BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

PEOPLE

OF THE STATE OF ILLINOIS, )

Complainant,

vs.

COMMUNITY LANDFILL COMPANY,

INC., an Illinois corporation, and

the CITY

OF MORRIS, an Illinois

municipal corporation,

Respondents.

)

)

)

)

)

)

)

)

)

)

)

PCB No. 03-191

(Enforcement)

NOTICE OF FILING

TO: Christopher Grant

Environmental Bureau

Assistant Attorney General

69 West Washington

18th Floor

Chicago, Illinois

60602

Charles

F. Helsten

Richard

S. Porter

Hinshaw

&

Culbertson, LLP

100 Park A venue

P.O. Box 1389

Rockford, Illinois 61105-1389

Bradley Halloran

Hearing

Officer

Illinois Pollution Control Board

100 West Randolph

Suite 11-500

Chicago, Illinois 60601

Scott Belt

Scott Belt and Associates, PC

105 East Main Street

Suite 206

Morris, Illinois 60450

PLEASE TAKE NOTICE that on July 27, 2009, the undersigned caused to be filed

electronically before The Illinois Pollution Control Board

COMMUNITY LANDFILL CO.,

INC.'S MEMORANDUM IN SUPPORT OF ITS MOTION FOR RECONSIDERATION

OF THE ILLINOIS POLLUTION CONTROL BOARD'S ORDER DATED JUNE 18,

2009 with the Clerk

of the Illinois Pollution Control Board, 100 W. Randolph Street, Suite 11-

500, Chicago, Illinois 60601, a copy

of which is attached and hereby served upon you.

/s/ Clarissa

Y. Cutler

One

of the Attorneys for Community Landfill Co.

THIS FILING IS SUBMITTED ON RECYCLED PAPER.

Electronic Filing - Received, clerk's Office, July 27, 2009

---

Mark

A.

LaRose

LaRose

&

Bosco, Ltd.

200 North LaSalle Street, Suite 2810

Chicago, Illinois 60601

(312) 642-4414

Clarissa

Y. Cutler

Attorney at Law

ISS North Michigan Avenue, Suite 375

Chicago

1L

6060 I

(312) 729-5067

THIS FILING IS SUBMITTED ON RECYCLED PAPER.

---

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

PEOPLE OF THE STATE OF ILLINOIS, )

ex reI.

LISA MADIGAN, Attorney

)

General

of the State of Illinois,

)

Petitioner,

-vs-

COMMUNITY LANDFILL CO.,

an

Illinois corporation, and

the CITY OF MORRIS, an Illinois

municipal corporation,

Respondents.

)

)

)

)

)

)

)

)

)

)

)

PCB 03-191

(Enforcement - Land)

COMMUNITY LANDFILL CO., INC.'S MEMORANDUM IN SUPPORT OF ITS

BOARD'S ORDER DATED JUNE 18,2009

Respondent, COMMUNITY LANDFILL CO., INC., by and through its attorneys Mark

A.

LaRose of LaRose

&

Bosco, Ltd. and Clarissa Y. Cutler, pursuant to 35 IlI.Adm. Code

101.520(a) and 101.902, hereby move the Illinois Pollution Control Board to reconsider its Order

dated June 18,2009, and in support thereof, states as follows:

I.

INTRODUCTION

Community Landfill Co., Inc.' s ("CLC") Motion to Reconsider the Illinois J.:'ollution

Control Board's Order Dated June 18, 2009 is timely filed pursuant to 35 Ill.Adrn. Code

101.520(a), which allows a motion for reconsideration

of an order by the Illinois Pollution

Control Board ("Board") to be filed 35 days after receipt

of an order.

In

the present matter, the

Order was received via registered mail by CLC on June 22, 2009. TIns motion is timely filed on

July 27, 2009.

II.

LEGAL STANDARDS

CLC moves the Board for reconsideration of its Order dated June 18, 2009 to bring the

1

---

Board's attention to errors in the Board's application of existing law. 35 IlI.Adm.Code 101.902;

Citizen's Against Regional Landfill

v. County Board of Whiteside County, PCB 920156, slip op.

at 2 (March II, 1993), citing Korogluyan v. Chicago Title Trust Co., 213 Ill.AppJd 622,627,

572 N.E.2d 1154, 1158 (1st Dist 1991). A motion to reconsider may specify facts in the record

which were overlooked.

CLC moves the Board for reconsideration

of several rulings contained in its Order dated

June 18,2009. (See Order dated June 18,2009, attached as Exhibit A and incorporated herein).

CLC also seeks reconsideration

of several issues contained in the Board's Interim Opinion and

Order dated February 16,2006. (See Order dated February 16,2006, attached

as Exhibit B and

incorporated herein). However, CLC specifically reserves the right to raise

on appeal to the

Third District Appellate Court any and all additional issues in either Order even if not contained

in the present motion.

J

III.

FACTS AND

PROCEDURAL HISTORY

The underlying facts of this matter have been the subject of extensive litigation. A brief

synopsis follows. With the Agency's knowledge and approval, pursuant to two significant

modification permits issued

to Respondents City of Morris (as owner) and CLC (as operator),

2000-155-LPM for Parcel A and 2000-156-LPM for Parcel B, respondents obtained $17,427,366

in financial assurance for closure/post-closure activities in the form

of three surety bonds from

I

The following citations will be used throughout CLC's Motion for Reconsideration: The Illinois Pollution Control

Board's Order

in PCB 03-191 date June 18,2009 will be referred to as either "Exh. A at _" or "Order dated June

18,2009

at_"; The Illinois Pollution Control Board's Interim Opinion and Order in PCB 03-191 dated February

16,2006 will

be referred to as either "Exh. B at _" or "Order dated February 16,2006 at _"; CLC exhibits

admitted at the Hearing

in PCB 03- I 91 on September 11-12, 2007 will be referred to as "Hearing - CLC Exh. _";

CLC's Post-Hearing Brief in PCB 03-191 filed on November 30,2007 will be referred to as "Hearing - CLC Exh.

_"; CLC's exhibits filed with its Response to Complainant's Motion for Summary Judgment fled on October 3,

2005 will be referred to

as "CLC Response, Exh. _"; the City of Morris' Post-Hearing Brief filed on Nov. 30,2007

will be referred to as "City Post-Hearing Briefat_"; the Complainant's Post-Hearing Brief filed on October 19,

2007 will

be referred to as "Complainant's Briefat_"; and the City of Morris' Motion for Reconsideration of the

Pollution Control Board's Order

of June 18,2009 will be referred to as "City Motion for Recosideration of June 18,

2009

Order at _".

2

---

Frontier Insurance Company ("Frontier" or "surety"). (See Hearing - CLC Exhs. 15, 16 and 17).

CLC is the principal for two

of the bonds, nos. 158466 and 91507 which have face values of

$5,906,016 and $1,439,720 respectively for a total face value of $7,345,736. The City is the

principal for bond no. 158465 which has a face value

of $10,081,630. Bond nos. 158466 (CLC)

and 158465 (City) expired on May 31, 2005 and bond no. 91507 (CLC) expired on June

14,

2005. (See Hearing - CLC Exhs. 15,16 and 17).

Prior to CLC's 1999 SigMod application, the closure and post-closure bond was $1.4

million. (CLC Post-Hearing Brief at 9). CLC proposed $7 million in financial assurance because

the City agreed

to treat the leachate and condensate from the landfill which would cost approx.

$10 million. (CLC Post-Hearing Brief at

9). The Agency rejected the $7 million and requested a

bond for the entire $17 million. The Agency approved the City and CLC' s agreement that CLC

would pay for all

of the bonds and that $10 million would be in the City's name. (CLC Post-

Hearing Brief at 9). The cost to CLC for the annual premiums was more than $200,000 with

cash collateral

of just under $200,000. (CLC Post-Hearing Brief at 9-10). The Agency reviewed

the drafts

of the Frontier bonds before they were issued and approved of the bonds before CLC

committed

to purchasing them. (CLC Post-Hearing Brief at 10). The Agency approved the

bonds even though it was specifically aware that Frontier Insurance had been delisted from the

U.S. Department

of Treasury's Circular 570 list of approved sureties. (CLC Post-Hearing Brief

at 11).

When all three

of the bonds were issued, Frontier was both licensed by the Illinois

Department ofInsurance and was on the U.S. Dept.

of Treasury's Circular 570 List of approved

sureties. (CLC Post-Hearing Brief at 10). Christine Roque testified that the permit was granted

in August 2000 because CLC posted adequate financial assurance. (CLC Post-Hearing Brief at

3

---

10). When the bonds were approved on August 4,2000, John Taylor, John Kim and then Bureau

of Land permit manager Joyce Munie alllmew that Frontier had been removed from the Dept. of

Treasury 570 list on June 1,2000. (CLC Post-Hearing Brief at 11). Joyce Munie directed John

Taylor to "find a way

to accept the bonds and put the operators on the hook for $17 million in

financial assurance." (CLC Post-Hearing Brief at 11).

If the Agency had rejected the bonds

when it knew that Frontier had been de-listed, CLC would have closed the landfill pursuant to

the permit requirements with the $1.4 million bond. (CLC

Post-Hearing Brief

at 11). Instead,

when the Agency approved the bonds, knowing full well that Frontier had been delisted, CLC

put up the collateral and purchased the bonds for the first year premium

of $208,730. (CLC

Post-Hearing Brief at 11).

CLC then filed a supplemental permit application

to receive approval for the construction

of a separation layer and to receive authorization for the acceptance of waste for disposal in a

newly constructed area and spent one year building and developing the new cell. (CLC Post-

Hearing Brief at 11).

In spite

of the absence of any law, rule or regulation, Agency employee

Blake Harris recommended on May 9, 2001 that the Frontier bonds be rejected and the permit be

denied because Frontier was no longer on the 570 list. (CLC Post-Hearing Brief

at 12). Harris'

recommendation was accepted without question

by permit manager Joyce Munie in spite of John

Taylor's opinion that the bonds still conformed with the most stringent reading

of the Act and the

regulations

as of May 2001, since: the bonds were issued when Frontier was on the 570 list; and

there

is no provision of the Act, rules or regulations that requires or even allows the Agency to

deny permits based on a subsequent removal from the 570 list. (CLC Post-Hearing Brief at 12).

The Agency denied the permit on that basis even though it Imew that Frontier had been de-listed

at the time it pre-approved the bonds

in

August 2000. (CLC Post-Hearing Brief at 12). If the

4

Electronic Filing - Received, clerk's Office, July 27, 2009

---

Frontier bonds had not been approved in August 2000, no additional financial assurance would

have been tendered by CLC or the City and

CLC would have been responsible for one year's

premium on only $1.4 miIlion or approximately $26,850. (CLC Post-Hearing Brief at 12).

The Board ruled that the Frontier bonds did not meet the requirements

of 35

Ill.Adm.Code 811.712(b) because Frontier had been removed from the Department of the

Treasury's Circular 570 list

of approved sureties. Community Landfill Company and City of

Morris v. Illinois Environmental Protection Agency. PCB 01-170 (Dec. 6, 2001, slip op. at 22).

The Board's decision was subsequently affirmed by the Third District Appellate Court.

Community Landfill Company and City

of Morris v. Illinois Pollution Control Board, 331

IlI.App.3d 1056, 1061, 772 N.E. 2d 231, 235 (3

rd

Dist. 2002)

(modified lipan denial of

rehearing),

2002). CLC filed a petition for leave to appeal to the Illinois Supreme Court, which

was denied. On April 17, 2003, Complainant filed a one-count complaint in the Illinois Pollution

Control Board against the City

of Morris and CLC in the present matter alleging a failure to

provide adequate financial assurance.

On March 20, 2003, one month before the complaint in the present matter was filed, CLC

asked Frontier about continuing payments for premiums on the bonds that the Third District

Appellate Court had determined were insufficient to allow the landfill to continue operations.

(See Hearing - CLC Exh. 4). On April

7, 2003, Scott Azzolini, Surety Underwriting Manager for

Frontier responded " ...

we concur with your conclusion that no further premium biIlings are

warranted on these bonds

as tlle permit application was denied on May 21, 2001. As such, we

are reversing all renewal billings for the above referenced bids and closing our file based on the

May 11,2001 date." (See Hearing - CLC Exh. 5).

On June 19, 2003, CLC formally requested that Frontier release its collateral. (See

5

---

Hearing - CLC Exh. 8). On July 2, 2003, Frontier requested that the Agency execute a release

so that the collateral could be properly returned to CLC. (See Hearing - CLC Exh. 9). On

August 21, 2003, the Agency refused

to do so on the grounds that alternate financial assurance

had not been received. (See Hearing - CLC Exh. 11). On December 18, 2003, CLC again made

a demand for the return

of its collateral. (CLC Response, Exh. J) and has continued to do so.

Frontier's position has not changed; it has assured CLC that it will return the collateral upon

receipt

of a release from the Agency. (See CLC Response, Exh. K).

On January 27, 2004, almost one year after the Agency filed its complaint against

respondents alleging inadequate financial assurance, Agency employee Beverly Anderson

specifically stated in writing

that "Morris Community Landfill is providing financial assurance

for closure

and post-closure costs through three Frontier Performance bonds ... " (See Hearing -

CLC Exh. 12). On January 29, 2004, Frontier acknowledged that the Agency had "specifically

indicated that these bonds are still in force" and warranted that premiums be billed. (See CLC

Response, Exh. M).

Finally, on May 27, 2005, then director

of the Illinois Environmental Protection Agency,

Renee Cipriano, made a demand on Frontier for bond nos. 158466 and 91507, the bonds for

which CLC

is the principal, for a total of $7,345,736.00. (See CLC Response, Exh. N). The

Agency argued that even though the Frontier bonds did not meet the requirements

of the Board

regulations to allow the landfill to operate, the bonds were still valid and the Agency had every

right to collect on them. (See CLC Response, Exh. N, p.6)

On July 21, 2005, nearly two months after it made its claim against Frontier, the State

filed a motion for summary judgment arguing that there was no genuine issue

of material fact

that respondents had not posted adequate financial assurance. The Agency did not inform the

6

---

Board that it had made a claim on those very same bonds that

it

fought so long and hard to keep

from being accepted.

On February 16, 2006, the Board issued an Interim Opinion and Order wherein

it granted

the Complainant's Motion for Summary Judgment on the issue

of liability. The Board sent the

matter for hearing on the specific issue

of "remedy" including penalty, costs and attorneys fees if

appropriate. (See Exh. B at 16). CLC timely filed a Motion for Reconsideration on March 31,

2006 which was denied by the Board on June

1, 2006. The matter proceeded to hearing on

"remedy" on September 11-12, 2007. The Complainant's post-hearing brief was filed on

October 19, 2007 and CLC's post-hearing brief was filed on November 30, 2007. On June 18,

2009, the Board issued an Opinion and Order from CLC now seeks reconsideration.

IV.

ARGUMENT

A.

IMPROPER

Respectfully, the Board has improperly ordered "affirmative" relief which is not available

to the State under Section

33 of the Environmental Protection Act (the "Act"). "Affinnative"

relief is only proper

if the State seeks injunctive relief in the circuit court.

Pursuant to Section 33(c)

of the Act, the Board may direct a respondent to cease and

desist from violations

of the Act and/or the Board may impose civil penalties in accord with

Section 42

of the Act. 415 ILCS 5/33. On the other hand, Section 43 of the Environmental

Protection Act provides that the Attorney General may institute a civil action for an immediate

injunction to halt any discharge or other activity causing or contributing to the danger or to

require such other action

as may be necessary (emphasis added). 415 ILCS 5/43.

When the language

of the statute is clear and tmambiguous, it will be given effect without

resort to other tools

of construction. People ex reI. Ryan and Douglas v. IBP. Inc., 309 IlI.App

7

---

3d 631, 636, 723 N.E.2d 370, 374 (3

rd

Dist. 1999). No language is present in Section 33 that

authorizes the "affirmative" relief sought by the State and ordered by the Board, including

requiring respondents

to post financial assurance, submit revised cost estimates, or order that no

additional waste can be accepted . 415 ILCS

5/33;

Exh. A at 35. Those specific acts could be

ordered by the circuit court ifthe State had proceeded successfully under Section 43 and sought

injunctive relief against CLC and the City

of Morris. However, because the State did not

proceed under Section

43 of the Act, and instead proceeded against the respondents under

Sections

33 and 42 of the Act, the Board is limited to directing respondents to cease and desist

from violations of the Act and to imposing civil penalties. Therefore, on reconsideration, the

Board should vacate the "affirmative" relief

it granted including requiring the posting of

financial assurance in the amount of $17,427,366, submitting revised cost estimates, updating

financial assurance, and ordering that no additional waste can be accepted, and hold that all of

the above is improper under Sections 33 and 42 of the Act.

B.

ALTERNATIVELY, IF THE BOARD DOES NOT RECONSIDER ITS

AUTHORITY

TO ORDER "AFFIRMATIVE" RELIEF, IT SHOULD

RECONSIDER ITS FINANCIAL ASSURANCE RULINGS

If the Board does not reconsider and vacate its order of "affirmative" relief, it should

reconsider the scheduling

of submitting financial assurance and cost estimates and/or the amount

of financial assurance to be posted.

1.

Alternatively, he Board should reconsider the scheduling of

submitting financial assurance and cost estimates

If the Board declines to reconsider its ruling and hold that it improperly ordered

"affmnative" relief

as set forth above, CLC respectfully requests that the June 18, 2009 Order be

modified to first require a detennination

of the updated cost estimates prior to the posting of

financial assurance. The cost estimates for closure and post-closure are 9 years old and there is

8

---

evidence in the record that the figures should currently be as low as $7 million. As has been set

forth in detail by the City in its motion for reconsideration, the Board should first require the

submission

of updated cost estimates. The Board should then direct tile Agency to review any

and all updated cost estimates and determine the appropriate updated amount and that CLC (and

the City)

be allowed to post financial assurance according to the approved revised cost estimates.

(See City Motion for Reconsideration

of June 18, 2009 Order at 1-2 and 13-19). Without

repeating the City's arguments, CLC hereby joins in those portions

of the City's brief requesting

reconsideration

of the timing of submitting financial assurance and cost estimates. (Id. At 12-

18).

C.

THE BOARD'S MISAPPLICATION OF THE LAW UNDER SECTIONS

33(c) AND 42(h)

OF THE ACT RENDERS THE PENALTY AGAINST CLC

IMPROPER

As stated in the Board's June 18,2009 Order, "[i]n fashioning all of its orders, the Board

must consider the factors

of Section 33(c) of the Act. If the Board determines a penalty is

appropriate (under 33(c)), the Board must also consider tile factors of Section 42(h) of the Act."

(Exh. A at 32). However, respectfully, the Board misapplied several factors

of both Section

33(c) and Section 42(h) as set forth below.

1.

The

Board Misapplied the Law under Section 33( c)(iv) of the Act

Under Section 33(c) (iv)

of the Act, tile Board is to consider the technical

practicability and economic reasonableness

of reducing or elimination the emissions, discharges

or deposits resulting from such pollution source. 415 ILCS 5/33(c)(iv). However, the Board

appears to have dismissed without consideration CLC's factually supported arguments that

compliance by CLC was not practicable or reasonable due to the Agency's acts

of (a) first

approving and then later disapproving the Frontier bonds, (b) failing

to grant permits based on

9

---

the Agency's reversal of position on the Frontier bonds, and (c) failing to authorize a refund to

CLC

of the collateral for the Frontier bonds and a refund for the premiums paid to Frontier by

CLC. Instead, the Board erroneously ruled

that"" .the economic reasonableness and technical

feasibility

of the Illinois landfill permitting and financial assurance system was established

during the rulemaking process." (Exh. A at 34). However, it is not the reasonableness and

feasibility

of the landfill permitting and financial assurance system that is to be considered under

Section 33(c)(iv) - rather, it is what

is technically practicable and economically reasonable

in

regard to CLC

which should be considered by the Board. The Board ignored Edward Pruim's

testimony that CLC investigated the possibility

of obtaining substitute financial assurance.

(CLC's Post-Hearing Brief at 13). CLC asked the broker who had worked with it on the Frontier

bonds to exhaust all available avenues

of financial assurance that CLC could possibly afford.

(CLC's Post-Hearing Brief at 13). Edward Pruim testified that the broker searched for other

bonding companies but that due to the lapse in time, CLC was informed that the collateral

required to obtain a $17 million bond would be

70-80%

of the bond value. (CLC's Post-Hearing

Brief at 13). In other words, in order to obtain a $17 million bond, CLC would have had to post

approximately $14-15 million in cash. (CLC's Post-Hearing Brief at 13). Funds available to

CLC were nothing like that. (CLC's Post-Hearing Brief at 13). The company was not

generating any income to be able to afford a bond for that amount. (CLC's Post-Hearing Brief at

13). CLC was informed that the only way it could be done was through a bond for which CLC

did not have collateral. (CLC's Post-Hearing Brief at 13).

It

is through the State's conduct of

approving the bonds, then disapproving the bonds and refusing to provide the operating permit

that would allow it to generate revenue, that CLC does not have sufficient funds.

10

---

The foregoing clearly shows that CLC set forth that obtaining substitute financial

assurance was not technically practicable or economically reasonable. Respectfully,

the Board

ignored these arguments. On reconsideration, the Board should determine that this factor weighs

in favor

of CLC and determine that a civil penalty is not justified. Alternatively, the Board

should determine that the penalty ordered against CLC should be significantly reduced in light

of the clear factors in mitigation set forth above.

2.

The Board Failed to Consider CLC's Diligence in Seeking Financial

Assurance as a Mitigating

Factor Under Section 42(h)(2) ofthe Act.

The Board's Order dated June 18,2009 ignores more than five (5) pages in CLC's Post-

Hearing

Brief wherein it sets forth detailed facts describing its efforts to obtain financial

assurance. (CLC Post-Hearing

Brief at 9-14). The Board's Order does not mention any of

CLC's arguments and appears to have not considered them at all as mitigating factors. (Exh. A

at 37).

Without completely restating the five (5) pages

of facts and testimony ignored by the

Board in

CLC's Post-Hearing brief, some of the highlights include:

•

CLC was diligent in its efforts to comply with the financial assurance requirements

(CLC Post-Hearing

Brief at 9)

•

Prior to

CLC' s 1999 SigMod application, the closure and post-closure bond was $1.4

million (CLC Post-Hearing Brief at 9)

•

CLC proposed $7 million in financial assurance because the City agreed to treat the

leachate and condensate from the landfill which would cost approx. $10 million (CLC

Post-Hearing Brief at 9).

•

The Agency rejected the $7 million and requested a bond for the entire $7 million.

The Agency approved the City and

CLC's agreement that CLC would pay for all of

the bonds and that $7 million would be in the City's name. (CLC Post-Hearing Brief

at 9)

•

The cost to CLC for the annual premiums was more than $200,000 with collateral

of

just under $200,000. (CLC Post-Hearing Brief at 9-10).

11

Electronic Filing - Received, clerk's Office, July 27, 2009

---

• The Agency reviewed the drafts of the Frontier bonds before they were issued and

approved

of the bonds before CLC committed to purchasing them. (CLC Post-

Hearing Brief at 10).

• When all three

of the bonds were issued, Frontier was both licensed by the Illinois

Department

of Insurance and was on the U.S. Dept. of Treasury's Circular 570 List of

approved sureties. (CLC Post-Hearing Brief at 10).

•

Christine Roque testified that the permit was granted in August 2000 because CLC

posted adequate financial assurance. (CLC Post-Hearing Brief at 10).

•

When the bonds were approved on August

4,2000, John Taylor, John Kim and then

Bureau

of Land permit manager Joyce Mlmie all knew that Frontier had been

removed from the Dept.

of Treasury 570 list on June 1,2000. (CLC Post-Hearing

Brief at 11).

• Joyce Munie directed Jolm Taylor to "find a way to accept the bonds and put the

operators on the hook for $17 million in [mancial assurance." (CLC Post-Hearing

Brief at 11).

•

If the Agency had rejected the bonds when it knew that Frontier had been de-listed,

CLC would have closed the landfill pursuant to the permit requirements with the $1.4

million bond. (CLC Post-Hearing Brief at 11).

• Instead, when the Agency approved the bonds, CLC put

up the collateral and

purchased the bonds for the first year premium

of $208,730. (CLC Post-Hearing

Briefat 11).

•

CLC then filed a supplemental permit application to receive approval for the

construction

of a separation layer and to receive authorization for the acceptance of

waste for disposal in a newly constructed area and spent one year building and

developing the new cell. (CLC Post-Hearing

Brief at 11)

• In spite

of the absence of any law, rule or regulation, Agency employee Blake Harris

recommended on May

9, 2001 that the Frontier bonds be denied because Frontier was

no longer on the 570 list. (CLC Post-Hearing Brief at 12)

•

Harris' recommendation was accepted without question by permit manager Joyce

Munie in spite

of Jolm Taylor's opinion that the bonds still conformed with the most

stringent reading

of the Act and the regulations as of May 2001 since:

o The bonds were issued when Frontier was on the 570 list; and

o There is no provision

of the Act, rules or regulations that requires or even

allows the Agency to deny permits based on a subsequent removal from the

570 list.

12

Electronic Filing - Received, clerk's Office, July 27, 2009

---

(CLC Post-Hearing Brief at 12).

