RECEIVED
CLERK’S OFFICE
ILLINOIS POLLUTION CONTROL BOARD
SEP 27 2005
)
STATE OF ILLINOIs
Pollution Control
Board
MIDWEST GENERATION EME, LLC
)
Petitioner,
)
PCB 04-185
)
(Trade Secret Appeal)
v.
)
)
)
ILLINOIS ENVIRONMENTAL
)
PROTECTION AGENCY,
)
Respondent
)
NOTICE OF FILING
To:
Bradley P. Halloran
Hearing Officer
Illinois Pollution Control Board
James R. Thompson Center, Suite 11-500
100 W. Randolph Street
Chicago, IL 60601
Lisa Madigan
Matthew Dunn
Ann Alexander
Paula Becker Wheeler
Office ofthe Attorney General
188 West Randolph Street, Suite 2000
Chicago, Illinois 60601
PLEASE TAKE NOTICE that I have today filed with the Office of the Clerk of the Pollution
Control Board an original (1) and nine (9) copies ofMidwest Generation EME, LLC’s Motion to
Stay PCB 04-185, Memorandum in Support of Midwest Generation’s Motion to Stay IPCB 04-
185, and Midwest Generation’s Status Report, a copy of which is herewith served upon you.
tlut
Acr~’~
Dated: September 27,
2005
SchiffHardin LLP
6600 Sears Tower
Chicago, IL 60606
(312)
258-5687
CERTIFICATE OF SERVICE
I, the undersigned, certify that I have served the attached Midwest Generation EME,
LLC’s Motion to Stay PCB 04-1
85,
Memorandum in Support of Midwest Generation’s Motion
to Stay JPCB 04-185, and Midwest Generation’s Status Report by U.S. Mail, upon the following
persons
Lisa Madigan
Bradley P. Halloran, Hearing Officer
Matthew Dunn
Illinois Pollution Control Board
Ann Alexander
100 West Randolph, Suite 11-500
Paula Becker Wheeler
Chicago, IL 60601
Office ofthe Attorney General
188 West Randolph Street, Suite 2000
Chicago, Illinois 60601
Dated: Chicago, Illinois
September 27, 2005
RespectfUlly submitted,
MIDWEST GENERATION EME, LLC
B~1&a~tV\~S~
SCHIFF HARDIN LLP
6600 Sears Tower
Chicago, Illinois 60606
(312) 258-5687
One of the Attorneys for
Midwest Generation EME, LLC
CH2\
1191021.2
RECEIVED
CLERK’S OFFICE
ILLINOIS POLLUTION CONTROL BOARD
)
)
PollutionSTATE
SEP
OFControl
27
ILLINOIS
2005
SoaM
MIDWEST GENERATION EME, LLC
)
Petitioner,
)
PCB 04-1 85
)
(Trade Secret Appeal)
v.
)
)
ILLINOIS ENVIRONMENTAL
)
PROTECTION AGENCY,
)
Respondent.
)
MIDWEST GENERATION EME, LLC’S
MOTION TO STAY IPCB 04-1 85
Pursuant to 35 III. Adm. Code §101.514, Midwest Generation EME, LLC
(“Midwest Generation”) respectfully submits this Motion to Stay PCB 04-185, and
hereby states as follows:
1.
PCB 04-185 concerns Midwest Generation’s appeal of the Illinois
Environmental Protection Agency’s (“IEPA”) negative trade secret determination
concerning certain business and financial information Midwest Generation originally
submitted to the United States Environmental Protection Agency (“USEPA”) in response
to an Information Request under §114 of the federal Clean Air Act (the “Response”). At
the time of submittal, Midwest Generation conspicuously marked certain information
contained in the Response as “confidential business information” (the “Confidential
Articles”) exempt from disclosure under the Freedom of Information Act (“FOIA”) 5 USC
§552. At the suggestion of USEPA, Midwest Generation sent a copy of the Response
to IEPA.
2.
