RECEIVED
BEFORE THE ILLINOIS
POLLUTION CONTROL BOAR~LERKJSOFFICE
PEOPLE OF THE STATE OF ILLINOIS,
)
JUL
2
1
2005
Complainant,
)
PO~o~~d
vs.
)
PCB No.
03-191
(Enforcement-Land)
COMMUNITY
LANDFILL COMPANY,
INC.,
an Illinois corporation,
and
the CITY OF MORRIS,
an Illinois
municipal corporation,
Respondents.
to:
Mr. Mark La Rose
Mr. Bradley P. Halloran
La Rose
&
Bosco
Hearing Officer
200 N. La Salle Street,
#2810
Illinois Pollution
Chicago,
IL 60601
Control Board
100 W. Randolph Street
Chicago IL 60601
Mr. Charles Heisten
Hinshaw & Culbertson
100 Park Avenue
Rockford
IL 61105-1389
NOTICE OF
FILING
PLEASE TAKE NOTICE that we have today, July 21,
2005,
filed
with the Office of the Clerk of the Illinois Pollution Control
Board,
an original and nine copies of Complainant’s Motion for
Summary Judgment,
a copy of which is attached and herewith served
upon you.
Respectfully submitted,
PEOPLE OF THE STATE OF ILLINOIS
ex
rel
LISA MADIG
Attorn y General o
the
BY
StQ,,1~fIllinois
CHM*O~
GRAF~JT
MIt94ELL
COHEN
AS’istant Attorneys General
Environmental Bureau
188
N. Randolph St.,
~
Flr.
Chicago,
IL 60601
(312)
814-5388
BEFORE THE ILLINOIS POLLUTION CONTROL BOARI~J~~~
PEOPLE OF THE STATE OF ILLINOIS,
)
JUL
2
1
2005
Complainant,
STATEOFILLIN0iS
Pollution
Control
Board
vs.
)
PCB No.
03-191
(Enforcement-Land)
COMMUNITY
LANDFILL
COMPANY,
INC.,
an Illinois corporation,
and
the CITY OF MORRIS,
an Illinois
municipal corporation,
Respondents.
COMPLAINANT’S MOTION FOR SUMMARY
IJUDGEMENT
NOW COMES the Complainant,
PEOPLE OF THE STATE OF ILLINOIS,
through its attorney, LISA MADIGAN, Attorney General
of the State
of
Illinois,
and requests that the Illinois Pollution Control
Board
(“Board”)
grant, pursuant to 35 Ill.
Adm.
Code 101.516,
summary judgment
in favor of Complainant and against the
Respondents,
COMMUNITY LANDFILL COMPANY, and the CITY OF MORRIS.
In support thereof, Complainant states as follows:
I.
INTRODUCTION/BACKGROUND
1.
On April
16,
2003,
the State filed its Complaint,
on
referral from the Illinois Environmental Protection Agency
pursuant
to Section 31 of the Illinois Environmental Protection
Act
(“Act”)
,
415 ILCS 5/31
(2002)
.
The State alleges that the
Respondents violated Section 21(d) (2)
of the Act,
415
ILCS
5/21(d) (2)
(2002),
and 35
Ill.
Adm.
Code Sections 811.700
(f)
and 811.712,
through failure to provide adequate financial
—1—
assurance for closure/post-closure activities at the Morris
Community Landfill,
Morris, Grundy County Illinois
(“Landfill”)
Financial assurance is required by 35
Ill. Adm.
Code,
Part 811,
Subpart G.
2.
Upon application by the Respondents,
on August
4,
2000
Illinois EPA issued two significant modification permits
to the
Respondents,
2000-l55-LFM for Parcel A
Exhibit
A
,
and 2000-156-
LFM for Parcel B
Exhibit
B
.
The Respondents subsequently
obtained various modifications
to the Permits.
Both Permits
(and
modifications thereto) were issued to Respondent City of Morris
(“Morris”),
as owner,
and Respondent Community Landfill Company
(“CLC”)
,
as operator.
Pursuant to these permits,
and the
provisions of the Board’s landfill regulations,
the Respondents
were to provide a total
of $17,427,366.00
in compliant financial
assurance,
beginning in 2000.
