ILLINOIS POLLUTION CONTROL BOARD
November 29, 1990
THE GRIGOLEIT COMPANY,
Petitioner,
v.
)
PCB 89—184
(Permit Appeal)
ILLINOIS ENVIRONMENTAL
)
PROTECTION AGENCY,
)
Respondent.
GARY
B. PASEK APPEARED ON BEHALF OF PETITIONER, AND
JAMES J.
O’DONNELL, WILLIAM D.
INGERSOLL, AND JULIE ARNITAGE
APPEARED ON BEHALF OF RESPONDENT.
OPINION AND ORDER OF THE BOARD
(by J. Anderson):
This matter is before the Board on the November
13,
1989
filing of
a “Petition for Permit Appeal”
by The Grigoleit Company
(“Grigoleit”).
Grigoleit contests the Illinois Environmental
Protection Agency’s
(“Agency”)
denial of its July
12,
1989
application for renewal of
its air operating permit.
Hearings
were held on March
6,
July
17,
18, and
19, and August
16 and 17,
1990.
No members of the public testified at the hearings.
Grigoleit’s and the Agency’s briefs were filed on October
1,
1990,
and October
22,
1990, respectively.
Grigoleit’s reply
brief was filed on November
7,
1990.
STATEMENT OF FACTS
Grigoleit owns and operates a decorative metal fabrication
plant located
in Decatur, Macon County,
Illinois.
On July 12,
1989,
Grigoleit mailed. an Application for Renewal
of its
1984
Operating Permit to the Agency.
(Pet.
par.
1).
The Agency
denied the application via a permit denial letter dated October
11,
1989.
(Id. par.
4).
In its letter, the Agency gave the
following three reasons for its denial of Grigoileit’s request
for permit renewal:
1.
Pursuant to section 4(d)(1)
of the Illinois
Environmental Protection Act, the Agency
shall have authority to enter at all
reasonable times upon any private or public
property for the purposes of inspecting and
investigating to ascertain possible
violations
of the Act or regulations
thereunder,
or of permits or terms or
conditions.
Standard condition
#4
of the
operating permit previously issued to this
facility allows the Agency to enter the
116—247
2
permittee’s property where actual or
potential emission sources are located or
where any activity is to be conducted
pursuant to the permit.
Since you have not
allowed the Agency access to the premises for
inspection purposes, you have not fulfilled
the requirements of standard condition
4.
This
is a violation of 35 Ill. Adm. Code
201.161 and Section
4 of the Act.
2.
Your application fails to provide proof of
compliance with 35 Ill.
Adra.
Code 215.204(h),
(j)
and 215.301.
The following information
is required to assess compliance with these
rules:
a.
Provide usage and percentage by
volume for each ingredient
in ink
and solvent used for each coating
application.
b.
Provide the weight percentage of
the volatile organic compound in
the ink and solvent and the amount
of ink and solvent used per hour.
3.
You have been previously notified by the
Agency’s Division of Land Pollution Control
of apparent violations of 35 Ill.
Adrrt. Code
Sections 722.111, 722.112, 722.134,
725.152,
725.116 and 725.273.
Since these violations
are still outstanding, pursuant to sections
21 and
39 of the Act,
no permit may be
granted.
PENDING MOTIONS
On November
13,
1989,
Grigoleit filed an “Application for
Non-Disclosure”
with its “Petition for Permit Appeal”.
On
November
15,
1989, the Board issued an Order stating that it
would conditionally maintain as “Not Subject to Disclosure” the
information attached to the Petition for Permit Appeal.
Because
the Board had several concerns regarding the request,
it also
directed the parties to file briefs,
motions,
or other
appropriate pleadings regarding the issue on or before December
15,
1989.
Grigoleit filed its response, entitled “Motion to
Supplement its Application for Non-Disclosure and Statement
of
Intent”,
on December
15,
1989.
The Agency, however, did not file
a response regarding this matter.
On January
1,
1990,
the Board
issued an Order granting Grigoleit’s Motion to Supplement, but
stated that it made no findings on the Application for Non-
Disclosure.
U6—248
3
On August
13,
1990,
Grigoleit filed a “Motion for Sanctions,
Contempt and Other Relief”. On August 24,
1990,
the Agency filed
a “Response to Petitioner’s Motion for Sanctions,
Contempt and
Other Relief and Motion to File Instanter”.
On September
4,
1990, Grigoleit filed a “Response to Motion to File Instanter and
Motion to Strike the Respondent’s Response to the Petitioner’s
Motion for Sanctions,
Contempt and Other Relief and Request for
Other Relief”.
On September
7,
1990,
the Agency filed
a
“Response to Motion to Strike”.
On August 30,
1990, the Board issued an Order requesting the
Hearing Officer,
Mr. Marvin Medintz, to provide the Board with
any input he may have regarding the Motion for Sanctions.
The
Hearing Officer filed his September
12,
1990 response to the
Board’s Order on September 27,
1990.
Grigoleit and the Agency
filed their replies to the Hearing Officer’s Response on
September 20, and September 21,
1990, respectively.
A.
Grigoleit’s Application for Non-Disclosure
In its Application for Non-Disclosure,
Grigoleit asks that
certain exhibits be stamped “Not Subject to Disclosure” pursuant
to 35
Ill. Adm.
Code
101.161, and be kept confidential.
In
support of its request,
Grigoleit states that the documents
contain production processes,
methods, descriptions
(including
materials),
and applications that it considers proprietary and
has kept confidential since the date of their creation,
except to
the extent needed to apply for operating permits.
Grigoleit adds
that only the following people have access to the information:
four officers and two employees of the company who are
responsible for the preparation of the applications for its
operating permits,
its attorney,
and its engineers.
