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)
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10
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12
13
14 Proceedings held on May 27, 1998 at 10:00 a.m., at
15 the County Building, County Board Chambers, 2nd Floor,
16 200 South Ninth Street, Springfield, Illinois, before
17 the Honorable Cynthia Ervin, Hearing Officer.
18
19
20
21 Reported by: Darlene M. Niemeyer, CSR, RPR
CSR License No.: 084-003677
22
23
24 KEEFE REPORTING COMPANY
11 North 44th Street
25 Belleville, IL 62226
(618) 277-0190 1
KEEFE REPORTING COMPANY
Belleville, Illinois
1 A P P E A R A N C E S
2 Claire A. Manning, Chairman
3 Board Member Ronald Flemal
4 Board Member G. Tanner Girard
5 Board Member Kathleen M. Hennessey
6 Board Member Marili McFawn
7
8 ILLINOIS ENVIRONMENTAL PROTECTION AGENCY
BY: Mark Wight
9 Assistant Counsel
1021 North Grand Avenue East
10 Springfield, Illinois 62794-9276
On behalf of the Illinois EPA.
11
ROSS & HARDIES
12 BY: David L. Rieser
Attorney at Law
13 150 North Michigan Avenue
Chicago, Illinois 60601-7567
14 On behalf of the Illinois Steel Group and
the Chemical Industry Council of Illinois.
15
CATERPILLAR, INC.
16 BY: David E. Howe
Senior Attorney
17 100 N.E. Adams Street
Peoria, Illinois 61629-7310
18 On behalf of Caterpillar, Inc.
19 ILLINOIS ENVIRONMENTAL REGULATORY GROUP
BY: Whitney Wagner Rosen
20 Legal Counsel
215 East Adams Street
21 Springfield, Illinois 62701
On behalf of IERG.
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KEEFE REPORTING COMPANY
Belleville, Illinois
1 E X H I B I T S
2 NUMBER ENTERED
3 Hearing Exhibit 10 9
4 Hearing Exhibit 11 10
5 Hearing Exhibit 12 11
6 Hearing Exhibit 13 168
7 Hearing Exhibit 14 187
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KEEFE REPORTING COMPANY
Belleville, Illinois
1 P R O C E E D I N G S
2 (May 27, 1998; 10:00 a.m.)
3 HEARING OFFICER ERVIN: Good morning and welcome.
4 My name is Cynthia Ervin, and I am the named Hearing
5 Officer in this proceeding entitled, In the Matter
6 of: Proportionate Share Liability, 35 Illinois
7 Administrative Code, Part 741, docketed as R97-016.
8 Present today on behalf of the Board is presiding
9 Board Member and Chairman of the Board, Chairman
10 Claire Manning.
11 CHAIRMAN MANNING: Good morning.
12 HEARING OFFICER ERVIN: To her right is Board
13 Member Kathleen Hennessey.
14 BOARD MEMBER HENNESSEY: Good morning.
15 HEARING OFFICER ERVIN: To her right is Board
16 Member Marili McFawn.
17 BOARD MEMBER McFAWN: Good morning.
18 HEARING OFFICER ERVIN: To my immediate left is
19 Board Member Ron Flemal.
20 BOARD MEMBER FLEMAL: Good morning.
21 HEARING OFFICER ERVIN: And to his left Board
22 Member Tanner Girard.
23 BOARD MEMBER GIRARD: Good morning.
24 HEARING OFFICER ERVIN: Also with us on behalf of
25 the Board is John Knittle, Joseph Yi's attorney
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KEEFE REPORTING COMPANY
Belleville, Illinois
1 assistant in Chicago, and Chuck King, Board Member
2 McFawn's attorney assistant.
3 In the back of the room I have placed a list for
4 those who would like to be added to the service or
5 notice lists. Please note that if your name is on the
6 service list you will receive only copies of the
7 Board's opinions and orders and all hearing officer
8 orders. If your name is on the notice list you will
9 receive not only those items but also copies of
10 documents filed by all persons on the service list in
11 this proceeding. Please keep in mind that if your
12 name is on the service list you are required to serve
13 all persons on the service list with all documents
14 that you file with the Board.
15 As background, on February 2nd, 1998, the Illinois
16 Environmental Protection Agency filed a rulemaking
17 proposal with the Board to add a new Part 741 to the
18 Board's waste disposal regulations. These proposed
19 rules would establish procedures for the
20 implementation of proportionate share provisions of
21 Public Act 89-443. This amendatory legislation
22 repealed joint and several liability in environmental
23 actions and replaced it with Proportionate Share
24 Liability. In addition to establishing Proportionate
25 Share Liability, Section 58.9 of the Act directed the
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KEEFE REPORTING COMPANY
Belleville, Illinois
1 Board to adopt rules implementing Section 58.9 by
2 December 31st, 1997. The statutory deadline was later
3 extended until January 1st, 1999.
4 On December 5th, 1996, the Board opened a docket
5 to solicit proposals to assist the Board in the
6 promulgation of rules and procedures implementing the
7 proportionate share provisions of Section 58.9. The
8 proposal filed by the Agency is in response to that
9 request.
10 The first hearing was held in this matter on May
11 4th in Springfield, and the second hearing was held in
12 Chicago on May 12th. The purpose of today's hearing
13 is to hear testimony from the remaining people who
14 have prefiled testimony in this matter, and for the
15 Agency to address any issues remaining from the
16 previous hearings. The order that the prefiled
17 testimony will be presented is as follows: The
18 testimony of Mr. Marder, followed by the testimony of
19 Mr. Rieser, followed by the testimony of Mr. Howe.
20 After hearing this testimony the Agency will then
21 address any matters that remain from the previous two
22 hearings. Following the Agency's presentation, anyone
23 else who would like to testify will be given the
24 opportunity as time allows.
25 This hearing will be governed by the Board's
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KEEFE REPORTING COMPANY
Belleville, Illinois
1 procedural rules for regulatory proceedings. All
2 information which is relevant and not repetitious or
3 privileged will be admitted. All witnesses will be
4 sworn and subject to cross-questioning. Please note
5 that any questions asked by a Board Member or staff
6 member are intended to help build a complete record
7 for the Board's decision and does not express any
8 preconceived opinion on the matter.
9 Are there any questions regarding the procedures
10 we will be following today?
11 Seeing none, then I will ask Chairman Manning and
12 the rest of the Board Members if they have any
13 additional comments that they would like to make.
14 CHAIRMAN MANNING: No. Just good morning, and
15 this is a very important proceeding and we look
16 forward to the testimony today.
17 HEARING OFFICER ERVIN: Thank you. We will begin
18 with the prefiled testimony that remains to be heard.
19 Ms. Rosen, do you have an opening statement or any
20 introductory remarks you would like to make?
21 MS. ROSEN: Yes. Thank you. My name is Whitney
22 Rosen. I am Legal Counsel for the Illinois
23 Environmental Regulatory Group.
24 With me today are Mr. Sidney Marder, Executive
25 Director of the Illinois Environmental Regulatory
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KEEFE REPORTING COMPANY
Belleville, Illinois
1 Group; David Rieser of Ross & Hardies; and Mr. David
2 Howe from Caterpillar Company. They are going to be
3 presenting summaries of their testimony. We would
4 like to have their prefiled testimony admitted into
5 the record, so I am going to take that time now.
6 HEARING OFFICER ERVIN: Okay.
7 MS. ROSEN: Mr. Marder, I am handing you a
8 document. Could you please look at it and identify it
9 for the record?
10 MR. MARDER: This is a copy of my prefiled
11 testimony.
12 HEARING OFFICER ERVIN: They need to be sworn.
13 Would the court reporter please swear in the
14 witnesses.
15 (Whereupon Sidney Marder, David Rieser and David
16 Howe were sworn by the Notary Public.)
17 MR. MARDER: This is a copy of my prefiled
18 testimony.
19 MS. ROSEN: Okay. Could you please -- are there
20 also other documents attached to this prefiled
21 testimony?
22 MR. MARDER: Attached to the prefiled testimony is
23 one document that is entitled, The Issue of
24 Proportional Share Liability, a White Paper from the
25 Illinois Chamber to Howard Peters, who was then Deputy
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KEEFE REPORTING COMPANY
Belleville, Illinois
1 Chief of Staff. Also attached to my testimony is
2 copies of the Governor's amendatory veto message in
3 two pieces of legislation, one the House Bill 544 and
4 the other being Senate Bill 46.
5 MS. ROSEN: Okay. Are these true and exact copies
6 of your testimony and exhibits as were filed with the
7 Board?
8 MR. MARDER: Yes.
9 MS. ROSEN: Thank you. We would like to admit
10 these as Exhibit 10, please.
11 HEARING OFFICER ERVIN: Are there any objections
12 to the admittance of this document?
13 MS. ROSEN: Do you need to look at it, Mark?
14 MR. WIGHT: No.
15 HEARING OFFICER ERVIN: Seeing none, the prefiled
16 testimony of Sidney M. Marder, with accompanying
17 attachments will be entered into the record as Exhibit
18 Number 10.
19 (Whereupon said document was entered into evidence
20 as Hearing Exhibit 10 as of this date.)
21 MS. ROSEN: Mr. Rieser, I am handing you a
22 document. Could you please identify it?
23 MR. RIESER: Yes, this is a copy of my testimony.
24 MS. ROSEN: Are there other documents attached to
25 your testimony?
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KEEFE REPORTING COMPANY
Belleville, Illinois
1 MR. RIESER: Yes, there is an attached Exhibit A,
2 which is Proposed Language Re: Applicability, and
3 Exhibit B, Revised Liability Provisions.
4 MS. ROSEN: And is that a true and accurate copy
5 of your testimony and your exhibits as they were filed
6 with the Board?
7 MR. RIESER: It is.
8 MS. ROSEN: Okay. Thank you. I would like to
9 move to admit this exhibit as Exhibit Number 11.
10 HEARING OFFICER ERVIN: Are there any objections
11 to the admittance of this document?
12 Seeing none, the testimony of David L. Rieser will
13 be in entered into the record as Exhibit Number 11.
14 (Whereupon said document was entered into evidence
15 as Hearing Exhibit 11 as of this date.)
16 MS. ROSEN: Okay. And, Mr. Howe, I am handing you
17 a document. Could you please identify it?
18 MR. HOWE: Yes. This is a copy of my prefiled
19 testimony in this case.
20 MS. ROSEN: Okay. Is that a true and accurate
21 copy of your testimony as was filed with the Board?
22 MR. HOWE: Yes, it is.
23 MS. ROSEN: Thank you. I would like to move to
24 admit the testimony of David Howe as Exhibit 12.
25 HEARING OFFICER ERVIN: Any objections to the
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KEEFE REPORTING COMPANY
Belleville, Illinois
1 admittance of this document?
2 Seeing none, the testimony of David E. Howe will
3 be admitted into the record as Exhibit Number 12.
4 MS. ROSEN: Thank you.
5 (Whereupon said document was entered into
6 evidence as Hearing Exhibit 12 as of this date.)
7 HEARING OFFICER ERVIN: Just to clarify, these
8 three gentlemen will be testifying as a panel, and
9 they will also be answering questions as a panel. So
10 we will hold questioning until all three have
11 testified.
12 Mr. Marder, you may proceed whenever you are
13 ready.
14 MR. MARDER: Thank you. Good morning. My name is
15 Sidney Marder. I am Executive Director of the
16 Illinois Environmental Regulatory Group, known as
17 IERG, and I am also Environmental Consultant to the
18 Illinois State Chamber of Commerce. I appreciate this
19 opportunity to testify, and I will be just
20 paraphrasing some of my testimony and adding a few
21 comments.
22 Not in my testimony is my concurrence with the
23 statements made at prior hearings by Mr. King and Mr.
24 Wight about the cooperative effort that really did
25 exist between the regulated community and the EPA. It
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KEEFE REPORTING COMPANY
Belleville, Illinois
1 is unfortunate that we were not able to come to a
2 complete agreement. But that's the process, and
3 that's probably a healthy part of the process.
4 So, in essence, my testimony is intended to
5 provide some background and statement of intent, at
6 least from the regulated community's point of view,
7 having lived through the process, as well as to
8 articulate some points of view on the few narrow but
9 important differences of opinion we have with the
10 Agency.
11 The reason I have been asked to testify is because
12 both IERG and the Illinois Chamber were among the
13 primary drafters and negotiators of the so-called
14 Brownfields legislation. My testimony that was
15 prefiled was intended to discuss the rationale
16 supporting the shift to Proportionate Share Liability
17 and the issue of orphan share funding, which was a
18 major issue of discussion. Additionally, I will
19 briefly address two issues as they relate to the
20 Agency's proposal. These are the two areas of
21 disagreement, applicability of the Proportionate Share
22 Liability and the assignment of liability for
23 unapportioned shares.
24 By way of background, this process generally
25 started in 1995 when IERG staff attended a
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KEEFE REPORTING COMPANY
Belleville, Illinois
1 presentation on what was billed Brownfields
2 legislation, and throughout my prefiled testimony I
3 have used the term Brownfields. I want the Board to
4 be aware that in using that term it is basically being
5 used as a surrogate for a much broader category of
6 land. It is sort of a shorthand used in explaining
7 the most typical type or a typical type of site that
8 would be involved in a real estate transaction. The
9 intent of the legislation was to cover much -- a much
10 broader applicability of different types of sites and
11 the different type of cleanups. I think everybody
12 agrees with that.
13 As the meetings unfolded, we went back to our
14 members on numerous occasions to ask them the
15 rhetorical question, do you want us to get involved in
16 this. Our members expressed a great deal of support
17 for legislation, and they were interested in the use
18 of a risk-based approach to remediation. They were
19 interested in some sort of a privatized review of
20 cleanups, and they were interested in a provision
21 which has become known -- well, I guess was known but
22 was articulated by the members in a way that persons
23 would no longer be held liable for contamination
24 beyond that portion which they actually caused or
25 contributed to in the first place, or proportionate
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KEEFE REPORTING COMPANY
Belleville, Illinois
1 share. As the process unfolded, the privatized review
2 went through a number of changes, and resulted in the
3 concept of a RELPE, as the Board is aware.
4 Quite frankly, while there was a great deal of
5 preliminary negotiations between the IEPA and the
6 business community and SRAC, which is S-R-A-C, which
7 is the legislative mandated advisory committee, those
8 negotiations eventually led to a request from the
9 Governor's office that the business community, the
10 Agency, and the Attorney General's office hold a
11 series of negotiating sessions in an effort to reach
12 consensus on the Brownfields initiative. As is
13 usually the case, when it looks like legislation has a
14 real chance of passing and it is a major piece of
15 legislation, the Governor's office involves
16 themselves, as appropriately they should, to try to
17 pull together the parties. Those discussions and
18 negotiations went on for quite awhile.
19 Following those discussions, the Chamber submitted
20 a detailed White Paper which outlined the business
21 community's views in support of Proportionate Share
22 Liability, and that document is attached to my
23 testimony, my prefiled testimony. And we tried to
24 address the concerns that had been expressed by the
25 parties to those discussions.
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KEEFE REPORTING COMPANY
Belleville, Illinois
1 Our basic rationale or a rationale for supporting
2 the shift to Proportionate Share Liability was that
3 the business community is concerned and was concerned
4 that under a joint and several liability scheme a
5 perception of liability accompanied every transaction,
6 every remediation project and, in fact, that acted as
7 a barrier to voluntary remediation of properties. We
8 felt that the existing owner or purchaser of real
9 property who voluntarily agreed to conduct remediation
10 in order to rehabilitate or expand the beneficial use
11 of the property needed a degree of certainty that in
12 exchange for the commitment, the cleanup commitment or
13 the purchase of the property, that upon completing
14 remediation of its proportionate share, of that
15 person's proportion share, that person would possess a
16 level of protection from future actions by the State
17 and/or third parties attempting to impose additional
18 environmental liability on it.
19 There are really two pieces, in our mind, to joint
20 and several liability and proportionate share. One is
21 the allocation during the process and the other is
22 certainty at the tail end. I think a lot of the
23 regulation before us deals with the apportionment
24 rather than the certainty.
25 Quite frankly, in addition to that, the business
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KEEFE REPORTING COMPANY
Belleville, Illinois
1 community felt that the concept of joint and several
2 liability was just simply unfair and warranted
3 change. During the discussions, and I emphasize the
4 word discussions rather than negotiations on
5 proportionate share, because there was very little
6 negotiation. There was discussion. The Governor's
7 office chose not to include the subject of
8 proportionate share in their negotiations. They
9 reserved that for a later date.
10 During these discussions one of the major concerns
11 that was raised was that the implementation of a
12 Proportionate Share Liability scheme would result in
13 orphan shares being left to the State. The business
14 community's position was that we believed strongly
15 that a Proportionate Share Liability mechanism in the
16 Brownfields legislation would not require the State to
17 assume the orphan share, as was being alleged by the
18 administration. The State would not have to assume
19 that share. That doesn't mean there wouldn't be an
20 orphan share, but nothing would require the State to
21 remediate.
22 We did acknowledge that implementation of a
23 Proportionate Share Liability mechanism might mean
24 that some orphan shares would go unfunded. There was
25 no question about that. Quite frankly, from reviewing
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KEEFE REPORTING COMPANY
Belleville, Illinois
1 the testimony of Mr. King and others at the last
2 hearings it appears that the same issue arises under
3 joint and several liability. It appears that in the
4 cases presented as examples under joint and several
5 liability, there was still orphan shares generated
6 even though in theory those orphan shares could have
7 been assigned to a responsible party. The issue seems
8 to become how much the orphan share will be, not
9 whether there would be orphan shares.
10 As I noted a moment ago, shortly after the
11 submittal of this White Paper to the administration,
12 the administration communicated their opposition to
13 the Proportionate Share Liability provisions. The
14 rest of the history of the passage of the bill and the
15 amendatory veto and the repassage of the bill is
16 included in my testimony. I won't belabor that
17 point.
18 The point I want to make is that all during this
19 process there was virtually no negotiation of the
20 language within the proportionate share portion of the
21 bill, no discussion of what was intended. The only,
22 if you will, negotiations centered around how to fund
23 the orphan share. I think this is important in that
24 the language that became law at Section 58.9 is
25 virtually identical to that initially proposed by the
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KEEFE REPORTING COMPANY
Belleville, Illinois
1 business community. We, as the business community,
2 are well aware of what we intended in the bill and how
3 we intended the provision to apply, and that was as
4 broadly as possible consistent with federal law. We
5 strongly believe that the contested portions of the
6 proposal presented by the IEPA do not conform with
7 that intent, and believe that the language that Mr.
8 Rieser will present does capture that intent, and I am
9 sure he will be explaining that.
10 The very same Governor who vetoed Section 58.9
11 mandatorily vetoed that language in Senate Bill 46 and
12 Senate Bill 901 -- in Senate Bill 46 and 544. That
13 Governor, Governor Edgar, then signed House Bill 901
14 into law with essentially identical language. The
15 only intervening change was the negotiation over a
16 funding package. That funding package, while
17 important, quite frankly, had the Governor been
18 advised that the proportionate share language would
19 affect only a meniscal number of sites, as we have
20 heard at past testimony, I believe that if that kind
21 of discussions took place during the discussions we
22 had, much of the information that was presented during
23 those discussions as to the number of orphan shares
24 would ring rather hollow.
25 During those discussions numbers were bantered
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KEEFE REPORTING COMPANY
Belleville, Illinois
1 around about billions of dollars of orphan shares.
2 That, quite frankly, doesn't reconcile very well with
3 the five or six lawsuits that are brought a year.
4 Not withstanding that, that was the intent that we
5 carried forth in the business community. And we
6 believe that the language which will be presented by
7 the Site Remediation Advisory Committee, on behalf of
8 them by Dave Rieser, is a reasonable reflection of the
9 intent of the General Assembly and of the
10 administration, and we would urge the Board to adopt
11 that language.
12 Again, I appreciate the opportunity to testify and
13 I will be pleased to answer any questions you may have
14 at the end of our testimony.
15 HEARING OFFICER ERVIN: Thank you. Mr. Rieser,
16 whenever you are ready.
17 MR. RIESER: Good morning Chairman Manning and the
18 Board Members. My name is David Rieser, partner with
19 the law firm of Ross & Hardies. I filed my appearance
20 on behalf of the Illinois Steel Group and the Chemical
21 Industry Council of Illinois. I am a member of the
22 Site Remediation Advisory Committee, and I am
23 testifying on behalf of the Site Remediation Advisory
24 Committee here this morning.
25 I participated in the early hearings and I
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KEEFE REPORTING COMPANY
Belleville, Illinois
1 listened carefully to what Gary King and John Sherrill
2 talked about in terms of the Agency's program and how
3 they viewed the legislation, and the difficulty of
4 putting these regulations together. As Sid says, we
5 had a very collegial exercise in trying to come to
6 some consensus, and in general we did achieve a
7 consensus on the outlining of a program and on the
8 basic procedures in the program, but we were unable to
9 achieve consensus with some of the details.