Subsequently, the Sierra Club submitted an FOIA request to IEPA
requesting a copy of the Response. IEPA directed Midwest Generation to file a
Statement of Justification for its trade secret claims as required by the Illinois
Environmental Protection Act (“Illinois Act”), 415 ILCS §7 and the Illinois Pollution
Control Board’s (the “Board”) implementing regulations codified at 35 Ill. Adm. Code
§130.201 et ~g.
Midwest Generation submitted the Statement of Justification, but
IEPA summarily determined that many of Midwest Generation’s claims did not
constitute trade secrets under the Illinois Act and therefore were not exempt from
disclosure under 35 Ill. Adm. Code Fart §130. Midwest Generation has filed this matter
with the Illinois Pollution Control Board (“Board”) to review IEPA’s determination.
3.
Midwest Generation has recently learned that the Sierra Club also
submitted a FOIA request to USEPA for the Response. The Sierra Club submitted its
request to USEFA on April 19, 2004, but it was not until June 30, 2005 that USEPA
informed Midwest Generation of this request and provided Midwest Generation an
opportunity to submit information supporting its claim that certain information in the
Response was confidential business information protected from disclosure under FOIA.
4.
On July 28, 2005, Midwest Generation submitted this information and the
USEPA is now in the process of determining whether to exempt the materials claimed to
be confidential business information from release under FOIA. Therefore, both USEPA
and the Board are currently addressing the same fundamental question: Are the
Confidential Articles exempt from disclosure.
5.
For the reasons set forth in the accompanying Memorandum in Support of
the Motion to Stay, Midwest Generation respectfully requests that the Board Stay 04-
-2-
185 until resolution of the federal process for determining if Confidential Articles are
exempt from disclosure.
Dated: September 27, 2005
Respectfully submitted,
MIDWEST GENERATION EME, LLC
By:~4t’
Sheldon A. abel
Mary Ann Mullin
Andrew N. Sawula
SCHIFF HARDIN LLP
6600 Sears Tower
Chicago, Illinois 60606
(312) 258-5687
Attorneys for
Midwest Generation EME, LLC
CH2\ 1290197.1
-3-
BEFORE THE ILLINOIS POLLUTION
)
CONTROL BOARD
RECEIVED
CLERK’S OFFICE
Midwest Generation EME, LLC
)
SEP 2’? 2005
Petitioner,
STATE OF ILLINOIS
I PCB No. 04-185PollutIon Control Board
v.
)
(Trade Secret Appeal)
)
Illinois Environmental Protection Agency,)
Respondent
)
MEMORANDUM IN SUPPORT OF MIDWEST GENERATION EME, LLC’S
MOTION TO STAY IPCB 04-1 85
Midwest Generation EME, LLC (“Midwest Generation”) respectfully
submits this Memorandum in Support of its Motion to Stay IPCB 04-1 85.
I. INTRODUCTION
The matter before the Illinois Pollution Control Board (“Board”) is the
appeal of an Illinois Environmental Protection Agency (“IEPA”) determination under the
provisions of 35 Ill. Admin. Code Part 130 that certain of Midwest Generation’s business
and financial information in IEPA’s possession does not constitute trade secret
information exempt from disclosure to third parties. As more fully set forth below, IEPA
made this determination in response to a Sierra Club Freedom of Information Act
(“FOIA”) request for this information. IEPA has taken the position that it can now
release this information to the Sierra Club. Midwest Generation has petitioned the
Board to review this determination.
Midwest Generation originally submitted the information at issue to the
United States Environmental Protection Agency (“USEPA”) in response to an
information request pursuant to Section 114 of the Clean Air Act. Midwest Generation
sent a copy of the information to IEPA at the suggestion of USEPA.
Midwest
Generation recently learned that the Sierra Club has an identical FOIA request pending
before USEPA. USEPA is now in the process of determining whether the information
constitutes confidential business information (“CBI”) under the federal FOIA and is,
therefore, exempt from disclosure. .~
5 U.S.C.
§
552 and 40 C.F.R. Part 2 Subpart B.
Accordingly, Midwest Generation moves the Board to stay PCB 04-1 85 until the federal
CBI determination is completed.