In its Motion to Supplement,
Grigoleit,
as requested by the
Board, marked those pages or portions of the material that it did
not want disclosed and stated that the material either
constituted
a trade secret,
a secret manufacturing process which
is considered proprietary and/or confidential information,
or
both.
Grigoleit also noted that certain emission data could not
be kept confidential.
The Board will maintain the documents
as “Not Subject to
Disclosure”.
Accordingly,
such material will be governed by the
procedures and protectons of 35 Ill.
Adin.
Code 120 Subpart
C.
(see
35 Ill.
Adm.
Code 101.160(d)).
B.
Agency Motion to File Instanter
In its Motion to File Instanter,
the Agency asks for leave
to file its Response to Grigoleit’s Motion for Sanctions
instanter.
In support of its motion,
the Agency states that it
116—249
4
received Grigoleit’s motion on August 13,
1990.
(Motion par.
1).
Although the Agency recognizes that its response was due to be
filed on or before August
20,
1990,
it notes that it received
Grigoleit’s motion three days before the final two days of
hearing
in this matter.
(Id.
pars.
1,
2).
The Agency states
that it spent most of the seven day response period preparing for
and attending the hearings.
The Agency adds that it was
attempting to resolve certain issues raised in Grigoleit’s Motion
for Sanctions with Grigoleit’s counsel from August 20,
1990,
until August 24,
1990.
(Id. par.
2).
Finally, the Agency notes
that the motion is not being filed for the purposes of delay,
and
that it will not prejudice Grigoleit or the Board because it
is
being filed in ample time for consideration at the Board’s August
30,
1990 meeting.
(~. par.
3).
In its Response to the Agency’s Motion to File Instanter
Grigoleit requests the Board to deny the Agency’s Motion to File
Instanter.
In support of its motion, Grigoleit states that the
Agency’s Motion to File Instanter is
in reality a motion for an
extension of time to file its response and is contrary to 35 Ill.
Adm. Code lOl.24l.1
(Response par.
1).
Grigoleit argues that
the Board cannot grant the Agency’s motion because the
requirements of the section are mandatory and not discretionary.
(Id. par.
3).
Grigoleit further argues that even if the Board
could entertain the Agency’s Motion to File Instanter, the motion
should be denied because the Agency showed no good cause for the
late filing and was aware of the filing deadline but chose to
ignore the relevant filing requirements.
(~.par.
4).
Although 35
Ill. Adm. Code 101.241 sets
a seven day time
limit in which to file a response, we will grant the Agency’s
motion for leave to file its Response instanter.
Although we are
not pleased with the lateness of the filing and suggest that it
would have been better
if the Agency had filed a motion for
extension of time to file its response, we note that our ruling
is made in light of the fact that the Agency received Grigoleit’s
motion three days prior to hearing, and then attempted to
negotiate a resolution to the matter with Grigoleit.
We also
wish to note that the Agency’s response may contain information
pertinent to a proper resolution of this matter.
Moreover,
it
does not appear that the Agency’s motion
is meant for purposes of
delay,
or that Grigoleit will be prejudiced by our ruling.
C.
Grigoleit’s Motion to Strike the Agency’s Response to
Grigoleit’s Motion for Sanctions
1This
section states that a party
is
deemed to have waived
objection to the granting of
a motion
if no response to
a motion
is filed within seven days but such waiver does not bind the Board
in its decision on the motion.
116—250
5
In its Motion to Strike, Grigoleit requests the Board to
strike the Agency’s Response,
or give it leave to file a reply to
the Agency’s Response,
if
it does not deny the Agency’s Motion to
File Instanter.
In support of its motion, Grigoleit states that
it will suffer material prejudice for several reasons.
First,
Grigoleit argues that the Agency’s attorney who prepared and
verified the Agency’s Response
(Mr. William D.
Ingersoll)
took no
part in the matters involved in the Motion for Sanctions and,
therefore,
lacks personal knowledge of the issues involved.
(Motion par.
7(a)).
Grigoleit adds that it is entitled to have
the Agency’s original attorney, Mr. James
J. O’Donnell respond.
(u.).
Second, Grigoleit states that there are gross
inischaracterizations, misleading information, and conclusory
statements in the Agency’s Response.
(Id. pars.
7(b)-(K)).
The
Board will not reiterate each alleged error in light of the fact
that Grigoleit takes each paragraph of the Response and details
the alleged errors contained therein.
In its response, the Agency objects to the Motion to Strike
based on its belief that the motion is based upon Grigoleit’s
objection to the Agency’s Motion to file Instanter.
(Response
par.
5)
.
Accordingly, the Agency reiterates its reasons for its
late filing.
(Id.
pars.
1,
2,
5).
The Agency also asserts that
Mr.Ingersoll’s August
24,
1990 affidavit (attached to the Motion
to File Instanter)
supports only those facts
in the Agency’s
Motion to file Instanter,
and that its Response to Grigoleit’s
Motion for Sanctions was based on facts already in the record or
otherwise supported by affidavit.
(j~.apr.
5).
Finally, the
Agency asserts that it will not move to strike Grigoleit’s
request for leave to file a reply because Grigoleit has already
used the Motion to Strike as
a vehicle for its reply.
(~.
par.
4)
As the Agency correctly points out,
Mr. Ingersoll only
verified those facts contained in the Agency’s Motion to File
Instanter.
Moreover,
the Agency’s Response to Grigoleit’s Motion
to Strike is based on facts already in the record.
The Board has
no objection to Mr. Ingersoll’s preparation of the Agency’s
Response because he filed his appearance in this matter on August
16,
1990
.
In the legal profession,
and
in many cases before the
Board,
it is common for different attorneys in a firm to prepare
the various pleadings and motions during the course of a case.