• The Agency denied the pennit on that basis even though it knew that Frontier had

been de-listed at the time it pre-approved the bonds in August 2000. (CLC Post-

Hearing Brief at 12).

•

If the Frontier bonds had not been approved in August 2000, no additional financial

assurance would have been tendered by CLC or the City and CLC would have been

responsible for one year's premium on only $1.4 million or approximately $26,850.

(CLC Post-Hearing Brief at 12).

•

Because the pennit was denied, CLC was unable to accept waste, a situation which

"would certainly eventually shut the facility down". (CLC Post-Hearing

Brief at 12)

• Nevertheless, during the pennit appeal process, CLC paid its second year premium

of

$217,842. By this time, CLC had paid more than $600,000 in cash for collateral and

premiums wIllIe the Agency took the position that the bonds were not compliant and

CLC could not operate the landfill. (CLC Post-Hearing Brief at 12).

• In good faith, CLC attempted to obtain substitute financial assurance by directing its

broker to exhaust all available avenues

of financial assurance that CLC could possibly

afford. (CLC Post-Hearing Brief at 13).

•

Due to the lapse in time, the collateral required to obtain a $17 million bond would be

70-80%

ofthe bond value or approximately $14-15 million in cash, which was

impossible for CLC to post since it was not generating any income. (CLC Post-

Hearing

Brief at 13).

Clearly, CLC was diligent in its good faith efforts to obtain financial assurance, which

should be considered a factor in mitigation. On reconsideration, the Board should detennine that

this factor weighs in favor

of CLC and detennine that a civil penalty is not justified.

Alternatively, the Board should detennine that the penalty ordered against CLC should be

significantly reduced in light

of the clear factors in mitigation set forth above.

3.

The Board Failed to Sufficiently Consider the Complete Lack of Any

Economic Benefit to

CLC Due to Delayed Compliance as a Mitigating

Factor under Section 42(h)(3) of the Act

The Board failed to recognize that CLC realized absolutely no economic benefit due to

any delayed compliance. As set forth below, the Board ignored Agency employee Blalce Harris'

13

Electronic Filing - Received, clerk's Office, July 27, 2009

---

testimony that the Frontier bonds were valid through 2006 resulting in no economic benefit to

CLC. In addition, the Board ignored that CLC's inability to accept waste has resulted in no

economic benefit to CLC.

a.

The Board ignored Blake Harris' testimony that the Frontier bonds

in no economic benefit to CLC

The Board ignored Blake Harris' testimony that the Frontier bonds were valid through

2006. (CLC Post-Hearing Brief at

14). The Board only commented vaguely that the City

"suggests" that the non-compliance period should run from January I, 2007 through September

11, 2007. (See Exh. A at 38). However, Blake Harris' testimony is clearly not a mere

"suggestion": he testified in no uncertain terms that the bonds were valid through 2005 at a

minimum and 2006 with an automatic one-year extension. (CLC Post-Hearing Brief

at 14).

Harris further testified that he agreed with Agency employee Beverly Anderson's position in

January 2004 that Frontier was providing financial assurance. (CLC Post-Hearing Brief at

14).

The Board should not ignore this plain and clear testimony.

The Board ruled that the appropriate measure

of civil penalty against CLC is the amount

of money CLC saved by not paying premiums for the non-compliant Frontier bonds less the

amount

of premiums paid. (See Exh. A at 40). The Board aclmowledged that CLC is entitled to

a credit in the amount of $426,531.00 for premiums paid in 2000-2001. (See Exh. A at 38). The

Board completely ignored that applying Agency employee Harris' testimony to the State's own

proposed penalty produces a radically different result: $596.83 per

day for the time period

January

1,2007 - September 11, 2007

=

$151,594.82. (City Post-Hearing Brief at 29). This is

significantly less tllan the amount of $426,531.00 which the Board aclmowledges should be

credited to CLC. (See Exh. A at 38). The Board ignored that under this calculation, there is NO

economic benefit to CLC.

14

Electronic Filing - Received, clerk's Office, July 27, 2009

---

The Board should reconsider the testimony of Blake Harris as set forth above and rule

that CLC received

no economic benefit due to any delayed compliance under Section 42(h)(3) of

the Act. On reconsideration, the Board should determine that this factor weighs in favor of CLC

and determine that a civil penalty

is not justified. Alternatively, the Board should determine that

the penalty ordered against CLC should be significantly reduced in light

of the clear factors in

mitigation set forth above.

b.

Resulted

in No Ecouomic Beuefit to CLC

The Board ignored in its June 18, 2009 Order that CLC's inability to accept waste has

resulted in

no economic benefit to CLC. The Board ignored that CLC's ability to generate

adequate revenue to pay ANY bond premiums was terminated when the Frontier bonds were

determined

to be non-compliant and the operating permit was denied. (CLC Post-Hearing Brief

at 18). The Board ignored Agency employee Mark Retzlaffs testimony that he "guesses" that

CLC does not make any money and that its not being able to dispose

of waste would "hamper the

landfill's ability

to malce money." (CLC Post-Hearing Brief at 18).

Tills evidence is not simply "CLC's cries of current poverty" as the Board erroneously

suggests. (See Exh. A at 40). On reconsideration, the Board should determine that this factor

weighs in favor

of CLC and determine that a civil penalty is not justified. Alternatively, the

Board should determine that the penalty ordered against CLC should be significantly reduced in

light

of the clear factors in mitigation set forth above.

4.

If

Making a Claim on the Frontier Bonds

As argued by CLC in its Response to Complainant's Motion for Summary Judgment, any

monetary penalty imposed by the Agency must

be used to enforce the Act, not merely punish a

15

---

party. Harris-Hub Co .. Inc. v. Illinois Pollution Control Board., 50 Ill.App.3d 608, 611 (1st Dist.

1977).

If the Board takes the Agency's position that respondents have not posted adequate

financial assurance and assesses a penalty, it cannot permit the Agency to simultaneously make a

claim for and collect on the bonds. The Agency would impermissibly be allowed to recover

twice from the same allegation, in contravention

of the law as set forth above. Id.

E.

IN ITS FEBRUARY 16, 2006

INTERIM OPINION AND ORDER, THE

BOARD ERRONEOUSLY RULED THAT THERE WERE NO GENUINE

ISSUES

OF MATERIAL FACT THAT ADEQUATE FINANCIAL

ASSURANCE

WAS

POSTED

AND

ERRONEOUSLY

APPLIED

OFFENSIVE COLLATERAL ESTOPPEL

CLC seeks to preserve these issues for appeal even if it is determined that they have been

previously ruled upon. Garibaldi

v. Applebaum, 194 Ill.2d 438, 447-48,742 N.E.2d 279, 283-84

(2000).

1.

The Board Erroneously Ruled that there No Genuine Issues of

Material Fact that Adequate Financial Assurance was Posted

The Board ruled that it

is "undisputed" that neither Morris nor CLC have provided

adequate financial assurance. (February 16, 2006 Order at 15)._However, the Board failed to

consider any

of CLC's arguments concerning the Agency's claims against the Frontier bonds -

the very same bonds that the Agency claims were inadequate. The Agency concealed its bond

claims from the Board. (CLC Response to Motion for Summary Judgment at 6-8). The Agency's

own act ofmalcing a claim against Frontier for $7,345,736, should preclude it from maintaining

that financial assurance

is not in place. If the Agency's claim is paid by Frontier, the Agency

would be receiving the very financial assurance it claims has not been provided. (CLC Response

at

6). Similarly, the Board failed to consider that on January 27, 2004, Agency employee

Beverly Anderson, who was an accountant for the Bureau of Land Compliance Unit, admitted in

a letter to Frontier that the landfill "is providing financial assurance for closure and post-

16

Electronic Filing - Received, clerk's Office, July 27, 2009

---

closure care." (CLC Response at 6, Exh. L (emphasis added). This admission alone should have

precluded summary jUdgment

on the issue of whether adequate financial assurance was in place.

2.

The Board Erroneously Applied Offensive Collateral Estoppel and

Determined

that Any Issues Regarding the Frontier Bonds Have Been

Resolved

In its February

16, 2006 Interim Opinion and Order, the Board determined that "offensive

collateral estoppels applies" without further explanation and ruled that "".the respondents'

noncompliance with financial assurance requirements, the same

as alleged in this enforcement

matter, has already been resolved", referring to Community Landfill, PCB 01-170. However, it

is clear that many issues regarding the Frontier bonds have NOT been resolved. Clearly, at issue

in this case

at a minimum is whether the bonds were in force through the end of 2006 as testified

to in September 2007 by the Agency's own employee, Blake Harris. (CLC Post-Hearing Brief

at

14). B1a1,e Harris's testimony was not available to the Board in 2006 when it found against

respondents on liability and granted summary judgment in favor

of complainant. Similarly,

Blake Harris' agreement with Agency employee Beverly Jolmson's position in January 2004 that

Frontier was providing financial assurance was not available

to the Board in 2006. In addition,

still at issue as set forth above

is whether the Agency can make a claim against the Frontier

bonds when at the same time denying the bonds constitute adequate financial assurance. Clearly,

numerous issues regarding the Frontier bonds are NOT resolved. Any application

of "offensive

collateral estoppel"

is erronerous.

V.

CONCLUSION

Based on the foregoing, CLC respectfully requests that the Illinois Pollution Control

Board GRANT its Motion for Reconsideration and revise its June

18, 2009 and February 16,

2006 Orders as follows:

17

Electronic Filing - Received, clerk's Office, July 27, 2009

---

A.

In regard to its June 18, 2009 Order:

1.

Order that a civil penalty against CLC in the amount of $1,059,534.70 is vacated

as not justified based on the clear factors in mitigation pursuant to Sections 33(c) and 42(h) of

the Act as set forth above;

2.

Order that the "affirmative" relief requiring CLC and the City, jointly and

severally to post financial assurance

in the amount of $17,427,366 and submit revised cost

estimates

and updating financial assurance is vacated as not justified under Section 33 of the Act;

3.

Alternatively, order that tlle timing of submitting cost estimates and financial

assurance should

be revised;

4.

Order that if any monetary penalty is imposed, the Agency is precluded from

making a claim

on the Frontier bonds

B.

In regard to

its February 16,2006 Order:

5.

Order tlmt Board mistakenly ruled tlmt there were no genuine issues of material

fact that adequate financial assurance was posted; and

6.

Order that the Board erroneously applied offensive collateral estoppel to

determine that any issues regarding the Frontier bonds have been resolved.

Respectfully submitted,

lsi

Clarissa Y. Cutler

One

of the Attorneys for

COMMUNITY LANDFILL CO., INC.

18

Electronic Filing - Received, clerk's Office, July 27, 2009

---

Mark

A.

LaRose

LAROSE

&

BOSCO, LTD.

200 North LaSalle Street,

Suite 2810

Chicago

1L 60601

(312) 642-4414

Clarissa

Y. Cutler

Attorney at Law

155 North Michigan Avenue

Suite 375

Chicago

1L 60601

(312) 729-5067

19

---

CERTIFICATE OF SERVICE

I, Clarissa Y. Cutler, an attorney, hereby certifY that I caused to be served a copy of the

foregoing

COMMUNITY LANDFILL CO., INC.'S MEMORANDUM IN SUPPORT OF

ITS MOTION FOR RECONSIDERATION OF THE ILLINOIS POLLUTION

CONTROL BOARD'S ORDER DATED

JUNE

18, 2009,

by electronically filing and by

placing the same in the United States Mail, first-class postage prepaid, this 27th day

of July

2009,

addressed as follows:

Christopher Grant

Environmental Bureau

Assistant Attorney General

69 West Washington

18th Floor

Chicago, Illinois

60602

Charles F. Helsten

Richard

S. Porter

Hinshaw

&

Culbertson, LLP

100 Park Avenue

P.O. Box 1389

Rockford, Illinois 61105-l389

Mark

A. LaRose

LaRose

&

Bosco, Ltd.

200

North LaSalle Street, Suite 2810

Chicago, Illinois 60601

(312) 642-4414

Clarissa

Y.

Cutler

Attorney at Law

155 North Michigan Avenue,

Suite 375

Chicago IL 60601

(312) 729-5067

Bradley Halloran

Hearing Officer

Illinois Pollution Control Board

100 West Randolph

Suite 11-500

Chicago, Illinois 60601

Scott Belt

Scott Belt and Associates, PC

105 East Main Street

Suite 206

Morris, Illinois 60450

lsi

Clarissa Y. Cutler

One

of the Attorneys for Community Landfill Co.

---

ILLINOIS POLLUTION CONTROL BOARD

June 18, 2009

PEOPLE OF THE STATE OF ILLINOIS,

)

)

)

)

)

)

)

)

)

)

Complainant,

v.

COMMUNITY LANDFILL COMPANY,

INC and the CITY OF MORRIS,

Respondents.

PCB 03-191

(Enforcement - Land)

CHRISTOPHER GRANT AND JENNIFER A. TOMAS, ASSISTANT ATTORNEYS

GENERAL, APPEARED ON BEHALF OF THE PEOPLE OF THE STATE OF ILLINOIS;

MICHAEL

S. ROUBITCHEK APPEARED ON BEff..ALF OF THE ILLINOIS

ENVIRONMENTAL PROTECTION AGENCY;

CLARISSA C GRAYSON, LAROSE

&

BOSCO, LTD. APPEARED ON BEHALF OF

COMMUNITY LANDFILL COMPANY, INC; AND

RICHARD S. PORTER, HINSHAW

&

CULBERTSON LLP AND SCOTT M. BELT, SCOTT

M. BELT

&

ASSOCIATES, P.C APPEARED ON BEHALF OF THE CITY OF MORRIS.

OPINION AND ORDER OF THE BOARD (by S.D. Lin):

SUMMARY OF TODAY'S DECISION

In this final opinion and order, the Board assesses penalties against two respondents for

violations

of the Environmental Protection Act (Act), 415 ILCS 5/1 e/

seq.

(2006) and the

Board's rules requiring the posting of financial assurance for the proper closure and post-closure

care

of a landfilL

On April 17,2003, the Office of the Attorney General, on behalf of the People of the

State of Illinois (People), filed a one-count complaint against Community Landfill Company,

Inc. and tile City

of Morris (respondents) alleging failure to provide adequate financial assurance

for closure and post-closure operations. Site permits for the Morris Community Landfill

(Landfill), issued

by tlJe Illinois Environmental Protection Agency (!EPA or Agency), list

Community Landfill Company, Inc. (CLC) as the operator, and the City

of Morris (City or

Morris) as the owner. The Landfill is a special waste and municipal solid waste landfill located

at 150 I Ashley Road, in Morris, Grundy County.

This case involves one continuing violation, which began in 2000,

of the Act's financial

assurance requirement and two violations of corresponding Board regulations. Section 21( d)(2)

EXHIBIT A

---

2

of the Act prohibits any person from conducting a waste disposal operation in violation of any

Board regulations.

See

415 ILCS 5/21 (d)(2) (2006). The Board regulations at issue are: (1) the

requirement for any person conducting any disposal operations to comply with the financial

assurance requirements

(35

Ill.

Adm. Code 81l.700(f)); and (2) that any surety bonds provided

must be issued by a surety company approved by the U.S. Department

of Treasury as an

acceptable surety

in its list of acceptable sureties, lrnown as the "Circular 570" (35

Ill.

Adm.

Code 712(b)).

On February 16,2006, the Board issued an interim opinion and order in this case granting

summary judgment

in favor of the complainant. People of the State of Illinois v. Community

Landfill Company, Inc. and City

of Morris, PCB 03-191 (Feb. 16,2006) (interim order). The

Board remarked that

The purpose

of financial assurance is to provide a guarantee to the State that funds

will be available

in the event a landfill owner or operator fails to perfonn needed

closure and post closure or

to address any other environmental problems that may

occur during and after the operating life

of the landfill. People v. ESG Watts.

Inc., PCB 96-233, slip op. at

11 (Apr. 16, 1998); citing 35

Ill.

Adm. Code

807.603. Inadequate financial assurance could cause the State, at taxpayer

expense,

to clean up or even close a facility.

See

People v. ESG Watts. Inc., PCB

96-237 (Feb. 19,1998). The Board finds the alleged violations

of Section

21 (d)(2) of the Act and Sections 811.700(f) and 811.7l2(b) of the Board's

regulations, and grants the [People]' s motion for summary judgment.

Accordingly, Morris' counter-motion for summary judgment is denied.

The Board affinned its order on reconsideration June

1,2006. People

ofthe State of

Illinois v. Community Landfill Company, Inc. and City of Morris, PCB 03-191 (June 1,

2006) (reconsideration granted, order affinned).

The Board held a hearing on the issues

of appropriate remedy on September 11-13, 2006,

and

in this final ruling the Board considers the parties' evidence and argument as presented at

hearing and discussed in their briefs.

The People request the Board

to assess a civil penalty of over $1.06 million against CLC,

and nearly $400,000 against the City. The People also requested that the respondents be ordered,

jointly and severally, within 60 days to: update closure estimates, post financial assurance, and

to initiate closure

of Parcel B of the landfill. While tlle People had initially requested recovery of

its attorney fees and costs, the People now waive them, requesting the Board to take notice of the

waiver

in

its evaluation of costs of any remedy.

Both respondents continue to contest the finding of liability. Each argues that, even if

found in violation of the Act, no penalty should be imposed. CLC argues that it has no funds to

pay a penalty

as it no longer has a pennit to operate the landfill and to generate revenue. The

City argues that no penalty is appropriate since it never operated the landfill for which CLC was

contractually obligated

to provide financial assurance, enjoyed no economic benefit from any

non-compliance, could have at any time given a "local government guarantee"

of financial

---

3

assurance at no cost if asked, has already expended municipal funds to correct landfill problems,

and anticipates expenditure of more.

Under all

of these circumstances and in light of the factors of Section 33( c) of the Act,

415 ILCS

5/33(c)

(2006), the Board finds that the appropriate remedy includes the following

directions

to respondents:

On or before August 17,2009, respondents CLC and the City must, jointly and severally

• post financial assurance in the amount of$17,427,366.00 using any combination

of

financial assurance mechanisms acceptable to the IEPA under the Board's rules;

•

submit revised cost estimates, and update financial assurance

in accordance with

approved revised estimates; and

•

cease and desist from accepting any additional waste at the site, and from committing any

other violations of the Landfill's permits, the Act, and Board regulations.

After considering the factors

of Section 42(h) of the Act, the Board imposes a civil

penalty against each respondent "at least

as great as the economic benefits ... accrued by the

respondent as a result ofthe violation ... unless the Board finds that imposition of such penalty

would result in an arbitrary or unreasonable financial hardship". 415 ILCS

5/42(h) (2006).

• Respondent CLC must pay a civil penalty of$I,059,534.70 (calculated by the People as

$1,486,106.70 with reference to the costs avoided for financial assurance premiums, less

$426,572.00) in premiums paid).

• 11,e Board declines

to make both respondents jointly and severally liable for payment of

the $1.06 million dollar penalty, finding that to do so would impose an arbitrary or

unreasonable hardship on the City's taxpayers.

• The City itself must pay a civil penalty amounting

to tl,e dumping royalties or tipping

fees it received from 2001-2005, amounting

to $399,308.98.

Finally, the Board does not order immediate closure

of the portion of the Landfilllmown

as Parcel B. 111e record in this case does not support such relief.

FACTUAL

BACKGROUND AS FOUND IN FEBRUARY

16, 2006

BOARD INTERIM ORDER

The Board set forth the pertinent facts establishing both respondents' liability in tllis case

in its February 16, 2006 opinion and order, which the Board incorporates by reference herein as

if fully set forth. People of the State of Illinois v. Community Landfill Company, Inc. and City

of Morris, PCB 03-191 (Feb. 16,2006). The Board will repeat here only enough of those facts to

aid the reader's comprehension of the relief discussion at hearing:

The Morris Community Landfill is approximately 119 acres in area, and is divided into

two parcels, designated parcel "A," consisting

of approximately 55 acres, and parcel "B,"

consisting

of approximately 64 acres. CLC operates the Morris Community Landfill and

manages the day-to-day operations

of both parcels at that site. [111e City owns the

Electronic Filing - Received, clerk's Office, July 27, 2009

---

4

property on which the Landfill is located.] The respondents have arranged for and

supervised the deposit

of waste, including municipal solid waste, garbage, and special

waste, into waste cells at the Morris Community Landfill since at least June I, 2000

on

parcels

"A"

and "B" of the landfill.

The Agency issued Significant Modification (SigMod) Permit Numbers 2000-

I 55-LFM, covering Parcel A, and 2000-1 56-LFM, covering Parcel B,

on August

4,2000.

Compo at 3. On June 29, 2001, the Agency issued Permit Modification

Number 2 for parcels A and B. On January

8, 2002, the Agency issued Permit

Modification Number 3 for Parcel A.

ld.

The SigMod permits were issued to

Morris, as owner, and CLC as operator. Pursuant to these permits, the

respondents were

to provide a total of $17,427,366 in financial assurance,

beginning in 2000.

See

Mot. Exh. A, p. 45, par.

6; Mot. Exh. B, p. 33, par. 6;

CLC and Morris v. IEPA, PCB 01-48, 49 (cons.), slip op. at 29 (Apr. 5,2001).

The respondents provided the Agency financial assurance

of closure and post

closure costs by way of three separate performance bonds underwritten.by The

Frontier Insurance Company.

Compo at 3; Mot., Exh. C. On June 1,2000, the

United States Treasury Department removed Frontier Insurancc Company from

the list

of acceptable surety companies listed in the United States Department of

Treasury publication "Circular 570." Compo at 3. People of The State of Illinois

V. Communitv Landfill Company, Inc. and City of Morris, PCB 03-191, slip op.

at 2-3 (Feb. 16, 2006).

The Board stated that the issue in the case is what activities constitute "conducting a

landfill" within the meaning

of 415 ILCS 5/21 (d)(2) and 35 Ill. Adm. Code 811.700(f).

ld.

at 13.

The Board explained:

In looking at the facts

of the case and considering what is anticipated by the Act

and Board regulations to be the behavior

of an operator conducting a waste

disposal operation, the Board finds both parties responsible for operating the site

and, therefore, conducting the waste disposal operation that is Morris Community

Landfill. While there must be at least one site operator, the Act does not prohibit

more than one party from operating a site. In this case, the Board finds that both

parties participated in the operations.

While Morris may not actively conduct the day-to-day operations at the landfill,

Morris also does not "passively own land upon which waste disposal operations

are (or have been) conducted." Morris Resp. at

7. Morris financed the operation,

litigated in conjunction with CLC, as well as profited from and treated the

leachate from the Morris Community Landfill. While these activities alone may

not constitute "operating" a waste disposal site, Morris also had discretion

regarding the decisions at the site and took responsibility for some

of the ancillary

site operations such as the treatment of leachate from the landfill. 111e Board

fmds that the grand sum

of Morris' conduct rises to the level of "operation" as

anticipated

by the Board in using that term in Section 811.700(f). People of111e

---

5

State

of Illinois v. Community Landfill Company. Inc. and City of Morris, PCB

03-191, slip op

at 14 (Feb. 16,2006).

The Board then found that neither Morris nor CLC have provided adequate financial assurance

as described in the Board's rules.

!d.

The Board went on to observe that the issue of whether the Frontier bonds complied with

Board regulations was previously adjudicated and resolved in a permit appeal involving the same

parties before the Board. People v. CLC and Morris, PCB 03-191 (Oct. 16,2003); referring to

Community Landfill Co.

v. IEPA, PCB 01-170 (Dec. 6, 2001), affd. Community Landfill Co. v.

PCB, 331 Ill. App. 3d 1056, 772 N.E.2d 231 (3rd Dist.

2002),pel.jor leave

10

appeal dell., 202

Ill. 2d 600; 787 N.E.2d 155 (2002).1 In its summary judgment order in the instant case, the

Board reiterated that the legal doctrine

of "offensive collateral estoppels" applied to bar

relitigation

ofthe issue here.

Id.

at 14-15.

The Board concluded its order

by directing the parties to hearing on the specific

issue or remedy only, directing them to provide specific figures and justifications for any

proposed penalty. As previously stated, the Board affirmed its order on reconsideration

June

1, 2006. People v. Community Landfill Company, Inc. and City of Morris, PCB 03-

191 (June 1,2006).

OVERVIEW OF ISSUES AND EVIDENCE PRESENTED AT HEARING AND IN POST-

HEARING FILINGS

Hearing was held in Morris by Board Hearing Officer Bradley C. Halloran. The hearing

was opened on September 10,

but testimony was presented only on September 11 and 12,2007.'

Complainant's Presentation

IpCB 01-170 involved denial ofa supplemental permit application addressing construction orthe

separation layer for Parcel A, an application made on November 27, 2000 pursuant to the August

4,2000 SigMod permits. By letter dated May 11,2001, the Agency denied the supplemental

permit application. The Agency denied petitioners' permit application on two grounds:

(I)

the

financial assurance documents submitted

by petitioners did not comply with the requirements of

35

Ill.

Adm. Code 811.712(b); and (2) Robert J. Pruim's felony conviction, pursuant to Section

39(i)

of the Environmental Protection Act (415 ILCS 5/39(i) (2006)). In PCB 01-170 CLC and

the City jointly litigated only the first issue. The Board found that the permit denial was proper.

Respondents appealed that ruling to the Third District Appellate Court, which affirmed the Board

and IEPA interpretation

of the Board's fmancial assurance rule. Community Landfill Co. v.