See Exhibit A,
p.
45,
par.
6,
Exhibit
B,
p.
33,
par.
6.
3.
Section 21.1
of the Act requires “persons” conducting
waste disposal operations pursuant to an Illinois EPA-issued
permit to post
“.
.
.a performance bond or other security for the
purpose of insuring closure of the site and post closure care in
accordance with this Act and regulations adopted thereunder.
.
.
415 ILCS 5/21.1
(2002)
4.
Closure/post closure financial assurance must meet the
provisions
of
35
Ill.
Adm.
Code 811.700,
as further described by
-2-
35
Ill. Adm.
Code Sections 811.706, 811.710 through 811.717,
and
811.719-720.
These regulations,
and the Act,
prohibit any person
from conducting waste disposal operations without adequate,
compliant financial assurance,
i.e.
financial assurance meeting
the specific requirements
of these Board regulations.
5.
The Respondents have failed to comply with the
conditions
of their permits and the pertinent regulations.
Instead,
in 2000,
the Respondents provided Illinois EPA with
three surety bonds issued by Frontier Insurance Company,
an
inadequate surety.
Copies of these bonds are attached hereto as
Exhibit C.
6.
Following denial of subsequent permit applications due
to inadequate financial assurance,
the Respondents fully
litigated the issue of whether the Frontier Bonds met regulatory
requirements.
In
Community Landfill Company and City of Morris
v.
Illinois EPA,
PCB 01-48/01-49
(Consolidated) (April
5,
2001,
slip op.,
at
29) Exhibit
D,
the Board found that the amount of
financial assurance to be maintained by the Respondents was
$17,427,366.00.
In
Community Landfill Company and City of Morris
v.
Illinois EPA,
PCB 01-170
(December
6,
2001,
slip op.
at
22) Exhibit
E,
the Board found that the Frontier Bonds did not
meet the requirements of 35
Ill.
Adm.
Code 811.712(b).
The Board
upheld the denial of the permit applications due to the
Respondents’
failure to provide adequate,
compliant financial
-3-
assurance.
On appeal,
the Appellate Court affirmed the Board’s
finding. 331 Ill.
App.
3d 1056
Exhibit
F.
The Illinois Supreme
Court subsequently denied the Respondents’
Petition for Leave to
Appeal.
202 Ill.
2d 600
(Dec.
5,
2002).
7.
As the attached Exhibits demonstrate,
the Respondents
have failed to provide ~j~y financial assurance meeting the
requirements of the Act or their permits.
However, they have
continued operations, specifically waste disposal
in parcel A at
the Landfill,
without financial assurance.
8.
This Motion seeks an order finding the Respondents
in
violation of the pertinent regulations and the Act;
ordering the
Respondents to stop disposal of any material at the Site until
they comply with the Act,
Board regulations, and relevant
Permits; ordering the Respondents to immediately provide
financial assurance meeting the requirements
of the Act, and
relevant permits; and setting a date for hearing on the issue of
Civil Penalty.
II.
PRELIMINARY MATTERS
9.
Complainant alleges that the Respondents have violated
35
Ill.
Adm. Code Sections 811.700(f)
and 811.712.
Section
21(d) (2)
of the Act,
415 ILCS 5/21(d) (2)
(2002)
,
provides that
violation of these regulations are violations
of the Act
as well.
10.
The pertinent sections of the Act and regulations
provide:
-4-
415 ILCS 5/21(d) (2)
(2002)
No person Shall:
*
*
*
(d)
Conduct any waste-storage,
waste-treatment
or
waste-disposal operation:
*
*
*
(2)
in violation of any regulations or standards
adopted by the Board under this Act....
*
*
*
35
Ill.
Adm.
Code 811.700(f)
*
*
*
(f)
On or after April
9,
1997,
no person,
other than
the State
of Illinois,
its agencies and
institutions,
shall conduct any disposal
operations
at an MSWLF unit that requires a permit
under subsection
(d)
of section 21.1 of the Act,
unless that person complies with the financial
assurance requirements of this Part.
35 Ill.
Adm.