10 I agree with a lot of what Gary King says about
11 outlining the legislation and the difficulty of
12 drafting these things. But he identified four
13 principles of interpreting the statute, not all of
14 which I agree with. And the fourth one I specifically
15 disagree with, because his fourth principle was that
16 the Board has broad discretion to promulgate a
17 workable program. Not that I disagree that the Board
18 has a broad discretion to promulgate a workable
19 program, but that is what the Board has to do for
20 every piece of regulation it adopts.
21 I think the fourth principle for interpreting this
22 legislation is the importance of recognizing the
23 change that was intended by the legislation. This
24 legislation was intended to change things from what
25 they were before. And so in looking at what the
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Belleville, Illinois
1 legislation requires and preparing a regulation that
2 meets the terms of that legislation, I think one
3 important issue is are we doing things differently
4 than we did before. We, obviously, have to look at
5 workability in terms of whether that programs works.
6 We can't adopt an unworkable program. But we also
7 have to strive to see how we can do things
8 differently. Because, as Sid talked about, it is very
9 important to the business community that we go away
10 from joint and several liability and move to a
11 different type of program. So the legislation has to
12 be viewed in terms of how we are going to do things
13 differently, not how we are going to do things the
14 same as we did before.
15 With respect to applicability, this was the first
16 issue that we had. I proposed legislation, as
17 attached as Exhibit A to my testimony, and that
18 reflects regulations that were -- a proposal that was
19 agreed to earlier in the negotiating process, and at
20 the last moment was not agreed to. And I, frankly,
21 still don't know, as I sit here today, what is wrong
22 with what we proposed. I thought it was a good idea
23 then. There was someone in the Agency that obviously
24 felt it was a good idea then, and I am not sure
25 whether they think it is good idea or not, because
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KEEFE REPORTING COMPANY
Belleville, Illinois
1 they reserved the right to come back and tell the
2 Board what they think about it.
3 I think what we proposed in terms of applicability
4 does exactly what the Agency requires, and which I
5 think is an appropriate requirement, which is so long
6 as they are bringing an action against an individual
7 who has regulatory responsibilities under federal
8 programs, such as RCRA, such as the Underground
9 Storage Tank Program, that individual must perform
10 those responsibilities under those programs. There
11 was no intent to change those responsibilities. We
12 must maintain -- there is no question that we have to
13 maintain the ability of the State to administer the
14 federal programs for which it is responsible.
15 I think the language that we proposed was narrowly
16 tailored so that you could accomplish that end but not
17 eliminate sites from the program and from
18 consideration of proportionate share that ought to be
19 considered. We mentioned examples of these in the
20 questions that we presented to the Agency, such as the
21 underground storage tank, the site with an underground
22 storage tank, where you don't have the owner or
23 operator at that site. There is a very specific
24 definition of owner or operator in the Underground
25 Storage Tank Statute. There is a very specific
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Belleville, Illinois
1 person. If that person is not there at that site,
2 there are no responsibilities for the owner of that
3 property under those Underground Storage Tank
4 regulations. In those circumstances, proportionate
5 share ought to apply. There is no longer a federal
6 regulatory responsibility. The same is true with
7 respect to certain types of RCRA issues.
8 So what we have proposed is a narrowly tailored
9 response to address the specific concerns. It ought
10 to be acceptable. I don't think we have heard any
11 reasons in the hearings to date why it should be not
12 acceptable. I believe the Board ought to adopt this
13 change to the applicability language.
14 The burden of proof issue, what I call the burden
15 of proof issue is really the heart of the discussion,
16 the differences between proportionate share and joint
17 and several liability. And through that discussion
18 you hear a lot of different issues that come out in
19 terms of how people think about Proportionate Share
20 Liability and how people think about joint and several
21 liability. It is safe to say that at the first
22 meeting that we had between the Site Remediation
23 Advisory Committee and the IEPA regarding this
24 program, proportionate share regulations, Gary King
25 and I argued about this very issue and we have not
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KEEFE REPORTING COMPANY
Belleville, Illinois
1 stopped arguing it, and I think we will continue to
2 argue about it until the Board makes a decision. But
3 we are very much opposed to the Agency's proposal at
4 several different levels, most of which I laid out in
5 my testimony, but I want to embellish a little bit on
6 that testimony based on some of the issues that the
7 Agency has raised in their -- on their testimony.
8 First of all, I think the Agency's proposal
9 shifting the burden of proof between liability and
10 allocation is just contrary to the statute. The
11 Environmental Protection Act shifts the burden of
12 proof to a defendant to prove a particular fact. It
13 says so. It says so in 22.2(j)(1) and 22.2(j)(6) in
14 the context of CERCLA, State and CERCLA type actions.
15 In those actions that defendant is required to prove
16 its defenses. It is required to prove that it has met
17 the definition of a contractual relationship for the
18 purposes of asserting an innocent land owner defense.
19 Those things are specific statutory requirements where
20 the legislature has said this person must prove this
21 fact to avail themselves of that defense. That is not
22 in 58.9. 58.9 presents limitations to the authority
23 of this State to bring certain actions in certain
24 types of conditions. And so there is no statutory
25 support whatsoever for this shifting of the burden.
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KEEFE REPORTING COMPANY
Belleville, Illinois
1 One of the central -- one of the many criticisms
2 of CERCLA, and by extension the State Superfund
3 statute in 22.2(f), is that it shifts the burden of
4 proof to the defendants, that once they are tagged as
5 being potentially responsible parties the entire
6 burden of proving their role in the site falls to
7 them. Now, there is nothing in CERCLA that says
8 that. But that is the way CERCLA has been
9 administered. Once the Agency tags you, it is up to
10 you to -- as a PRP it is up to you to bring forward
11 the evidence that gets you out. Even if you do that
12 they don't accept it nine times out of ten.
13 So in light of the fact that this legislation was
14 intended to change CERCLA, this is one of the most
15 important elements that has to be changed, this idea
16 that the defendants bear a burden of proof. Again, in
17 the context of the regulation that is before you, what
18 we are talking about are enforcement actions. There
19 is a certain constitutional issue where one is
20 innocent until proven guilty. Even in a civil action
21 that is still an issue. The State has to prove their
22 case. The State always has to prove their case unless
23 the legislature presents a situation which says
24 otherwise. So absent some very specific authority in
25 the legislation, which I contend is not there, there
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1 is no basis in the statute for shifting the burden of
2 proof of the defendants to any part of this process.
3 Secondly, the division between liability and
4 allocation which allows the Agency to make this burden
5 shifting, to insert this burden shifting device, I
6 submit is artificial on the one hand and not so easily
7 drawn on the other. There are plenty of companies,
8 entities, people, that are liable, quote, unquote, at
9 a Superfund site based on their status as owners, as
10 operators, as people who sent material to a site, even
11 if they have not contributed one molecule of
12 contamination to the problem that has to be resolved
13 at the site.
14 Gary and I had some discussions back and forth
15 about a person who submitted one chemical when the
16 problem was a separate chemical, and the chemical that
17 that person submitted was not a part of the issue.
18 That person in that situation, I would contend, that
19 that person did not cause costs to be incurred at that
20 specific site. That person should not be viewed as
21 being, quote, liable simply because of what they did,
22 but part of that liability issue is the causation of
23 the costs to be incurred.
24 Board Member Hennessey asked some questions at the
25 last hearing that focused on that central point. I
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1 think it is a very central point that has to be
2 continued to be looked at in terms of whether this
3 division between liability on the one hand and
4 allocation on the other is really supportable. I
5 think the central issue that has to be maintained is
6 that the causation element needs to incorporate the
7 concept of causing the cost to be incurred, the
8 remediation costs to be incurred at a given site, and
9 not just did you send chemical X to the site. It has
10 to be broader than that.
11 Third, as you can tell by the discussion, we have
12 a very specific problem with the Agency's proposal at
13 741.210(d)(3). It is our contention that that is
14 purely joint and several liability, and it is an
15 attempt to bring joint and several liability back into
16 this process through a back door. The Agency has
17 identified this as a, quote, safety valve, but the
18 very purpose of this is to threaten parties without
19 significant information at a site with absorbing some
20 arbitrary entire share that there is no evidence for.
21 This has been justified as -- justified based upon the
22 party's, quote, liability, unquote. But, again,
23 liability in this context is a very slippery issue.
24 The liability has to be tied with the contribution,
25 what they have actually done at the site.
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1 Further, the Site Remediation Advisory Committee
2 is firmly convinced that the Board will be capable of
3 making the decisions it has to make at the site based
4 on the evidence that is before it, and does not need a
5 safety valve to allow it to impose additional shares
6 on parties who don't deserve them or to allow the
7 State to threaten parties who are in that position
8 with having these additional shares imposed upon
9 them. Because, again, one of the issues in all of
10 this is trying to get away from a situation where
11 potentially responsible parties, by virtue of the
12 status, have no rights, have no leverage, have no
13 ability to get themselves out of a situation based on
14 the information that they have.
15 Another element I want to talk about in line with
16 the same thing is that -- and I think David Howe is
17 going to follow-up on -- is that the Agency excused
18 this imposition of additional shares on these parties
19 without information because those parties are, quote,
20 liable and it is okay. Well, this seems to have a
21 moral component to it, that people who are liable at
22 certain sites deserve whatever happens to them, which
23 is a moral component that underlies all of Superfund
24 which is one of the things that we are trying to
25 change.
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1 There is a lot of different reasons that people
2 become liable or potentially responsible parties at
3 Superfund sites. Very rarely do those reasons have to
4 do with conduct that people would consider bad or
5 immoral. Many times people operated their facilities
6 in accordance with all technical standards that were
7 appropriate at the time, and those standards are
8 different from what they are now. A lot of times
9 people sent material to fully licensed landfills that
10 eventually had problems. None of these make them bad
11 people in the sense that we would normally consider
12 that term even in an environmental context.
13 These are, by and large, business people who were
14 doing what was appropriate at the time. So in
15 thinking about whether it is appropriate to impose on
16 these parties an additional share just because they
17 are liable by virtue of their status at a given site,
18 I think creates real problems. It is the type of
19 thing that the legislation was adopted to avoid.
20 People should not be charged or threatened with
21 absorbing the entire cost of the site merely because
22 they sent one drum of material to that site or some
23 amount of material that is less than the entire amount
24 at the site. That is what proportionate share has to
25 mean.
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1 Because Gary King had identified workability as a
2 principle for interpreting the statute, one has to
3 assume that the basis for the Agency's proposal here
4 is the issue of workability. Workability is an
5 important but slippery concept. I mean, you can't
6 violate statutory or constitutional rights in the name
7 of workability. The legislation is about change and
8 in making things different, and for people in
9 organizations or governments that are used to doing
10 things one way, any new way that you propose is
11 obviously going to be viewed as less workable than the
12 one that you currently have.
13 But as Mr. Marder pointed out, I don't know that
14 the Board has heard evidence from the Agency that
15 their system would be unworkable if they bear the
16 burden of proof in these situations, as they ought
17 to. It would be different. It might be more
18 difficult. There might be more additional shares that
19 they can't impose on the potentially responsible
20 parties. But as Mr. Marder has pointed out, those
21 additional shares were funded by the legislation. In
22 fact, the amount of funding that was represented by
23 that legislation, approximately 2 million dollars a
24 year, represents over a third of what the Agency
25 identifies as its financial input into its Hazardous
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1 Waste Fund Program for 1997. The larger amount is the
2 2.5 million it received in cost recovery settlements.
3 So a lot of money got put into this process to fund
4 the difficulty that this change will -- to the extent
5 that there is a difficulty, that this change will
6 engender. This new system ought to be given a chance
7 to work.
8 What I heard from what the Agency testified, was
9 that a lot of their program depended on the
10 availability of the funding to administer. During the
11 time when they had Clean Illinois Funding and Build
12 Illinois Funding they issued far more 4(q)s than they
13 did in the absence of that fund. As I said, we have
14 provided additional funding that should represent and,
15 in fact, probably overpays for the cost of the
16 difficulties, any potential difficulties that this
17 shifting of the burden will cause.
18 I want to follow-up on something else that Mr.
19 Marder pointed out, which is the Agency described --
20 in describing how its system operated, described three
21 different sites. It was an interesting choice of
22 sites to bring before the Board. Because it didn't
23 strike me that any of those sites really demonstrated
24 the differences between joint and several liability,
25 the problems of Proportionate Share Liability or the
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1 need to have a shifting of burden between liability
2 and allocation.
3 Two of the sites involved a landfill situation
4 where there was no potentially responsible parties
5 that could be identified. Well, under either system
6 that is going to be the problem. That is what the
7 Hazardous Waste Fund is to deal with, is to clean up
8 those places that create imminent and substantial
9 endangerments where there is no responsible parties to
10 pay the freight. There are those sites and fewer now
11 than there were before, but I am sure more will be
12 discovered as we go on. But that is what the
13 Hazardous Waste Fund is for. That is what government
14 is for, to take care of these types of problems.
15 The Steagall landfill site, on the other hand, is
16 really sort of a different situation. And what that
17 seemed to demonstrate is that the current system
18 already incorporates certain elements of proportionate
19 share, that there are already de facto components to
20 the current system. At Steagall, and I know nothing
21 about Steagall except what the Agency presented at the
22 hearing, but you had the owner, you had some of the
23 principal PRPs, you had a very significant problem.
24 There was a suit under federal statutes, under the
25 Federal Superfund, which joint and several liability
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1 should always apply, and settled with most of the PRPs
2 for less than the entire cost that the State expended
3 at the site.
4 I don't know why those settlements happened the
5 way they did. I am sure there were a wide variety of
6 issues, but one has to figure that at least some of
7 the issues was that the issues of proportionality,
8 causation, divisibility, were issues that were brought
9 forward by the PRPs at the site and that those issues
10 were so resonant and strong that the State decided
11 that it was more appropriate, better use of resources,
12 to settle those cases for less than the amount that
13 they could obtain under a joint and several liability
14 attack under Superfund.
15 So if these issues are already implicit in how the
16 State makes these decisions in enforcement cases, then
17 it strikes me that it is our obligation to make them
18 explicit in the regulations adopted by the Board as
19 they are in the statute that was issued by the
20 legislature. They are already going to be making
21 decisions at sites and settling cases based upon
22 proportionality and causation, and those factors need
23 to be brought to the Board. It should not be up to
24 individual responsible parties and the ability of
25 their counsel, if that is what the issue was, to be
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1 able to use those factors in getting the State to make
2 those types of decisions.
3 The final issue on this and this is, again,
4 something that David Howe is going to address in
5 greater detail, is that I think that the Agency and
6 the State underestimate how much the PRPs and people
7 who are named as PRPs in these actions really hate
8 being involved in these things. As David will say in
9 greater detail, they are a mess and very expensive.
10 And as the Agency testified, there is a lot of people
11 who would rather simply write the Agency a check than
12 do anything further with regard to one of these sites
13 or have any further discussions.
14 The Agency brings -- I am sorry -- the State
15 brings very few of the cases. The Agency issues few
16 4(q)s. So it is hard to see that the shift, that a
17 shift in burden of proof between liability and
18 allocation is absolutely necessary to make the system
19 work. Perhaps it is necessary to make the system work
20 as the Agency currently does things. But as I said,
21 that is not enough. The legislature, the State of
22 Illinois, has mandated change, and it is up to us to
23 implement that change here.
24 I attached to my testimony as Exhibit B a version
25 of this liability language that SRAC presented, and
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1 what this is intended to do is basically take the
2 statute and put it into regulatory form. I thought
3 that this had some virtue because it was simple. It
4 followed and tracked the statute as closely as
5 possible while preserving some of the issues with what
6 is in the statute. It doesn't specifically discuss
7 burden of proof, because I don't think there is an
8 issue of burden of proof. The statute is very clear
9 that the State cannot bring an action except against
10 those people who caused costs to be incurred and only
11 to the extent of those costs.
12 Plainly, the statute can be -- I am sorry -- the
13 regulatory proposal that I have presented can probably
14 be improved upon. As I was looking at it this
15 morning, I thought of some potential suggestions
16 myself. But it was an attempt to give the Board some
17 language to insert instead of what the Agency has,
18 because I do believe, as I have said, what the Agency
19 has is inconsistent with the legislation. It is not
20 necessary, and it is not appropriate to use in this
21 setting.
22 The final thing I want to talk about is the
23 information order. Again, there is no language which
24 specifies information order in the statute. There is
25 numerous mechanisms that both the Attorney General's
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1 office and the Agency has for gathering this
2 information up to and including there is a Rule 224
3 which I suggested is a way of using a court proceeding
4 to get information prior to filing an action, that
5 could be the type of thing that was done. I don't
6 know why that couldn't be done with the Board as
7 well.
8 There is lots of different ways to get
9 information; investigations, asking for it. I don't
10 know that the Agency has really made the case to the
11 Board that this is really necessary, necessary in such
12 a way that the fact that this action is authorized,
13 this additional Board action is not authorized by the
14 statute. Further, the Agency has not really presented
15 to the Board the real thought through process about
16 how it ought to work. I think they are waiting for
17 some suggestion that this is something the Board was
18 interested in. And I guess our suggestion is that the
19 Board should not be interested in this, because it is
20 not necessary.
21 The final thing I want to say is that in thinking
22 about the Proportionate Share Liability and its
23 workability and whether this is going to present
24 problems for the Agency in addressing the sites, I
25 think the Board should also look at the Site
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1 Remediation Act, Title 17, as a whole, and recognize
2 that the legislation accomplished a huge amount in
3 terms of providing for the remediation of hazardous
4 materials sites in the State. What was needed and
5 what that statute provided was a mechanism by which
6 people involved in property, owners of property, could
7 come to the State and get rational decisions to be
8 made, that they have a process for getting the State
9 to decide that the site was clean enough for its use,
10 that they would have a process for evaluating
11 appropriate remediation objectives for the site.
12 I think that the State would say, if asked, that
13 the Site Remediation Program has been very successful
14 and that many, many sites are being brought into that
15 program that were not being addressed previously. So
16 this legislation led to what it was intended to, which
17 was that sites would be remediated, are being
18 addressed, they are being put back into commerce.
19 I think the Proportionate Share Liability issue is
20 part and parcel of that same process, that you want to
21 give the people who have worked to address these
22 properties some level of certainty that their mere
23 ownership of the properties in the process of
24 remediating them is not sufficient to cause them to be
25 liable for all conceivable problems associated with
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1 those properties. And that there is a straightforward
2 process where the State has to be -- has to bear the
3 burden and has to do a lot of work before it can
4 demonstrate that any party is liable for any given
5 share at a given site before that party has to
6 contribute to the cost of remediating. I think it is
7 part and parcel of the other portion of that
8 legislation and it is an important element that has to
9 be preserved.
10 As with Mr. Marder, I will be available for
11 questions at the conclusion of Mr. Howe's testimony.
12 HEARING OFFICER ERVIN: All right. Mr. Howe.
13 MR. HOWE: Madam Hearing Officer, Members of the
14 Board, my name is David Howe. I am a Senior Attorney
15 with Caterpillar, Inc. based in Peoria. I very much
16 appreciate the opportunity to have submitted the
17 written testimony and also to submit oral testimony
18 today.
19 Basically, Caterpillar, Inc. is a heavy equipment
20 manufacturer. It is a mainstream manufacturer. At
21 this point in time I believe that it is still the
22 largest single private employer in the State of
23 Illinois. I have participated in the events leading
24 up to this proceeding on behalf of Caterpillar and on
25 behalf of the Illinois Environmental Regulatory Group,
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1 which I call IERG, and also as a member of the
2 Environmental Law Section Council of the Illinois Bar
3 Association. I am speaking today as a representative
4 of Caterpillar and IERG.
5 To describe the nature of my oral testimony, I am
6 not going to repeat my written testimony. But,
7 basically, I am here as a member of the regulated
8 community. I am here as one of the people that
9 actually authorizes the checks that are written to pay
10 for the cleanups, to pay for the attorney's fees, to
11 pay the administrative expenses in all different types
12 of contaminated site situations. Traditionally, we
13 call -- I call them first party sites which might be a
14 site that is owned by a company or a business entity
15 that they may be the only entity involved in the
16 contamination issue, or a third party site which is
17 one that is thought of as the traditional Superfund
18 site or cleanup site where waste has been transported
19 to a site and there may be a number of parties
20 involved.
21 But I am the guy that writes the checks, and I am
22 the guy that goes to the meetings and sits there and
23 listens to all of the attorneys arguing about things,
24 and calculates up the amount of legal fees that are
25 being expended per minute by the PRP committees. And
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1 so I hope that that experience will be of benefit to
2 the Board.