Moreover, we note that the Agency’s actions are understandable in
light of the time constraints prior to hearing and that matters
may have been further delayed if Mr. O’Donnell continued to be
the only Agency attorney to handle all of the matters
in this
extremely litigious case.
Thus, we will not grant the Motion to
Strike simply because Mr. Ingersoll rather than Mr. O’Donnell
prepared the Agency’s Response.
As for Grigoleit’s analysis
of the content of the Agency’s
Response, we note that such analysis is,
in fact,
a reply to the
116—251
6
Response.
Accordingly, we will not grant the Motion to Strike on
this basis, nor will we grant Grigoleit’s motion for leave to
file a reply.
However, because we construe Grigoleit’s comments
as its reply and wish to have a complete debate on the issue
of
sanctions, we will summarize Grigoleit’s comments below and
consider them in our deliberations.
0.
Grigoleit’s Motion for Sanctions
In its Motion for Sanctions, Grigoleit asks the Board to
allow oral argument on the motion, grant the relief requested in
its permit appeal, award it attorney’s fees and costs,
and order
the Agency’s attorney to show cause why he should not be held in
contempt for the Agency’s failure to produce certain documents
that were requested by Grigoleit.
(Motion
p.
7).
Specifically,
Grigoleit alleges that the Agency failed to provide the following
documents:
an inspection memorandum cover sheet dated May 14,
1985, permit reviewer notes listing certain pieces of equipment,
a July 16,
1984 calculation sheet detailing permit reviewer
notes, an April
9,
1973 permit reviewer notation sheet,
a March
13,
1974 permit reviewer notation sheet, an October
11, 1979
calculation sheet,
a March 16,
1976 calculation sheet detailing
permit reviewer notes,
and a December 2,
1975 permit reviewer
notation sheet.
(Id.
Ex.
A).
Grigoleit also alleges that the
Agency’s failure was willful,
deliberate,
contumacious,
and
in
violation of 35
Ill.
Adm. Code 105.102 and Supreme Court Rule 7-
102(a) (3) ~2
(Id. pars.
10,
11,
12,
14).
In support of its allegation that the Agency failed to
produce the above—mentioned documents, Grigoleit states that,
on
January 23,
1990,
it requested the Agency to produce all
documents contained in the “flag
file”,
“ID file”,
and “permit
file”.
(~.
pars.
1,
2).
Grigoleit states that the Agency
responded to its request on March
1,
1990,
but did not provide
the above—mentioned documents and did not object to the
production of the documents or claim any privilege.
(see
Respondent’s Response to Petitioner’s Request for Production of
Documents’
dated February 28,
1990).
~
pars.
3,
4).
Grigoleit states that it learned of the omission via
a June 21,
1990 Notice to Appear and Produce that directed the Agency to
produce the files at the July 17,
1990 hearing, which
it did.
(~.
par. 7).
Grigoleit adds that it also requested that the
documents in several Notices of Depositions prior to hearing, and
235 Ill.
Adin.
Code 105.102(a) (4) requires the Agency to file
the
entire
Agency
record
of
the
permit
application
at
issue
including the application, correspondence with the applicant,
and
the
denial.
Supreme
Court
Rule
7—102(a) (3)
states,
“In
his
representation
of
a
client,
a
lawyer
shall
not...conceal
or
knowingly fail to disclose that which he
is required by
law
to
reveal.”
116—252
7
that the Agency failed to produce the above—mentioned documents
at any of the depositions.
(~.
par. 8).
In support of its allegation that the Agency’s failure to
produce was willful, deliberate,
and contumacious, Grigoleit
points to the Agency’s February 28,
1990 Motion to Reverse the
Hearing Officer’s Order of February
23,
1990.
(~.
par.
14(a)).
In paragraph 32
of that motion, Mr. O’Donnell stated:
~JJ~
requested documents,
except the following,
have
previously been provided to Petitioner or will be
provided on March
1,
1990:
1)
Portions of Mr.
Shah’s review notes which
contain his recommendations to Mr.
Sweitzer.
(Portions of
1 page)
2)
Memo regarding
a management/technical review
of the Grigoleit chrome contamination.
(1
page)
3)
Traveler sheet.
(1 page)
4)
Permit Manual.
(jç~.emphasis added).
Grigoleit also points to the following documents as evidence of
the willful nature of the failure to produce:
the Agency’s March
1,
1990 document production statement made on the record during
the depositions of Mr.
Sashi Shah
(the permit review in this
matter)
and
Mr.
Terry Sweitzer (manager of the air permit
section),
in which Mr. O’Donnell stated that everything in the
ID, flag,
and permit files was contained in the Agency Record
with the exception of the above three documents,
and paragraph
5
of the Agency’s March
12,
1990 Response to Grigoleit’s Motion for
Sanctions which states,
“
On March
1,
1990,
the Agency provided
to Petitioner everything the Petitioner is legally entitled to
in
discovery”.
(Id. par.
14(b),
(c),
Ex.
B).
Finally, Grigoleit
points to two affidavits made by Mr. O’Donnell as evidence of his
perjury regarding this issue
(see affidavit attached to Agency’s
March 12,
1990 Response to Grigoleit’s Motion for Sanctions and
the Agency’s February 28,
1990 Motion to Reverse the Hearing
Officer’s Order of February
23,
1990).
(~.
pars.
15,
16).
The Agency makes several arguments in response to
Grigoleit’s allegations.
First, the Agency states that,
in its
January 23,
1990 Second Request for Production of Documents,
Grigoliet did not ask for “all documents contained in the “flag
file”,
“ID file” and “permit file”.
(Response par.
2).
