OFFICE
OF THE AflORNEY
GENERAL
STATE
OF
ILLINOIS
July 9,
2003
RECEIVED
CLERK’S OFFICE
JUL
112003
STATE
OF
ILLINOIS
Pollution
Control Board
Dorothy
Gunn, Clerk
Illinois
Pollution Control
Board
100
West Randolph
Street
Suite
11-500
Chicago,
Illinois 60601-3286
Re:
People
v.
ESG
Watts,
Inc.,
an Iowa corporition
PCB
No.
01-167
Dear Clerk Gunn:
Enclosed for filing please find the original
and ten copies of a NOTICE OF FILING and
POST-HEARING
BRIEF in
regard to
the above captioned
matter.
Please file the originals and
return
a file-stamped
copy to our
office in
the enclosed
self-addressed stamped
envelope.
Thank
you for your cooperation and
consideration.
Sincerely,
Thomas
Davis
TD/pp
Enclosures
Assistant Attorney General
500 South
Second Street
Springfield, Illinois
62706
500
South Second
Street,
Springfield,
Illinois
62706
•
(2)7) 782-1090
•
YFY: (217) 785-2771
•
Fax: (217)
782-7046
100 \Vcsc
Randolph Street. Chicago, Illirtoix
60601
•
(312)
81-4-300(1
•
FIt
(312) 814-3374
•
Fax: (312)
814-5806
(101
E:tcr \Iain. Carhondale.
Illinois
62901
•
(618) 529-6401)
•
‘FI’\:
1618)
529—6403
•
Fax:
(618) 529-6416
Lisa Madigan
NFI’ORNEY
GENERAL
RECEIVED
BEFORETHE ILLINOIS POLLUTIONCONTROL BOARD
CLERK’S OFFICE
PEOPLE OFTHE STATE OF
)
JUL
11
2003
ILLINOIS,
)
STATEOF ILLINOIS
Pollution
Control Board
Complainant,
v.
)
PCB 01 -167
ESG WATTS,
INC.,
an Iowa
corporation,
Respondent.
)
NOTICE OF FILING
To:
Larry Woodward
Corporate Counsel
Watts Trucking
Service,
Inc.
P.O. Box5410
Rock Island, Illinois61204-5410
PLEASETAKE NOTICE thaton this date
I mailed for filing with the Clerk of the Pollution
Control Board of the State of Illinois, a POST-HEARING BRIEF, acopyof which is attached hereto
and herewith served upon you.
Respectfully submitted,
PEOPLE OF THE STATE OF
ILLINOIS
LISA MADIGAN,
Attorney General of the
State of Illinois
MATTHEW
J.
DUNN, Chief
Environmental Enforcement/Asbestos
Litigation
Division
BY:_____________________
THOMAS
DAVIS,
Chief
Assistant Attorney General
Environmental Bureau
500 South
Second Street
Springfield,
Illinois 62706
217/782-9031
Dated:
July
9,
2003
CERTIFICATE OF SERVICE
I
hereby certify that
I
did
on July 9, 2003,
send
by
First Class
Mail, with
postage
thereon
fully prepaid,
by depositing
in a United
States Post Office
Box a true and
correct copy of the
following
instruments entitled
NOTICE OF FILING
and
POST HEARING BRIEF
To:
Larry Woodward
Corporate Counsel
Watts Trucking
Service,
Inc.
P.O.
Box 5410
Rock
Island,
Illinois 61204-5410
and the original and ten copies
by First
Class
Mail with
postage thereon fully prepaid of the same
foregoing instrument(s)
To:
Dorothy
Gunn, Clerk
Illinois
Pollution
Control
Board
James
R. Thompson Center
Suite
11-500
100 West Randolph
Chicago,
Illinois
60601
A copy was also sent by First
Class Mail with
postage thereon fully prepaid
To:
Carol
Sudman
Hearing
Officer
Illinois
Pollution Control
Board
600
South
Second Street, Suite 402
Springfield,
Illinois 62704
Thomas
Davis
Assistant Attorney General
This filing is submitted
on recycled paper.
BEFORETHE ILLINOIS POLLUTION CONTROL BOAIIQECEIVED
CLERK’S
OFFICE
PEOPLE OFTHE STATE OF ILLINOIS,
)
JUL
11
2003
Complainant
STATE OF ILLINOIS
Pollution
Control Board
vs.
)
No.01-167
(Enforcement)
ESGWATTS, INC., an Iowa corporation,
)
Respondent.
POST-HEARING BRIEF
Complainant,
PEOPLE
OF THE
STATE OF ILLINOIS,
by
Lisa
Madigan,
Attorney
General of the
State of
Illinois, hereby files
its
Brief subsequent
to
the hearing-conducted on
June
3,
2003,
and
provides the following
argument:
INTRODUCTION
In
its
February 5,
1998,
order,
in the previous
enforcement action
(PCB 96-1 07),
the
Board
had
revoked the operating
permit issued
to Watts and
ordered that Watts must not
accept any more waste at the Taylor
Ridge Landfill.
ESG Watts was ordered generally to
cease and desist from violations of the Act and
the Board’s regulations.
The
Board
specifically
directed
that “ESG Watts
must,
in accordance
with the supplemental permits issued
by the
Agency,
perform
the compliance requirements
including
the initiation
and timely completiorrof
closure and
post-closure care, groundwater assessment monitoring,
and
gas and
leachate
extraction.”
A civil penalty of $100,000 was
also
imposed
and attorney’s fees of $26,567 were
awarded.
When
Respondent continued
to
operate the
landfill,
the Attorney General’s Office filed
a
civil action
in
Rock
Island
County Circuit Court (98
CH
20) to enforce the Board Order.
An
Injunction
Order was
entered
on
March 20,
1998,
requiring the landfill
to
cease waste
disposal
1
pending appeal.
ESG Watts
received
its
final volume of waste
at this facility on
or about March
20,
1998.
The court action was later amended
to
include allegations of Respondent’s failure to
comply with the
Board’s February 5,
1998,
order regarding the implementation
of
closure and
corrective actions.
On December 29,
1999,
a Judgment and
Injunction
Order (People’s
Exhibit
1) was
entered adjudicating the violations alleged in
the Amended
Complaint,
including
continuing odor and
runoff violations,
and again
requiring the closure and
remedial
measures
to
be timely implemented.