3 I will make a few brief general observations. I
4 will also note that what I am speaking from is my
5 experience in seven years of managing Superfund sites
6 or traditional cleanup sites. I have not done a great
7 deal of case research or anything like that to prepare
8 for this hearing, but I hope that the experience that
9 I bring to this proceeding will be of benefit to the
10 Board.
11 In terms of the observations that I have, the
12 first one is that most of these site remediation
13 schemes that we are dealing with here, and I am
14 talking about the traditional CERCLA type schemes and
15 the equivalents in the various states are based upon
16 the proposition in the 20 second sound bite that the
17 polluter must pay. One thing I want to point out is
18 by that definition, I am reasonably certain that every
19 single person that is in this room today meets the
20 definition of a polluter. A polluter, under these
21 schemes, is a generator of waste that has a hazardous
22 component. There have been numerous cases where there
23 is expert testimony that household waste, household
24 garbage contains somewhere between one and three
25 percent of a hazardous component to it. So the point
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1 is that everybody in this room could be deemed to be a
2 polluter.
3 The other point here is that these polluters, as
4 they would be called, and I will now refer to them as
5 generators, because I feel that that is a more
6 accurate term, do not have any kind of evil intent
7 that you would see, say, in a Saturday morning cartoon
8 like "Captain Planet" or something like that. Rather,
9 these generators are business entities, everywhere
10 from a company the size of Caterpillar down to a Mom
11 and Pop grocery store or a sole proprietorship, that
12 in the course of their operations, in the course of
13 their daily life, generate waste that they then must
14 then send away to be disposed of in locations that
15 they would have deemed to be a normal landfill, a
16 normal waste disposal site. They would have assumed
17 that they would have been competently managed.
18 The other thing that you have to understand is
19 that with respect to this type of scheme, you are
20 dealing with in almost all situations, historic
21 contamination. We are not dealing with contamination
22 that has been caused recently by a specific action.
23 People don't do that anymore. You are talking about
24 things that may have occurred 10, 20, 30, 40, 50, 100
25 years ago. And in many situations you will have
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1 situations where not only was it thought to be the
2 correct thing to do, but in certain circumstances,
3 there will be companies and business entities that
4 will be able to point to letters from state
5 environmental agencies or the equivalents back then
6 directing them to dispose of waste at a particular
7 site in a particular manner. And then later on that
8 same agency may be directing them to clean up that.
9 So those are some of the things that you need to
10 understand about what we are dealing with.
11 Now, to reiterate the types of persons that you
12 are talking about here, there are various types of
13 business entities. They can include municipalities.
14 They can include some types of local government
15 agencies sometimes. And, as I have said, in the vast
16 majority of situations, we are not talking about
17 anything that deals with evil intent. You are also
18 not talking about entities where if they have the
19 money to pay without bankrupting themselves that they
20 are necessarily going to be trying to not be
21 cooperative, okay. So that is a basic background.
22 Now, let's talk a little bit about what happens
23 with respect to a site when there is a historic
24 contamination issue that comes up. As I have said,
25 there are many different types of sites. The one that
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1 I am really going to be focusing in on right now is
2 what I call the third party type of site. Basically,
3 most of the people that are involved in those sites
4 are going to be very small players, and even very
5 large companies in the vast majority of the sites that
6 they are involved in are actually going to be de
7 minimis parties. They will have less than one percent
8 by volume of whatever is there. They are generally
9 willing to cooperate to the extent that they can do so
10 without opening themselves up to huge liabilities
11 and/or liabilities that they do not feel are fair,
12 particularly. They are also willing to pay money if
13 it is being paid for cleanup. They want to see things
14 remediated. They are like anybody else. Nobody wants
15 to have a bad environment. They don't want to spend
16 the money in an inefficient process. They want
17 something that is going to work.
18 They are also typically dealing with information
19 that is not perfect. Especially with historic
20 contamination, it is the rule rather than the
21 exception that information is not perfect, and they
22 have to deal with that. The way that information is
23 developed and used sometimes can be -- can really
24 stretch credulity.
25 To give you an example, in one situation we were
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1 presented with affidavits from parties alleging that
2 Caterpillar had done various things. This was not in
3 the context of litigation. This was prelitigation.
4 The names of the affiants had been blacked out. We
5 were not given the opportunity to even know who those
6 affiants were, let alone interview them. And,
7 nevertheless, we were being asked to contribute based
8 upon that.
9 We have been in situations where we have received
10 affidavits from people alleging that they emptied
11 waste oil tanks back in the 1950s for plants, and that
12 they did it from 1950 to 1960 for plants that were not
13 even built until 1955. We have had many situations
14 like that that come up. So information is not
15 perfect, and the means by which information is
16 gathered and used can be critical.
17 Now, given that, the process basically begins with
18 some sort of request for information. At that point
19 in time generally parties find out about each other
20 and they try to get together. They try to work out
21 allocation issues many times. There are numerous
22 meetings that occur. There are all sorts of lawyers
23 who can typically add up and figure an average hourly
24 rate and come up with a fee in terms of hundreds of
25 dollars per minute in some of these meetings. Then
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1 after that there is usually a lull while the major
2 players work on remedy selection and just exactly how
3 is the site going to be cleaned up.
4 There are numerous frustrations that parties feel
5 during this process. One of them is the amount of
6 time that it takes. A typical site remediation from
7 the time that you first learn about your potential
8 involvement to the time that it is completed can take
9 years and oftentimes can take decades. The expense
10 that is borne is also very frustrating.
11 On the sites that Caterpillar has been a small
12 player, I will tell you, without getting into hard
13 numbers, that we will spend typically more in legal
14 fees than we will wind up spending on the site
15 itself. The remainder of that, especially if we are
16 involved in PRP groups, goes to something called
17 administrative expenses. We don't know a lot of times
18 exactly what those administrative expenses ultimately
19 get used for, because we try to get some closure on
20 the site. But we suspect that in many cases it is
21 used for lawyers trying to go after other PRPs to get
22 them to contribute as well. The point here is that it
23 is very, very frustrating for anybody to want to clean
24 up the environment, want to do what is right and to
25 spend that kind of money on legal and administrative
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1 matters.
2 There are other frustrations. One of them is that
3 you have a lot of uncertainty in terms of what is
4 going to be happening. You have a lot of uncertainty
5 about closure. You have a lot of uncertainty about
6 whether after you are done with this somebody might
7 try to bring you back in, things of that nature. And
8 one of the others, I am sure you have heard of the
9 situation where you can't win, you can't break even,
10 and you can't quit. Many times small parties will
11 want to work things out and try to buy out of the
12 liability and get closure on the situation so that
13 they can go on and do what it is that they are
14 supposed to be doing. Sometimes everybody will agree
15 to that and it still takes two or three years for that
16 to occur. These things also become very, very
17 frustrating.
18 The goal of the member of the regulated community,
19 or the goals are to pay their fair share of a cleanup,
20 to the extent that they have money. Sometimes they
21 don't. Sometimes it is very difficult, especially for
22 a small entity. They want certainty in the process.
23 They want to achieve closure. They want to resolve it
24 and move on. They want it to be fair. They want to
25 leave the process without having a bad taste in their
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1 mouth. As I have said, they really do want the
2 certainty that is involved in this thing.
3 Now, I have dealt with this as part of my job. I
4 will still have a bad taste in my mouth in many
5 different areas, because under the traditional
6 Superfund allocation scheme, it is not a level playing
7 field. There are situations where you can be forced
8 to participate in a scheme without being able to get
9 your liability determined or adjudicated until after
10 the cleanup is over. And then if you are wrong you
11 can face a number of penalties if you have not
12 participated in the process.
13 The point that I am making here is that entities
14 are going to participate when they know the process is
15 fair, when they know that it is efficient. To the
16 extent that they believe that somebody can make the
17 process very unfair, they are going to get their backs
18 up, and that's when they are going to say to protect
19 myself I need to go hire an attorney. And,
20 unfortunately, that can contribute to this.
21 So the point that I have been trying to make is
22 that entities will participate to the extent that the
23 process can be made efficient, to the extent that the
24 process can be made fair. There will be more
25 participation and they will accomplish what everybody
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1 wants to accomplish, which is making the environment
2 better.
3 And, again, I will be glad to answer any questions
4 that you have and, again, I very much appreciate the
5 opportunity to have provided testimony today.
6 HEARING OFFICER ERVIN: Thank you, Mr. Howe. We
7 will then open it up for questions. Mr. King?
8 MR. GARY KING: Mr. Howe, you were saying that you
9 have been involved for the last seven years on -- I
10 don't know if oversight is quite the term, but as a
11 managing lawyer relative to contamination of sites?
12 MR. HOWE: Yes.
13 MR. GARY KING: And your comments represent
14 nationwide experience of Caterpillar relative to
15 this?
16 MR. HOWE: Yes, they do. So when I refer to a
17 traditional site, I mean traditional as it is deemed
18 in pretty much the national sense, yes.
19 MR. GARY KING: You mentioned -- well, you didn't
20 mention any specific sites, but how many sites are you
21 involved with in Illinois?
22 MR. HOWE: If you are talking about third party
23 sites, we have been involved, I believe, in
24 approximately five, six.
25 MR. GARY KING: When you say third party sites,
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1 those are sites where Caterpillar has been a
2 generator?
3 MR. HOWE: Caterpillar has been a generator, yes,
4 and it is one of a number of sites, or a number of
5 potentially responsible parties.
6 MR. GARY KING: Can you tell me what those five
7 sites are?
8 MR. HOWE: Let's see. We have Brockman.
9 MR. GARY KING: Brockman?
10 MR. HOWE: Brockman. Ability Drum. Pierce Waste
11 Oil and, Lord, to tell you the truth, the other two --
12 it may be four sites. There is another site that has
13 been -- it disappeared so long ago that I don't even
14 remember the name of it.
15 MR. GARY KING: So it is really three sites?
16 MR. HOWE: Three sites that I am able to talk
17 about, yes.
18 MR. GARY KING: Okay.
19 HEARING OFFICER ERVIN: Do you have an additional
20 question, Mr. King?
21 MR. GARY KING: Yes. You were making a comment
22 that -- you said that people don't do this anymore. I
23 guess I was not sure of the context. It was almost
24 like you were indicating that all sites are historical
25 in nature, and that there were not new cleanup sites
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1 that are coming into existence. Is that what you were
2 trying to say?
3 MR. HOWE: Yes, I think so. What I meant by that
4 is when you are dealing with a traditional site, it is
5 typically not one where there is an activity issue,
6 meaning an activity leading to contamination or a
7 management issue that is recent. Most third party
8 sites in existence today that are new sites are
9 typically pretty well managed and they don't
10 necessarily lead to the contamination issues that we
11 are talking about here.
12 If you are talking about -- what we are talking
13 about basically is a site that may have been in
14 existence for decades that the contamination issues
15 that come up will have come up literally on the basis
16 of actions and activities that took place in the 1960s
17 or 1970s, in terms of the management of the site.
18 Oh, the other site is M.T. Richards, which is in
19 Southwestern Illinois.
20 MR. GARY KING: So your view is that waste is not
21 being generated that goes into sites that fail now?
22 MR. HOWE: Not in my experience, no. It could be,
23 but not in my experience.
24 MR. GARY KING: So if we were to go out to sites
25 around Illinois it is highly unlikely that we would
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1 find any waste materials being released that had been
2 disposed of, let's say, since 1990?
3 MR. HOWE: Oh, no, you will find waste materials
4 disposed of. It is just a question of whether or not
5 the site is being managed in a manner that will create
6 a contamination issue.
7 MR. GARY KING: Okay. So it is your view that
8 there are not sites being mismanaged today such that
9 releases are --
10 MR. HOWE: Typically, if you have a site that is a
11 new site that is a permitted site, I think that that
12 is a fair statement. If you have a site that has
13 ongoing activity but also has a lot of historic
14 activity it may be that you are still dealing with
15 contamination issues, but they will typically be more
16 on a historic basis.
17 MR. GARY KING: This site where you talked about
18 the affiants being blacked out, was that an Illinois
19 site?
20 MR. HOWE: No, it was not.
21 MR. GARY KING: Have you seen any sites that --
22 you describe four sites that -- have you seen any
23 activity relative on the Agency's part that has lead
24 to your conclusions relative to this general
25 traditional scheme? I guess what I am getting at is I
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1 am trying to see how your very broad statements about
2 how the traditional Superfund process has worked,
3 particularly on a national level, how that relates to
4 what your experience has been relative to the way
5 Illinois sites have operated.
6 MR. HOWE: One site in particular did potentially
7 have that problem which was the Ability Drum site.
8 The activity with respect to Caterpillar in that site
9 actually started prior to my joining Caterpillar in
10 1991. And in that site I believe the cleanup numbers
11 were known at least to the State as early as the end
12 of 1991. That site was not -- or Caterpillar's
13 involvement in that site was not settled out until, I
14 believe, 1995. We did wind up in litigation. In all
15 fairness, we did wind up in litigation in that site
16 that was brought, I believe, on the eve of the
17 effective date of 58.9.
18 MR. GARY KING: Now, Caterpillar has settled on
19 that site; is that correct?
20 MR. HOWE: Yes, we have.
21 MR. GARY KING: What was the percentage of the
22 total that Caterpillar settled on?
23 MR. HOWE: I do not recall the precise percentage
24 of total. I did not bring that information with me.
25 We paid, I believe, somewhere on the order of
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KEEFE REPORTING COMPANY
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1 $800,000.00.
2 MR. GARY KING: Okay. The entire costs were about
3 2.2 million; is that correct?
4 MR. HOWE: Something to that effect, yes.
5 MR. GARY KING: What was the percentage of waste
6 that Caterpillar sent to that site?
7 MR. HOWE: Again, I don't have the precise
8 numbers.
9 MR. GARY KING: Was it about 40 percent?
10 MR. HOWE: Something on that order, yes.
11 MR. GARY KING: So, in essence, that was not an
12 attempt to impose something far beyond proportionate
13 share in that case?
14 MR. HOWE: There had been an attempt made at one
15 point in time during the settlement discussions.
16 MR. GARY KING: But when the initial notices were
17 sent back in the early 1990s wasn't Caterpillar given
18 an opportunity to settle with much less than a full
19 100 percent?
20 MR. HOWE: Caterpillar was given the opportunity
21 to settle for less than 100 percent of the site, yes.
22 There was always the threat that in the event or the
23 perceived threat that in the event that settlement
24 would not occur Caterpillar might be forced to pay up
25 to 100 percent at the site. As I said, at one point
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1 in time the suggestion was made that Caterpillar
2 should pay in excess of its actual proportion.
3 MR. GARY KING: Okay. So out of these four sites
4 that you are talking about, the one that you really
5 focused on as being something out of line is this
6 Ability Drum case?
7 MR. HOWE: In terms of what we are talking about,
8 my comments were necessarily general, because I was
9 talking about what I view as traditional allocation
10 schemes. In terms of the involvement in the process,
11 there are other things that I have seen at other sites
12 that, yes, I might have a problem with in terms of
13 procedurally.
14 I don't know that I am answering your question,
15 and I am not completely sure I understand it. But in
16 terms of the allocation issues, that's the only one
17 where it really jumps out. But in all of these cases
18 you have a situation where there is at least the
19 bogeyman hanging over your shoulder that you could be
20 deemed to be liable.
21 MR. GARY KING: I guess what I am concerned about
22 is the way that you have phrased a traditional
23 Superfund allocation scheme process working, based on
24 your experience in working at Federal Superfund sites,
25 I assume, and at State Superfund sites in other states
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1 around the nation, and are trying to translate that
2 experience, having painted a very negative picture of
3 that traditional scheme, and now you are translating
4 that towards Illinois. I guess I am seeing that as
5 kind of an unfair way to portray the issue. I
6 wondered if you want to comment on that.
7 MR. HOWE: Yes, I will be glad to. There are
8 basically two points to make in response to that. One
9 thing that you have to understand is that this is not
10 something where a fault is stated or even had any
11 intention of causing that. Basically, what I am
12 talking about is the experience that we have that
13 anybody that manages these sites translates over from
14 jurisdiction to jurisdiction. Because while certain
15 nuances may differ, the basic scheme remains pretty
16 much the same.
17 The first one is that regardless of what is done
18 in the negotiations process, during that process, and
19 whether or not there has been a suit filed or whether
20 it is merely that you were trying to negotiate
21 something up, whether it is involved in a federal
22 situation, negotiations with the state or a private
23 cost recovery, the threat of joint and several
24 liability, the possibility that you can be deemed to
25 be jointly and severally liable and have to pay the
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1 entire cleanup cost, it is something that colors the
2 activities that all of your actions that you do,
3 whether it is in Illinois or Pennsylvania or anywhere
4 else. It always colors what you are doing. It will
5 cause somebody, even somebody who has a lot of
6 experience with this, to go out and hire an attorney
7 and engage in protracted negotiations for unallocation
8 issues.
9 The second point to make is that this occurs even
10 when you have experience. When somebody does not have
11 experience in this thing, it makes it even more
12 difficult for them. They really do feel like they --
13 that the process is unfair, et cetera, and this can be
14 despite the best intentions and the best feelings of
15 fairness on behalf of other parties.
16 MR. GARY KING: So that the threat of joint and
17 several liability is really an important issue as far
18 as the perception of people and how they approach
19 cleanup activities?
20 MR. HOWE: I think so. It really does color their
21 actions, and it can tend to polarize things.
22 MR. GARY KING: Of course, in our proposal you
23 realize we have eliminated joint and several
24 liability?
25 MR. HOWE: No, I do not.
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1 MR. GARY KING: So you do not agree that we have
2 eliminated joint and several liability?
3 MR. HOWE: No, I do not. Not under the proposal
4 that is made. Basically, for all practical purposes I
5 think that it is there, because once a party has been
6 deemed to or has been found or deemed to have
7 contributed anything to a site, they still believe
8 that they have to -- you know, they are still put in a
9 position of having to prove what it is that they have
10 contributed. If they are unable to do so, or if the
11 information is not there, then I still believe that
12 there would be that type of liability.
13 MR. GARY KING: At the last hearing Chairman
14 Manning asked me a question and it was around a
15 hypothetical, if there were a total of 1,000 gallons
16 of waste material that went to a site and there was
17 only -- and the respondent only sent one gallon to the
18 site, and she asked whether the person would be
19 responsible for one gallon as opposed to the 1,000
20 gallons. And I answered her that that person would be
21 responsible for one gallon. Isn't that Proportionate
22 Share Liability? Joint and several liability would
23 say that that person is responsible for the entire
24 1,000 gallons.
25 MR. HOWE: There were, as I recall, a number of
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1 other things that went with that. And to give you an
2 example from what I can recall, it went something like
3 this. If there is proof made that the company only
4 contributed X amount during a certain period of time,
5 and the company can also show that it did not -- that
6 its practices prior to that time were of the same
7 order of magnitude, then in that situation, yes, they
8 would only be liable for one gallon.
9 I think there were certain types of qualifications
10 that depended upon proof that a company or business
11 entity must provide. And that the question remains if
12 the entity is not able to provide that proof, what is
13 going to happen. And the biggest concern is in
14 741.210(d)(3), which is any respondent unable to prove
15 the degree to which the respondent caused or
16 contributed to the release or substantial threat of
17 release may be liable for all unapportioned costs that
18 are respondent's actions that are the subject of the
19 complaint. And right there I say that if you can't
20 make your case then, yes, you are subject to joint and
21 several liability.
22 CHAIRMAN MANNING: If I might, I wanted to jump in
23 on all of this whole issue of burden of proof and
24 allocation and all of this kind of thing. Not just
25 from the hypothetical that I asked about at the last
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1 hearing, but Mr. Rieser, a lot of this goes to a lot
2 of the testimony that you had as well earlier this
3 morning. I want to ascertain before we leave the
4 record, obviously, what everyone's position is on this
5 whole question of burden of proof and persuasion and,
6 you know, shifting of burdens and that sort of thing.
7 Because I think how we answer those questions
8 really go to the question of liability, and you can
9 see we are sort of mixing metaphors with, you know,
10 well, can we prove it. Because, actually, I think the
11 question Mr. King asked you, the answer probably would
12 be, yes, that it is a proportionate share process, you
13 know, if the -- it is really that what we are getting
14 muddy here with is the burdens and who goes forward
15 and who has to show what.
16 So if I might ask Mr. Rieser, and Mr. Howe or Mr.
17 Marder would like to chime in, I understand your
18 testimony to say part of the reason that you are
19 concerned is you don't think that this should act like
20 CERCLA, and part of the concern you have is that in
21 CERCLA the federal government simply has to tag you,
22 and you are tagged and, therefore, you are liable.
23 You think that there is something more that has to
24 happen in this process other than just being tagged
25 and you are a potentially responsible party, and
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1 that's all the State has to show. Am I correct so
2 far?