Rather,
the Agency notes that Grigoleit requested “documents contained in
the “flag file”,
“ID file” and “permit file”,
identified and
116—253
8
referred to by Shashi Shah in his discovery deposition, which
concerned the Grigoleit Company.”
(Id.).
Thus,
the Agency
argues that the documents in Exhibit A were not within the scope
of the request to produce, and that the Agency’s interpretation
of what documents were requested was reasonable.
(~.
par.
3).
Second, the Agency notes that there were only three documents at
issue during the discovery process: Mr.
Shah’s permit review
notes regarding the permit decision in this case,
the “Permit
Manual”,
and permit traveller sheets.
(ç~. par. 4).
The Agency
then states that,
because none of the documents referenced in
Grigoleit’s motion were ever at issue during discovery,
it gave
little attention to the documents and only turned over those
documents at issue
(i.e.
those documents referred to in the
permitting analysis and decision)
after ordered to do so by the
Hearing Officer and Board.
(Id. pars.
4,
5).
Third, the Agency
argues that Mr.
Shah’s testimony at deposition and at hearing
reflects that, while the files were identified,
the documents
were neither referred to nor relied upon in the permit review
because they related to permit applications from five to
seventeen years ago.
(Id. par.
6)
.
Fourth, the Agency states
that it had offered access to the files by letter dated April
11,
1990.
(Id. par.
3).
Fifth, the Agency argues that Grigoleit has
not been prejudiced by not seeing the documents prior to July 17,
1990,
because they were admitted into the record at hearing,
Grigoleit had one month
(i.e. until the last hearing)
to evaluate
their relevance to the permit decision but failed to do so,
and
because they are available to the Board for consideration when
making its ruling.
(Id. pars.
7,
8).
Finally, with regard to
Grigoleit’s allegation that
Mr.
O’Donnell committed perjury, the
Agency argues that
Mr.
O’Donnell’s interpretation of what
Grigoleit requested was reasonable considering the circumstances
and, even if there was a mistake,
it was unintentional.
(Id.
par.
11).
In reply,
Grigoleit first states that its request refers to
the particular files
(i.e.
flag,
ID, and permit files)
that were
identified by Mr.
Shah in his discovery deposition, rather than
certain documents contained in each file.
(Response par.
7(B)).
Second, Grigoleit argues that the production request could not be
misinterpreted because the request asked for “all documents”
in
the files.
(Id. par.
7(C)).
Third,
in response to the Agency’s
argument that the documents were never at issue, Grigoleit notes
that the reason that the documents were never at issue was
because it did not know of the existence of the documents.
(Id.
par. 7(D)).
Fourth, Grigoleit argues that the documents are not
irrelevant or non-discoverable simply because the Agency did not
rely on them in the decision process.
(Id. par.
7(E)).
Rather,
Grigoleit argues that,
because the documents were requested and
discoverable, the Agency cannot refuse to produce them or
disclosure their identity on the basis that it did not look at
the documents.
(Id.).
Fifth,
Grigoleit asserts that there is no
evidence that the information contained the documents
is
116—25
4
9
outdated,
and adds that it was denied due process and prejudiced
as a result of the Agency’s actions.
(Id. par.
7(G)).
For
example, Grigoleit points to the fact that one of the Agency’s
reasons for the permit denial was because Grigoleit’s application
did not provide sufficient information to show compliance with
the coating regulations,
but asserts that the documents at issue
show that the Agency previously classified Grigoleit’s operations
as a painting operation.
(Id.).
Finally, as for the Agency’s
April 11,
1990 offer to produce the files, Grigoleit states that
the letter was a tender of documents that were ordered produced
by the Board and Hearing Officer and did not involve the
documents at issue in its Motion for Sanctions.
(~.
par.
7(C)).
The Board wishes to make two points before it begins its
discussion of this issue.
First, we note that much of the
information contained in the Mr. Nedintz’s Response and the
parties’
replies thereto relates to the other discovery battles
in this case,
or is
a repetition of information already presented
and summarized above.
As
a result, we will not give a complete
and separate summary of the content of the documents as we did
above.
We will,
however, reiterate the relevant information
contained in the documents,
as necessary,
during our discussion
below.
Second, we deny Grigoleit’s request for oral argument.
Although 35
Ill. Adm. Code 103.140(d) provides for oral argument
on a motion, the Board believes that the issue of sanctions can
be decided based on the documents before
it and that oral
argument will serve no useful purpose in this instance.
As for the matter at hand, as Mr. Medintz correctly points
out, discovery in Illinois is designed to allow
a broad and
liberal transfer of information which may lead to the development
of relevant evidence.
Discoverable matters need not in
themselves be relevant or have been relied on or considered by
the Agency.
Moreover, although the Agency is required to file
the Agency Record
in permit appeals, there is limited regulatory
guidance regarding what constitutes the Record.
As a result,
there have been instances where a petitioner introduces evidence
that was not included in the Agency’s Record, even though the
evidence was in the Agency’s files.
In order to guard against
such mishaps and ensure that a complete hearing record is made,
liberal discovery must be afforded and obeyed.
Balanced against
the above concerns
is
35
Ill. Adm. Code 101.280, which allows
sanctions for unreasonable refusals to comply with any provision
of
35 Ill.
Adm. Code 101 through 120.
Thus, the question that
the Board first must ask is whether the Agency’s actions were
unreasonable before it can determine if the Agency’s actions are
sanctionable.
For the following reasons,
the Board concludes the Agency’s
actions were unreasonable and sanctionable.
In its January
24,
1990 Second Request for Production of Documents,
Grigoleit asked
for,
“All documents contained in the “flag file” which ~
116—255
10
identified and referred to by Shashi Shah in his discovery
deposition,
which concerned The Grigoleit Company”.
(emphasis
added)
.