Code 811.712
*
*
*
(b)
the surety company issuing the Bond shall
be
licenced to transact the business of insurance by
the Department of Insurance,
pursuant to the
Illinois Insurance Code
215
ILCS
5
,
or at a
minimum the insurer must be licensed to transact
the business of insurance or approved to provide
insurance as an excess or surplus lines insurer by
the Insurance Department of one or more states,
and approved by the U.S.
Department of the
Treasury as an acceptable
surety.
Section
21.1(a.5)
of the Act,
415
ILCS 5/21.1(a.5)
-5-
BOARD NOTE:
The U.S.
Department of the Treasury
lists acceptable sureties in its Circular 570.
11.
In its Answer,
CLC admits that it is
a
“person”,
as
defined.
The City of Morris denies that
it is a
“person”
as
that term is used in the Act.
However, Respondent Morris admits
that it
is an Illinois municipal corporation
Morris
Answer,
par.3
.
Section 3.315 of the Act,
415
ILCS
5/3.315
(2002),
defines
“person”
as follows:
“PERSON”
is an individual, partnership, co-
partnership,
firm,
company,
limited liability
company, corporation,
association,
joint
stock company,
trust, political subdivision,
state agency,
or any other legal
entity,
or
their legal representative,
agent or assigns.
12.
As
a municipal corporation,
the City of Morris is
a
‘political subdivision’, and therefore
a “person”.
The City of
Morris’
denial of this allegation is frivolous.
13.
Respondent CLC admits that
it was issued the following
permits:
Significant Modification Permits No. 2000-l55-LFM and
2000-156-LFM on August
4,
2000,
Permit Modification No.
2 on June
29,
2001,
and Permit Modification No.
3 on January
8,
2002
CLC
Answer,
par.
8
.
However, Respondent Morris denies that
it was
issued these permits
Morris
Answer,
par.
8
.
Again,
Respondent
Morris’
denial is frivolous.
Exhibits A and B clearly indicate
that the City was Permittee as
‘owner’
.
See also: Affidavit of
Brian White
Exhibit
G,
par.
7-8
regarding subsequent permits.
Moreover,
Respondent Morris vigorously litigated the denial of
-6-
its subsequent permit applications
in Case No.
PCB 01-170,
and
the Appellate Court.
Respondent Morris’
standing in these cases
was
as existing permit holder, and applicant for the
(denied)
modifications.
There is no genuine question that Respondent
Morris is Permittee under all relevant Landfill permits.
14.
Section 3.285 of the Act,
415 ILCS 5/3.285
(2002),
provides,
as follows:
“Municipal Solid Waste Landfill Unit”
or MSWLF unit”
means a contiguous area of land or an excavation that
•receives household waste, and that is not a land
application unit,
surface impoundment,
injection well,
or any pile of noncontainerized accumulations of solid,
nonflowing waste that
is used for treatment or storage.
A MSWLF unit may also receive other types of RCRA
Subtitle D wastes,
such as commercial
solid waste,
nonhazardous
sludge,
small quantity generator waste and
industrial solid waste.
Such a landfill may be
publicly or privately owned.
A MSWLF unit may be a new
MSWLF unit,
an existing MSWLF unit,
or a lateral
expansion.
A sanitary landfill
is subject to
regulation as a MSWLF unit
if
it receives household
waste.
15.
Both Respondents admit that parcels A & B of the Morris
Community Landfill are MSWLF units.
Therefore the provisions of
35
Ill.
Adm.
Code 811.700(f)
apply to the entire Morris Community
Landfill.
III.
THE RESPONDENTS HAVE CONDUCTED A WASTE DISPOSAL OPERATION
a.
Activities of Both Respondents
16.
Although the term ‘waste disposal operation’
is not
defined in the Act,
the facts show that both Respondents are
‘conducting a waste disposal operation’
at the Landfill,
giving
-7-
that term its common meaning.
First,
both Respondents were
issued permits for
solid waste disposal
at the landfill.
This
fact alone,
as a matter of law,
demonstrates that both
Respondents were conducting a waste disposal operation.
In
addition,
as shown by Exhibit
H,
the Respondents submitted
reports acknowledging the receipt of solid waste at the Landfill.
