1 BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
2
3
4
5 IN THE MATTER OF:
6
7 PROPORTIONATE SHARE LIABILITY No. R97-16
8 (35 ILL. ADM. CODE 741) (Rulemaking-Land)
9
10
11
12
13
14 Proceedings held on June 10, 1998, at 10:10 a.m.,
15 at the County Building, County Board Chambers, 2nd
16 Floor, 200 South Ninth Street, Springfield, Illinois,
17 before the Honorable Cynthia Ervin, Hearing Officer.
18
19
20 Reported by: Darlene M. Niemeyer, CSR, RPR
21CSR License No.: 084-003677
22
23 KEEFE REPORTING COMPANY
24 11 North 44th Street
25 Belleville, IL 62226
0001
KEEFE REPORTING COMPANY
Belleville, Illinois
1 A P P E A R A N C E S
2
3 Claire A. Manning, Chairman
4 Board Member G. Tanner Girard
5 Board Member Kathleen M. Hennessey
6
7 ILLINOIS ENVIRONMENTAL PROTECTION AGENCY
8 BY: Mark Wight
9 Assistant Counsel
10 1021 North Grand Avenue East
11 Springfield, Illinois 62794-9276
12 On behalf of the Illinois EPA.
13
14 ROSS & HARDIES
15 BY: David L. Rieser
16 Attorney at Law
17 150 North Michigan Avenue
18 Chicago, Illinois 60601-7567
19 On behalf of the Illinois Steel Group and
20 the Chemical Industry Council of Illinois.
21
22
23
24
25
0002
KEEFE REPORTING COMPANY
Belleville, Illinois
1 ILLINOIS ENVIRONMENTAL REGULATORY GROUP
2 BY: Whitney Wagner Rosen
3 Legal Counsel
4 215 East Adams Street
5 Springfield, Illinois 62701
6 On behalf of IERG.
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
0002a
KEEFE REPORTING COMPANY
Belleville, Illinois
1 E X H I B I T S
2 NUMBER ENTERED
3 Hearing Exhibit 15 30
4 Hearing Exhibit 16 117
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
0003
KEEFE REPORTING COMPANY
Belleville, Illinois
1 P R O C E E D I N G S
2 (June 10, 1998; 10:10 a.m.)
3 HEARING OFFICER ERVIN: Good morning and welcome
4 to this fourth hearing in Proportionate Share. My
5 name is Cynthia Ervin, and I am the named Hearing
6 Officer in this proceeding entitled, In the Matter
7 of: Proportionate Share Liability, 35 Illinois
8 Administrative Code, Part 741, docketed as R97-016.
9 Present today on behalf of the Pollution Control
10 Board is presiding Board Member of this rulemaking, to
11 my right, Chairman Claire Manning.
12 CHAIRMAN MANNING: Good morning.
13 HEARING OFFICER ERVIN: To her right is Board
14 Member Kathleen Hennessey.
15 BOARD MEMBER HENNESSEY: Good morning.
16 HEARING OFFICER ERVIN: To my left is Board Member
17 Tanner Girard.
18 BOARD MEMBER GIRARD: Good morning.
19 HEARING OFFICER ERVIN: Also with us today is
20 Marie Tipsord, Board Member Girard's attorney
21 assistant; and Jack Burds, who is one of our hearing
22 officers; and Chuck King. He is here somewhere today.
23 He is Board Member Marili McFawn's attorney assistant.
24 In the back of the room I have placed a list for
25 those who would like to be added to the notice and
0004
KEEFE REPORTING COMPANY
Belleville, Illinois
1 service list in this rulemaking. Please note that if
2 your name is on the notice list you will only receive
3 copies of the Board's opinions and orders and the
4 hearing officer orders in this matter. If your name
5 is on the service list, you will not only receive
6 those items, but you will also receive copies of
7 documents filed by all persons on the service list in
8 this proceeding. Please keep in mind that if your
9 name is on the service list, you are required to serve
10 all persons on the service list with all documents
11 that you file with the Board.
12 As background, on February 2nd, 1998, the Illinois
13 Environmental Protection Agency filed a rulemaking
14 proposal with the Board to add a new Part 741 to the
15 Board's waste disposal regulations. These proposed
16 rules would establish procedures for the
17 implementation of Proportionate Share Liability scheme
18 established by Public Act 89-443. This amendatory
19 legislation repealed joint and several liability in
20 environmental actions and replaced it with
21 Proportionate Share Liability.
22 In addition to establishing Proportionate Share
23 Liability, Section 58.9 of the Act directed the Board
24 to adopt rules implementing Section 58.9 by December
25 31st, 1997. The statutory deadline was later extended
0005
KEEFE REPORTING COMPANY
Belleville, Illinois
1 until January 1st, 1999.
2 On December 5th, 1996, the Board opened a docket
3 to solicit proposals to assist the Board in the
4 promulgation of rules and procedures implementing the
5 proportionate share provisions of Section 58.9. The
6 proposal filed by the Agency is in response to that
7 request.
8 The first hearing was held in this matter on May
9 4th in Springfield. The second hearing was held on
10 May 12th in Chicago. The third hearing was held in
11 Springfield on May 27th.
12 The purpose of today's hearing is to hear some
13 additional comments from the Agency and to ask
14 additional questions of the Agency. Following the
15 Agency's presentation, anyone else who would like to
16 testify will be given the opportunity as time allows.
17 This hearing will be governed by the Board's
18 procedural rules for regulatory proceedings. All
19 information which is relevant and not repetitious or
20 privileged will be admitted. All witnesses will be
21 sworn and subject to cross-questioning. Please note
22 that any questions asked by a Board Member or staff
23 are intended to help build a complete record for the
24 Board's decision, and does not express any
25 preconceived opinion on the matter.
0006
KEEFE REPORTING COMPANY
Belleville, Illinois
1 Are there any questions regarding the procedures
2 we will be following this morning?
3 Seeing none, then I will ask Chairman Manning or
4 any of the other Board Members if they have any
5 comments that they would like to make at this time.
6 CHAIRMAN MANNING: No. Just good morning. Our
7 regular caveat applies as well with this proceeding.
8 Just because we are asking questions does not
9 necessarily reflect any way we are proceeding. We
10 might have a lot of questions for you this morning.
11 HEARING OFFICER ERVIN: Thank you. It is my
12 understanding that the Agency, you have some rebuttal
13 testimony as well as some responses to some questions
14 you would like to present this morning.
15 MR. WIGHT: Yes, we do. I will start by once
16 again introducing our panel of witnesses. With me
17 again today for the fourth hearing, on my immediate
18 right, Gary King who is the Manager of the Division of
19 Remediation Management within the Bureau of Land.
20 On my immediate left is Bill Ingersoll, who is an
21 associate counsel with the Division of Legal Counsel
22 at the Illinois EPA who manages an enforcement unit.
23 To Bill's immediate left is John Sherrill who
24 supervises a unit within the Remedial Projects
25 Management Section in the Bureau of Land.
0007
KEEFE REPORTING COMPANY
Belleville, Illinois
1 Behind me and to my left is Larry Eastep who is
2 the Manager of the Bureau of Land's Remedial Projects
3 Management Section. Excuse me. Yes, that is right.
4 You would think I have said these enough that I would
5 have them down by heart, but it is confusing.
6 We do have some follow-up today both by way of
7 some comments and rebuttal to testimony that was
8 delivered at the last hearing and some follow-ups to
9 some questions that were pending, as well. I guess we
10 will just get right to that.
11 One other person, Vicki VonLanken is back with us
12 again today. She is our legal assistant who is
13 helping with document management. Anybody who has any
14 questions about Agency documents can see Vicki to
15 resolve those.
16 We will go right to Gary King to start today's --
17 HEARING OFFICER ERVIN: Why don't we have them
18 sworn in.
19 MR. WIGHT: Yes.
20 (Whereupon Gary King, Bill Ingersoll, John
21 Sherrill and Larry Eastep were sworn by the
22 Notary Public.)
23 HEARING OFFICER ERVIN: Whenever you are ready to
24 proceed.
25 MR. GARY KING: What I want to do this morning is
0008
KEEFE REPORTING COMPANY
Belleville, Illinois
1 to -- there is two aspects to the testimony. One is
2 to respond to some areas and questions that we had
3 left open from the previous hearing, and then to
4 provide, in essence, a rebuttal on some of the points
5 that were raised by SRAC's testimony at the last
6 hearing.
7 There were quite a few points that we disagree
8 with relative to their testimony. We are not going to
9 try to focus on all of those, but we are going to try
10 to focus on those that we feel are most significant.
11 And sometimes as you go through these things you find
12 more things significant than what you thought when you
13 first started. So I will apologize at the start for
14 the length of the presentation.
15 I want to begin by summarizing, at least from our
16 point of view, the testimony that we heard coming from
17 the SRAC panel at the last hearing.
18 We saw Mr. Marder as having summarized the
19 business sector's view on the legislative history of
20 Title 17 with particular focus on the need to limit
21 the liability of the private sector for cleanups.
22 We saw Mr. Howe as discussing the problems created
23 for business by what has sometimes been a draconian
24 application by the U.S. EPA of the joint and several
25 liability principles at Federal cleanup sites. Mr.
0009
KEEFE REPORTING COMPANY
Belleville, Illinois
1 Howe, however, did not conclude that the problems on a
2 State level were the result of IEPA's implementation
3 of its program, which as we have testified to, it has
4 contained elements of Proportional Share Liability.
5 But that the problem was this perception of liability
6 that had been created by the way the Federal
7 government had handled joint and several liability on
8 a nationwide basis.
9 We saw Mr. Rieser's testimony as supporting
10 specific changes in our proposal. We saw that as
11 supporting four specific areas of changes.
12 First was changes in the applicability
13 provisions. And we thought a lot of those made sense,
14 and we had incorporated those changes with some
15 modification in our Errata Number 1.
16 The second area was that he proposed that the
17 concept of the information order be deleted, and he
18 contended that it was not needed; that first of all,
19 civil discovery was adequate and, secondly, that
20 Supreme Court Rule 224 is adequate to handle
21 information requests before the filing of a
22 complaint.
23 We disagree with both of those points. First, the
24 notion of civil discovery really doesn't help in a
25 prelitigation area. And we think that the need for an
0010
KEEFE REPORTING COMPANY
Belleville, Illinois
1 information order is particularly critical because we
2 have gone to the whole concept of Proportional Share
3 Liability. It becomes particularly important as we
4 have talked about it in trying to identify PRPs, the
5 need to identify PRPs, to make the Proportional Share
6 Liability concept work effectively.
7 The second point is that we have reviewed things,
8 and it is our -- we are not sure that Supreme Court
9 Rule 224 is incorporated in the Board rules, so that
10 it is not clear that we could even have access to that
11 as a methodology for getting prelitigation
12 information. That was the second point, was the
13 information order that we had.
14 The third change that Mr. Rieser focused on was
15 proposing changes in the causation provisions. And
16 from our standpoint, what he is really suggesting is
17 going to amount to a need to fingerprint the waste and
18 the releases, fingerprint the waste to the releases as
19 an element of proof. He contends that is the approach
20 required by the statute. We don't agree with that.
21 We think that was just going to create an impossible
22 burden for us if that kind of approach is used.
23 Finally, Mr. Rieser, and this is the fourth major
24 point that he had, he is objecting to the shifting of
25 the burden when we came to the allocation phase. As
0011
KEEFE REPORTING COMPANY
Belleville, Illinois
1 you recall our proposal was that the State would have
2 the burden in establishing liability. But then when
3 it came to the allocation phase, then that burden
4 would rest with the respondents. And he contended
5 that this burden shifting concept, although it is
6 unaddressed in Section 58.9, is prohibited by Section
7 58.9. And then his proposal simply repeats the
8 statutory language which I think everyone admits is
9 not clear and that is not going to resolve difficult
10 interpretive issues. I just don't think that
11 approach, in the long run, is going to be very helpful
12 as far as working with these cases.
13 Now, I want to go back and talk about some of the
14 things that we covered in our initial testimony. One
15 of the things that I focused on initially is what is
16 the purpose of this rulemaking, and I referenced
17 Section 48, Paragraph 5 of the Act. It is clear if
18 you look at that that the purpose of this rulemaking
19 is not to minimize liability for private industry.
20 The purpose of this rulemaking is to assure that
21 cleanup of sites occurs in a manner that is efficient
22 and is fair to all concerned, both to the public
23 sector as well as the private sector.
24 In our testimony we recognize that this rulemaking
25 has a lot of difficulties to it. I focused on three
0012
KEEFE REPORTING COMPANY
Belleville, Illinois
1 of those difficulties.
2 One was there is no real model for what we are
3 doing here. The Board is creating a model and
4 hopefully the Board ends up creating a model which is
5 useful not only in this State but beyond this State.
6 I think that -- we believe that our proposal has
7 elements that would be useful in the areas beyond what
8 we have in Illinois. We have tried to answer
9 questions that I think other states are struggling
10 with, as well.
11 The second area of difficulty was the whole nature
12 that there is a limited number of sites we are dealing
13 with. In our initial testimony we warned against
14 skewered experience causing over generalization based
15 on what has happened. I think to some extent if you
16 reflect on Mr. Howe's testimony, that is what has
17 happened. I mean, Caterpillar has had a lot of
18 experience with cleanup sites around the country and
19 in other states and the Federal government, and yet
20 the experience they have had in Illinois comes down to
21 two sites that they are working with the Illinois EPA
22 program, and those experiences have been -- have had
23 Proportional Share Liability concepts to them. So we
24 have to be careful about not just taking what is a
25 national concern and then just putting that down to a
0013
KEEFE REPORTING COMPANY
Belleville, Illinois
1 State level without understanding what the State
2 program is and has been all about.
3 The third area of difficulty that I had seen
4 initially is how do you interpret a statute which has
5 a lot of incompleteness to it and a lot of ambiguities
6 to it. I testified that I saw that there was four
7 basic principles there.
8 First there was the notion of liability being
9 based on causation or contribution. That we wouldn't
10 just have the kind of status liability that has
11 happened with some of the elements of liability in the
12 past.
13 Second, allocation would be based on proportionate
14 share rather than being based on a joint and several
15 concept.
16 Third, that there would be -- there would not be a
17 disturbance of existing delegated and authorized
18 programs.
19 Fourth, that the Board would need and was
20 statutorily authorized to develop a workable procedure
21 relative to the whole concept that is outlined in
22 those first three principles.
23 Mr. Rieser, in his testimony, he agreed with the
24 first three of those. But he took issue with the
25 fourth one, not in terms that the Board should have a
0014
KEEFE REPORTING COMPANY
Belleville, Illinois
1 workable procedure, but my emphasis on that. He felt
2 that I over emphasized the need for having a workable
3 procedure. His emphasis there was the emphasis should
4 be on change, changing something. Well, that to me
5 begs the question of what are we trying to change.
6 I think one of the things that Mr. Rieser was
7 saying was that after hearing how we had implemented
8 many of these principles, proportionate share
9 principles in operating our program already, that the
10 legislature wanted to change that program further,
11 wanted to change the way we actually did things. But
12 if you reflect back to the -- what happened in 1995
13 when the legislation was passed, there was not a
14 concern at that point about the way the Illinois EPA
15 was implementing the cleanup program. The simple fact
16 of the matter is that nobody asked. Nobody asked in
17 1995 how we were implementing the program. The
18 legislature didn't ask. The business community didn't
19 ask.
20 In fact, they didn't ask until we got around to
21 the fall of 1997 and were developing this rulemaking.
22 Now, it is obvious that the legislature still wanted
23 to change something, if they didn't understand our
24 program, they, in fact, wanted to change something.
25 And I think that Mr. Marder and Mr. Howe both spoke to
0015
KEEFE REPORTING COMPANY
Belleville, Illinois
1 the issue that they wanted a change, and from our view
2 what the legislature really wanted to change was this
3 perception created by joint and several liability.
4 As I was talking about earlier, this perception of
5 joint and several liability has been negative,
6 particularly based on the way the Federal government
7 has tended to implement it throughout the country.
8 You know, Mr. Howe I think rightly focused on the fact
9 that the U.S. EPA has taken a deep pockets approach to
10 the implementation of joint and several liability with
11 a focus on a few people and then really shift the
12 burden to those people to bring in everybody else.
13 That simply has not been our approach in Illinois.
14 So if you think about it, well, if that's kind of
15 what is going on with the Agency's proposal and what
16 we are doing, what does this proposal do to the
17 Illinois program, certainly our proposal, what does it
18 do? Is it going to make radical changes in the way
19 the Illinois EPA has done business under its cleanup
20 program? The answer is, no, it won't. It is not
21 going to make radical changes.
22 But if you think back, when we went through the
23 Part 740 rulemaking, where the Board was developing a
24 regulatory program for a voluntary program, there was
25 a foundation there. There was a foundation of a
0016
KEEFE REPORTING COMPANY
Belleville, Illinois
1 program and that rulemaking process modified it,
2 changed it, but built upon it. And we see Part 741,
3 as we have proposed it, building upon what we have
4 already.
5 So is it going to make radical changes? No. Is
6 it going to modify it? Certainly, yes. Is it going to
7 make the implicit explicit? Certainly, yes. Is it
8 going to make significant changes? Absolutely.
9 Again, although the changes may not be radical, they
10 are going to be substantial. If you look at the way
11 we really focused a lot on how we -- we talked about
12 how we developed cases that are heading toward
13 litigation. This is going to have a substantial
14 change in how we develop those cases. It is going to
15 have a substantial change in how the whole concept of
16 orphan share is handled. That is going to be much
17 different.
18 Now, if you go with what SRAC is proposing, they
19 would impose even more stumbling blocks to effective
20 remediation. Their causation requirements, what we
21 perceive is a fingerprinting approach, keeping all of
22 the burdens of proof essentially on the State, those
23 are going to be a -- those would be major stumbling
24 blocks. If you think about that analogy I drew in my
25 first testimony about walking a tightrope, as far as
0017
KEEFE REPORTING COMPANY
Belleville, Illinois
1 developing this proposal, if the Board is going to
2 follow what SRAC has suggested, it is going to knock
3 us off that tightrope, from our standpoint. We will
4 end up with a program that I don't think we are going
5 to be able to effectively implement.
6 So one of the key questions is -- SRAC testified,
7 and I think very directly, that they found our
8 proposal as being essentially joint and several
9 liability under CERCLA, and if the notion was we are
10 going to change joint and several liability, did we
11 change joint and several liability. Their testimony
12 is that, no, we didn't.
13 Well, we think we have made major changes from
14 that. In a sense the only way you completely change
15 from joint and several liability is you have no
16 liability. Well, that is not going to be acceptable
17 under the legislation either.
18 I am going to describe six major differences that
19 I see from what we have proposed in Part 741 from the
20 way joint and several liability is implemented under
21 the Federal CERCLA law.
22 First of all is the real key Brownfields issue,
23 and that's the status liability of current owners. We
24 have eliminated status liability for current owners.
25 That is a major change.
0018
KEEFE REPORTING COMPANY
Belleville, Illinois
1 Second, there is not a severability requirement as
2 there is under Federal law as far as proof of
3 proportionate share.
4 Third, is that the allocation can be based on the
5 type of --
6 MR. RIESER: Not a severability?
7 MR. GARY KING: Right, not a severability.
8 MR. RIESER: Thank you.
9 MR. GARY KING: The third point is that allocation
10 can be based on the concept of how you are remediating
11 a site.
12 Four, just because you are liable, that does not
13 translate to an automatic 100 percent share as it does
14 under -- that is kind of the fundamental precept under
15 joint and several liability under CERCLA.
16 Proportional liability under our proposal is going to
17 be the norm.
18 Fifth, there is an orphan share responsibility,
19 and we recognize the need to incorporate that and to
20 include that as far as our funding aspects.
21 Then sixth and finally is the concept of no deep
22 pockets approach. Again, as I was saying before, the
23 Federal approach there, and that was something that
24 Mr. Howe rightly complained about on a Federal level,
25 is that they identify a small group of financially
0019
KEEFE REPORTING COMPANY
Belleville, Illinois
1 viable PRPs and assert liability against those. And
2 then the expectation is either that small group pays
3 for the entire cleanup or brings in other responsible
4 parties to help address the matter. That is kind of
5 the deep pockets approach that is part of Superfund.