An
appeal
of the
Board’s February 5,
1998,
order was
taken to the Third
District
Appellate Court, which subsequently dismissed
the appeal.
The Illinois Supreme Court denied
a
petition for
leave to appeal.
After the termination
of the appeal,
Respondent failed to
pay the
penalties
imposed
in
PCB 96-107
as well as
PCB 96-233 and 96-237
(and accrued
interest).
The Attorney General’s
Office filed a civil action
in Sangamon
County
Circuit Court (00
CH 239)
to collect the monetary sanctions.
After finding that Respondent failed to comply with
final
orders of the
Board,
in
October 2000, the Court ordered the company to pay $30,000 per month
to
satisfy the penalties and
accrued
interest.
This present proceeding
was initiated
by a
Complaint filed
on June
12,
2001.
Counts
I,
II
and
Ill respectively alleged
continuing failures to
effectuate closure and to control odors
and
runoff.
The Amended Complaint filed with
the
Board
on
August
14,
2002,
added
Count IV to
allege
overfilling beyond
the maximum
permitted vertical
elevation
and
Count V to allege that
Respondent has
failed to
submit quarterly groundwater monitoring
reports for
the 3~
and
41h
quarters of 2001
and
the
Vt
and 2~
quarters
of 2002.
In addition
to these alleged
violations,
Watts still
has not obtained a significant
modification to
its
permits.
As discussed below,
this fact is relevant because Watts contends
that it cannot complete closure absent
approval of
its
“sig
mod” and,
therefore,
in essence,
the
2
Illinois
EPA is to blame because
Wafts
has spent hundreds
of thousands of dollars
in an
unsuccessful effort to
obtain a sig
mod.
At least,
this seemed
to be the
purpose of
Respondent’s
evidentiary presentation.
In
an effort to provide
background, Complainant suggests that the
Board
ought to
take
official
notice
pursuant to Section
101.630
of the prior proceedings and the final orders
in
PCB
94-127 as well as
PCB 96-107.
In
particular,
the
Board
has
previously found
that “ESG
Watts’
sig
mod
application for the Taylor Ridge
landfill
was due,
pursuant to 35
III.
Adm.
Code
814.104, 814.105(b)
and
Agency deadline,
on
September
1,
1993.”
PCB 96-107 (February
5,
1998) at page 13.
This factual
finding
reiterated the Board’s previous finding
of violation in
PCB
94-127
(May 4,
1995)
for Respondent’s failure to
timely file a
sig
mod application.
As argued
below,
however,
Respondent’s showing
of “money down a
hole” does not
equate to due diligence.
A series
of technically deficient permit
applications,
and consequent
permit denial
appeals,
does
not equate to
a defense for noncompliance.
This purported
defense may be summarized
as
follows:
closure
has
not been completed because
the overfill
has
not been
relocated;
that the overfill
has
not been
relocated
because the
closure plan
has
not been
revised;
that the closure
plan
has
not been
revised because the pending sigmorci
application
has
not been approved; and runoff problems
have not been correctsdtecause the
stormwater control
plan
has
not been
implemented because
final cover has
not been
instalied
because the overfill
has not been
relocated
because the closure
plan
has notbeenievised
because the pending
sig
mod application
has
not been approved.
ESG Watts
has always tried
to defend against the numerous enforcement actions
by attempting to show that compliance
was
somehow thwarted
by
the Illinois EPA’s permitting
actions.
This argument,
whether the
focus is
the agency’s
refusal to
release financial
assurance
trust funds or tcrissuepermit
approvals,
has
been repeated
ad nauseum.
3
PROOF OF VIOLATIONS
Respondent’s Answer:
ESG Wafts filed an Answer to the Amended Complaint on
March
14, 2003,
indicating
the following
material admissions, denials
and
contentions:
Count
I:
Closure Violations
3.
Respondent ADMITS that
it
had ceased
accepting waste on
March
20,
1998.
9.
Respondent ADMITS that
it
had failed
to
comply with final orders
of
the
Board
regarding payment of penalties,
and was
ordered on
October 23, 2000,
by
the Court to
pay
$30,000
per month
to
satisfy the penalties
and
accrued
interest.
10.
Respondent ADMITS only that it has failed lo complete groundwater assessment
monitoring
but further alleges
that said actions
have
been made futile
by the
Illinois
EPA
requirement
that
it move waste in
order
to close
the landfill.
12.
Respondent CONTENDS that it began the implementation
of the closure
plan on
December
18, 2000,
with the performance of assessment
monitoring
of the groundwater.
14.
ESG Wafts
DENIES that it has
failed
to timely initiate and
complete the closure
of the Taylor Ridge Landfill
in
accordance with the Board’s order
in
PCB 96-107
and the permits
issued
to Watts
by the
Illinois
EPA,
and has
thereby violated
Section
21(d) of the Act
Respondent ADMITS that
it
has failed to
complete groundwater assessment monitoring
but
further alleges that said
actions
have been
made futile
by the Illinois
EPA requirement that
it
move waste in order
to
close
the landfill.
15.
Respondent DENIES that it has
knowingly or willfully committed
these
presently
alleged
closure violations
since at
least December 29,
1999.
16.
Respondent ADMITS
it has
been
previously adjudicated in violation
of Section
21(d) of the Act.
4
Count II:
Odor violations
15.
Respondent DENIES that
it
had been
required by the
1996 permit to effectuate
the installation of a
gas
collection
system
and CONTENDS that this permit m&e!~t
allowed the
installation
and
operation of the system.
16.
ESG Watts ADMITS that gas recovery wells for the primary purpose of energy
production
had been
installed
by December
12,
1996,
and that a flare was connected
to 30 of
the wells on
or before April 3,
2000.
20.
Respondent DENIES that it has caused
or allowed the emissions of landfill
gas
and other contaminants in
sufficient quantities and
of such characteristics and
duration
as to
unreasonably interfere with the enjoyment of life or property by neighbors
to the
landfill.
21.
Respondent DENIES that it has violated its permits by failing to implement the
gas
management
system
and thereby violated
Section 21(d)
of the Act.
22.
Respondent DENIES that it has caused
air pollution
in violation
of Section
9(a) of
the Act.
23.
Respondent ADMITS it has
been
previously adjudicated
in violation of Sections
9(a) and
21(d) of the Act.
Count
Ill:
Runoff violations
17.
Respondent DENIES that
it has
caused or allowed the discharge of stormwater
runoff and other contaminants.