II. FACTS
In 2003, Midwest Generation received an information request pursuant to
Section 114 of the Clean Air Act (“Information Request”) from USEPA, seeking
information regarding six of Midwest Generation’s coal-fired generating stations. The
Information Request specified that Midwest Generation could assert a claim of business
confidentiality and that information subject to such a claim would be available to the
public only to the extent allowed under 40 C.F.R. Part 2, Subpart B. Information
Request at 2 (Attached hereto as attachment 1). In the response Midwest Generation
submitted to USEPA on November 6, 2003 (the “Response”), Midwest Generation
included certain financial and business data marked conspicuously as “confidential
business information.” This information consisted of data on two charts, which Midwest
Generation spent many months compiling specifically for its Response. The first chart
listed monthly net and gross generation, monthly net and gross heat rate and monthly
average coal heat content for each unit (the “Generation Chart”). The second chart
described certain maintenance projects undertaken at the stations, identified the dates
the projects were undertaken, and detailed expenditures for the projects (the “Project
Chart”). (Collectively, the Generation Chart and Project Chart are referred to hereinafter
2
as the “Confidential Articles.”) At USEPA’s suggestion, Midwest Generation sent an
identical copy of its Response to IEPA.
A. IEPA Denial of Trade Secret Status
By letter dated January 5, 2004, IEPA asked Midwest Generation to
provide a Statement of Justification for its confidentiality claims following the agency’s
receipt of a FOIA Request from the Sierra Club for the Response. Specifically, IEPA
stated that, pursuant to the requirements of the Illinois Environmental Protection Act
(the “Illinois Act”) and the Illinois Pollution Control Board’s (the “Board’s”) implementing
regulations, codified at 35 III. Admin. Code
§
130.201 p~~g., Midwest Generation must
submit a “trade secret” justification.
On January 23, 2004, Midwest Generation submitted a Statement of
Justification as requested by IEPA. In its statement, Midwest Generation set forth the
legal requirements for trade secret status and argued that those requirements are
satisfied. Specifically, Midwest Generation detailed its corporate policies governing the
handling of sensitive information and set forth the measures used to protect the
Confidential Articles. Midwest Generation’s justification discussed the competitive value
of the information and informed IEPA that releasing its information would place Midwest
Generation at an economic disadvantage because informed observers and competitors
could ascertain overall business strategies, alter bidding practices and infer operational
plans from a review of these materials. Midwest Generation’s Statement of Justification
was accompanied by an Affidavit from a corporate official attesting that the confidential
information was not public knowledge.
3
On March 10, 2004, IEPA denied Midwest Generation’s trade secret
claims and stated that the Confidential Articles were, in the agency’s determination, not
exempt from disclosure under the Illinois Act. In its denial, the agency simply stated,
tracking the regulations without explanation, that Midwest Generation failed to
adequately demonstrate that the Confidential Articles had not been disseminated or
published and/or that the information has competitive value.
Additionally, IEPA
asserted that the Project Chart constituted “emission data.”
On April 19, 2004, Midwest Generation timely petitioned the Board to
review IEPA’s ruling and reverse the negative trade secret determination. In an order
issued on May 6, 2004, the Board accepted the petition for review.
B. USEPA Proceeding
On June 30, 2005, Midwest Generation learned that an identical Sierra
Club FOIA request was pending with USEPA.
Although the FOIA request was
submitted on April 2, 2004, USEPA did not inform Midwest Generation of the request or
ask Midwest Generation to submit information supporting its claims of confidentiality
until June 30, 2005. By letter dated July 28, 2005, Midwest Generation provided
USEPA with a substantiation of its confidentiality claims. USEPA is currently reviewing
the confidential status of the Response.
II. ARGUMENT
Pursuant to 35 Ill. Admin. Code 101.514, Midwest Generation moves this
Board to stay IPCB 04-185, pending resolution of the federal CBI determination
4
process.1 The Board and USEPA are currently addressing the same fundamental
question: Are the Confidential Articles exempt from disclosure? Granting a stay would
(1) avoid the costly and inefficient allocation of resources that is necessarily resulting
from duplicative proceedings, (2) avoid practical difficulties that might arise from
contrary determinations by state and federal agencies, and (3) allow the Board to be
informed by a closely related federal determination.