6 Under our proposal, it has been -- we have not --
7 in essence, we have never implemented our program that
8 way. Our proposal here makes it -- by going to a
9 proportionate share concept expressly it is clear that
10 we have the incentive out of the box to identify as
11 many PRPs as possible. It makes no sense for us to
12 identify only a limited range of PRPs, because there
13 is not the incentive for everybody else to be brought
14 in as there is on a Federal level. Now, that is -- if
15 you look at either the Agency proposal or the SRAC
16 proposal, they both have that incentive for the Agency
17 to bring in as many responsible parties as possible.
18 Where we differ is what is the incentive for a PRP
19 to bring forward information about its own liability,
20 about other potential responsible parties. It was
21 very clear from their testimony that they saw that
22 there was not an incentive for that. Under our
23 proposal, yes, there is an incentive for that. We
24 think that is important because as we -- throughout
25 this process of developing our proposal as we have
0020
KEEFE REPORTING COMPANY
Belleville, Illinois
1 talked to experts on Superfund allocation, they talked
2 about the need to have as complete as possible a model
3 of site operation in order to understand how
4 allocation was to be accomplished. And that to move
5 that concept forward you have to have incentives for
6 all participants to bring forward information to that
7 end. And so that's why it is important under our
8 proposal that there is some incentive for PRPs to
9 bring information forward.
10 So I think as I have gone over these six points I
11 think it is pretty clear that we have accomplished
12 that based on a goal of eliminating joint and several
13 liability as part of our proposal and moving to a
14 Proportionate Share Liability concept that the
15 legislature wanted.
16 There was a couple of areas in SRAC's testimony
17 where I think they misconstrued a couple of the
18 concepts that we had included.
19 First is related to Section 741.210(b). That's
20 the causation section. What we saw SRAC's testimony
21 as saying was that they were interpreting 210(b)(4),
22 which is the generator liability provision and
23 210(b)(5), the transporter liability provision, as
24 applying to anyone who brought any regulated substance
25 to the facility from which there has been a release.
0021
KEEFE REPORTING COMPANY
Belleville, Illinois
1 They were construing that as being our proposal.
2 We don't think that is a correct interpretation of
3 our proposal. I think it is important to read the
4 specific words of how we tried to deal with that, and
5 not just make assumptions about what it is saying. We
6 have included some specific words in there to make it
7 clear that our burden of proof goes beyond what SRAC
8 was contending. The State is required to prove that
9 the generator or the transporter arranged for or
10 transported the same regulated substances or
11 pesticides that were identified in the release. That
12 is why the word "such" has been inserted in the
13 phrase, any such regulated substances or pesticides at
14 the end of (b)(4) and (b)(5). The word "such" ties
15 back to the -- ties the release back to the regulated
16 substances for which the arranger or transporter are
17 connected in the earlier portions of these two
18 subsections.
19 Now, we included -- we further went on and said,
20 the phrase such regulated substances or pesticides is
21 further modified by the word "any," so that we don't
22 end up with a fingerprinting requirement. For us a
23 fingerprinting requirement means that you are saying
24 that the hazardous substance is brought to the site or
25 the hazardous substance is in the release. We don't
0022
KEEFE REPORTING COMPANY
Belleville, Illinois
1 think that is -- that things should go that far as far
2 as the burden of proof, and are not required to
3 because of the contribution requirement, liability
4 being based on contribution.
5 The second area that we thought SRAC misconstrued
6 our proposal relative to the causation and
7 contribution requirements, is the contention that
8 (b)(3), (b)(4) and (b)(5) are status based. We don't
9 think they are status based. We think the liability
10 there is based on either causation or contribution to
11 the release. We think that what SRAC is proposing is
12 going to be a fingerprinting requirement, and we would
13 be required to fingerprint that a hazardous substance
14 that comes to the site is the hazardous substance that
15 is found in the release. We think that is an
16 impossible burden. If somebody -- our proposal allows
17 somebody to prove that was not the case, but it does
18 not mandate that the State prove that up front.
19 I think that pretty much summarizes the responses
20 to the issues raised by SRAC in their testimony.
21 There were some other issues that were raised by
22 questions at the hearing, and I want to go in and
23 provide a response on those, as well.
24 The first issue is the nature of private cost
25 recovery actions. And Chairman Manning requested a
0023
KEEFE REPORTING COMPANY
Belleville, Illinois
1 response from the State and from SRAC on the legal
2 question of whether there is private cost recovery
3 allowed under the Act. I think Chairman Manning was
4 right to be concerned that we had ignored this issue
5 in our proposal. I won't say that we ignored it so
6 much as we chose to focus on what we needed to assure
7 successful operation of our program. Our concern was
8 not so much whether there was -- those actions existed
9 or did not exist from the legal standpoint, but
10 whether they were going to create a ripple effect that
11 was going to interfere with the administration of our
12 cleanup program under the Act.
13 There is a couple of issues that we saw as being
14 ripple effects. First, we were concerned that with
15 these third party cases that there could be an orphan
16 share arising out of those. Now, it is not an issue
17 that we would be legally obligated to fund those
18 orphan shares, but it would be a situation where
19 potentially cleanup would not go forward unless the
20 State funding was made available. We are going to be
21 very reluctant to spend State dollars at sites where
22 we have not been closely involved in developing the
23 remediation and oversighting activities and so forth.
24 If there is a third party action and the case goes to
25 a final judgment before the Board and there is a split
0024
KEEFE REPORTING COMPANY
Belleville, Illinois
1 on the proportionate share, you know, what happens
2 then at that site after the completion of the case.
3 Another question is whether the judgment in those
4 third party cases would impose limitations on the
5 Agency filing its own cases at such sites. The
6 Attorney General's office has called our attention to
7 the case of -- it is called People ex rel. Hartigan v.
8 Progressive Land, and the citation for that is 576
9 Northeast Second, 214, at page 219, where the Court
10 really talked about the State being prevented from
11 proceeding with litigation where there was a very
12 close similarity of interest between the private party
13 and the State in the initial litigation.
14 The second big concern is that a third party case
15 could disrupt ongoing Agency activities. If we have
16 issued a 4(q) notice and we are trying to proceed to
17 get an entire cleanup at a site and a third party case
18 is filed, that could put our Agency activities at the
19 site in some kind of limbo pending the outcome of that
20 case. Now, we tried to recognize those principles of
21 concern for us when we were drafting Subpart C, and we
22 drafted those in a way that for us avoided them.
23 We said no Subpart C proceeding may be initiated
24 if an enforcement case is pending at a site. For
25 sites where there has been a 4(q) notice, the
0025
KEEFE REPORTING COMPANY
Belleville, Illinois
1 remediation plans must be settled before a Subpart C
2 proceeding may be initiated. So we took some steps to
3 try to diminish that concern for us. In addition, we
4 said that if somehow an orphan share developed out of
5 that Subpart C proceeding then the original people who
6 came into that would have to absorb that share.
7 If the Board is going to conclude that -- and,
8 again, that is a big if, I think, and it is really an
9 issue for the Board to decide. If the Board is going
10 to conclude that third party actions need to be
11 addressed, then in our view it should not do so in
12 this docket. The appropriate thing to do would be to
13 set up a separate Docket B to look at that issue. I
14 think there is at least three reasons for that.
15 First, I think that the concerns that we have
16 identified relative to how our program operates are
17 substantial. I don't think you can simply look at
18 Part 741 and just drop some words interspersed
19 somewhere without really impacting the entire nature
20 of our proposal.
21 Second, it would have a chance, then, to get the
22 issues raised in our proposal at least somewhat
23 settled before opening them up to new issues that
24 might be raised by thirty party complaints.
25 Third, the inclusion of a third party action in
0026
KEEFE REPORTING COMPANY
Belleville, Illinois
1 741 is an issue that may be of interest to a much
2 broader section of the public than the parties
3 interested in the procedures that we have outlined in
4 741. I am not sure how anybody who has not attended
5 these hearings would even be aware that this was an
6 issue in this docket. Just to give you a little
7 background on this, this was one of the most important
8 issues to the SRAC committee when we were first
9 discussing this issue last fall. When we reached the
10 conclusion -- they reached the same conclusion for
11 different reasons. But we mutually agreed that the
12 proposal that would be presented would not include
13 these third party actions.
14 I mean, to a lot of people who have a very deep
15 interest in the proposal that had initially been
16 prepared, they kind of dropped out of the
17 discussions. So I think it would be -- if the Board
18 is going to conclude they want to go forward on that
19 issue then I think it should really be reserved for
20 Docket B, so that everybody can look at it in a fairer
21 way that everybody gets their roles heard.
22 Well, you have heard enough from me. Thank you.
23 HEARING OFFICER ERVIN: Thank you.
24 MR. WIGHT: We have just a couple more items for
25 which we owe responses. There was a discussion, I
0027
KEEFE REPORTING COMPANY
Belleville, Illinois
1 believe, between Board Member McFawn and David Howe
2 concerning sanctions, and the question asked by Member
3 McFawn was what sorts of sanctions should be used
4 against a dilatory party, whether it should be
5 monetary sanctions or a fee schedule or something like
6 that.
7 Bill Ingersoll has a few remarks on that point.
8 Excuse me. That was in the transcript at
9 approximately pages 145 and 146.
10 MR. INGERSOLL: First of all, I would like to let
11 the Board know that Mr. Dunn asked me to advise that
12 he and Ms. Wallace and Mr. Morgan all had previous
13 commitments and they apologize for not being here, but
14 they are still involved.
15 At any rate, the sanctions that we contemplated
16 are the ones that frankly are currently in Section
17 101.280. I think there are a list of seven. I mean,
18 those are examples of sanctions that the Board would
19 intend to exercise. We don't agree with the attorney
20 fee suggestion that was within the question, but at
21 any rate, there is a list here and I know that changes
22 are proposed, and those will be worked through as they
23 are. But whatever the sanctions that are in the
24 Board's procedural rules are those that -- are the
25 ones that we contemplate.
0028
KEEFE REPORTING COMPANY
Belleville, Illinois
1 MR. WIGHT: And the fourth question for which we
2 owed a response, Member Hennessey had asked generally
3 at approximately page 175 of the transcript what was
4 the Agency's response to Ms. O'Sullivan's testimony
5 regarding inadequate funding sources and where the
6 money is going to come from for funding orphan shares
7 in the future. This discussion took place at
8 approximately pages 162 to 167 in the transcript.
9 John Sherrill is going to provide some follow-up
10 testimony on funding issues. In support of that we
11 have an additional exhibit which I will go ahead and
12 ask John to identify now and then he will provide
13 additional testimony, and then perhaps Gary King will
14 have some follow-up remarks to John's testimony, as
15 well.
16 John, I have handed you a document that has been
17 marked Exhibit 15 for identification. Would you
18 please take a look at the document. Do you recognize
19 the document?
20 MR. SHERRILL: Yes.
21 MR. WIGHT: Please tell us what it is.
22 MR. SHERRILL: It is a document that I prepared
23 earlier this week to discuss projections for remedial
24 work that will tie together some funding issues also.
25 MR. WIGHT: Okay. Thanks very much. At this time
0029
KEEFE REPORTING COMPANY
Belleville, Illinois
1 I move to admit this document as Exhibit Number 15.
2 HEARING OFFICER ERVIN: Any objections to the
3 admittance of this document?
4 MR. RIESER: May I see it, please? Thanks.
5 HEARING OFFICER ERVIN: Do you have some
6 additional copies?
7 MR. WIGHT: Yes, there are copies. I guess there
8 have already been copies placed on the back table.
9 Does anyone else need a copy?
10 HEARING OFFICER ERVIN: Are there any objections
11 to the admittance of this document?
12 Seeing none, then the document entitled, Hazardous
13 Waste Fund, Fiscal Years 1998 through 1999,
14 Projections for Remedial Work, will be admitted into
15 the record as Exhibit Number 15.
16 (Whereupon said document was duly marked for
17 purposes of identification as Hearing Exhibit 15
18 as of this date.)
19 MR. SHERRILL: What I would like to discuss -- the
20 question was regarding funding sources, and that was
21 on Gary King's prefiled written testimony on page 11
22 where he discusses cost recovery litigation which
23 changes from year-to-year. Our solid waste fund
24 transfer, that is 2 million dollars a year, the
25 hazardous waste disposal fees and penalties that we
0030
KEEFE REPORTING COMPANY
Belleville, Illinois
1 ensue. So Gary King had addressed that on page eleven
2 of his written testimony.
3 One of the Board Members last week at the last
4 hearing had asked about monies, and I wanted to
5 elaborate on that question and then also do some
6 follow-up to some comments that David Howe made.
7 In this table that you are looking at, the fiscal
8 year runs from -- will be ending here, the fiscal year
9 of 1998 will be ending June 30th, and the fiscal year
10 of 1999 will be started July 1. And there was a
11 question asked how much of the Hazardous Waste Fund
12 money is spent on contractors versus salaries and so
13 forth, salaries of State personnel.
14 What I have done here is I have listed these
15 sites. This first category, Hazardous Waste Funded
16 remedial investigations that are or will undergo
17 Illinois EPA contractual work, there is nine in fiscal
18 year 1998 and eleven in 1999, for a total of 20
19 distinct sites. That is monies that -- I want to make
20 clear that that is money paid directly to contractors
21 for investigative work at sites. So we are not
22 talking about money paid for salaries or any of the
23 other uses of the Hazardous Waste Fund.
24 Site cleanup activities, Hazardous Waste Funded
25 remedial cleanups that are or will undergo an Illinois
0031
KEEFE REPORTING COMPANY
Belleville, Illinois
1 EPA led contractual work, there are six in fiscal year
2 1998 and twelve in fiscal year 1999. As you can see,
3 for our fiscal year 1998 we plan on 3.250 million
4 dollars. For fiscal year 1999, 6.435 million
5 dollars. So these are monies paid to contractors for
6 cleanup activities.
7 This third category is sites under Illinois EPA
8 review to determine if remedial action is warranted.
9 In my original testimony when I went through the whole
10 process of how a site progresses to eventually
11 warranting a 4(q), in fiscal year 1998 there were five
12 sites that we are reviewing that are at the final
13 stages of being issued a 4(q). They have not incurred
14 contractual money, but they have, as you can see the
15 little asterisk, there has been considerable IEPA
16 personnel and laboratory expenses to get it to that
17 point. So when I responded last week where I said,
18 well, all of the money on this Hazardous Waste Fund is
19 going toward these type of sites, that is what I meant
20 by that. Then in fiscal year 1999 I plan on ten sites
21 being under a more intense review.
22 This fourth category, sites funded by a
23 responsible party, typically under a consent order, I
24 wanted to bring this into this chart to let you know
25 that there is 48 sites that we are working on this
0032
KEEFE REPORTING COMPANY
Belleville, Illinois
1 year that we did not have to hire a contractor, but
2 these were sites that were brought right to the
3 precipice of being issued a 4(q) and the responsible
4 party finally did cleanup.
5 So when you look at all of these sites, and there
6 is 46 next year, when you look at all of these sites,
7 there is 94 distinct sites, and these are currently
8 being managed by what is called the State Site Unit.
9 The State Site Unit is the unit within the Bureau of
10 Land that handles the type of sites that these
11 hearings have been discussing. So I would say these
12 94 sites are in the queue or they are on the radar
13 screen for an Illinois EPA directed Hazardous Waste
14 Funded remedial action. Or they, for several of these
15 in 1998, they are currently undergoing an Illinois EPA
16 directed remedial response, or some of them have
17 actually been finished in this fiscal year.
18 So I wanted to give you the two years to let you
19 see to kind of contrast one year to another year. For
20 example, like, in the second category, the site
21 cleanups, there is an overlap with seven of the sites
22 from the first category. In other words, some of the
23 sites that we are investigating this year, we are
24 going to be doing a cleanup this year, in the next
25 fiscal year. So I wanted to let you see these are the
0033
KEEFE REPORTING COMPANY
Belleville, Illinois
1 kind of magnitude of dollars that we are talking about
2 that are out-of-pocket dollars for spending on some of
3 these sites.
4 I wanted to bring that up first before I touched
5 on a couple of remarks that David Howe remarked at the
6 last hearing about newer contamination and older
7 contamination. The remark was made that we are
8 addressing primarily -- by David Howe -- sites with
9 older contamination. Well, I was going through our
10 records, and if you look at this chart, of these in
11 fiscal year 1998 and fiscal year 1999, I estimate that
12 ten sites are from newer contamination and ten sites
13 are from older contamination, in looking at the site
14 investigation and site cleanup categories. And so I
15 would take issue with saying that these are all old
16 contamination sites.
17 By newer contamination I would -- I am saying
18 activities or contaminations or releases, I just
19 picked a number let's say from 1985 to the present.
20 For example, two sites in this cleanup category are
21 sites that are what I would call newer open dumps, and
22 I am calling them open dumps, but actually they are
23 several acres from a party who would go around various
24 states and say he was an environmental contractor and
25 then he would clean up people's waste and take it to
0034
KEEFE REPORTING COMPANY
Belleville, Illinois
1 this piece of property that he had bought under a
2 false name, and this was a person who was doing this
3 in the 1990s. So, yes, what I am trying to say is,
4 yes, we do have new contamination type sites.
5 And then tying another remark that David Howe made
6 about there is no evil intent on these parties that
7 get tied into this, one of the very first sites that I
8 worked on when I was hired at the Agency was a post
9 1990 cleanup site, and three individuals were found
10 guilty by a court, and they were either handed a class
11 three or class four felony for illegally burying
12 hazardous waste on one of the individual's
13 mother-in-law's property. So I won't characterize it
14 as evil intent. I would say that on several sites
15 that we deal with a court has found these individuals
16 guilty of environmental crimes. So not only
17 violations of the Act, but environmental crimes.
18 Kind of to further elaborate on that, in my -- you
19 could take this as anecdotal information, but in my
20 meetings with the SRAC and the Illinois Environmental
21 Regulatory Group personnel and the businesses that
22 they represent, I would say that in whole that they do
23 respond to their environmental responsibilities. So
24 most of the sites on this chart that you are looking
25 at, where I have these 94 sites that I am talking
0035
KEEFE REPORTING COMPANY
Belleville, Illinois
1 about, most of the sites that I would think that the
2 State would be responding to are not business
3 interests represented by SRAC and IERG, because the
4 members that I have met in IERG, when I see the
5 businesses that they represent or the companies that
6 they represent, they do respond to their environmental
7 concerns.
8 Yes, there are a few, two or three sites in here
9 that they were a generator at, but I would say most of
10 these sites that I have on my list that we are going
11 to be working on are not sites totally represented by
12 IERG or SRAC. But if I were to name names, and I am
13 not, they are people you have never heard of, sites
14 you have never heard of.
15 Like this one individual, this guy who would say
16 that he was an environmental contractor, and there was
17 an open arrest warrant for him for two different
18 states for several years. When they finally caught up
19 with him, he served time in a correctional institute
20 for environmental crimes.
21 So I just wanted to make that point, that that
22 individual and those kinds of individuals are not at
23 these hearings. I mean, they are not going to show
24 up. I mean, with him having an outstanding arrest
25 warrant, he would be unwise to show up. So we may not
0036
KEEFE REPORTING COMPANY
Belleville, Illinois
1 be seeing the type of sites -- I wanted to bring that
2 up to say that these kinds of sites and the earlier
3 exhibit that I had on the type of sites, very many of
4 those sites do act environmentally irresponsible. So
5 that's all I wanted to say about that.
6 MR. INGERSOLL: May we have a moment?
7 (Mr. Ingersoll and Mr. Sherrill confer briefly.)