This same request was reiterated for all documents in
the ID file and the permit
file.
Although the Agency claims
that Grigoleit requested only those documents
(in the flag file,
ID file,
and permit file) that were identified and referred to by
Mr. Shah in his discovery deposition,
such a reading is not
correct from the face of the Request to Produce.
The word “was”
clearly refers to each file rather than documents
in those files.
Moreover,
as Grigoleit correctly points out, and as the above
emphasized language of the Request indicates,
it was the flag,
ID,
and permit files that were identified by Mr. Shah in his
discovery deposition rather than his identification of certain
documents within those files.
The Agency,
however,
failed to
give Grigoleit the complete files.
Moreover, although Mr. Medintz notes that he has no
knowledge as to what documents were produced or withheld by the
Agency in this instance, he also notes that there have been
numerous discovery battles
in this case in which Grigoleit had
not received the materials it requested,
even as the hearings
proceeded.
For example,
it refused to tender documents ordered
produced pending appeal to the Board of the production order,
in
direct contravention of the Board’s rules.
Although we recognize
that such instances are not directly related to the motion at
hand, we do believe that they serve as an indication that the
Agency has not followed the spirit of discovery in this case.
We must reiterate that it does not matter whether the
documents at issue
in this motion are relevant or whether the
Agency relied on the documents.
Nor does it matter whether the
documents were ever at issue during the lengthy discovery
battles.
As Grigoleit correctly notes, the documents were never
at issue because it did not know that they existed.
As for the
Agency’s argument regarding its offer of access to the documents
via the April
11,
1990 letter, the Board has reviewed several
letters that are attached to Grigoleit’s reply that indicate that
the April
11,
1990 letter represented a tender of those documents
that the Hearing Officer and Board ordered to be produced rather
than the documents at issue
in this motion.
Although we conclude that the Agency’s interpretation of
what Grigoleit requested was unreasonable, there
is no proof that
the Agency intentionally or knowingly kept the documents at issue
from Grigoleit,
or that Mr. O’Donnell committed perjury.
Accordingly, although the Board
is persuaded that the Agency
should be sanctioned for its failure to identify documents as
requested prior to hearing
(and thus,
its failure to comply with
pre-hearing discovery),
we do not believe that the Agency’s
actions are so unconscionable as to warrant Grigoleit’s request
for dismissal.
Rather, we find that the appropriate sanction is
for the Board to disregard any evidence presented by the Agency
116—25 6
11
on any matters pertaining to the type of information revealed in
the withheld documents that may be favorable to the Agency.
BURDEN OF PROOF
Permits are granted by the Agency pursuant to Section 39(a)
of the Act which sets forth the requirements for securing a
permit as follows:
When the Board has by regulation required a permit.
.
.
it
shall be the duty of the Agency to issue such a permit
upon proof by the applicant that the facility.., will
not cause a violation of this Act or of regulations
hereunder....
Section 40(a) (1)
of the Act provides that an applicant who
has been denied a permit may petition the Board for a hearing to
contest the Agency’s denial of the permit application.
(Ill.
Rev. Stat.
1989,
ch. 111~,par.
1040(a)(1)).
In such a permit
appeal,
the sole question before the Board
is whether the
applicant proves that the application,
as submitted to the
Agency, demonstrated that no violation of the Act would occur
if
the permit was granted.
Alton Packaging Corporation v.
IEPA, PCB
85—145,
64
PCB 234,
236
(April 24,
1986)
aff’d ~
~
Alton
Packaging Corp.
v.
PCB,
162 Ill.
App.
3d 731,
516 N.E.2d 275,
279
(5th Dist.
1987); Joliet Sand
& Gravel Co.
v.
PCB,
163
Ill. App.
3d 830,
833,
516 N.E.2d 955,
958
(3d Dist.
1987); Wells
Manufacturing Company v.
IEPA,
PCB 86-48,
76 PCB 324,
334—335
(March
19,
1987)
;
EPA v.
PCB,
118 Ill.
App.
3d 722,
780, 445
N.E.2d 188,
194
(1st Dist.
1983); Oscar Mayer
& Co.
v.
IEPA,
PCB
78—14,
30 PCB 297,
398
(1978).
Thus,
a petitioner bears the burden of proving that no
violation of the Act or Board regulations would have occurred had
the Agency approved the permit application. Browning-Ferris
Industries of Illinois,
Inc.
v. PCB et al.,
179 Ill. App.
3d 598,
601,
534 N.E.2d 616,
619
(2d Dist.
1989); Alton Packaging
Corporation
v.
IEPA,
64 PCB at 236—37 and Alton packaging Corp.
v.
PCB,
162 Ill.
App.
3d 731,
516 N.E.2d at 279; EPA
V.
PCB,
118
Ill.
App.
3d at 780,
445 N.E.2d at 194).
Once a petitioner
establishes a prima facie case,
it becomes incumbent upon the
Agency to refute the prima facie case. John Sexton Contractors
Company
v. IPCB and IEPA,
No.
1-89—1393,
slip op. at
15
(4th
Dist. June 29,
1990).
DISCUSSION
Permit Denial Reason No.
1
On September 12,
1990,
the Agency filed a “Notice to the
Board” stipulating that reason #1
in the permit denial
letter
(regarding denial of access)
should no longer be considered in
116—257
12
support of the permit denial.
In its brief, the Agency adds
that,
because it previously provided notice that permit denial
reason #1 should not be considered in the cause, the issue is
moot and,
in reality,
a nonissue.
(Agency Br.
p.
23).
Grigoleit argues that,
in the Notice, the Agency admitted
that its position regarding reason #1 is not supported by the
facts.
(Reply Br.
p.
1-2).