PCB, 331

Ill.

App. 3d 1056, 772 N.E.2d 231 (3rd Dis!. 2002),

pel. for leave

10

appeal dell., 202

Ill.

2d 600; 787 N.E.2d 155 (2002).

2 The transcripts for each day of hearing begin with 'page 1 '. Citations to the transcript will therefore

be made date specific,

e.g.

9111/07 Tr. at_.

Electronic Filing - Received, clerk's Office, July 27, 2009

---

6

On September 11, 2007, the People presented testimony offour witnesses:

Mark Retzlaff, Inspector, IEPA Bureau

of Land, Des Plaines, Illinois (primary inspector

for Morris Landfill regarding observations at various site inspections);

Blake Harris, Accountant,

IEPA Bureau

of Air (fornlerly of the Bureau of Land).

Springfield, Illinois (environmental protection specialist regarding some aspects

of

financial assurance instruments tendered for Morris Landfill by CLC and City);

Brian White, IEPA Bureau

of Land Compliance Unit Manager, Springfield, Illinois

(testimony concerning operation

of financial assurance rules, bond claim process

regarding Frontier bonds, "local guarantee" process); and

Christine Roque, Permit Engineer, IEPA Bureau

of Land, Springfield, Illinois

(environmental protection engineer concerning the most current (August 2000 SigMod)

permits and requirements, subsequent submissions by respondents).

The People had admitted into evidence its Group Exhibit

A, consisting of Exhibits 1-14. The

People also made an offer of proof as to the details of a possible settlement of a bond claim made

by IEPA

to Frontier

(9/11/07

Tr. at 187-188); this possible settlement was the subject of a

motion which will be dealt with in more detail along with other "Preliminary Matters",

illji-a,

at

p.19-22.

The Retzlaff Testimony

IEPA inspector Mark Retzlaff stated that he was the primary inspector for 111e Morris

Landfill, having inspected it some

18 times between 2000 and 2007.

9111/07

Tr. at 45,53.

Among other things, he testified concerning his inspection of Parcel A of the Landfill on June

26,2007 and

of Parcels A

&

B on August 29,2007, and sponsored exhibits consisting of his

inspection reports and photographs taken on

111e site.

9111107

Tr. at 55-111 and Camp. Gr. Exh.

A, Exh. 7-8. Generally, Mr. Retzlaff described

the condition oflhe Landfill as "deteriorating".

During his June and August 2007 inspections, Mr. Retzlaff's discovered cover erosion

in

several locations

(9111107

Tr. at 68-69),1andfill gas escaping to the atn10sphere

(9111/07

Tr. at

63,68, 71), leachate escaping from the waste disposal area

(9111/07

Tr. at 63-4, 74), and

uncovered refuse.

9111107.Tr.

at 58,60,-67,72,73;

see also,

photographs included in People's

Group Exhibit

1, Compo Gr. Exh. A, Exh. 7-8. Mr. Retzlaff testified that the photos showed

evidence

of recent and ongoing waste disposal at 111e site, despite the Landfill's lack of permits to

accept waste.

9111/07

Tr. 60-61, 65-67.

The Harris Testimony

IEP A Accountant Blake Harris testified he worked with financial assurance issues in the

IEPA Bureau

of Land from February 1999 11lrough December of2003 and that he testified in the

PCB 01-170 permit appeal proceeding.

9/11/07

Tr. at 116-17. Mr. Harris was involved with

review and evaluation

of the Landfill's Frontier Insurance Company Bonds in 2000, and stated

---

7

that the annual bond premium, as sbown on the face of each ofthe three bonds, amounted to two

percent (2%)

of the face value of the Frontier Bonds.

9111/07

Tr. at 125. Mr. Harris stated that

Frontier was delisted

fTOm federal Circular 570 June 1,2000, and that 30 other landfills in

Illinois were using Frontier Insurance Company surety bonds for financial assurance. All of

these landfills were sent notices of violation.

9111107

Tr. at 125. These violation notices, sent in

October-November 2000, advised that the Frontier bonds had become noncompliant, and

requested that substitute financial assurance be provided.

9111/07

Tr. at 126-129, and Compo Or.

Exh. A, Exh. 10-11.

Mr. Harris reported that

of the 30 facilities receiving violation notices, 28 subsequently

replaced their Frontier bonds with compliant fmancial assurance.

Of the two landfills that took

no action one, Dowty, went out of business and is now on the State list of abandoned landfills.

The Morris Community Landfill

is the only remaining noncompliant landfill.

9111/07

Tr. at 129.

The White Testimony

!EPA Bureau

of Land Compliance Unit Manager Brian White testified regarding the

financial assurance requirements for landfills generally, and for the Morris Landfill

in particular.

He testified that, under the Board's financial assurance rules at

35 Ill. Adm. Code 81 1.700(f) and

8 I 1.70 I (a) applicable to the City and CLC, the owner or the operator of a landfill must provide

the required amount

of

closurelpost

closure financial assurance. He also testified that if the

operator did not post the required amount

of financial assurance, the landfill owner was required

to do so.

Mr.

W11ite testified that the only financial assurance that had ever been provided at the

Landfill under the Board's Part

81 I regulations was in the form of the noncompliant Frontier

Bonds.

9111107

Tr. at 180-83. Since the Frontier bonds were issued in 2000, neither respondent

has provided !EPA with any other compliant financial assurance for the Morris Community

Landfill "in the amounts

of the [$17.4 million] most recent approved cost estimate and post

closure cost estimate [using] one

of the ten mechanisms ... listed in [35 III. Adm. Code]

81 I .706."

911 1/07

Tr. at 190-91.

The Rogue

Testimonv

!EPA Bureau

of Land Engineer Christine Roque testified that she had worked with some

30 landfills during the course

of the 15 years she has worked for !EPA; she has been responsible

for the permits for the Landfill since 1996.

9111107

Tr. at 212. Ms. Roque estimates that, over

the years, the City had been issued

50 to 55 permits for the Morris Community Landfill, and that

Community Landfill Company had been issued approximately

50 permits.

9111107

Tr. at 213-

14. Ms. Roque stated that, to obtain the 2000 SigMod permits, respondents provided three surety

bonds

in the amount of$17,427,366.0044. The City of Morris provided $10,081,630.00, more

tl1an half.

9111/07

Tr. at 216-17, and Compo Or. Exh. A, Exh. 9.

Ms. Roque testified that Board rules require annual updates of cost estimates for

closure/post-c1osure care costs, but that respondents had not submitted such updates.

9111/07

Tr.

at 217. While financial assurance amounts may be reduced by seeking and obtaining a permit

Electronic Filing - Received, clerk's Office, July 27, 2009

---

8

modification from IEPA, the respondents did not seek a permit modification until July 2007; that

permit modification was

underIEPA review atthe time of the hearing.

9111/07

Tr. at 217-18.

The permit modification would revise the schedule

of closure activities from those approved in

the 2000 SigMod permits, and the revised cost estimates were some $7 million less based

On

these activities.

9111107

Tr. at 233.

The City's Presentation

On September 12,2007, the City presented the testimony of two witnesses:

William J. Crawford, Certified Public Accountant (CPA) (concerning City finances,

based on audit work performed from 1986-2007 with the exception of2003-04 audits),

9112107

Tr. 17-65 and City Exh. 11; and

Devin Moose, registered Professional Engineer and Director

of St. Charles office for

Shaw Enviromnental (concerning Shaw Environmental's work for the City at the Landfill

site since 2003, Tr. at 66-149 and City Exh. 1-2).

The City had

12 exllibits admitted into evidence, consisting of Shaw's updated closure cost

estimates for Parcels A

&

B and a closure plan update (City Exh. 1-2, 10), independent auditor's

reports for 2005 and 2006 (City Exh. 4-5), various permit documents (City Exh. 3 (a),(b ),(

c), 8,

9), lease agreements for the landfill site between the City and CLC (City ExlJ.

7(a),(b),(c),(d),(e),(f); a letter between the Agency and Frontier (City Exh. 6), Mr. Crawford's

resume and a financial assurance worksheet completed

by Mr. Crawford calculating City's

ability to "self-insure" closure costs in excess of$9.1 million based on an April 30, 2007

financial statement (City Exll. 11-12.)

The Crawford Testimony

Mr. Crawford testified that he has owned his own certified public accounting firm since

1995, and has performed the

City's annual audits under contract as an independent auditor for

the years 1986-2007 (with the exception

of2003-04 audits).

9112/07

Tr. 17 and City Exh. 11.

Mr. Crawford describes the purpose

of the annual audit as "to express an opinion ofthe fairness

of the financial statements and to provide that in an independent external way."

9112/07

Tr. at

17.

Mr. Crawford testified that he had reviewed the

Board's financial assurance rules at 35

TIL Adm.

Code 811.716 "Local Government Financial Test" and 811.717 "Local Government

Guarantee", and completed a worksheet designed to allow determination

of whether the City

could

meet the rules' requirements based on the fiscal year ending April 30, 2007.

9/12/07

Tr. at

19-23 and Exll. 12. The

Board's rules allow a municipality to guarantee landfill closure if a third

party operating the landfill fails to close. Mr. Crawford states that there are two ratios

of concern

in meeting the test, a local government's liquidity ratio and annual debt service ratio.

9112/07

Tr.

at 24, 26. Once the local government has met those ratios, a final computation is performed to

determine

how much the government can guarantee: ammal revenues according to generally

accepted principles times

43 percent.

9112/07

Tr. at 28-29.

---

9

Mr. Crawford testified tilat, to meet the rules, a local government's "liquidity ratio" (or

"ratio

of marketable securities in comparison to expenditures") "must be greater than

OS'.

9112/07

Tr. at 24-25. Mr. Crawford computed the City's liquidity ratio to be 2.295 for the fiscal

year ending April 30,2007.

9/12/07

Tr. at 25. While he did not have prior audits before him, he

believes that the City's liquidity "has never been a problem," and that it has met the first

component

of the financial test.

9112107

Tr. at 26.

Mr. Crawford described the annual debt service ratio as

a comparison of the amount of expenditures for debt service, which include

principal and interest

in one year, compared to, again, the total expenditures of the

City. And that ratio must be less than [0].2.

9112/07

Tr. at 27

Mr. Crawford computed the City's liquidity ratio to be 0.0133 for the fiscal year ending

April 30, 2007.

9112/07

Tr. at 27. Mr. Crawford concludes that the City would meet the test for

that fiscal year, and opines that it would have met the ratio since the year 2000.

9112/07

Tr. at

28-29. Mr. Crawford stated that he did not have final figures for the City's fiscal year ending

in

2007, but that he believed that the total revenues were $21,269,662, and that 43 percent of that

amount is approximately

$9.1 million.

9112/07

Tr. at 30.

Mr. Crawford's analysis

of revised closure cost estimates made by Shaw Environmental

and provided

by the City lead him to conclude that closure costs would be $7,347,572, and post

closure costs of$2,714,047, for a total amount of$10,061,619. While the City could only

self

guarantee $9.1 million, Mr. Crawford testified that the $900,000 difference could be made up by

funds available in 3 City funds: the Sanitary Landfill Contingency Fund, the Solid Waste Tax

Fund, and the Garbage Fund.

9112/07

Tr. at 30-31. Mr. Crawford testified that at the end of

fiscal year 2007, the City had approximately $2.7 million in those funds, with some $777,000

eannarked

to pay expenses.

9112/07

Tr. at 32.

Mr. Crawford reported that, additionally, the City had capital projects "on the horizon":

airport expansion in the amount

of $2.2 million, a new municipal building with room for police

and a city hall for $10-12 million, and a major drinking water and sewer expansion project for

$14-15 million.

9112107

Tr. at 31-32. The sewer project is being funded by a $7.4 million bond

issue, while the municipal building is being funded by the "TIF" fund and general city moneys.

9112/07

Tr. at 30-31.

Mr. Crawford testified that, after a municipality provides its initial guarantee fee, it does

not "cost money" in the same way buying a bond or insurance vehicle from a third party would.

9112/07

Tr. at 30-31. In response to the question by the City's counsel that "if we assume that

somehow the City had an obligation

to post financial assurance since 2000, did they (sic) sustain

any economic benefit

by not posting their own guarantee," Mr. Crawford stated that "I don't see

that".

9112/07

Tr. at 37.

On cross-examination, Mr. Crawford stated that in a previous deposition he had stated

that the City could have guaranteed $7.1 million based on 43%

of the revenues for the fiscal year

---

10

ending April 30,2005, and that the City's revenues had increased each year between 2000 and

2007. 9112/07

Tr. at 40-41. Mr. Crawford stated that the Board's entry of the February 16, 2006

interim order

in this case finding the City in violation of the financial assurance rules does not

change his opinion on the financial statements.

9112/07

Tr. at 41-45 discussing City Exh. 4 at

39. Mr. Crawford states that a $7.6 million potential liability is disclosed

(9112/07

Tr. at 44), in

addition

to "$10.2 million of fmancial assurance for leachate collection and treatment by a third

party for

the landfill."

9112/07

Tr. at 45.

Mr.

Crawford agrees that immediately thereafter the

financial statement says that the $10.2 million "amount

is in dispute, because the City is

presently treating, and plans to treat in ti,e future, all leachate collected from the landfill at its

own facilities at no cost to the State."

9112/07

Tr. at 41-45 discussing City Exh. 4 at 39.

Mr. Crawford stated that he

was not aware that the Board had ruled in 200

I

that the

City's treatment

of its own leachate was insufficient, and that it would be required to post the

additional $10-plus million as financial assurance.

9112/07

Tr. at 4

I

-45 discussing Community

Landfill and City

of Morris v. !EPA, PCB 01-48 and 01-49 (cons.) slip op. at 29-30 (Apr. 5,

2001), and affirmed on reconsideration (June 7, 2001). Asked whether the City could have

guaranteed $17 million or more

of financial assurance at any time between 2000 and 2007,

Mr.

Crawford stated that he was sure of his revenue figures, but that he has no idea what the closure-

post-closure figures are.

9112/07

Tr. at 51-52. He agreed that $9.1 million was the maximum ti,e

City could guarantee, and it could not guarantee $17.

I

million.

9112/07

Tr. at 53-54. Mr.

Crawford stated that he was not aware how different metllOds

of financial assurance could be

combined to meet the rules, and tllat he has no idea if the City could afford to pay the premium

for $7.4 million in surety bonds.

9112/07

Tr. at 55-56.

Mr. Crawford stated that the City had net assets

of $35 million in 2006, an increase of

$4,946,000 over tile previous year (2005). While the City's financial position is strong, Mr.

Crawford stated that "a strong financial position may not always be indicative

of a strong cash

position.

9112/07

Tr. at 57.

Mr.

Crawford stated that he did not know if any surety bonds taken

out

by tile City would need to be reflected against its legal debt limit, or which capital projects

previously discussed would affect the debt margin.

9112/07

Tr. at 58-59. Mr. Crawford

answered that the City could not expend $7.347 million

to close Parcels A

&

B over a 6-month

period with available funds.

9/12/07

Tr. at 61.

Mr. Crawford agreed tllat the Board rule at

35

Ill.

Adm. Code 811.716 would require the

City to include in its next financial statement a reference to

its use of the financial test to

guarantee closure and post-closure care costs. He was unsure whether this would have any effect

on the City's ability to borrow funds.

9112/07

Tr. at 63-64.

The

Moose

Testimony

Devin Moose is a licensed professional engineer, and is ti,e director of ti,e St. Charles

office

of Shaw Environmental, Inc.

9/12/07

Tr. at 67.

Mr.

Moose stated he has been involved in

solid waste-related work since 1983. Among otller things, he has designed "dozens upon

dozens" oflandfills, and worked on compliance problems at "dozens" oflandfills. He has

worked in over 60 Illinois counties, and fornearJy

75 Illinois municipalities.

9112/07

Tr. at 68.

---

II

Mr. Moose stated that he and Shaw Environmental had not been involved with the Morris

Community Landfill prior to 2003, when the City engaged Shaw to do some preliminary work.

(Andrews Engineering had previously done work for the Landfill, including preparation of the

applications for !EPA-issued SigMod permits for Parcels A and

B.

9112/07

Tr. at 85, 135-36,

Compo Exh. 12. Mr. Moose said Shaw's involvement with the site increased significantly

following

an inspection in October 2004. Shaw took several steps to determine whether "there

was some kind of imminent threat", including making a site visit and obtaining a copy of the

entire !EPA file on the site, amounting to "over 35 linear feet" of documents.

9112/07

Tr. at 72-

73. Shaw also recommended, and the City authorized Shaw

to make, evaluations ofthe

Landfill's leachate collection system, the landfill gas system, and the groundwater monitoring

system, as well as to do some monitoring

of groundwater, landfill gas, and leachate.

9112/07

Tr.

at 73.

Shaw's evaluation found that "all three

of these systems were in disrepair, or in some

cases, never constructed."

9112107

Tr. at 74 But, Shaw also concluded that there were

measurable, but no significant, impacts to the groundwater, and that there was no significant

landfill gas present beyond the facility limits.

9112/07

Tr. at 74-5. The evaluation and monitoring

took place during over a dozen site visits between early 2005 and September 2007.

9112/07

Tr.

at 75.

Mr. Moose stated that (referring to the August 4, 2000 !EPA-issued SigMod permits for

Parcel A and Parcel B of the Landfill

9112/07

Tr. at 77, Compo Exh. 12):

[Ilt was clear from my first inspection

of the file and first inspection of the field

that the actual file conditions didn't - were not congruent with what was

originally permitted.

So that the closure plan - well, at least partially that was in

the application, which was approved, in some instances, didn't represent on the

ground real-world conditions

of what existed out there at the time.

9112/07

Tr. at

76-77.

Mr. Moose stated that he thought that the $17.4 million dollar Andrews Engineering

closure estimates filed with the permit applications were not reflective of field conditions either,

made on the basis

of "the incapability of the modeler ... to actually get the model to meet the

regulations, as opposed to what's actually best for that particular piece

of ground."

9112107

Tr.

at 78. Mr. Moose stated that he felt that the inputs in the modeling were incorrect, and that the

result was that the Landfill was required

to pump and treat groundwater within 100 feet of the

landfill for 100 years, rather than do modeling,

at an estimated cost of some $10 million.

9/12/07

Tr. at 79. Mr. Moose also believed that the model included a mischaracterization of the

groundwater, to the extent the modeler used Class II groundwater rather than Class IV

groundwater, creating a higher standard

to pass.

9112/07

Tr. at 87-88. Mr. Moose also stated

that he felt that Darcy velocity used by the modeler was offby a factor of 40,000 from the Darcy

velocity Mr. Moose measured at the site in 2006.

9112/07

Tr. at 88-89.

Shaw Environmental prepared revised cost estimates for the City for Parcels A

and

B.

9112/07

Tr. at 80, 84 and City Exh. 1-2. Mr. Moose compared the closure

estimates prepared by Andrews Engineering and included in the 2000 SigMod permits.

---

12

Shaw's estimate for closure/post-closure care of both Parcels A and B was $10,061,619.

9112/07

Tr. at 84. Shaw's costs did not include groundwater pumping and treating for

100 years, leachate pumping and treating for 100 years, or relocation of the overfill

waste from Parcel B (which Mr. Moose

did not feel an "appropriate course of action"

due to environmental risk).

9112/07

Tr. at 85-87.

Andrew's estimate for closure

of Parcel A was $11,103,346, including

$10,117,800 for groundwater treatment.

9112107

Tr. at 84. TIlese excluded costs for

repair and/or installation ofleachate, gas collection and or groundwater monitoring. The

Andrews' estimate for Parcel B was $1,927,680, including $900,000 for removal and

relocation

of overfill. Mr. Moose stated that Shaw's estimates included costs for leachate

treatment for 100 years at a cost

of over $1 million, but did not include leachate gas and

groundwater monitoring, repair, and installation.

9112/07 Tr. at 84-85.

Shaw drafted

its Own proposed schedule of closure activities for the site.

9112/07

Tr. at 90 and City Exh.lO. Shaw would perform a series of investigations and repairs to

existing facilities, and "over a period of 5 to 6 years, take incremental steps to close out

both Parcels A and B".

9112/07

Tr. at 89-90. Mr. Moose stated that the 5-6 year estimate

took into account the process

of finding the large amounts of soil needed, as well as the

need to properly sequence projects for cost efficiency, and the limitations

of the

construction season.

9112/07 Tr. at 92-93.

Review

of Shaw's estimated shows that costs include expenditures for various tasks to

take place between Fall 2006 and Spring-Fall 2012 totaling $6,729,000 (Tasks

101 to 404), as

well as estimates for a 30 year post-closure maintenance and monitoring period of $2,662,400, or

$88,700 per year (Tasks 501-504). City Exh. 10. Tasks

101 to 404 include repair and operation

of the various systems (for leachate collection, gas collection, and groundwater monitoring), and

placement

of cover over the fill. City Exh. 10 and

9112/07

Tr. at 90. The largest cost item in

Shaw's estimate --$1,905,000-- is for construction oflandfill cover, a "fuzzy" number depending

on stated variables. 9/12/07 Tr. at 91. Mr. Moose stated that the City had done two things:

passed ordinances

to require developers to stockpile fill from other projects at the landfill, and to

authorize Shaw to perform a soil cover study to determine how much fill would actually be

necessary.

Id.

Mr. Moose testified that the revised closure/post-closure care figures had been submitted

to IEPA, but that IEPA had not responded to them as of September 12, 2007. 9112/07 Tr. at 94-

95. He testified that he believed that there would be no cost savings

to a municipality in failing

to provide its own municipal guarantee of costs under 35 Ill. Adm. Code 811.716-717.

9/12/07

Tr. at 96-97. Mr. Moose believes that if a municipality meets the self-guarantee test, that it

should not be required to buy a surety bond, since it "directs public resources from this facility to

some suit sitting down on LaSalle Street ... money [that] needs to be spent on this piece of

ground. 9112/07 Tr. at 98. Mr. Moose stated that the timing of a landfill's closure would affect

the rate

of payment for a surety bond.

9112/07

Tr. at 99.

Mr. Moose testified that he believed it was reasonable for CLC to believe that it was not

required to post-finaocial assurance "up until the motion

to reconsider was denied by the

---

13

Pollution Control Board", based on ilie 1982 transfer of the Landfill's development and

operating permit from the City to CLC and the 1982 lease agreement between the City

and CLC.

100-103, and City Exh.3 (a),(b),(c).

9112/07

Tr. at 102.

Mr. Moose does not see:

any substantiation for the $17.4 million closure costs

in

the current pemlits, oilier

ilian ilie closure cost estimate that was put in the application.

If the work is

executed 11,e way it's (sic) permitted to ... I don't think it's protective of the

public health, safety and welfare. I

don't 111ink iliat's where we ought to be

spending the money.

It

doesn't include repair to ilie leachate collection system for one.

It

doesn't

include repair and installation ofilie gas collection system, which is flooded.

Over 50 percent of it is not functioning.

It

also takes money and spends it where it ought not to be spent. There's no

reason to pump Class IV ground water from

an abandoned strip mine and send it

to a sewage treatment plant. I don't think that's what we ought to be doing with

anybody's money.

And it also doesn't ... really address the problems that are really out there as they

exist today .... if you look at the amount of money compared to what the State

Spends to close landfills within its program, it's very high on a per acre basis.

So the amount

of money, just compared empirically to other facilities, is twice

what it ought to be. And 11,e way it's dictated in the closure plan is not the best

foriliis piece of ground.

9112/07

Tr. at 104-106.

Mr. Moose testified

111at he believes that if a bonding company were to issue a bond 11,at

would "get called immediately", iliat it would require full collateralization of 11,e bond, i. e. $17.5

million in collateral for a bond covering $17.5 million

in closure/post-closure costs.

9112/07

Tr.

at 108-109.

On cross-examination,

Mr. Moose admitted 1113t ilie revised cost figures were not

submitted

to lEPA for over a year after iliey were developed.

9112/07

Tr. at 110. Mr. Moose

stated that Shaw had been involved in preparing ilie November 2005 permit applications' cost

estimates, which utilized ilie work plan in ilie 2000 permits, and basically updated 11,e costs.

TIlese applications showed a closure cost for Parcel A

of about $5.7 million, and for Parcel B of

$9.4 million, for a total of$15.1 million or $15.2 million.

9/12/07

Tr. at 119.

Complainant posed a question about ilie acceptability

of violating landfill regulations

"even

ifit doesn't cause an imminent threat [to] the environment,"

9112/07

Tr. at 124.

In

response, Mr. Moose testified iliat he iliinks iliere are occasions where "the regulations don't

squarely fit wi111ilie situation at hand", and "where consent decrees have been negotiated to put

the public healili, safety and welfare in practicality

of the solution, above a particular code within

Electronic Filing - Received, clerk's Office, July 27, 2009

---

14

a regulation."

9112/07

Tr. at 125. Mr. Moose agreed that Shaw was watching gas probe

infonnation at the site regarding possible methane exceedances.

9112/07

Tr. at 128-130.

Still on cross-examination, Mr. Moose testified that, while not the licensed landfill

operator,

the City had spent a significant amount of money with Shaw to monitor the landfill,

and in 2007 had funded repair activities conducted by CLC.

9/12/07

Tr. at 132-133

CLC's Presentation

On September 12, 2007, CLC presented

the testimony of a single witness:

Edward Pruim, SecretarylTreasurer

ofCLC (sequence of events, motives, perceptions).