These reports were signed,
under oath, by the Mayor of the City
of Morris and the President of CLC,
and indicate dumping activity
during the years 2000,
2001,
and 2002.
Although the Respondents
have failed to submit these reports for subsequent years
See:
Affidavit
of Ellen Robinson, Exhibit
1-1,
par.
7,
as shown by the
Affidavit of Mark Retzlaff
Exhibit
I,
par.
11
,
waste disposal
at the Landfill has continued,
in parcel A,
through at least May
18,
2005.
b.
Activities of Respondent Community Landfill Company
17.
Respondent CLC admits that
it
is the operator, and that
it manages day-to-day operations at the Landfill
CLC
Answer,
par.
5
.
It also admits that
it was issued Significant
Modification Permits No. 2000-155-LFM, 2000-156-LFM, and
modifications issued on June
29,
2001 and January
8,
2002
CLC
Answer,
par.
8
.
As shown by the Affidavit of Mark Retzlaff
Exhibit
I,
CLC employee James Pelnarsh Sr. continues to manage
operations at the Site.
In October,
2004,
Retzlaff noted dumping
of general
debris,
and reviewed records of substantial dumping of
-8-
petroleum-contaminated soil.
Exhibit
I,
par.
7-9.
On May 19,
2005, James Pelnarsh Sr. admitted to additional dumping the
previous day.
Exhibit
I, par.
11
c.
Activities of Respondent City of Morris
18.
Not only did the City apply for the relevant permits,
it provided,
as principal,
a Frontier Insurance Company surety
bond in the sum of
$10,081,630.00
Exhibit
C.
Also,
the City of
Morris was a Petitioner in the two Landfill Permit appeals,
and
was co-appellant
in the appeal of the Boards’
finding in PCB 01-
170.
19.
Respondent Morris has also profited from continued
disposal at the Site.
As shown by excerpts from the deposition
transcript of the City’s representative deponent,
Mr. John Enger
Exhibit
J,
the City receives a royalty for waste dumped at the
Landfill,
free or reduced dumping fees,
and
(formerly)
royalties
from operation of a landfill gas-to-energy plant.
Exhibit
J,
at
p.
21-22.
20.
The City of Morris’
active involvement
in permitting
for solid waste disposal, bonding
the landfill,
and collecting
royalties for waste dumping,
shows that it was,
along with CLC,
‘conducting a waste disposal operation’
IV.
COMPLAINANT IS ENTITLED TO SUMMARY
JUDGMENT
21.
Section 101.516 of the Board Procedural
Rules,
35 Ill.
Adm.
Code 101.516, provides,
in pertinent part,
as follows:
-9-
*
*
*
b)
If the record,
including pleadings,
depositions and
admissions on file,
together with any affidavits,
show
that there is no genuine issue of material fact,
and
the moving party is entitled to judgment as a matter of
law,
the Board will enter summary judgment.
22.
The affidavits,
depositions,
prior Board and court
rulings, and the pleadings in this matter clearly indicate that
the Respondents have failed to provide the required financial
assurance for the Morris Community Landfill,
in violation of the
Board’s financial assurance regulations,
and the relevant
landfill permits.
a.
The Respondents have violated 35
Ill. Adm. Code 811.712
23.
Section 811.712 of the Board regulations requires that
Performance Bonds used as financial assurance be listed in the
U.S.
Department of the Treasury ‘Circular 570’.
24.
The Respondents noncompliance with 811.712 has
previously been decided.
In PCB 01-170,
the Board found that the
Frontier Bonds submitted by Respondents did not meet the
requirement of this Section. Exhibit
E,
at
14.
The Appellate
Court, Third District upheld the Board’s determination.
Exhibit
F,
at
4.
25.
The principal of Collateral Estoppel should be applied
in our case.
Collateral Estoppel applies where:
1)
the issue decided in the prior adjudication
is identical
with the one presented in the instant matter;
2)
there was a final judgement on the merits in the prior
adjudication; and
-10-
3)
The party against whom estoppel
is asserted was a party
or a party
in privity with a party to the prior
adjudication.
People
v. Community Landfill
Co.
et al.