18.
Respondent DENIES that
it has failed
to implement
the stormwater control
plan
required
by its permits.
19.
Respondent DENIES that runoff from
the
landfill
has
created
a nuisance so asto
unreasonably interfere with
the enjoyment of life
or property
by neighbors to the
landfill.
5
20.
Respondent
DENIES that it has violated
its permits by failing to implement the
stormwater control plan
and
thereby violated
Section 21(d)
of the Act.
22.
Respondent DENIES that it has caused
water pollution
in violation of Section
12(a) of the Act.
23.
Respondent ADMITS
it has
been
previously adjudicated
in violation of Sections
12(a)
and
21(d) of the Act.
Count IV:
Overfill Violations
14.
Wafts ADMITS that prior to January
1,
1995,
it
had deposited
approximately
34,100 cubic yards of waste
in areas
of the landfill exceeding the
maximum permittedDIevation
of 758 feet mean
sea
level,
and that this waste remains
in’ the overfilled
areas of the
landfill.
15.
Wafts ADMITS that,
by
exceeding the permit limitations regarding the contours
of waste disposal,
it has violated Section
21 (d)(1) of the Act.
However, Respondent
CONTENDS that this violation
is barred
by
resjudicata
because
the overfill waspurportedly
known to the Illinois
EPA as of January 1,
1995.
16.
Respondent ADMITS that it has
been
previously adjudicated
in violation
of
Section
21(d) of the Act,
for exceeding
its
permitted
maximum vertical elevation&at the
Sangamon Valley Landfill
and
the Viola
Landfill.
Count V:
Reporting Violations
14.
Respondent ADMITS that
it
has failed
to submit quarterly groundwater
monitoring
reports for the 3~
and
4th
quarters
of 2001
and
the
Vt
and 2’~
quarters of 2002 as
required
by its
permits.
15.
Respondent ADMITS that,
by failing to submit quarterly groundwater monitoring
reports,
it has violated
Sections 21(d)(1)and 21(o)(11)of the Act.
6
16.
Respondent ADMITS that
it has
been previously
adjudicated
in violation of
Sections
21 (d)(1) and
21 (o)(1 1) of the Act, for failing
to submit monitoring
reports.
Complainant’s Exhibits:
Complainant admifted
the following
exhibits:
1.
December 29,
1999,
Judgment and
Injunction
Order in
People of the
State of
Illinois
v.
ESG
Waifs,
Inc.,
Rock Island
County Circuit Court No.
98
CH 20, aftached
to the
Complaint filed
on
June
12,
2001.
2.
Supplemental
Permit
No.
1996-087-SP, issued June
13,
1996 (“the
1996
permit”).
3.
Supplemental
Permit No.
1996sic-136-SR
issued July 2,
1999 (“the 1999
permit”).
4.
One-page summary of closure cost estimates
from permit application
log
no.
2001-459.
5.
Testimony of Joyce
Munie,
Manager of the Permits Section,
Bureau
of Land,
Illinois
EPA.
6.
Testimony of Kevin
Bryant, Manager
of Accounting and
Cash
Management,
Illinois EPA.
7.
Monthly
status
report
by ESG
Wafts for April 2003 and
cover letter dated
MayS,
2003.
8.
Monthly
status
report by
ESG Watts for February 2003 and
cover letter dated
March
3, 2003.
9.
July 30, 2001,
letter from Attorney General’s Office to
counsel for Respondent.
10.
November 20, 2001,
letter from Aftorney General’s
Office to
counsel for
Respondent.
7
11.
December 27, 2001,
lefter from Aftorney General’s
Office to counsel for
Respondent.
12.
January 31, 2000, Judgment and
Injunction Order in
Peop/e
of the State
of
Illinois
v.
ESG
Watts,
Inc.,
Mercer County Circuit Court No.
99 CH
10.
13.
May 3,
2000,
letter from
Respondent with April
13,
2000,
certification from
consultant regarding the Viola
Landfill.
14.
Report with
photographs of inspection
by
Ronald
Mehalic on April
4, 2002.
15
Report with
photographs of inspection by
Ronald
Mehalic on
July 25, 2002.
16.
Report with
photographs of inspection by
Ronald
Mehalic on October
16,
2002.
17.
Report with
photographs of inspection
by
Ronald
Mehalic on January 8,
2003.
18.
Transcript
of the October 29,
1996,
testimony of Joe Whitley in
People of the
State of Illinois v. ESG
Watts,
Inc.,
PCB 96-107.
Respondent’s Exhibits:
Wafts
has tendered
an entire
box
of documents,
mostly consisting of all the previous sig
mod
permit application.
The evidentiary objective of this “kitchen sink” approach
is difficult to
discern until
Respondent’s
Brief may be reviewed.
The People, therefore,
continues to
reserve
the right to
object on the grounds of weight,
materiality and relevance.
For instance,
some
of
the exhibits
relate
to totally extraneous issues such
as whether Rock
Island
County might
have
authorized
the overfill to remain
in place (Respondent’s
Exhibit
15).
Other exhibits,
such as the
RTC bankruptcy case
file docket sheet
(Respondent’s
Exhibit 29), are simply meaningless.
AFFIRMATIVE
DEFENSE
The Respondent has pleaded allegations
of fact that,
as
a legal
matter,
do not rise
to an
affirmative defense so as to defeat the claims
in Counts
I and
II.
None of these allegations
S
constitutes an
affirmative defense
pursuant to
Section 2-613(d) of the Civil
Practice Act, 735
ILCS 5/2-613(d)
(2002).
As to
Count IV,
however,
Respondent admits
the overfill violation and
asserts that a finding
of liability is barred
by the equitable doctrine of
res
judicata,
since
it
contends that the
State attempted
to address this claim
in
PCB 96-107 and
could have
subsequently prosecuted
such violation
98
CH 20.
The equitable doctrine
of
res judicata
is that a
cause of action
may not
be
relitigated
by
the same
parties or those
in
privity with them in a subsequent proceeding
before the same or
any other tribunal,
except as the judgment may be
brought before
a court of appellate
jurisdiction for review in
the manner provided
by
law.
The doctrine of
resjudicata,
briefly stated,
is that a final judgment rendered
by a
court of competent jurisdiction on the merits
is
conclusive
as to
the
rights of the
parties and
their privies,
and, as
to them,
constitutes an
absolute bar to a
subsequent action
involving the same claim,
demand
or cause
of action.