8 MR. SHERRILL: What Bill was asking me, on this
9 chart, this category of sites funded by a responsible
10 party typically under a consent order, not all of
11 those sites -- a few of those -- several of those
12 sites have 4(q)s, and that gets back to my earlier
13 definition. When we issue a 4(q) it is the trigger to
14 let parties know that we are going to spend State
15 funds. So a lot of these sites may be under let's
16 say -- are in the stages of a consent order or
17 actually under a consent order, and they do respond to
18 their -- the responsible party does perform the
19 remedial work. But it is not uncommon that we will
20 issue a consent order with someone and they still
21 don't do their work, and then we will issue a 4(q)
22 notice. That is just to further explain on that.
23 I didn't know if Gary wanted to respond.
24 CHAIRMAN MANNING: I just had a couple of
25 questions so that I understand this exhibit, Mr.
0037
KEEFE REPORTING COMPANY
Belleville, Illinois
1 Sherrill. You are talking about 94 sites, but as I
2 add up the column there are 69 for 1998 and 79 for
3 1999, I think. What you are saying with the 94 number
4 is that some of these sites appear in different
5 categories at different times --
6 MR. SHERRILL: Exactly.
7 CHAIRMAN MANNING: -- so there is 94 distinct
8 sites for FY '98 and FY '99?
9 MR. SHERRILL: Yes, as a cumulative. The reason I
10 say that is -- to kind of get back to my earlier
11 testimony, is that I don't suddenly just hear about a
12 site today and the next day we issue a 4(q). It is a
13 time element there of days, weeks, months, and years.
14 And so while we are currently -- I have 94 sites on my
15 radar screen that could be issued a 4(q). Because it
16 is kind of hard to just look at one slice in time at
17 one particular point because it is hard to say, well,
18 is this site actually at the stage where you need a
19 4(q). Well, it is a cumulative effort gaining
20 information.
21 CHAIRMAN MANNING: And your FY '99 numbers would
22 be projections, would they not?
23 MR. SHERRILL: They are projections, but our
24 fiscal year 1998 starts in less than a month, and I
25 would say that these are -- the first, second, and
0038
KEEFE REPORTING COMPANY
Belleville, Illinois
1 third category are pretty firm. We already know which
2 sites we plan on working on. Then this last category,
3 sites funded by a responsible party, more than half of
4 these sites are carryover from the previous year. So
5 it would kind of get more complicated if I tried to
6 break up the numbers anymore than that.
7 So I wanted to present this to show, again, we
8 know which sites we are going to be working on in 1998
9 and 1999 and we kind of know how much money we are
10 going to be expending out of the Hazardous Waste
11 Fund.
12 HEARING OFFICER ERVIN: Does this conclude the
13 Agency's testimony?
14 MR. WIGHT: Yes, it does.
15 HEARING OFFICER ERVIN: Thank you. Then we will
16 open it up for questions for the Agency.
17 Are there any questions for the Agency at this
18 time? Mr. Rieser.
19 MR. RIESER: Yes, I have some questions on Exhibit
20 15, as long as we are here.
21 Mr. Sherrill, in your testimony on May 27th,
22 specifically at page 202 of the transcript, you
23 testified that the 4.216 million dollars was the
24 Bureau of Land remedial related expenses from the
25 Hazardous Waste Fund. For fiscal year 1998 was the
0039
KEEFE REPORTING COMPANY
Belleville, Illinois
1 same number -- was approximately the same number
2 allocated to Bureau of Land remedial related
3 expenses?
4 MR. SHERRILL: I didn't bring that figure with me,
5 but it would be much higher because, as you can see in
6 fiscal year 1998, we are allocating -- if you add
7 these, the $1,115,138 and the 3.2 million dollars,
8 that is money that we are actually issuing to
9 contractors.
10 MR. RIESER: Right.
11 MR. SHERRILL: So whereas I testified before that
12 I would also consider under the term remedial is
13 Agency payrolls for project managers and our Agency
14 laboratory. So I would say we are spending more in
15 1998.
16 MR. RIESER: I hate to send you back to the books
17 especially since this is the last hearing. But could
18 you say what percentage for fiscal year 1998 of funds
19 allocated to the Bureau of Land remedial related
20 expenses what percentage this 4.3 million dollars in
21 Exhibit 15 represents?
22 MR. SHERRILL: That I don't know, but this --
23 MR. GARY KING: I think another way to look at
24 that, the figure that we gave at the last hearing was
25 looking at FY '97. We gave a figure of approximately
0040
KEEFE REPORTING COMPANY
Belleville, Illinois
1 4.2 million dollars that went to the Bureau of Land
2 for remedial activities, and then I believe it was .8
3 million went to the Bureau of Water for groundwater
4 protection activities. In FY '98 the Bureau of Water,
5 groundwater protection activities would have remained
6 approximately the same at about .8 million, whereas
7 the Bureau of Land allocation will have gone up
8 significantly out of that total. So it will be -- it
9 would be -- if that was about 84 percent in FY '97
10 that was going to the Bureau of Land it would be
11 considerably higher than that for FY '98.
12 MR. RIESER: And considerably higher still for FY
13 '99?
14 MR. GARY KING: Correct, yes.
15 MR. RIESER: What accounts for these increases in
16 funding for these activities?
17 MR. SHERRILL: What would account for it is when
18 we have meetings on deciding what sites --
19 MR. WIGHT: John, hold on a second.
20 MR. GARY KING: Let me enter before John gets too
21 deeply involved in that. If you recall the 2 million
22 dollars that was transferred from the Solid Waste Fund
23 to the Hazardous Waste Fund, that began in -- the
24 first initial quarterly transfer began in July of
25 1996, and so there has been -- that money did not get
0041
KEEFE REPORTING COMPANY
Belleville, Illinois
1 spent immediately in 1997, so there has been an
2 accumulation of some of that money from that first
3 year or so. So that's allowed for a rise in that.
4 And also we were -- we have had some significant cost
5 recoveries in the last couple of years that has
6 allowed us to provide this money.
7 MR. RIESER: Those were the cost recoveries that
8 were in your original table in your testimony?
9 MR. GARY KING: That's correct.
10 MR. RIESER: Okay. Thank you. And just to
11 clarify and to follow-up on Chairman Manning's
12 questions, what you are saying is that there are sites
13 listed for fiscal year 1999 that are also listed for
14 fiscal year 1998. So of the eleven sites listed for
15 investigation under 1999, some of these also had
16 investigations funded for fiscal year 1998; is that
17 correct?
18 MR. SHERRILL: Actually, the site investigation
19 row, that site investigation, those are -- the nine
20 and eleven are two -- those are 20 distinct sites.
21 MR. RIESER: Okay.
22 MR. SHERRILL: The six is a distinct number in the
23 second for site cleanups, but then this number of
24 sites where it says twelve, seven of those are
25 overlapped from the site investigations, some from
0042
KEEFE REPORTING COMPANY
Belleville, Illinois
1 fiscal year 1998 and some that -- that is what is
2 maybe kind of confusing. Some of the investigation
3 and cleanup we will do in the same fiscal year and
4 some we won't.
5 MR. RIESER: Okay. Thanks. Turning to Gary
6 King's testimony, looking at the SRAC proposal, what
7 is the specific language that you contend requires the
8 State to fingerprint the waste?
9 MR. WIGHT: Bear with us just a few moments.
10 MR. RIESER: Sure.
11 (Mr. Wight and Mr. King confer briefly.)
12 MR. GARY KING: What we were reflecting on is the
13 draft of the language in 741.210(a) under the Exhibit
14 D to Mr. Rieser's testimony, and how that we saw that
15 being interpreted in response to the questions that we
16 raised at the last hearing.
17 If you look at 210(a)(1) and (2), what we saw that
18 as doing is creating a two part requirement relative
19 to establishing liability. First you have to meet the
20 causation requirements under 22.2(f) and then once you
21 have established that, then you have to show that
22 those -- there was a specific connection between those
23 materials and the release. And that's what we were
24 reflecting on, and that's what appeared to be also the
25 responses to the questions at the last hearing.
0043
KEEFE REPORTING COMPANY
Belleville, Illinois
1 MR. RIESER: Okay. It is your contention that
2 your proposal in 210(b)(4) and (5), where the State
3 has to demonstrate that the party arranged for the
4 disposal at a site where there was a release of such
5 regulated substance does not require fingerprinting?
6 MR. GARY KING: Right.
7 MR. RIESER: So it is the difference between such
8 regulated substance in yours and that regulated --
9 that substance in the SRAC proposal? Or in or under
10 the site that was identified and addressed by the
11 remedial action taken pursuant to the --
12 MR. GARY KING: Well, we didn't say any such
13 regulated substances.
14 MR. RIESER: So let me make sure I understand.
15 When you say any such regulated substance, for a
16 person to be liable as a, quote, generator under
17 (b)(4), if the site is a site -- if the contaminant of
18 concern at the site is benzene and that person takes
19 Xylene to that site, is that person a liable person
20 under 210(b)(4)?
21 MR. GARY KING: And benzene is the release?
22 MR. RIESER: Yes, benzene is the release.
23 (Mr. Wight and Mr. King confer briefly.)
24 MR. GARY KING: I just want to restate it for the
25 record so we don't have a yes or a no, and no one
0044
KEEFE REPORTING COMPANY
Belleville, Illinois
1 remembers what the yes or no was answering.
2 If you had a situation where the release was
3 benzene, and let's use a totally different class of
4 compound to make it real clear, and the PRP sent lead
5 to the site, that would not -- that would be not
6 enough to show liability.
7 MR. RIESER: Okay. Now, taking that same
8 hypothetical, if there were two separate releases on
9 the site -- well, let me put it this way. If there
10 was a separate -- if the facts of the site
11 demonstrated that there was a separate operable unit
12 and there was one set of tanks on the north end of the
13 site and another set of drums on the south end of the
14 site, what the person did was send the material, the
15 benzene to the north end of the site, but the benzene
16 release that you are concerned about was from the
17 drums on the south end of the site. Would that person
18 still be a liable party under (b)(4)?
19 (Mr. Wight and Mr. King confer briefly.)
20 MR. GARY KING: Okay. I will restate the example
21 once again just for clarity on the issue. If you had
22 a site that had two distinct operable units, and there
23 were releases from both units, but the releases
24 themselves were -- let me go back. I am not sure. I
25 am going to give you the wrong example. That is not
0045
KEEFE REPORTING COMPANY
Belleville, Illinois
1 going to be the right example. Let me go back.
2 If you had a site that had two operable units,
3 okay, and let's say a north unit and a south unit, and
4 there is a release discovered from the south unit, but
5 there is no release from the north unit, and the
6 responsible party sent benzene to the north unit, and
7 the release at the south unit was benzene, the
8 responsible party would not be liable as to that
9 benzene that was sent to the north unit relative to
10 the release from the south unit.
11 MR. RIESER: Because it was not involved in the
12 release that was the subject of the work that you were
13 doing at the site?
14 MR. GARY KING: Right, that is correct.
15 MR. RIESER: Thank you.
16 HEARING OFFICER ERVIN: Mr. Rieser, did you have a
17 follow-up question? I think Mr. Rosemarin had one.
18 MR. ROSEMARIN: I was going to ask a question with
19 Mr. Rieser's permission. If you want to continue --
20 MR. RIESER: That is okay. I was going to go to a
21 different area.
22 MR. ROSEMARIN: I would like to pursue that --
23 HEARING OFFICER ERVIN: Could you state your name
24 for the record.
25 MR. ROSEMARIN: I am sorry. My name is Carey S.
0046
KEEFE REPORTING COMPANY
Belleville, Illinois
1 Rosemarin. I am an attorney with Jenner & Block,
2 representing Commonwealth Edison.
3 Mr. King, in taking that example one step further,
4 what would be the result if the PRP at issue was
5 unable to, in your example, carry his burden of
6 showing that that benzene was not his?
7 (Mr. Wight and the IEPA panel of witnesses confer
8 briefly.)
9 MR. GARY KING: Based on the information that you
10 have provided in the hypothetical that responsible
11 party could be liable.
12 MR. ROSEMARIN: Thank you.
13 MR. RIESER: I am sorry. Which is -- is that an
14 answer to Mr. Rosemarin's question where there was not
15 sufficient information to document whether -- that
16 party did not have sufficient information to document
17 whether it sent benzene to one unit or the other
18 unit?
19 MR. GARY KING: Yes, that's correct.
20 MR. RIESER: Okay, just so I understand the
21 question. Thank you.
22 HEARING OFFICER ERVIN: Mr. Rosemarin, did you
23 have any other questions?
24 MR. ROSEMARIN: No, I yield to Mr. Rieser.
25 BOARD MEMBER HENNESSEY: I have a question.
0047
KEEFE REPORTING COMPANY
Belleville, Illinois
1 HEARING OFFICER ERVIN: Sure.
2 BOARD MEMBER HENNESSEY: Mr. King, whose burden
3 would it be in this situation to show that -- I will
4 start over.
5 You are assuming that it would be the -- once you
6 had shown that the generator had sent benzene to the
7 site, the burden would shift under the Agency's
8 proposal to the generator to show that the benzene
9 released was from the south operable unit and not the
10 north operable unit?
11 MR. GARY KING: I think in effect that is what
12 would happen, because what the -- again, what was
13 being emphasized to me as we were talking about this,
14 you know, there is lot of missing information in these
15 hypotheticals. The information that we would have in
16 approaching the site was that there had been material
17 sent to the site. There is some record of the
18 hazardous substance benzene having arrived at the
19 site.
20 Now, we may not know directly where it went, but
21 we have evidence that that regulated substance is in
22 the release that this person sent to that site. So
23 the presumption here then would be that that is part
24 of the release and was a contribution to the release.
25 The respondent then certainly would be fully entitled
0048
KEEFE REPORTING COMPANY
Belleville, Illinois
1 to show that, no, that benzene went to a different
2 part of the site, that they can -- that they establish
3 that it did go to another part of the site, that it
4 does not have a nexus relative to the release. Then
5 there would be a disconnect, that there would be a
6 severability issue there at that point. You have
7 proven a disconnect between what happened and what
8 material you sent to the site where the release
9 occurred.
10 (Mr. Wight and Mr. King confer briefly.)
11 MR. GARY KING: It would also -- it also could be
12 the case, although I would not see this as generally
13 happening that often, that the records might be that
14 clear as to where the material went to at a site in
15 which case, you know, that would be information in our
16 records and we would make a decision based on that
17 information. And generally if we can exclude somebody
18 as far as being a part of the process we will.
19 BOARD MEMBER HENNESSEY: But your burden is
20 basically carried, though, at least under your
21 proposal, if you can prove that somebody sent benzene
22 to the site, and then if the PRP wants to argue and
23 dig up the witnesses to show that it only went to the
24 north unit rather that the south unit, that is their
25 problem or their burden?
0049
KEEFE REPORTING COMPANY
Belleville, Illinois
1 MR. GARY KING: I think that's a fair
2 interpretation.
3 BOARD MEMBER HENNESSEY: Okay. Thank you.
4 HEARING OFFICER ERVIN: Are there any additional
5 questions for the Agency? Mr. Rieser.
6 MR. RIESER: Mr. King, I want to go back to
7 something else. You identified as a difference
8 between -- there are many differences you identified
9 between the Agency's position and SRAC's position.
10 Was the incentive for the -- that under the Agency's
11 proposal PRPs had larger incentives to bring forward
12 information about the site; is that correct?
13 MR. GARY KING: That's correct.
14 MR. RIESER: Am I correct that the incentive for
15 PRPs to bring that information forward is contained in
16 741.210(d)(3)?
17 MR. GARY KING: That is correct that there are
18 incentives contained there. And I think it is also
19 contained in the nature of the information order
20 capability as well.
21 MR. RIESER: The information order is a matter of
22 having the Board order people to present information,
23 but the incentives in the process for PRPs to bring it
24 forward is contained in 210(d)(3)?
25 MR. GARY KING: Right, coupling that with the
0050
KEEFE REPORTING COMPANY
Belleville, Illinois
1 burden shifting as well. That is part of that issue.
2 MR. RIESER: Right. So the incentive for PRPs to
3 bring information forward is the possibility that they
4 don't -- that if they don't, they may get stuck with a
5 larger share than their own records would document,
6 assuming that they had any?
7 MR. GARY KING: Right.
8 MR. RIESER: Okay. So the threat is that they get
9 a larger share than whatever the proportion of the
10 responsibility might be at a site?
11 MR. GARY KING: I don't think that is fair to
12 characterize it that way. Just because their evidence
13 shows one thing, that does not mean that the share
14 that they get is not a proportionate share. It still
15 is a proportionate share. It is proportionate share
16 based on the facts as introduced and understood in the
17 record of the case.
18 MR. RIESER: Is it your position that a PRP
19 looking at this program, this regulation, if the Board
20 should adopt the SRAC proposal with respect to burden
21 of proof and causation, that PRP would not have the
22 same information to bring forward, whatever
23 information they had with respect to the site?
24 MR. GARY KING: I think certainly the incentive is
25 it not as great. I think that is what you testified
0051
KEEFE REPORTING COMPANY
Belleville, Illinois
1 to. I think in response to the questions from the
2 Board that's what I understood you saying.
3 MR. RIESER: All right. I understand your
4 answer. I disagree with it, but I understand it.
5 Thank you.
6 Looking at the Errata 1, Exhibit 14, with respect
7 to the applicability issue, the language you propose
8 is different in some respects from the language that
9 SRAC proposed. My question is what the -- whether
10 that was intentional or whether you thought it was
11 more editorially clear or what was the purpose of
12 that.
13 MR. GARY KING: We conceptually agreed with what
14 you had. We thought our changes were editorially
15 better. We thought that your proposal had some
16 wording in it that to us seemed to be redundant, and
17 there was some issues as to whether this should be
18 placed in a separate subsection or should be grouped
19 with some of the other applicability provisions. So
20 we put those together. I think that the changes are
21 basically editorial in nature.
22 MR. RIESER: Okay. Under your proposal, this
23 would not apply to the owner or operator of a TSD
24 site, a permitted TSD site, whether or not the Agency
25 was bringing an action against that owner for
0052
KEEFE REPORTING COMPANY
Belleville, Illinois
1 violation of TSD regulations; is that accurate?
2 MR. GARY KING: Right, that owner or operator
3 could not raise proportionate share as a basis for not
4 complying with RCRA requirements.
5 MR. RIESER: Well, that's the question. To say
6 one of the differences I see, and this is why I asked
7 the question, is that in the proposal that we had we
8 talk specifically about actions in which those
9 violations are alleged and the requirement that this
10 be an action which those violations are alleged is not
11 in your -- isn't in your proposal. I am wondering if
12 that was a substantive difference or an issue on which
13 there just wasn't sufficient clarity.
14 MR. GARY KING: Well, as we look at that State
15 alleges language, and probably that was our original
16 language back in the fall of 1997, we looked at that
17 and concluded that it was just setting up a condition
18 for this to operate that didn't -- that was more
19 confusing than clarifying. And that to -- it made
20 more sense to simply say that this part does not
21 apply.
22 MR. RIESER: Is it your position that if the State
23 brought an action to recover its costs against an
24 owner of a TSD facility, that proportionate share
25 would apply even if there were no allegations or proof
0053
KEEFE REPORTING COMPANY
Belleville, Illinois
1 that that owner had violated RCRA regulations with
2 respect to that facility?
3 (Mr. Wight and the IEPA panel of witnesses confer
4 briefly.)
5 MR. GARY KING: I am not understanding the
6 hypothetical.
7 MS. ROSEN: Let me try to rephrase the issue in a
8 different light. This may just be a
9 miscommunication.
10 Is it your position that these proportionate share
11 procedures would not apply to any instance where the
12 State is bringing an action against an owner of a
13 permitted TSD facility even when the costs that you
14 were seeking to recover were spent in regard to a
15 release from something other than what was actually
16 required to be permitted as the TSD? That is not
17 making it any clearer.
18 MR. INGERSOLL: I think you are talking about a
19 facility that has a RCRA permit that may be
20 remediating an historical release -- Caterpillar,
21 okay. They have RCRA units, they have historical
22 contamination. Is that the issue?
23 MS. ROSEN: That's one of the -- that could be the
24 issue.
25 MR. INGERSOLL: Okay. So they have a release that
0054
KEEFE REPORTING COMPANY
Belleville, Illinois
1 didn't occur from the RCRA units?
