ILLINOIS POLLUTION CONTROL BOARD
April
6,
1989
ILLINOIS ENVIRONMENTAL
PROTECTION
AGENCY,
)
Complainant,
v.
)
PCB
86—2?
)
MODINE MANUFACTURING
COMPANY,
INC.,
Respondent.
MESSRS.
MICHAEL JOHN MAHER* AND MICHAEL
K.
OHt’1, ASSISTANT
ATTORNEYS GENER~.L,APPEARED
ON
BEHALF OF THE COMPLAINANT;
MESSRS.
ROY M. HARSCH AND DANIEL
F.
O’CONNELL APPEARED ON BEHALF
OF THE RESPONDENT MODINE MANUFACTURING COMPANY,
INC.
SUPPLEMENTAL OPINION AND ORDER OF THE BOARD
(by J.
Anderson):
This matter comes before the Board
on
a remand
from the
Illinois Appellate
Court
Second District (Court)
.
Modme
Manufacturing Company
v.
Pollution Control Board and
Environmental Protection
Agency,
No.
2—88—0176
(2d Dist.
1988).
The Court affirmed
in part and reversed
in part
a February
4,
1988 Order
of this Board upholding the Illinois Environmental
Protection Agency (Agency)
in both Counts of
its two count
complaint alleging that Modine Manufacturing Company
(t4odine)
had
violated sections of the Environmental Protection Act
(Act)
and
related
Board Air Pollution regulations related
to operation
without
a permit (Count
I)
and exceeding allowable particulate
air emission limits
(Count II).
The Board included a cease
and
desist order
and imposed
a penalty of $10,000.
The Court reversed
the Board
on Count
II, holding that
the
Board should have dismissed
the Agency’s “complaint alleging
that
Modine violated
Section 9(a)
of the Act by exceeding particulate
air emission limitations”.
(Court Order
P.
12); the Court agreed
with Modine that the Agency, during the last of three pre—
*
The
Boar~9 notes
that
~r
.
Maher
,
formerly
a
member
of
the
Board’s
staff subsequent to his employment
as
an Assistant
Attorney General, took no part
in the deliberations
in this
matter.
98—05
enforcement conferences,
had entered
into
an enforceable
oral
contract not
to enforce against Modine
for actions alleged
in
Count
II.
The Court
then upheld
the Board
on
its finding
of violation
regarding Count
I,
operating
without
a permit,
holding that there
was no oral contract
or estoppel.
In
so saying, the
Court took
special notice of
the following
testimony by Mr.
Fahi,
Moc9ine’s
Supervisor
of Environmental Engineering:
“Subsequently,
the
EPA
informed
Modine
that
Modine
would
not
need
to
file
a
variance
request
for
excess
particulate
emissions
during
the
phase—out
period
for
the
Alfuse
process”.
(Court Order,
p.
8)
The Court made three points about
this
testimony:
first,
the
Agency did not promise
to
take no
enforcement action
for
operation without
a permit; second, even
if such
a promise were
implied,
it would
not be enforceable under contract
law because
the event was subsequent
to the pre—enforcement meeting with the
Agency when the oral contract was
formed,
and
no evidence existed
of another contract that
included
the Agency’s variance
statement;
and third,
the elements of
promissory estoppel were
not established
—
there was no unambiguous promise
and Mr.
Fahl
did not testify that Modine
relied on
the subsequent Agency
statement
(Court Order
p.
8,9).
The Court then explained
its remand
as
follows:
“Although
the PCB said
that Modine’s operation
without
a permit for more
than two years would
alone
warrant
a
$10,000
penalty,
the
PCB did
not
indicate
that
a
penalty
in
that
amount
would
have been
imposed
in the absence of
the
particulate
emission
limitation
violations.
We therefore
remand
this
cause
to the PCB for
a determination of the appropriate penalty
for
Modine’s
operation
without
a
permit.