9/12/07

Tr. at 911

2/07

Tr. at 150-183.

CLC entered

18 exhibits, consisting mainly of correspondence between Frontier and CLC (CLC

Exh. 3-10), from the !EPA

to Frontier (CLC Exh. 11-14), and from Emerald Insurance to CLC

(Exh. 18). CLC also entered three bonds issued by Frontier (CLC Exh.15-17).

3

CLC Exhibit I

was also marked

as Hearing Officer Exhibit 1 (HO Exh. I).

Edward Pruim is the Secretary/Treasurer

of Community Landfill Company, Inc.

l!

is Mr. Pruim's opinion that the Board should not impose a penalty against CLC, because it

"at this time has no funds available, we have no business going on there. So we don't have the

cash flow that we did

at one time, years ago".

9112/07

Tr. at lSI-52. Mr. Pruim also stated that

no penalty should be imposed because CLC complied with all rules when it got tile Frontier

surely bonds in 2000.

9112/07

Tr. at 152.

Prior

to CLC's first SigMod application in 1999, it had carried a bond for $1.4 million in

c1osure/post-c1osure care costs. In the 1999 SigMod application, closure costs were estimated at

$7 million. CLC was to post a bond in tilat amount, while the City would commit to leachate

treatment costing roughly $10 million. !EPA rejected that application,

and required the posting

ofa bond for the entire $17 million.

9112/07

Tr. at 155. CLC and tile City agreed that, for five

years, CLC would pay for a

$7 million bond in its name, as well as for a $10 million bond in tile

City's name.

9112/07

Tr. at 156-57. The cost for all bond premiums was over $200,000 per

year; Frontier, the bonding company, also required $200,000 in collateral.

Jd.

Frontier issued the bonds to CLC on May 31 and June 14,2000. Frontier was removed

from the federal Circular 570 list on June 1,2000.

9112/07

Tr. at 170 and Compo Ex. 9. Mr.

Pruim stated that

if the !EPA had not initially pre-approved the Frontier bonds in 2000 as

complying with the rules, CLC would have closed tile landfill within 4-5 years for $1.4 million.

9112/07

Tr.l59, 168. But, having received the SigMod pennit in 2000, CLC proceeded with

engineering work to build and develop a new cell for waste acceptance. CLC approached !EPA

for an operating

pennit for that new cell, and was told that it needed to replace the Frontier bonds

3 The remaining exhibits were the previously mentioned material incorporated from

PCB 01-170 (CLC

Exh.l, also marked as HO Exh. 1), and CLC's

9/28/04

first supplemental

response to discovery requests (CLC Exh. 2).

---

15

with another financial instrument.

9/12/07

Tr. at 160. !EPA denied the pennit, and the Board

and the Appellate Court affirmed the denial on appeal.

9112/07

Tr. at 160-61.

Mr. Pruim stated that CLC paid Frontier a total

of two years in premiums on the bonds; in

addition to the $200,000 in collateral, then, CLC tendered roughly $600,000 in funds to Frontier.

9/12/07

Tr. at 161-62. CLC had its broker look for another bonding company, and found out that

"the collateral was going

to be in the range of70, 80 percent of the bond value."

9/12/07

Tr. at

162. Mr. Pruim said that CLC did not have those funds at that time.

Id.

Mr. Pruim stated that, once the operating permit for the new cell was denied,

CLC's

income was minimal and it had to let go all employees except for a general manager to oversee

and maintain the landfill and a part-time secretary.

9/12/07

Tr. at 163. CLC had difficulty

paying

its fixed expenses and outstanding bills including insurance, equipment maintenance,

fuel, and labor.

9112/07

Tr. at 164. Mr. Pruim said that CLC did continue to take in

contaminated soil at the landfill, but that was to allow CLC to "dress up the top of the fill where

there was voids from settlement" which it continues

to do periodically.

Id.

Mr. Pruim stated that

t.he last premium payment CLC made on the Frontier bonds was in

2001. 9112/07

Tr. at 165. I-Ie said that Frontier refused to release the $200,000 collateral paid to

him, on !EPA direction. (Mr. Pruim testified that he believed that the collateral was now worth

$300,000-$400,000,

as a result of Frontier' s investment of the funds.) For the same reason,

Frontier has not refunded

to CLC any of the previously-paid premiums.

9112/07

Tr. at 165-67.

Mr. Pruim stated that, even

if ordered to do so by the Board, lack of funds would prevent

CLC from finding a way to get financial assurance in the amount

of $1 7 million or even $7

million, and that CLC would be unable

to pay any civil penalty the Board might assess. 911

2/07

Tr. at 167-68.

On cross-examination, Mr. Pruim aclmowledged that CLC had received a November 14,

2000 violation notice from !EPA regarding the non-compliant Frontier bonds, including the

suggested resolution

of the violation by replacement of the bonds with another method of

financial assurance.

9112/07

Tr. at 171-2 and Compo Exh. II. He also agreed that, given the 5-

year term

of the bonds, that he knew that he would need to expend closure costs at the end ofthe

period. 911

2/07

Tr. at 172-175. Mr. Pruim stated that he would allow the City to take over the

Landfill, and to begin closure at once.

9112/07

Tr. at 176.

On re-direct, Mr. Pruim reiterated his understanding

of the agreement between CLC and

the City was that CLC alone was to be responsible for all closure and post-closure care, with the

exception

of City treatment of Landfill leachate at a cost of roughly $10 million.

9/12/07

Tr. at

176-177. Mr. Pruim stated that he was unaware that Frontier would be delisted from the Circular

570 a day after the bonds were issued, and that !EPA approved the bonds and issued the SigMod

permits even after the delisting.

9/12/07

Tr. at 179. Mr. Pruim repeated that he believed that he

did not need bonds for a full $17 million, given the City's $10 million leachate treatment

commitment,

but got bonds in that amount only to insure that !EPA would issue the SigMod

permits.

9/12/07

Tr. at 180. Mr. Pruim challenged the $17 million amount, only to lose the

argument at the Board and appellate court levels.

Id.

He stated that, as landfill lessee, he had

---

16

never asked tile City as owner to take over c1osure/post-c1osure activities at the Landfill.

9112/07

Tr. at 183.

Before the hearing was adjourned, a written "public statement"

ofMr. John Swezey

was read into the record.

9112/07

Tr. at 188 and HO Exh. B (erroneously listed as "E" in

transcript). Mr. Swezy's statement was that he was unable to appear at hearing due to a medical

condition.

Mr.

Swezy was an alderman of tile City of Morris from 1979 until 2007. Mr. Swezy

commented til at, while the City owns the land under the Landfill, that tile City has not itself

conducted disposal operations since 1982.

9112/07

Tr. at 189. Mr. Swezy stated that, under the

terms of the lease and operating agreement between CLC and tile City, CLC is solely responsible

for

all

c1osure/post-c1osure

care costs. He further claimed that tile City Council had no reason to

believe that the City would have to pay any such costs, and that the City Council had never

authorized tilen-Mayor Feeney in 1976 to execute any documents for the City in any capacity

other than

as owner ofthe land underneath the waste.

9112/07

Tr. at 190.

Mr.

Swezy criticized

IEPA for failure, prior

to 2002-2003, to require the City to initiate closure of Parcel B or to post

any financial responsibility, stating

If tile Parcel B really had reached its capacity in the mid-to-Iate I 990s, why

wasn't the [I]EPA compelling CLC as the permanent operator to close it at tilat

point in time?

If

the [I]EPA had done its job, tile City wouldn'( be in the

predicament it finds itself

in today.

***

[I]EPA [ should be] put on notice it has an obligation to protect (he environment

and has failed

(0

adequately protect the citizens of the City of Morris. As stated

above, it

is an injustice to nOW burden our taxpayers with a [$10 million] or $17

million obligation because

of the [I] EPA's failure (0 enforce its own regulations.

9112/07

Tr. at 192-193, Compo Ex. II.

Post-Hearing Filings

On October 9, 2007, Richard Kopczick, the Mayor of the City of Morris, filed an

affidavit (Kopczick Affid.). In his affidavit, the Mayor stated that he had been Mayor since May

1,2001, following aldennanic service for the City since

M'ay 1, 1995. Kopczick Affid. at 1. He

stated timt since transfer of(lle Landfill

in 1982, no prior Mayor or other agent of tile City was

authorized to designate the City was anything other than "the owner

of the land underneath tile

waste facility, and was

not authorized to designate the City as owner of tile waste operation."

Id.

The affidavit recites timt the City has not:

compacted waste at tile Morris Community Landfill, operated equipment at the

landfill, placed cover on the landfill, constructed or developed the landfill, set

consumer rates for the landfill, paid bills

of the landfill, or in any way participated in

tile day-to-day operations at tile landfill.

Id.

at 2.

The Mayor states that in passing its Resolution No. R-99-6, regarding leachate treatment

by its wastewater treatment plant for 100 years, the City reflected tile $10 million valuation

of

---

17

this service by the Applicant (presumably CLC). Finally, the Mayor concluded that the City

Council's passing of the resolution was not intended "to obligate the City in any way to posting

of closure/post-closure financial assistance."

Id.

On October 12,2007, the City filed a motion to strike or dismiss the Kopczick affidavit

(Mot. Strike). The City filed a response in opposition (Resp. Mot. Strike) on October 26, 2007.

On October 18, 2007, the People filed a closing argument and post hearing brief (Comp.

Br.)

At the same time, the People filed an appeal of the Hearing Officer's ruling disallowing

admission of, except

as an offer of proof, testimony concerning a settlement offer made by

Frontier

to lEP A concerning the Frontier bonds. The City filed a response in opposition on

November

2, 2008.

The City filed its closing brief and argument on November 30, 2008 (City Br.), and the

People filed a reply on December

7, 2006 (Camp. Reply to City). On November 30,2007, CLC

filed its closing

brief and argument (CLC Br.), and the People filed a reply on December 10,

2007 (Comp. Reply"to CLC).

On December 6, 2007, the City filed a Motion to Bar Punitive Damages (City Mot. Bar),

to which the People filed a response in opposition on December ]3,2007 (Camp. Reply Mot.

Bar).

On June 3, 2009, the People filed a "request for final order". On June 11, 2009, the City

filed a motion to strike that request. On June 15, 2009, CLC filed a motion for leave to join in

the City's June 11 motion. Also on June 15, 2009, complainant filed its motion in opposition to

the City's June 11 motion. On June 16, 2009, the City filed a supplemental motion to strike.

PRELIMINARY MATTERS REGARDING EVIDENCE AND PLEADINGS

TIle post-hearing filings raise several matters the Board must dispose of concerning

which evidence is properly before the Board in its consideration

of penalty matters.

Request for Final Order

TIle People's June 3, 2009 request for final order and all subsequent responsive and

related filings are denied

as moot. TIle Board has not reviewed, or taken into account, any ofthe

parties' factual statements, characterizations, or arguments contained in these filings. Today's

decision is being rendered consistent with the Board's own work plan to decide this action prior

to the end of the current fiscal year.

Kopczick Affidavit

As previously stated, on October 8, 2007, within the deadline for filing public comment

set

by the Hearing Officer, Mayor Kopczick of the City of Moms filed an affidavit. In the

affidavit, the Mayor states beliefs

as to the City's intent in taking certain actions concerning CLC

and the Landfill.

Electronic Filing - Received, clerk's Office, July 27, 2009

---

18

People's Arguments

The People move to strike or dismiss the affidavit on the grounds that, as an agent for the

City, a party

to this action, the Mayor cannot file public comment, citing American Bottom

Conservancy. et al. v. Village of Fairmont City, PCB 01-159 (slip op. at 7) (Oct. 18, 200 I)

(ABC, PCB 01-159) (citing the Board's rules at 35 Ill. Adm. Code 101.202, 101.628(c)) (ABC,

PCB 0 1-159). Mot. Strike at 3-4. Alternatively, the People allege that the affidavit should be

stricken as outside the scope of comment allowable under and as 35

lll.

Adm. Code 101.628(c),

in

that it is based on evidence outside the record, and does not present legal argument citing to

authorities.

Id.

at 4.

City's Arguments

In response, the City argues tllat the Board's rules do not, by their terms, prevent parties

from filing public comments. Resp. Mot. Strike at 2-5. TIle City states tllat tlle Board has

allowed parties to file public

comment in other cases, and distinguishes ABC, PCB 01-159 on

tlle grounds tllat the statement that "parties may not submit public comment" is

die/a,

and that in

any case an administrative determination in one proceeding is

not

res judicata

in another. Resp.

Mot. Strike

at 5-7. TIle City argues that the Mayor's affidavit in this enforcement action is

clearly a "written statement[] to tlle

Board in connection with the subject thereof'. Resp. Mot.

Strike at 7, quoting 415 ILCS 5/32 (emphasis added in response).

Board Ruling

After considering the parties' arguments, the Board declines to strike the Kopczick

affidavit,

but in so doing does not retreat from its comment on the issue in ABC, PCB 01-159.

ABC was a landfill siting case, in which petitioners attempted to enter as public comment a

document that

had not been part of the local government's record on appeal. TIle City correctly

states that the

Board first struck tlle document on tlle grounds tllat tlle document, in its entirety,

had not been part of the record before the local siting autllOrity, citing as grounds the Act's

dictate tllat the Board's decision was to be based "exclusively on the record before the county

board or governing body of tlle municipality." 415 ILCS 5/40.1 (b) (2006). Only after that did

the

Board comment that

Petitioners cannot file public comments because they are a party to tlle

proceeding. Public comments are reserved for members

of the public that are not

a party, who wish to submit information concerning the proceeding.

See

35 Ill.

Adm.

Code 101.202, 101.628(c).

The cases cited by the City in support of the contention that the Kopczick

affidavit is

proper comment are inapposite; tlley do not involve cases in which tlle Board

itself accepted post-hearing public comments from parties.

4

Members oftlle public are

4 In Land and Lakes Co. v. IPCB, 319 Ill.App.3d 41, 743 N.E.2d 199 (3rd Dist. 2000), the

Appellate

Court was referring to public comment submitted to the local siting authority during

Electronic Filing - Received, clerk's Office, July 27, 2009

---

19

extended some latitude under the Act and the Board's rules so that they can express their

opinions and beliefs concerning environmental issues without being unduly hampered by

procedural barriers. These opinions and beliefs are afforded lesser weight than evidence

and statements that are subject

to cross examination.

See

35111. Adm. Code 101.628(b);

see also

9/12/07 Tr. at 191 re Sweezy statement, HO Exh. B.

Parties in adjudicatory proceedings, particularly in enforcement cases, cannot be

afforded the same latitude

as members of the public who participate at hearings. Parties

and their agents are subject

to the rules of discovery, evidence, and administrative

procedure

as set out in the Board's rules.

See

35 Ill. Adm. Code 101. Subpart F. As the

People contend, post-hearing

"comment"-even though accompanied by affidavit-is

not subject to cross-examination, and is not an acceptable substitute for hearing

testimony.

TIle Board caTI110t give the full weight of sworn testimony to public comment

concerning facts and opinion statements

as to the intent of the City and its agents in

taking particular actions. By the same token, tlle Board could not allow the People to

present Agency affidavits attesting to post-hearing site inspections or their interpretation

of Board rules or City actions.

In summary, the Board strikes the Kopczick affidavit as improper public

comment. In

so doing, the Board notes tllat tlle Swezey statement concerning the same

matters remains as part

of the record.

People's Offer of Proof re Frontier Bond Settlement Offer

During tlle testimony

of IEP A's Brian White, the People attempted to elicit testimony

concerning possible settlement

of tile Frontier bonds (Camp. Exh. 9). Without objection, Mr.

White testified that IEPA,

as beneficiary of the Frontier bonds, had made a claim on tllOse bonds.

9111107

Tr. at 183. He explained that on a perfOlmance bond, IEPA must give the surety an

opportunity to perform closure/post-closure.

9111107

Tr. at 184. If the surety does not perfornl,

it must "pay tlle penal sum" on the bonds.

Jd.

Mr. White stated, without objection by

respondents, that Frontier would not be performing closure/post-closure at the Landfill.

Jd.

Mr.

landfill siting proceedings. In Village

of Sauget v. IPCB, 207 Ill.App.3d 974, 566 N.E.2d 724

(5tll Disl. 1990), the Appellate Court was not discussing Board failure

to accept public comments

ofllie petitioner, who was a permit applicant appealing IEPA denial

of a permit. The case dealt

with a finding

of lack of due process prior to permit issuance where the applicant was unable to

file effective comments with tlle IEPA before the close of the comment period in response to

USEPA comments, since USEPA filed its comments late and failed to provide tlle applicant with

a copy. Finally, in Waste Management

of Illinois. Inc. v. County Board of Kane County, PCB

03-104, slip op. at 7 (June 19,2003), tlle Board found that the local government proceedings

were not made fundamentally unfair because Waste Management did not have

an opportunity to

respond to a document submitted in public comment to the local authority because H[p Jarties to a

siting approval proceeding

do not have a right to submit public comment or respond to filings

more than thirty days after the end

of the public hearing. 415 ILCS 5/39.2(c)".

Electronic Filing - Received, clerk's Office, July 27, 2009

---

20

White testified that Frontier would not be paying on those claims, and went on to state that he

had received information that Frontier had offered to settle the case at $400,000.

ld.

At that point, counsel for the City interposed a hearsay objection, which was sustained by

the hearing officer.

9/1 1107 Tr. at 184. 111e People rephrased the question to ask whether

Frontier had offered to pay on the claim, to the witness' knowledge, and how much the offer was

for.

9/1

1/07

Tr. at 184-85. Counsel for the City then interposed a relevance objection. The

People explained that their view was that Frontier was "in rehabilitation" and that the settlement

being negotiated was substantially less than the amount needed for post-closure care.

9/1 1

107

Tr.

at

185-86. Complainant argued that the material was relevant to the issues of gravity of the

offense, since if the State:

can claim on these bonds for the full amount

of closure and post-closure care,

then that limits our penalties substantially.

However,

if nothing more than a

de

minimis settlement offer has been made on

the bonds, it shows, you know, the amount of damage to the State, the gravity of

the violation. The only financial assurance that's eyer been provided [or $17.4

million is now worth $400,000." 9/1 1107 Tr. at 186.

The hearing officer stated that he did find the information "somewhat relevant",

but that the settlement was "still up in the air and it's heavy in conjecture,"

(9/1

1/07

Tr. at

187), but allowed the People to make the following offer of proof:

Ms. Tomas:

Do you know if Frontier will be paying on those claims?

The Witness: I don't know if Frontier will be paying on those claims, no.

Ms. Tomas: To your lmowledge, have they made

an offer to pay on those claims?

111e Witness: Yes.

Ms. Tomas: And what was that amount?

111e Witness: $400,000. 911 1107 Tr. at 187-88.

People's Arguments

On October 19, 2007, the People filed an appeal of the hearing officer ruling

(Camp. HO

App.i along with its final argument and closing brief. After relaying the

exchanges between counsel, the witness, and the hearing officer (Camp. HO App. at 1-3),

5 The pages of this appeal motion are unnumbered. The first page following the notice of filing

with the heading

"I.

Evidentiary Ruling" will

be referred to as page 1, the page with footnotes 1-

2 as page 2, the page with footnotes 3-5 as page 3, and the pages with footnotes 6-9 as page 4.

Electronic Filing - Received, clerk's Office, July 27, 2009

---

21

the People present their argument for admission into the record of the evidence contained

in the offer of proof. TIle People state that the excluded facts were not introduced either

as proof ofliability against respondents. TIley argue that the settlement proposal was not

introduced

as proof of liability against Frontier,

6

or of the amount of the !EPA's claim on

the bonds, which some cases state may be reasons for exclusion of the material, but

instead

to show the inadequacy of the funds available for closure. Compo HO App. at 3

and n. 4.

The People reiterate their comment at hearing concerning the relevancy

of the

infonnation, stating again that the "fact that only $400,000

is available to satisfy closure

and post-closure obligations

of $17.4 MM indicates a serious and grave injury to the

general welfare".

Compo HO App at 4, citing People v. ESG Watts Inc. (Sangamon

Valley), PCB 96-237 (Feb. 19, 1998).

City's Arguments

The City filed a response in opposition to the appeal of the hearing officer ruling on

November

2,2007 (Resp. EO App.). TIle City first argues that the appeal is untimely filed under

35 III. Adm. Code I 01.502(h), since it was not filed within 14 days of the Board's receipt ofthe

hearing transcript. The Board received the transcript September 24, 2007, but the appeal was not

filed until

25 days later on October 19, 2007. TIle City argues that the People's objection to the

hearing is accordingly waived, and that its appeal should be stricken or denied. Resp. HO App.

at 2-3.

TIle City next argues, citing authority, that the hearing officer properly denied admission

of the White testimony because it concerns settlement negotiations, particularly where they are

introduced

to prove liability. Resp. HO App. at3. TIle City also argues that the hearing officer

properly excluded the White testimony

as hearsay and as irrelevant to penalty considerations.

Id.

at 3-5.

Board Ruling

The Board declines to strike the People's motion on the procedural objection raised by

the City. The issue of the admissibility ofinfonnation concerning any Frontier offer of

settlement ofIEPA's bond claim was the subject of an offer of proof,

in

addition to hearing

officer rulings. Under the tenns

of35 III. Adm. Code 101.502(b), the People's appeal was due

October 8, 2000 and was so was filed some

II days late. But, given the fact that the People were

in the process of preparing a final brieffortimely filing October 19, 2009, the Board finds that

there is no undue filing delay on the People's part, or resulting prejUdice to the respondents

as a

6 The People explain that the State's bond claim is not the subject of a lawsuit, but is being

processed according to New York State insurance company rehabilitation procedures. The

People assert that "[ c ]ounsel for Frontier Insurance Company

in Rehabilitation was consulted

prior to hearing in this case, and had no objection

to the State's use of its $400,000.00 offer as

evidence." Camp. EO App. at 3, n. 5.

---

22

result of the late filing. The People filed the appeal along with its closing brief on October 19,

2007, and the City had ample opportunity

to file a reply to the motion as well as to respond to the

People's arguments based on this material in

its own closing brief, timely filed on November 30,

2007 under the briefing schedule set

by the hearing officer before the close of hearing.

Considering the parties' arguments on their merits, the Board grants the People's motion

and admits the proffered White testimony concerning Frontier's offer

to settle its liability under

the bonds to IEPA for $400,000. The Board is persuaded by the People's arguments that it is

within the Board's discretion

to accept this material, which is not offered for the purpose of a

liability determination against respondents (already established

in the Board's orders of February

and June 2006).

111e material contained in the offer of proof was not, in the end, the subject ofa

hearsay ruling

(911 1107

Tr. at 187), and so is not excludable on that ground. TIle material is

relevant to at least some of the penalty factors of Sections 33( c) and 42(h) of the Act. 4 I 5 ILCS

5/33(c) and

42(11) (2006). TI1ese include, as the People suggest, the degree of injury and

interference with the general welfare (415 ILCS 5/33(

c) (i)) and the gravity of the violation (4 15

ILCS 5/42(h)(I)). As the People argued, if Frontier is a ready source of funds for the full closure

amount, the gravity

of the violation is arguably less than if Frontier is not.

Even

if the Frontier settlement figure could properly be excluded from evidence, the

Board notes that this information is,

to some extent, cumulative to other undisputed evidence in

the record. The hearing officer was correct that the potential $400,000 bond settlement figure is

speculative, in that an offer by Frontier to settle IEPA claims is not proof that the company

wiII

in fact settle the bond claim in any amount. But, the City did not object to testimony by Mr.

White that Frontier

wiII not perform closure/post-closure care. The record is clear that the full

bond premium funds were never paid, so that the amount

of any recovery on the bonds is

unlikely to be the full face value of the bonds. Respondents have offered testimony that CLC

paid two years worth

of premiums for a total of $400,000 on the Frontier bonds, which had 5-

year terms and could be extended for another 5 years (Camp. Exh. 9). 11,e evidence

is

undisputed that CLC presented Frontier with some $200,000 in collateral, so that in all Frontier

had received a total

of some $600,000 from respondents as surety for closure costs of some $17.4

million.

9112/07

Tr. at 161-62,165-67.

Applicability

and Effect of

. .. ..--"-

Local Governmental and Government Emplovees Tort Immunity Act

-'

The City has raised the Local Goverrunental and Governmental Employees Tort

Immunity Act (Tort Immunity Act), 745 ILCSIO/l-101

et seq.

(2006), in two separate motions in

this action: a September 5, 2007 pre-hearing motion for leave to file amended affirmative

defenses, and a post-hearing December

6, 2007 motion to bar punitive damages (Mot. Bar). The

People have opposed both motions on substantive and procedural grounds

and on December 13,

2009 moved to strike the City's motion to bar (Mot. Strike).

TI,e pleadings on the affirmative defense issue include the City's September 5, 2007

motion for leave to file amended affirmative defenses, the People's September

6, 2007 objection

thereto, and the

City's September 10,2007 motion for leave to file a reply to the People's

response. In addition

to the statutory claim, the City's September 5, 2007 motion raises issues of

---

23

laches, estoppel, and other matters the Board will consider in this opinion in its considerations of

the factors of Section 33( c) and 42(h) of the Act. 415 ILCS 5/33(c) and 42(h) (2006). None of

these motions were addressed by the hearing officer, so that they all remain pending. 911 1/07 Tr.

at 17-18.