Citation.
The doctrine of
resjudicata,
in all
cases where the second suit is upon
the same cause
of action and
between
the same
parties or their privies
as the
former action,
extends
not only
to the questions
actually litigated and decided,
but
to all grounds
of recovery or defense which might have
been presented.
Citations.
When
a former adjudication
is relied
upon
as an
absolute bar to a
subsequent action,
the only questions to
be determined
are whether the cause of
action
is
the same
in
both proceedings, whether the two actions are
between the
same parties or their privies,
whether the former adjudication was
a final
judgment or decree upon the
merits,
and whether it was within the jurisdiction of
the court rendering
it.
People
v.
Kidd,
398
III.
405,
408-09
(1947).
More
recently,
in
People
v.
Progressive Land
Developers,
Inc.,
151
III.
2d 294,
176
Ill.
Dec.
874 (1992),
the Illinois Supreme Court
summarized
the three criteria as
“(1) a final judgment on
the merits rendered
by
a court of
competent jurisdiction;
(2) an
identity
of cause
of action;
and (3)
an
identity of parties
or their
privies.”
See
also
Low v.A
&
B Freight Line,
Inc.,175
Ill.
2d
176,
180,
222
III.
Dec.
80
(1997).
First of all,
the overfill violation, which Respondent has
admitted,
is not “the
same claim,
demand
or cause of action” adjudicated
previously nor
is
it one of the “grounds
of recovery or
defense which might
have been presented” in the
previous prosecutions.
The “identity of cause
9
of action” is not satisfied
merely
because, once again, the
State
is enforcing
environmental
violations at the Taylor Ridge
Landfill.
This criterion
is
not satisfied
because the overfill violation
was not
one of the grounds
underlying the violations adjudicated
in
PCB 96-107 or 98
CH 20.
As the Supreme Court
stated in
Loew:
“The doctrine extends
not only to what actually was
decided
in the original action
but
also
to
mafters which could
have been
decided
in that suit.
La
Salle National Bank
v.
County Board of School Trustees,
(1975)
61
III.
2d 524,
529, 337
N.E.
2d
19.”
These
matters
must directly relate
to the actual
causes of action
previously
adjiidicaLed.
While the courts possess
inherent powers
in equity
to, for
instance,
allow an
affirmative
defense to
defeat a
claim,
issue
injunctions,
and
impose contempt sanctions,
the
Board
is
a
creature of statute.
An administrative agency is different from a court because
an agency only
has the authorization
given to
it by the legislature through the statutes.
See,
e.g.,
Business
&
Professional People
for Public Interest
V.
Illinois Commerce
Comm’n,
136
III.
2d
192, 243,
144
III.
Dec. 334,
555
N.E.2d 693
(1989).
An administrative
agency has no
inherent judicial powers.
See,
e.g.,
Ford
v. Environmental Protection Agency,
9
III.
App.
3d
711,
292 ftE.2cL540 (1973)
Sections
31.1(g), 33(d),
and 42(d) of the Act acknowledge that the
Board
lacks the
power to
enforce its orders by
explicitly providing for enforcement through theffiingof a
civil
action
in the circuit courts
to obtain
injunctions and
to collect
penalties.
In
contrast,
a court
enjoys the inherent power to
impose contempt sanctions to coerce
compliance with
its
judgment orders.
In
addition
to
the absence of expressly granted authority
to
enforce its own
orders,
the administrative
powers of the
Board
are
strictly delineated
by specific statutory
provisions.
For instance,
Section 35 of the Act delegates authority to
the
Board
to
grant a
variance when compliance with any
rule or regulation,
requirement or order of the Board
would
impose an
arbitrary or unreasonable
hardship.
This provision
authorizes the
Board
to exercise
limited discretionary authority
through “balancing
the hardships”
in
determining whether a
10
variance may be granted.
The enforcement-related authorizations in
Title VIII
are also
narrowly
confined.
Section
31(e) of the Act
provides that,
once the State or other complainant has
proven
a violation,
“the burden shall
be on
the respondent to
show that compliance
...
would
impose an arbitrary or unreasonable hardship.”
This type of “balancing
the hardships” after a
violation
is proven is intrinsically different than
defeating a claim through the allowanceof an
affirmative defense.
The
Board
is mandated
by
Section 33 to consider specified
factors
in
subsection (c).
More importantly,
subsection
(a) explicitly restricts the
Board’s discretion
in
providing that subsequent compliance is neither a defense
nor a
bar to
penalty imposition.
The
scope of such discretion
as
to penalty
imposition
is
set forth
through the Section 42(h)criteria
In
summary,
the
Board
is simply unable
to function
as a court does.
By pleading
that “said violation was
known to
the IEPA on or before January 1,
1995,”
the Respondent assumed an
evidentiary burden
that it has failed to satisfy.
In
rebuftal to the
factual allegation that
the overfill
violation was
known
to the Illinois
EPA,
Complainant alleges
that Respondent informed
the Illinois
EPA of the documented
existence and extent of the
wastes
deposited
beyond
the permitted
vertical
limits on
a date
subsequent to
the entry of the
Judgment
and
Injunction Order in 98
CH
20 on December 29,
1999.
At hearing,
Tom Jones
testified about the overfill
issue.
Tr.
at
159-60, 177-80,
187-96.
The possibility that
ESG
Watts
had exceeded
its
maximum permifted vertical
elevation came
to
light during
the hearings
in the
prior case
(PCB 96-107).
Steve
Brao
had
performed
soil
borings at
the landfill just two weeks
before the October 1996
hearings,1
utilizing
a previous
aerial
survey that Jones
testifieded was
“not
an accurate representation of the landfill
at the time
he did
his
cover thickness
investigation.”
Tr.
at
189.
These documents were produced
to
Complainant during
discovery
depositions
in
mid-October
1996;
Respondent admitted the documents
at hearing on
October
‘See
PCB 96-107
Tr.
at 589.
Brao also testified
that ‘there was
no
top-of-waste survey to rely on.”
Tr. at
591.
11
30,
1996.
When
the hearing
resumed
on
December
12,
1996,
the Complainant aftempted
to
elicit testimony on
the possibility of
an
overfill
violation,
utilizing the survey documents,
but the
Respondent objected
and
an offer of proof was
rejected.