3 MR. RIESER: Yes.
4 CHAIRMAN MANNING: What else is it, from your
5 perspective, that the State has to show to make a
6 prima facie case, if you will, of liability under this
7 particular scheme?
8 MR. RIESER: Well --
9 CHAIRMAN MANNING: I know you are trying to do
10 that with 741.210(a)(1) and (2).
11 MR. RIESER: I guess I have an issue with, again,
12 this spliting off of liability and allocation as a
13 very fundamental point. I mean, there is no question
14 that what the State has proposed before the Board
15 plainly has elements of proportionality written into
16 it. You can't look at this and say, no, this is all
17 joint and several. But what they did is they proposed
18 those things yet still kept vestiges of the entire
19 process in order, to put it in simple terms, to
20 protect the leverage that they currently have in these
21 issues when there is not sufficient information for
22 people to make these demonstrations.
23 So I think what the State has to show is that they
24 have to show that an individual contributed a certain
25 amount to the cost of remediating the site. And I
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1 think they also have to show the extent to which they
2 think that person contributed to the cost of
3 remediating the site. I think that's fundamentally
4 what the statute lays out.
5 CHAIRMAN MANNING: And you think they have to show
6 both of those things before there is any burden of
7 going forward, if you will, forget burden of
8 persuasion, but let's talk about a legal concept of a
9 burden of going forward with information. Does
10 industry, once they have been more than tagged, if you
11 will, or there is some sort of showing of liability in
12 the first part of that, where you said the State has
13 come in and they have shown that there is a
14 connection, if you will, with the generation of the
15 waste and the particular remediation that has to be
16 done at that site, isn't there, then, a burden that
17 needs to be, in terms of the allocation, is there a
18 burden of going forward that needs to be assumed by
19 that person who is potentially responsible?
20 MR. RIESER: Remember that this doesn't happen in
21 a vacuum. The first thing that happens is not the
22 filing of an action before the Pollution Control
23 Board. The Agency gets a lot of information about the
24 site. Now, the first part of the information about
25 the site it is going to get is this site is creating a
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1 problem because of X and Y. Gary describes the
2 leachate running off to the soccer field. Then it
3 works back from that information to gather whatever
4 information they can about the site to identify people
5 that it thinks is responsible. And then it is going
6 to start engaging with those people in a dialogue
7 about their responsibility in order to get them to do
8 what they think has to be done at the site. All of
9 this happens before anyone starts filing anything or
10 issuing -- well, maybe they will issue a notice and
11 maybe not. Certainly, there is lot of discussion and
12 information exchanged before anything is filed with
13 the Board.
14 I certainly believe that anyone on the receiving
15 end of the phone call or letter or whatever it is that
16 they are going to get from the Agency is going to
17 bring forward to the Agency whatever information that
18 they have, and will do it because they don't want to
19 be involved other than to the extent to which they
20 think they are involved. And it is hard for me to
21 imagine a person sitting there and taking no action
22 whatsoever and saying, fine, sue me, and I only did a
23 little bit, and you are not going to be able to prove
24 anything.
25 Certainly, if the State has reason to think that a
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1 person is responsible, they have reason to think that
2 a person is responsible to a certain extent. They may
3 not know the exact percentage, but they have reason to
4 know that it is within a certain type of ballpark.
5 Either it is a lot or it is a little, or it is in the
6 middle someplace. There is a reason that they think
7 the person is involved. There are facts which support
8 that reasoning.
9 And I submit that those facts are going to go
10 towards being able for the State to say we think that
11 you are totally responsible because you are the sole
12 person who operated this place, the only person who
13 ever owned it while this stuff was going on,
14 therefore, it is this. Or the site is full of TCE and
15 it is all your drums or something. There is going to
16 be some factual basis in what they know about the site
17 that is going to allow them to say this is what you
18 did at the site, and this is what we think the extent
19 is.
20 CHAIRMAN MANNING: You are not suggesting that
21 there is a certain number like ten percent over five
22 percent over fifteen percent that the State has to get
23 in the door with before --
24 MR. RIESER: No.
25 CHAIRMAN MANNING: Okay. So --
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1 MR. RIESER: No, I am not suggesting a certain --
2 well, I don't know that it is -- it can be reduced to
3 a percentage, but certainly the State has the burden
4 for saying, you know, you are one of three people and
5 all of you share equally, or you are one of three
6 people and the other two guys did more than you did,
7 and you have a smaller share. But, yes, I don't see
8 that the statute says to -- I think what the statute
9 says is that the State cannot bring an action against
10 anybody except to the extent to which they -- to seek
11 recovery except to the extent to which they
12 contributed to the site.
13 Now, theoretically, you could say that there is
14 some type of prima facie case that they have to make
15 before they get into the door based on that language.
16 I don't think that makes any sense, to set up some
17 type of prescreening. I don't think we are saying
18 that. We are saying the State does have the burden of
19 coming in and saying that we think you are responsible
20 for these three reasons and we think this is generally
21 your share of the site.
22 CHAIRMAN MANNING: And so your short answer to the
23 question of whether the person who is identified as
24 being somewhat responsible without a number being
25 tagged to it when the State comes in with a case, is
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1 that, no, there is no burden of going forward with
2 information during that proceeding then. I mean,
3 that's -- what I hear you telling me, then, is that
4 there is no burden of going forward on the part of
5 that person or entity that has been --
6 MR. RIESER: You know, there is --
7 CHAIRMAN MANNING: That is a prima facia case, if
8 that's what we call it.
9 MR. RIESER: There was a point where we discussed
10 splitting this thing up in terms of the burden of
11 going forward, and that people were not real happy
12 about that. I guess I have an issue of burden of
13 going forward, because it implies, without saying,
14 that there is no burden of going forward because that
15 implies that people won't submit information or there
16 will be information that they have that the Agency
17 won't be aware of.
18 I just don't think that is -- by the time that
19 there is a trial of these issues, which is where the
20 burden of going forward has its place, that that
21 information is going to be available to the Agency,
22 and that the Agency will be able to make to the State
23 and be able to make some type of demonstration
24 regarding that. Again, I think that any person in
25 that situation, in defending that situation, would be
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1 spilling whatever they had because they want to make
2 sure they are identified with a certain -- with the
3 percentage that they think is appropriate.
4 David, do you --
5 MR. HOWE: Yes, I do have a couple of comments.
6 First of all, I am here -- we have a genuine desire to
7 help, to be helpful. To the extent that I am not
8 giving you a short answer and being too much of a
9 lawyer let me know, okay.
10 The short answer that I have is that I believe
11 that the person that is seeking to get another entity
12 adjudged to be liable for a portion of the cleanup
13 costs, whether it is the State or a private party, if
14 one person is trying to get another person to be
15 deemed liable for the cost of a cleanup, they would
16 have the burden of going forward not only with respect
17 to presence at the site, but also with respect to the
18 amount or the extent of that liability.
19 I can give you some examples of what I am talking
20 about. You have to judge this in the context that in
21 these cases you are going to be dealing with imperfect
22 information at all times. It is very, very rare that
23 you have perfect information.
24 Basically what happens is that there will be
25 certain evidence by which people can arrive at
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1 estimates with regard to what may have reasonably been
2 disposed of at a site, estimates as to what actually
3 is there in terms of gallonages, et cetera. In
4 addition to that, with respect to the types of things
5 that are at a site, there are also different
6 estimates.
7 For example, you can have a site where there are
8 metal -- there is metals contamination and there is
9 chlorinate contamination. The chlorinate
10 contamination drives 95 percent of the cleanup cost.
11 That is something that can be determined. And then it
12 can be determined that there is X amount of
13 chlorinates at a site and there is evidence by which a
14 person can arrive at a range that a certain entity
15 has -- may have generated that was shipped to that
16 site.
17 Now, in that situation, dealing with imperfect
18 information, the proponent is going to come forward
19 with certain types of proof or certain types of
20 evidence which that proponent is going to contend will
21 show the extent to which the defendant, we will call
22 him, or the PRP, contributed to that contamination.
23 He would have to come forward with that type of
24 evidence. The PRP would then have the opportunity to
25 rebut that or to say that that particular proof does
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1 not necessarily -- is not the best proof, or is not
2 the most accurate or reasonable reflection of what
3 actually had been sent to the site.
4 To give you an example, an affidavit from somebody
5 who hauled waste oil from a 500 gallon tank
6 establishes an outer range of how much waste oil might
7 have been hauled to a particular site. Testimony with
8 respect to a certain number of drums that were sent to
9 the site can establish an outer range of what was
10 there. The defendant might be able to come back and
11 say, yes, but if you notice, every single one of those
12 55 gallon drums was loaded by hand and, therefore,
13 they had to be empty, which may establish a minimum
14 range.
15 In other words, there has to be -- the way the
16 statute is written, there has to be a burden of going
17 forward not only with evidence of involvement but with
18 evidence of extent of involvement. The fact that
19 there is generally going to be a lack of perfect
20 information means that there will be an evidentiary
21 back and forth in terms of the extent of that
22 involvement, but the initial burden of going forward
23 must be on the proponent. Does that make sense?
24 CHAIRMAN MANNING: I understand what you are
25 saying. What if the proponent is a citizen, in a
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1 citizen's enforcement action? I know you avoided this
2 entirely and so did the State. You may continue to do
3 so. But I wonder if you wanted to put something on
4 the record in terms of what you think the Board needs
5 to do, if anything, with the whole issue of
6 Proportionate Share Liability and the burden of proof
7 and allocation and all of this when a citizen comes
8 forward. And you know we have these kinds of cases
9 that are before the Board consistently. With the
10 proportionate share concept, as you indicate in terms
11 of the applicability, I see these issues coming
12 forward in that context. I don't know how we are
13 going to be able to avoid what process we utilize to
14 deal with these. I just thought I would give you the
15 opportunity, as I also give the State, to comment on
16 it.
17 MR. RIESER: Well, this was an area of agreement
18 with the State but for very different reasons,
19 although I respect the State's reasons for their
20 position. I think they had some valid concerns in
21 that area. Our concerns were a little bit different
22 in terms of citizen enforcement actions.
23 First of all, we saw them more the concern being
24 greater for the issue of cost recovery actions under
25 the Illinois Environmental Protection Act, which at
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1 the time we started working on this thing was
2 something that was, I think, closer to people's mind
3 sets than enforcement actions to enforce a certain
4 type of remediation. It was the position that I took,
5 and I don't know that it was shared by everybody on
6 SRAC, but something that we came around to on behalf
7 of the regulated industries that I represent, that the
8 Illinois Environmental Protection Act did not provide
9 for cost recovery actions brought by the citizens.
10 Plainly, it provides for citizens suits of a certain
11 type with respect to violations of the Act, but it
12 didn't provide for cost recovery actions. Now, I know
13 the Board issued rulings in which it supported that.
14 Since then and since this discussion actually
15 today of the -- since the day of the prehearing that
16 we had there was a case law from the First District
17 Court of Illinois that also made a finding that the
18 Board didn't have the authority to hear the private
19 cost recovery actions. The private cost recovery
20 actions was a more significant issue for us because
21 another element of this whole CERCLA thing and what
22 impact the statute has with regard to CERCLA from the
23 regulated community, and I think particularly the
24 lawyers in the regulated community, was whether we
25 could set up an entirely different system to take into
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1 account private cost recovery actions and include them
2 within what we were proposing and have an entirely new
3 way for handling these private cost recovery actions.
4 And that was the position that my associations were
5 interested in, and it was a position that IERG was
6 interested in as well, if I can speak for them on this
7 point. And given the Agency's unwillingness to have
8 the private cost recovery actions included for their
9 reasons, which Gary stated, it worked out that they
10 were not included.
11 Now, if the question is how does the Board deal
12 with the enforcement actions that are brought by
13 individual citizen suits, and I have to say that I am
14 representing somebody, a defendant in one of these as
15 we speak, and so I have thought a lot about this.
16 Plainly, the Board will have to make a decision
17 because the defendant in that situation has the
18 ability to avail themselves of the defense that they
19 did not cause or contribute to the remediation or
20 cause or contribute to the contamination and cost of
21 the remediation.
22 Now, it is a little bit trickier when you are
23 talking an enforcement action when the remediation has
24 not been done, because then you get into the issue
25 about what the costs of the remediation or the extent
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1 of the remediation is going to be, whether a plaintiff
2 can require a defendant to do more remediation than
3 would be normally required under a TACO approach to
4 the site or not.
5 But I think the bottom line is that we probably
6 have the same answer that the Agency does as to how
7 the Board is going to handle it, which is you are
8 going to have to look to the statute in the specific
9 context of actions filed by citizens seeking to
10 enforce the regulations. And there is a certain level
11 of disconnect between the enforcement of regulations
12 at a site and the remediation of that site. The
13 regulations may or may not require the remediation.
14 The remediations may or may not require the extent of
15 remediation that an individual is seeking. There is
16 some additional issues there that don't make this a
17 clear connection between the one and the other that,
18 as you say, we have not dealt with.
19 CHAIRMAN MANNING: Well, for purposes of
20 clarifying the record, I think the First District case
21 you were referring to was the NBD case?
22 MR. RIESER: Yes.
23 CHAIRMAN MANNING: And for purposes of clarifying
24 the record, the Board has distinguished the NBD case
25 in the context of cost recovery cases, in recent cases
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1 before the Board where we have indicated that there is
2 a distinction between NBD and the cost recovery under
3 the Environmental Protection Act. So the Board still
4 continues to proceed on cost recovery issues. And I
5 just needed to say that for clarification of the
6 record, because as far as we are concerned, the
7 majority of the Board, the issue has not gone away. I
8 just wanted to clarify that.
9 I don't have any further questions at this time.
10 Do any of the other Board Members?
11 BOARD MEMBER HENNESSEY: I have one question.
12 CHAIRMAN MANNING: Member Hennessey.
13 BOARD MEMBER HENNESSEY: Mr. Rieser, I just wanted
14 to follow-up on this burden of proof a little bit
15 further. Does the State bear the burden of proving by
16 a preponderance of the evidence that a defendant's
17 share is a particular percent? This is at the
18 conclusion of a trial.
19 MR. RIESER: Right, right. I understand. Yes.
20 MR. HOWE: If I could, I will add my concurrence
21 to that.
22 BOARD MEMBER HENNESSEY: Okay. So if there is
23 some uncertainty as to whether a defendant's share is
24 49 percent or 50 percent, and there is not a
25 preponderance of the evidence on either one does the
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1 defendant's share go to zero?
2 MR. RIESER: No. It is either 49 or 50 percent.
3 I mean, that's the discussion that we had at the last
4 hearing, and one of the real problems I had with the
5 scenarios that the Agency presented is that they
6 associated a lack of information with the Board making
7 a decision that there was no share whatsoever. And I
8 just don't see how that connection is there. I can
9 understand that concern of the Agency, because it does
10 take away from them a certain ability or a certain
11 authority to just say that this is -- that, you know,
12 this is your share or else it is going to be something
13 larger, or this is your share or it is going to be
14 something smaller.
15 But the Board is going to have make the decision
16 based on the evidence before it. And the State has
17 the burden of presenting and proving that evidence.
18 Now, you know, the difference between 49 and 50
19 percent is not something people in the main are going
20 to litigate. So it is a different situation if the
21 State presents the evidence that they have and says it
22 is X percent and the defendant says it is Y percent,
23 the Board is going to have to choose between those.
24 If the defendant chooses to sit back and say, well,
25 you have not proven your case, they have the -- and
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1 present no evidence in support of it, they have the
2 possibility of the Board just simply adopting what the
3 Agency proposes because that is the evidence that you
4 have before you.
5 As David Howe says, there is never going to be
6 perfect information here. The question is, who bears
7 the risk of that information not being perfect. And,
8 again, focusing on the theme that the legislation was
9 intended to change things from the way they were, I
10 think that risk and focusing on the fact that
11 additional funding was provided to deal with this
12 exact issue, I think that there has to be a
13 determination that that risk of uncertainty goes back
14 to the State instead of being imposed on individual
15 parties. So I think that the logical consequence of
16 that is, yes, the State does have the burden of proof
17 in proving both liability and percentage.
18 BOARD MEMBER HENNESSEY: Mr. Howe?
19 MR. HOWE: Yes, I would like to add something.
20 There may be a misconception. I don't know that there
21 is, but there may be. In light of some of the issues
22 in terms of thresholds or an all or nothing
23 proposition, I don't think that anybody testifying
24 today believes that it is an all or nothing
25 proposition or that there is a certain minimal
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1 threshold that has to be met before liability can be
2 imposed. Rather, it is an issue of I think you are
3 talking about an amount.
4 What I mean is, for example, if the proponent
5 comes in and is able to establish that you did send
6 chemical X to the site, and chemical X is causing the
7 cleanup, and they establish what they believe is by a
8 preponderance of the evidence that you sent 300 full
9 barrels of that, and the PRP comes in and is able to
10 establish through other evidence that they believe
11 that of those 300 barrels only two of them were full
12 and the rest of them contained residue, which might be
13 three percent by weight, then in that situation it is
14 going to be up to the trier of facts to determine by a
15 preponderance of the evidence how much that trier of
16 fact believes of that chemical was actually sent to
17 the site. It is not an all or nothing proposition.
18 It is more a proposition of how much.
19 BOARD MEMBER HENNESSEY: Okay. This probably
20 doesn't need saying, but I will just for the record.
21 As in any civil proceeding, there could be
22 circumstantial evidence, that needn't necessarily have
23 to have an eyewitness testifying that they saw these
24 300 full barrels coming in and directly being dumped.
25 MR. RIESER: It is a preponderance of the evidence
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1 standard.
2 MR. HOWE: Yes, and the evidence can be anything,
3 as far as we are concerned, that would ordinarily be
4 admissable to the Board. As I have said, some of
5 these examples do not come out of thin air. For
6 example, the idea of is a barrel full or empty, a
7 proponent may be able to come in with evidence that,
8 yes, there were 300 barrels transported. The other
9 side can come in and say, yes, but the evidence also
10 shows and present testimony that those barrels were
11 all loaded by hand. And a 55 gallon barrel weighs a
12 heck of a lot if it is full, and you can't load those
13 by hand. So, for example, there would be evidence
14 presented that would indicate that these barrels are
15 not full and that you should not do it. Then what the
16 trier of fact decides to do with that is going to be
17 up to the trier of fact using established evidentiary
18 notice standards.
19 BOARD MEMBER HENNESSEY: Just one other, I guess,
20 comment, slash, question. You have indicated that --
21 everyone on the panel has indicated that people don't
22 want to be involved in these things, so it is in their
23 own interest to come forward with the information, so
24 the shifting of the burden is not really necessary.
25 Without being cynical, I have occasionally had
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1 experiences where people have not been entirely
2 forthcoming with information when they have been
3 PRPs. But isn't another answer to that that you have
4 discovery and you have the ability to get orders from
5 the Board enforcing discovery to require someone to
6 disclose all of their information?
7 MR. RIESER: Absolutely.
8 MR. HOWE: I think so. I would add a couple of
9 points to that. One of the worse things in the world
10 to a PRP is to get some finality on something and then
11 have their liability reopened because of newly
12 discovered evidence. That is something that PRPs do
13 not like to have happen. One of the other things to
14 mention is that, yes, there should be a discovery
15 period, but not at the expense of dragging something
16 out to infinity.
17 In the last round of Superfund reform activities
18 back in the early 1990s CMA came out with something
19 they called the fair share approach, which was a rough
20 justice type of deal where it was proportionate
21 liability but a very accelerated process. And it was
22 thought that the accelerated process would be the
23 trade-off for a little bit rougher justice, if you
24 could call it that, and limited appeals, et cetera.
25 The point being that, yes, that can be developed
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1 through the discovery process. Let's not make that
2 discovery process something that drags out for years,
3 would be the way that I would look at it.
4 CHAIRMAN MANNING: Is that part of the reason
5 that -- I see these, particularly Subpart C cases,
6 being different than what the Board has typically
7 dealt with in the past in our regular kind of cases,
8 and it seems to me what I hear you saying is you want
9 a fair, efficient and quick process. Fair and
10 efficient, I think, is what I heard over and over.
11 And I think, obviously, that is true with all your
12 experience with Superfund and CERCLA and the fees and
13 that sort of thing. Is that part of the reason why
14 your proposal indicates a greater role on the part of
15 the hearing officers at the Board, where we might be
16 able to allow our hearing officers to better drive the
17 process, if you will, for us and perhaps it being a
18 different kind of case before the Board that perhaps
19 that is part of the reason you propose this new kind
20 of procedure to us?