2 MS. ROSEN: Correct.
3 MR. INGERSOLL: Is that the hypothetical that you
4 want to --
5 MS. ROSEN: Let's focus on that, because --
6 MR. INGERSOLL: That's one we know.
7 (Mr. Wight and the IEPA panel of witnesses confer
8 briefly.)
9 MR. GARY KING: The way this is drafted, the owner
10 or operator would not be able to assert proportionate
11 share in that situation.
12 MR. RIESER: So this is solely an owner or
13 operator of a TSD facility that never gets to take
14 advantage of proportionate share even if the claims
15 being alleged have nothing to do with violations of
16 RCRA regulations?
17 MR. GARY KING: That's correct.
18 MR. RIESER: And the same would be true of an
19 owner or operator of an Underground Storage Tank
20 System?
21 MR. GARY KING: That's correct.
22 MR. RIESER: Thank you.
23 CHAIRMAN MANNING: If I might ask Mr. Rieser, that
24 is different than your proposal?
25 MR. RIESER: Yes, I would interpret that as being
0055
KEEFE REPORTING COMPANY
Belleville, Illinois
1 different than my proposal which was designed to say
2 when the State is bringing an action under -- alleging
3 that there are violations of RCRA regulations for
4 which that owner or operator is responsible under
5 those regulations, that person can't use proportionate
6 share to get out from those regulatory
7 responsibilities.
8 But, for example, I don't think there is any --
9 well, I know there is no right of -- well, there is no
10 right of cost recovery under RCRA or under the UST.
11 So our proposal was definitely focused on the issue of
12 when -- on the specific issue that the State has
13 raised, which is when they bring a RCRA action they
14 have to be able to enforce RCRA regulations against
15 those people responsible for it, but --
16 CHAIRMAN MANNING: And you don't believe your
17 proposal cuts into that?
18 MR. RIESER: No, no. I think that is the
19 importance of why it is written the way it is in terms
20 of actions alleging violations of RCRA or the
21 Underground Storage Tank regulations for exactly that
22 purpose. It is as narrowly focused as it could be, in
23 our opinion, and as it should be in order to
24 accomplish that end. I am not -- although I
25 appreciate what the Agency has done, my questions were
0056
KEEFE REPORTING COMPANY
Belleville, Illinois
1 designed to find out whether that change from that
2 narrow focus was intentional or a miscommunication on
3 all of our parts.
4 HEARING OFFICER ERVIN: While we are on that
5 session on the Errata Sheet I have a question. In
6 741.105 --
7 MR. WIGHT: Excuse me.
8 HEARING OFFICER ERVIN: Oh, I am sorry.
9 MR. WIGHT: Could we confer just a moment? We may
10 have some follow-up before we leave this subject.
11 HEARING OFFICER ERVIN: Certainly. I am sorry.
12 (Mr. Wight and the IEPA panel of witnesses confer
13 briefly.)
14 HEARING OFFICER ERVIN: Okay. Mr. Wight.
15 MR. WIGHT: We have nothing to add. We may add
16 some material in the comments.
17 HEARING OFFICER ERVIN: Okay. Thank you. I had a
18 question on Section 741.105(4)(b) on your Errata
19 Sheet. It is my understanding that the Agency
20 believes that Section 58.9 is limited by Section 58.1;
21 is that correct?
22 MR. GARY KING: That's correct.
23 HEARING OFFICER ERVIN: Okay. Section 58.1 only
24 talks about sites that are subject to closure and not
25 corrective action, but your (4)(b) talks about sites
0057
KEEFE REPORTING COMPANY
Belleville, Illinois
1 that are subject to closure or corrective action. How
2 do you reconcile those two?
3 (Mr. Wight and Mr. King confer briefly.)
4 MR. GARY KING: We are trying to recall whether
5 that is the phrase that we used in Part 740, which
6 right off the tops of our human heads we don't recall
7 if that is.
8 MR. WIGHT: Immediately where that came from was
9 from Mr. Rieser's proposal. That was the language
10 that -- we were working his language into our proposal
11 in a different fashion and we lifted that language
12 from Mr. Rieser's proposal.
13 HEARING OFFICER ERVIN: So it is the Agency's
14 position that it does not apply to sites that are
15 subject to corrective action?
16 MR. GARY KING: No, I think the converse. I think
17 it is just -- we took it from their language, and I
18 think they pulled it from something else, and now we
19 are just trying to remember where it comes from
20 exactly. But if you look at the 58.1, a lot of times
21 what happens in legislative language is that a general
22 term is used like closure, that is not intended to be
23 used in the strict regulatory sense.
24 You can have a site that is subject to closure or
25 corrective action requirements for purposes of RCRA
0058
KEEFE REPORTING COMPANY
Belleville, Illinois
1 although there is -- it has a meaning. There is a
2 difference in meaning, but for purposes of what we are
3 talking about here it does not seem like it is a
4 difference with a lot of significance.
5 HEARING OFFICER ERVIN: So it would be your
6 position that closure or corrective action means
7 basically the same thing?
8 MR. GARY KING: Yes, for purposes of Section
9 58.1.
10 HEARING OFFICER ERVIN: I think we have a couple
11 more questions on the applicability.
12 CHAIRMAN MANNING: Mr. King, in our last meeting
13 Member McFawn asked Mr. Rieser a series of questions
14 related to 58.9 and its potential applicability to
15 allegations of violations of Section 9 or Section 12
16 of the Act. I don't know if you recall that, but it
17 was in terms of air pollution violations or water
18 pollution violations. And I believe Mr. Rieser's
19 response, and I might ask him these questions as well
20 to follow-up later, was that indeed I believe 58.9
21 could be utilized in proportionate share. In other
22 words, could be utilized in the context of an air
23 pollution violation or a water pollution violation.
24 Does the State agree with that response? I guess
25 then I would ask as well in terms of the nature of
0059
KEEFE REPORTING COMPANY
Belleville, Illinois
1 58.9 being the question of remediation, are we only
2 talking about the connection with Section 9 and
3 Section 12 if we are actually talking a lot of
4 remediations conducted pursuant to Section 9 and
5 Section 12, which is hard for me to envision,
6 actually. The reason I think probably this comes
7 under the land division and your auspices more
8 generally is that remediation is more obvious in the
9 land area than it is in the other two.
10 I guess what I wanted to do is get the Agency to
11 speak on the record about that issue, if you would.
12 MR. GARY KING: The connection is to the
13 remediation aspect, and it has to be distinguished
14 from a situation where there is an attempt to prove
15 noncompliance with a specific requirement that grows
16 out of either the Clean Air Provisions or the Clean
17 Water Provisions of the Environmental Protection Act
18 in which case the Proportional Share Liability concept
19 would not apply.
20 Now, there would be a potential -- if you think
21 back, and this kind of goes back to kind of the TACO
22 concept, one of the pathways of risk is inhalation of
23 contaminants, and contaminants are inhaled via an air
24 situation. So there would be a potential for us as
25 part of a remediation of a site to allege that Section
0060
KEEFE REPORTING COMPANY
Belleville, Illinois
1 9(a) was being violated because the contaminants would
2 be getting in the air and being inhaled at a level
3 that was not healthful for humans.
4 If we then went ahead and did a remediation to
5 address that inhalation risk, then I think this --
6 these provisions could apply. That would be much
7 different from correcting in a pollution control
8 facility so that emission standards are met, in which
9 case it would not apply. It would not be related to
10 the remediation at that point.
11 CHAIRMAN MANNING: Thank you. Another question on
12 that, is it the State's position, and I think I heard
13 this more from the Attorney General's office than I
14 did the EPA, but in terms of the applicability of
15 Section 58.9, is it the State's position that it is
16 only applicable to actions brought under 22.2(f) and,
17 if so, doesn't 22.2(f) pretty specifically limit
18 itself to questions of cost recovery and not questions
19 of remediation? And could you, if you would, expand
20 on the State's position regarding the connection
21 between 22.2(f) and 58.9?
22 (Mr. Wight and the IEPA panel of witnesses confer
23 briefly.)
24 MR. GARY KING: I am not sure if this is going to
25 directly respond to the question, but then it wouldn't
0061
KEEFE REPORTING COMPANY
Belleville, Illinois
1 be the first time I have not responded directly. I
2 will try to give the best answer I can.
3 In a complaint -- when the Attorney General is
4 filing a complaint seeking remediation of a site,
5 okay, normally what is going to be alleged is a
6 combination of violations of the Act. There is --
7 typically there is going to be a 12(a) count, a 12(d)
8 count, potentially a 21(a) count, and in some
9 instances this would be much more rare, there would be
10 a 9(a) count. And then if we have expended any money
11 doing preliminary investigative work then that would
12 include the 22.2(f) count. And I think all of that
13 would get rolled into a Proportionate Share Liability
14 proceeding. That's the way I would see it.
15 HEARING OFFICER ERVIN: Mr. King, did you have a
16 question?
17 MR. CHARLES KING: Yes. To expand on that
18 question of Chairman Manning's, in Exhibit B to Mr.
19 Rieser's testimony, their proposed language for
20 Section 741.210, Part (a)(2) of that, it says the
21 State can only recover its costs from or with regard
22 to the performance of remediation by any person that
23 demonstrates the following, one, that that person is
24 liable pursuant to Section 22.2(f) of the Act.
25 So then it would be the Agency's position that --
0062
KEEFE REPORTING COMPANY
Belleville, Illinois
1 I know that you didn't bring it into yours through the
2 Errata Sheet. But do you think that is an
3 inappropriate condition to put on liability?
4 (Mr. Wight and Mr. King confer briefly.)
5 MR. GARY KING: Yes, we would disagree that it
6 should be laid out that way. We have laid things out
7 in our draft of 22.2 -- excuse me -- of 741.210 in
8 terms of five categories of liable parties.
9 MR. CHARLES KING: All right. On the general
10 applicability, the way you have it laid out is in
11 terms of seeking to require or seeking to recover. Is
12 that different from an action that is brought seeking
13 an order to cease and desist from violating, for
14 example, Section 12(a)?
15 Or maybe to explain that a little more, under
16 Section 12(a) or other sections with general
17 prohibitions on pollution, no person shall cause or
18 allow, for instance, water pollution. So is that
19 obligation or that prohibition impacted by the
20 provisions that say that no -- that you can't bring an
21 action to seek to require someone to remediate
22 something beyond their proportionate share for it?
23 MR. GARY KING: I think that is one of those
24 issues where the parties and the Board will have to
25 look at what the specifics of the complaint and the
0063
KEEFE REPORTING COMPANY
Belleville, Illinois
1 fact situation are. If it is a case where somebody is
2 alleging a violation of a surface water quality
3 standard from a discharge from some kind of a
4 wastewater treatment plant, and somebody is looking to
5 make sure that that wastewater treatment plant is
6 meeting the property standard so that there is not a
7 surface water violation, then that is not a removal or
8 a remedial action, I don't think, within the context
9 of the way it is defined in Title 17. And I don't --
10 this is more general language but, you know, at some
11 point it is difficult to try to make things real
12 specific without causing other difficulties, I guess.
13 CHAIRMAN MANNING: If I might follow-up on the
14 question that I asked, because I think this is kind of
15 getting to the same issue. If the State has filed a
16 complaint against two or more parties and it alleges a
17 9(a) violation, a 12(a) and (d) and a 21(a) violation,
18 but does not allege a 22.2(f) -- in your example back
19 to me you were alleging part of it as a 22.2(f)
20 because I believe some money had been expended.
21 But let's say that with all of the violations
22 alleged that the relief being sought by the State was
23 a remediation and not just penalties, or maybe not
24 penalties at all but maybe the relief being sought in
25 the enforcement action was a remediation of the site.
0064
KEEFE REPORTING COMPANY
Belleville, Illinois
1 It is the State's position, then, that even though you
2 have not expended any money yet the Proportionate
3 Share Liability as set out in 58.9 would be applicable
4 in that matter?
5 MR. GARY KING: Yes.
6 CHAIRMAN MANNING: Okay.
7 HEARING OFFICER ERVIN: Chuck King.
8 MR. CHARLES KING: Then if I could just expand a
9 little bit on the other issue that I was asking about,
10 if a person -- say you have a situation where there is
11 a piece of property and there is something leaking
12 into the groundwater into a stream off of it, such
13 that the property owner could arguably be liable for
14 allowing water pollution. Would Proportionate Share
15 Liability be a defense or could that be interposed to
16 obviate that party's obligation to not allow water
17 pollution, if they can come in and say, well, we were
18 not the ones who proximately caused it or we are not
19 completely responsible for it?
20 MR. INGERSOLL: I think that they could
21 appropriately be required to stop the continuation of
22 the release. Whether or not there is enough evidence
23 to warrant them being required to do the entire
24 cleanup, that probably is going to need a lot more
25 facts.
0065
KEEFE REPORTING COMPANY
Belleville, Illinois
1 MR. CHARLES KING: Okay. Thank you. Then also on
2 the issue of applicability, Section (c)(6) of your
3 revised revision 741.105, which I understand was taken
4 from Mr. Rieser's suggested language, limits --
5 appears to me to limit the other conditions to places
6 where Federal law conflicts with the application of
7 the proportionate liability proceeding. However,
8 under Subsection (4) above that, in Paragraph (4)
9 above that, it appears that a person could be excluded
10 based on State permitting requirements. Are those --
11 do you see that that might present an inconsistency?
12 How are you envisioning paragraph (6) there
13 operating?
14 MR. GARY KING: Our intent with (c)(6) was to
15 provide a -- I hate to use this term because I used it
16 earlier in a different context, but I will use it
17 again anyway. That is to provide kind of a safety
18 valve provision. We included something similar to
19 that in our Part 740 rules, so that if we get in
20 situations where the Federal government decides to
21 approve something as proceeding in a different fashion
22 than what they currently allow that there will be a
23 mechanism to deal with that and to allow that to
24 occur.
25 MR. CHARLES KING: So under paragraph (4) above
0066
KEEFE REPORTING COMPANY
Belleville, Illinois
1 someone who is, for instance, subject to closure and
2 corrective action requirements under state laws or has
3 a permit issued under state laws, and the Federal laws
4 are silent on it, would still nevertheless be excluded
5 notwithstanding paragraph (6)?
6 MR. GARY KING: That's right.
7 MR. CHARLES KING: Okay. Finally, one other thing
8 on this subject. I believe you had mentioned earlier
9 that five categories of parties. Is it your position
10 that the people listed in 241.210(b)(2) through (5)
11 are as a matter of law -- that people in those
12 categories as a matter of law would have proximately
13 caused or threatened releases or substantial threats?
14 (Mr. Wight and Mr. King confer briefly.)
15 MR. GARY KING: As we see it, there is two
16 distinct concepts here. There is the nature of cause
17 and proximate cause, and then there is also the
18 context of contribution where there has been a
19 proximate cause. So, in essence, if you have -- if
20 somebody has proximately caused a release, they are
21 liable. But if somebody has also contributed to the
22 release they are also liable. So I guess I was -- I
23 would be reluctant to say that (b)(2) through (5)
24 means that there is a legal finding of proximate
25 cause, because the statute talks in terms of both
0067
KEEFE REPORTING COMPANY
Belleville, Illinois
1 causation and contribution.
2 MR. CHARLES KING: Where are you getting the
3 contribution part of that?
4 MR. GARY KING: If you look in 58.9(a)(1) the
5 phrase -- the word contributed is used in
6 58.9(a)(2)(a). It is used in 58.9(a)(2)(b). It is
7 used in 58.9(c). It is used in 58.9(d).
8 MR. CHARLES KING: You say it is used in (a)(1)?
9 I am looking at (a)(1).
10 MR. GARY KING: (a)(2).
11 HEARING OFFICER ERVIN: Chuck, did you have a
12 follow-up question?
13 MR. CHARLES KING: No, that is it for now.
14 BOARD MEMBER HENNESSEY: I had a question on
15 incentives, the incentives of PRPs under the various
16 proposals to identify other PRPs.
17 One of the things you have said, Mr. King, is that
18 under Mr. Rieser's proposal you don't think that
PRPs
19 have an incentive to identify PRPs other than those
20 that the State has identified in the suit? Do I read
21 you correctly on that?
22 MR. GARY KING: Right, that's correct.
23 BOARD MEMBER HENNESSEY: I am wondering if some of
24 the principles of due process and res judicata do give
25 PRPs an incentive to try to identify all of the PRPs
0068
KEEFE REPORTING COMPANY
Belleville, Illinois
1 so that they litigate these things only once. I am
2 thinking in particular of the general principle, which
3 is a complicated one, but generally a judgment is not
4 binding on a person who was not a party to the
5 action.
6 So if -- assume that you have three parties at the
7 site, A, B, and C. The State only knows about A and
8 B. The State sues A and B and obtains a judgment that
9 each of them are 20 percent liable. That leaves a 60
10 percent share, an orphan share at that time. The
11 State later learns that C is out there. Then the
12 State sues C. C is not going to be bound by that
13 judgment against A and B that they were each 20
14 percent liable. So C could turn around and bring a
15 contribution action against A and B for whatever its
16 share happened to be.
17 Doesn't that give parties A and B the incentive to
18 try to bring all of the parties to the table once they
19 have been brought into an action?
20 MR. GARY KING: You know, I think that's clearly
21 something that occurs on a Federal level. There is
22 that kind of incentive to do that. I guess I am not
23 quite sure how those contribution actions would factor
24 in relative to a Board proceeding. I guess I am not
25 seeing that there would be that much incentive in that
0069
KEEFE REPORTING COMPANY
Belleville, Illinois
1 situation. I would see it almost as being -- there
2 being a converse to that in the sense that party A and
3 B are going to hold that judgment in their favor, hold
4 that up as a defense against any further contribution.
5 BOARD MEMBER HENNESSEY: As I understand the law,
6 I don't think that A and B could assert that judgment
7 against C in a contribution action. They cannot say
8 we have previously been adjudicated to be only 20
9 percent liable, because C was not a party to that
10 previous action.
11 MR. GARY KING: I mean, they certainly could say
12 that. I mean, I think whether that -- again, in a lot
13 of these in terms of incentives and leverages and that
14 kind of thing, I think clearly A and B will say that
15 stands for something, those determinations.
16 BOARD MEMBER HENNESSEY: Well, I still think that
17 they might be forced to relitigate the issue, which
18 the question is as to whether that is a sufficient
19 incentive. But I guess it really comes down to the
20 need for finality. Doesn't everybody want finality
21 from these actions, and doesn't that, in and of
22 itself, give the parties an incentive to try to bring
23 everyone to the table once one of these cases have
24 been brought?
25 MR. GARY KING: You know, contribution protection
0070
KEEFE REPORTING COMPANY
Belleville, Illinois
1 is one of those -- I mean, it is just not provided for
2 in Section 58.9. It is a different scenario that
3 occurs under Federal law where they do have that
4 contribution protection. You know, it kind of -- if
5 you reflect on what the Site Remediation Program is
6 all about, we make decisions that represent a prima
7 facie decision that the State agrees that a
8 remediation is complete. Well, that doesn't prevent
9 somebody else from contending that that determination
10 was insufficient because clearly they would have the
11 right to do that.
12 But from a practical standpoint, people accept
13 that determination when the State either -- the Agency
14 in the context of the SRP program or the Board in
15 terms of a litigated action, people are generally
16 accepting that when those decisions are made they
17 stand for something.
18 John, did you want to add something?
19 MR. WIGHT: There was some discussion also that at
20 least in the Superfund context the judgments may not
21 be binding. They are given great weight, and I think
22 that is what Gary was just saying with his last
23 comment, that people would look very carefully at
24 those before they would try to reopen a previous
25 judgement.
0071
KEEFE REPORTING COMPANY
Belleville, Illinois
1 The other thing that I would like to add to that,
2 Gary has already cited the Hartigan versus Progressive
3 Land case, and our concerns about the private party
4 enforcement actions and cost recovery, and one of our
5 concerns about whether there would be limitations on
6 our ability to bring additional actions. You may want
7 to take a look at that case.