PCB 03-191,
slip op at 4-
5
(October
16,
2003), (citing
ESC Watts,
Inc.
v.
IEPA,
PCB 96-191
and 97-210,
slip op.
at 2-3
(July 23,
1998))
26.
The issue of whether the Frontier Bonds were compliant,
decided by the Board in PCB 01-170,
is identical
to that in our
case-the Bonds are the same.
This issue has already reached a
final adjudication,
and was reviewed on appeal.
The Respondents
were Petitioners in PCB 01-170,
and fully litigated the issue.
27.
Although courts closely scrutinize the application of
‘offensive collateral estoppel’,
its use is appropriate
in this
case.
Courts do not favor offensive collateral estoppel where:
1)
it may encourage potential plaintiffs
to
‘wait and see’
rather than joining in earlier litigation; and/or
2)
where the prior litigation was comparatively minor,
and
a Defendant did not have incentive to fully litigate an
issue.
American Family Mutual Insurance Co.
v.
Savickas,
193
Ill.
2d 378,
390
(2000)
28.
However, neither of these factors
is present
in this
case.
First, the prior litigation involved the same parties.
The State could not
‘wait and see’
for a favorable result:
Respondents’ permit appeal
in
PCB
01-170
was thrust upon it.
Also,
the Respondents,
seeking to operate new sections of the
landfill, had the incentive to vigorously litigate the legitimacy
—11—
of
their own bonds.
In fact the Respondents appealed to Board’s
ruling to Appellate Court,
and sought leave to appeal to the
Illinois Supreme Court.
There is no unfairness to the
Respondents from applying offensive collateral estoppel, and its
use
is reasonable-there is no reason to further litigate the
‘legitimacy’
of the Frontier Bonds.
29.
Moreover,
as shown by the Affidavit
of Brian White
Exhibit
G,
par.
11,
Frontier Insurance Company is not listed on
Circular 570.
Therefore,
as
a matter of law,
the Performance
Bonds provided do not comply with either Section 811.712 or the
Respondents’ permits.
30.
By providing noncompliant performance bonds
as
financial assurance for closure/post closure of the Landfill,
the
Respondents have violated 35
Ill.
Adm.
Code 811.712.
There is no
genuine question of material
fact,
and the Board should find that
Plaintiff
is entitled to judgment on this issue as a matter of
law.
b.
The Respondents Violated,
and Continue
to Violate,
35
Ill. Adn.
Code 811.700(f)by Failing to Provide
Adequate Financial Assurance
31.
Section 811.700(f)
of the Board regulations,
35
Ill.
Adm.
Code 811.700(f), prohibits disposal operations at Municipal
Solid Waste Landfills without compliant financial assurance.
32.
The Board and the appellate court have previously
determined that the Frontier Bonds did not meet the requirements
-12-
of 35
Ill.
Adm.
Code 811.712(b);
the Board does not need to
revisit this issue.
However, the Respondents also have failed to
substitute or provide ~
adequate financial assurance,
even
though they have known since no later than December
5,
2002
(when
the Illinois Supreme Court denied Respondents’
Petition),
that
the Frontier Bonds did not satisfy their financial assurance
obligations.
33.
35
Ill. Adm.
Code 811.706 lists ten alternative
mechanisms for providing acceptable financial assurance,
including,
inter alia,
compliant performance bonds,
payment
bonds,
insurance policies,
and local government guarantees.
As
shown by the Affidavit of Brian White, neither Respondent has
arranged for or submitted closure/post closure financial
assurance conforming with ~
of these ten mechanisms
Exhibit
G,
par.
12
.
The Respondents
do not now have
~nx
adequate,
compliant financial assurance for closure/post closure of parcels
A & B of the Landfill.
This fact
is indisputable.
34.
In addition,
the Respondents have also failed to
provide annual updates of closure/post-closure costs,
or even to
annually adjust estimates for inflation as required by 35
Ill.
Adm.
Code 811.701(c)
Exhibit
G,
par.
14-15,
and their Permits.
35.
By conducting waste disposal operations
at the Landfill
after August
4,
2000,
without providing financial assurance
according to the requirements of
35
Ill. Adm. Code Sections
-13-
811.700 and 811.706,
the Respondents have violated 35
Ill. Adm.