In
its
February 5,
1998,
Order in
PCB
96-107, the
Board
denied
Complainant’s
motion
to
conform pleadings to
proof regarding the
overfill allegation:
This claim
is based upon the testimony
of an
ESG
Watts’ witness at
the very
final
stages of the hearing.
Throughout the entire discovery process,
complainant never once raised an issue
concerning the vertical
elevation
in
excess
of permit limits.
The
Board
agrees with
ESG Watts that this allegation
results
in
unfair surprise and
disallows ESG
Watts from providing an informed
evidentiary
response.
Further, given the character of the testimony regarding
the overage,
adequate evidence of this potential violation
is
lacking.
The Board’s criticism
of the Complainant was not
only gratuitous but
also unfak’ for at
least two
obvious
reasons.
First, the documents which suggested the possibility that ESG
Watts
had
exceeded
its
maximum permitted
vertical elevation at Taylor Ridge
were not produced
to the
State until the depositions only a week before the first
hearing.2
It would
be
unlikely that
Complainant could
raise an
issue of which
it was
(throughout the entire
discovery process)
unaware.
Secondly,
the documents which suggested
the possibility that ESG Watts
had
exceeded
its
maximum permitted
vertical elevation
at Taylor Ridge
were generated
by
Respondent.
It would
be unlikely that
Respondent would
be
unfairly surprised
by information
that
it generated and
possessed.
In reality,
it
was due to the discovery abuses of the
Respondent that “adequate
evidence of this potential
violation
was
lacking,” at the time of the
prior adjudication.
At hearing
in the
present proceeding,
Tom Jones testified
that “everybody knew that we
were over height,”
but did
not acknowledge the uncertainty or adequacy
as
to
the “evidence” of
2See pc~
96-107 Hearing
Officer Order of October 17,
1996.
12
the situation.
Tr. at
190.
He suggested
that Respondent’s Exhibit
14,
a submiftal to the
Illinois
EPA dated October21, 1999,”specifically addressed” the overfill violation.
Id.
The consultants
for the Respondent submitted
the materials within this exhibit during
the pendency o198CH 20
in
an
unsuccessful effort to convince
the State
that the closure of the TaylorRidge
Landfill
could only occur if ESG Wafts were allowed
to accept additional waste during
closure to
facilitate
proper final
contours.
Respondent’s
Exhibit
14
includes an August
10,
1999,
lefter
from Envirogen
to Jones
indicating
that the
landfill
still
had
at least 300,000 airspace cubic
yards of net capacity remaining and espousing
a position
that “as
long as theiandfihiUoes
not
1) violate a
limit set during
the
siting
process
(i.e.
capacity, area,
height,
etc.) or 2)
have a
net
increase in
capacity,
then
local
siting
approval may not be’ required for revisThwtth~k~ndfifttrnaI
grades.”
If “everybody knew that we were over height,” then
ESG Watts and
its
legal and
technical
representatives were
still
careful
not to
provide reliable
proof of such vioiatkxlTdurtrig
the pendency of 98
CR
20
and the ill-pleaded
appeal of
PCB 96-107.
At best,
the sporadic
discussions
concerning closure of the facility
and compliance with
Ieachate, stormwater and
gas emissions
control
requirements were merely a delay tactic.
In
his testimony, Jones
conceded that the overfill was
not quantified
until
the
next sig
mod
application, which was
submitted
January 29, 2001.
See Respondent’s
Exhibit 15.
Once
the
State
had received
and
reviewed
adequate
factual
information showing that
ESG Watts
had
exceeded
its
maximum
permitted
vertical
elevation at Taylor Ridge,
such allegation of violation was
timely pleaded
in
the present
proceeding.
Even
if Respondent could establish the requisite factual grounds
regarding an earlier
time at which the
Illinois EPA had
direct knowledge
of the overfilled wastes, the
Board
cannot
exercise the equitable powers that it does
not possess
in
order
to defeat the claim
in Count
IV
13
through
a finding of
resjudicata.
However,
based upon the record, the
Board
may simply rule
that the Respondent has not proven the facts
to
support such a
defense.
The People are certainly mindful that the
Board
has made
res judicata
findings in
past
cases, including
the February
5,
1998,
order
in
PCB 96-107 (pages 5-6).
That ruling was
erroneous,
but
a re-examination
of the
issues
may be
instructive for the
Board’s consideration
of the Count
IV defense in the present
proceeding.
The circuit court had on
September 11,
1992,
entered
a preliminary injunction against
ESG Wafts for leachate and water pollution
violations.
In
PCB 96-1 07, Complainant had
alleged
NPDES
permit, effluent and
water quality
violations dating back
to
1986.
The
Board accepted Respondent’s argument “that under the
doctrine of
resjudicata,
any pre-1992 water violations should
be
barred
because such
violations
were
previously prosecuted” in the court case
and found that the pre-1992
violations were
“substantially the same
violations as
in
the previous circuit court case.”
Disregarding
for the
moment the critical issue of whether the
Board
has
legislatively delegated
authority
to exercise
equitable powers,
the first criterion
is clearly not demonstrated:
the
1992 preliminary injunction
order was
not “a final judgment
on the merits;”
in fact, the Fourth
District Appellate Court has
already explicitly ruled
on this very issue.3
The
lack of
a final judgment on the merits was the primary argument by the
People
in
opposition
to
the
resjudicata
claim
in
PCB 96-107, but such was
ignored
by the
Board.
Instead, the
Board substituted an
accurate representation of fact (“Complainant asserts
that the
effluent and water quality
violations from the July 1986 inspection
and the NPDES
permit
violations that
have occurred
since the permit issuance
in
October 1986, were
not previously
included”
in the court case) for the People’s actual
argument that the injunction was
not a final
See
ESG
Watts,
Inc.
v. Pollution control Board,
282
III.
App. 3d
43, 53-4
(4th
Dist.
1996), which
held that
the preliminary injunction
order “was
not a
binding
determination on
the merits” butwas
properly considered
in
aggravation
as
a “previously adjudicated violation” for purposes of Section 42(h)(5).
14
judgment.
However,
it is instructive
here to simply focus on
the second
criterion, the identity of
the cause of action.
The Board’s finding
that the violations were “substantially
the same” as
those
underlying the preliminary injunction
would
be
a valid finding.
Although the effluent and
water quality violations from the July 1986 inspection
and the NPDES
permit violations that
have occurred
since the permit issuance
in
October
1986 as alleged
in
PCB 96-1 07
were not
included
in the
1992 circuit court case, such allegations could
have
been
prosecuted thereinso
as
to
more
comprehensively support
the
showing4
of water pollution that resulted
in
the
issuance
of the preliminary injunction.