8 It was called to our attention by the Attorney
9 General. We have not had a chance to discuss it with
10 them yet. But it talks about it is true that res
11 judicata applies to parties, but also to parties that
12 are -- but to people in privity with the parties. And
13 this case is about what constitutes privity, and when
14 the State may have been in privity with a private
15 plaintiff. And there are some reasons why that case
16 might be distinguishable on its facts.
17 But you might want to take a further look at that,
18 because they do kind of discuss the issues about when
19 you are in privity, and it may be as simple as that
20 you had notice and an opportunity to assert your claim
21 in the earlier proceeding rather than being a full
22 party. You know, you may be cut out or prohibited
23 from relitigating the issue. That is one of the
24 things we are concerned about in the third party
25 context, and may have some applicability in terms of
0072
KEEFE REPORTING COMPANY
Belleville, Illinois
1 the question you just raised.
2 BOARD MEMBER HENNESSEY: There could certainly
3 still be situations in which C did not have notice or
4 an opportunity to participate.
5 MR. WIGHT: Certainly, yes. But you could also
6 see situations where they did or at least were aware
7 that it was a site that they had been involved in or,
8 you know, just -- again, it would raise all sorts of
9 questions about how formal that notice has to be and
10 whether you would actually receive pleadings or not
11 receive pleadings or to what level you were involved
12 in the case.
13 In the Progressive Land case it was a case where
14 the Attorney General had received copies of the
15 pleadings and didn't pursue the action at the time,
16 and then later brought a subsequent action and was
17 prohibited from doing so.
18 CHAIRMAN MANNING: I have some of the same
19 questions as Member Hennessey, I mean, not necessarily
20 for the same reasons in terms of her couching it as
21 the incentive, but this whole question of the missing
22 party and what happens when the missing party shows up
23 later and either with an action someone else files
24 against him or they file any.
25 It would seem to me to behoove all of the parties,
0073
KEEFE REPORTING COMPANY
Belleville, Illinois
1 SRAC included, that everybody would want as many
2 parties that are potentially liable there in that
3 first instance and if anybody -- in fact, if SRAC has
4 some input on this question as well, and would want to
5 either provide it now, Mr. Rieser, or later in post
6 hearing comments, the fact of the matter is we should
7 be developing a process that tries to get everybody
8 there and everybody's share allocated and that sort of
9 thing as opposed to leaving someone out.
10 MR. RIESER: Right. I mean, I think the reasons
11 that we have said and the reasons that Board Member
12 Hennessey identified, I think that people are
13 interested and would be interested in doing this. As
14 David Howe testified, what people want most out of the
15 world with these situations is for them to be over and
16 done with, and over and done with as soon as
17 possible. And over and done with means trying to
18 bring as many people in as you possibly can and making
19 sure that they are all in the same proceeding.
20 Everybody from the State on down has an interest in
21 that.
22 Now, the interest shifts slightly under
23 proportionate share and some of that burden goes more,
24 and correctly, to the State, in that the individual
25 members may not have the same type of contribution
0074
KEEFE REPORTING COMPANY
Belleville, Illinois
1 action, because if they are adjudged to have a
2 proportionate share then that's their share, that is
3 what the Board has found that they are responsible
4 for, and so --
5 BOARD MEMBER HENNESSEY: That's what I am just not
6 clear on, as a matter of law is that true that that is
7 going to be binding on others who were not a party to
8 the original proceeding.
9 MR. RIESER: Well, but that other party A has to
10 talk about what its share is. And that may or may not
11 impact on what other parties shares are. That is just
12 a very fact specific, fact driven thing. But, again,
13 I come back to what our experience is in representing
14 the people that we do which is that people want these
15 things over with. I think there are strong incentives
16 that people will bring the people in. I think people
17 generally have the same instincts and will continue to
18 have the same instincts for handling these cases under
19 proportionate share as they do under joint and
20 several, which is I don't want to face -- if there is
21 other people in here I shouldn't have to face the
22 Agency by myself. I am going to tell them about as
23 many people as I can. Everybody is going to have to
24 suffer the way I am suffering now. So I just -- I
25 think this is -- I think, as your questions have
0075
KEEFE REPORTING COMPANY
Belleville, Illinois
1 indicated, I think the incentives are towards bringing
2 people in.
3 As to the impact of -- I am not familiar with the
4 case which Mr. King and Mr. Wight alluded to. It is
5 the impact, the res judicata impact that somebody
6 would have to research.
7 CHAIRMAN MANNING: Sort of in a similar vein of
8 sort of the missing party, I had a question about
9 Subpart C. I am going to ask it first directly to Mr.
10 Rieser, because I think the Subpart C issue is more
11 directly related to him. And if the Agency has any
12 comment on it, go ahead.
13 Let's say you had four parties in a Subpart C
14 proceeding and there is a fifth party out there but
15 you don't care. The four parties come forward and say
16 we are going to assume 100 percent of the liability.
17 But it doesn't shake out the way the four parties
18 thought it was going to. Perhaps party A got stuck
19 with 50 percent. Party B gets 10. Party C and D each
20 get 20. Does party A have the ability to come forward
21 and appeal the Board's order allocating the shares
22 saying there was a missing party, and that if the
23 other party was -- and if so, why not, because the
24 statute says the Board has to determine what was
25 proximately caused. Doesn't the missing parties --
0076
KEEFE REPORTING COMPANY
Belleville, Illinois
1 HEARING OFFICER ERVIN: You have been sworn in
2 before, but let's go ahead, since there are going to
3 be a number of questions for you, go ahead and swear
4 you in at this time.
5 (Whereupon Mr. David Rieser was sworn by the
6 Notary Public.)
7 CHAIRMAN MANNING: Thank you. Do you need me to
8 update anymore?
9 MR. RIESER: No. Subpart C envisions people -- a
10 group of people who have decided that among themselves
11 they are going to share the entire cost of the thing,
12 and they commit to doing that up front. I think it is
13 actually a regulatory requirement that they do so,
14 that it is part of filing a Subpart C proceeding that
15 they sign as part of their petition that the four of
16 them agree that between themselves they are going to
17 allocate the cost of whatever it is they are doing
18 between themselves. And so it is essentially a
19 binding allocation, a State funded binding allocation
20 process, a binding arbitration process, let me put it
21 that way, where at the end of the day you get a
22 Pollution Control Board determination that as between
23 these parties these are the appropriate shares.
24 So in the situation that you have suggested, I
25 don't think that -- while an individual party could
0077
KEEFE REPORTING COMPANY
Belleville, Illinois
1 appeal the decision based on a factual issue as
2 between the four of them, I don't think that that
3 party would have a right to appeal based on a factual
4 decision as to a fifth person, because in bringing the
5 petition he has basically already given up the right
6 to do that in the Board proceeding. Now, I suppose
7 that theoretically that person could go off under
8 CERCLA and do something but, again, you have got a
9 national contingency plan, compliance issue that would
10 probably interfere with the ability to do that.
11 But I think the expectation of Subpart C is it is
12 for people trying to solve their problems and are
13 looking for a venue to go to to get the problem
14 solved, and they are making a decision up front that
15 this is the decision making process that they have
16 decided to use, and they are going to accept the
17 results of the decision making process. Again, with
18 the right to appeal based on only the possibility of
19 arbitrated decision making within that narrow decision
20 making process that they brought before the Board.
21 CHAIRMAN MANNING: Okay. Thank you.
22 HEARING OFFICER ERVIN: Chuck King.
23 MR. CHARLES KING: I have a couple of questions
24 about opening up the determination under Subpart C,
25 and I think I asked Mr. King about this at one of the
0078
KEEFE REPORTING COMPANY
Belleville, Illinois
1 earlier hearings and he said that that language had
2 come from SRAC, so maybe you could address this.
3 What is the logical basis for Section
4 741.335(a)(2) which is the one that provides where it
5 ends up costing more than everybody expected they can
6 come back in?
7 MR. RIESER: Well, what you want to do -- one of
8 the problems in all of this, and something we really
9 wrestled a lot with when we were drafting all of these
10 regulations is the possibility that you might well be
11 doing this allocation prior to the time that the money
12 is actually spent. And that you might not
13 understand -- and that in the process of performing
14 the remediation at the site facts may come to light
15 which change totally what everybody's assumptions were
16 when they made the allocation. That is not uncommon
17 that the costs for dealing with one issue were far
18 larger than they expected or that something else came
19 up when you were doing the remediation work that was
20 totally unexpected and unaccounted for. And that it
21 would be fundamentally unfair for people who were in
22 that situation to have done this allocation prior to
23 doing any of that type of remedial work, where that if
24 those -- if that remedial work demonstrated that there
25 were really substantially different issues at the site
0079
KEEFE REPORTING COMPANY
Belleville, Illinois
1 that really changed things in a substantive way and a
2 substantial way, that people ought to be able to go
3 back and relook at those things.
4 Now, it is expressed in terms of dollars because
5 that is probably the easiest way to talk about those
6 things. It is also done in that fashion because,
7 again, given the model of what we have here is a group
8 of private parties using this dispute resolution
9 mechanism. The only reason to go back and redo things
10 is because the thing that they resolved, that is the
11 allocation of money, was not resolved accurately given
12 what they now know about the site.
13 And so the numbers that were chosen were purely
14 arbitrary based on, I suppose, my own personal biases
15 about at what point does it make it worthwhile for
16 somebody to go back and redo these things, and at what
17 point is it worth the Board's while to go back and
18 redo this stuff. So there is no magic to the
19 numbers. But I think the concept is important,
20 because it may be that people do these things prior to
21 doing this work and that they ought to have the right
22 to relook at this issue after doing the work and after
23 actually spending the money, and they made the
24 determination that what they spent it on was totally
25 not what they thought they were going to spend it on
0080
KEEFE REPORTING COMPANY
Belleville, Illinois
1 when they originally went through the allocation.
2 MR. CHARLES KING: Wouldn't that scenario you
3 described be covered by language like that that is
4 under 741.220 which is more of just a blanket where
5 new information comes to light that would have brought
6 about a different result, you can come back and
7 revisit it?
8 MR. RIESER: Well, yes and no. You have got two
9 conflicting goals here, and trying to balance those
10 goals. On the one hand, you want finality. But on
11 the other hand, you want fairness. And you are making
12 a decision not in an information vacuum, but in the
13 situation of incomplete information. And given that
14 you are working with incomplete information, you
15 still -- but fundamentally at a very basic level you
16 want the process to be fair. You want people going
17 into the process to think it is going to be fair. So
18 you have all of these different issues to weigh.
19 You don't want somebody reopening this thing or
20 having the ability to reopen the thing or having
21 people think that they can reopen this thing just
22 because of slight differences in end result, where the
23 change was from ten to five percent, and that was all
24 of $10,000.00. You never know what people are going
25 to think is worth fighting over, especially in the
0081
KEEFE REPORTING COMPANY
Belleville, Illinois
1 situation where somebody thought they really got a
2 horrible decision to start with. That five to ten
3 percent difference may mean a lot to them.
4 But you don't want this State organized process to
5 get going again unless you have got a situation where
6 you can say, boy, we really have a result that is not
7 reflective of the situation, that is not fair, and it
8 is not fair in a way that is so important and crucial
9 that we really need to start thinking about going
10 through it again. So I think you do need that level
11 of -- and the easiest and most objective way to talk
12 about that is in terms of the money. Because that is
13 what the issue is.
14 MR. CHARLES KING: Where you have a proceeding
15 where the Board has gone through and heard -- where
16 not all of the parties have agreed. Say you have
17 these two parties who have agreed, and these three
18 parties are fighting like cats and dogs. They are
19 coming under Subpart C, but as far as who gets what
20 percentage that is heavily disputed. And then the
21 Board has, you know, an evidentiary hearing and
22 figures out the allocations of everything, and then
23 later it ends up costing more, not based on
24 necessarily some bizarre circumstance involved in the
25 actual site, but some external factor. Do you believe
0082
KEEFE REPORTING COMPANY
Belleville, Illinois
1 that that should still be opened up again?
2 MR. RIESER: Well, it is hard for me to imagine,
3 given the levels of dollars that we talked about here,
4 an external factor that was not related to the site.
5 I mean, I suppose you could have a strike. You could
6 have something like that. But I guess you also have
7 to look at why the parties would bother to reopen it.
8 I mean, people have reasons to do everything, of
9 course. But if the things that raise the price of the
10 site don't really go to the issues among the parties,
11 then it is probably not worth doing.
12 Yes, I mean, I suppose you could nail it down more
13 closely to issues relating to the parties, but then
14 you get into a real drafting issue about how you
15 express that. I think my assumption was that anything
16 that increased the cost of the site by these types of
17 amounts, changed people's position by these amounts,
18 would be something that was related directly to the
19 site and something that meant that there was a
20 difference that they had discovered about the site
21 that had not been known at the time that they
22 originally did the allocation.
23 MR. CHARLES KING: So it was your purpose in
24 putting this language in rather than providing for a
25 reopening, a decision based on factors other than
0083
KEEFE REPORTING COMPANY
Belleville, Illinois
1 newly discovered information about the site, rather
2 your concern was to set a floor, sort of a level of
3 significance below which it would not be worth
4 reopening?
5 MR. RIESER: Yes.
6 MR. CHARLES KING: Okay.
7 HEARING OFFICER ERVIN: Could we go off the record
8 for a second, please.
9 (Discussion off the record.)
10 HEARING OFFICER ERVIN: We will break for lunch
11 and reconvene at 1:30.
12 (Whereupon a lunch recess was taken from 12:30 p.m.
13 to 1:30 p.m.)
14
15
16
17
18
19
20
21
22
23
24
25
0084
KEEFE REPORTING COMPANY
Belleville, Illinois
1 AFTERNOON SESSION
2 (June 10, 1998; 1:30 p.m.)
3 HEARING OFFICER ERVIN: Back on the record. We
4 are beginning with questions for the Agency. Are
5 there additional questions for the Agency at this
6 time?
7 I know I had a couple of questions on the
8 information orders on your Errata Sheet. Under
9 Section 741.115 of the errata sheet, I think it is E,
10 that provides that if the respondent fails to comply
11 with the information order, the Agency may seek
12 enforcement under Section 42 of the Act. Section 42
13 only deals with penalties. Did you mean that the
14 Agency could seek penalties under Section 42 of the
15 Act?
16 MR. INGERSOLL: Injunctive relief. Under 42(e) we
17 would contemplate, anyway, that if the circumstances
18 are warranted, that we would ask the Attorney General
19 to pursue an injunction to require the information be
20 provided.
21 HEARING OFFICER ERVIN: Rather than saying you
22 seek enforcement, you could seek penalties or
23 injunctive relief under Section 42?
24 MR. INGERSOLL: Right.
25 HEARING OFFICER ERVIN: In that same section, it
0085
KEEFE REPORTING COMPANY
Belleville, Illinois
1 has that penalties may be imposed if respondent fails
2 without sufficient cause to comply with the
3 information order. Were you contemplating that the
4 Board would still look at the 42(h) factors in
5 determining the appropriate penalties?
6 MR. INGERSOLL: Yes.
7 HEARING OFFICER ERVIN: A question that came up at
8 the last hearing, Elizabeth Wallace from the AG's
9 office, asked a question regarding what needed to be
10 included in a complaint. Specifically it was
11 regarding whether or not there had to be a specific
12 number regarding the proportionate degree of
13 responsibility. What is the Agency's position on what
14 actually would have to be included in a complaint?
15 MR. INGERSOLL: I think it would be the allegation
16 necessary to show liability, not proportionate share.
17 HEARING OFFICER ERVIN: I think the question was
18 kind of directing to do you need to include a specific
19 percentage.
20 MR. INGERSOLL: No.
21 HEARING OFFICER ERVIN: Looking at the statute
22 under Section 58.9(a)(2) there is a list of people
23 whom the State or any person can't bring an action
24 against. I think Chuck King asked a question -- I am
25 not sure if it was at the last hearing or the hearing
0086
KEEFE REPORTING COMPANY
Belleville, Illinois
1 before, about what you actually did with these people
2 if you brought an action against them and they raised
3 as a defense that they fell within one of these
4 categories.
5 Just to understand, is it the Agency's position
6 that these type of people could never proximately
7 cause a release, or is it that these people could
8 proximately cause, but they are exempted from being
9 held liable under Section 58.9(a)(2)?
10 (Mr. Wight and Mr. King confer briefly.)
11 MR. GARY KING: Each of the subsections under
12 (a)(2) is a little bit different, but I think the
13 question really particularly focuses on (c), (d), (e)
14 and (f). And I don't -- I think for an entity to fit
15 within one of those frameworks it means the causation
16 framework is irrelevant, because it is kind of a
17 legislative statement that they are not to be
18 responsible relative to that correction of that
19 release.
20 HEARING OFFICER ERVIN: Maybe if I can provide an
21 example it will help you understand where I am coming
22 from. Say there are four PRPs that have been
23 identified and you bring an action against those. And
24 PRP A brings the defense that he falls within
25 Subsection C. Then is it that he can never
0087
KEEFE REPORTING COMPANY
Belleville, Illinois
1 proximately cause the release so that we would still
2 apportion 100 percent liability between the other
3 three, or is it that his share basically would become
4 an orphan share?
5 MR. GARY KING: It would seem to us that if
6 someone is not a liable party then whatever his
7 contribution may have been relative to that site it
8 would not be included within the general allocation
9 parts. The allocation would go as to those people
10 that are liable.
11 BOARD MEMBER HENNESSEY: So they would not become
12 orphan shares then?
13 MR. GARY KING: Right. If I could add one point
14 to that. There may be alternative bases for showing
15 liability, and a person may fall within one of these
16 and say, well, I am not liable because C says I am not
17 liable. But there might be some other reason that
18 that person is liable that does not allow him to
19 assert C, in which case then if they were held to be
20 liable then they would be included within the
21 allocation process.
22 HEARING OFFICER ERVIN: Mr. Rieser.
23 MR. RIESER: What would that be? Because it says
24 notwithstanding anything in the Act, as a preface.
25 MR. GARY KING: Well, to give you an example,
0088
KEEFE REPORTING COMPANY
Belleville, Illinois
1 let's just say it is the State of Illinois under C,
2 and the State of Illinois has involuntarily acquired
3 ownership of a site. It would seem it would go to the
4 ownership issue. But if the State of Illinois at the
5 same time had sent hazardous materials to that site as
6 a generator, then that would be a different basis for
7 liability. It wouldn't relate to the ownership.
8 MR. RIESER: I see what you are saying. I
9 understand. Thank you.
10 HEARING OFFICER ERVIN: Could you still bring a
11 cost recovery action against them based on their
12 ownership?
13 MR. GARY KING: Yes, but then they would raise
14 that as a defense.
15 HEARING OFFICER ERVIN: Except that (a)(2) deals
16 with you can't require performance of remedial
17 action. It does not say anything about cost
18 recovery.
19 (Mr. Wight and Mr. King confer briefly.)
20 MR. GARY KING: We really haven't thought through
21 the context of the difference between performance of
22 remedial action and cost recovery in this context, and
23 we will address that in our written comments.
24 HEARING OFFICER ERVIN: Thank you. Are there any
25 other questions for the Agency? Mr. Rieser.
0089
KEEFE REPORTING COMPANY
Belleville, Illinois
1 MR. RIESER: Yes. I just had a question which is
2 sort of off a little bit of this particular topic. It
3 is something that I thought about before. It has been
4 asked in private, so I will ask in public. How many
5 sites have come into the site remediation program
6 since its inception under 740?
7 MR. EASTEP: Hopefully I have got that. In 1997
8 we had 198 sites in the program. Well, July was the
9 effective date, right?
10 MR. RIESER: Yes.
11 MR. EASTEP: So probably about half of that was --
12 they bounce around a little bit, but it is pretty
13 typical, so I would say probably there would have been
14 100 that came in since July of last year. There might
15 have been a few that came in pursuing -- they entered
16 the SRP, but they might have been pursuing 4(y)s.
17 That would have been much less common than say a year
18 ago.
19 MR. RIESER: Would that represent an increase over
20 prior years under the --
21 MR. EASTEP: In 1996 we had 149 applications in
22 the voluntary programs overall. In 1995 we had 102.