It adds that an admission that
reason #1 is not supported by the facts
is different from
concluding that the reason is moot or a nonissue, and thus,
objects to the Agency’s conclusion that the issue is moot.
(n.).
Finally, Grigoleit argues that the evidence shows that it
did not deny the Agency access to its facility,
and accuses the
Agency of bad faith in its imposition of this denial reason.
(Id.
pp. 2—5)
The Board is puzzled by the Agency’s filing of a “Notice”
in
light of the fact that our procedural rules do not provide for
such a pleading.
We do not understand why the Agency simply did
not admit that there was no factual support for the denial reason
and make a motion to withdraw the reason from the permit denial
letter.
In any event, the Agency cannot claim that
a denial
reason should not be considered
in the cause,
and then argue that
it is moot or a nonissue.
In other words, the Agency cannot
unilaterally retract a denial reason any more than it can add one
at this juncture.
Rather,
it
is the Board that must make
a
finding with regard to that denial reason.
Accordingly, we will
construe the “Notice”
as a motion to withdraw and grant the
motion.
Permit Denial Reason No.
2
Grigoleit argues that the Agency’s denial of its permit
application based upon denial reason #2
is improper for several
reasons.
First, Grigoleit claims that the Agency had all the
information in its files and in the permit application which
demonstrated that it was exempt from 35
Ill. Adm. Code 215.204(h)
and
(j)
pursuant to 35 Ill.
Adm. Code 215.206, and that it was in
compliance with 35 Ill.
Adxn.
Code 215.301.
(Pet.
Br. pp.
12-
19).
Second, Grigoleit propounds the alternative argument that
it
is subject to 35 Ill. Adm. Code 215.301 rather than 35 Ill.
Adm. Code 215.204 because it is a printing operation rather than
a coating operation.
(Id.
pp.
19-21).
Finally, Grigoleit argues
that the Agency denial of its permit application was contrary to
law because the Agency lacked any evidence that its operation
violated any emission standard.
~
pp. 22-23).
In response, the Agency argues that Grigoleit’s permit
application did not demonstrate compliance with the Act and the
regulations.
(Agency Br. pp.
2-12).
Specifically, the Agency
notes that Grigoleit failed to provide the information necessary
to prove compliance with 35
Ill. Adm. Code 215.204(h),
(j),
or
116—258
13
215.301.
(Içi.).
Thus, the Agency states that, based on its
review of Grigoleit’s permit application,
it was unable to
determine the company’s compliance with the applicable emission
limitations.
(Id.).
It appears from the record that Grigoleit’s previous permit
was issued on the basis that it was not subject to 35 Ill. Adm.
Code 215.204 based on the exemption in 35 Ill.
Adm. Code 215.206,
and in compliance with,
35
Ill. Adm. Code 215.301.
The Agency
appears to have denied Grigoleit’s 1989 permit application,
however,
based on the conclusion that the company no longer met
the 25 tons per year (“T/yr”) emission limit contained in 35
Ill.
Adm. Code 215.206 and,
therefore, was not in compliance with 35
Ill. Adm. Code 215.204(h),
(j),
and 215.301.
There is no
indication,
however, that Grigoleit was ever apprised of this
fact prior to the permit denial.
The similarity of this fact situation to Wells Manufacturing
Company v.
IEPA,
195 Ill. App.
3d 593,
552 N.E.2d
1074
(1st
Dist.
1990)
leads us to believe that Wells
is on point
in this
situation.
In Wells the Appellate Court held that the Agency
violated due process when it denied a foundry operator’s
application for renewal of an air operating permit on the basis
of alleged air pollution because it did not give the applicant an
opportunity to submit evidence during the application process
that
it was not polluting the air.
Martell
v. Mauzy,
511
F.
Supp.
729,
(N.D.
Ill.
1981)
is another case that appears to be
analagous to the situation at hand.
In that case,
the District
Court held that the Agency’s denial, without prior hearing,
of an
operating permit for a sanitary landfill
(after granting a
developmental and construction permit)
on the basis of
unadjudicated charges of previous misconduct violated the
landfill operators’
due process rights.
In light of the above
cases,
the Board finds that the Agency violated Grigoleit’s due
process rights
in this case because it did not give the company
an opportunity to submit evidence in rebuttal of the denial
reasons during the application process.
Moreover, even if we were not to rely on the above cases,
we note that we have difficulty in ruling fully on the merits of
this denial reason because there was insufficient information
submitted as regards Grigoleit’s compliance with 35 Ill. Adm.
Code 215.301,
and because we are restricted to a review of the
information that was before the Agency during its permit review.
The Agency,
in denial reason #2,
states that the application
fails to provide proof of compliance with 35 Ill.
Adm. Code
215.204
(h),
(j),
and 35 Ill. Adm. Code 215.301.
While the
Agency’s statement with regard to 215.204 may be technically
correct
(i.e. that the volatile organic material
(“VOM”)
content
of some of the coating materials used at the plant exceed the
specific limitations specified in
35 Ill.
Adm. Copde 215.204(h)
116—259
14
and
(j))
it also implies that the emissions of VON do not meet
the requirements for exemption from 35
Ill. Adm. Code 215.204,
as
specified
in 35
Ill. Adm. Code 215.206.
However,
a review of the
information in the application indicates that Grigoleit qualifies
for the exemption.
The total plant usage of organic based
material
(consisting of printing ink, thinners, and solvents) was
stated to be 11,988 gallons per year (“gal/yr”).
(Agency Record
Ex.
1).
A break-down of this total
is as follows:
Group A1-A6:
6,768 gal/yr
(inks
& solvents used in the silk
screen,
lithograph, and wash line operations).