TIle motions for leave to file are granted; the Board has considered the content of all of

these filings.

The pleadings on the motion

to bar punitive damages are the City's December 6, 2007

motion, and the People's December 13, 2007 motion to strike it. The People's motion to strike is

denied.

The Tort Immunity Act states that its purpose is

"to protect local public entities and

public employees from liability arising from the operation

of government." 745 ILCS 10/2-

101 (a). The Tort Immunity Act also states:

Notwithstanding any other provision

of law, a local public entity is not liable to pay

punitive or exemplary damages in any action brought directly or indirectly against

it by tlle injured party or a tllird party. 745 ILCS 10/2-102.

Among other things, "a local public entity is not liable for

an injury resulting from an act or

omission of its employee where tlle employee is not liable." 745 ILCS 10/2-109.

TIle City contends that:

TIle Illinois Supreme Court has explained that punitive damages are those

damages which are awarded

in order to punish the offender and to deter that party

and otilers from committing similar acts

of wrongdoing. Loitz v. Remington

Anus Co

.. 138 Il1.2d 404, 414, 563 N.E.2d 397 (1990). TI1US,

it

is clear that the

damages sought by the State for the purpose

of punishment or as a deterrent to

others constitute punitive damages, which are barred by the Tort Immunity Act.

See Paulson v. County ofDeKalb, 268 Ill.App.3d

78, 83,644 N.E.2d 37, 40 (2nd

Dist. 1994) (holding that

the Tort Immunity Act barred the imposition of

statutorily available treble damages against county-run nursing home). Mot. Bar

at 1-2.

In response, tile People argue that they are

not seeking punitive damages from the Respondents

... [ as] [c ]ivil penalties

assessed under the Act are not 'damages', but rather administrative sanctions.

Envirornnental Protection Agency

v. City of Champaign. PCB 1971-051

(September 16,1971),1971 WL 4357 (slip op. at I). The purpose

of civil

penalties is remedial and not punitive. People

v. Bentronics Corporation. PCB

1997-020 (October

17,1996),1996 WL 633410 (slip op. at 4) (citing Modine

Manufacturing Co. v. IPCB,

193 Ill. App. 3d 643 (2d Dist. 1990)). Mot. Strike at

2 (emphasis

in original).

Electronic Filing - Received, clerk's Office, July 27, 2009

---

24

The Board denies the City's motion

to bar. The Board finds that the Tort Immunity Act

does not by its terms apply. Section 2-101

of the Tort Immunity Act provides til at "[n]othing in

tilis Act affects the right to obtain relief other than damages against a local public entity or public

employee." 745 ILCS 10/2-101 (2006). The City cites no autilOrity for the proposition

that an

enforcement action seeking civil penalties for violation

of the Act is properly charactacterized as

a tort action for damages, punitive or othenvise. Early in its history, the Board held:

[T]he City's reference to Section 2-102 of Chapter 85[the Tort Immunity Act]

is totaIly inapplicable since that section deals with "punitive or exemplary

damages," a technical term having to do with additional payments in private civil

damage actions. The penalties which the Board may invoke pursuant to the

Environmental Protection Act are, on the other hand, not in the nature

of

"damages," but are, rather, administrative sanctions .... IEPA v. City of

Champaign,PCB 71-5IC, slip op. at I (Sept. 16, 1971).

The Act provides separately for civil penalties and punitive damages. The People

seek

civil penalties under Section 42(a) of the Act (415 ILCS

5/42(a)

(2006)). Punitive damages are

addressed elsewhere

in the Act, for example, in Sections 22.2(Ic) and 57.12(f) (415 ILCS

5/22.2(Ic),

57.12(f) (2006)). Moreover, it is weIl-settled that the primary purpose of civil

penalties is to aid in enforcement of the Act; any punitive considerations are secondary.

See, e.g.

,People v. Fiorini, 143

III.

2d 318, 349, 574 N.E.2d 612,625 (1991).

The purpose of the Tort Immunity Act is "to protect local public entities and public

employees fTom liability arising from the operation of government." 745 lLCS 10/1-101.1

(2006). The Board believes that the City's arguments that the welfare

of its taxpayers should

receive special consideration here may properly be considered by tile Board under Section 42(h)

of the Act (415 ILCS

5/42(h)-{2006))

in the context of tile "arbitrary or unreasonable financial

hardship" exception

to imposing a civil penalty at least as great as any economic benefit accrued

from non-compliance. Accordingly, the Board

wiII address this further in its later discussion of

Section

4201). See inji-a

pp. 42-44.

STATUTORY AND REGULATORY FRAMEWORK

A short summary of the relevant statutes and rules foIlows.

Section

21 (d)(2) of the Act provides that "[n]o person shaIl ...

Conduct any waste-storage, waste-treatment, or waste disposal operation ... in

violation

of any regulations or standards adopted by the Board under this Act."

4151LCS

5/21

(d)(2) (2006).

Section 811.700(f) of the Board's financial assurance regulations provides:

On

or after April 9, 1997, no person other than the State oflIlinois, its agencies

and institutions, shaIl conduct any disposal operation at an MSLF unit that

requires a permit under subsection (d)

of Section 21.1 of the Act, unless that

---

25

person complies with the financial assurance requirements of this part." 35 Ill.

Adm. Code 811.700(f).

Under Section 811.712(b), the surety company issuing the bond must be licensed

by the

Department ofInsurance, pursuant

to tl,e Illinois Insurance Code, or at least licensed by the

insurance department

of one or more states and approved by the U.S. Department oftl,e Treasury

as an acceptable surety. 35

III.

Adm. Code 81 1.712(b). Section 811.712 also provides tllat the

U.S. Department

of the Treasury lists acceptable sureties in its "Circular 570."

Id.

Section 33(c) of the Act provides in its entirety that:

(

c)

In making its orders and detemlinations, the Board shall take into

consideration all the facts and circumstances bearing upon the

reasonableness oftlle emissions, discharges or deposits involved

including, but not limited to:

(i)

tl,e character and degree of injury to, or interference with the

protection

of the health, general welfare and physical property of

the people;

(ii)

tl,e social and economic value

of tl,e pollution source;

(iii)

tlle suitability or unsuitability

of the pollution source to the area in

which it is located, including tl,e question of priority oflocation in

tlle area involved;

(iv)

tl,e technical practicability and economic reasonableness

of

reducing or eliminating the emissions, discharges or deposits

resulting from such pollution source; and

(v)

any subsequent compliance. 415 ILCS 5/33(c) (2006).

Section 42(h)

of the Act provides tl1at

In determining the appropriate penalty to be imposed ... fue Board is

authorized to consider any matters ofrecord in mitigation or aggravation

of

penalty, including but not limited to the following factors:

(l)

tl1e duration and gravity of the violation;

(2)

tl1e presence or absence of due diligence on the part of the

respondent

in

attempting to comply with requirements of this Act

and regulations tl1ereunder or to secure relief tl1erefrom as

provided by this Act;

(3)

any economic benefits accrued

by tl,e respondent because of delay

Electronic Filing - Received, clerk's Office, July 27, 2009

---

26

in compliance with requirements, in which case the economic

benefits shall be determined

by the lowest cost alternative for

achieving compliance;

(4)

the amount

of monetary penalty which will serve to deter further

violations

by the respondent and to otherwise aid in enhancing

voluntary compliance with this Act by the respondent and other

persons similarly subject to the Act;

(5)

the number, proximity in time, and gravity

of previously

adjudicated violations

of the Act by the respondent;

(6)

whether the respondent voluntarily self-disclosed, in accordance

with subsection (i)

of this Section, the non-compliance to the

Agency; and

(7)

whether the respondent has agreed to undertake a "supplemental

environmental project," which means an environmentally

beneficial project that a respondent agrees to undertake in

settlement

of an enforcement action brought under this Act, but

which the respondent is not otherwise legally required to perform.

In detennining the appropriate civil penalty to be imposed under

subsection (a)

or paragraph (1), (2), (3), or (5) of subsection (b) of this Section,

the Board shall ensure, in all cases, that the penalty is at least

as great as the

economic benefits,

if any accrued by the respondent as a result of the violation,

unless the Board finds that imposition

of such penalty would result in an arbitrary

or unreasonable financial hardship. However, such penalty may be offset in

whole

or in part pursuant to a supplemental environmental project agreed to by

the complainant and respondent. 415 ILCS 5/42(h) (2006).

ADDITIONAL FlNDlNGS OF FACT

Prior to analysis of the 33(c) and 42(h) factors, the Board will make additional findings of

fact based on the hearing record. But, the Board must reiterates some earlier findings, which the

Board will

not revisit even to the extent of repeating the parties' arguments about them as it

relates to analysis

of the Section 33(c) and 42(h) factors:

Limits of Curreut Record

---

27

TI,e complaint in fuis case concerns only the financial assurance violations alleged in the

complaint.

TI,e record in tilis case closed in December of 2007. Again, fuis record does not

incorporate fue record in tile fully-briefed, but still-pending cases alleging operating violations. 7

Respondents' Unavailing Collateral Attacl{ on Landfill Rules and Permit System

TI,e Board modernized its landfill permitting and operating rules, and upgraded financial

assurance requirements

as dictated in Section 21.1 offue Act (415 ILCS 5/2111 (2006) in a

rulemaking proceeding. Development. Operating and Reporting Requirements for Non-

Hazardous Waste Landfills, R88-7 (Aug. 17, 1990). Section 29(a) of the Act provides for appeal

of such rules within 35 days of their adoption. 415 ILCS 5/29(a), referencing 415 ILCS 5/41

(2006). Section 29(b) specifically provides that

Action by the Board

in adopting any regulation for which judicial review could

have been obtained under Section

41 of this Act shall not be subject to review

regarding tile regulation's validity or application

in any subsequent proceeding

under Title VIII, Title IX or Section

40 oflhis Act. 415 ILCS 5/29(a) (2006).

TI,e time for challenge to tile landfill permitting and financial assurance rules

is long past.

Board does not and will not adjust closure/post-closure care cost figures in

fue context of an

enforcement action. These cost figures, based

on fue permitees' own estimates of actions needed

to comply Witil the Act and Board rules, are established in the permit process and can be

modified only by

fue Agency under 35 111. Adm. Code 811.Subpart G or by the Board in a

proceeding

to establish a facility-specific rule or adjusted standard.

See

415 ILCS 5/27-28 and

28.1.

8

TIle SigMod permits issued in 2000 set the closure/post-closure care costs at $17.4

million based on respondents' own figures. As even respondents aclmowledge, the Board

7 TI,ese cases are People of tile State of Illinois v. Community Landfill Company. Inc. and

People

of ti,e State of Illinois v. Edward Pruim and Robert Pruim, PCB 97-193 and PCB 04-207

(cons.).

PCB 97-193 was initiated

by a May 1, 1997 six count complaint re operation of fue site,

alleging,

inter alia,

water pollution, lack of appropriate financial assurance, failure to file

application for permit sig mod, and various other operating deficiencies.

PCB 04-207 was begun by a May

21,2004 19-count complaint alleging,

inter alia,

failure to

adequately manage refuse and litter; failure to preventlcontrolleachate; failure to timely file a

SigMod application; water pollution

of ti,e Illinois River; waste deposition in unpermitted

portions

of fue landfill; conducting disposal operation without permit (2 counts); open dumping;

violation

of standard permit conditions (deviations without approval); improper used tire

disposal; violation

of permit conditions (re movable fencing, prior notification of operation of

gas control facility, taking corrective action re erosion control, proper leachate disposal, prior

approvals before waste placement); and failure to provide adequate financial assurance and

update cost estimates.

8 As Mr. Moose suggested, courts may make such adjustments using fueir general equity powers,

but the Board as a creature

of statute has only fue specific authority given to it.

See, e.g,.

Ford. v.

IEPA, 9 Ill. App.3d 711, 292 N.E.2d 540 (3rd Dist.l973).

---

28

decided in 2001, and the appellate court agreed, that the figure must include the roughly $1 0

million

in costs for the treatment ofleachate which the City agreed to undertake.

Chronology

The Board has been dealing with cases involving the Landfill, its SigMod pemlit

applications, and financial assurance issues since 1993. The chronology

of all of these events is

not immediately clear from the parties' briefs, and the Board believes that some recapitulation

may assist the reader's understanding

of this case.

In 1982, the City of Morris executed the first of a series of agreements with CLC

concerning CLC's status

as sole operator oftbe Morris Community Landfill. While remaining

the owner of the property on which the Landfill is located, since tbat time the City has not

engaged in day-to-day operations

of the Landfill. This change has been reflected in pennits

issued since then. Tr.

9112/07

at 101-102.

As part

of the agreement, CLC agreed to pay dumping-related royalties or "tipping fees"

for

eLC's use of the Landfill. CLC paid the City $399,208.98 in such fees for the years 2001

through 2005.

Compo Ex. 13, Response. No. 23. Additionally, CLC accepted responsibility for

maintenance

of appropriate financial assurance.

9/12/07

Tr. at 156.

Under

35 Ill. Adm. Code 814.104, owners of existing landfills pennitled under Section

21 (d) were required to submit a SigMod application on or before September 18, 1994, unless

required to do so earlier

by the lEPA. The Board takes administrative notice of the fact that, in

Community Landfill Corp. v. !EPA, PCB 95-137 (Sept. 21,1995) the respondents requested a

retroactive variance on April 26, 1995. Respondents sought a retroactive variance from the

Board

to begin June IS, 1993 (the earlier SigMod application due date set by lEPA) and to end

45 days from the grant of variance to make the filing. The Board denied the variance.

Respondents appealed the decision. The Third District Appellate Court was persuaded

to order

the Board

to grant variance. Community Landfill Corp. v. PCB, No. 3-96-01-82 (3rd Dis!. June

17, 1996) (unpublished order under Supreme Court Rule 23). Accordingly, the Board issued the

variance

as directed, giving the City until August 5, 1996 to file the variance. Community

Landfill Corp. v. !EPA, PCB 95-137 (June 30,1996.)

TI,e Board takes administrative notice of the facts stated in its decision in Community

Landfill Company and City

of Morris v. !EPA, PCB 01-48 and PCB 01-49 (cons.) (Apr. 5,

2001)(review of conditions included in August 4,2000 SigMod pennits for Parcels A and B

applied for in May, 2000).

On August

5,1996, respondents filed the [variance-authorized SigMod]

applications. On September I, 1999, the Agency denied the SigMod pennit

applications. Parcel B, Vol. I at 36. Among other things, whether CLC timely

filed the applications is raised in

an enforcement case currently pending before tl,e

Board.

See

People of the State of Illinois v. Community Landfill Company Inc.

(AprilS, 2001), PCB 97-193 (ruling on motions for partial summary judgment).

PCB 01-48 and PCB 01-49 (cons.) (slip op at

5) (Apr. 5, 2001).

---

29

Beginning

in

1996, CLC secured financial assurance from Frontier bonds. On

May

1, 1997, the People initiated the stil1-pending enforcement action referenced above:

People

ofthe State of Illinois v. Community Landfill Company. Inc., PCB 97-193. Prior

to CLC's SigMod application in 1999, it had carried a bond for $1.4 million in

closure/post-closure care costs. In the 1999 SigMod application, closure costs were

estimated at

$7 million. CLC was to post a bond in that amount, while the City would

commit

to leachate treatment costing roughly $10 million. Again, IEPA rejected that

application, and required the posting

of a bond for the entire $17 million. 9/12/07 Tr. at

155. CLC and the City agreed that, for five years, CLC would pay for a $7 million bond

in its name, as wen as for a $10 million bond in the City's name. 9112/07 Tr. at 156-57.

The cost for all bond premiums was over $200,000 per year; Frontier, the bonding

company, also required $200,000

in

collateral. 9

Id.

CLC and the City filed their next SigMod applications in May 2000. Frontier

issued

$17.1 million in bonds to respondents on May 31,2000. On June 1,.2000, Frontier

was dropped from Circular 570.

In

August 2000, the IEPA issued the SigMod permits,

and respondents appealed some 200 conditions contained

in those permils.

On November 14, 2000, the TEPA sent notice to respondents that their Frontier

bonds were non-compliant. On November 27, 2000, respondents filed

an application for

supplemental permit for Parcel A.

In April, 2001, the Board affirmed many, but not

an of the variolls conditions

contained

in the 2000 SigMod permits, including the $17.4 million financial assurance

amount.

See

PCB 01-48 and PCB 01-49 (cons.) (Apr. 5, 2001) (slip op at 25-30). The

Board's decision was affirmed

in part (including on the financial assurance amount) and

reversed

in

part. Community Landfil1 Corp. v. PCB, No. 3-01-552 (3rd Dis!. July 12,

2001) (unpublished order under Supreme Court Rule 23).

The

TEPA denied the November 2000 supplemental permit application

in

May 2001,

citing

as grounds the non-compliant Frontier bonds. Respondents filed an appeal of this denial

in August, 2001, and the Board affirmed the supplemental permit denial in Community Landfill

Company and City

of Morris v. IEPA, PCB 01-170 (Dec. 6,2001). On respondents appeal, the

111ird District Appellate Court in tum affirmed the Board. Community Landfill Corp. v. IEPA,

331 m. App. 3d 1056,772 N.E.2d 231 (3rd Dist. 2002), pet. for leave to appeal denied in No.

94600,202 III. 2d. 600, 787 N.E.2d 155 (2002).

CLC made its last premium payment on the Frontier bonds at some point

in 2001.

It

is undisputed that the only financial assurance posted for this landfill since issuance of

the SigMod pemlits in 2000 was the non-compliant Frontier bonds. Pursuant to the agreement

9 As the People note, there is conflicting evidence as to the actual cost of the Frontier bonds, as

evidenced in the testimony ofIEPA's

Mr.

Edwards and CLC's Mr. Pruim.

See

People's Br. at

16.

---

30

between CLC and the City, CLC was

to pay premiums for both the $10 million bond for leachate

treatment issued in the City's name,

as well as the $7 million bond issued in CLC's name. The

bonds were issued for a 5-year term, renewable for another 5 years, for a total of 10 years. IEPA

approved the bonds

as complying with the Board's financial assurance rules. But, as of June I,

2000 Frontier was removed from the federal Circular 570 list. As a result, the Frontier bonds

issued May 31,2007 were no longer compliant with the rules.

TIlirty Illinois landfills had purchased Frontier bonds.

Of these, one closed, and 28 others

obtained acceptable substitute financial assurance. The Morris Community Landfill was

the only

one which did not obtain substitute financial assurance, even following receipt

of an IEPA notice

of violation suggesting this course of action in November, 2000.

TI,e Frontier bonds are not a present source of adequate financial assurance for closure of

the Landfill. Frontier has not offered to close the Landfill using the proceeds of the bonds. CLC

paid Frontier only 2 years premium on the bonds,

in addition to making an initial $200,000

collateral payment.

CLC's premium payment was $217,842, which the People calculate to be a

cost of$596.83 per day.

TI,e

People filed this action

in April 2003. In May, 2004, the People filed another

enforcement action concerning operations at

1l,e Landfill. People of 1l,e State of Illinois v.

Edward Pruim and Robert Pruim, PCB 04-207. At some point in 2004, the City engaged Shaw

Engineering to inspect

1l,e site and evaluate 1l,e situation.

In February 2005, the Board "reluctantly" granted

1l1e Pruims motion to consolidate PCB

07 -193 and PCB 04-204, noting 1l,at "both parties agree that consolidating these two proceedings

will avoid duplication and that neither party will be prejudiced". People

v. Community Landfill

Co., Inc. and People v. Edward and Robert Pruim, PCB 07-193 and PCB 04-204 (Feb. 17,2005).

According to the interrogatories in

1l1is case, the Landfill accepted its last waste load in

2005. Mr. Pruim stated that the Landfill currently continued to accept contaminated soil "to

dress up the top of1l1e fill where there was (sic) voids from settlemenf'. 9112/07 Tr. at 164.

The Board granted summary judgment

in this action in February 2006. The City

contends that it was

not aware of any obligation to provide financial assurance for the site until

1l1e Board issued its decision in June 2006 affmning on reconsideration the February 2006 order.

In the City's words:

since the PCB found that the City would be required

to assure the performance of

closure, post-closure care, the City voluntarily incurred substantial costs,

including hiring environmental experts to evaluate the situation at the Landfill

facility and determine all necessary closure, post-closure activities, and to revise

the defective closure, post-closure plan previously submitted by CLC,

as well as

to create current, accurate cost estimates which were submitted to IEP A

approximately 6 months ago [in July 2007]. City Br. at 5, citing Tr.

911 2/07 at 94,

111-113,229,231.

Electronic Filing - Received, clerk's Office, July 27, 2009

---

31

The Board held hearing in 111is matter in September 2007, at which time !EPA

Inspector Relzlaffreported signs

of waste acceptance and other problems at the Landfill

during inspections as late

as August 2007. Briefing in 111is action concluded in December

2007.

Since 2000, Frontier has made no payments to anyone in relation to these bonds.

As

beneficiary of111e bonds, !EPA blocked CLC's attempt to have its collateral returned. As of111e

close of the record in this case, IEP A had made a claim on the bonds, but had not received

payment. The hearing record indicates that Frontier made an offer

of $400,000 in settlement of

the claim, but does not specify a date.

REMEDIES

Remedies Requested

The People here have requested Board entry

of an order containing mUltiple remedies.

The first the People characterize

as "affirnmtive remedies": 1) requiring the respondents to post

financial assurance in the amount of$17 ,427 ,366.00, submit revised cost estimates, and update

financial assurance in accordance with approved revised estimates, and

2) requiring respondents

to close Parcel B of the Landfill in accordance with 35 III. Adm. Code 811.110, and the

provisions

of Permit No. 2000-156-LFM6.

The People next urge the Board to assess a civil penalty against the respondents, jointly

and severally, in the amount

of $1 ,059,534.00, and an additional civil penalty against ti,e CHy of

Morris in the amount of$399,308.98. Camp. Br. at 25.

10

The People have waived attorney

fees, asking the Board

to consider this waiver when considering the costs of the various remedies

111e People have requested. Camp. Br. at 32-33.

CLC contends, in sum tI,a!: any CLC non-compliance was unintentional, and a direct

result

of the Agency's initial approval of ti,e Frontier bonds; CLC has at all times acted in good

faith and with due diligence; CLC has received no economic benefit from non-compliance; and

in any event has no funds

to pay a penalty.

See, e.g.,

CLC Br. at 19.

In summary, the City argues timt no remedy at all should be imposed against it.

See, e.g.,

City Br. at 5-7. TI,e essence of ti,e City's argument is that its conduct was at all times

reasonable, that no remedy should be imposed against it because that remedy will add to tile

burden of tile expenses already incurred by its taxpayers.

Id.

10 TIle amount of the penalty tile People request against the City for recovery of dumping

royalties

or tipping fees is listed as various amounts at various places throughout ti,e brief.

Compare pp. 4, 25, 27, and 35. The People state that the source

of tile amounts of111e royalties

or fees received by ti,e City is Complainant's Exhibit 13, Response to Second Set ofInterrogatories,

Response

No. 23. Camp. Br. at. 25. The figures listed are: 2001--$242,527.55; 2002--$63,226.01;

2003--$0; 2004--$73,925.07; 2005--$19,630.35. TIle Board calculates 111e total of these amounts to be

$399,308.98, as listed at Camp. Br. at 25. The Board will consistently use the $399,308.98.

Electronic Filing - Received, clerk's Office, July 27, 2009

---

32

In fashioning all of its orders, the Board must consider the factors of Section 33( c) of the

Act.

If the Board determines a penalty is appropriate, the Board must also consider the factors of

Section 42 (h) of the Act.

Section 33(c)(i):

The character and degree of injury to, or interference with the protection

orthe health, general welfare and physical property orthe people.

People's arguments. The People argue that the evidence in the record demonstrates a

substantial interference with the protection of the general welfare. Based on the uncontroverted

evidence

in the record, there has been no compliant financial assurance in place for this site since

June 1,2000;

CLC's premium payments on the non-compliant bonds ceased in 2001.

Based on record evidence in which CLC admitted it had last received waste in parcel B in

1996. Camp. Ex, 13, the People calculate that Parcel B should have been closed in 1996.

But,

parcel B has not been closed, and the situation at the landfill is deteriorating. Camp. Br. at 6.

City's arguments. The City maintains that, since it did not own or operate the Landfill.,

that it has not caused any injury, and that it has no control over facility operations since 1982.

City Br. at 8-9. 11,e City asserts that its environmental engineer, Mr. Moose, found there

were

"no significant" impacts to ground water, presence of landfill gas, or gas migration, and discounts

the evidence

ofIEPA 's Mr. Retzlaff. City Br. at 10-13. However, it has taken action to address

site concerns, states the City, and has approved Mr. Moose' set

of recommendations for actions

to be taken at the site. City Br. at 13.

CLC's arguments. CLC too argues that there is no evidence of harm, given testimony

that landfills have economic value, the Morris Landfill

is properly located, and that closure and

post-closure activities are occurring

at the Landfill. CLC Br. at 2.