23 In 1994 we had 54.
24 MR. RIESER: Okay. Thank you.
25 BOARD MEMBER HENNESSEY: I had a question on
0090
KEEFE REPORTING COMPANY
Belleville, Illinois
1 Subpart C. As I understand the Agency's position,
2 58.9 does not create a new cause of action. If that's
3 true, I am wondering how the Board has jurisdiction
4 over Subpart C actions. If there is no cause of
5 action, where does the Board's authority to decide
6 these disputes come from?
7 (Mr. Wight and Mr. King confer briefly.)
8 MR. GARY KING: I am not sure we focused on --
9 when we were involved in preparing Subpart C I am not
10 sure that we really focused on the issue in the terms
11 that you placed the question. We were looking at
12 58.9(d) and it requires that the Board's rules meet
13 certain requirements. One of the things that these
14 rules are required to have is if you look down through
15 there, it says, procedures to establish how and when
16 such persons may file a petition for determination of
17 such apportionment. So that was -- we felt that was
18 the authority for the Board to have these rules. And
19 we saw this as more of a, I guess, a dispute
20 resolution context among persons who would have
21 potential liability under other parts of the Act.
22 BOARD MEMBER HENNESSEY: Does Subpart C implicitly
23 assume that there is a private cost recovery action
24 under the Act?
25 (Mr. Wight and Mr. King confer briefly.)
0091
KEEFE REPORTING COMPANY
Belleville, Illinois
1 MR. GARY KING: We didn't -- from our standpoint
2 we didn't contemplate it in the context of a third
3 party relief. What we were contemplating was in the
4 context of somebody resolving potential liability
5 vis-a-vis the State. That is why we structured the
6 entry requirements into Subpart C the way we did, in
7 741.105 where it talks there about an Agency approved
8 remedial action plan under either 740 or pursuant to a
9 4(q) notice. So we were not presuming that that third
10 party right existed when we were doing this. We were
11 presuming that there was a potential liability to the
12 State that would need to be resolved, at least in our
13 drafting process and in our thought process.
14 BOARD MEMBER HENNESSEY: One other question. In
15 58.9(d) the language that you have cited requires the
16 Board to establish procedures on how people may file a
17 petition for determination of apportionment. Did you
18 contemplate that setting up a procedure where someone
19 could come in and petition, bring a petition for an
20 apportionment, where basically the Agency would be the
21 respondent? That seems to be -- that is a potential
22 that that is what that language could be referring
23 to. That is not real clear. I wondered if you
24 contemplated that.
25 MR. GARY KING: No, we did not contemplate that.
0092
KEEFE REPORTING COMPANY
Belleville, Illinois
1 BOARD MEMBER HENNESSEY: It was not an alternative
2 that you considered at all?
3 MR. GARY KING: No, it really never crossed our
4 minds to address it in that kind of way. We wanted to
5 address the cases that we were involved with in terms
6 of us being plaintiffs as opposed to us being
7 defendants.
8 BOARD MEMBER HENNESSEY: Well, just for the
9 record, do you have any reaction to -- do you think
10 that such a procedure would be permissible under 58.9,
11 and do you think it is a good idea or a bad idea?
12 MR. GARY KING: Well, I think it would be a bad
13 idea from our perspective, and I think it goes to some
14 of the reasons that I talked about earlier in terms of
15 how it would influence our process in how we go about
16 committing money or allocating money to sites. John
17 Sherrill talked about how we have gone through a
18 process and we have allocated money to do remediations
19 in the next fiscal year, and we have done that
20 recognizing what we believe are the most important
21 environmental issues to deal with.
22 If you have a -- one of these third party
23 procedures where all of the sudden the Agency is being
24 drawn in and now we are potentially forced to allocate
25 money towards cleanup of a site, which is not so much
0093
KEEFE REPORTING COMPANY
Belleville, Illinois
1 of a pollution control threat or a pollutional threat
2 but more of a situation where it is private parties
3 that want to get out about building a factory there
4 and just making sure that their liability concerns are
5 straightened away, we don't think that is the best use
6 of State resources in terms of cleaning up the sites
7 that pose the most risk to human health and the
8 environment.
9 BOARD MEMBER HENNESSEY: Also, I assume that it
10 could conceivably take up a lot of Agency resources
11 simply to respond to those petitions, aside from
12 cleanup, all the costs to be involved in litigation.
13 MR. GARY KING: That is absolutely correct. One
14 of the reasons why we don't have that many cost
15 recovery actions and we talked about the number of
16 those before, is that they are very resource
17 intensive, and we want to make sure that it is an
18 appropriate use of our resources.
19 BOARD MEMBER HENNESSEY: Thank you.
20 CHAIRMAN MANNING: If I might continue with the
21 Subpart C dialogue just for a second, and perhaps ask
22 SRAC as well, it is my understanding that Subpart C is
23 envisioned as not being an adversarial process, but a
24 process where -- that is seeking a Board
25 determination.
0094
KEEFE REPORTING COMPANY
Belleville, Illinois
1 MR. RIESER: It is a process seeking a Board
2 determination that may well be adversarial with
3 respect to the specific and narrow issues that the
4 parties are not able to otherwise resolve, and in that
5 context it may be very adversarial. But it is
6 adversarial to a narrow set of issues with respect to
7 who did what at the site and what -- who contributed
8 to what. But the parties involved have all agreed
9 that among themselves all of them will share in the
10 cost, and they have agreed on this as a resolution
11 mechanism for taking care of that issue.
12 CHAIRMAN MANNING: And you did not envision it
13 being an adversarial procedure in that not one would
14 come forward and sue the other three?
15 MR. RIESER: No, exactly.
16 CHAIRMAN MANNING: That all four of them would
17 agree. Do you envision this process being well
18 utilized? I mean, what is your theory on who and
19 under what circumstances Subpart C might be utilized?
20 MR. RIESER: Well, that, too, is a good question.
21 We have talked about that and it may not be well
22 utilized. It may be that for a variety of reasons
23 people don't use it. I think the situation where
24 people would use it is where you do have a limited
25 group of people, and they are all embroiled in a
0095
KEEFE REPORTING COMPANY
Belleville, Illinois
1 discussion about how they are going to resolve it, and
2 they want to find a mechanism to resolve it.
3 I could see circumstances where the Board having
4 this Board mechanism it would be a very attractive
5 thing. You get -- you have this impartial decision
6 maker with some experience in the area. You have got
7 various specified due process procedures in terms of
8 how the hearings are handled. You get a determination
9 at the end by this decision maker that has a great
10 deal of weight in terms of the process that you are
11 engaged in.
12 So, you know, it is hard to say. I mean, it is
13 hard to know exactly how many cost recovery actions
14 are brought in toto and what percentage of those would
15 be brought to the Board. But it strikes me that it is
16 an opportunity for those situations where you do have
17 this sort of narrow group of people wrestling with the
18 idea of how they are going to resolve this issue that
19 it may be attractive to them. We would have to see.
20 It has never been done before, so we would have to see
21 what utility it has in practice. Excuse me.
22 (Mr. Rieser and Ms. Rosen confer briefly.)
23 MR. RIESER: And then the other issue is having
24 the Board determination of liability. That would have
25 a weight and formality to it and an official
0096
KEEFE REPORTING COMPANY
Belleville, Illinois
1 determination that would, in itself, carry some
2 weight. And maybe this gets into the third party
3 issue that you were asking earlier about whether that
4 would be good as to other third parties. But there
5 may be circumstances where people really want that
6 Board determination on what they are doing and what
7 decision is made, and that in itself has a great deal
8 of weight.
9 CHAIRMAN MANNING: You would agree with the Agency
10 that it is within the Board's authority, if you
11 contemplate the provisions of Section 58.1 and the
12 rulemaking sort of obligation where we are asked to
13 assume under 58.1 in conjunction with our general
14 authority found under Section (5)(d) which readily
15 allows us to have other hearings as may be provided by
16 rule? Would you agree that there is no question of
17 authority under Subpart C?
18 MR. RIESER: I don't think there is a question on
19 authority. As Gary says, it is not something that we
20 focused on specifically. I mean, the language of
21 58.9(d) that we were just reading talks about people
22 going to the Board and having these decisions made and
23 for the reasons we have discussed, how implementing
24 that legislative charge got done, a lot of different
25 issues at a lot of different levels for different
0097
KEEFE REPORTING COMPANY
Belleville, Illinois
1 people and people viewed it differently. This struck
2 us as the most appropriate way, given all of our
3 issues that we have already talked about to fulfill
4 that requirement. Because it is plainly not solely in
5 the context of Agency enforcement actions.
6 But as we talked about, we don't see this -- as we
7 talked about and the reasons that we have talked
8 about, we don't see it as a private cost recovery
9 action. But we also don't see this as a cost recovery
10 action. We see this as an allocation determination
11 pursuant to this legislation. These are people,
12 again, who have agreed that we are going to share, we
13 are going to put up the money. We have agreed on the
14 remedial action plan that has already been submitted
15 to the Agency. The only question is among us who is
16 going to pay what.
17 That is a very different issue than dragging
18 somebody kicking and screaming in front of the Board
19 by filing a complaint and serving them with process
20 and all of the rest of it. So, yes, I do think
21 that -- I do think that the Board has authority to
22 handle those types of cases.
23 CHAIRMAN MANNING: Thank you.
24 BOARD MEMBER HENNESSEY: Do you think that the
25 Board has -- do you think that the Board has that
0098
KEEFE REPORTING COMPANY
Belleville, Illinois
1 authority whether or not these private parties would
2 have any actions against each other?
3 MR. RIESER: I am not sure I understand the
4 question.
5 BOARD MEMBER HENNESSEY: If there is no private
6 cost recovery action --
7 MR. RIESER: Yes.
8 BOARD MEMBER HENNESSEY: -- there is basically no
9 claim that these parties have against each other,
10 correct?
11 MR. RIESER: Under State law that is true,
12 correct.
13 BOARD MEMBER HENNESSEY: Okay.
14 MR. RIESER: Under the Environmental Protection
15 Act, I should say, that's true.
16 BOARD MEMBER HENNESSEY: So I am troubled by what
17 is the Board's authority. How do we have jurisdiction
18 over something like this when these parties wouldn't
19 ordinarily have a case against other?
20 MR. RIESER: Again, I am not saying it creates a
21 cost recovery. Maybe another way to look at this is
22 something that -- the way Chairman Manning suggested
23 which is that this is not an action in the sense of a
24 coercive action where somebody is filing process and
25 requiring them to appear before a tribunal for a
0099
KEEFE REPORTING COMPANY
Belleville, Illinois
1 determination to be made. That, in my mind, is a
2 legal action. What we have here is an --
3 BOARD MEMBER HENNESSEY: A rulemaking.
4 MR. RIESER: I am sorry?
5 BOARD MEMBER HENNESSEY: In a sense an
6 administrative rulemaking with a very narrow
7 rulemaking.
8 MR. RIESER: Well, I suppose you can call it
9 that. I am not sure -- you know, it is a quasi
10 judicial, quasi legislative determination, I suppose,
11 although it strikes me as being more quasi judicial.
12 But it is quasi judicial only in the sense that you
13 are making a determination on a set of facts. But you
14 are making it among people who have voluntarily
15 decided to come to you and say can you make this
16 decision.
17 And it is a decision that this legislation calls
18 for you to be making in some context. And I think
19 this is what private persons and persons come to. So
20 this strikes us as being the most appropriate, if not
21 the only context, where that can be fulfilled. And
22 that is how we came to this.
23 BOARD MEMBER HENNESSEY: And if these decisions
24 can be appealed to the Appellate Court, on what
25 grounds can they be -- I mean, on what grounds would
0100
KEEFE REPORTING COMPANY
Belleville, Illinois
1 they be appealed?
2 MR. RIESER: Well, the only grounds I would think
3 would be the grounds that are the same grounds for
4 appeal on any Board decision, which is the Board's
5 determination was arbitrary, capricious, or in some
6 measure not based on the facts that were presented to
7 you.
8 BOARD MEMBER HENNESSEY: Okay. Thank you.
9 HEARING OFFICER ERVIN: Are there any other
10 additional questions for the Agency at this time?
11 Seeing none, did you have any further comments
12 that you would like to make, Mr. Wight?
13 MR. WIGHT: No.
14 HEARING OFFICER ERVIN: We appreciate all your
15 testimony and the time that you have taken in this
16 matter.
17 Mr. Rosemarin, do you still want to provide
18 testimony today?
19 MR. ROSEMARIN: Yes, I do.
20 HEARING OFFICER ERVIN: Is there anybody else that
21 would like to provide testimony today?
22 Seeing none, would you like to move down, or are
23 you comfortable?
24 MR. ROSEMARIN: I am comfortable where I am.
25 Thank you.
0101
KEEFE REPORTING COMPANY
Belleville, Illinois
1 HEARING OFFICER ERVIN: Okay.
2 CHAIRMAN MANNING: Could you use the microphone?
3 MR. ROSEMARIN: Yes.
4 HEARING OFFICER ERVIN: If the court reporter
5 could swear the witness, please.
6 (Whereupon Mr. Carey Rosemarin was sworn by the
7 Notary Public.)
8 HEARING OFFICER ERVIN: Proceed whenever you are
9 ready, Mr. Rosemarin.
10 MR. ROSEMARIN: Thank you. My name is Carey S.
11 Rosemarin. I am an attorney with Jenner & Block in
12 Chicago. I represent Commonwealth Edison in these
13 proceedings.
14 Initially, our view is that the rule proposed by
15 the Illinois Environmental Protection Agency can
16 advance the purposes of Section 58.9 of the statute
17 and represent a positive advancement in administrative
18 rulemaking in Illinois with the critical caveat that
19 some crucial modifications are effective.
20 Com Ed's central position is that Proportionate
21 Share Liability, as mandated by the statute, requires
22 that each party pay no more than the portion of
23 remediation costs attributable to its respective
24 wastes and/or actions. We also believe that there is
25 a fatal flaw in the IEPA proposal which causes it to
0102
KEEFE REPORTING COMPANY
Belleville, Illinois
1 contravene the statute. Section 741.210(d)(3) allows
2 all unapportioned shares to be imposed upon a PRP,
3 whereas the rule allows -- and that rule, that
4 characteristic, allows the imposition of
5 disproportionate liability notwithstanding the
6 statute's mandate of Proportionate Share Liability.
7 Quoting from 58.9, the pertinent part, and I
8 will -- well, although I say that, let me paraphrase a
9 bit here. The operative provisions of 58.9 reads as
10 follows: Notwithstanding any other provision of this
11 Act to the contrary, in no event may any person,
12 paraphrasing, be held responsible to conduct remedial
13 action or pay for cost of remedial activity beyond the
14 remediation of releases of regulated substances that
15 may be attributed to being proximately caused by such
16 person's act or omission or beyond such person's
17 proportionate degree of responsibility for costs of
18 remedial action.
19 I think that the clearest example of the fact of
20 how the proposed rule contravenes the statute lies in
21 Agency's -- the IEPA's Exhibit Number 7. I refer the
22 Members and other persons present to that exhibit,
23 Scenario 2, Example 1, parties B and C may end up
24 paying a total of 75 percent, although this exhibit
25 says that there exists no proof that either party
0103
KEEFE REPORTING COMPANY
Belleville, Illinois
1 contributed more than 25 percent of the wastes.
2 Scenario 2, Example 2, parties B and C pay a total
3 of 50 percent. But there exists no proof that either
4 party contributed more than 20 percent of the wastes.
5 Scenario 3, Example 1, parties B and C pay a total
6 of 75 percent, but there exists no proof that either
7 contributed more than 25 percent of the wastes.
8 Our analysis focuses on the Restatement, and in
9 going through this we asked the question, we asked
10 ourselves how did we end up at this result of having a
11 rule which the Agency advances as being consistent
12 with the statute, which is blatantly inconsistent with
13 the statute. The Agency relies on Section 433(b)(2)
14 of the statute to support 210(d)(3). And, of course,
15 that is the section, as I said, that would allow the
16 Board to hold any respondent unable to prove the
17 degree to which respondent caused or contributed to
18 the release liable for, quote, all unapportioned
19 costs.
20 Our analysis, in conclusion, is that the IEPA has
21 taken 433(b) entirely out of context and grossly
22 misapplied that section. The Agency, in our opinion,
23 has confused the separate issues of divisibility and
24 apportionment. Those are two separate issues. And we
25 refer to the case of, In the matter of Bell Petroleum,
0104
KEEFE REPORTING COMPANY
Belleville, Illinois
1 3 F 3d 889, a Fifth Circuit Case from 1993, which
2 contains an excellent discussion of these concepts.
3 433(b)(2), as the Agency represents, does, in
4 fact, say that with respect to injuries that are
5 caused by joint tort feasors, then, yes, the defendant
6 does have the burden of proving that the harm is
7 divisible, in other words, that it is capable of
8 apportionment. And it also supports the view that a
9 defendant's failure to show that harm is divisible
10 results in the imposition of joint and several
11 liability.
12 What the Agency overlooks is the fact that the
13 question asked by 433(b), that is, is this harm
14 divisible, has already been answered by the
15 legislature. It is divisible. 58.9 says it is
16 divisible. By enacting 58.9 the General Assembly has
17 already determined, as a matter of law, that
18 environmental damages caused by hazardous substances
19 are divisible, and that cannot be questioned.
20 I refer to Section 434 of the Restatement, Comment
21 D, which clearly makes the distinction between the
22 question of divisibility, which is a matter of law,
23 and the question of apportionment, which is a question
24 of fact for the jury, no statute or where we are not
25 talking about the statute. Therefore, there is really
0105
KEEFE REPORTING COMPANY
Belleville, Illinois
1 no need for any party to show that the harm is
2 divisible. It is already shown. And, therefore,
3 joint and several liability cannot be a consequence of
4 failing to show divisibility.
5 Looking at the Restatement in context, we also
6 look at 433(a). That section requires that damages be
7 apportioned when there are distinct harms or when
8 there is a reasonable basis for determining the
9 contribution of each cause to a single harm.
10 Similarly, we refer to the Restatement of Section
11 881. That section states that in cases of harms, for
12 which there was a reasonable basis for division, as
13 there is as dictated by 58.9 in the present case, when
14 there is such a reasonable basis for division,
15 according to the contribution of each, each party is
16 subject to liability only for the portion of the total
17 harm that that person has caused.
18 Even if there is issue taken with our
19 interpretation of 58.9, and let us assume that a party
20 does have to show divisibility, then we can refer to
21 433(b) itself which indicates that in certain
22 situations joint and several liability does, in fact,
23 not obtain. And that is precisely the view that was
24 taken in A&F Materials, and I will give you the cite
25 in a second, as well as Allied v. Acme. U.S. v. A&F
0106
KEEFE REPORTING COMPANY
Belleville, Illinois
1 Materials, focusing on the Restatement, cited at 578 F
2 Supp. 1249, a case out of the Southern District of
3 Illinois, 1984. Allied v. Acme, 691 F Supp. 1100, a
4 case from the Northern District of Illinois, 1988.
5 Both of those cases focus on comment E which state
6 that even in cases in which a PRP, or in our case a
7 defendant, is forced to show divisibility, has that
8 burden of proof, there are certain cases the
9 Restatement recognizes in which the imposition of
10 joint and several liability would be unjust. That is
11 precisely what the legislature has said in here,
12 especially considering what the change was. Section
13 58.9 was enacted against the back trap of years and
14 years of joint and several liability. The legislature
15 has said that that was intolerable, and that is why
16 the statute was changed.
17 We are of the view that adoption of 741.210(d)(3)
18 may be subject to valid challenge. There is simply no
19 authority to enact that section of the Rule as
20 proposed. Under Landfill, Inc. v. Pollution Control
21 Board, 74 Ill. 2d 541, 4387, Northeast 2d, 258, from
22 1978, the Illinois Supreme Court clearly held that if
23 the Pollution Control Board lacks the authority to
24 promulgate certain rules, those rules are void.