The pre-1992
discharges of
leachate and
stormwater
runoff violated the
Board’s effluent and water quality standards and
the facility’s NPDES
permit
and
thereby violated
Section
12(a) of the Act.
The pleadings and
evidentiary presentation
to
Judge Richard
Cadagin,
however, simply provided
a
showing
that recent and ongoing
leachate
and
stormwater runoff caused
or threatened
water pollution.
In
other words,
the effluent, water
quality and
permit violations would
have constituted
“grounds of recovery.., which might have
been presented” in the prior court case
and were as
the Board found “substantially the same”
as the showing
of water pollution.
However,
the preliminary injunction was not a final judgment
and the
Board was
not authorized
to exercise equitable powers
in
PCB 96-107.
In
summary, while
the Judgment Order in 98
CH
20 is
a final judgment,
the overfill
violation
pleaded in
PCB 01-167
is
not “substantially the same”
as those other violations
(e.g.
failure
to
implement stormwater,
leachate
and gas
management) before thecourt and
the
Board is still
not authorized
to exercise equitable powers.
The landfill’s operating
permit had
been
revoked
as of March
5,
1998;
there was no allegation
in 98
CH
20 that ESG Wafts had
operated
in violation of its permit.
The crux of that court action was that ESG Watts
had
failed
to
comply with the
Board’s February
5,
1998,
order
in
PCB 96-107.
Therefore,
there is no final
40f
course, only
a “showing” of violation
is
necessary.
See,
e.g.,
People
v.
Mika
Timber co.,
221
III.
App.3d
192,
581
N.E.2d 895
(5th
Dist.
1991).
15
judgment on the merits and
no
identity
as to
cause of action, and
thus the
resjudicaia_clairn
must fail.
PROOF OF VIOLATIONS
Two witnesses testified
at hearing
on behalf of the Complainant.
Gary Styzens,
Chief
Internal Auditor for the
Illinois EPA,
presented expert testimony as
to the economic benefit
resulting
from the continuing delays in the completion of closure of the Taylor Ridge
Landfill.
Joe Whitley testified
as to
the continuing off site impacts caused
by the gas emissions and
stormwater runoff from the
landfill.
People’s
Exhibit
18 is the transcript of
Mr. Whitley’s
prior
testimony on October29,
1996,
in PCB 96-107.
This prior testimony
is relevant because the
problems
have continued
unabated and
it is necessary for the
Board
to
haveacontext within
which to consider Mr.
Whitley’s present testimony.
Mr. Whitley testified
that the runoff and odor
problems
he
had described during
his
previous testimony
had only
“gotten worse” over thwpast
six and
a
half years.
Tr.
at 73.
Mr.
Whitley provided several photographs depicting the runoff
problems
(Exhs.
21-26) and
testified at length about the retention
pond andothec conditions on
his property
and the
landfill.
Tr.
at 77-88.
His
testimony
clearly supports
another finding
of
nuisance and
repeated
violations.
For instance,
he testified that “many, many times
I
have
to
go in
the house and
shut the windows.
I cannot stand the odors.”
Tr.
at 89.
When
asked
how
the gas emissions
had
affected
his
life
or interfered
with
his
activities and
enjoyment of his
property,
Mr. Whitley said
that as far as
sitting
on his
deck “sometimes it’s completely
impossible.”
Tr.
at
91.
During the past two or three years,
it
has been completely impossible
for him
to
sit by
the
pond,
which
is closer to the
landfill
than the
house.
Tr.
at
92.
He is often
prevented from
working
in
his flower garden.
Tr.
at 93.
With the
passing
of his wife in
September 2002,
Mr. Whitley
has
spent less time at
home than
before, but the interference with
his enjoyment
of the simple
pleasures of country living
has obviously increased.
16
The Complainant also
presented the wriften testimony of Joyce
Munie,
the Manager of
the Permits
Section, and
Kevin
Bryant,
the Manager of Accounting and
Cash
Management.
People’s
Exhibits 5 and
6.
Both the 1996 permit (Exh.
2) and the
1999 permit (Exh.
3) explicitly
required
Respondent to
“initiate implementation
of the closure plan within
30 days
after the site receives
its final
volume of waste,”
In
addition
to this specific
permit
condition, Section
807.506
of the
Board’s regulations generally requires
landfills to “initiate implementation
of the closure plan
within
30 days after the site rec&ves
its final volume of waste.”
The written
testimony of Joyce
Munie
(Exh. 5) indicates that the Respondent clearly failed
to comply with
these generally
applicable regulations
and specifically applicable
permit conditions.
In
her professional opinion
or conclusion, the facility must be
properly closed,
monitored,
and
the appropriate corrective
actions
identified
and
implemented,
as
soon as
possible, so that potential
environmental threats
may be
mitigated;
not only are the potential
threats to the environment likely to increase the
longer closure is
delayed,
but the technical difficulties and costs will
also
likely increase.
Ms.
Munie is a professional
engineer,
licensed
in the State of Illinois, and well qualified to speak
on
behalf of the Illinois
EPA.
In
contrast, the testimony of
Jones is presented
to
purportedly demonstrate that closure
has
been “initiated” and
to explain why
it
has
not been
completed.
This testimony
was
apparently intended
to
support the contention
in Respondent’s Answer
(~f
12,
Count
I) that ESG
Watts
began
the implementation
of the closure
plan on
December
18, 2000, with the
performance of assessment monitoring of the groundwater;
however,
there was
no specific
testimony as to that or any
other date.
Tr. At
165.
Asked what activities were part of closure,
Jones
listed
leachate collection,
landfill
gas
management,
and
groundwater monitoring.
Tr.
at
172.
While these actions
are certainly necessary during
and
subsequent
to
closure, each
was
17
a permit obligation prior to
March
20,
1998, when the landfill
was forced to cease accepting
waste for disposal.
For instance,
in the weeks
leading
up to the hearings
in PCB 96-107, which
alleged odor violations resulting
from
uncontrolled landfill gas emissions,
88 wells were installed
pursuant to the
1996 permit
for gas
and leachate collection.