Board ruling. 11,e Board agrees with the People that the record shows a high degree of

injury to the general welfare of the public. 11,e record amply demonstrates, even through the

testimony of the City's environmental consultant, that Parcels A and B remain open, although

ostensible not receiving waste, and that conditions at the Landfill evidence signs

of neglect

including erosion. Since 2001, there has been no assurance by CLC, the City

or any third party

that the $17.1 closure costs can

be met. Even assuming

arguendo

that a $7.1 million figure was

to be found appropriate in some future-issued permit, no one has ever stepped forward to

guarantee even this amount. 111is factor weighs against respondents.

33(c)(ii):

The social and economic value or the pollution source.

People's arguments. Regarding "the social and economic value of the pollution source,"

see

415 ILCS 5/33(c)(2) (2006), the People argue that the Morris Community Landfill

as it exists

has become an environmental liability due to respondents' neglect. Parcel B is not permitted to

accept waste at all. To the extent Parcel A may have remaining capacity, it has no operating

permit allowing waste disposal. Com. Br. at 8-9.

---

33

City's arguments. The City cites to the testimony of TEPA's Mr. Retzlaff as proof that

landfills present a benefit

to the public, without specifically addressing the Landfill's current

condition. City Br. at 13.

CLC's arguments. CLC too argues that there is testimony here that landfills have

economic value. CLC Br. at

2.

Board ruling. While properly-run, closed, monitored, and cared for landfills have

economic and social value, the Board agrees that the Landfill in

its current state is an

environmental liability. The Board weighs 111is factor against respondents.

33(c)(iii):

The suitability or unsuitability of the pollution source to the area in which

it

is

located, including the question

of priority of location in tbe area involved.

People's

arguments. On the issue of "the suitability or unsuitability of the pollution

source

to the area in which

it

is located,"

see

415 ILCS 5/33(c)(3) (2006), the People note that

11,e City had obtained approximatedly 50-55 permits for 11,e Landfill, while CLC had obtained

approximately 50.

0111erwiRe, the People contend, there is no evidence in the record regarding

suitability, and so this factor is not significant

in this case. City Br. at 9.

City's arguments. The City cites to the testimony ofIEPA's Mr. Retzlaff as proof that

the Landfill

is suitably located, and notes that there is no contrary evidence. City Br. at 14 ..

CLC's arguments. CLC too argues that landfills have economic value, the Morris

Landfill is properly located.

Board ruling. There is no evidence in this record that would lead the Board to conclude

that

111e Landfill, when properly operated and managed, is unsuitable to the area in which it is

located. This factor weighs neither for nor against respondents.

33(c)(iv):

The technical practicabilitv and economic reasonableness of reducing or

eliminating the emissions, discharges or deposits resulting from such pollution source.

People'S

arguments. TIle People also argue that providing financial assurance was both

technically practicable and economically reasonable."

See

415 ILCS 5/33(c)( 4) (2006). The

People contend that the financial assurance requirements

of the Act and Board rules are designed

to place the burden of landfill closure on those with a direct financial stake in a landfill. As to

CLC,

fue People argued fuat 28 of the 30 other landfills holding non-compliant Frontier bonds in

2000 managed to find alternative insurance. Acknowledging CLC's argument that it currently

has

no funds available to secure financial assurance, the People contend that CLC's inability to

properly conserve resources from its 20 years of waste disposal obligations should not be

considered a defense to compliance. Moreover, argue the People,

if Parcel B had been closed

when closure was due, the problem

of posting high amounts of collateral could have been

avoided.

Compo Br. at 9-13.

Electronic Filing - Received, clerk's Office, July 27, 2009

---

34

As to the City, the People also cite to the testimony of the City's auditor Mr. Crawford

that the City was "in a strong financial position," and could have provided a local government

guaranteed under

35

Ill.

Adm. Code 811.716-717 for $9.1 million as of fiscal year 2007, up fTOm

$7.1 million for fiscal year 2005. Compo Br. at 10-11. While the City could therefore not have

provided the full $17.4 million required under the permits, the People contend that there is every

indication that the City, alone or in combination with CLC, could have provided surety

bonds

from 2000 to the present. Assuming a premium of two percent of face value, the annual

premium would have been $348,000, a sum the People believe the City could afford. City Br.

at

II.

City's arguments. The City contends this factor does not apply in this case. The City

states that since the alleged violations here

do not involve "emissions, discharges or deposits" of

pollutants, the "technical practicability and economic reasonableness of reducing or

eliminating discharges"

is not relevant.

CLC's arguments. CLC argues that compliance is not economically reasonable Or

tec1mically feasible for CLC due to lack of funds. CLC argues that its current situation is a direct

result

of the Agency's A

U

gil st 2000 approval of the Frontier bonds, failure to grant a penni t to

accept waste at the site, and failure to allow CLC to recoup its collateral from Frontier.

Board ruling. As the Board previously stated, the economic reasonableness and

technical feasibility

of the Illinois landfill permitting and financial assurance system was

established during the rulemaking process.

11,e Board will not further address 1l,e City's

contention that

1l1is factor is irrelevant here. 11,e record demonstrates that 28 of 30 other landfill

sources were able

to find alternative financial assurance following the disapproval of Frontier

bonds. The Board weighs this factor against respondents.

33(

c)(iv):

Any

subsequent compliance.

People's arguments. Addressing the final factor of any subsequent compliance,

see

415

ILCS 5/33(c)(5) (2006), the People state that 1l,e record reflects only continued noncompliance.

The People argue that respondents have done nothing to provide 1l,e required financial assurance.

Although respondents challenge the financial assurance amount here, neither sought a pernlit

modification between 2000 and July 2007.

Compo Br. 14-15.

City's arguments. The City argues that it has continued to treat leachate from the

Landfill, in addition

to retaining environmental consultants. As to any liability of the City for

posting financial assurance, the City repeats that it continues

to challenge 1lmt it has any

responsibility for

so doing, and that it has been properly pursuing legal challenges and

exhausting administrative remedies. The City contends that it has been complying subsequent

to

the Board's orders ofFehruary and June 2006, by voluntarily hiring Shaw Enviro11l11ental and

proceeding with closure and post-closure care activities despite the fact that the City does not

conduct the waste disposal operation. City Br. at 14-15.

CLC's arguments. CLC argues that it attempted to find compliant financial assurance

once the permit denial for a new operating cell was upheld

in the appellate court. Because the

Electronic Filing - Received, clerk's Office, July 27, 2009

---

35

permit was denied, CLC could not accept waste, and was unable to make money. IEP A refused

to allow Frontier

to release coJlateral to CLC. When CLC attempted to find alternative financial

assurance,

it found lhat it would have to post coJlateral of $14-15 mi11ion in cash, which it could

not afford to do. CLC contends that it at all times acted in good faith, and that the problem here

was a result

of lhe State's conduct.

Board ruling. At present time, it is undisputed that there is no financial assurance

currently in place to guarantee funds for closure oflhe Morris Community LandfiJl. The Board

fmds that lhis factor weighs against each respondent. CLC as an operator of the LandfiJl, and lhe

City as owner

of the property on which the Landfill sits, and as an operator as found by the

Board in February 2006, were and are jointly and severaJly responsible for posting lhe initial

financial assurance, as weJl as for upgrading it as needed following lhe required annual cost

updates.

Affirmative Remedies

Granted

The Board finds on lhe basis of the record before it that the Section 33(c) factors weigh in

favor

of granting much of the "affirmative" relief requested by lhe People. In this context, the

Board again notes that the People have foregone their original claim for attorney fees, requesting

the Board to take notice of lhe fee waiver in its evaluation of costs of any remedy.

The record amply supports, and tJle Board orders, respondents to post financial assurance

in lhe amount of $17 ,42 7,366.00 witJlin 60 days; tJlis sum may be reduced by any amount IEPA

has or wiIJ receive from its claim against 111e Frontier bonds. Respondents may use any

combination offmancial assurance mechanisms acceptable

to the !EPA under the Board's rules.

Respondent's submission

of any pernlit application for reduction of closure/post-closure costs to

IEP A does not constitute compliance with lhis order.

Also witJlin 60 days, respondents must submit revised cost estimates, and update

financial assurance in accordance wilh approved revised estimates. The Board orders

respondents to cease and desist from accepting any additional waste at the site, and from

committing any other violations ofthe Landfill's permits, tJle Act, and Board regulations.

As lhe People point out, lhe Board's remedy order here is consistent with lhat imposed in

0111er cases involving financial assurance violations.

See

People v. Jolm Prior and Industrial

Salvage. Inc., PCB 93-248 (July 7,1995) (ordering closure of three landfills, development permit

revocation, posting of financial assurance, and tJlat Prior "cease and desisf' from further

violations); People

v. WaYne Berger and Wayne Berger Management, PCB 94-373 (May 6,

1999)(ordering landfill closure and imposing $30,000 penalty).

The Board does not today require respondents

to immediately close Parcel B of the

Landfill

in

accordance wilh 35 I11. Adm. Code 811.1 10, and the provisions of Permit No. 2000-

I 56-LFM6. This record makes clear that a wholesale reassessment of 111e best approach to the

closure

of Parcels A and B is necessary to avoid compounding tJle environmental issues they

currently present. But, lhis record does not provide the information to enable

tJle Board to do so.

---

36

TI,e Board finds that this record demonstrates the need for penalties. To detennine the

appropriate penalty amount, the Board below considers factors listed

in Section 42(h) of the Act.

See

415 ILCS 5/42(h) (2006).

Penalty Considerations

nnder Section 42

Section 42(a) Maximum Civil Penalties.

Act:

TI,e maximum civil penalties the Board can assess are established in Section 42(a) of the

[A]ny person that violates any provision

of this Act or any regulation adopted by

the Board

... shall be liable for a civil penalty of not to exceed $50,000 for the

violation

and an additional civil penalty of not to exceed $10,000 for each day

during which the violation continues

.... 415 ILCS 5/42(a) (2002).

TI1e People assert that each of the respondents committed two violations, one each of 35 Ill.

Adm. Code 811.700(f) and 811.712. At the time it filed its brief, the People calculated that the

maximum penalty for the violation

of Section 811.700(f) should be $24,950,000 ($50,000 plus

$24,900,000 (the 2,490 days

fTom November 16, 2000 through September II, 2007 at $10,000

fine

per day). 11 At the time it filed its brief, the People calculated that the maximum penalty for

the violation

of Section 811.712 should be $16,580,000 ($50,000 plus $16,580,000 (the 1,658

days

fTom November 16,2000 through June 1,2005 at $10,000 fine per day). Pursuant to

Section 42(a)

of the Act, the People assert that the Board could require Board could require

respondents to pay a civil penalty

of $41 ,580,000. Camp. Br. at 15-17.

TI,e People

do not seek the maximum penalty of $41.5 million. Instead, the People ask

that the respondents at least be held liable for the economic costs avoided due

to failure to have

financial assurance. The People ask that respondents be held jointly and severally liable for the

cost

of bond premiums avoided. At roughly $600 per day for each day, the People calculate this

sum

as in excess of $1.49 million. Camp. Br. at 26-27. The People also request an additional

penalty

of $399.308.98 against the City alone, the amount of tI,e landfill operating royalties or

"tipping fees" paid

to the City by CLC.Comp. Br. at 25. The People state tlmt, "for simplicity",

they waive recover

of interest between the date the benefit was received to the date of hearing.

Camp. Br. at 23.

Section 42(11) Penalty Factors

Section 42(h) articulates the aggravating and mitigating factors that tI,e Board weighs in

detennining an appropriate civil penalty

(see

415 ILCS 5/42(h) (2006)). Below, the Board will

layout tI,e more significant points the parties have made in support oftl1ese factors. TI,e Board

will give its analysis

of the factors following this presentation.

11 The Board calculates the additional fines that would have accrued during tI,e 646 days from

September 12,2007 through June 18,2009

to be $646,000. The total maximum civil penalty

assessable today, then, would be $48,040,000.

Electronic Filing - Received, clerk's Office, July 27, 2009

---

37

Section 42(h)(1): Duration and Gravity of the Violation. TI,e People argue that a

conservative first date for the beginning

of violation was November 14,2000, the date CLC was

advised

ofthe non-compliant status of the Frontier bonds. Compo Br. at 26. But, the City argues

that the duration

of any violation attributable to it should run only from June 1,2006, the date of

the Board's affirmance of the summary judgment order here. City Br. at 20-21.

TI,e People argue that the evidence on the gravity of the violation is substantially the

same as the evidence presented concerning Section 33( c)(l). 415 ILCS 5/33( c)(1 )(2006). The

People again maintain that the gravity of the violations is high, arguing prior Board precedent.

Compo Br. at 19-20, citing ESG Watts Inc. (Viola Landfill) V. Illinois EPA, PCB 01-63 (slip op.

at 14) (April 4, 2002) ("financial assurance for closure/post closure

of a landfill is essential to

protect the State

of Illinois from potential liability to care for landfills that may be abandon ed ");

People

v. Wavne Berger, PCB 94-373 (slip op. at 20-21) (May 6,1999) ("the [financial

assurance] provisions are

in place to ensure that other more threatening violations do not occur,

and which provide a safety net to protect the environment

if the operator cannot or will not meet

his obligations under the law"); People

V. ESG Watts, Inc. (Sangamon Valley Landfill), PCB 96-

237 (slip

op. at 5) (February 19, 1998) ("compliance with fmandal assurance' requirements is

necessary

to assure that the State of Illinois will not have to pay for correcting environmental

harm created

by insolvent polluters."). TI,e People suggest that a number of pro hI ems need

immediate attention at the Landfill, including the closure

of Parcel B, cover maintenance,

correction ofleachate seeps,

and uncovered refuse. For these reasons, the People believe tilis

should be considered a significant aggravating factor.

Compo Br. at 20-21

As

to the gravity of the violation, CLC argues that any violation is minimal. Although it

has not filed appropriate local guarantee documents, the City states that "it is and has been

performing [CLC's failed obligations], even without

an order from the Board." CLC Br. at 21.

In addition, CLC again reargues the correctness

of its interpretation of the financial assurance

rules. CLC Br. 21-25.

Section 42(h)(2): Presence

or Absence of Due Diligence. After applying for and

obtaining

in 2000 the SigMod permits with financial assurance requirements totaling

$17,426,366, respondents unsuccessfully challenged the amount

of financial assurance before the

Board. The challenge resulted in a Board denial April 5,2001 followed by an appellate denial

in

2002. No cost updates have ever been filed. Respondents never sought regulatory relief, and

respondents did not submit a permit application requesting a reduction

of financial assurance

until July 2007. Since the date that the Frontier bonds were deemed non-compliant, the

respondents have posted no compliant financial assurance,

of any kind or in any amount, for

closure/post-closure

of the Landfill. Compo Br. at 21-22

TI,e City argues that it has been diligent

in pursuing resolution of any Landfill violations

since at least 2004. The City asserts that Shaw submitted revised cost estimates to IEPA

as early

as 2005, and submitted revised estimates as recently as July 2007. City Br. at 26. TI,e City

asserts that

as long as CLC remains its lessee under the lease agreement, that "the City cannot,

on its own initiative, charge in and close Parcel B at CLC's facility, nor can it dictate how CLC

will conduct its operation at the facility". City Br. at 27.

---

38

Section 42(h)(3): Economic Benefit from Delaved Compliance. At hearing, the only

testimony concerning possibly applicable financial assurance mechanisms for compliance with

35 Ill. Adm. Code 811.706 were performance bonds under Section 811.712, local government

guarantee under Section 811.717, and the local government financial test under Section 811.716.

The maximum amount that the City could have guaranteed ranged from $7 million

to a high of

$9 million. 11,e City posted no guarantee in any amount. Camp. Br. at 25

11,e People argue that respondents jointly benefitted from the avoided costs on financial

assurance bonds, and suggest using the premium payments avoided for the non-compliant

Frontier bonds

as providing "a very conservative estimate of the avoided economic benefit."

Compo Br. at 26.

Based on the 2001 annual premium of$217,842, the People calculate that the avoided

cost per day was $596.83. Based on the initial non-compliance date

of November 16, 2000, until

the first day ofl1,e remedy hearing September 11,2007,

l1)e People calculate the economic

benefit from non-compliance

to be $1,486,107.70. Compo Br. at 26. Even assuming a credit to

CLC for the premium payments for 2000-200], the avoided costs would be $1,059,534.70.

11)e People assert l1)at these costs should be assessed CLC jointly and severally.

ld.

The City asserts it could have posted a self-guarantee without any cost to itself. City Br.

at 27-28. The City argues it received no economic benefit from any compliance delay, because

under Section 42(h)(3) any benefit must be

"determined bv the lowest cost alternative [or

achieving compliance."

City Br. at 28 (emphasis in original), citing 415 1LCS5/42(h)(3). The

City also suggests that based on the testimony ofIEPA's Mr. Harris that the Frontier bonds were

valid on their face through 2005 and by rule through 2006, the non-compliance period should run

only from January 1,2007 through September 11,2007, resulting in a cost

of $]51, 594.82 at a

daily cost

of $596.83. The City states that, crediting premiums paid of $426, 572, no economic

benefit resulted. City Br. at 28-29.

CLC again argues that the State has refused

to allow Frontier to release funds to it, and

that CLC lacks the means

to pay any penalty. CLC Br. at 17-18.

11,e People also contend that the State should recover the dumping royalties or tipping

fees

it received from 2001-2005, amounting to $399,308.98. This is because after the 2001

operating permit denial, the City knew that there should have been no waste dumping at the

Landfill.

Compo Br. at 26-30. On this point, the City suggests 11,at it was still permissible to

continue dumping waste in Parcel A. City Br. at 28. Moreover, the City argued that it received

no benefit from

CLC's failure to acquire bonds only CLC was required to pay for. Overall, tile

City urges, "it makes no sense that the City would pay more penalty than CLC because the City

accepted royalties, when the operator clearly benefited more from the direct revenues it received

from

l1)e acceptance of waste."

Jd.

The City argues that 11,e City and its taxpayers have incurred

substantial costs

as a result ofCLC's situation, and that tI,ere are no "ill-gotten gains" or

"windfall profits"

to be disgorged from the City. City Br, at 29-30.

Electronic Filing - Received, clerk's Office, July 27, 2009

---

39

Section 42(h)(4):

Penalty Amount That Will Deter Further Violations and Enhance

Voluntary Compliance. The People argue that deterrence is closely linked to the economic

benefit factor. The People argue that

Municipalities which own landfills may contract with other entities for operation,

however, they remain jointly liable under the pertinent land disposal regulations,

and tl1erefore have the responsibility

to ensure that their contract partner operates

the landfill in compliance with tile law .... TI1ese municipalities must not be

allowed to stand

by while their landfiIls deteriorate, nor must they be allowed,

once dumping revenues have ceased, to shift long tern1 maintenance

responsibilities

to the State. In our case, City of Morris has ignored its

environmental responsibilities, while spending a significant amount

of funds on

other projects. Therefore the penalty assessed in this matter must make it clear to

otl1ers that municipalities will not be treated differently from private owners when

violations of the Act and Board regulations occur at their landfiIls. At a minimum,

fees and royalty payments made

to municipalities during periods of knowing

violation must

be recovered in penalty, so that there is no incentive for continued

violations.

Compo Br. at 29-30.

TIle City argues that any penalty would only serve to furtl1er burden local taxpayers, who

have already suffered mightily, and would not facilitate closure. TIle City argues that it is

"not in

ti,e public interest to impose a harsh punishment on a smaIl municipality (and tl1erefore its

taxpayers) for a private operator's failings".

CityBr. at 30-31.

Section 42(h)(5): Previously

Adjudicated Violations of the Act. 111e People state that

aside from the summary judgment order issued in this action, tile only previously adjudicated

violation is that in IEPA

V. Community LandfiII Co., AC 89-6 (Feb. 23, 1989) (uncontested,

$500 fine). Compo Br. at 32.

Section 42(h)(6): Voluntary Self-Disclosure Under Section 42(i). TI1ere was

no self-disclosure here; CLC was notified of the Frontier bonds non-compliance. Compo Br. at

32. But that, argues the City, should have no relevance to penalty considerations relative to it.

Section 42(h)(7): Supplemental Environmental Project Undertaken. There is no

supplemental environmental project (SEP) proposed here. Compo Br. at 32. Here, too, tile City

argues that this factor does not weigh against it, since a municipality cannot "voluntarily take on

environmental projects at taxpayer expense in order

to 'settle' with the State, where the City

believes the

IEPA's action result from a misinterpretation of the law." City Brief at 32.

Board Analysis and Penalty Calculation

TI,e Board finds that the Section 42(b) factors justifY the imposition of a penalty on both

respondents. TIle single adjudicated administrative citation violation weighs minimaIIy against

CLC. The factors related to voluntary self-disclosure and SEP performance weigh neither for

nor against respondents. Aggravating factors are many and severe.

Electronic Filing - Received, clerk's Office, July 27, 2009

---

40

TIlese aggravating factors are that the on-going, grave financial assurance violations in

this case have persisted since 2000, leaving unresolved problems at the Landfill. Neither

respondent has exhibited due diligence

in actually replacing the non-compliant Frontier bonds

(for which no premiums have been paid since 2001). Compliance with financial assurance

requirements has yet

to be achieved, as respondents continue to argue against the cost

requirements and figures based on their own SigMod pennit applications.

TIlese respondents have exhibited a course and pattern

of conduct in which they appear to

believe that they can unilaterally re-write the Board's landfill and pennitting rules and

requirements. Both respondents have clung steadfastly to their interpretation

ofthe financial

assurance requirements for surety bonds despite consistent, contrary interpretations rendered by

!EPA, the Board,

and even the TIlird District Appellate Court. Similarly, both respondents

appear

to believe that their closure/post-closure care costs and obligations are not those actually

contained

in pennits, but instead those advocated by the City's new environmental engineer.

TIle Board finds that both respondents benefited economically by putting off spending

money

to achieve compliance with the financial assurance rules, and for this, Section 42(h)(3)

requires recovery

of benefits received. After listing the factors, the Section 42(h) goes on to

provide that

the Board shall ensure, in all cases, that the penalty

is at least as great as the

economic benefits,

if any, accrued by the respondent as a result of the violation,

unless the Board finds that imposition

of such penalty would result in any

arbitrary or unreasonable hardship. However, such civil penalty may be off-set

in

whole or in part pursuant to a supplement environmental project agreed to by the

complainant and the respondent. 4

15 ILCS 5/42(h) (2006).

Based on the limitations

of this record, the Board agrees that an appropriate measure of

tlle civil penalty against CLC is the amount of money CLC saved by not paying premiums for

tlle non-compliant Frontier bonds, less the amount

of premiums paid. TIle Board will award the

State the penalty amount

it requested against CLC: $1,059,534.70.

TIle Board is not swayed by CLC's cries of current poverty; costs of closure have always

been part

of tlle landfill business equation. TIle cost/post-closure care requirements were

tightened at ilie state

and federal level in the early 1990s after lengthy and public regulatory

processes. Incomplete Imowledge, or even misunderstanding, of these requirements, does not

excuse non-compliance

Witll the provisions of the Act and rules designed to protect tlle State's

taxpayers

fTOm bailing out from their closure/post-closure defaults tlle landfill operators who in

earlier years reaped the profits of landfill operation. The $1,059,534.70 penalty assessed here

is

notthe Board's first substantial penalty for landfill fmancial assurance and closure violations.

See

People v. ESG Watts. Inc. (Taylor Ridge Landfill), PCB 01-167 (Apr. 1,2004) ($1 million

penalty plus attorney fees for closure violations); People v. ESG Watts. Inc. (Viola Landfill),

PCB 96-233 (February 5, 1998) ($683,200 penalty plus attorney fees for financial assurance and

closure violations).

---

41

The Board finds some force in the People's arguments in favor ofjoint and several

liability for the "premiums avoided" penalty, finding that the City has not been diligent

in

resolving this situation. But, the Board will not impose this $1.06 million penalty jointly and

severally on CLC and the City. The Board finds that to do so would impose an arbitrary or

unreasonable hardship on the City's taxpayers, within the meaning of Section 42(h).

12

Unless

the City

is able to recover funds from CLC in any separate civil action for breach of the lease

agreement between them, the City may well be left to shoulder all necessary compliance costs. 13

The City was lessor, owner of the underlying property, and an operator of the Landfill

under all circumstances here

as previously found by the Board.

It

is beyond question that CLC,

under the Act, Board rules, and permits as well as the lease agreement with the City, was the

person the State properly looked to

first

for tile posting of financial assurance. But, the City was

on notice that the State would look

to the City

Ilext

in terms of remediation of any problems. 11,e

Board cannot find that the City has reaped no financial benefit from its inaction. While the City

argues that it

could have

"self-guaranteed" closure costs of from $7.1 up to $9.1 million in 2001

through 2007, the City has never

actually made

such a guarantee.

14

While this record does not

quantify amounts, the Board finds that the City received some economic benefits from the fact

that it did not formally execute the local guarantee. 11,e Board may

re~sonably

assume that

eliminating any such pledge of the City's credit from appearing in its annual audits could only

serve to have the City's credit picture appear in a more favorable lightto any interested person or

entity.

See, e.g.,

ESG Watts, Inc. v. PCB, 218111. App. 3d 43, 668 N.E. 2d lOIS (4th Dis!. 1996)

(reasonable to assume timely value

of money by delaying necessary expenditures on slight

evidence).