21 MR. HOWE: Yes, that is, to a great extent, a part
22 of the reason. I want to be very fair to the State
23 and to the IEPA. The proposal with respect to the
24 hearing officer provisions actually did come from SRAC
25 and basically the thought was, first of all, we know
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1 that is a very thorny issue. What we did was rather
2 than not say anything at all give a proposal that the
3 Board in this area can do what they want. This, at
4 least from my point of view, was a concept basically
5 modeled on the magistrate system more than anything
6 else, where a magistrate makes a proposal but then the
7 district judge can either adopt or sua sponte ignore
8 or modify or whatever and other people can object to.
9 The idea is that by the time it got to the Board
10 for the Board's decision the Board would not be
11 working in a vacuum, but rather would have a
12 recommendation and if there were objections there
13 would also be alternatives, so the Board would have
14 something to work with and not be forced to come up
15 with their own scheme, and that that would hopefully
16 speed the process up.
17 CHAIRMAN MANNING: Thank you. I wanted to get to
18 this cost recovery thing, too. You don't have to
19 answer this today, but this private cost recovery, I
20 am looking again at Section 58.9(a), and if you would,
21 you don't have to answer this today, Mr. Rieser and
22 the State, but if you could provide us with more of an
23 answer regarding this legal question prior to the next
24 hearing or even brief it, if you will, briefly.
25 The concern that I have is that I understand that
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1 people don't think the Board has the authority to do
2 the cost recovery issues on private enforcement
3 actions, but I am troubled by the language. There is
4 three places in 58.9(a)(1) where the words "any
5 person" appears. And every place that they appear,
6 this "any person" suggests to me that any person might
7 file these kinds of claims against any other person,
8 and any other person might be, therefore, liable for
9 cost recovery for any kind of remediation that is
10 indicated. So if you want to comment on what that
11 verbiage, "any person," means in 58.9(a)(1) I would be
12 happy to listen to that either now or later on in the
13 record.
14 MR. RIESER: I can comment on it now. I think it
15 is -- as Mr. Marder testified, this was a part of the
16 statute that was not negotiated at all let alone as
17 thorough as the rest of the statute. It was not
18 intended -- and I think it is pretty clear it was not
19 intended to create rights that are not there.
20 Certainly, at the time it was written there were
21 discussions about private cost recovery actions and
22 certainly, as now, individual persons can file an
23 action seeking to force remediation as opposed to
24 recovery costs. And so I think that the language was
25 probably overly inclusive to accomplish that to make
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1 sure that those private enforcement actions were also
2 addressed, but it wasn't -- there was no intent on the
3 drafters to create by this a cost recovery action that
4 was not otherwise in the statute.
5 I think the Agency has said pretty clearly that
6 they don't view this legislation, this 58.9, as
7 creating additional causes of action that were not
8 there. I don't think it can be read that way. I
9 mean, I know exactly what you are saying, that that
10 does imply that such an action exists, and I think we
11 have agreed that a person can bring an enforcement
12 action purporting to seek remediation, but recovery of
13 costs, you know, I would submit the reasons we
14 discussed, that it is not appropriate.
15 CHAIRMAN MANNING: But even if we forget the cost
16 recovery issue, and a private citizen can come
17 forward, an industry can come forward and sue other
18 industries for the question of remediation, don't we
19 still even in that context get into the whole
20 proportionate share issue?
21 MR. RIESER: Again, we are focusing more on the
22 enforcement actions brought by the State.
23 CHAIRMAN MANNING: Right, but we would. I mean,
24 it would seem to me we would have to entertain a
25 defense on the part of the respondent that they were
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1 only -- so it seems to me that whatever process we
2 devise or help devise through the enforcement process
3 of the State enforcement actions needs to somehow
4 apply to an action brought by a citizen in trying to
5 ascertain the degree of liability on the part of three
6 or four respondents that are brought before the Board.
7 MR. RIESER: This is not, in the scheme of things,
8 an elaborate process that has been brought out in
9 terms of how the State enforcement actions are to be
10 handled. I don't want to speak for the State, because
11 they have a real separate issue about allocating
12 liability and allocating responsibility for sites that
13 they are not a part of, because they don't want --
14 again, I won't speak for them, but they don't want the
15 site to be allocated so that it could be implied or
16 supposed that the State bears the unallocated share of
17 that individual site. That is a very significant
18 problem. I don't necessarily think the statute does
19 that, but I can see why they would be concerned and
20 want to make sure that that is not a result of that
21 type of allocation.
22 You know, there is no reason that in an individual
23 enforcement action between two parties or even between
24 three parties the Board cannot apply the same
25 principles that are drawn here. And there is no
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1 reason that, you know, in the scheme of things that
2 that is a huge -- that that is a huge issue. But as I
3 said, it is a very slippery slope from requiring
4 remediation to the recovery of costs. From the
5 State's perspective it is very slippery slope between
6 allocating shares and making them be the ones
7 responsible for the unallocated share.
8 CHAIRMAN MANNING: Mr. Howe, did you want to add
9 to that?
10 MR. HOWE: Yes, just briefly. With respect to the
11 58.9, the way that I had interpreted that is to the
12 extent that a private right of recovery might exist
13 elsewhere in the Act, that then in that situation, you
14 could not -- a person could not force somebody else to
15 pay more than their proportionate share. That is
16 another very thorny issue, one that did receive a lot
17 of debate. And I really have no answers on that
18 particular subject.
19 But there was -- there were a couple of other
20 things that needed to be mentioned there. And that is
21 that there has been a rather large fear expressed
22 during this entire process that it might be possible
23 for a developer, say, to come in and try to clean up a
24 site and then try to share the wealth and try to get
25 other people to pay for the cost of their cleanup.
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1 That is something that I just wanted to mention right
2 now, that that is something that has been a concern
3 and it has been a difficult issue to deal with. How
4 does one prevent that type of activity, where somebody
5 comes in and pays, say, just a nominal amount to start
6 a cleanup, tries to get prior parties to pay for the
7 cleanup, and then winds up with a clean piece of
8 property that they can sell at an enormous profit. So
9 that was another issue that kind of gets wrapped up in
10 here.
11 Do you understand what I mean?
12 CHAIRMAN MANNING: Yes, I think so.
13 MR. HOWE: Okay. Thank you.
14 CHAIRMAN MANNING: Mr. King?
15 MR. GARY KING: I just wanted to follow-up on the
16 discussion that Mr. Howe and Mr. Rieser had in
17 response to Board Member Hennessey's questions. I
18 thought that that discussion was very interesting, I
19 guess, for one, because I don't think I had heard it
20 before. And, second, I don't see that it is reflected
21 in your proposal anywhere. Could you point out where
22 that concept that you were talking about is set
23 forth?
24 MR. RIESER: I think it is implicit in 741.220(a).
25 MR. GARY KING: So it is not spelled out
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1 anywhere?
2 MR. RIESER: Yes, I would say that is true.
3 MR. GARY KING: So the Board is simply supposed to
4 glean that procedure from your recitation of the
5 statutory language?
6 MR. RIESER: Well, I don't know that it is a
7 separate procedure that plays out how -- what case the
8 State has to bring based on the statute, and then
9 Chairman -- Board Member Hennessey had some questions
10 about that.
11 MR. GARY KING: So you don't provide any
12 additional guidance language for the Board to develop
13 in that other than that statutory --
14 MR. RIESER: Yes.
15 MR. HOWE: I think, obviously, many of the Gore
16 factors wouldn't apply because they don't deal with
17 the issue of proportionate liability. But it is the
18 issue of what actually went to the site, what is
19 driving the cleanup, what is driving the cleanup
20 costs, and what is the quality of the information, the
21 quality of the evidence.
22 MR. RIESER: It is like any enforcement action,
23 the Board is presented with evidence and the Board
24 makes the decision based on the evidence.
25 MR. GARY KING: Is it your intention to spell that
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1 out in any kind of explicit way, or do you want to
2 just leave it implicit for everybody to try to
3 understand?
4 MR. RIESER: Well, similar to the proposal on
5 information orders, you know, plainly, we can provide
6 more guidance than we have done to date. In looking
7 at what I have proposed, I was thinking there were
8 ways that it could be improved, and that may be
9 something that we could do.
10 HEARING OFFICER ERVIN: Mr. Wight, do you have a
11 question?
12 MR. WIGHT: Yes, I do have a question on another
13 issue. I am not sure if this discussion is finished.
14 Did anyone have any follow-up questions?
15 I had another question. I think this is for Mr.
16 Rieser. It goes to the discussion on the burden of
17 proof that was in your testimony. You were talking
18 generally about how you felt that the division between
19 liability and allocation was really somewhat
20 artificial and not that easy maybe in practice to
21 distinguish. I can't remember exactly how the
22 testimony went, but at some point shortly following
23 that comment, you stated that there had to be
24 something more than just did you send chemical X to
25 the site. I believe that was your statement in terms
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1 of what had to be proved.
2 MR. RIESER: Yes.
3 MR. WIGHT: Sort of along the lines of whose
4 burden of proof that it is, what is it that -- what
5 more would have to be proved? What specifically did
6 you have in mind when you made that statement?
7 MR. RIESER: Well, I think it is what we talked
8 about in discussions with the Board where the State,
9 in its proposal, limits what it has to demonstrate the
10 fact that a person brought any kind of -- any
11 hazardous substance to a site, and we had actually had
12 a discussion about -- and that there was a release of
13 a chemical at the site. It didn't have to be the same
14 chemical. Any person that brings any hazardous
15 substance to a site in which there is a release of a
16 hazardous substance, even if it is a separate
17 hazardous substance, is liable under the State's
18 proposal. We have even talked about limiting in the
19 State's proposal the hazardous substance that had to
20 be shown for that generator to be liable, that
21 generator had to have brought that hazardous substance
22 which had been released from the site, and that was --
23 my recollection was that was not an acceptable
24 amendment.
25 So I think what we are saying is it is not enough
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1 that a generator generated a hazardous substance at a
2 site at which other hazardous substances were
3 released. I think there has to be a causation element
4 between what that generator arranged for the disposal
5 of at a site and what costs were incurred in
6 remediating conditions at the site. And that that
7 causation element and percentage element, as we have
8 talked, is something that is part of the State's
9 burden to show.
10 MR. WIGHT: So the answer you just gave seemed to
11 be distinguishing between chemicals that a person
12 brought to a site and different chemicals, but what
13 about where you are talking about generators who
14 brought the same chemical, so that you are talking the
15 same chemical constituent with multiple generators,
16 what would your view be on that with regard to --
17 MR. RIESER: Well, I think the view would be that
18 you use the best information that you have with
19 respect to your waste in allocations and everything
20 else, as is currently done, and try to make some
21 determination based on all of the information that you
22 can gather about what each generator's contribution
23 was to the site and whether that is the chemical
24 driving the remediation.
25 MR. WIGHT: Well, the gist of the comment was it
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1 had to be something more than just did you send
2 chemical X to the site.
3 MR. RIESER: Right.
4 MR. WIGHT: So then in addition to that would
5 there be some additional requirement for what is
6 commonly known as fingerprinting? In other words, it
7 would have to be shown exactly whose chemical
8 constituent was released and found its way into the
9 plume?
10 MR. HOWE: I think realistically that what you are
11 talking about, again, has to do with preponderance of
12 the evidence. If you have three people that sent a
13 certain chemical to a site and you are able to show
14 that it is chemical X, and that party A sent 50,000
15 gallons, and party B sent 100,000 gallons, you have
16 met a burden of proof. If then the defendant is able
17 to come in and show, be it fingerprinting or whatever,
18 that the material that he sent could not be that,
19 that, again, is part of the evidentiary mix that the
20 trier of fact would have to consider.
21 MR. WIGHT: So the defendant would have the
22 obligation to distinguish between his chemical X and
23 the chemical X of the other generators?
24 MR. HOWE: I think we might be getting a little
25 bit too specific, but basically, again, it is a
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1 preponderance of the evidence still. If it is
2 chemical X and you can show that party A sent chemical
3 X, in the absence of anything else, I would say that
4 by a preponderance of the evidence you have shown that
5 he sent 50,000 gallons of chemical X to the site. If
6 he is able to come in and show, be it fingerprinting
7 or whatever, that his chemical X is different from the
8 chemical X at the site, then he has basically made a
9 rebuttal to the extent that the trier of fact
10 considers that credible.
11 MR. WIGHT: Well, suppose there is a scenario
12 where the individuals are unable to make that
13 demonstration. What would be the outcome of that
14 particular case then under your proposal?
15 MR. HOWE: Well, if I were a trier of fact, which
16 I am not, I would probably say that by a preponderance
17 of the evidence you have shown that he contributed
18 that amount to the site. And that he would be,
19 therefore, liable for that portion of the cleanup
20 cost.
21 MR. WIGHT: The proportion would just be done on
22 the volume of the chemical that was brought to the
23 site?
24 MR. HOWE: If we assume, for example, that there
25 is only one chemical at the site that is driving 100
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1 percent of the cleanup, there is -- and this person
2 sent 25 percent of that chemical -- and I love working
3 with percentages on this stuff -- and he sent 25
4 percent, he would be responsible for 25 percent of
5 that cleanup cost. That would be the way that I would
6 look at it.
7 MR. WIGHT: Okay.
8 HEARING OFFICER ERVIN: Are there additional
9 questions for this panel?
10 MR. DUNN: Matthew Dunn, with the Attorney
11 General's office. Following up on those questions,
12 what if releases of the chemical A had occurred a year
13 before a new generator first sent their waste to the
14 site? Would that be evidence that would be
15 appropriate to introduce that it wasn't my chemical A,
16 because I wasn't there when the release began?
17 MR. HOWE: I would think so.
18 MR. RIESER: Sure.
19 MR. DUNN: What about I send my stuff always in
20 nice, neat over pack drums, and generator Y over here,
21 they always send theirs in rusty ones that are about
22 ready to fall apart and are always a hazard. Is that
23 credible evidence?
24 MR. HOWE: It would be credible evidence, I would
25 think, in terms of whether, you know, to what extent
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1 somebody may have proven by a preponderance of the
2 evidence that was not theirs. I think, again, it is
3 going to depend basically on exactly what the evidence
4 is and what the trier of fact thinks about it.
5 MR. DUNN: Do either of you gentlemen have a
6 concern with all of these new elements about
7 conditions of the drums, and dates of receipt, and
8 fingerprinting, and the new elements that are
9 established either at whoever's burden, are not going
10 to decrease transaction costs in the number of
11 elements and the need for experts and the time
12 involved in discovery and all of that, but will, in
13 fact, increase it tremendously, if not skyrocket it?
14 MR. HOWE: I don't think it will. The reason that
15 I don't is because so much of this is done through the
16 negotiation process. So much of this can occur long
17 before there is a genuine issue to present to a trier
18 of fact. I am not going to spend a lot of money going
19 to a trier of fact if it is something that there is
20 not a heck of a lot of genuine dispute in terms of
21 numbers and amounts and things of that nature. A
22 small party, a small generator is not going to do that
23 either, simply because it is not going to be worth it
24 to them, okay. This is a part of the process that
25 gets negotiated.
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1 The thing that I am trying to do is I am trying to
2 get it to the point that when the process starts there
3 is an accelerated process that it can be done, that
4 you can make it more efficient and spend the actual
5 money on that, on the cleanup costs, and I think that
6 with the joint and several liability out of the
7 picture there is going to be less tendency to polarize
8 positions.
9 MR. RIESER: Just to add, I mean, we are not --
10 you know, all of the things that you described are
11 evidence in my mind rather than elements. The way you
12 have described them implies to me that these are
13 issues that have been brought up in the past to you in
14 cases that you have handled. And, yes, these are all
15 issues, pieces of evidence that have to be
16 considered.
17 Does the State have to go out and disprove
18 absolutely everything that it can think of with regard
19 to a site? No, that is not what we are saying. They
20 do have to make a prima facie case regarding what
21 people contributed and to the extent they can how
22 much, and then if people dispute that based upon
23 fingerprinting and based upon factual issues with
24 respect to the site, that is their right. The virtue
25 of this is what the legislature has said is that that
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1 is now all relevant information that is to be
2 considered by the trier of fact, and it is relevant
3 information.
4 HEARING OFFICER ERVIN: Board Member Girard.
5 BOARD MEMBER GIRARD: Thank you. I have a
6 question for Mr. Howe, going back to Subpart C. What
7 element or elements of the magistrate model make for a
8 more fair or efficient decision in Subpart C?
9 MR. HOWE: In Subpart C there may not be anything
10 that would make it more fair or efficient.
11 BOARD MEMBER GIRARD: Is that your answer or would
12 you like another question?
13 MR. HOWE: No, I am just going to continue on.
14 Subpart C, my belief is the way that the IEPA is
15 involved in this thing -- well, okay, let's go back.
16 Let's assume that there is some sort of dispute
17 between the parties in Subpart C in terms of what the
18 allocation is. In that situation would the
19 magistrate's participation make it a more efficient
20 process? I would say the answer is probably yes in
21 that situation. So I will retract that previous
22 statement as probably being too bold or general.
23 The point here is that by the time -- the Board is
24 going to be making the ultimate decision in these
25 cases. By the time it gets to the Board, we would
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1 want the Board hopefully not to be working in a
2 vacuum, to be able to have the benefit of a
3 recommendation, objections, et cetera, so that they
4 would be able to take that and make a reasonable
5 decision. To the extent that a magistrate was not
6 making any kind of a recommendation, then in that
7 situation what you would have is basically a briefing
8 to the Board with conflicting interpretations and
9 without the benefit of the magistrate's -- the hearing
10 officer's thinking on the subject.
11 As I have said, this was a suggestion. There is a
12 possibility, given many other concerns, that that is
13 not the way the Board wants to do it. But we just
14 felt that it would be appropriate to at least make a
15 suggestion that the Board can either accept or do
16 something else with.
17 MR. RIESER: Another element of this that also
18 sort of plays off the model of the magistrate is that
19 there would be somebody in authority, sort of in
20 control of the process as they move through it with
21 that process resulting in recommendations for the
22 Board to make a -- an organization of the information
23 and perhaps some recommendations for the Board to make
24 a final decision on. And because that person would
25 have a little bit more authority than the hearing
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1 officers typically do, they may be able to direct the
2 discussion, direct the negotiations in a way that is
3 more fruitful for everybody, and by that way make the
4 process more efficient.
5 So that was just the idea that having somebody in
6 that position would help the process. As David says,
7 it is a proposal that we are making that is new, that
8 is different, but it is something for the Board to
9 consider.
10 MR. HOWE: One other thing to mention, this is in
11 connection with my very general statement. To the
12 extent that the parties have already agreed upon an
13 allocation, then, obviously, the recommendation from a
14 hearing officer would probably be superfluous, you
15 know, just to the extent that private parties avail
16 themselves of the mechanism to reach an agreement with
17 respect to 100 percent of the cost of the site, which
18 is another avenue that this can be used in.
19 CHAIRMAN MANNING: On that very question, if one
20 of the parties -- if all of the parties -- let's say
21 there is four parties, all four of them agree that
22 somebody was 25 percent liable, including the person
23 who is 25 percent liable. Would you all agree that
24 that person could just opt out then and just write the
25 check for the 25 percent of whatever the remediation
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1 cost is going to be, and they are done?
2 MR. RIESER: Yes.
3 MR. HOWE: Yes. Sometimes what may happen is that
4 you will know the proportion, but you will not know
5 the ultimate cost, which is one reason that
6 percentages sometimes work very well here, is that you
7 are liable for X percentage of whatever the cleanup
8 cost is.
9 CHAIRMAN MANNING: And they could agree to that
10 percent without even knowing what the cost is going to
11 be and as long as everybody that is at the table
12 agrees to the percentage that particular participant
13 is done?
14 MR. HOWE: At least with respect to allocation.
15 CHAIRMAN MANNING: Right.
16 MR. HOWE: Now, if somebody proposes to increase
17 their cost by 200 percent, they might have a say in
18 the remedy. But that's not what we are dealing with
19 here.
20 CHAIRMAN MANNING: Thank you.
21 HEARING OFFICER ERVIN: I think there are probably
22 several additional questions for you. Beings that we
23 have been going --
24 BOARD MEMBER GIRARD: Well, I would like to finish
25 this line of questioning.
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1 HEARING OFFICER ERVIN: All right.
2 BOARD MEMBER GIRARD: Mr. Marder looked like he
3 was about to jump into it. But if he isn't, I have
4 another question along this line.
5 HEARING OFFICER ERVIN: We will go to Mr. Marder.
6 Do you have a comment?
7 MR. MARDER: I have just a quick comment on the
8 issue of the hearing officer. The Board should be
9 aware that this was not an issue that was -- it was a
10 consensus issue that went into the proposal, but there
11 was quite a bit of debate in the discussion as to
12 whether it was or was not the most appropriate way to
13 go.
14 From our point of view, listening to the testimony
15 of the last two hearings as to the limited number of
16 cases that would probably come before the Board on
17 this issue, it makes it more possible that a Board
18 Member could be in attendance and a Board Member could
19 make those decisions. I think there is a fundamental
20 difference on how you handle this if you are dealing
21 with hundreds of cases and if you are dealing with
22 three or four cases a year.
