearly
have so indicated in the regulatory provision most likely to include that prohibition
. This Board
did not do so, thereby underscoring Broadus's interpretation that no such blank prohibition was
intended, but instead Section 732
.405(d) was intended solely to address those situations where
no prior corrective action plan and budget had been reviewed or approved by the Illinois EPA
prior to the NFR issuance .
9
In addition to the lack of regulatory support for its position, the Illinois EPA also lacks
any statutory basis
. (Of course, if the regulation supports the
.Illinois EPA, but is itself contrary
to the statute, the regulation must be deemed void and the statute controls
. See 5 ILCS 100/ 10-
55
(c)).
Even if this is the type of case subject to 732
.406(d), the Illinois EPA's interpretation of
the regulation will only apply if
i t.i s
consistent with the Illinois Environmental Protection Act's
treatment of the subject, but it is not
. Section 57.7(e)
of the Act, 415 ILCS 5/57 .7(e), addresses
the issue
. That subsection allows an owner/operator to elect to proceed with any 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 [Illinois EPA
at any time ." (415
ILCS 5/57
.7(e)(1) (emphasis added)
. That subsection continues by requiring the Illinois EPA to
"proceed to review in the same manner as required under this Title
." (415 ILCS 5/57
.7(e)(2)).
In turn, Section 57
.8 concerns the underground storage tank fund, and Section 57
.9 concerns
eligibility for reimbursement from that fund (415 ILCS 5/57
.8 and 5/57 .9)
; neither says a thing
about ineligibility based upon an amended budget being submitted to approve payment for
admittedly required corrective action subsequent to issuance of the NFR
.
Simply put, there is no statutory or regulatory authority for the Illinois EPA's action in
this case .
The facts before this Board are undisputed, and it is conceded by the Illinois EPA that the
work for which the amended budget and reimbursement are sought was corrective action
activities eligible for reimbursement from the fund, no genuine issue of material fact exists, and
Broadus is entitled to this Board's judgment as a matter of law requiring the Illinois EPA to
approve the budget amendment, and approve reimbursement of $24,289
.70 in rejected corrective
action costs .
WHEREFORE, Petitioner, BROADUS OIL, requests that this Board deny the motion for
summary judgment submitted by Respondent ILLINOIS ENVIRONMENTAL PROTECTION
AGENCY, and enter a summary judgment in favor of Broadus Oil ordering the Illinois
Environmental Protection Agency to approve Broad Oil's proposed amended budget and
approve for reimbursement an additional $24,289
.70 in corrective action costs, and award to
Broadus Oil all such other and further relief as is within this Board's authority and jurisdiction .
Respectfully submitted,
BROADUS OIL,
Petitioner,
By its attorney,
HEDING LAW OFFICE
By
Hedinger Law Office
2601 South Fifth Street
Springfield, IL 62703
Telephone : (217) 523-2753
Fax: (217) 523-4366
hedinger@cityscape.net
tO
BEFORE THE ILLINOIS POLLUTION CONTROL
BOAgtRK'S
RECEIVED
OFFICE
BROADUS OIL,
)
SEP
2 2
ZUU6
STATE OF ILLINOIS
Petitioner,
)
Pollution Control Board
V .
)
PCB 04-31
PCB 05-43
ILLINOIS ENVIRONMENTAL PROTECTION
)
(UST Appeal)
AGENCY,
)
Respondent.
)
NOTICE OF FILING AND PROOF OF SERVICE
To :
Bradley Halloran, Hearing Officer
Illinois Pollution Control Board
James R . Thompson Center
100 West Randolph Street, Suite 11-500
Chicago, Illinois 60601
Melanie Jarvis
Division of Legal Counsel
IL Environmental Protection Agency
1021 N . Grand Ave . East
P.O. Box 19276
Springfield, IL 62794-9276
The undersigned certifies- that an original and nine copies of Petitioner's Response to
Motion for Summary Judgment and Cross-Motion for Summary Judgment were served upon the
Clerk of the Illinois Pollution Control Board, and one copy was served upon the hearing officer
and the above party of record in this case by enclosing same in envelopes with postage fully
prepaid, and by depositing said envelopes in a U.S
. Post Office Mail Box before 5 :30 p .m
. in
Springfield, Illinois on the/
ay of September, 2006
.
tephen Y edinge
Hedinger Law Office
2601 South Fifth Street
Springfield, IL 62703
Telephone
: (217) 523-2753
Fax : (217) 523-4366
hedinger@cityscape
.net
THIS FILING IS SUUM17TED ON RECYCLED PAPER