Since
the penalty may be modified
on remand,
we will
not
consider
at
this
time
Modine’s
issue
challenging
the
propriety
of
the
penalty
imposed.
(Court Order,
p.
12)
The Board statement
to which
the Court refers
is contained
in
the followinc paragraph
of the Board’s Order:
Based
upon
its
consideration
of
the
factors
set
forth
in
Section
33(c)
of
the
Act
and
other
matters
as
stated
in
this
Opinion,
the
Board
finds
that
a penalty
of
$10,000.00
for
the
above
cited
violations
is
warranted
in
—3—
this
case.
As
stated
above,
Modine operated
its
facility
for
a
period
of
over
two years
after
its permit expired and for
at least
four
years
after
the
initial
noncompliant
reading
was reported.
This was inexcusable.
For
this
violation
alone
a
$10,000
penalty
is
warranted.
The Board
then
stated:
Modine’s good faith arguments are considerably
under—cut
by
its
failure
to
do
anything
to
operate
lawfully.
The little weight
that can
be
given
to
Modine’s
good
faith
arguments
serves
to
mitigate
against
the
finding
of
a
more
substantial
penalty.
Under
these
circumstances,
the
Board
believes
that
imposition
of
a greater
penalty would
not
aid
in the enforcement of the Act.
The above
statements were the culmination of almost three
pages of Board
consideration of the factors
set forth
under
Section
33(c)
of the Act,
factors
which
the Board must consider
when determining penalties.
While
the Board suggests that
the above language did
identify the Count
I violation as the reason
for the $10,000
penalty, the Board, pursuant to the Court’s directive, has
revisited
the penalty
issue
so as
to assure that only Count
I
is
considered.
In
so doing, the Board has reconsidered the Section
33(c)
factors
and has again reviewed the only two post-hearing
documents filed
by the parties,
the Agency’s Post Hearing
Memorandum
of Law (filed September
9,
1987)
and Modine’s Post—
Hearing Brief,
filed November
6,
1987.
The Board
notes
that
both
the Agency and Modine argued
the penalty
issue as related
to
Count
I.
Regarding
the lack of
a permit,
the facts are not at
issue;
Modine was twice denied
a permit
in 1983,
and from October
31,
1983, when its existing permit expired, until January 24,
1986,
Modine operated without
a permit.
The Board will
first revisit
the Section
33(c)
factors.
The
first consideration under Section 33(c)
is the character
and
degree of injury to or
interference with the health, general
welfare or property of
the public.
With Count
II no longer at
issue, any considerations affecting
the penalty involve
the Count
I violation only.
The Board does consider that
the degree
of
interference
with
the
public
health,
welfare
or
property
is
considerable
for
operating
without
a
permit,
particularly
given
the
circumstances
of
this
case.
98—07
—4—
When
a permit program
is established,
each permit and
its
contents become
a first
line mechanism by which the requirements
of
the Act and
related Board
regulations are effectuated,
facility by facility,
(see also
Illinois Environmental
Protection Agency
v.
Trilla Steel Drum Corporation,
PCB 86—56,
June
25,
1987, modified August
6,
1987).
A person has no authority to operate without
a
required
permit;
it
is
a threshhold requirement
and the Board
has long
emphasized
its special
importance:
We
have
often
stated
that enforcement
of
the
permit
provisions
...
is
essential
to
the
environmental control
system
in
Illinois.
It
is
rare
indeed
when
a permit
violation
does
not call
for at least
some monetary penalty.
Illinois
Environmental
Protection
Agency
v.
George
E.
Hoffman
& Sons,
Inc.,
PCB 71—300,
12
PCB 413,
414
(May 29,
1974):
There are certainly no rare circumstances here.
As will be
discussed later,
the circumstances
in this case call
for more
than “at least
some monetary penalty”.
The second consideration under Section
33(c)
is the social
and economic value of the pollution source.