11,e only undisputable economic benefit figure quantified

in this record is that the City

has received dumping royalties or tipping fees from Landfill operations

in the years 2001-2005,

amounting

to $399,308.98. 11,e Board gives little credence to the City's arguments to the effect

that it has been an innocent bystander held captive by the

fec1dess actions of its royalty-paying

lessee. The Board notes that the City has been ably assisted by counsel through many appeals

of

determinations by the IEPA and the Board.

See supra

at pp. 27-30. The Board is unable to credit

that the City could

in good faith believe that it could contract away any responsibility to post

financial assurance, or to assume that without posting acceptable financial assurance that CLC

would always be able to remediate pollution on land the City owns.

12 In

this case, this finding is not in consistent with the taxpayer-protection aims of the Tort

Immunity Act, 745 ILCSlOll-IOI

et seq.

(2006), as discussed

supra

pp.22-24.

13 Assuming

arguendo

that Frontier Insurance was ready, willing, and able to refund all monies

received

by it from CLC in both collateral and bond premiums, this record establishes that this

would amount to some $600,000. This sum falls far short

of financial assurance costs needed

here

by any party's reckoning.

14

11le

City's argument also ignores the fact that at all times pertinent the permit-established

closure costs have been at least $17.4 million, figures which should have been but were

not

routinely and annually updated.

Electronic Filing - Received, clerk's Office, July 27, 2009

---

42

As a prudent landlord and steward

of its own property, the City had an obligation to its

taxpayers

to ensure that CLC lived up to its obligations under the lease agreement. TIle Board

has long held, and the courts have long affirmed, that even

passive

ownership of property

15

is

sufficient

to allow a finding of liability for pollution under the Act.

See, e.g.,

Perkinson v. IPCB,

187

Ill.

App.3d 698, 543 N.E. 2d 901 (1989); Ryan v. McFalls, 313 Ill.App.3d 223,728 N.E.2d

1152 (2000). When a person owns the land from which discharges originate, that person

has

long been held liable for the resulting violations of the Act.

See, e.g.,

Meadowlark Farms. Inc. v.

PCB. 17

Ill.

App. 3d 891,308 N. E. 2d 829, 835-36 (1974).

TIle Board finds that it is appropriate under all of the above circumstances to recover

from the City the monies it received from 2001-2005, amounting

to $399,308.98. The People

have made their case that the City knew or should have Imown that further disposal activities on

the site were being conducted without proper financial assurance during these years. As

the

courts have repeatedly held, the primary purpose for authorization of civil penalties in the Act is

to aid in the enforcement of the Act; any punitive considerations are secondary.

See, e.g.,

Fiorini, 143 Ill. 2d at 349, 574 N.E.2d at 625. The Board does not consider the recoupment of

these dumping royalties or tipping fees to be punitive in nature. TIle City has a long record of

disregard of the State's landfill requirements, and requiring it to forego some of the financial

benefits

of its lease arrangement is appropriate here to aid in the enforcement of the Act within

the meaning

of Section 42(h).

Mindful

of the City's taxpayers and the potential costs of the remedies ordered today, the

Board

is not imposing any additional penalty amount on the City or CLC in this case.

In

so stating, the Board again notes that these respondents could be assessed statutory penalties

under Section 42(a) in this case alone amounting

to over $48 million.

matter.

This opinion constitutes the Board's findings

offact and conclusions oflaw in this

ORDER

I)

TIle Board finds that respondents Community Landfill Corporation, Inc. (CLC)

and the City

of Morris (City) have violated Section 21 (d)(2) of the Act (415 lLCS

5/21 (d)(2) (2006)), and Sections 81l.700(f) and 811.712(b)

of the Board's

regulations. 35 Ill. Adm. Code 81 l.700(f) , 81l.712(b). TIle Board incorporates

by reference herein as if fully set forth its orders of February I, 2006 and June I,

2006 granting summary judgment in favor

of complainant, the People of the State

of Illinois.

2)

Wi11lin 60 days of the date of111is order, on or before August 17, 2009, CLC and

the City must, jointly and severally, post financial assurance in the amount

of

15

The Board reminds that it has not found the City's role here to be mere passive land

ownership.

See illfi"a

at p. 4-5, quoting the Board's February 2006 summary judgment

order. People

of The State of Illinois v. Community Landfill Company, Inc. and City of

Morris, PCB 03-191, slip op at 14 (Feb. 16,2006).

Electronic Filing - Received, clerk's Office, July 27, 2009

---

43

$17,427,366.00 in such fonn(s) as meet the requirements of the 35 Ill. Adm. Code

811.700, and the current pennits for the Monis Community Landfill (Landfill).

Respondents may use any financial assurance mechanism, or combination

of

mechanisms acceptable to the IEPA under the Board's rules. Respondents'

submission

of any permit application for reduction of closure/post-closure costs to

IEPA does not constitute compliance with this order.

3)

Within 60 days of the date ofiliis order, on or before August 17, 2009, CLC and

the City must, jointly and severally, provide updated cost estimates for

closure/post-closure care

as meet the requirements of35 Ill. Adm. Code

811.705(d).

4)

Within 60 days

of providing the update cost estimate required in paragraph 3),

above, CLC and the City must, jointly and severally, upgrade the financial

assurance for closure and post closure,

as required by 35 Ill. Adm. Code 811.701.

5)

Respondent CLC must pay a civil penalty of $1 ,059,534.70 no later than

Monday, August 17,2009, which

is ilie first business day after 60 days

from the date

of this order. Such payment must be made by certified

check, money order, or electronic transfer

of funds, payable to the

Envirorunental Protection Trust Fund. The case number, case name, and

CLC's federal employer identification number must be included on the

certified check or money order.

6)

Respondent City must pay a civil penalty

of $399,308.98 no later than

Monday, August 17,2009, which

is the first business day after 60 days

from the date

of iliis order. Such payment must be made by certified

check, money order, or electronic transfer

of funds, payable to the

Environmental Protection Trust Fund.

TI,e case number, case name, and

City's federal employer identification number must be included on the

certified check or money order.

7)

Respondents must each send ilie certified check, money order, or

confinnation

of electronic funds transfer to:

Illinois Envirorunental Protection Agency

Fiscal Services Division

1021 North Grand Avenue East

P.O. Box 19276

Springfield, Illinois 62794-9276

8)

Penalties unpaid wiiliin the lime prescribed will accrue interest under

Section 42(g)

of the Envirorunental Protection Act (415 ILCS 5/42(g)

(2006)) at the rate set forth in Section I 003(

a) of the Illinois Income Tax

Act (35 ILCS 5/1003(a) (2006)).

---

44

9)

Respondents must cease and desist from accepting any additional waste at

the

site, further violations of the Act

and the Board's regulations

IT IS SO ORDERED.

Member G.L. Blankenship concurred.

Section

41 (a) of the Environmental Protection Act provides that final Board orders may

be appealed directly to the Illinois Appellate Court within 35 days after the Board serves the

order. 415 ILCS 5/41 (a)(2006);

see alsa

35

III.

Adm. Code 10 l.300( d)(2), 101.906, 102.706.

Illinois Supreme Court Rule 335 establishes filing requirements that apply when the lIIinois

Appellate Court, by statute, directly reviews administrative orders. 172

111. 2d R. 335. The

Board's procedural rules provide that motions for the Board to reconsider or modify its final

orders may be filed with the Board within

35 days after the order is received. 35 III. Adm. Code

101.520; see also

35111. Adm. Code 101.902,102.700,102.702.

1,

Jolm T. Therriault, Assistant Clerk of the lIIinois Pollution Control Board, certify that

the Board adopted the above opinion

and order on June I g, 2009, by a vote of 5-0

John T. Therriault, Assistant Clerk

lIIinois Pollution Control Board

---

ILLINOIS POLLUTION CONTROL BOARD

June 18, 2009

PEOPLE OF THE STATE OF ILLINOIS,

Complainant,

v.

COMMUNITY LANDFILL COMPANY,

INC. and the CITY OF MORRIS,

Respondents.

)

)

)

)

)

)

)

)

)

)

PCB 03-191

(Enforcement -Land)

CONCURRING OPINION (by G.L. Blankenship):

I respectfully concur in all aspects

of the Board's order today with the exception of

paragraph six, which assesses a civil penalty 0[$399,308.98 against respondent City of Monis.

Given the costs ofthe remedy ordered, I believe that imposition of a civil penalty on the City

would be an arbitrary or unreasonable hardship upon the City's taxpayers, who may bear costs

associated with closing this landfill.

For this reason, I respectfully concur.

I, John T. Theniault, Assistant Clerk of the Illinois Pollution Control Board, certify that

the above concuning opinion was submitted on June 18, 2009.

~~I~~~~~V\~~-~~~h-----

h:n

T. Therriault, Assistant Clerk

Illinois Pollution Control Board

Electronic Filing - Received, clerk's Office, July 27, 2009

---

ILLINOIS POLLUTION CONTROL BOi}Kb

February 16, 2006

PEOPLE OF THE STATE OF

llLINOIS,

)

)

Complainant,

)

)

v.

)

)

COMMUNITY LANDFILL COMPANY,

)

INC., an llIinois corporation, and the CITY OF )

MORRIS, an llIinois municipal corporation,

)

)

Respondents.

)

PCB 03-191

(Enforcement - Land)

INTERIM OPINION AND ORDER OF THE BOARD (by N.J. Melas):

On April

17,2003, the Office of the Attorney General, on behalf of the People of the

State ofllIinois (AGO), filed a one-count complaint against Community Landfill Company, Inc.

and the City

of Morris (respondents) alleging failure to provide adequate financial

assuran~e

for

closure and post-closure operations. Community Landfill Company, Inc. (CLC) is the

or>~rator,

and the City of Morris (Morris) the owner, of the Morris Community Landfill, a special waste

and municipal solid waste landfill located at 1501 Ashley Road, Morris, Grundy County.

This order addresses

.the parties' counter-motions for summary judgment. The primary

issue

is whether both respondents failed to provide adequate financial assurance for waste

disposal operations in violation

of the Environmental Protection Act (Act) (415 ILCS 511

et al.

(2004)) and Board regulations. This order also addresses CLC's motion to strike parts of the

AGO's motion for summary judgment that seeks the Board to impose an interim and immediate

remedy.

For the reasons set forth below, the Board grants CLC's motion to strike the requests for

an interim remedy from the

AGO's motion for summary judgment and strikes those parts. The

Board then grants the AGO's motion for summary judgment and denies Morris' counter-motion.

Today

the Board orders the hearing officer to proceed expeditiously to hearing on the issue of

remedy.

PROCEDURAL BACKGROUND

The Board accepted the complaint for hearing on May

1,

2003. On June l3, 2003, the

City

of Morris filed an "Answer and Mfirmative Defenses" (Morris Ans.). The filing, however,

contained no affirmative defenses.

On June 16, 2003, CLC filed an answer along with four affirmative defenses (CLC Ans.).

On July 16, 2003, the AGO filed a reply and a motion to strike the affmnative defenses alleged

b2~d

Electronic Filing - Received, clerk's Office, July 27, 2009

---

2

by CLC (Mot. to Strike). On August 1,2003, CLC responded to the AGO's motion to strike

(Resp.).

On October 16, 2003, the Board granted the AGO's motion to strike

in part and denied

the motion

in part. The Board granted the AGO's motion to strike the alleged affirmative

defense

of estoppel. The Board also granted the AGO's motion to strike CLC's second, third and

fourth alleged affirmative defenses. The Board denied the AGO's motion to strike

laches.

The Envirorunental Protection Agency (Agency) has denied a supplemental pelU1it

application filed by CLC in a prior permit appeal before the Board due to inadequate financial

assurance.

On appeal by CLC and Morris, the Board upheld the denial of the permit applications

due to the respondents' failure to provide adequate, compliant financial assurance.

See

CLC and

Morris v. IEP

A, PCB 01-170, slip op. at 22 (Dec. 6,2001).

In

Community Landfill; PCB 01-

170, the Board found that the Frontier Bonds did not meet the requirements

of 35 Ill. Adm. Code

811.712(b). The Board's finding was confirmed on appeal. CLC

v. PCB, 331

Ill.

App. 3d 1056;

772 N.E. 2d

231 (May IS, 2002).

On July 21,2005, the AGO moved the Board to grant summary judgment in its favor. On

October 3, 2005, CLC responded and moved to strike portions

of the AGO's motion for

summary judgment. On October 4, 2005, Morris responded to the

AGO's motion and filed a

counter-motion for summary judgment. On October 18, 2005, the AGO made several filings,

including a response to CLC's motion to strilce and a response to the counter-motion

for

summary judgment. On that same day, the AGO moved the Board for leave to file a reply in

support

of the AGO's motion for summary judgment

instanter.

The AGO claimed that CLC

misrepresented the issue

of relief and stated that the misrepresentation could result in material

prejudice

if the AGO was not allowed to reply. The Board grants the motion and accepts the

AGO's reply.

FACTUAL BACKGROUND

The Site

The Morris Community Landfill is approximately 119 acres in area, and is divided into

two parcels, designated parce]""A," consisting

of approximately 55 acres, and parcel "B,"

consisting

of approximately 64 acres. Compo at 2. CLC operates the Morris Community Landfill

and manages the day-to-day operations

of both parcels at that site. The respondents have

arranged for and supervised the deposit

of waste, including municipal solid waste, garbage, and

special waste, into waste cells at the Morris Community Landfill since at least Jurie

1,2000 on

parcels "A" and

"B" of the landfill. Camp. at 2.

The Agency issued Significant Modification (SigMod) Permit Numbers 2000-155-LFM,

covering Parcel A, and 2000-156-LFM, covering Parcel B, on August 4, 2000. Camp. at 3. On

June 29, 2001, the Agency issued Permit Modification Number 2 for parcels A and

B. On

January 8, 2002, the Agency issued Permit Modification Number 3 for Parcel A,

ld.

The

SigMCld permits were issued to Morris, as owner, and CLC as operator. Pursuant to these

---

3

pennits, the respondents were to provide a total of $17,427,366 in financial assurance, beginning

in 2000.

See

Mot. Exh. A, p. 45, par. 6; Mot. Exh. B, p. 33, par. 6; CLC and Monis v . IEP A,

PCB 01-48,49 (cons.), slip op. at

29 (Apr. 5,2001).

The respondents provided the Agency financial assurance

of closure and post closure

costs

by way of three separate perfonnance bonds underwritten by The Frontier Insurance

Company.

Compo at 3; Mot., Exh.

C.

On June 1, 2000, the United States Treasury Department

removed Frontier Insurance Company from the list

of acceptable surety companies listed in the

UnitedStates Department

of Treasury publication "Circular 570." Compo at 3.

REGULATORY FRAMEWORK

A short summary of the relevant statutes and rules follows. SeCtion 21(d)(2) of the Act

provides that "[n]o person shall

.... Conduct any waste-storage, waste-treatment, or waste-

disposal operation

... in violation of any regulations or standards adopted by the Board under

this Act." 415 JLCS

5/21

(d)(2) (2004). Section 81 L700(f) ofthe Board's financial assurance

regulations provides:

On or after April 9, 1997, no person other than the State oflllinois, its agencies

and institutions, shall conduct any disposal operation at

an MSLF unit that

requires a permit under subsection (d)

of Section 21. 1 of the Act, unless that

person complies with the financial assurance requirements

of this part." 3511L

Adm. Code 81UOO(f).

Under Section

81 1.712(b), the surety company issuing the bond must be licensed by the

Department

of Insurance, pursuant to the Illinois Insurance Code, or at least licensed by the

insurance department

of one or more states and approved by the U.S. Department of the Treasury

as an acceptable surety. 35 IlL Adm. Code 81 L712(b). Section 811.712 also provides that the

U.S. Department

ofthe Treasury lists acceptable sureties in its "Circular 570."

ld.

SUMMARY JUDGMENT STANDARD

Section 101.516 of the Board's procedural rules regarding motions for summary

judgment provides:

lithe record, including pleadings, depositions and admissions on file, together

with any affidavits, show that there is no genuine issue

of material fact, and the

moving party is entitled

to judgment as a matter oflaw, the Board will enter

summary judgment. 35

l1L Adm. Code 101.516;

see also

415 JLCS

5/26 (2004).

Summary judgment "is a drastic means of disposing oflitigation," and therefore the

Board should grant it only when the movant's rigbt

to the relief"is clear and free from doubt."

Dowd, 181m. 2d at 483,693 N.E.2d at 370, citing Putrill V. Hess, III IlL 2d 229, 240, 489

N.E.2d 867,871 (1986). "Even so, while the nonmoving party in a summary judgment motion is

not required to prove [its] case, [it] must nonetheless present a factual basis, which would

---

4

arguably entitle [it] to ajudgment." Gauthier v. Westfall, 266 Ill. App. 3d 213,219,639 N.E.2d

994, 999 (2nd Dist. 1994).

THE AGO'S MOTION FOR SUMMARY JUDGMENT

The AGO urges the Board to grant summary judgment in their favor and find the

respondents in violation of the Act and the Board's financial assurance regulations. Further the

AGO seeks an order requiring the respondents to cease and desist from further operations at the

landfill and comply with the closure and post-closure financial assurance regulations,

and finally

to immediately set a date for hearing on the issue

of civil penalty.

CLC, on the other hand, argues

tl1at genuine issues of material fact exist that preclnde a

finding

of surornary judgment at this time. CLC contends that while the Agency states that CLC

and Morris have not provided adequate financial assurance, the Agency has made a

claim on the

very same bonds

it claims are inadequate for closure and post-closure care. CLC Resp. at 5.

CLC maintains that the Agency's conduct regarding the surety bonds is conflicting and

confusing.

Respondents Conducted a

Waste Disposal Operation

The AGO states that the respondents submitted reports to the Agency, signed by the

Mayor .0fMonis and

tl1e President of CLC, acknowledging the receipt of solid waste at the

landfill. Mot. at 8; citing Mot. Exh. H. The AGO further states that waste disposal has

continued at the landfill through at least May 18, 2005. According to the AGO, the signed

reports and continuing disposal demonstrate that CLC is the operator

of the landfill, and was a

recipient

ofthe SigMod pennits. Mot. at 8; citing CLC Ans. par. 5.

The AGO

clarns that Morris applied for the SigMod pennits and provided a Frontier

Insurance Company surety bond in the sum

of $10,081,630.00 as principal. Mot. at 9. The AGO

argues that Morris has profited from waste disposal at the site and has taken an active role in the

permitting process. Mot. at

9. For these reasons, argues the AGO, both respondents operate the

landfill.

. - .

Offensive

Collateral Estoppel: Performance Bonds Not Listed in the Circnlar 570

The AGO contends that Section 811.712

of the Board's regulations requires that

performance bonds nsed

as financial assurance be listed in the U.S. Department of the Treasury

"Circular 570." Mot. at 10; citing

35

Ill.

Adm. Code 811.712. The AGO states that the Board

has already found the Frontier Bonds noncompliant in PCB 01-170.

For this reason, the AGO

argues that collateral estoppel applies because: (1) the issue decided in PCB 01-170 is identical

with the one presented here because the bonds are the same; (2) there was a final judgment on the

merits; and (3) CLC and Morris were also parties to the proceeding in

PCB 01-170. Mot. at lO-

11; citing People v. CLC e/

ai,

PCB 03-191, slip op. at 4-5 (Oct. 16, 2003).

Electronic Filing - Received, clerk's Office, July 27, 2009

---

5

The AGO states there is no unfairness to apply offensive collateral estoppel here and it is

reasonable because there is no further need to litigate the status

of the Frontier Bonds. Mot. at

11-12. Therefore, claims the AGO, the Board should find that the AGO is entitled to

judgment

on tillS issue as a matter oflaw. Mot at 12.

In

response to the status of the Frontier bonds, CLC argues that the Agency's own

conduct should preclude it from maintaining that financial assurance is not in place. CLC states

that on January 27,2004, almost a year after the present complaint was filed alleging

that the

respondents had failed

to provide financial assurance, the Agency stated in a letter that Morris

Community landfill "is providing financial assurance for closure and post-closure costs." CLC

Resp. at

6; citing Resp. Exh. 1. At the very least, argues CLC, the letter raises an issue of fact as

to whether adequate financial assurance is

in place.

Respondents' Failure to Provide Adequate Financial Assurance Continues

TIle AGO further states that the respondents have failed to substitute any adequate

financial assurance even after the appellate court's 2002 ruling and the Illinois Supreme

Court's

delllal of their petition for review. The AGO claims that by continuing to conduct waste

operations at the facility after August

4, 2000, the respondents therefore violated Section

Sll.700(f). 35 Ill. Adm. Code S11.700(f). The AGO contends that the respondents have also

failed to provide annual updates

of closure or post-closure costs, or even to annually adjust

estimates for inflation, in violation

of Section Sl1.701(c) and their SigMod permits. Mot. at 13.

Because

of the alleged violations of Board regulations, tile AGO states tile respondents

also violated Section 2l(d)(2)

of the Act, the Act's prohibition against violating any offue

Board's land pollution or refuse disposal regulations. 415 lLCS 5/21 (d)(2) (2004).

Respondent's Violations Were Willfnl, Knowing,

and

Repeated

According to the AGO, the respondents' actions demonstrate a willful, Jmowing, and

repeated violation

of the Act and Board regulations. The AGO states that the respondents

violated the financial assurance requirements

of the Board's regulations and their pennits since

August 4, 2000. Since the lllinois Supreme Court's denial

of their petition for leave to appeal on

December

5,2002, argues the AGO, the respondents have been aware that the Frontier Insurance

Company bonds were noncompliant, yet continue to operate the landfilL Mot. at 15.

Requested Relief

The AGO specifically requests that a separate hearing be held on the issue of civil

penalty. The AGO further requests that the Board order interim relief. The AGO asks the Board

to order the respondents to cease and desist from transporting and depositing any additional

waste at the landfill until they are fully compliant with theirperrnits and the

Board's financial

assurance requirements. Further, the

AGO asks that the Board find that the respondents'

violations were willful, knowing, and repeated. The AGO asks the Board to order the

---

6

respondents to immediately provide financial assurance, update the closure or post-closure costs

in accordance with their pennits, and initiate closure

of parcels A and B of the landfill.

Regarding the requested relief; CLC states that

if the Agency prevails, it will essentially

be recovering "twice from the same allegation." CLC Resp. at 6.

J CLC states that ifthe Agency

prevails

on its claim, the result is likely to be financial penalties to CLC and Moms. CLC

continues that the Agency will also likely recover for the very closure and post-closure care for

which it claims financial assurance has not been provided. According to CLC, tllis

result would

allow the Agency to recover twice from the same allegation and result in a contravention

of its

duty to use penalties only to enforce the Act, not to punish. CLC Resp.

at 6.

The AGO moved to file a reply

instanler,

claiming that CLC confused the issue of relief,

and stating that this nllsrepresentation could result in material prejudice. The AGO reiterates that

the Agency has

not

recognized the Frontier Bonds as acceptable. Reply

at 3.

The AGO states that there is nothing "unjust" about the AGO's requested relief. The

AGO states that the Agency knew notlling about the "collateral" that CLC spealcs of in the

response, or tllat CLC and Frontier had agreed that CLC was not required to make payments on

the bonds. The violation, claims the AGO, lies in that the respondents never substituted financial

assurance once the Frontier Bonds were deemed noncompliant, and continued to operate the

landfill. Reply at

4.

The AGO states tllat payment or perfonnance by Frontier is not tIle relief the AGO seeks

in the motion for summary judgment. The AGO contends that by continuing operations for tlrree

years after the Frontier Bonds were found noncompliant without providing alternate financial

assurance, CLC has demonstrated a knowing, willful, and continued violation

of the Act. Reply

at

5.

For these reasons, the AGO argues it is entitled to an order requiring CLC and Moms to

cease and desist from additional violations. CLC and

Moms must also provide; states the AGO,

new, compliant financial assurance.

MORRIS' COUNTER MOTION FOR SUMMARY JUDGMENT

Moms moves the Board for summary judgment in its favor because it did not "conduct"

and disposal operation at the

Moms Community Landfill, and because it has complied with

1

As discussed below, CLC references the Agency and the AGO interchangeably, at tinles,

throughout pages

5-7.ofCLC's response to the AGO's motion for summary judgment. For

example, by stating U[i]fthe Agency prevails on its claims ... " the CLC is confusing the

complainant

in tllls proceeding. The Board nonetheless discusses CLC's arguments in the

discussion section below.

Electronic Filing - Received, clerk's Office, July 27, 2009

---

7

Sections 811.706 and 811.717 ofthe Board's regulations. Morris Mot. at 2,8; citing 35 Ill. Adm.

Code 811.706,811.717.

The AGO states that Morris' argument that it is not "'conducting a waste disposal

operation'

at the Morris Community Landfill ... defies common sense, and is legally incorrect."

Resp. at 1-2. The AGO contends that Morris has been permitted

as either an "owner" or

"operator" and actively participated in landfill decisions since 1974. AGO Resp. at 2. The AGO

further states that Morris contracted with CLC on all permitting and financial assurance issues,

and financially benefited from landfill operations.

Id.

Morris Did Not "Conduct Any Waste Disposal Operation"

Morris' Arguments

Morris' first argument in support of a Board granting summary judgment in its favor is

that Morris did not "conduct any waste disposal operation"

at the Morris Community Landfill.