23 CHAIRMAN MANNING: I appreciate that, Mr. Marder.
24 There is quite a bit of dispute at the Board as well
25 as to what process we will adopt on this particular
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1 provision.
2 BOARD MEMBER GIRARD: Well, as a follow-up on your
3 response, so you are saying that other models could be
4 appropriate, say, having a Board Member in attendance
5 or a panel of Board Members?
6 MR. MARDER: Yes. I think that's correct. I
7 think as both Mr. Howe and Mr. Rieser said, this was a
8 suggestion. It was a consensus of the group, but it
9 is not by far the primary element of the proposal.
10 CHAIRMAN MANNING: The key is, as I understand it,
11 that you want someone close to the process to be able
12 to give a recommendation ultimately for the Board's
13 seven members to make a determination? Am I correct?
14 MR. HOWE: I think so, yes. There were a number
15 of different alternatives that were thought about.
16 For example, having a panel that there was a Board
17 Member and, say, an attorney that has been doing it
18 for a long period of time, hopefully not me, and a
19 licensed professional engineer. There could be, for
20 example, a small panel of the board itself. There are
21 any number of ways that could be done. In terms of
22 what made the most sense, we were not sure, frankly,
23 so we gave a proposal.
24 CHAIRMAN MANNING: Did you give any thought to a
25 whole private process, an arbitration, a mediation
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1 process, that would be done privately with somehow
2 being connected to the Board ultimately for a Board
3 decision on an arbitration award or a mediation that
4 preceded an arbitration award that you would like to
5 speak of in terms of that process?
6 MR. HOWE: There was some discussion about that
7 process, and I believe that there is some language in
8 the proposal on it. The one thing to be cautious
9 about with respect to arbitrations and mediations is
10 that at times unscrupulous people have used those as a
11 means of delay in the sense that they will agree to
12 nonbinding arbitration and go through a lengthy,
13 expensive, or sometimes inexpensive process, and then
14 choose not to accept the position of the arbitrator
15 and then wind up back in court basically with a
16 delay.
17 In this particular situation, there is always that
18 possibility that it could be an arbitration panel that
19 could make a recommendation. That, again, in terms of
20 what the Board's power are and things of that nature I
21 haven't really thought that through. But there are
22 all sorts of ways to skin a cat. It is a question of
23 what makes the most sense, what is the most efficient,
24 what does the Board have the power to do, et cetera.
25 MR. RIESER: The Site Remediation Advisory
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1 Committee, in our discussions in an earlier draft, had
2 actually had language allowing for other dispute
3 resolution mechanisms to be eventually approved by the
4 Board at the end of the day. Actually, I thought it
5 was in here. That's plainly something that we think
6 is appropriate and could be doable under the way that
7 this is proposed. I mean, this is essentially -- what
8 is laid out here is essentially a publicly funded
9 dispute resolution mechanism, where at the end of the
10 day you have a Board determination as to the
11 appropriate allocation which I think has a great deal
12 of value, and the value of this process.
13 But there is no magic to the particular -- based
14 on the fact that the parties can agree, the parties
15 are in this process because they agree that they are
16 going to undergo a process always struck us that the
17 parties could go a long way towards setting the rules
18 as they went along consistent with getting sufficient
19 information, sufficient detail to the Board so the
20 Board can make a final -- could make a final decision,
21 and there is any number of ways of undergoing that
22 process if the Board is in the position to make that
23 final determination that is being called for here.
24 BOARD MEMBER GIRARD: I just have one more line of
25 questions. Under the magistrate model, how do you
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1 determine the appropriate qualifications of the
2 magistrate for a particular case?
3 MR. RIESER: When we talked about this, that was
4 an issue that we discussed. And out of that
5 discussion is what came the -- is what came the
6 discussion about having a panel to bring a lot of
7 different abilities and experience to making those
8 types of decisions. I guess at the end of the day we
9 have to trust the Board to appoint the appropriate
10 people to handle these things, and the qualifications
11 are, obviously, people that -- one would hope that you
12 have people who are experienced in this area, would
13 have some experience in handling these types of cases
14 before, because that's the reason to have a person
15 independent of the Board overseeing this process.
16 But, you know, we understand that if it is not the
17 actual current Board hearing officers, it be somebody
18 else. There is a variety of issues, decision making
19 issues in terms of how you select those people to go
20 along with that. But that's -- that was not something
21 that we specified in this proposal.
22 MR. HOWE: One possibility that had been briefly
23 discussed was that it be a hearing officer but that
24 the procedures spell out the particular qualifications
25 that the hearing officer would have to have in terms
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1 of experience and things of that nature. Again, there
2 just was not a right answer, and this was an issue
3 that was kind of like trying to tackle a cloud. It
4 was very difficult to sink your fingers into it and
5 figure out what would be the best means of doing it,
6 what would be the means given the concerns of the
7 Board in the area of what would be the best way to
8 handle it. So it was felt that let's go ahead and
9 make a suggestion but, quite frankly, we have been
10 happy to discuss all of these options with you.
11 BOARD MEMBER GIRARD: Do you believe that the
12 decisions on the allocation factors as given in the
13 proposal are purely legal decisions or do they involve
14 scientific understanding?
15 MR. HOWE: Frequently they will involve scientific
16 understanding.
17 BOARD MEMBER GIRARD: Thank you.
18 BOARD MEMBER FLEMAL: The proposal that is
19 currently before us, the issue regarding hearing
20 officer recommendations and I would note as well the
21 statements regarding ruling on issues of fact and law
22 occur only in Subpart C and not in Subpart B. Is it
23 SRAC's position that that is an appropriate way to
24 split the role of the hearing officer or does that
25 apply to both?
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1 MR. HOWE: I will refer to my lawyer.
2 MR. RIESER: I know it was our position that
3 Subpart B being a traditional enforcement action would
4 follow the way the Board had always handled
5 enforcement actions. And that setting up a separate
6 process and a separate person to make recommendations
7 to the Board probably was not going to be appropriate
8 in the enforcement context. Whereas in this dispute
9 resolution process there might be some room for some
10 more flexibility, because you could look at this as
11 being a step away from the core responsibilities of
12 the Board where it might be useful to them to delegate
13 some abilities to an individual to further this
14 process in the situation so --
15 BOARD MEMBER FLEMAL: To the -- excuse me.
16 MR. RIESER: So, yes, there was a specific
17 decision to do it in the context of Subpart C and not
18 in the context of Subpart B.
19 BOARD MEMBER FLEMAL: To the extent that you
20 retain any support at all for this concept it would be
21 confined solely to the dispute resolution?
22 MR. RIESER: Yes. We are not -- I guess what we
23 are saying is this is not -- what Mr. Marder was
24 saying is that this is not integral to the proposal.
25 We think it is -- we do think it is a useful way to
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1 approach this. We understand that there are issues
2 for the Board in adopting this, but we think it is a
3 useful approach. But the proposal does not stand and
4 fall on whether there is a hearing officer or not.
5 BOARD MEMBER FLEMAL: There is a phrase in the
6 current proposal that says that the hearing officer
7 shall rule on any issues of fact and law presented in
8 the hearing. Is there any conflict between somebody
9 ruling on issues of fact and law and not being a trier
10 of fact?
11 MR. RIESER: Can you direct me to the language you
12 are reading, please?
13 BOARD MEMBER FLEMAL: Section 741.320(a), the
14 hearing officer shall preside over hearings conducted
15 pursuant to Section 741.315(a)(3) above and shall rule
16 on any issues of fact and law presented at the
17 hearing.
18 MR. RIESER: Well, what I am trying to do is to
19 square that language in A with the language of C in
20 terms of presenting a recommendation to the Board on
21 the allocations. I think what we had in mind is --
22 and who do I turn to to correct me if I am wrong?
23 I think what we had in mind was that the hearing
24 officer would make evidentiary rulings and things of
25 that nature and make recommendations to the Board in
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1 terms of the ultimate decisions. Because I don't
2 think there is any question that the Board is the
3 ultimate decision makers on the issues of fact and
4 law, and it may have been that this was inartfully
5 drawn or there was a -- these drafts went through
6 numerous drafting stages, and it may be there were
7 some decisions made where this thing was not
8 addressed. But I think what we had in mind was that
9 the hearing officer will make evidentiary rulings and
10 then make recommendations with respect to fact and law
11 that would be provided to the Board.
12 MR. HOWE: Just to add, currently a hearing
13 officer makes findings with regard to credibility. So
14 there is a certain amount of activity involved with
15 regard to the fact determinations that may be minimal,
16 but they are there. In terms of rules of law it has
17 always been the case that any reviewing body can
18 determine issues of law de novo without any question.
19 There is no deference given ever. But basically there
20 is certain things that the person that is there might
21 want to do with respect to issues of fact, perhaps
22 with respect to issues of law. But they are going to
23 be making recommendations which the Board can either
24 adopt in whole or in part or sua sponte ignore,
25 whatever.
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1 HEARING OFFICER ERVIN: Okay. I think we will
2 take a break for lunch and we will reconvene at 1:30.
3 MS. ROSEN: Excuse me. Before we go off the
4 record, I don't know if there is a way to gauge how
5 much more questioning will be done of these witnesses.
6 HEARING OFFICER ERVIN: Mr. King, you had a
7 question earlier?
8 MR. GARY KING: Yes, I can either do it now or
9 wait until after lunch. It won't take very long.
10 MS. ROSEN: Because if it is a matter of just
11 having one or two questions remaining it might be
12 worthwhile to finish up with these witnesses so that
13 if they are unable to return, unless there is more --
14 HEARING OFFICER ERVIN: Yes, we do have several
15 questions from the Board.
16 MS. ROSEN: Okay. That's fine.
17 HEARING OFFICER ERVIN: We won't keep you too long
18 in the afternoon, though.
19 MS. ROSEN: Thank you.
20 (Whereupon a lunch recess was taken from 12:30
21 p.m. to 1:35 p.m.)
22
23
24
25
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1 AFTERNOON SESSION
2 (May 27, 1998; 1:35 p.m.)
3 HEARING OFFICER ERVIN: Back on the record.
4 Are there any additional questions for this
5 panel? Mr. King?
6 MR. GARY KING: I want to go over a couple of
7 things.
8 Mr. Rieser, I am concerned that either I
9 misunderstood something that you were saying in
10 response to a question from Mr. Wight or you
11 misunderstood my testimony from the first hearing. I
12 want to put it in terms of a hypothetical to kind of
13 draw that out.
14 Let's assume we have got a site and there has been
15 a release from that site, and it is identified that
16 the release is -- the chemical constituent that
17 comprised the release is benzene which is a hazardous
18 substance, and we determined that there is two
19 generators who sent material to the site, one of them,
20 the generator A, has sent benzene to the site.
21 Generator B has sent a hazardous substance that is not
22 benzene. For purposes of the example let's just say
23 it is lead.
24 Now, my testimony was that under our proposal, if
25 we were contending that generator B was liable for the
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1 release of the hazardous substance benzene on the
2 basis that he sent the hazardous substance lead to the
3 site, that would be insufficient proof under our
4 proposal. What I heard you say this morning was I
5 thought maybe you were saying something different than
6 that.
7 MR. RIESER: Well, I think my recollection of your
8 testimony was that in that scenario generator B would
9 be liable, but that he might not have -- but that his
10 allocation would be zero. I think that was more
11 specifically what you said. In other words, the
12 liability is tied to whether -- to the simple issue of
13 whether that person arranged for the disposal of the
14 hazardous substance at the site, whether or not that
15 hazardous substance caused the release which was the
16 subject of the remediation. And I don't read your
17 proposal as limiting the liability determination to
18 causation of the specific release which is the subject
19 of the remediation at the site, or that the generator
20 in order to be liable has to have arranged for the
21 disposal of that chemical which was released at the
22 site which was the reason the site is of concern to
23 the Agency.
24 MR. GARY KING: Let me draw you to 210(b) where it
25 says to establish liability the State shall prove by a
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1 preponderance of the evidence that the respondent
2 caused or contributed to the release or substantial
3 threat of release in one or more of the following
4 ways. That, in my mind, is the introductory concept
5 in all of our proposal as to proof of liability.
6 MR. RIESER: If you look down to (4), the proof,
7 if you will, of (b), the mechanism by which you make
8 that demonstration is by arranging -- someone who
9 arranged with another person for the disposal of a
10 regulated substance at a site or facility from which
11 there is a release of such substance.
12 (Board Member Girard entered the hearing room.)
13 MR. GARY KING: So are reading that clause, caused
14 or contributed in (b) as not having any independent
15 significance?
16 MR. RIESER: I read (4) as being the means by
17 which if you prove (4) you have proved (b). In other
18 words, (4) is an example as it is written. I use (4)
19 as an example of (b) not (b) as being a limitation on
20 (4).
21 MR. GARY KING: Okay. I think that clarified for
22 me where we may have to adjust the language a little
23 bit here.
24 The second thing I wanted to talk about, we had a
25 chance to check in over lunch hour a little bit, this
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1 M.T. Richard site, Mr. Howe, that is a federal
2 jurisdiction site; is that right?
3 MR. HOWE: I believe so, yes.
4 MR. GARY KING: Okay. So that would not be a site
5 that would have any -- this proposal would not impact
6 that type of site?
7 MR. HOWE: No.
8 MR. GARY KING: Okay. The same is true with
9 Pierce Waste Oil?
10 MR. HOWE: With Pierce that is going to be a
11 long-term issue, and I am not -- I would not be
12 comfortable right now saying that I believe that that
13 is going to be solely a federal jurisdiction site.
14 MR. GARY KING: But the activities to date have
15 been strictly federal in terms of the removal action?
16 MR. HOWE: In terms of the recovery, yes.
17 MR. GARY KING: So we are talking about -- really
18 out of the four sites we are talking about two sites
19 that were --
20 MR. HOWE: Brockman and Ability Drum.
21 MR. GARY KING: Right.
22 MR. HOWE: Yes.
23 MR. GARY KING: I don't think I asked you this.
24 How many sites is Caterpillar involved with as a third
25 party respondent nationwide?
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1 MR. HOWE: At any given time that can vary,
2 because some sites we have been able to resolve our
3 liability. As an active participant in third party
4 sites, we probably average about 20 at a given time.
5 MR. GARY KING: Okay. So the fact that we have a
6 couple of sites ever in Illinois is a small percentage
7 of all of the sites that Caterpillar is involved in?
8 MR. HOWE: In terms of number, yes. In terms of
9 liability perhaps not, but in terms of number, yes.
10 MR. GARY KING: Okay. I have no other questions.
11 MS. WALLACE: I am Beth Wallace with the Attorney
12 General's office. Does your proposal expect that the
13 State has to allege a person's allocation in its
14 complaint?
15 MR. RIESER: Just a minute.
16 (Mr. Rieser and Ms. Rosen confer briefly.)
17 MR. RIESER: Well, that's a good question. And I
18 guess the -- it does create a -- excuse me.
19 (Mr. Rieser and Ms. Rosen confer briefly.)
20 MR. RIESER: I mean, plainly you have to --
21 pleadings state you have to allege the facts and your
22 claims but, you know, it is like -- I guess I make the
23 analogy to the damages where you don't necessarily
24 have to specify the exact amount of the damages that
25 you are seeking in a complaint. So based on -- I
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1 mean, to the extent you have that information
2 initially certainly it should be done. To the extent
3 you are not in a position to do that, I guess my
4 analogy would be to something like damages where it is
5 not something that is always capable of being
6 specifically alleged in the initial complaint and you
7 would allege whatever information you have at the time
8 with the understanding that based on the discovery you
9 may refine those allocations more specifically.
10 MS. WALLACE: Okay. So you don't expect that if
11 the State files a complaint and it doesn't have the
12 information to make an allocation that then you could
13 file a motion to dismiss saying that the complaint is
14 deficient because we have not alleged what we need to
15 under your proposed regulations?
16 MR. RIESER: I don't think so, because we are
17 talking in terms of burden of proof. I mean, if at
18 some point, obviously, the State is going to have to
19 demonstrate what it has to support its allegations
20 with respect to specific percentages. Excuse me.
21 (Mr. Rieser and Ms. Rosen confer briefly.)
22 MR. RIESER: So I guess my answer -- the complaint
23 itself would outline the allegations you have in terms
24 of the cause or contribution and to the extent you are
25 in a position to identify the specific percentages you
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1 would have that. But, certainly, as we have talked
2 about, these are things that -- where the information
3 may get developed through the process. And I think,
4 again, going through the analogy of the damages, you
5 may not have that specific information, but you
6 plainly have to be able to develop that information in
7 discovery or at some other point in the procedure.
8 MS. WALLACE: Okay. Thank you.
9 HEARING OFFICER ERVIN: Mr. King?
10 MR. GARY KING: Now, isn't that -- but that is
11 not, to follow-up on Ms. Wallace's questions, again,
12 that is not explicitly stated in 220(a)?
13 MR. RIESER: No, it is not.
14 MR. GARY KING: It is implicit within 220(a)?
15 MR. RIESER: Well, we have not specified the
16 specific allegations that have to be included in the
17 complaint.
18 MR. GARY KING: Should it be explicit within
19 220(a)?
20 MR. RIESER: Well, I mean, it is in context of the
21 enforcement action in the Board's 103 rules, and I
22 suspect it would apply to the pleadings. It is
23 something that we can look into and develop, but I am
24 not sure that it has to be.
25 MR. GARY KING: Okay. That's all.
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1 HEARING OFFICER ERVIN: I have a question for you,
2 Mr. Rieser. In your proposed revisions to Section
3 741.105, if I understand this right, a Subpart C
4 action is not applicable to a site on the NPL list or
5 if it is subject to a court order. But a Subpart B
6 action is not applicable to those sites as well as to
7 the parties in Subsection E. Why is there a
8 distinction between applicability for a Subpart C
9 action as opposed to a Subpart B action?
10 MR. RIESER: Let me make sure I have the
11 information in front of me. I am sorry, Ms. Ervin,
12 you were looking specifically at --
13 HEARING OFFICER ERVIN: At your Section 741.105.
14 MR. RIESER: Yes.
15 HEARING OFFICER ERVIN: Maybe I am reading this
16 wrong, but a Subpart C action applies unless it is an
17 NPL site or a site where there has been a court order
18 which is (c)(1) and (2) and (3), right?
19 MR. RIESER: It says this part, so it was intended
20 to be the entire Part 741.
21 HEARING OFFICER ERVIN: Right. But a Subpart C
22 action can be brought for any other site?
23 MR. RIESER: I don't read --
24 HEARING OFFICER ERVIN: I guess my question is why
25 is the Subsection E which says Subsection A is not
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1 applicable to actions against the following parties,
2 does that only apply to Subpart B actions or does that
3 also apply to Subpart C actions?
4 MR. RIESER: Subpart E -- both Subpart C and
5 Subpart E are intended to be limitations for the
6 entire part. In other words, Proportionate Share
7 Liability is not available to allocate away
8 responsibility for -- allocate away the responsibility
9 that an individual has under federal regulations. So,
10 certainly, the intent that these would apply under
11 both.
12 I suppose you could see an example where if the
13 State or if there was an agreement that the site would
14 be remediated and everybody had agreed to do it, which
15 is part of the prerequisite for a Subpart C action,
16 then it doesn't really matter whether it is a
17 regulatory responsibility as long as it gets done.
18 But that is not how this was really written.
19 HEARING OFFICER ERVIN: I think my confusion was
20 in that Subsection E it refers to Subsection A.
21 MR. RIESER: Yes.
22 HEARING OFFICER ERVIN: Subsection A refers to
23 when a Subpart B action is applicable, so I think that
24 reference is probably just --
25 MR. RIESER: I don't -- let's put it this way.
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1 There may have been a discussion about since parties
2 are agreed to remediate the entire site, those -- the
3 statutory and regulatory responsibilities with which
4 the State is concerned will be addressed and it is not
5 as important an issue as long as it -- from the
6 State's perspective as long as it gets done. These
7 things only happen in the context of these things
8 being Subpart C, activities only happen in the context
9 as presently drafted where there is an approved
10 corrective action plan.
11 Sitting here today, I don't recall that we drew
12 that type of distinction between the Subpart B and
13 Subpart C for those purposes. I think that was
14 intended to apply across the Board. But by the same
15 token, I don't know that there would be a real issue
16 of allowing Subpart C activities to apply to
17 Underground Storage Tank sites or RCRA sites since
18 there is a commitment that the stuff is going to get
19 done. So I guess it is a long way of saying if it is
20 written that way it doesn't have to be. It could
21 apply and probably should apply to both.
22 HEARING OFFICER ERVIN: Thank you. Are there any
23 additional questions?