Code 811.700(f).
There
is no genuine issue of material
fact,
and
Complainant
is entitled to judgment as a matter of
law.
c.
Violation of 415 ILCS 5/21
(d) (2)
36.
Section 21(d) (2)
of the Act provides that “no person
shall.
.
.conduct any waste-storage,
waste-treatment,
or waste-
disposal operations.. .in violation of the Board’s regulations and
standards.
.
.
.“
As shown above,
the Respondents have conducted,
and continue to conduct waste disposal operations at the
Landfill,
while violating 35
Ill.
Adm.
Code 811.712 and
811.700(f).
The Respondents have thereby also violated Section
21(d) (2)
of the Act,
415 ILCS 5/21(d)
(2)
(2002).
There
is no
genuine issue
of material fact and Complainant
is entitled to
judgment as a matter of
law.
d.
The Respondents’ Violations were Wilful,
Knowing, and
Repeated
37.
The Respondents have violated the financial assurance
regulations,
and their Permits,
since at least August
4,
2000.
Since no later than December
5,
2002,
when the Illinois Supreme
Court denied their Petition for Leave to Appeal,
the Respondents
have been fully aware that the Frontier Insurance Company bonds
were noncompliant, and thus insufficient.
Yet the Respondents
have failed to provide any other compliant financial assurance
for closure/post-closure of the landfill to the date of filing
this Motion for Summary Judgment, even though,
as shown by the
-14-
Landfill Capacity Reports
Exhibit
H,
and the Affidavit of Mark
Retzlaff
Exhibit
I,
they have continued waste disposal
operations.
The Respondents’
failure to provide compliant
financial assurance,
while continuing waste disposal operations,
constitutes wilful,
knowing, and repeated violations of the Act
and pertinent regulations.
V.
REQUESTED RELIEF
38.
Although there should be no doubt regarding the
Respondents’
violations of the financial assurance violations,
discovery in this case continues on issues related to civil
penalty,
specifically the economic benefit accruing to the
Respondents from these violations.
Complainant believes that
a
hearing on the sole issue of civil penalty will be necessary once
discovery closes on September 25, 2005.
However there
is no
reason to delay the Board’s decision on the Respondents’
liability,
or to delay interim relief in the form of an Order
stopping additional dumping and requiring the Respondents
to
immediately comply with the closure/post-closure financial
assurance regulations.
Therefore,
Complainant respectfully
requests that the Board order interim relief
in the form of the
following:
1.
A finding that the Respondents have violated 415 ILCS
5/21(d)
(2)
(2002),
and 35
Ill.
Adm.
Code Sections 811.700(f)
and
811.712;
-15-
2.
A finding that the Respondents’
violations were wilful,
knowing, and/or repeated;
3.
Ordering the Respondents to cease and desist from
transporting and depositing any additional material at the
Landfill until they are
in full compliance with their Permits,
and the Board’s financial assurance regulations;
4.
Requiring the Respondents to immediately provide
financial assurance as required by the Act,
Part
811,
Subpart G
of the Board solid waste regulations,
and the Respondents’
permits;
5.
Requiring the Respondents to update the
closure/postclosure costs
in accordance with Permits No.
2000-
155-LFM,
2000-156-LFM and modifications thereto;
6.
Ordering the Respondents
to initiate closure of parcels
A & B of the Landfill;
and
7.
Setting a date for hearing on the issue of civil
penalty.
WHEREFORE,
Complainant,
PEOPLE OF THE STATE OF ILLINOIS,
respectfully requests that the Board grant
its Motion for Summary
Judgment against the Respondents,
COMMUNITY LANDFILL COMPANY and
the CITY OF MORRIS,
award the relief requested herein,
set
a date
for hearing on the issue of civil penalty, and take such other
action as the Board believes to be appropriate and just.
-16-
Respectfully Submitted,
BY:
-~
A
/
C
STOPHER
G~NT
M
CHELL COHEN
Assistant Attorneys General
Environmental Bureau
188 W.
Randolph St.,
20th
Flr.
Chicago,
Illinois
60601
(312)
814-5388
(312)
814-5282
-
I 7-