Morris contends that Section 21(d)(2) of the Act provides "no person shall ... conduct any

waste-storage, waste-treatment, or a waste-disposal operation ... in violation of any regulations

or standards adopted by the Board under this Act." 415 ILCS

5/21 (d)(2) (2004). Therefore,

according to Morris, by the plain language ofthe Act, the requirements of that section only apply

to a person that "conducts" a waste disposal operation. Morris Mot. at 2. Morris contends that

the well-settled rules

of statutory construction provide that words must be given their plain and

ordinary meaning.

Jd.;

citing King v. First Capital Finandal Services Corp., 215

Ill.

2d 1, 828

N.E.2d 1155, 1169 (2005).

Morris cites

to the Black's Law Dictionary's definition of "conduct:" "to manage; direct;

lead; have direction; carry on; regulate; do business." Morris Mot.

at 2; citing Black's Law

Dictionary, 295 (6th Ed. 1990). Morris states that based on the definition of "conduct," there is

no question that Morris does not conduct a waste disposal operation because it is not managing,

leading directing, carrying on, regulating or doing business

as a waste disposal facility. Rather,

argues Morris, it merely owns and is the fee titleholder

of the property that CLC uses for waste

disposal activities. Morris Mot. at

2.

Morris states that CLC is listed as the operator on the Agency-issued permits. Morris

Mot. at 3. Further, argues Morris, Mr. Brian White,

an affiant the AGO relied upon in support of

the motion for summary judgment, states that the owner of a facility does not necessarily have to

post closure and post closure financial assurance. Morris Mot. at 3, Exh. B at 37 -38.

Morris states that the Board has held that where a waste disposal operation is owned and

operated by separate entities, it is the operators

of such sites, not the owners, who are responsible

for posting of the requisite financial assurance. Morris Mot. at 7; citing People v. Wavne Berger

and Berger Waste Management, PCB 94-373 (May

6, 1999). Morris notes that in Berger, the

Board held that the owner

of the landfill did not become the operator when it received title to the

property and, consequently, was not liable for the financial assurance violation alleged in Section

21 (d) ofthe Act.

---

s

Moms argues that like the owner company in Berger, and in accordance with the plain

language

of Section 2 I (d)(2) ofthe Act and Section Sll.700(f) of the Board's regulations, Morris

does not conduct a waste disposal operation

at the site. Morris Mot. at 8.

The AGO's

Response

According

to the AGO, the Board should find that, as a matter ofJaw, holding an Illinois

EPA permit for waste disposal

at a landfill constitutes "conducting a waste disposal operation."

AGO Resp. at

2. The AGO states that Morris obtained 35 Agency permits, including

modifications, regarding waste disposal

at the Morris Community LandfilL

Id.

at 3. The AGO

asserts that Agency records show that five permits issued to Morris show Morris as the "owner

and operator." AGO Resp. at

4.

Above and beyond being a named operator of the landfill, the AGO states that joint action

with CLC demonstrates that Morris was

an active participant at the landfIlL For example, the

AGO notes that Morris applied for

and received joint waste disposal permits with CLC, provided

noncompliant financial assurance

in excess often million dollars, litigated the validity ofthe

Frontier Bonds along with CLC, and failed to replace the Frontier bonds with substitute financial

assurance. The AGO also states that Morris benefited financially from the landfill operations.

AGO Resp. at

6. These activities, claims the AGO, demonstrate that Morris was an active

participant

in the landfilL

The AGO contends that Wayne Berger is clearly distinguishable from the facts at hand.

In Wayne Berger, the Board found that the landowner did not "conduct a waste disposal

operation." Wayne Berger is distinguishable, however, because the operator transferred the

property

to the landowner after being cited for operational and financial assurance violations, no

permit was transferred with ownership of the property, and the landowner was never issued any

Agency-issued pennits. AGO Resp.

at 7; citing Wayne Berger, slip op. at 8.

In contrast, states the AGO, Morris is a permitee of 35 permits for waste disposal

activities, five

ofwhjch name Morris as "owner and operator." AGO Resp. at 7. Further, the

AGO asserts that Morris did not acquire the landfill after the violations occurred. Rather, Morris

has owned the

Moms Community Landfill since its original development.

Id.

The AGO states the rules of statutory construction dictate that the Act and Board

regulations should be construed to affect their purpose and to avoid absurd results. AGO Resp.

at

8; citing Mulligan v. Joliet Regional Port District, 123 IlL 2d 303.313 (1988); Lionel Trepanier

et aI.,

v. Speedway Wrecking Co., PCB 97-50 (Jan. 6,2000),

The AGO first contends that the term "conduct" should be broadly construed. The AGO

states that Morris is not only the owner

of the property, but also of the Morris Community

Landfillitself. AGO Resp. at 10. The AGO states that although Morris leased the landfill to

CLC, it never conveyed the title to CLC. Rather, Morris has continued to be bound under

subsequent permits, provided surety bonds, and appealed permit denials. AGO Resp.

at 10.

Electronic Filing - Received, clerk's Office, July 27, 2009

---

9

The AGO contends that pursuant to Morris' interpretation, Section 21(d) of the Act and

regulations promulgated under

it would only apply to the person physically disposing of the

waste.

Monis's approach, claims the AGO, would allow pennitted owners to set up "operator"

entities

to avoid the consequences of violating the Board's landfill management regulations.

AGO's Resp. at 10. At the Morris Community Landfill neither the owner nor the operator of

CLC has provided compliant financial assurance.

CLC's Response

CLC opposes Monis' counter-motion for summary judgment stating that it lacks legal

foundation

and must be denied. CLC states that Morris is not merely a fee title holder of the

landfill, but rather

an operator that is substantially involved in conducting the waste disposal

operation.

CLC Resp. at 1. CLC states that courts and the Board itself have broadly interpreted

the definition

of an operator depending "on" the specific facts of the case as a whole." CLC Resp.

at 2; citing People v. Bishop, 315

III.

App. 3d 976, 978; 735 N.E.2d 754, 757 (5th Dist. 2000).

According

to CLC, the Board's regulations are clear that "[t]he owner or operator shall

provide financial assurance to tlle agency

.... " CLC Resp. at 2; citing 35 Ill. Adm. Code

811. 700(b). CLC's interpretation is that this Section does not limit the responsibility solely to

either entity. Further, Monis has litigated financial assurance issues involving the Morris

Community Landfill for years.

CLC also states that Morris' involvement in the

pennitting process and pledge

of

financial assurance qualify as substantial involvement in the operation of the landfill. CLC states

that Monis has committed, in an addendum to a lease agreement, to treat leachate, condensate,

and groundwater at the landfill. CLC Resp. at 3; Exh. 2; citing Bishop.

CLC contends that pursuant

to Board rules, the operator, not the owner "is responsible for

the operation

of a leachate management system designed to handle all leachate as it drains from

the collection system." CLC Resp. at 3; citing

35

Ill.

Adm. Code 811.309(a). Therefore, by

agreeing to treatleachate at the landfill, and providing fmancial assurance, Morris is an operator

that conducts a waste treatment operation. CLC

Resp:at 3. CLC states that at the very least,

Morris' actions demonstrate a genuine issue of material fact making summary judgment

inappropriate at this time.

Id.

Morris' Replv

hl its reply, Morris disputes the AGOs' arguments for several reasons. First, Morris

states that the

AGO's argument that Morris "conducts a waste disposal operation" simply

because it was listed

as an "owner and operator" on pennits issued decades ago must fail. Morris

contends that when it was issued pennits

in

1974 and supplemental permits in 1978, 1980, and

1989 that listed Morris

as the "owner and operator," there was no obligation for a local unit of

government to post any financial assurance. Even currently, Morris states that the financial

---

10

assurance requirement under Section 807.601 (a) does not apply to "any unit oflocal government.

Manis Reply at I; citing 35

Ill.

Adm. Code 807.601(a).

Morris agrees that "whether one is

an operator pursuant to the Act depends on the specific

facts as a whole."

Manis Reply at 2; citing Bishop, 315 Ill. App. 3d 976, 979, 735 N.E.2d 754,

757 (5th Dist. 2000).

Manis states, however, that it has not conducted any disposal operation

since 1982.

Manis states no City of Manis employee has ever spread and compacted waste,

operated earth-moving equipment or conducted any other waste disposal operations at the

landfill. Manis Reply at 3.

Agency employees, states Morris, concede that CLC is the entity that perfonns

the day-to-

day operations, not

Monis. Morris contends that the record shows that Monis is not conducting

a waste disposal operation, and thus, has no duty

to post financial assurances for closure or post-

closure care.

Monis Reply at 5. Monis states that "merely contracting with an operator does not

make the other contracting party the 'conductor'

of a landfill operation."

Id.

at 6; citing Bishop,

735 N.E.2d 754, Tennaat v. Anderson.

et al.,

PCB 85-129 (Oct. 23,1986), Berger, PCB 94-373.

Likewise,

Monis states, receiving financial benefit does not mean that Monis is conducting a

waste disposal operation.

Monis Reply at 7. Morris asserts that host fee agreements are

common and that no local unit of government would ever vote in favor of siting a landfill if

doing so would subject it to fmancial assurance requirements.

Id.

at 7-8. That argument, states

Monis, is "disingenuous and ridiculous."

Id.

at 8.

Monis states that enforcing the Act and Board regulations to require owners

or

operators,

but not both, to provide financial assurance does not produce absurd results. Monis Reply at 9.

According to Monis, the law is clear that a unit oflocal government is exempt from the financial

assurance requirements unless it conducted landfill operations after April 9, 1997.

Id.;

citing 35

Ill. Adm. Code 811.700(c),

(f).

According to Manis, the Board need only enforce the plain

language

ofthe statute and regulations to award surnmary judgment in favor of Manis. Manis

Resp. at 10. Monis states that because it is excluded from posting financial assurance in this

case,

Manis has not committed any willful or repeated violations. For all of these reasons,

Monis urges the Board to grant summary judgment in its favor. Monis Resp. at 11.

Morris Has Complied With All Financial Assurance Requirements

Monis' second argument in support of a finding of summary judgment in its favor is that

Monis has complied with the financial assurance requirements of Sections 811.706 and 811.717

ofthe Board's procedural rules. 35

Ill.

Adm. Code SI1.706, SI1.717.

Manis disputes the AGO's argument that Monis has failed to provide financial assurance

in compliance

with one of the ten mechanisms, a surety bond guaranteeing perfonnance under

subsection SI1.706(a)(3), set forth in Section 811. 706(a).

Monis states that it "can and would

provide fmancial assurance in compliance with the mechanism set forth

in Section SII.717,"

which is the local government guarantee. Manis contends that because it could comply with

Section 811.706 through the posting

oflocal government guarantee to perfonn closure and post

---

11

closure activities, the Board should find there is no genuine issue of material fact that Moms can

and will comply with all rules and regulations and grant summary

judgment in its favor.

TIle AGO claims that

Moms' argument that it has offered, or could offer,the Agency

financial assurance in the form of a local government guarantee is misleading and false. In fact,

states the AGO, neither respondent has provided financial assurance in the form

of any of the ten

mechanisms in Section 811.706.

It

is not enough for Moms to say that it "can and WOUld"

provide the local govermnent guarantee as the method of financial assurance. Moms simply has

not met the requirements

of Section 811.716 or 81 1.717. AGO Resp. at 15.

The AGO again state that

Moms' failure to provide compliant financial assurance since

August

8, 2000 to the present, especially subsequent to the illinois Supreme Court's ruling that

the Frontier Bonds were noncompliant

on December 5, 2002, demonstrates that the alleged

violations are knowing, willful, and repeated.

AGO Resp. at 16.

CLC'S MOTION TO STRIKE PARTS

OF THE AGO'S MOTION FOR SUMMARY JUDGMENT

CLC moves the Board to strike portions of the AGO's motion for summary judgment in

which CLC claims the

AGO alleged continuing violations and separate relief beyond that which

is set forth in the initial complaint. Mot.

to Strike at 1-2. CLC asks the Board to strike both

allegations that disposal operations continued at the landfill (Mot. at 4, par. 7, 8, par. 17), and a

request that the Board order CLC to cease and desist from transporting

or depositing any

additional material at the landfill (Mot. to Strike at 16, par. 38(3)).

In general, the AGO contends that

CLC's motion to strike is untimely. The AGO argues

that CLC was granted an extension

of time to respond

only

to Moms' counter motion for

summary judgment.

The AGO contends, therefore, that CLC's motion to strike should be denied

as untimely.

Allegations of Continuing Disposal Operations

CLC states that the Board's procedural rules require the AGO to move to amend the

complaint and to provide

just and reasonable cause for the amendments. Mot. to Strike at 2;

citing People v. Petco Petroleum

Com., PCB 05-66, slip op. at 3 (May 19, 2005). Regarding the

new request for relief, CLC contends that while the Board's procedural rules allow the moving

party to "move the Board for summary judgment for all or any part of the relief sought," the relief

the AGO seeks is newly pled. Mot. to Strike at 3; citing 35 Ill. Adm. Code 101.516(a).

The

AGO responds that the motion for summary judgment does not seek to add any

additional violations.

For this reason, CLC's reliance on Petco Petroleum is not applicable.

Resp.

at3; citing Petco Petroleum, PCB 05-66. The AGO states that also included in its motion

is a request for specific interim relief. The

AGO states that the Board's orders that accept

matters for hearing demonstrate that the

Board encourages such a request. Resp. at 3.

Electronic Filing - Received, clerk's Office, July 27, 2009

---

12

Request for Cease and Desist Order

Further, contends CLC, while the Board does have the power to issue a cease and desist

order, it may only

do so upon issuing a final order. 41511CS 5/33(a) and (b) (2004). CLC states

that a cease and desist order

.is premature. CLC, therefore, asks the Board to strike the AGO's

request for a cease and desist order.

The AGO states that nothing in the Act prevents the Board from issuing a cease and

desist order after a finding

of liability, but before issuing a final order. Resp. at 4. The

AGO

claims that the language of Section 33 of the Act stating" ... the Board shall issue and enter such

[mal order, or make such final determination

... " assumes that there will be cases where only

certain issues are determined. Resp. at 5; citing 415 llCS 5/33 (2004). The AGO cites Section

33(b)

ofthe Act that states "such order may include a direction to cease and desist from

violations of this Act

... ," which allows the Board to issue cease and desist orders dealing with

those certain issues.

!d.

As an example of where the Board has granted partial summary judgment prior to hearing

on penalty, the AGO cites

to People v. Michael Stringini, PCB 01-43 (Oct. 16,2003). Resp. at

5-6; citing also Krautsack v. Patel

et ai.,

PCB 95-143 (Aug. 21,1997) (granting partial summary

judgment, ordering the respondents

to cease and desist from further violations, and ordering a

respondent

to remediate the site, but deferring the Board's final decision on civil penalty).

Finally, the AGO states that the appellate courts have recognized that the Act has "conferred

upon the

... Board those powers that are reasonably necessary to accomplish the legislative

purpose

of the administrative agency ... and necessarily the power to order compliance with the

Act." Resp. at 6; citing Discovery South Group Ltd. v. PCB, 275m. App. 3d 547 (lst Dist.

1995).

The AGO states that the interim reliefrequested is tile only way for respondents to come

into compliance with the Act. Resp. at

6.

In

fact, the AGO contends tIlat the Board should deny

CLC's motion to strike

and order tile respondents to come into compliance on an expedited basis.

[d.

at 7.

BOARD DISCUSSION

Board Analvsis of CLC's Motion to Strike

The Board grants CLC's motion to strike both the AGO's allegations of continuing

disposal operations

as well as the AGO's request for an interim order requiring CLC to cease and

desist from further violations of the Act. The Board disagrees with CLC's argument that the

AGO has alleged new violations. Rather, the Board fmds that the AGO's allegations that

disposal operations have continued at the landfill are allegations

of continuing violations, not

newly pled violations.

The Board further finds it is premature

to rule on the issues of penalty or attorney fees

at tllls time. Under Section

33 of the Act, a Board order may include a direction to cease and

---

13

desist from violations ofthe act or any rule adopted under this Act, but only after determining

the reasonableness

of the emissions.

See

415 ILCS 5/33(a)-(c) (2004). As held in the past, the

Board looks

to the factors in Section 33(c) and Section 42(h) ofthe Act (415 ILCS 5/42

(2004)) in determining and assessing penalties and each

of those factors require factual

determinations. People v. CLC, PCB 97-193,

slip

op.

at 10 (Apr. 5, 2001). The Board has

previously found that "the factors are not appropriately discussed in an order on cross motions

for summary judgment." CLC, PCB 97-193,

slip op.

at 10 (Apr.

5, 2001);

see also

People v. J

&

F Hauling, Inc., PCB 02-201 (June 6, 2002). After today's finding ofviolations, the Board

will consider factors such as the duration of the violations, and whether they are continuing, in

its remedy analysis.

The parties may address the economic benefits gained by respondent, the duration

of

the violations, as well as the remaining factors under Section 42 (h) of the Act (415 ILCS 5/42

(2004)) at hearing and in final briefs on the issue ofremedy. Further, whether a respondent's

violations were willful, Imowing, and repeated are considered in deciding whether to award a

complainant attorney fees.

For tIns reason, the Board grants CLC's motion and strikes

references to the

AGO's requests forrelieffrom the summary judgment pleading.

Board Analysis of Cross Motions for Summary Judgment

The Board finds that there are no genuine issues of material fact regarding the alleged

violations. TIlerefore summary judgment is appropriate and (he Board grants summary judgment

in favor of the complainant for the reasons discussed in more' detail below.

This case involves a single alleged violation

of the Act and two violations of

corresponding Board regulations. Section 21 (d)(2) of the Act prohibits any person from

conducting a waste disposal operation in violation

of any Board regulations.

See

415 ILCS

5/21(d)(2) (2004). TIle Board regulations at issue are:

(I)

the requirement for any person

conducting any disposal operations to comply with the financial assurance requirements (35 III.

Adm. Code 811.700(f)); and (2) that any surety bonds must provided by a surety company

approved

by the U.S. Department of Treasury as an acceptable surety in its list of acceptable

sureties,

1m own as the "Circular 570" (35m. Adm. Code 712(b)).

Therefore, the issue is what constitutes "conduct"

in determining whether CLC and

Monis conducted any waste-disposal operations at the Monis Community Landfill. The Board

addresses the counter motions together and grants summary judgment in favor

of the AGO,

finding that both CLC and Morris violated the Act and Board regulations that require any person

conducting disposal operations to comply with the financial assurance requirement mandating

that surety bonds

must be licensed as an acceptable surety in the U.S. Department of Treasury's

Circular 570.

CLC and Morris Conducted Waste Disposal Operations

The Board is persuaded by the AGO's argument that the Board takes a broad view of

what types of activities might constitute "operating" a waste disposal site. People v. Poland,

---

14

Yoho, and Briggs Ind., InC.,

et al.,

PCB 98-148, slip op. at 18 (Sept. 6, 200l). The Board does

not, however, adopt the AGO's position that

as a matter oflaw, holding an Illinois EPA permit

for waste disposal at a landfill constitutes "conducting a waste disposal operation"

(AGO Resp.

at 2). Like the court in Bishop, the Board looks beyond tile permit

to the specific facts of the

case as a whole.

See

Bishop, 735 N.E.2d at 757-58.

For example, in Briggs, PCB 98-148, the Board found that Briggs was involved in the

day-to-day operations

of the site. Briggs was responsible for half of the bulldozing expenses and

half

of the engineering fees. The record showed that Briggs did not even profit from disposal

activities at the unpermitted site, but despite the fees paid, the arrangement was still a "good

deal" forB riggs. While the facts

of Briggs are distinguishable in some ways from the facts at

hand, similarities may be drawn since the Board typically "looks beyond the permit"

to day-to-

day operations and maintenance.

In Termaat, Boone County and tile City of Belvedere, listed as owners of the landfill at

issue, had assumed responsibility to assure proper closure and post-closure care ofthe site, used

the tipping fees and, when necessary, otiler public funds

to pay for all site operations.

In

comparison, the Board considered the activities of an independent contractor who actually

operated the site. TIle contractor performed limited services under the direction of the City and

County and had little discretion in performing his duties. The Board concluded that the

contractor's responsibility "do not rise

to the level of an operator conducting a waste disposal

operation as anticipated in the Act

and Board regulation." Termaat, PCB 85-129 slip op. at 5.

In looking at the facts ofthe case and considering what is anticipated by the Act and

Board regulations to be the behavior

of an operator conducting a waste disposal operation, the

Board finds both parties responsible for operating the site and, therefore, conducting the waste

disposal operation that is

Moms Community Landfill. While there must be at least one site

operator, the Act does not prohibit more than one party from operating a site.

In this case, the

Board finds that both parties participated in the operations.

While

Moms may not actively conduct the day-to-day operations at the landfill, Moms

also does not "passively own land upon which waste disposal operations are (or have been)

conducted."

Moms Resp. at 7. Moms financed the operation, litigated

in

conjunction with

CLC,

as well as profited from and treated the leachate from the Moms Community Landfill.

While tilese activities alone may not constitute "operating" a waste disposal site,

Moms also had

discretion regarding tile decisions at the site and took responsibility for some

of the ancillary site

operations such

as the treatroent of leachate from the landfill. The Board finds that the grand

sum

of Moms' conduct rises to the level of "operation" as anticipated by the Board in using tilat

term

in

Section 8ll.7DO(£).

Compliance With Financial

Assurance

Requirements

The Board disagrees with Moms' argument that it has complied with any or all financial

assurance requirements. The

capacity to comply

is not relevant, only actual compliance with the

---

. .

15

Act and the Boards' requirements.

It

is undisputed that neither Morris nor CLC have provided

adequate financial assurance.

Offensive Collateral Estoppel Applies

On October 16, 2003, the Board found that. the issue of whether the Frontier bouds

complied with Board regulations has been previously adjudicated and resolved in a permit appeal

involving the same parties before the Board. People

v. CLC and Morris, PCB 03-191 (Oct. 16,

2003); referring to Community Landfill, PCB 01-170. The Board reiterates here that

the

respondents' noncompliance with financial assurance requirements, the same as alleged in this

enforcement matter, has already been resolved.

The Board also notes that

res judicata,

the rule that a final judgment by a court

of

competent jurisdiction is a bar to subsequent action involving the same cIaim,2 does not apply

between PCB 01-170 and this proceeding because there is no required identity of causes of

action.

"An

enforcement case and a permit appeal are not the same 'cause of action,' primarily

because

ofthe different inquiry involved in each.'.' ESG Watts, Inc" v. IEPA, PCB 97-210, slip

op. at 4 (July 23, 1998). On the other hand, and as discussed in the Board's Oct()ber 16,2003

order, collateral estoppel

can

apply to preclude relitigation of a specific issue, even where the

requirements

of

res judicata

are not met.

See Id.

In Community Landfill, PCB 01-170, the Board affirmed the Agency's decision denying

CLC's SigMod permit request. The Board found that because Frontier was removed

fTom the

Circular 570 list on June

1,2000, the Agency properly denied CLC's permit application on

May 11,2001. Community Landfill, slip op.

at 13. The Agency's denial letter identified its

reason for denying the permit with respect to financial assurance

as CLC's noncompliance with

Sections 811.700(f) and 811.712(b). Community Landfill, slip op. at

9.

The purpose of financial assurance is to provide a guarantee to the State that funds will be

available in the event a landfill owner or operator fails

to perform needed closure and postclosure

or

to address any other environmental problems that may occur during and after the operating life

ofthe landfill. People v. ESG Watts, Inc., PCB 96-233, slip op. aU 1 (Apr. 16, 1998); citing 35

Ill. Adm. Code 807.603. Inadequate financial assurance could cause the State, at taxpayer

expense, to clean up

or even close a facility.

See

People v. ESG Watts, Inc., PCB 96-2.37

(Feb. 19, 1998). The

Board finds the alleged violations of Section 21(d)(2) of the Act and

Sections 811.700(f) and

81 1.712(b) ofthe Board's regulations, and grants the AGO's motion for

summary judgment. Accordingly, Morris' counter-motion for summary judgment is denied.

This interim opinion and order constitlItes the Board's findings

of fact and conclusions of

law.

2

Black's

Law Dictiol1my;

West Publishing Co., 6th Edition, 1996.

Electronic Filing - Received, clerk's Office, July 27, 2009

---

16

ORDER

1.

The Board grants Community Landfill Corporation's motion to strike and strikes

the requests for

an interim remedy from the AGO's motion for summary

judgment.

2.

The Board grants the AGO's motion for summary judgment in part, finding that

Community Landfill Corporation and the City

of Morris violated Section 21(d)(2)

of the Act (415 ILCS 5/2l(d)(2) (2004)), and Sections Sll.700(f) and Sl1.7l2(b)

of the Board's regulations. 35

Ill.

Adm. Code Sll.700(f), Sll.712(b).

3.

The Board denies the City of Morris' counter motion for summary judgment.

4.

The Board directs the parties

to hearing on the specific issue ofrernedy, including

penalty, costs, and attorney fees,

if appropriate. The parties are oilly to present

evidence that is relevant under Sections 33(c), 42(f) and 42(h)

of the Act (415

lLCS 5/33(c), 42(f), (h) (2004)). The Board directs the parties to provide specific

figures and justifications for any proposed penalty.

IT

IS SO ORDERED.

I, Dorothy M. Gunn, Clerk of the Illinois Pollution Control Board, certifY that the Board

adopted the above interim opinion and order on February 16, 2006,

by a vote of 4-0..

~~~

Dorothy M. GUl111, Clerk

Illinois Pollution Control Board