Groups
B,
B2,
and B5:
360 gal/yr
(water soluble cutting
oil used by B2)
1,400 gal/yr
(1,1, 1-Trichloroethane
used by B2)
240 gal/yr
(water soluble cutting oil used by
punch press).
3,220 gal/yr (1,1,1-Trichloroethane used by punch
press)
In order to qualify for exemption from 35 Ill Adm. Code
Subpart
F: Coating Operations
(which includes 35
Ill.
Adrn.
Code
215.204(h)
and(j)), plant emissions of VON should not exceed 25
T/yr in the absence of air pollution control equipment.
Grigoleit assumes that only 6,768 gal/yr should be used in the
calculation because the water soluble cutting oil and the 1,1,1—
Trichloroethane do not contain or are not VOMs. Using the
definition of VOM in
35 Ill.
Adm. Code 211,
1,l,1-Trichloroethane
is not a VON.
Information on the cutting oil
is not provided to
determine if it is a VON or not.
For purposes of this
discussion,
even if we assume that all of the organic based
material used other than 1,1,l-Trichloroethane
11,988
gal/yr
-
(1,400 gal/yr
+
3,220 gal/yr)
=
7,368 gal/yr
is necessary for
calculating the exemption,
the VON emissions equal 22.1 T/yr
(7,368
gal/yr x
6 lb VON/gal) /2000 pounds per ton
(“lb/T”).
Thus,
it is clear that there was sufficient information
in the
permit application for the Agency to determine that Grigoleit’s
emissions meet the criterion for exemption from the limitations
of 35 Ill. Adm. Code 215.204 and,
therefore,
are not in violation
of 35 I1l.Adm. Code 215.204(h)
and
(j).
On the other hand,
determination of compliance with 35
Ill.
Adm. Code 215.301 requires a determination that the discharge of
organic material that is also photochemically reactive material
from any emission source be no more than
8 pounds per hour
(“lb/hr”).
The Agency, therefore,
is correct
in asking for
information specified in denial reason #2(a)
and
(b) because such
information is necessary in order to prove compliance with the
regulation.
116—260
15
Thus, based on the above, we conclude that denial reason #2
is an insufficient basis for permit denial,
and will remand this
matter to the Agency for the sole purpose of eliciting the
information requested in subparagraphs
(a) and
(b)
of denial
reason #2 and then determining whether Grigoleit is in compliance
with 35 Ill. Adm. Code 215.301.
Permit Denial Reason No.
3
Grigoleit argues that the Agency’s denial of its permit
because of alleged land violations
is improper for several
reasons.
First,
Grigoleit argues that the Agency’s conclusion
that there are land violations
is based upon invalid information
that was given to the Air Division by the Land Division and that
the land violations have been resolved.
(Pet.
Br.
pp.
24—37).
Second, Grigoleit argues that the denial of its operating permit
for unadjudicated land violations
is contrary to Section 39(a)
of
the Act because the Agency must issue a permit upon proof that
its facility will not violate the applicable air emissions
standards.
(Id. pp.
37-38).
Third,
Grigoleit argues that the
Agency’s denial of its permit for alleged land violations
is
contrary to Sections 30 and 31 of the Act, and violated
Grigoleit’s due process rights.
(Id. pp.
38-42).
Specifically,
Grigoleit notes that these sections require the Agency to issue
and serve it with a written notice and formal complaint for the
alleged violations,
and that the Agency has no authority to cite
alleged land violations as a basis for its denial of an air
permit application.
(Id.).
Finally, Grigoleit argues that it
was unlawful for the Agency to apply Coordinated Review of Permit
Applications
(“CROPA”)
rules to its permit application.
(Id.
pp.
42—43)
For its part,
the Agency states that denial reason #3
is
valid because the alleged land violations were still outstanding
and remained unresolved at the time of the permit denial
(i.e.
October 11,
1989).
(Agency Br.
p.
12-20).
The Agency adds that
neither the Act nor case law supports the proposition that the
Agency’s Air Division can only examine air emission violations
when deciding whether to issue an air permit, and that such an
assumption would be contrary to the Agency’s mandate to protect
the environment and enforce the regulations adopted by the Board.
(id.
p.
18).
With regard to CROPA, the Agency argues that it is
not an improper use of unpromulgated regulations because
it
is
not a set of substantive regulations.
(~.
p.
21-22).
Rather,
the Agency argues that it
is only a means of processing permit
applications in order to facilitate communication among the
various divisions of the Agency so that one division does not
issue
a permit for equipment that may be causing violations
in
other environmental media.
(Id.).
The Board has no quarrel with the Agency’s desire to protect
116—261
16
the environment, nor are we willing to state that the Agency can
not examine,
for example, water or land violations
in its review
of an air permit when the grant of that air permit would cause a
violation of the Act or water pollution or waste disposal
regulations.
That is not the situation in this case, however.
We are troubled by the situation at hand, moreover,
for
several reasons.
First, we are troubled by the fact that
Grigoleit had no knowledge or notice of the fact that the Agency
was denying its permit on the basis of possible land violations,
and was not given an opportunity to provide any information with
regard to the alleged land violations prior to the permit denial.
As a result,
it appears that Grigoleit’s due process rights have
been violated.
(see the Wells and Martell cases cited above).
Moreover,
as Grigoleit correctly points
out, Sections
30 and
31 of the Act require the Agency to file complaints against
companies for alleged violations.
The Board has repeatedly
stated that permit denial cannot take the place of an enforcement
action.
Centralia Environmental Services
v.
IEPA,
PCB 89—170
pp.10-11
(October 25,
1990); Waste Management v.
IEPA, PCB 84-
45,
61,
68,
60 PCB 173, 208—210
(October
1,
1984),
aff’d
~
IEPA
V.
IPCB,
138
Ill. App.