24 BOARD MEMBER HENNESSEY: Just a question on
25 Section 741.215.
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1 HEARING OFFICER ERVIN: Is this of the proposed --
2 BOARD MEMBER HENNESSEY: This is of Mr. Rieser's
3 proposed language. I am sorry. It is Exhibit B to
4 the --
5 MR. RIESER: All right. I have got it.
6 BOARD MEMBER HENNESSEY: The introductory phrase
7 reads in addition to the requirements of Section
8 741.220. I wonder, should that be a reference to
9 741.210 instead of 220 or both maybe?
10 MR. RIESER: No, it really applies to 210. Thank
11 you.
12 BOARD MEMBER HENNESSEY: And another question on
13 741.220 of your proposal, in (b)(2) of that section
14 you have the language, consistent with the provisions
15 of 35 Illinois Administrative Code 742. I have a
16 guess at what you mean by that, but I think it would
17 be helpful if you could explain what that phrase is
18 intended to mean.
19 MR. RIESER: Well, the allocation factors we laid
20 out here are a little bit different than the
21 allocation factors that the Agency provides and the
22 State provides in their proposal. It is a difference
23 in degree more of kind, and I think what we were
24 looking at here, we have four things that we have
25 described. We have got volume. We have got degree of
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1 risk or hazard posed by the individual substance,
2 extent of remediation necessary, and degree of
3 involvement in the generation, et cetera, of the
4 site. And I believe we laid out the -- separated the
5 degree of risk from the degree -- from the extent of
6 remediation necessary, because it struck me that those
7 really were two separate issues especially at sites
8 where the remediation had not actually been
9 performed.
10 Then it strikes me also that when you are talking
11 about degree of risk at a hazardous substance site in
12 Illinois anymore that evaluation has to be made, ought
13 to be made in all cases consistent with 742, which
14 provides a wealth of information in terms of how you
15 evaluate the extent of risk at a given site based on
16 those factors. So, again, we want to tie both risk,
17 the termination of risk, and extent of remediation to
18 the Board's determinations in 742.
19 BOARD MEMBER HENNESSEY: Okay. In your proposed
20 Section 741.220(c) at the end you are -- that's where
21 you are talking about the degree of remediation in
22 that factor.
23 MR. RIESER: Yes, 220.
24 BOARD MEMBER HENNESSEY: (c)(3).
25 MR. RIESER: (b)(3).
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1 BOARD MEMBER HENNESSEY: It is (b)(3). I am
2 sorry.
3 HEARING OFFICER ERVIN: Which (b)(3)?
4 BOARD MEMBER HENNESSEY: The first (b)(3).
5 MR. RIESER: The first (b)(3). If I was able to
6 count, I would probably not be a lawyer.
7 BOARD MEMBER HENNESSEY: You talk about having the
8 site cleaned up to allow it to be used consistent with
9 its current and reasonably foreseeable future use.
10 MR. RIESER: Yes.
11 BOARD MEMBER HENNESSEY: Would this -- if someone
12 is cleaning up an industrial site and they want to
13 clean it up to residential standards, would this
14 factor be a limitation on that person's recovery?
15 MR. RIESER: Absolutely. I mean, this is not in
16 the context of that specific thing. But this is an
17 enforcement action, and what we are trying to say is
18 that --
19 BOARD MEMBER HENNESSEY: The State --
20 MR. RIESER: Right, if it is the State bringing
21 the action, but it is something that the Board is
22 going to consider how this applies in the context of
23 the citizen's dispute. This is an incredibly crucial
24 and important issue for which there is currently no
25 real specific solution in the regulations. And a
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1 big -- it is a real problem. Unlike federal agents,
2 unlike the U.S. EPA, there is no specific national
3 contingency plan that really dictates how remediations
4 of this nature are to be carried out. They could be
5 carried out under the Site Remediation Program which
6 provides a series of decisions. But there is no
7 requirement in terms of the extent of contamination.
8 So the concern that David Howe voiced this morning
9 about a person buying a piece of contaminated property
10 that has always been industrial, spending 3 million
11 dollars so that it be cleaned to residential
12 standards, and then suing the former owners and
13 operators of that property for that entire amount so
14 that they can use it as residential property, it
15 certainly strikes us as an inappropriate use of
16 money.
17 I mean, they are getting a much better property as
18 a residential property than they had as a contaminated
19 industrial property, which is the property that they
20 bought. And that you ought to be very careful about
21 allowing either the State or a private party to
22 require people to pay for an additional level of
23 remediation that is not mandated by the current use of
24 the property.
25 So this is, yes, exactly intended to be a
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1 limitation on making the proper -- spending more money
2 on remediation than is appropriate for the use of the
3 property as it stands today and it is likely to stand
4 in the future.
5 BOARD MEMBER HENNESSEY: So that is going to
6 require us in some cases to -- suppose someone wants
7 to clean it up to residential, and they only sue you
8 for the -- the State wants cleanup to residential
9 standards, but they say we understand we can only hold
10 these parties liable for those costs that would be
11 required to bring it to industrial standards. So the
12 Board is really going to have to make a determination
13 there about what percentage of the costs are
14 excessive, I guess.
15 MR. RIESER: Yes. Believe me, that is something
16 that will be brought forward by the parties because
17 the whole issue of the extent of remediation will be a
18 very specific issue that gets discussed. If to keep
19 it industrial all you have to do is install a cap and
20 record appropriate deed restrictions, then that is --
21 and it has always been industrial property and that is
22 what should be done, somebody says, well, we want it
23 cleaner than that, then that is not money that ought
24 to be allocated to the responsible parties.
25 MR. HOWE: There is another example that could be
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1 given here. And that is a situation where you have
2 contamination in an area that is -- the terrain is
3 configured so that it could never really be used for
4 residential use. Say, it is a mountain top or
5 something like that. And the question becomes well,
6 but, you know, maybe somehow it could be used that way
7 or something like that, and you wind up having to
8 clean it up to a standard that is really not going to
9 be ever, as a practical matter, used and that is an
10 area that -- that is another type of area that this
11 can get into.
12 BOARD MEMBER HENNESSEY: Thank you.
13 CHAIRMAN MANNING: I had a couple of questions
14 that flow from Ms. Wallace's question on the issue of
15 the complaint. I think -- I understand you to say
16 that you would consider the complaint to have to
17 allege contamination, of course, allege the typical
18 ownership, operation, some sort of type of
19 constituents in the contamination, elements of
20 causation, I think I hear you saying, as well. You
21 think the complaint needs to have some sort of nexus
22 between the contamination and the potential cleanup,
23 what actually constituents are in the ground and what
24 the cleanup is going to entail.
25 Let's say that the State comes in with all of that
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1 against one party. And this one party knows, well,
2 you know, that is probably all correct, but there are
3 other parties here that contributed much more
4 substantially than I may or may not have. If I have
5 any liability at all it is perhaps ten percent. Is
6 that an absolute defense? Can the respondent then
7 argue, well, I am not a material contributor, because
8 there are other parties here who are unnamed? Is
9 there a responsibility on the part of the respondent
10 to go find the other potentially responsible parties?
11 Where does the State sit in that situation, when it
12 has filed a complaint against one person who is, in
13 fact, responsible but maybe only for a minor
14 percentage?
15 MR. RIESER: I mean, I would say the State cannot
16 recover -- I don't -- the answer to is this an
17 absolute defense, that there are other people
18 involved, I think the answer has to be no.
19 CHAIRMAN MANNING: Okay.
20 MR. RIESER: But on the other hand, the State --
21 in that situation the State can't -- the statute says
22 the State can't recover from that person more than
23 their proportionate share. And at some point the
24 discussion has to be had that they have only had X.
25 If the State doesn't allege it, that person will come
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1 back and say, hey, we are only excess the extent of
2 your recovery. Or if the State, they engage in
3 discovery and an exchange information through
4 discovery, and the State says, well, we only have you
5 as this, and we have somebody else as 90 percent, then
6 the 10 percent is the answer. So I guess --
7 CHAIRMAN MANNING: Who comes up with the ten
8 percent first? Who comes up with the figure of ten
9 percent? How is that derived at in the hearing
10 process? If the State only knows that -- you are
11 saying that the evidence will show somehow, based on
12 all of the -- if the evidence only shows there is a
13 certain degree of liability --
14 MR. RIESER: Right.
15 CHAIRMAN MANNING: -- how do you get to the
16 percentage of liability without -- who throws out the
17 number first? Does the Board just ascertain that
18 based on facts that are there and facts that are
19 missing?
20 MR. RIESER: No, no. I think at some point -- at
21 some point the State -- at some point the State has to
22 be in a position to prove -- and what I have said and
23 I am going to stay with, is that at some point the
24 State has to be in a position to prove an individual's
25 proportionate share. They either know that going in
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1 or they develop that information through discovery and
2 at some point they have to answer a contention that
3 says that this is -- this is where we are.
4 Now, it may be and certainly if I were in the
5 position of that individual, I would be spewing out
6 any number of documents saying this is what we did. I
7 suspect that in 90 percent of the cases that is what
8 is going to happen, because that is -- as an attorney,
9 that's how I would represent that person. I wouldn't
10 lay back and say, well, we will wait and see what
11 happens. If I had information, we would go with it.
12 CHAIRMAN MANNING: Would we expect that that
13 party, if the State doesn't bring the other parties
14 forward, that that party would try to cross-claim
15 against those other parties?
16 MR. RIESER: The interesting thing about this is
17 that they don't need to. I mean, contribution ought
18 to drop out. It may not. But it ought to drop out,
19 because that person is only liable for a percentage
20 that doesn't involve the other parties. And the State
21 is going to have to make the decision if it sues
22 somebody in that situation or they are a relatively
23 minor player at the site that it may well be a
24 decision at the end of the process that this person is
25 a minor player at the site, and it is not going to be
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1 worth it to us, if this is not a resource useful
2 activity to pursue it in this name, in this manner, we
3 are going to have to bring in people who are the big
4 players at the site. Excuse me.
5 (Mr. Rieser and Ms. Rosen confer briefly.)
6 MR. HOWE: I would like to add some observations
7 to what Mr. Rieser has already said on this particular
8 issue. In a joint and several liability situation,
9 Caterpillar has been faced with situations, not in
10 this state, but in other jurisdictions, where it was a
11 very small player. A government agency sued
12 Caterpillar and a number of other defendants basically
13 under the theory that they were jointly and severally
14 liable, and even though there were well over 500
15 additional possible defendants, the agency involved
16 did not file suit against them under the theory that
17 the defendants that they did sue would have a real
18 interest in filing cross-claims, et cetera, and
19 bringing these other 500 people or entities into the
20 situation.
21 What basically the reasoning was in that situation
22 was, I think, that Caterpillar was the deep pocket.
23 That rather than -- in this case it was the federal
24 government -- going in and suing all of the 500 PRPs
25 that were viable PRPs, they would just sue 30 and let
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1 those 30 bear the expense of suing everybody else.
2 Because if they didn't then those 30 would bear the
3 cost of the entire site. Our responsibility at that
4 site was less than half of one percent. And there
5 were well over 500 PRPs involved in that site.
6 That situation is one that under a proportionate
7 liability scheme -- admittedly, Caterpillar does not
8 like to be put in that position. I don't think any
9 PRP wants to be put in that position. In a
10 proportionate liability scheme of the type that we are
11 talking about here, it would be in Caterpillar's
12 interest if they had information with respect to other
13 PRPs to bring that information to the State's
14 attention. I mean, we would have a strong motivation
15 in a general sense to do that. But on the other hand,
16 we don't want to be put in a position that the an
17 agency sues us, sues only a small portion of the
18 defendants, and then uses joint and several liability
19 as a means of making them sue everybody else.
20 So in this situation I think it would be our
21 position that the State, if they were able to prove
22 that a given party had ten percent of the liability
23 that they would go ahead and go forward with that
24 proof. But if that's the only entity that they sued,
25 then they would collect the ten percent of the
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1 liability from that particular party. They wouldn't
2 collect anything else, and that party would not be put
3 to the burden of turning around and suing everybody
4 else.
5 CHAIRMAN MANNING: They, in part, get to the ten
6 percent because you indicated to them on the record
7 your extent of the liability because you perhaps named
8 these other 500 or other potentially responsible
9 parties on the record?
10 MR. HOWE: Not necessarily, but if the State has
11 developed information that there is X number of
12 gallons of X at the site or, you know, a million
13 gallons of X at the site, and they are able to prove
14 that company Y contributed 100,000 of the million
15 gallons, then they would be able to recover from Y if
16 they only sued Y one tenth of the cost. They would
17 not be able to force Y to go and sue everybody else.
18 It would be in Y's interest, frankly, if they had
19 information regarding these others to provide that.
20 And I think in the ordinary course of discovery that
21 would come out, and then at that point in time the
22 State would be able to sue other parties.
23 CHAIRMAN MANNING: So your presumption is that
24 generally the facts will show the extent of the
25 contamination and get you to a number because most of
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1 the -- I mean, in the situation you gave me the facts
2 are pretty clean. You have a certain number of drums
3 and a certain time frame and that. There are some
4 situations, I would assume, that the facts are not
5 going to be that easy to ascertain, and that's what I
6 am looking for, where the facts are not going to
7 clearly show the extent of the contamination and
8 someone is going to have to come up with some sort of
9 information to help get to a number, a percentage.
10 BOARD MEMBER McFAWN: For example, what if you
11 can't come up with a volumetric figure? If you just
12 have practices at Caterpillar, that Caterpillar seemed
13 to have a practice of using this disposal site over a
14 period of years, how do you find out the whole of the
15 contamination and know what your share of it is? The
16 State being, how do you --
17 MR. RIESER: Well, I think this all assumes that
18 you have an idea of what is going on at the site, and
19 you can turn that question around saying if you don't
20 know that, how can you bring an action against any
21 individual person and say that they caused or
22 contributed to that particular problem, which is what
23 the statute --
24 BOARD MEMBER McFAWN: Well, I don't quite
25 understand that. What if you know that that site
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1 needs to be remediated and you know what the problem
2 is, and you only know of one company and their
3 practice of using that site?
4 MR. RIESER: Well, the statute says you can't make
5 that company do more than their share, so if you don't
6 know what that share is you can't go to that company
7 and say you have to clean it all up because we know
8 you were there. I mean --
9 BOARD MEMBER McFAWN: But the State is not saying
10 you have to clean it all up. The State is saying you
11 have to help, or you have to prove what your share is.
12 They are not saying you have to clean it all up or you
13 are liable for all of it.
14 MR. RIESER: No, no, that's how it worked before,
15 that the State would go to the one people, the one
16 person that they know and say you have got to do the
17 whole thing because we don't know. We don't know,
18 therefore, you are it, and that's, in my opinion, a
19 little bit of what the State's proposal smacks of
20 now. I am not hearing, from what the State presented
21 to the Board in terms of the information regarding how
22 it administers its program, that that is what
23 happens. What I am hearing is that at the sites where
24 there are immediate problems that they don't have an
25 individual that they can go and take care of those
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1 immediate problems that they feel is responsible for
2 those immediate problems, they go and take care of
3 those problems themselves and then go from -- and in
4 the process of doing that they are going to develop a
5 lot of information about the site, and they may give
6 them the ability to start parcelling out
7 responsibility to individual parties.
8 BOARD MEMBER McFAWN: Can they recover their cost
9 for that investigation, so to speak?
10 MR. RIESER: I don't know. Yes. I mean, assuming
11 that they have the parties before them.
12 BOARD MEMBER McFAWN: So they have to do the PRP
13 searches, in CERCLA terms, and they can recover their
14 cost for PRP searches?
15 MR. RIESER: I would assume that that is
16 recoverable as part of their investigation. I mean,
17 that is one of the things that people have to weigh in
18 terms of how -- in terms of how much they dispute
19 these things. But, yeah, I don't -- we are not really
20 talking about recoverability or outlining
21 recoverability of specific costs, but I don't know of
22 anything that says that that is not a recoverable
23 cost.
24 MR. HOWE: To give you some additional examples of
25 the way that that can work, there will be situations
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1 where, for example, I mentioned somebody putting
2 together an affidavit that said that Caterpillar had a
3 500 gallon tank of waste oil that this person emptied
4 once a week from 1950 to 1960. And they submitted
5 that affidavit and based upon that and the gallonage
6 of the tank they were able to calculate a certain
7 number of gallons. Now, that was evidence, whether
8 that was the greatest evidence in the world or not, it
9 is evidence that the trier of fact can consider. Now,
10 we came back in that situation and showed that the
11 plant had not been built until 1955 and, therefore,
12 they were at least halfway wrong and it also went to
13 the credibility of the rest of the affidavit.
14 There are also other situations, for example,
15 where somebody says that he hauled one dumpster a week
16 out of the plant and that can be, for example, your
17 high end of your range. We went back and we showed
18 that 90 percent of the time he hauled it to a
19 different site, you know. So there is not an exact
20 means of going about this. Again, it is a question of
21 what evidence there is, how credible is it, and what
22 inferences can reasonably be drawn from that evidence
23 as a means of determining percentages, gallonages, and
24 things of that nature.
25 The one that really got to me and, again, not in
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1 the State of Illinois, but somebody attempted to hold
2 us liable for plant trash, et cetera, being hazardous
3 waste under the theory that we had on occasion taken
4 dry paint rags and had them in the dumpster and that
5 was, therefore, hazardous and we were liable for huge
6 amounts of material that didn't have anything to do
7 with any hazardous component. So, again, it all goes
8 to weight and credibility.
9 CHAIRMAN MANNING: It would be your position,
10 then, as a respondent, if you were just the one
11 respondent that the State brought forward, it is not
12 your responsibility to bring any other potentially
13 responsible respondents forward, rather, you will
14 contest the evidence presented by the State and stand
15 on the record evidence that was or was not presented
16 by the State; am I correct?
17 MR. HOWE: Yes.
18 MR. RIESER: Yes.
19 CHAIRMAN MANNING: Is there any situation where
20 you could envision desiring to pull in other
21 respondents?
22 MR. RIESER: Yes. I mean, anything could happen
23 in these things.
24 CHAIRMAN MANNING: How could you do that in an
25 enforcement process? Do a --
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1 MR. RIESER: Well, according to Brockman and
2 Fiorini you could bring contribution actions in those
3 settings, and there is nothing here that we are
4 excluding that. But what we are saying, though, is
5 that the need to do that and the incentives to do that
6 under this situation are far less. And the idea is,
7 as David Howe has been saying, is that it ought not to
8 be, under the way the statute is drafted, the PRPs
9 burden to bring in the other people who were
10 responsible instead of turning to a deep pocket like
11 Caterpillar and saying, well, hey, you have got money,
12 you have got lawyers, go do this for us.
13 It is the State's responsibility to bring these
14 people in and recover the costs from all of them
15 directly. I mean, yes, I can envision a situation
16 where that would seem like a good idea, but that is
17 certainly not the direction that this proceeding ought
18 to take.
19 CHAIRMAN MANNING: So your version, that I would
20 guess, is that the way this process should work is the
21 State should, in the first instance, determine when
22 they are going to go after anybody in an enforcement
23 action on a proportionate, that they should try to
24 name all of the potentially responsible parties as
25 opposed to just going after one or two?
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1 MR. RIESER: Oh, absolutely, absolutely.
2 BOARD MEMBER HENNESSEY: But they don't have to,
3 though. I mean, as information develops there is not
4 anything to prevent them from bringing this piecemeal
5 if that's the way the information develops?
6 MR. RIESER: Well, that is absolutely right. As
7 the information develops they can bring more and more
8 people in. But, yes, the idea is for that to be the
9 responsibility of the State, as it should be, and as
10 the statute requires it to be.
11 HEARING OFFICER ERVIN: Yes, Mr. King.
12 MR. GARY KING: Mr. Howe, I just wanted to go back
13 to the federal site that you talked about. I think
14 you had described 500 potentially liable parties.
15 MR. HOWE: Over that, yes.
16 MR. GARY KING: Over that. Okay. Caterpillar
17 were the only ones named?
18 MR. HOWE: No, there were approximately 30
19 defendants named.
20 MR. GARY KING: Are you aware of anything like
21 that occurring in Illinois where there has been that
22 kind of singling out?
23 MR. HOWE: I am not aware of anything like that
24 having been done by the State of Illinois. I am aware
25 of that being done by the federal government, yes.
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1 And by the way, I should clarify when you had asked me
2 originally about sites that were involved in Illinois
3 I thought you meant sites that are physically present
4 in Illinois.
5 MR. GARY KING: Yes. That was my confusion.
6 MR. HOWE: All right.
7 HEARING OFFICER ERVIN: Are there any other
8 questions for this panel?
9 BOARD MEMBER McFAWN: I have a couple. On your
10 proposal Exhibit B, Section 741.210, liability, could
11 you just explain paragraph (a)(1) to me there
12 especially in the context of the statutory language at
13 Section 58.9(a)?
14 MR. RIESER: Yes. What we --
15 BOARD MEMBER McFAWN: My question may be better
16 put, how can you limit it this way, given the language
17 at 58.9?