The Board does
consider the source of significant social
and economic value
insofar
as the plant manufactures condensers and evaporators and
has a significant employment; however,
operating without a permit
significantly reduces social
and economic considerations when
assessing
a monetary penalty.
The
third consideration under Section
33(c),
the
suitability
of
the
location
of
the
site was not separately addressed;
consideration
of
the
location
per
se
is
not
a
particularly
relevant
consideration
for
assessing
a
penalty
for
operating
without
a permit.
The fourth consideration is the economic reasonableness and
technical
feasibility of reducing the pollution.
Modine
demonstrated
that
it was economically reasonable
and technically
feasible
to reduce the pollution.
The problem was time.
From
a
Count
I perspective,
and assuming
that time was a justifiable
limiting
factor,
the Board
finds no merit
in considering this
factor
in
a light
favorable to Modine,
since Modine failed
to
98—08
—5—
seek variance relief from the Boards standards so
it could take
the time
in
a lawful permit setting.*
In again reviewing Modine’s arguments
in
its post—hearing
Brief, the Board again can find no
stand—alone reason why Modine
made no effort
to remedy its permit problem
for over two years.
Instead, Modine seeks
to excuse its inaction by linking
its
violation of Count
I
to its efforts
to cure its emission
problems.
For example, Modine states:
Any
penalty
imposed
in
this
case
could
only
serve
to
punish
Modine
for
cooperating
with
the
Agency
instead
of
litigating
through
variance and permit appeal proceedings.
(Modine Br.
p.
19)
Modine also states:
The
fact
that
this
case
involves
a
period
where
Modine
operated
without
a
permit
does
not
mean
that
it
would
be
appropriate
to
impose
a penalty.
Modine’s failure
to have
an
operating
permit
as
alleged
in
the
complaint
was
a
direct
result
of
the
technical
difficulty
in
bringing
the
scrubber
into
compliance.
(Modine
Br.
p.
25)
Modine also states:
The Agency agreed
to Modine’s compliance plans
each time there
(Sic) were revised.
*
The Board
notes
that Section 33(c)
has been amended
twice
during the pendancy of this proceeding
to add two new Section
33(c)
factors:
Section 33(c)(5) includes “any economic benefits
accrued by a noncomplying pollution source because of
its delay
in compliance with pollution control requirements”.
P.A.
85—358
(fIB
0345)
eff.
9/11/87.
This effective date occurred
in the
middle of the post—hearing briefing schedule.
Section 33(c)(6)
includes “any subsequent compliance”.
P.A.
85—1041
(HB 3425)
eff.
7/13/88.
This effective date occurred after
the Board
first
ruled
on the case.
Because
the appellate court directed the
Board
to reconsider
the penalty
for Count
I based
on the record
as
it existed,
the Board has given
the former
factor little
weight
and does
not
hel ieve
the
latter
factor
can
properly
he
considered
now.
The Board does note,
however,
that even
if the
new factors were
to be fully considered, that consideration would
not be
favorable
to Modine.
98—09
-6-
Therefore,
the
goals
of
the
permit
program
were met.
(Modine Br. p 25; emphasis added)
Modine also states:
The
Board
should
not
listen
to
the
Agency’s
faulting
of
Modine
for
not
seeking
a
variance.
The Agency told Modine not
to seek
a
variance.
T.90.
This
was
a
good
way
to
proceed.
The Agency
and
Modine
concentrated
their
efforts
on
achieving
compliance
rather
than
litigating.
This
type
of
cooperative
effort
should not be discouraged by imposing
a
penalty
to
punish
Modine
for
not
litigating.
(Modine
Br.
p.
32)
What Modine appears
to be
arguing,
in essence,
is that
it
ought
to he
able to, with
impunity, do nothing
to comply with one
regulation until
it comes
into compliance with another.
What
is particularly disturbing about this argument
is that
that “one regulation”
involves the requirement
to have
a
permit.
This requirement
is not less important when one
is out
of compliance with standards
than when one
is
in compliance; that
would be an absurd conclusion.