Illinois courts have recognized that multiplicity of litigation results in an
inefficient expenditure of resources for both the forums and the parties, who must
prepare for both proceedings. Village of Mapleton v. Cathy’s Tap, 313 Ill. App~3d at
264, 268 (3~Dist. 2000) (multiplicity of litigation is a valid consideration in granting
motions to stay). Board regulations define a duplicative proceeding as a matter
“identical or substantially similar to one brought before the Board or another forum.” 35
Ill. Admin. Code 101.202.
A substantially similar proceeding involving Midwest
Generation’s confidentiality claims is currently under way at the federal level. Since July
28, 2005, the date on which Midwest Generation submitted its substantiation letter,
USEPA has been engaged in an analysis of the confidentiality of the Confidential
Articles. This evaluation was prompted by Sierra Club’s FOIA request, substantively
identical to the one sent to IEPA, for the Response. The Confidential Articles at issue in
both the Board and the USEPA proceedings are identical. In fact, the documents
reviewed by IEPA, and on appeal, by the Board, are photocopies of the Response.
Not only do the state and federal proceedings share factual commonality,
but the applicable legal standards governing both confidentiality determinations are also
Midwest Generation has also moved to stay PcB 04-216. a trade secret appeal concerning different
information which is subject to a separate FOIA Request pending before USEPA.
5
substantially similar. See Monstanto v. Illinois EPA et al., PCB 85-19 (1985) (citing
federal judicial interpretations of the federal FOIA in support of ruling under 35 III.
Admin. Code Part 120); Outboard Marine Corp. v. Illinois EPA et al., PCB 84-26 (1984)
(“The Board notes that its broad construction of standing under 35 III. Code Part 120
comports with the federal courts’ interpretation of standing under the federal ‘Freedom
of Information Act’
(5 USC
552,
as amended)”).
See also, Cooper v. Dep’t of the
Lottery, 640 N.E.2d 1299 (III. App. Ct. 1st Dist. 1994) (citing federal FOIA caselaw in
trade secret analysis under Illinois FOIA). Both the Board’s trade secret regulations,
codified at35 Ill. Admin. Code Part 130, and similar trade secret provisions in the Illinois
FOIA, are frequently interpreted by the Board and by Illinois courts with reference to
federal analyses of analogous federal FOIA standards. Id. In Monsanto and Outboard
Marine Corp., for example, the IPCB considered federal cases interpreting the federal
FOIA as guides during its own analyses of the trade secret provisions promulgated
under Section 7 of the Illinois Act. Monsanto, PCB 85-19; Outboard Marine Corp., PCB
84-26. Similarly, Illinois courts have routinely held that “caselaw construing the federal
statute should be used in Illinois to interpret the Illinois FOIA.”2 ~
Cooper, 640
N.E.2d at 1303; Roulette v. Dep’t of Cent. Mgmt. Servs., 490 N.E.2d 60.
For one issue that the Board and USEPA will be deciding simultaneously,
federal regulation is controlling.
The Illinois Act excludes “emission data” from
protection as a trade secret and incorporates the federal definition of “emission data”.
See 415 ILCS 5/7. While Midwest Generation vehemently opposes the characterization
of the Project Chart, a listing of maintenance projects, as “emission data,” IEPA’s denial
2
Indeed, Illinois FOIA exempts from disclosure “information specifically prohibited from disclosure by
federal or State law or rules or regulations adopted under federal or State law.” 5 ILCS
140/7(1
)(a). See
also 2 III. Admin. code § 1828.202(a)(1)(A).
-
6
of trade secret protection was based, in part, on its determination that the Project Chart
constituted “emission data” under the regulations implementing Sectionll4 of the Clean
Air Act. Id. Accordingly, the Board and USEPA will be simultaneously applying the
federal regulatory term “emission data” to the Project Chart. USEPA has the primary
duty to interpret the Clean Air Act and its own regulations, and the Board, at the least,
owes deference to those interpretations. See Chevron U.S.A. Inc. v. Natural Resources
Defense Council, Inc., 467 U.S. 837, 104 S. Ct. 2778, 81 L. Ed. 2d 694 (1984). In fact,
the Board may be bound by USEPA’s interpretations but, even if not bound, principles
of comity encourage the Board to consider that determination. Doing so is particularly
appropriate in this instance because the IEPA determination rests on-its interpretation of
an USEPA regulation.