25 There is similar authority, Biomedical
0107
KEEFE REPORTING COMPANY
Belleville, Illinois
1 Laboratories, Inc. v. Trainor, 68 Ill. 2d, 540, a 1977
2 case, and yet again, Waste Management of Illinois,
3 Inc. v. Pollution Control Board at 231 Ill. App. 3d,
4 278 at 288-89.
5 Now, at this point I will progress into the three
6 issues that have dominated these proceedings.
7 Obviously, taking the first one, the burden of proof,
8 given the fact that 241 -- excuse me -- 741.210(d)(3)
9 is in the context of burden of proof, I will focus on
10 that section initially.
11 The Agency says that on the initial showing,
12 fundamental showing of liability by the Agency then
13 the burden of proof shifts. And a PRP's failure to
14 carry that burden may thus result in the imposition of
15 disproportionate liability, again, a derogation of the
16 statute.
17 We propose that 210(d)(3) be -- excuse me -- we
18 propose that Section 210(d)(1) through (3) be deleted
19 and that a new section be added, which I would like to
20 read into the record. But actually before I do so, I
21 have a number of copies of it which I would be pleased
22 to distribute.
23 MR. GARY KING: We will just read it in the
24 record. We don't need a copy of it.
25 HEARING OFFICER ERVIN: Were you wanting to make
0108
KEEFE REPORTING COMPANY
Belleville, Illinois
1 this an exhibit?
2 MR. ROSEMARIN: Sure.
3 HEARING OFFICER ERVIN: After you have finished
4 why don't you offer it then.
5 MR. ROSEMARIN: All right. Our proposed section
6 reads as follows. This would be a new Section
7 210(d).
8 210(d)(1) would read: Subject to Subsection
9 210(d)(2) following a determination of liability, the
10 Board shall, based on equitable principles and the
11 facts before it, allocate remediation costs, or
12 responsibility to conduct remedial action, that are
13 the subject of the complaint, to respondents which
14 caused the release or releases addressed or to be
15 addressed by such remediation costs or remedial
16 action.
17 (d)(2) would read as follows: Notwithstanding any
18 other provision of this Title, in no event shall any
19 respondent be required to pay remediation costs or be
20 allocated a responsibility to conduct remedial action
21 in an amount exceeding such respondent's proportionate
22 degree of responsibility for the incurrence of such
23 remediation costs, or the necessity to conduct such
24 remedial action.
25 That is the entirety of our proposed section.
0109
KEEFE REPORTING COMPANY
Belleville, Illinois
1 Now, Com Ed does agree that the burden does rest with
2 the State to show liability in the first instance.
3 Com Ed also supports SRAC's proposed Section 741.210
4 which would require that to be held liable the person
5 must be within the scope of 22.2(f) and must also be
6 shown to have materially caused the release.
7 We also take issue with the statement of Mr. King
8 earlier today -- that is Gary King, as opposed to Mr.
9 King at my left -- that the statute does not provide
10 for liability based on status. We believe that in its
11 present form the Rule does allow for that, in
12 particular, 210(b)(3). A landlord who is aware, for
13 example, of hazardous waste handling by a tenant would
14 nonetheless be liable as the landlord even though that
15 person may have had nothing to do with any release of
16 hazardous substances.
17 Progressing to the other issues, we also believe
18 that as to applicability, that -- well, let me
19 paraphrase the IEPA's position. As we understand it,
20 that position is that the U.S. EPA will withdraw the
21 delegation of RCRA and the RCRA program if the Rule
22 interprets 58.9 to apply to the sites listed in 58.1,
23 and we have gone through those on a number of
24 occasions in these hearings.
25 Com Ed's position is simply that in 58.1 -- excuse
0110
KEEFE REPORTING COMPANY
Belleville, Illinois
1 me -- our position is that 58.9 is not controlled by
2 58.1, and our proposal is that Section 741.105(c)
3 should be deleted. The basis of this position are
4 initially statutory construction, the plain language
5 rule. 58.9 commences with the phrase, notwithstanding
6 any other provisions of the statute to the contrary.
7 The IEPA has referred to absolutely nothing in the
8 statute or the legislative history to indicate that
9 Section 58.9 should be interpreted with references to
10 any consideration of the potential withdraw of
11 delegation of RCRA authority. Our position is further
12 that IEPA's position amounts to mere speculation. The
13 U.S. EPA has not indicated any possibility of
14 withdrawal of RCRA authority and the IEPA has not
15 asked the U.S. EPA about its position on this issue.
16 The IEPA has referred to other states having
17 Proportionate Share Liability, and has not indicated
18 in any event that the U.S. EPA has raised the
19 indication, raised the possibility of withdrawal of
20 Federal authorization.
21 Additionally, 42 USC 6926(b), cited by Mr. Dunn,
22 states that the U.S. EPA may authorize the State to
23 administer the RCRA program upon a finding of what is
24 referred to collectively as stringent as, the State
25 must be as stringent as -- excuse me -- the statute,
0111
KEEFE REPORTING COMPANY
Belleville, Illinois
1 the State program must be as stringent as the Federal
2 program.
3 In fact, there are three factors listed in
4 6926(b). One, the State program must be equivalent to
5 the Federal program. Two, it must be consistent with
6 the Federal program. And, three, it must be shown
7 that the State has provided adequate enforcement of
8 compliance with hazardous waste management
9 requirements. The State has offered no legal support
10 for its conclusion that Proportionate Share Liability
11 does not satisfy these requirements.
12 We also believe that 741.105(c) may also be
13 subject to challenge. Initially referred to the
14 standard by which rules are challenged in Illinois at
15 415 Ill. CS5/29 which says that any person who is,
16 quote, adversely affected or threatened by any rule or
17 regulation the Board may obtain the determination of
18 the validity or application of such rule or regulation
19 by a petition or review referring to 415 Ill. CS5/29.
20 That is particularly -- Section 5/29 is particularly
21 relevant in the present context. Because it states
22 that any final order of the Board shall be based
23 solely on evidence of the record. There is no
24 evidence in this record of any possibility of
25 withdrawal of the program by the U.S. EPA. The only
0112
KEEFE REPORTING COMPANY
Belleville, Illinois
1 thing that has been discussed is mere speculation.
2 Additionally, the Board's consideration of the
3 possibility of withdrawal of Federal RCRA authority
4 absent any indication that such consideration is
5 required by 58.9 and absent any evidence to the
6 possibility of withdrawal is arbitrary -- we believe
7 would be arbitrary and capricious.
8 In Illinois an administrative agency's actions are
9 contrary and capricious if the Agency relies on
10 factors which the Agency -- excuse me -- which the
11 legislature did not intend for the Agency to
12 consider. There is no indication that the legislature
13 has suggested that the Board consider withdrawal of
14 RCRA authorization in the context of deciding on the
15 present rule. For the same reason, we believe that it
16 is improper for the Agency to consider the funding
17 which has been a significant part of the testimony of
18 the Agency in these proceedings. We offer Waste
19 Management of Illinois v. Pollution Control Board, 231
20 Ill. App 3d. at 278, 285 as authority. An alternate
21 cite is 585 Northeast Second 1171 and 1174.
22 Progressing to the issue of information orders,
23 the third and final issue, the IEPA argues that the
24 rule must contain the authority for the Board to issue
25 orders for the production of information before a case
0113
KEEFE REPORTING COMPANY
Belleville, Illinois
1 is filed, because absent joint and several liability,
2 PRPs have no incentive to produce information. They
3 also acknowledge -- the IEPA also acknowledges that
4 there exists no express authority but suggests that
5 58.9 provides the necessary and statutory authority
6 for information orders.
7 I want to focus initially on incentives. We
8 believe that the Agency's premise is entirely wrong.
9 The fact is from our standpoint, and we believe from
10 any PRP's standpoint, that there is ample incentive to
11 go forward and produce information under a
12 proportionate liability scheme. The fundamental
13 complaint and criticism of the Superfund process as it
14 has existed at the national level and reflecting the
15 State level prior to 58.9 is the lack of certainty.
16 The reason that there has been so much contention
17 over this issue over these proceedings and the reason
18 that they last so long is the fear of being saddled
19 with liability to which one has no nexus. The genius
20 of 58.9 is that it puts an end to those proceedings.
21 It states very clearly that there is Proportionate
22 Share Liability and under that system we submit that
23 people, that PRPs, persons who are potentially liable
24 will gladly come forward with the information if they
25 are sure that they are not going to have imposed upon
0114
KEEFE REPORTING COMPANY
Belleville, Illinois
1 them liabilities to which they have no nexus and did
2 not cause.
3 Additionally, the Agency has talked about its need
4 extensively for information orders. The issue is not
5 need. It is statutory authority. We believe that
6 there simply exists no authority for the Board to
7 issue the information orders. And we also believe
8 that, therefore, Section 741.115 should be deleted.
9 There has been a great deal of discussion about this
10 issue. We add our voice to those persons who suggest,
11 including SRAC, of course, that there exists ample
12 authority for the Agency to get the information it
13 requires through existing means.
14 That was amply and eloquently demonstrated by Mr.
15 Sherrill on the first day of these proceedings in the
16 transcript at 47. It was clearly shown that the
17 Agency has numerous means at its disposal to acquire
18 information. We also believe that in its present form
19 741.115 may be subject to challenge. Again, referring
20 to the previously cited authorities, an agency, an
21 administrative agency is a creature of the legislature
22 and possesses only such powers as the legislature has
23 granted it. I have cited the Biomedical case.
24 Similarly, I cited authority on Landfill, Inc.
25 We believe that with respect to information orders
0115
KEEFE REPORTING COMPANY
Belleville, Illinois
1 there is yet an additional dimension which makes this
2 issue particularly serious. The issuance of an
3 information order under the Rule as if it had been --
4 as it is proposed, if that Rule is adopted and if an
5 information order is issued there under, we believe
6 that such an order, if carried out, would violate
7 Fourth Amendment rights. Because the legislature has
8 not granted the Board the authority to force persons
9 to produce documents, as clearly shown and has already
10 been noted in these proceedings in Section (4)(d) by
11 comparison -- excuse me -- to Section (4)(d), issuance
12 of an order requiring the production of documents may
13 be unreasonable because it is absent statutory
14 authority. And in support of that proposition we cite
15 Oklahoma Press Publishing Company v. Walling, 327 U.S.
16 186. That is a Supreme Court case from 1946. I think
17 the date of that opinion shows how fundamental that
18 issue is.
19 I also wanted to add one other point concerning
20 the incentive and the issues raised by Mr. King this
21 morning. Initially referring to the Restatement
22 issue, Mr. King has noted on several occasions that
23 the Rule does not relate to -- does not require a
24 finding of divisibility. We believe -- we agree, and
25 we believe the reason for that is obvious. Again,
0116
KEEFE REPORTING COMPANY
Belleville, Illinois
1 divisibility is already mandated by this statute and
2 it is not a subject for this rule.
3 With that, I think that I will close. We believe,
4 as I emphasized at the outset, that this rule can be
5 amended so that it can be consistent with the statute
6 and be a positive advancement of Illinois
7 administrative rulemaking. Thank you very much.
8 HEARING OFFICER ERVIN: Thank you, Mr. Rosemarin.
9 Do you want to move at this time to have your
10 alternative language entered into the record as an
11 exhibit?
12 MR. ROSEMARIN: Yes, I do. I so move it.
13 HEARING OFFICER ERVIN: Is this a correct and
14 accurate copy?
15 MR. ROSEMARIN: Yes, it is indeed.
16 HEARING OFFICER ERVIN: Are there any objections
17 to the admittance of this document?
18 Seeing none, then the Commonwealth Edison's
19 alternative language for 741.210(d) will be entered
20 into the record as Exhibit Number 16.
21 (Whereupon said document was duly marked for
22 purposes of identification as Hearing Exhibit 16
23 as of this date.)
24 HEARING OFFICER ERVIN: Are there any questions
25 for Mr. Rosemarin at this time?
0117
KEEFE REPORTING COMPANY
Belleville, Illinois
1 MR. INGERSOLL: You expressed some concerns about
2 landlord liability for a situation where, in fact, the
3 tenant had been conducting the waste handling
4 activities on the site. What duty, if any, do you
5 believe the landlord has to manage the operations on
6 his or her property?
7 MR. ROSEMARIN: I think that there is often,
8 having worked on situations and transactions in which
9 hazardous substances handling is at issue, I think the
10 common-law provides evidence of some suggestion of
11 knowledge of the duty of knowledge by the landlord. I
12 think that that is going to differ from case to case.
13 There may be situations in which a landlord has --
14 there may be certain situations in which a landlord is
15 an absentee landlord and perhaps has little or no
16 duty.
17 MR. INGERSOLL: So there may be some duty if they
18 know?
19 MR. ROSEMARIN: Well, I think knowledge -- the
20 reason I refer to knowledge is I think that is
21 referred to in 59(a)(2)B which reads that
22 notwithstanding the landlord's rights against the
23 tenant, if the landlord did not know and could not
24 reasonably -- could not have reasonably known of the
25 acts or omissions. So I was referring to knowledge
0118
KEEFE REPORTING COMPANY
Belleville, Illinois
1 merely based on the fact that it is cited in the
2 statute.
3 MR. INGERSOLL: And you contend that the Agency
4 proposal bypasses that?
5 MR. ROSEMARIN: I think that there are situations
6 in which the section that I cited could render a
7 landlord liable on his status as a landlord without
8 more.
9 MR. INGERSOLL: Is that 22.2(f), liability?
10 MR. ROSEMARIN: Well, in that case 22.2(f),
11 liability would come under (a)(1), because the
12 landlord would be an owner. Now I am saying that
13 there are situations in which it amounts to the same
14 thing.
15 MR. INGERSOLL: Okay. Then the landlord arguably
16 has status liability under 22.2(f)?
17 MR. ROSEMARIN: Yes. I think that is amended and
18 will change by 58.9.
19 MR. INGERSOLL: I am not talking about allocation,
20 what the final amount they pay is. I am talking about
21 22.2(f), liability.
22 MR. ROSEMARIN: I agree.
23 MR. INGERSOLL: So you contend that 58.9 amends
24 22.2?
25 MR. ROSEMARIN: Well, I think it says that on its
0119
KEEFE REPORTING COMPANY
Belleville, Illinois
1 face.
2 MR. INGERSOLL: Okay. I don't have any further
3 questions.
4 CHAIRMAN MANNING: I had a question, Mr.
5 Rosemarin, based on your proposed language. And I
6 have a hypothetical that I want to give you.
7 Let's say the Board has three parties before us,
8 party A, party B, and party C. Party A is the oldest
9 party of all three of them. We have B and C, and B
10 and C are the most recent, the good guys, the guys
11 that come forward and have every incentive to show us
12 that they only have a 10 percent degree of liability
13 on both of their parts. And in that case I agree with
14 you that perhaps they have incentive to come forward,
15 and they cough up all the information in the
16 proceeding, and they present everything. And it is
17 clear on its face that their liability, both B and C,
18 don't go beyond 10 percent.
19 However, party A has lost its memory. There is no
20 Agency records that can be found regarding party A,
21 because perhaps the historical nature of the
22 contamination. For whatever reason, party A presents
23 very little, if any, information regarding any of the
24 contamination. But we do know that only three of
25 these parties are liable, and there is no other
0120
KEEFE REPORTING COMPANY
Belleville, Illinois
1 question of orphan shares, there is no question of any
2 other generator or any other owner or anybody. There
3 is just A, B and C.
4 Given your language as you proposed in terms of
5 the Board shall, based on equitable principles, and
6 the facts before it, given those are the only facts
7 before it, allocate remediation costs and the
8 responsibility, and then given your number two as
9 well, is there no presumption that the Board can make
10 vis-a-vis party A, who has presented us with no
11 information or little information that there is a
12 presumption, perhaps, that he is the other 80 percent
13 in terms of liability?
14 MR. ROSEMARIN: I thought your facts in your
15 hypothetical presumed that he was the other 80
16 percent, because you said there are only three
17 parties, and B and C are only liable for ten percent.
18 Therefore, under the facts, as presented, A can only
19 be liable and I believe would be liable for the
20 remaining 80 percent.
21 CHAIRMAN MANNING: Okay. You say the facts would
22 show that regardless of whether there is no
23 affirmative facts showing A's proportion -- what A did
24 or didn't do, the fact that there are no affirmative
25 facts vis-a-vis A, because there is only three parties
0121
KEEFE REPORTING COMPANY
Belleville, Illinois
1 and there is facts enough for B and C, there is sort
2 of circumstantial evidence enough for us to conclude
3 that A is only 80 percent liable.
4 MR. ROSEMARIN: Maybe I am misreading your
5 question. When you say there are only three parties,
6 does that presume that it is known that party A is the
7 remaining 80 percent?
8 CHAIRMAN MANNING: Yes, it is known that party A
9 is liable to some degree. To what degree, we do not
10 know.
11 MR. ROSEMARIN: Oh. So then -- okay. It is known
12 that there may, in fact, be more than three parties?
13 CHAIRMAN MANNING: No, there are only three
14 parties.
15 MR. ROSEMARIN: Three parties before and only
16 three persons who may be liable?
17 CHAIRMAN MANNING: That's correct.
18 MR. ROSEMARIN: Then I think that's -- I don't
19 have much trouble in saying that if B and C prove
20 their share, and it is known that there are -- there
21 is only one other person who could have caused the
22 contamination, then I think the natural result is that
23 A is liable for the remaining 80 percent.
24 CHAIRMAN MANNING: Then if there was an unknown
25 party who was not presented, however, we could not
0122
KEEFE REPORTING COMPANY
Belleville, Illinois
1 make that presumption vis-a-vis number A?
2 MR. ROSEMARIN: That is a different set of facts.
3 Indeed, I think that would qualify as an orphan
4 share.
5 CHAIRMAN MANNING: Okay.
6 MR. WIGHT: Excuse me. A would qualify as an
7 orphan share or the unknown party or both?
8 MR. ROSEMARIN: I think we are talking about both
9 one and the same thing. I think the facts are that a
10 situation is known to where there is totality of --
11 there is some totality of contamination. It is known
12 that B is responsible, and the cause of 10 percent,
13 and C is responsible and caused 10 percent, and it is
14 simply unknown who caused the remaining 80 percent. I
15 think that defines an orphan share of 80 percent.
16 CHAIRMAN MANNING: And if there is one party there
17 that we know is liable, but there is a potentially --
18 and that is the only other -- and we know as a fact
19 that there is only three potentially responsible
20 parties, you are willing to presume that the 80
21 percent goes to A, but if we don't know that there is
22 a -- that these are the only three responsible
23 parties, we can't jump to the conclusion that A is 80
24 percent responsible.
25 MR. ROSEMARIN: In the latter case in which it is
0123
KEEFE REPORTING COMPANY
Belleville, Illinois
1 simply not known how many parties there are, but it is
2 known that a proportionate share of B is 10, and the
3 proportionate share of C is ten, then all that has
4 been shown in this proceeding, and all that B and C
5 can be held liable for is 10 percent each.
6 CHAIRMAN MANNING: I understand B and C. That is
7 easy. I am worried about A that doesn't come forward
8 with any information at all. The Agency has no
9 information on A.
10 MR. ROSEMARIN: But A is liable so --
11 CHAIRMAN MANNING: A is liable, but we can't come
12 up with a percentage.
13 MR. ROSEMARIN: Well, that hypothetical has come
14 up in these proceedings on a number of occasions in
15 which A is known to be liable, but not for how much.
16 I think that there may be -- that may not be as much
17 of a problem as it has been made out to be, to some
18 extent. If it is known that A is liable, it is known
19 that there is some nexus to the site.
20 So it can be extrapolated that there is at least
21 some share which this 58.9 would hold A liable for.
22 We may not be talking about, therefore, the full 80
23 percent. The question, thus, will become the degree
24 to which the 80 percent can be imposed upon A within
25 the confines of 58.9. It may be some or it may be
0124
KEEFE REPORTING COMPANY
Belleville, Illinois
1 all. But I don't believe, given the fact that it has
2 been shown that A is, in fact, liable that it is going
3 to be zero.
4 CHAIRMAN MANNING: It is your position that it
5 would always be in A's best interest to come forward
6 with whatever information it has?