Modine knew full well that its
facility was required
to have
a permit.
Modine knew about the
variance process
and knew that
a variance petition was a route
available to
it
for temporary relief from operating
without
a
permit
following the Agency’s permit denials.
Modine chose
instead
to view its interaction with the Agency to stave off an
enforcement action as an effort sufficient
to bypass any further
actions whatsoever
for over two years to operate lawfully.
This mind—set
is
totally unacceptable.
It turns
the system
upside down.
As the Court correctly stated,
a decision not to
bring an
enforcement action rests with the Agency,
not the Board
(Court Opinion,
p.
11);
however,
an Agency decision
to accept
Modine’s compliance plans does not vest
the Agency with the power
to grant
a variance
to cure Modine’s permit problems.
Modine’s
assertion that “Therefore
the goals of
the permit program were
met”
is disingenuous and totally mistaken.
Section
35(a)
of the
Act specifically vests authority
in the Board
to grant variances
“beyond
the limitations prescribed
in this
Act, whenever
it
is
found,
upon presentation of adequate proof,
that compliance with
any rule
or regulation, requirement or order of the Board would
impose
an
arbitrary or unreasonable hardship.”
The irony in all
this
is that had Modine, early on, presented
its compliance plan
and asserted its
goo’d
faith arguments sufficient
for
an arbitrary
or
unreasonable
hardship
showing
in
a
variance
petition,
enforcement
litigation
would
not
have
taken
place
at all.
98—10
—7-.
In
a very real sense,
the Court’s directive
to the Board
to
consider the penalties
for the permit violation without being
distracted
by the mitigating considerations
related
to the
particulate emission violations makes this Board’s penalty
considerations that much more
to the point.
Section
42(a)
of the Act provides
for
a penalty not to
exceed $10,000 for said violation and an additional penalty not
to exceed $1,000
for each day the violation continues.
The length of
time Modine was
in violation of the permit
requirement could of course be
an added component
in assessing
the penalty.
However, the
Board believes that assessing
the full
statutory penalty for
the violation itself will be sufficient
deterrence, particularly since
it will most clearly target
the
intolerable aspects of this case.
The Board does not wish
to
blur
in any way that which
is so fundamentally unacceptable about
this case
and which needs
to be
forcefully deterred.
The Board
wishes
to deter Modine and any other like—minded member of
the
regulated community
from believing that
it
is an acceptable
strategy to violate
the permit requirements
in the Act and Board
regulations simply because they have persuaded the Agency
to
defer enforcement action.
In summary,
the Board can find
no mitigation
for Modine’s
operating without
a permit.
On the contrary,
Modine’s failure
to
act and
its underlying mind—set are
so egregious that the Board
determines
that
a $10,000 penalty is necessary to aid
in the
enforcement of
the Act;
it
is specifically imposed
for Modine’s
operating without a permit,
in violation of Section 9(b) of the
Act and
35
Ill.
Adm.
Code 201.141 and 201.144.
This Opinion constitutes
the Board’s supplemental findings
of fact and conclusions of law
in this matter.
The Board’s
February
24, 1988 Order
is hearby affirmed
in its entirety except
that the holding
that Respondent has violated Section
9(a)
of the
Act and
35
Ill.
Adm.
Code 212.322
is stricken.
Section
41 of the Environmental Protection Act,
Ill.
Rev.
Stat.
1987
ch.
111 1/2 par.
1041, provides
for appeal of Final
Orders of
the Board within
35 days.
The
Rules of the Supreme
Court of Illinois establish filing requirements.
IT IS SO ORDERED.
R.
Flemal dissented.
97—1 1
-8-
I,
Dorothy
M.
Gunn, Clerk of
the Illinois Pollution Control
Board, hereby certify that the above Supplemental Opinion
and
Order was adopted
on the
~ZZ
day of
~
,
1989,
by a
vote of
~
.
Do
Illino: -s
n Control Board
98—12