See, ~
Mather Investment Properties LLC v. Ill. State
Trapshooters, IPCB 04-29 (2005).
(Principles of comity caution against contrary
determinations, at least where a stay of one proceeding remains possible.) Achieving
“consistent construction” between determinations of trade secret status at the state and
federal levels in this case would be facilitated bya stay, which would allow IPCB to be
informed by the federal confidentiality determination during its own analysis.
A denial of a FOIA request at the federal level, but not at the state level,
provides an incentive for FOIA requestors to circumvent one agency’s confidentiality
determinations by simply directing their requests to another agency.
Just as
confidentiality determinations among various state agencies, including IEPA and IDNR,
are coordinated pursuant to state regulations, see, ~
35 III. Admin. Code 132.216,
similar coordination of state and federal determinations makes sense. This coordination
also promotes the efficient allocation of resources. If, for example, at the conclusion of
7
the federal process, the Confidential Articles are released to the Sierra Club, the Board
proceedings will be largely moot.
**
*
WHEREFORE, Midwest Generation respectfully requests that its Motion
to Stay IPCB 04-185 pending USEPA’s determination of Midwest Generation’s
confidentiality claims be granted, pursuant to 35 III. Admin. Code 101.514.
Dated: September 27, 2005
Respectfully submitted,
MIDWEST GENERATION EME, LLC
By
Mary(Ann Mullin
SCHIFF HARDIN LLP
6600 Sears Tower
Chicago, Illinois 60606
(312) 258-5687
Attorneys for
Midwest Generation EME, LLC
C112\ 1290816.2
8
I
UNITED STATES
ENVtRONMENTM.,
PROTECTION AGENCY
-
REGION 5
IN TUE MATTER OF:
Midwest Generation EME, IJLC
One Financial Fiance
440 5. LaSalle Street
Suite 3500
Chicago, Illinois 60605
ATTENTION:
Basil G. Coristantelos, Dire
Environmental, Health
Request to Provide Information Pursuant to t
The ‘Jnited States Environmental Protection Agency
L’.~....
PA)
is requiring Midwest Generation (you) to submit certain
information concerning the following stations: Crawford, Joliet,
Will county, Waukegan,
Fisk,
Pc’werton. Appendix A specifies the
information that you must submit. You must submit this
information to us within 45 days of receipt of this request.
We are issuing this information request under Section 114(a)
of the Clean Air Act (Act), 42 U.S.C.
§
7414(a). Section 114(a)
authorizes the Administrator of
U.S.
EPA to require the
submission of information. The Administrator has delegated this
authority to the Director of the Air and Radiation Division,
Region 5.
Midwest Generation owned and operated emission sources at
several plants located in Illinois. You are required to provide
the information specified herein in order to determine whether
your emission sources were complying with the Illinois State
II
2
Implementation Plan and applicable provisions of the New Source
performance Standards at 40 C.F.R. Fart 60.
You must send all required information to:
Attn: Compliance Tracker, AE-17J
Air Enforcement and Compliance Assurance Branch
U.S. Environmental Protection Agency
Region 5
77 West Jackson Boulevard
Chicago, Illinois 60604
We suggest that you provide copies to the Illinois
Environmental Protection Agency (IEPA)
Julie Armitage., Acting Manager
Compliance and Systems Management Section
Bureau of Air
Illinois Environmental Protection Agency
1021 North Grand Avenue East
Springfield, Illinois 62702
You may consider the information confidential that you
submit to us. You may assert a claim of business confidentiality
for any portion of the submitted information, except emission
data, under 40 C.F.R. Part 2, Subpart B. Information subject to
a business confidentiality claim is available to the public only
to the extent allowed under 40 C.P.R. Part 2, subpart B. Failure
to assert a business confidentiality claim makes all submitted
information available to the public without further notice.