7 MR. ROSEMARIN: Given the hypothetical that you
8 just posed, I believe that it certainly would be in
9 A's interest to do that. It has no memory in your
10 hypothetical. A is going to come forward and resolve
11 liability irrespective of whatever it is.
12 HEARING OFFICER ERVIN: Any other questions for
13 Mr. Rosemarin?
14 BOARD MEMBER HENNESSEY: I do. Mr. Rosemarin, you
15 discussed to what extent the fact that the U.S. EPA
16 may withdraw Illinois RCRA authority, should it
17 influence the Board's decision. I just want to make
18 clear that if -- you pointed out two things. That the
19 legislature didn't intend us to consider that fact,
20 and also you didn't believe that there were any
21 factual support in that for the record that they
22 actually would withdraw that authority.
23 Would your belief change at all if we do end up
24 getting a letter from the U.S. EPA during the public
25 comment period stating that they do intend to withdraw
0125
KEEFE REPORTING COMPANY
Belleville, Illinois
1 Illinois RCRA authority if your proposal or Mr.
2 Rieser's proposal is adopted?
3 MR. ROSEMARIN: It would not. I still maintain
4 that there is no authority for the Board to consider
5 that factor. I see nothing in the statute, and I
6 don't see anything in the record that the Agency has
7 advanced to suggest that the legislature intended that
8 to be a factor within the Board's gamut of
9 responsibility in adopting the present Rule.
10 BOARD MEMBER HENNESSEY: That's what I thought,
11 but I just wanted to clarify that. And then also if
12 you can just briefly discuss 433(b) and 433(a), the
13 Restatement of Torts. As I understand your testimony,
14 you believe that the legislature has decided that
15 releases of hazardous substances create a harm that is
16 divisible as a matter of law. And, therefore, no
17 burden shifting as of the type that is provided for in
18 433(b)(2) and (3) Restatement of Torts can occur under
19 58.9?
20 MR. ROSEMARIN: Yes.
21 BOARD MEMBER HENNESSEY: Okay. Are you aware of
22 any other situations in which a legislature has
23 decreed a type of harm to be divisible?
24 MR. ROSEMARIN: It has been noted in these
25 proceedings that the Michigan statute comes pretty
0126
KEEFE REPORTING COMPANY
Belleville, Illinois
1 close to that. I have not considered that in that
2 particular light. At this time I can't name any other
3 examples.
4 BOARD MEMBER HENNESSEY: Thank you.
5 MR. ROSEMARIN: Thank you.
6 MR. WIGHT: I have a follow-up question on that.
7 As a practical matter, what does it mean to say that a
8 harm is divisible as a matter of law if the problem
9 before the Board is a problem of fact in determining
10 allocation? I mean, what does that help the Board in
11 reaching its determination to say that a harm is
12 divisible as a matter of law?
13 MR. ROSEMARIN: I think that's a crucial first
14 step, and I think, that, as I said, is the genius of
15 this statute. We have before us a statute in which
16 the legislature has mandated a system which we have
17 referred to as TACO. We get out of the way initially
18 all of the arguments concerning divisibility. Is it
19 divisible? Is it not? The legislature has said it is
20 divisible as a matter of law.
21 Now fact comes in equitable principle. We have
22 this wonderful system in Illinois known as TACO which
23 enables us to use that, to use a vehicle for
24 allocation. Where is the risk presented by this
25 particular site. We are going to devote our
0127
KEEFE REPORTING COMPANY
Belleville, Illinois
1 remediation resources to where that risk is, and the
2 persons who are responsible for creating that risk, as
3 defined through the TACO system, are the persons who
4 are going to be paying for that.
5 Now, in some situations, that is going to be
6 pretty easy. Maybe there is only one party. Maybe
7 there are ten parties who sent the same hazardous
8 substance in known quantities. Then it is going to be
9 a pretty easy decision. In other cases we may get
10 back to some of the same allocation problems that we
11 have had for the past 15 years in Superfund, but
12 nobody says that proportionate share rulemaking is a
13 panacea. It is an improvement over what we had
14 previously and that is all.
15 Indeed, the Restatement comments clearly note
16 throughout consistently of the difficulty in
17 apportioning shares. But they also consistently state
18 that merely because it may be difficult is not a
19 reason to deny the fact that apportionment must
20 occur.
21 MR. WIGHT: So are you saying the Board always
22 much reach an apportionment decision?
23 MR. ROSEMARIN: Yes.
24 MR. WIGHT: As matter of law, whether it feels it
25 has evidence on which to base that decision or not or
0128
KEEFE REPORTING COMPANY
Belleville, Illinois
1 if it just doesn't have that evidence then that
2 becomes an orphan share?
3 MR. ROSEMARIN: I think that's a correct analysis
4 under 58.9.
5 MR. WIGHT: One other question on a little
6 different issue. On your suggested language here you
7 are referring to using equitable principles?
8 MR. ROSEMARIN: Yes.
9 MR. WIGHT: What would an example of those
10 principles be?
11 MR. ROSEMARIN: We talked about one earlier with
12 Mr. Ingersoll's question, knowledge. In the case of
13 the allocation with equitable principles, obviously,
14 the Gore factors. But I think perhaps the greatest
15 one is the degree to which a person's wastes caused
16 the costs, as indicated under TACO, to be incurred.
17 One of the cases -- one of the examples that came
18 up in Mr. King's testimony was that of the
19 differentiation between lead in the soil and TCE in
20 groundwater. If TCE in groundwater is the driver of
21 the remediation, then the person who is responsible
22 for the lead in the soil does not pay for that
23 remediation. I think we have that vehicle in TACO
24 which enables the allocation to occur.
25 MR. WIGHT: Given the limitation of (d)(2) on
0129
KEEFE REPORTING COMPANY
Belleville, Illinois
1 (d)(1) so then would you be saying that equitable
2 principles -- I guess what I am struggling with is
3 that I don't see that the statute authorizes the use
4 of equitable principles, because I am not sure how
5 they relate to determining proportionate share.
6 On the other hand, you place a limitation on
7 (d)(1) with (d)(2), so are you, in effect, saying that
8 equitable principles could be used to reduce a share
9 but not to increase a share?
10 MR. ROSEMARIN: No, I am not saying that. I am
11 saying that allocation, again, I believe that Bell
12 Petroleum discussed this particular issue and there is
13 an article by Carver, which I believe I have it with
14 me, and I can give you the cite. It indicates that
15 allocation is an equitable process. And we struggled
16 with that issue, whether to include equitable
17 principles or not. Our conclusion was that because
18 allocation is an equitable process, the legislature in
19 determining, in mandating proportionate share, must
20 have intended equitable principles to apply.
21 MR. WIGHT: So you would say, for example, if the
22 Agency had included the Gore factors in its proposal
23 under the allocation factors that that would have been
24 perfectly acceptable under 58.9, that the Gore factors
25 may just as easily have been listed as the ones we
0130
KEEFE REPORTING COMPANY
Belleville, Illinois
1 ultimately did?
2 MR. ROSEMARIN: I would agree that the Gore
3 factors are equitable principles that can be
4 considered in allocations.
5 MR. WIGHT: Well, in allocations in Illinois under
6 58.9?
7 MR. ROSEMARIN: I am sorry?
8 MR. WIGHT: They are factors that can be
9 considered in allocations in Illinois under Section
10 58.9?
11 MR. ROSEMARIN: Yes.
12 BOARD MEMBER GIRARD: I have a question. I would
13 like to go back to the hypothetical where you have --
14 let's say this time we have four parties, and we have
15 evidence that they have all contributed to the
16 chemical of concern at this one particular site which
17 is creating a problem.
18 We have two parties that come forward with
19 information which shows the Board that each one of
20 those parties contributed 10 percent each, so we have
21 20 percent of the liability determined.
22 Are you saying that the other 80 percent, then, if
23 we have no other information, would be an orphan
24 share?
25 MR. ROSEMARIN: Isn't that the same hypothetical
0131
KEEFE REPORTING COMPANY
Belleville, Illinois
1 as posed by Chairman Manning?
2 BOARD MEMBER GIRARD: Yes, only now we have four
3 parties instead of three. So we have two parties that
4 have contributed an unknown amount of that 80 percent.
5 MR. ROSEMARIN: I guess I don't see how my answer
6 is different in any respect merely because there are
7 two parties in formerly A's position under Chairman
8 Manning's hypothetical, rather than only one.
9 BOARD MEMBER GIRARD: So then the Board could
10 determine that each one of those parties is liable for
11 40 percent of the costs?
12 MR. ROSEMARIN: Not if there is no evidence to
13 show that.
14 BOARD MEMBER GIRARD: Well, we know that they
15 contributed to that site, we just don't know how
16 much. We don't know how much of the 80 percent each
17 one of those two parties contributed.
18 Are you saying -- how do we deal with that cost,
19 that 80 percent?
20 MR. ROSEMARIN: Look at information that is
21 produced in discovery and make a reasonable
22 determination of how much the evidence shows each
23 of -- in this case I will label them imaginatively C
24 and D, might be responsible for, and perhaps it equals
25 the remaining 80 percent, and perhaps it does not.
0132
KEEFE REPORTING COMPANY
Belleville, Illinois
1 BOARD MEMBER GIRARD: Well, I am saying what if
2 they come forward with no information at all?
3 MR. ROSEMARIN: But it is known that they are
4 liable?
5 BOARD MEMBER GIRARD: We know that they are
6 liable. We know that they contributed that particular
7 chemical to that site. We just don't know how much.
8 MR. ROSEMARIN: Well, then my answer is the same
9 as in the hypothetical proposed by Chairman Manning
10 that the determination that they are liable and they
11 have some nexus at the site will produce some
12 information and some modicum of information to
13 determine some percentage. It may be a very low
14 percentage under the statute, but we have no choice
15 but to live with it. It may be less -- if your
16 question is could it be less than the remainder 80
17 percent, my answer is yes.
18 BOARD MEMBER GIRARD: Why would any party bring
19 the information before the Board to begin with? Why
20 not just assume that the Board will use what little
21 information it has and most likely it will come up
22 with a lower percentage?
23 MR. ROSEMARIN: To make sure that the other 80
24 percent is not poised upon them. That is precisely
25 why C and D would come running into this proceeding.
0133
KEEFE REPORTING COMPANY
Belleville, Illinois
1 I know if I am C or D, C or D says, okay, I cannot
2 challenge your finding of liability, that is true.
3 But I simply have no information. And the Board says
4 we have no information other than that tying you to
5 the site. C now has the advantage under the statute
6 of saying I know I can't be liable for the remaining
7 80 percent, because the statute does not allow it. C
8 gets certainty.
9 BOARD MEMBER GIRARD: Well, I am still not sure
10 there would be an incentive for parties to bring
11 information forward.
12 MR. ROSEMARIN: Well, I can only tell you that as
13 a veteran of numerous Superfund cases that the
14 greatest fear of any PRP is that the PRP is going to
15 be stuck with the share far in excess of the amount of
16 damages caused by its waste in the case of generators.
17 BOARD MEMBER GIRARD: But you just said there is
18 no other information, the Board cannot stick that PRP
19 with the share.
20 MR. ROSEMARIN: That's why they are going to come
21 in and finalize their finding.
22 BOARD MEMBER GIRARD: We may be speaking past one
23 another. I am not sure. Until we have an actual case
24 before us, it is hard to say how the Board would
25 rule.
0134
KEEFE REPORTING COMPANY
Belleville, Illinois
1 MR. ROSEMARIN: Well, all I can do is repeat what
2 I have said, is that the Board does not have any
3 choice but to assign solely the proportionate share of
4 C and D, the other two parties that you are referring
5 to in your hypothetical. The Board would not have --
6 I think you have put your finger on precisely the
7 fallacy of 210(d)(3). Under this statute the Board
8 does not have the authority to impose upon C and D the
9 remainder absent evidence of C and D's proportionate
10 share. It is simply not there.
11 BOARD MEMBER GIRARD: Well, the evidence may be
12 that they contributed to the site. I mean, that may
13 be all the evidence we need to make a determination.
14 MR. ROSEMARIN: And that will have to suffice to
15 be translated into some percentage allocation.
16 BOARD MEMBER GIRARD: In that case I am not so
17 sure under your language and under the language from
18 the Agency that the Board would make a different
19 determination with the same set of facts.
20 MR. ROSEMARIN: I am sorry. I don't see how that
21 conclusion can result if there is virtually no
22 information. What I am saying is in our language, in
23 Com Ed's proposed language, the result cannot be that
24 whatever is unknown gets dumped on C and D. That is
25 an unlawful result. That would be the result, we
0135
KEEFE REPORTING COMPANY
Belleville, Illinois
1 believe, under the Agency's proposal. That result is
2 prohibited under Com Ed's proposal.
3 BOARD MEMBER GIRARD: Well, I guess I don't have
4 any other questions. I will take a look at it.
5 MR. WIGHT: Just a follow-up on that. Didn't you
6 also just testify that equitable factors could be used
7 as part of the allocation?
8 MR. ROSEMARIN: I did.
9 MR. WIGHT: So could equitable factors in the
10 absence of evidence to proportionate share be used to
11 allocate some share?
12 MR. ROSEMARIN: Equitable factors have to come in
13 as evidence.
14 MR. WIGHT: Although they are not necessarily
15 evidence tied to the volume or the toxicity or those
16 issues that we would typically think of when we are
17 thinking about allocations?
18 MR. ROSEMARIN: Equitable factors is a term of
19 art. That has been amply defined in case law, but
20 they still have to come in as evidence.
21 MR. WIGHT: I am not quarreling with that. I am
22 saying if there were none of the types of evidence
23 that Dr. Girard was talking about, you would -- you
24 had testified that equitable factors could be
25 considered by the Board. I thought I understood you
0136
KEEFE REPORTING COMPANY
Belleville, Illinois
1 to testify that they could be used in determining the
2 proportionate share.
3 MR. ROSEMARIN: I did.
4 MR. WIGHT: So is not the technical, numerical
5 type factors that one might use, for example, volume,
6 toxicity, and that sort of thing, equitable factors
7 such as Gore factors? And I believe one of those have
8 the degree of cooperation with the government. Could
9 that be a basis for allocation of some percentage of
10 share?
11 MR. ROSEMARIN: That's one, the Gore factors. And
12 Gore factors are among the equitable principles that
13 can be examined. I can't imagine any of the volume,
14 slash, toxicity factors being responsible to fill the
15 void of the remaining 80 percent. I can't imagine a
16 situation in which that would occur, other than
17 perhaps some extreme situation in which we have a bad
18 actor encouraging all persons to place their hazardous
19 substances illicitly on a site or something strange
20 like that.
21 MR. WIGHT: There might be some share based on
22 equitable factors, not necessarily the entire
23 remaining share but some lesser share?
24 MR. ROSEMARIN: In the abstract I think that is
25 conceivable.
0137
KEEFE REPORTING COMPANY
Belleville, Illinois
1 MR. WIGHT: Okay.
2 HEARING OFFICER ERVIN: Any additional questions
3 for Mr. Rosemarin?
4 MR. ROSEMARIN: If I can add one point?
5 HEARING OFFICER ERVIN: Certainly.
6 MR. ROSEMARIN: One issue that I did want to raise
7 in response to Member Hennessey's comment earlier, I
8 think one of the cases that is particularly
9 instructive with respect to proportionate share may be
10 the Supreme Court case which I failed to cite earlier,
11 McDermott v. AmClyde, 511 US 202, which talks about
12 settlements and talks about the difference between pro
13 tanto settlement and proportionate share settlement.
14 That is really what is at issue here.
15 HEARING OFFICER ERVIN: Any additional questions?
16 Thank you.
17 MR. ROSEMARIN: Thank you.
18 HEARING OFFICER ERVIN: One final matter before we
19 adjourn.
20 Public Act 90-489, which became effective on
21 January 1st, 1998, requires the Board to request the
22 Department of Commerce and Community Affairs to
23 conduct an economic impact study on certain proposed
24 rules prior to the adoption of those rules. DCCA has
25 30 to 45 days after such request to produce a study of
0138
KEEFE REPORTING COMPANY
Belleville, Illinois
1 the economic impact of the proposed rules.
2 In accordance with this Public Act, the Board has
3 requested, by a letter dated February 5th of 1998,
4 that DCCA conduct an economic impact study on this
5 rulemaking. In the request letter the Board asked
6 that DCCA notify the Board within ten days of receipt
7 of the request if DCCA was going to conduct an
8 economic impact study.
9 The Board further stated that if it did not
10 receive such notification, the Board would rely on the
11 January 26, 1998 letter in which DCCA notified the
12 Board it would not be conducting economic impact
13 studies on rules pending before the Board for the
14 remainder of FY '98 as the required explanation for
15 not conducting an economic impact study.
16 The ten days for DCCA to notify the Board has
17 expired, and the Board has not received any
18 notification from DCCA that it would be conducting an
19 economic impact study. Accordingly, the Board will
20 rely on the January 26, 1998 letter as DCCA's
21 explanation for not producing the study.
22 Under Public Act 90-489 the Board is also required
23 to hold a hearing on DCCA's explanation for not
24 conducting a study. So I would ask at this time if
25 there is anyone who would like to comment regarding
0139
KEEFE REPORTING COMPANY
Belleville, Illinois
1 DCCA's explanation for not conducting an economic
2 impact study for these proposed rules?
3 Seeing none, then we -- the Board has requested an
4 expedited transcript of this hearing. The transcript
5 should be available in the Chicago office on Monday,
6 and in the Springfield office on Tuesday. If anyone
7 would like a copy of the transcript from today's
8 hearing, you can speak to the court reporter
9 directly. It will not be -- you will not be able to
10 get it off the web site. You can get a free copy by
11 contacting the Clerk's office in Chicago or by
12 contacting me. The copies of the transcripts from the
13 other hearings are also available.
14 Due to the statutory deadline the Board is
15 operating under, public comments must be received by
16 the Clerk of the Board no later than 4:30 on July
17 14th, 1998, to insure that the comments will be
18 considered by the Board in its deliberations as to how
19 the proposed rule should read at the first notice
20 publication. The mailbox rule does not apply to this
21 filing.
22 Anyone may file public comments. These public
23 comments must be filed with the Clerk of the Board.
24 If you are on the service list your public comment
25 must be simultaneously delivered to all persons on the
0140
KEEFE REPORTING COMPANY
Belleville, Illinois
1 service list. You should contact the clerk's office
2 to make sure that you have an updated service list.
3 Please note that there will be additional time to
4 file public comments. This time period will last 45
5 days commencing on the date the first notice appears
6 in the Illinois Register.
7 Are there any other matters that need to be
8 addressed at this time?
9 Seeing none, then I would like to thank you all
10 for your patience and participation at these hearings,
11 and this hearing will be adjourned.
12 (Hearing Exhibits 15 and 16 were retained by
13 Hearing Officer Cynthia Ervin.)
14
15
16
17
18
19
20
21
22
23
24
25
0141
KEEFE REPORTING COMPANY
Belleville, Illinois
1 STATE OF ILLINOIS )
) SS
2 COUNTY OF MONTGOMERY)
3
4 C E R T I F I C A T E
5
6 I, DARLENE M. NIEMEYER, a Notary Public in and for
7 the County of Montgomery, State of Illinois, DO HEREBY
8 CERTIFY that the foregoing 141 pages comprise a true,
9 complete and correct transcript of the proceedings
10 held on the 10th of June A.D., 1998, at 200 South
11 Ninth Street, the 2nd Floor, Springfield, Illinois, In
12 the Matter of: Proportionate Share Liability, in
13 proceedings held before the Honorable Cynthia Ervin,
14 Hearing Officer, and recorded in machine shorthand by
15 me.
16 IN WITNESS WHEREOF I have hereunto set my hand and
17 affixed my Notarial Seal this 12th day of June A.D.,
18 1998.
19
20
Notary Public and
21 Certified Shorthand Reporter and
Registered Professional Reporter
22
CSR License No. 084-003677
23 My Commission Expires: 03-02-99
24
25
0142
KEEFE REPORTING COMPANY
Belleville, Illinois