3d 550,
486 N.E.2d 293
(3d Dist.
1985),
~ft’d
115 Ill.2d 65,
503 N.E.2d
343
(1986); Frink’s
Industrial Waste,
Inc.
v.
IEPA,
PCB 83—10,
52 PCB
447
(June 30,
1983),
aff’d sub
~
The City
of Rockford v.
PCB,
125 Ill. App.
3d 384,
465 N.E.2d 996
(2d Dist.
1984).
Thus,
if
the Agency has
waste concerns, the proper mechanism to address those concerns is
an enforcement action rather than the denial
of an air permit.
In this case,
however,
it
appears that the Agency has acted
in
contravention of this holding.
Finally, we are troubled by the Agency’s application of
CROPA in this situation.
While the Agency argues that CROPA is
not a set of substantive rules that need to be promulgated
pursuant to the Illinois Administrative Procedures Act
(“IAPA”),
it
admits that CROPA
is used as a means of processing permit
applciaitons within the Agency.
Even
if
we were not to question
the Agency’s assertion that the CROPA “rules” need not be
promulgated, this record shows that the CROPA “rules” were not
made available to Grigoleit during the permitting process.
Moreover, even
if
the “rules” had been made available to
Grigoleit,
it
still would be unreasonable to expect Grigoleit to
have anticipated their application to the situation at hand
because Grigoleit had only the one air permit and the CROPA
rules,
on their face,
apply to multiple permitting situations.
(see the Wells and Martell cases above)
Thus,
based on the above,
the Board finds that the reason
#3
is an inappropriate basis for permit denial.
Accordingly, we
need not deal with the issue of the accuracy of the information
that the Agency relied on as support for the denial reason.
116—262
17
However, we do note that Grigoleit has presented unrebutted
evidence showing that the Air Division relied on outdated and
imprecise information from the Land Division in denying the
permit.
Additional Matters
Grigoleit continues to contend that the Agency violated
Section 39 of the Act in that it failed to act upon its permit
application within the 90 days from the date the application was
filed
(i.e. mailed).
(Pet.
Br. pp.
44—45).
Grigoleit argues
that,
as a result,
its permit issued as a matter of law.
(Pet.
Br.
p.
50; Reply Br.
p.
41).
In response, the Agency states that
it received the permit application on July
13,
1989 and issued
its denial on October 11,
1989
(i.e.
90 days after its receipt of
the application).
(Agency Br.
pp.
20-21).
The Board notes that it already has issued two Orders
in
this case finding that the Agency acted
in a timely manner
(see
the Board’s March 22 and May 10,
1990 Orders).
Grigoleit has not
presented any new information that persuades us that our decision
was incorrect.
Grigoleit next contends that the denial letter lacked the
specificity required by Section 39 of the Act and that,
as a
result, the Agency’s permit denial was improper.
(Pet.
Br. pp.
45-47;
Reply Br.
p.
41-42).
Specifically, Grigoleit argues that
the letter is deficient in that it does not contain a statement
of specific reasons why the cited sections of the Act and
regulations might not be met
if the permit were granted.
(Id.).
The Agency did not rebut this argument.
Section 39(a)
of the Act requires that the Agency provide
the applicant with
a detailed statement of the reasons for
denying the permit application.
That Section also states that
such statement shall include, but not be limited to, the
following:
1) the sections of the Act which may be violated
if
the permit were granted;
2) the provisions of the regulations,
promulgated under the Act, which may be violated if the permit
were granted;
3)
the specific type of information which the
Agency deems the applicant failed to provide; and
4)
a statement
of specific reasons why the Act and the regulations might not be
met if the permit were granted.
The intent of Section 39(a)
is to require the Agency to
issue its decision in a timely manner with information sufficient
for the applicant to determine the bases for the Agency’s
determination.
City of Metropolis v.
IEPA,
PCB 90-8 (February
22,
1990).
After reviewing the denial letter and Grigoleit’s
specified objections thereto, the Board finds that the three
reasons articulated in the denial statement coupled with the
cited sections of the regulations sufficiently sets forth the
116—263
18
reasons why the regulations might not be met if the permit was
granted.
(see Centralia, Environmental Services,
Inc.
v.
IEPA,
PCB 89-170
(October 25,
1990)).
Thus,
we will not overturn the
Agency’s denial based on this argument.
Finally, because we are not finding in favor of the Agency
on any of the denial reasons, we will not rule on Grigoleit’s
argument that an entire permit denial is improper once the Board
finds that one of the Agency’s denial reasons is improper.
Moreover, we wish to leave no implication that we have held that
Grigoleit is necessarily in compliance with the Act or
regulations, that this Order
is
a relaxation of Grigoleit’s
obligation to comply with the Act and Board regulations,
or that
this Order frees it from the possibility of enforcement for any
noncompliance other than for operating without a permit.
The above Opinion constitutes the Board’s findings
of fact
and conclusions of law in this matter,
ORDER
For the foregoing reasons, the Board finds that denial
reasons #1 and #3 are inappropriate, and remands this matter
for
reconsideration
of denial reason #2 consistent with this Opinion.
Section 41 of the Environmental Protection Act.
Ill. Rev.
Stat.
1989,
ch. 111~,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.
Board Members
J. Theodore Meyer and R.
Flernal concurred,
and
Board Members J. Dumelle and B.
Forcade dissented.
I, Dorothy N. Gunn,
Clerk of the Illinois Pollution Control
Board, hereby certify that the above Opinion and Order was
adopted on the
~rc2~
day of
~
,
1990,
by a
vote of
4~—~
.
~
)7L.
/L~
Dorothy M. ,q~unn, Clerk
Illinois Pc~1lutionControl Board
116—264