Midwest Generation must submit all requested information
under an authorized signature certifying that the information is
true and complete to the best knowledge of the certifying
official after due inquiry. Knowingly providing false
II
3
information, in response to this request, may be actionable under
Section 113(c) (2) of the Act, and 18 U.S.C.
§~
1001 and 1341.
We may use any information submitted in response to this
request in an administrative, civil, or criminal action.
This request is not subject to the Paperwork Reduction Act,
44 U.S.C.
§
3501 et
~
because it seeks collection of
information from specific individuals or entities as part of an
administrative action or investigation.
Failure to comply fully with this request for information
may subject Commonwealth Edison toan enforcement action under
Section 113 of the Act, 42 U.S.C.
§
7413.
You should direct any questions about this request for
information to Kathy Memmos at (312) 353-4293.
z/’ /100 S
Date
Stephen Rothblatt, Director
Air and Radiation Division
BEFORE THE ILLINOIS POLLUTION CONTROL
BflêbEIVED
CLERICS OFFICE
Midwest Generation EME, LLC
SEP 2720135
Petitioner,
)
PollutionSTATE OFControl
IWNOIS
Board
IPCB No. 04-1 85
V.
)
(Trade Secret Appeal)
)
Illinois Environmental Protection Agency,)
Respondent
)
STATUS REPORT
In compliance with 35 III. Adm. Code §101.514, Midwest Generation EME, LLC
(“Midwest Generation”) respectfully submits this status report on the above captioned
mailer:
This mailer concerns the trade secret status of certain information Midwest
Generation originally submitted to the United States Environmental Protection Agency
(“USEPA”) pursuant to an information request under Section 114 of the Clean Air Act
regarding six of Midwest Generation’s coal-fired generating stations. At the suggestion
of USEPA, Midwest Generation sent an identical copy of this information to the Illinois
Environmental Protection Agency (“IEPA”).
In its submittal to USEPA, Midwest
Generation prominently marked some of the information as confidential.
By letter dated January 5, 2004, IEPA asked Midwest Generation to provide a
Statement of Justification for its confidentiality claims following the agency’s receipt of a
FOIA Request from the Sierra Club for the information. On January 23, 2004, Midwest
Generation submitted a Statement of Justification as requested by IEPA. On March 10,
2004, IEPA denied Midwest Generation’s trade secret claims and stated that the
information was not exempt from disclosure. On April 19, 2004 Midwest Generation
petition the Illinois Pollution Control Board (“Board”) for review of this determination: by
an Order dated May 5, 2004, the Board accepted the Petition for Review.
The Board has ruled on certain procedural motions in this matter, but discovery
has not begun. By Order dated November 4, 2004, the Board denied Sierra Club’s
Motion to Intervene, ordered the IEPA to clarify its trade secret determination, and
partially denied Midwest Generation’s Motion for Partial Reconsideration. On November
30, 2004, IEPA filed a document purporting to be a clarification of its trade secret
determination. On December 9, 2004, Midwest Generation filed a Motion to Strike
IEPA’s Clarification. The Board has not yet ruled on this motion.
On December 13, 2004, Midwest Generation filed a Petition for Review of the
Board’s November 4, 2004 Order with the Third Appellate District. On January 20,
2005, the Board, on its own motion, stayed this mailer pending the Third District
Appellate Court’s decision on Midwest Generation’s appeal. On March 4, 2005, the
Third District dismissed Midwest Generation’s Appeal.
Currently, the parties are waiting for the Board to rule on Midwest Generation’s
Motion to Strike. The next telephone status conference in this mailer is scheduled for
November 10, 2005.
Dated: September 27, 2005
Respectfully submitted,
MIDWEST GENERATION EME, LLC
heldon A. Zat$’e
Mary Ann Mullin
Andrew N. Sawula
SCHIFF HARDIN LLP
6600 Sears Tower
Chicago, Illinois 60606
(312) 258-5687
Attorneys for
Midwest Generation EME, LLC
CH2\ 12943981