In
this prior case,
the
Board
noted
that a sig
mod
permit had
been
denied
by the
Illinois
EPA
in
February
1995 because it lacked
a
groundwater assessment monitoring program,
that Respondent had
agreed
in October 1995 to
perform
groundwater assessment and
monitoring,
and that, when
the Illinois
EPA issued
a
permit
in
January
1996 requiring
the
landfill
to
perform
groundwater assessment and
monitoring,
ESG Watts appealed; the
Board
specifically found
that “ESG
Watts
had
not
complied
with the requirements
in
its groundwater monitoring
permit,”
February
5,
1998,
order
at page 25.~Therefore,
the testimony of Jones that closure
was initiated
is substantially
impeached
by these
prior factual findings.
This factual context also diminishes
the weight of his
explanation:
“I
feel the issuance of a permit is required to
properly close the
landfill,
to
move the
waste,
to improve
design which will include a stormwater management
plan, gas collection
system,
leachate collection system
will all
be tied together
in a final closure docurnentwhich-we
have
not been able to obtain.”
Tr.
at
172-73.
The intent, design
and
effect of this approach
have combined
to
achieve years of delay.
ESG
Watts has
benefitted economically from this delay because the expenditures have
been deferred or avoided.
Obviously,
no
revenue
is being
generated because
no waste
disposal
is
being
conducted.
Additionally,
it
has cost money for attorney’s fees and
consulting
expenses to
achieve this delay.
Funding for these
efforts has
been found while
not only
compliance and
corrective actions have
been indefinitely postponed
but alsocourt ordered
payments
have been
ignored.
Mr.
Bryant’s testimony
indicates that no
payment has
been
5The appeal
(PCB 97-210) was subsequently dismissed upon joint motion.
18
made
by Watts since August 2001.
More than
$40,000 in
interest has accrued
on the
unpaid
$100,000
penalty previously imposed for violations
at the Taylor Ridge
Landfill.
The $30,000
monthly payments required
under a court order
in a
collection action
have notbeen madeand
these funds
have obviously not
been allocated
to compliance measures.
The company
has
failed to
initiate and
complete closure of the landfill
in a timely fashion
and
has deferred the
expenditure of $1,183,545
in closure costs
that are proposed
in
the pending
sig
mod
application.
According to the calculations of
Gary Styzens, the economic
benefits of
noncompliance with
the closure
requirements
(which include the
relocation of the overfill)
are at
least
$284,383.
See
People’s
Exhibit 20 and
Tr.
at 25-70.
The Complainant asserts that these
calculations w”ere quite
conservative and fairly
simplistic.
First, he
utilized
the current
cost estimates proposed
by the Respondent in the
pending
sig
mod
application.
People’s Exhibit
4.
As counsel for Respondent established
during
cross-examination, these costs have
not yet been approved.
Tr.
at 46-7.
Mr. Styzens
indicated
that the $1,183,545
figure was still
a reasonable estimate of closure
costs.
Tr,
at 47.
Secondly,
he deflated
these 2003 dollars
and
provided the “biggest tax break
up front”
instead
of depreciation allowances overtime.
Tr.
at 50.
Thirdly,
the prime
lending rates were
utilized to
estimate the economic benefit accrued for each year or portion thereof, even
though
it
is
unlikely that a lender would
provide
these
rates for a high
risk company with
a
poor credit
history.
Lastly,
the economic
benefit calculations did
not take
into
account the lack of
expenditures for proper operation
of the
gas
collection system
and timely submissionef-the
groundwater monitoring
reports.
Therefore,
the Board’s determination of economic benefit in the present proceeding
is
qualitatively different than
the
Panhandle
Eastern Pipe Line
case
(PCB 99-191).
In that
previous
matter,
the
Board was
confronted
with
dueling
experts and
conflicting testimony
19
concerning weighted
average costs of capital
based
upon company specific financial
information.
In its
November
15,
2001,
Order
(at page 33), the
Board found that “half a million
dollars represents
a good
approximation
of Panhandle’s economic
benefit from
delayed
compliance,” even though the Complainant’s assessment of economic
benefit was $628,759
and the
Respondent’s estimate was
substantially
lower.
Here,
Watts
has presented
no
evidence of a
lower amount nor disputed that there
was an
economic benefit.
The Board,
therefore,
has
no
basis
in the
record
to
“split the baby” in
the recapture of the economic benefits
of deferred or avoided
compliance expenditures.
Respondent will likely attempt to
blame the State for the delay
and to
reduce the
economic
benefit assessment by the
Board.
In
rebuttal to’these assertions,
Complainant has
provided exhibits documenting the State’s enforcement objectives
as communicated
to
Respondent.
People’s
Exhibits 9,
10 and
11.
These are not settlement negotiation
communications but rather demands for
action.
For instance,
counsel for Respondentwas
advised
(Exh.
9) that “there exist no legal or technical
impediments to the relocation
of the
overfilled wastes within the
previously permitted
final
contours of the landfill” and that “the
Attorney General’s Office’s
compliance demand
as to Count
I
is for ESG Watts to
properly
relocate
the overfilled
wastes, beginning
September
1,
2001, and
to
be completed
by
November 1,2001.”
Following concerns expressed
at a subsequent meeting,
a
proposed
court
order
was drafted
“to facilitate the resolution of the vertical
overfill
problem.”
People’s
Exhibit
10.
More than a month
later,
no
reply
was
made
to
the suggested judicially sanctioned
mechanism.
People’s
Exhibit
11.
The clock
had
run out for another year.
It is important for the
Board
to view the present proceeding
in the proper context,
to wit
the most recent in
a series of enforcement actions.
In
PCB 94-127
and
PCB 96-107, the lack
of a
sig
mod supposedly prevented the
landfill
from complying
with other alreadypermitted
20
requirements.
ESG Watts
in those
proceedings and the present one seemingly contends that,
if the
State
really wanted compliance, the
Illinois
EPA
must approve whatever permit application
may
be
pending, and that the Illinois
EPA would
do so if the permit applicantwereanyone other
than
ESG Watts.
The factual context of each
of these enforcement actions
has essentially
been that Respondent argues that
it cannot do what is necessary until some other contingent
event occurs,
such
contingency being
beyond
Respondent’s
control.
For instance,
as
it
contends
in its
Answer to
the Amended
Complaint,
“said
actions have
been
made futile
by the
Illinois
EPA requirement
that
it move
waste
in order
to close
the landfill,”
Another example
is the stormwater management plan;
its
implementation
has-been
delayed for various
reasons and was a primary focus of the hearings
in PCB 96-107.
Currently,
as
Jones testified, “Andrews Engineering
is trying
to make
a case
to delineate certain areas
in
the
landfill from
having
to
have
additional final
cover.”
Tr.
at
173.
Jones was then asked
whether this unresolved issue affected
the installation of stormwater retentiorrstructures and
final
contours:
“As long as that issue is outstanding,
yeah,
it
affects your ability
to have
an
acceptable
final
cover with,
you
know, final
—
final contours,
final cover, well placement,
leachate extraction
placement.”
Tr.
at
174.
Another aspect of this context is that
ESG Watts has
utilized so many differertpersons
and firms for legal and
technical
representation over the years.
The only continuity
has
been
provided
by the prosecutors and
regulators;
the concerns of local residents and officials are
another constant,
See,
e.g.,
Tr.
at
116-21.
The lawyers and
consultants come
and
go, usually
after they have
failed
to
receive compensation,
and
it
is obviously time consumptive for
each
new lawyer or consultant to come
up to
speed.6
The laboratories
providing analytical
services
6The burden
on
the prosecutors
and regulators is
also
increased
by the revolving door resulting from
Respondent’s cash flow problems.
Good faith efforts are made
again and again to inform the newly retained
attorneys
and engineers of the history of the landfill,
of the“where we are and how we got here”
aspects.
See,
e.g.,
People’s
Exhibit 9.
21
refuse to
provide
documentation when
ESG Watts fails to
pay them.
See,
e.g., Tr.
at
165.
The
only tangible
result of this revolving door is the continuation of pollutional discharges and
emissions without effective monitoring
and control,
CONCLUSION
The evidence
has
clearly shown
that
closure has not been completed becausellie
overfill has
not been
relocated;
that the overfill
has
not been
relocated because thetlosuieiptari
has
not been
revised;
that the closure
plan
has
not been revised
because thapendingsigrriort
application
has not been
approved.
Similarly, the runoff problems and the adverse off site
impacts to
Mr. Whitley’s
property have
not been corrected
because the stormwater control plan
has
not been implemented
because final cover
has
not been
installed becaa~the~o~fiittras
not been
relocated.
The odor problems and the nuisance
caused to
Mr.
Whitley are just as
bad
as
in
1996 because Watts has
failed to
properly operate the gas collection
systemrwhich had
been installed
by December
12,
1996;
the single flare,
which was connected to only 30
of the
88 wells
on or before April
3,
2000,
has
not been operational
since January 27, 2003.
As to the
reporting
violations,
these
are admitted as
alleged;
in addition,
Ms. Munie indicates
that no
reports were
submitted
for the subsequent three quarters.
Evidence
in aggravation
has been
presented to
demonstrate previously adjudicated
violations,
lack of due diligence,
and
economic benefit.
The gravity and
duration
of the
violations are well supported
by the proof.
The remaining
Section
42(h) factor pertains
to “the
amount of monetary penalty which will
serve to
deter further violations
by the violator....”
On
this issue,
two statements may be made
without fear of contradiction:
First, the previously
imposed
Board
penalties
in
PCB 96-1 07 as well as
PCB 96-233 and
96-237
have
not been
paid; and
secondly,
it is obvious that those penalties
($100,000; $658,787;
and$256,000r
respectively) were
inadequate to deter these
subsequent violations.
Therefore,
it stands
to
22
reason that the amount of monetary penalty which will serve to
deter further violations
by the
violator must be
increased
to achieve this statutory objective
and thus the Board
must impose a
significantly higher civil
penalty upon
ESG Watts.
The Complainant
recommends a
penalty of
$1,000,000
plus attorney’s fees and expert witness
costs.
This recommended amount is ten
times the previous
penalty for the Taylor Ridge
Landfill
in
PCB 96-107, but slightly less
than the
total of the three
1996 enforcement cases.
The request for
an award of reasonable fees and
costs may be
supported
by a finding that these
present and continuing violations
are knowing,
wilful or repeated
pursuant to Section
42(0;
if the Board
makes such
a finding,
the
People
ask
leave to quantify
the reasonable fees and
costs through affidavits.
This
is the practice allowed
by the
Board
in the
1996 enforcement cases,
although the
People respectfully suggest that the
Board ought to
increase the rate for
attorney’s fees from $120 per hour to
$150 per hour.
In
PCB 96-233, regarding the Viola
Landfill,7 the
Board
had
imposed
a record
penalty for
a
contested
environmental enforcement action
although
specific economic
benefit information
was not presented.
This penalty record
was
recently broken
by the
Panhandle Eastern Pipe
Line
decision
(PCB 99-191) in which the
Board
relied
upon expert testimony regarding
economic benefit.
In
closing, a million dollar penalty
is appropriate for this violator,
especially in
light of the
conservative economic benefit calculations.
ESG Watts has
an
unprecedented
history of
violations
prosecuted
in
numerous
Board and
court actions.
The appellate courts have
either
upheld or dismissed
all of the enforcement appeals.
Moreover,
ESG Watts
has litigated
numerous
permit appeals
before the
Board,
challenging
many different actions
by the
Illinois
EPA,
and
has
prevailed only
in a fraction of these
matters.
The Respondent is currently
7Subsequent court action was also
required to achieve
strict compliance with the
Board’s order.
See
People’s
Exhibits
12
and 13.
23
delinquent in
its obligations
under a pending court order regarding collection of the prior
penalties and
a
rule to show cause
is
also pending.
Whatever penalty the
Board
imposes,
whether a
million dollars or some other amount,
it is reasonably anticipated
that the
Complainant will likely be forced
to
expend
additional litigation efforts to
collect
it.
In this
case,
Respondent has offered
absolutely no evidence regarding
its ability
to
pay a
penalty while
Complainant has
provided substantial evidence as
to the refusal of Respondent
to comply with
the compliance and
payment obligations imposed
by
a series of
Board and court
orders.
Respectfully submitted,
PEOPLE OF THE
STATE
OF ILLINOIS,
LISA MADIGAN
Attorney General
State
of Illinois
MATTHEW
J.
DUNN, Chief
Environmental Enforcement/Asbestos
Litigation
Division
BY:_________________________
THOMAS
DAVIS,
Chief
Environmental Bureau
Assistant Attorney General
500 South
Second Street
Springfield,
Illinois 62706
217/782-9031
Dated:
July
8,
2003
24