18 MR. RIESER: Well, the language at 58.9 is that
19 notwithstanding anything in the Act the State can only
20 bring actions against parties who caused something or
21 did something. So this was -- as drafted, this was a
22 reaction to what we perceived the Agency's position to
23 be, which is that liability is based solely on status,
24 in 22.2(f), status, and once they demonstrated status,
25 that then you went into the allocation. That was the
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1 burden to be proven, the defendant's burden to prove.
2 What this is saying is that to be liable, a, you
3 have to meet these 22.2(f) factors, and there has to
4 be an issue of causing or contributing to the site.
5 So rather than lay out those specific 22.2(f) factors,
6 people liable, this was a way of providing shorthand a
7 direction as to the types of potentially responsible
8 parties, plus it wasn't enough that they were status.
9 There had to be a demonstration that they had caused
10 or contributed to the release of a regulated substance
11 that were identified and addressed by the remedial
12 action. So it was a two-part deal, whereas I perceive
13 what the Agency is proposing is a one-part liability
14 demonstration.
15 BOARD MEMBER McFAWN: So this is really in
16 response to their Paragraph B under their liability
17 section?
18 MR. RIESER: Yes.
19 BOARD MEMBER McFAWN: So this could -- so could
20 this cost assignment of 58.9 be used in actions
21 brought under, like, for instance, Section 9 or
22 Section 12 of the Act, enforcement actions brought by
23 the Agency?
24 MR. RIESER: Yes is, I guess, the short answer.
25 You know, I was thinking about requiring a person to
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1 conduct remedial action or seek recovery response
2 costs. I was focusing pretty solely on the issue of
3 the 22.2(f) factors. But, yes, of course, that could
4 be -- that could also be an issue, as well. It is
5 hard to imagine somebody being liable under 12(a), for
6 example, that wouldn't meet one of these categories in
7 general, or for that matter, be outside of those
8 categories. But I would think anyone liable under
9 12(a) would be an owner or operator of the property or
10 someone who arranged for the disposal of contaminants,
11 or a transporter, for that matter.
12 BOARD MEMBER McFAWN: Okay. Thanks. My next
13 question has to do with 741.220. I don't know if you
14 just didn't include it, but I was wondering if you had
15 intended for the Subparagraph B that the Agency has
16 under its allocation factors which reads, the Board
17 shall not be required to determine precisely all
18 relevant factors provided substantial justice is
19 achieved. Were you proposing that that be included or
20 not?
21 MR. RIESER: I was not proposing that that be
22 included, because I don't -- I don't know what it
23 means. I don't know what it is intended to do. My
24 assumption is that the Board will always do
25 substantial justice, and that it is not necessary, and
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1 that the Board will use a mix of the factors as we
2 have provided for to make those decisions.
3 What I read the Agency's statement to be is more
4 literally a safety valve saying, well, you can go
5 outside of these factors, and as long as you -- as
6 long as what you are doing is basically okay, then it
7 is okay. I just don't understand the purpose of
8 laying out factors for decision making and then
9 following up by saying, well, you don't have to follow
10 these factors as long as your final decision is
11 basically okay. I don't know what basically -- I
12 don't know what substantial justice means if you don't
13 follow the factors that you lay out for decision
14 making.
15 BOARD MEMBER McFAWN: Well, thank you for the
16 compliment to the Board. So the Agency has language
17 which says you shall consider the following three
18 factors including but not limited to, so you would
19 have us limited to these four factors listed under
20 Paragraph B?
21 MR. RIESER: Yes.
22 HEARING OFFICER ERVIN: So you don't think there
23 is any other factors that bears upon a person's
24 proportionate share responsibility that we could
25 consider?
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1 MR. RIESER: Well, I think what has to happen is
2 that the factors have to be -- well, let me put it
3 this way. We couldn't think of any. And we spent a
4 lot of time considering factors to be considered and
5 these struck us, and these are, I should say, pretty
6 general. On the one hand, they are pretty specific to
7 the issue of how you identify appropriate costs of a
8 remediation of a site, which is the issue that we are
9 talking about. That is not to say that we are all
10 seeing and we thought of everything. But I do think
11 it is important to specify the factors that the Board
12 is -- on which the Board makes these decisions.
13 I always have a problem in the general sense of
14 saying the Board can make decisions on factors
15 including but not limited to, because I always wonder
16 what could we come up with at the last minute that I
17 don't know about and didn't know about when I started
18 defending the client in the action. So I think it is
19 important for unspecified factors to do the best you
20 can in terms of outlining them, but there ought to be
21 specified factors.
22 MR. HOWE: There is another aspect of that, too.
23 And that is that we are limited by what the statute
24 says in this particular case, which basically deals
25 with the issue of proportionality and causation. So
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1 that's why I made the comment earlier that we could
2 not use all of the so-called Gore factors which, you
3 know, are based upon things other than actual
4 contribution at the site or in addition to actual
5 contribution at the site.
6 HEARING OFFICER ERVIN: Are there any additional
7 questions?
8 BOARD MEMBER McFAWN: Yes, I have one more. This
9 is kind of a sticky one, so if you would like to think
10 about it that would be fine. In light of that, in
11 that the allocation factors proposed by the Agency, as
12 well as you, are limited to the degree of hazard posed
13 by the regulated substances or pesticides contributed
14 by the parties, I don't read the statute as actually
15 saying that. And my question is what if you are a
16 party that contributed a nonregulated substance and,
17 of course, you have a commingling going on, for
18 instance, a municipal landfill, should you have any
19 responsibility? Or liability, maybe, is the better
20 word.
21 MR. RIESER: I guess my -- perhaps we should think
22 about this one for a better answer later, but the off
23 the top of my head response is if it is a nonregulated
24 substance they are not liable under this particular
25 act or statute. It has to do with recovery of --
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1 22.2(f) talks in terms of regulated substances and
2 this section talks in terms of regulated substances or
3 pesticides. So the whole point of this is to limit
4 the liability to proportionate share to regulated
5 substances for which you are responsible. So if they
6 are nonregulated substances, those are not part of the
7 problem. Those are not the reason that the
8 remediation is being performed.
9 MR. HOWE: To add to that, in addition, the
10 statute, I think there is also a very practical reason
11 for that. Recently the federal government had
12 proposed, and I am trying to remember just exactly how
13 this came up, but basically it involved certain types
14 of permit approvals, and there was a provision to be
15 drafted on or proposed to be drafted on that said that
16 you had -- that there were certain things that had to
17 be done with respect to any species that was either on
18 the endangered species list or had been proposed for
19 inclusion on the endangered species list, which at
20 that point in time would give the Agency involved a
21 great deal of latitude and more latitude than I think
22 they were really allowed. It is a hazy example, and I
23 apologize.
24 But the point was that all of a sudden if anything
25 had been proposed for inclusion, somebody could deny a
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1 permit regardless of whether or not there was any
2 scientific evidence to back up that species being
3 included on the endangered species list. Here there
4 is a definition of regulated substances that is used,
5 and if you start going beyond that I guess one of the
6 questions that I would have is where do you stop.
7 BOARD MEMBER McFAWN: On a different subject, at
8 Section 741.205 in the Agency's proposal, there is a
9 reference to sanctions. It says, sanctions for
10 failure to comply with procedural rules, subpoenas, or
11 orders of the Board or Hearing Officer shall be as set
12 forth therein. Especially in light of your
13 considerations, Mr. Howe, that this be an expedient
14 process, I was wondering what kind of sanctions you
15 envision the Board using against the dilatory party.
16 Are you talking monetary sanctions? Are we talking
17 attorney's fees? What would you envision us having
18 the authority to do? And should we set it -- should
19 we have a fee schedule? A sanctions schedule, I
20 should say.
21 MR. HOWE: There is the possibility that you could
22 do that. To give you -- this is not something that I
23 have thought through, but to my mind, for example, the
24 cost of discovery of that additional evidence, for
25 example, if evidence has been withheld, the cost of
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1 bringing that to the Board's attention, et cetera,
2 could be a factor to be considered. Monetary -- some
3 sort of monetary fine, perhaps. There may be many
4 other things. Evidentiary exclusions. And, again, I
5 am speaking pretty much off of the top of my head on
6 this.
7 BOARD MEMBER McFAWN: The reason I asked you is
8 because you had addressed that this should be a fast
9 process, a quick process. And it seems like sanctions
10 would be the way to do it. If you would like to think
11 about it some more and give us a comment on it I would
12 appreciate it.
13 MR. HOWE: Okay. Thank you.
14 BOARD MEMBER McFAWN: I would appreciate that from
15 the Agency, as well.
16 HEARING OFFICER ERVIN: Are there any additional
17 questions?
18 All right. Seeing none, on behalf of the Board, I
19 would like to thank you for presenting your testimony
20 today. It is very helpful. We will take a five
21 minute break right now.
22 We are also going to deviate a little bit from the
23 schedule I announced earlier. We have Laurel
24 O'Sullivan who is here today who is going to be
25 testifying on behalf of BFI. We will take her
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1 testimony next. Then after that we will go to the
2 Agency. I am sorry. It is BPI, not BFI.
3 (Whereupon a short recess was taken.)
4 HEARING OFFICER ERVIN: All right. Let's go back
5 on the record.
6 We will now begin with the testimony of Laurel
7 O'Sullivan.
8 Would the court reporter please swear in the
9 witness.
10 (Whereupon Laurel O'Sullivan was sworn by the
11 Notary Public.)
12 MS. O'SULLIVAN: Good afternoon, Chairman Manning,
13 Members of the Board. My name is Laurel O'Sullivan.
14 I am here today testifying on behalf of the Business
15 and Professional People for the Public Interest. I am
16 a staff attorney at the BPI which is located in
17 Chicago, Illinois. BPI is a public interest law and
18 policy center which provides advocacy on issues
19 relating to the environment.
20 In the past BPI has participated extensively in
21 other rulemakings and adjudicatory matters before the
22 Board, including the development of hazardous waste
23 disposal regulations, the development of groundwater
24 quality standards, and the development of groundwater
25 technology and control regulations. In addition, BPI
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1 has been an active participant in the City of
2 Chicago's Brownfields Forum.
3 BPI commends the Illinois Environmental Protection
4 Agency on producing a proposed rule that does a
5 reasonably good job of protecting the health of
6 Illinois' citizenry and the environment. Overall we
7 think the rule strikes an appropriate balance between
8 protecting these very important interests, while also
9 providing sufficient incentives to make remediation of
10 Brownfields a much more attractive and viable option
11 in the State of Illinois. By placing the burden of
12 proof for demonstrating its proportionate share of
13 liability on a responsible party and imposing
14 consequences on those parties that fail to do so, the
15 rule accomplishes many important policy objectives.
16 First, it recognizes the appropriateness of holding
17 polluters accountable for their actions. Second, it
18 acts as an important deterrent to prevent businesses
19 from adopting poor record keeping practices. Third,
20 it is protective of public health and the environment
21 because it imposes repercussions on parties who cannot
22 demonstrate their proportionate share.
23 While we applaud some provisions of the rule,
24 other provisions leave us deeply troubled. First and
25 foremost amongst our concerns is that by not even
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1 addressing the issue of orphan share liability, let
2 alone providing for the allocation of such liability,
3 the rule does not go far enough to protect the health,
4 welfare, and environment of the Citizens of the State
5 of Illinois. Instead of achieving the much touted and
6 desirable objective of quick and sure remediation, at
7 best the rule can only provide hope that a few more
8 sites may be remediated. It is clear that in most
9 instances cleanup at sites will lag because of a
10 shortage of funding to cover these orphan shares. In
11 other instances, even if resources are available,
12 protracted cost recovery litigation between the Agency
13 and responsible parties is likely to occur due to the
14 inevitable complexities involved in apportioning
15 liability.
16 We also believe it is important to draw attention
17 to the fact that this rulemaking has not been the
18 result of a true consensus process. There is a real
19 danger that the interests of the business community
20 may overshadow the concerns of the People of
21 Illinois. For this reason, we urge the Board not to
22 assign importance to comments on the basis of numbers
23 alone; and more importantly, we are here to remind the
24 Board that there are many citizens in the State of
25 Illinois who are concerned about the impacts of this
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1 rule on their communities, their families, and their
2 wallets.
3 Stated at the table alongside the agencies were
4 nine representatives from various sectors of the
5 business community, including the Illinois State
6 Chamber of Commerce, the Illinois Manufacturers
7 Association, the Chemical Industry Council of
8 Illinois, the Consulting Engineers Council of
9 Illinois, The Illinois Bankers Association, The
10 Community Bankers Association of Illinois, and the
11 National Solid Waste Management Association. Together
12 these representatives collectively comprised the Site
13 Remediation Advisory Committee, or SRAC, appointed by
14 Governor Edgar. The interests of these participants
15 are principally to limit cleanup liability for
16 businesses.
17 Glaringly absent from the table, however, was any
18 formal representative purporting to represent the
19 interests of three important groups of participants
20 who have a very real stake in this rulemaking: (1)
21 Illinois citizens concerned about the environmental
22 and public health impacts of this rule; (2) community
23 organizations interested in ensuring restoration of
24 Brownfields to productive uses, and (3) Illinois
25 taxpayers concerned about the fiscal implications of
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1 this rule. In light of this skewed representation, it
2 is disturbing to hear these same representatives from
3 the business community complaining about the
4 inequities of a rule which was the result of a process
5 in which their input was the sole input formally
6 solicited.
7 The skewed representation on the Site Remediation
8 Advisory Committee causes us concern with respect to
9 the manner in which any proposed changes to the rule
10 may be handled in the future. All of SRAC's members
11 have a common goal: Protecting the narrow self
12 interest of their constituents, namely potentially
13 responsible parties. Their concerns were voiced then
14 and they have continued to play a substantial role in
15 commenting on this rule before the Board. And while
16 we believe the agencies did a reasonably good job of
17 protecting the interests of Illinois' citizens, we
18 propose a few modest changes to the rule.
19 My testimony will begin by laying out some of the
20 inequities in this rule in terms of the burdens and
21 costs imposed upon the Agency, and by extension
22 taxpayers, versus the costs imposed on responsible
23 parties. By way of illustrating this point, I will
24 refute contentions that the proposed rule is not
25 sufficiently distinct from CERCLA or Superfund by
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1 reiterating the significant distinctions between
2 several provisions contained in this proposed rule as
3 compared to its federal counterpart. I will then
4 address the significant and serious problems presented
5 by the unanswered question of orphan share liability.
6 There is no denying the fact that this proposed
7 rule provides the business community in Illinois with
8 a far more economically advantageous regulatory
9 program than the alternative program available under
10 the federal Superfund program. In light of the active
11 participation SRAC played in developing the rule, and
12 when compared to the much stricter penalties imposed
13 under CERCLA's strict liability scheme, it is
14 difficult to understand on what real basis members of
15 the business community claim to still be dissatisfied
16 with this rule.
17 Make no mistake about it: the Agency's burden
18 under the proposed rule is significant; to suggest
19 otherwise, as some representatives have, is to ignore
20 the larger context into which this rulemaking fits.
21 In the future, parties who find themselves subject to
22 a cleanup order from the IEPA should breathe a sigh of
23 relief. In addition to replacing joint and several
24 retroactive liability with proportionate share
25 liability, several other provisions of this rule
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1 provide favorable accommodations for responsible
2 parties, while adding to the Agency's burden. The
3 allocation section provides responsible parties with
4 an opportunity to reduce their liability through the
5 development of risk-based remediation objectives. And
6 under the Appeals and Adjustment Section, a
7 responsible party is provided with the opportunity to
8 bypass the formal requirements of a regular appeal and
9 may instead request the Board to reopen a case where
10 subsequent facts reveal a different allocation
11 assignment would have been more appropriate. This
12 Section in particular has the potential to strain the
13 Agency's resources by an untold factor, although we do
14 recognize the value when appropriate and necessary in
15 certain situations.
16 By comparison, far worse financial burdens and
17 legal entanglements would await them under CERCLA if
18 this same party were involved in a site which had been
19 referred to the U.S. EPA. There is a danger that if
20 the criticisms levied by the regulated community are
21 heeded and the rule adjusted accordingly to reflect
22 these criticisms, the Board may totally whittle away
23 the protections the rule provides for the public
24 health and the environment as well as the tax dollars
25 of the State's citizens.
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1 The most troubling aspect of the rule is the
2 tremendous inequity which it imposes on the Agency's
3 resources relative to the resources of responsible
4 parties. The inequity is present throughout the rule
5 and nowhere is it more apparent than in the initial
6 stages of a remedial investigation. The proposed rule
7 places a substantial premium on the Agency's ability
8 to initially identify, up front, as many potentially
9 responsible parties as possible. The Agency's
10 motivation stems from the very real possibility that
11 it will become responsible for cleaning up any
12 unapportioned orphan shares. Even after the Agency
13 has expended considerable time, money and personnel
14 resources on an investigation there is no guarantee
15 that this investment will have paid off in the form of
16 a viable PRP. In the meantime, protracted and
17 potentially lengthy investigations threaten to erode
18 the very policy objective that was at the heart of
19 this rulemaking; instead of expedited cleanups, the
20 State of Illinois and its citizens will face certain
21 delays and hurdles in cleaning up the environment and
22 putting these sites to protective uses.
23 Once the Agency has identified as many potentially
24 responsible parties as possible, it must then proceed
25 to prove that these potentially responsible parties
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1 are in fact responsible parties. The standard of
2 proof which the Agency is required to meet is a
3 preponderance of the evidence, a typical standard
4 applied in civil action cases. This standard should
5 be viewed with favor by members of the business
6 community because it represents a significant
7 departure from the strict liability standard applied
8 in CERCLA. Under CERCLA a potentially responsible
9 party becomes a responsible party solely by virtue of
10 the party's status as an owner, operator, generator,
11 or transporter. In Illinois, by contrast, under the
12 proposed rule, the Agency must prove by a
13 preponderance of the evidence that a party caused or
14 contributed to a release; thus, the party must have
15 either owned or operated the facility, have been a
16 transporter, or arranged for the transportation of the
17 waste at the time of the release. This is a
18 significant departure from CERCLA's retroactive
19 liability. However, it raises the difficult question
20 of determining when a release occurred. In some
21 instances, where for example, an unusual substance was
22 discovered, such as coal tar, tracing it to the
23 responsible party and then working backward to
24 determine approximate time of the release will not be
25 a problem. But in most instances, where common
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1 contaminants are discovered, determining the time of
2 release will be extremely difficult. In light of
3 these distinctions, it is untrue to suggest that the
4 standard of proof and the methods of proof which are
5 presented in this rule are not distinct from CERCLA's
6 strict liability scheme.
7 Throughout this whole process, the Agency must go
8 it alone; in other words, it can forget receiving any
9 assistance from other responsible parties. Unlike a
10 PRP involved in a federal Superfund site, this rule
11 provides absolutely no incentive for a PRP, once
12 identified as such, to provide the Agency with
13 assistance in identifying other PRPs. The simple
14 reason stems from the fact that it is not in their
15 self interest to do so, because the rule does not
16 place responsibility for orphan share liability on
17 these parties. The information orders help to offset
18 this lack of assistance and are therefore an absolute
19 prerequisite to insuring that the Agency is able to
20 prove liability in the first instance.
21 Section 741.115 authorizes the Board to, at the
22 Agency's request, require a PRP to provide the Agency
23 with information relevant to the proposed cleanup. An
24 order will not be granted by the Board, however,
25 unless the Agency first provides a reasonable basis
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1 for its need. This is another area of the rule which
2 has been criticized for giving the Agency too much
3 authority. The orders, however, are an essential tool
4 necessary for the Agency to do its job as
5 expeditiously as possible. To suggest that the Agency
6 should simply rely upon traditional tools used as part
7 of the litigation process, such as discovery requests
8 and interrogatories, is like sending the Agency out in
9 a row boat heading upstream with only one oar. It
10 will significantly impede its ability to undertake an
11 already significant task. The suggestion also adds
12 one more layer of bureaucracy and red tape to the
13 Agency's job. This task is made all the more
14 important in light of the premium which the rule
15 places on the Agency's ability to identify as many
16 PRPs as possible. Identifying PRPs is the only
17 mechanism which the Agency has for safeguarding the
18 State and taxpayers against the likelihood of being
19 stuck covering the orphan shares.
20 We strongly support the provision in Section
21 741.210(d) which requires a party, which has been
22 proven by a preponderance of the evidence to be a
23 legally responsible party, to demonstrate its
24 proportionate share of liability. In our view this is
25 exactly the party who should bear this burden. First,
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1 considerations of fairness dictates that the obvious
2 party to bear this burden should be the party which
3 has already been demonstrated to have contributed, in
4 the first instance, to the contamination and which
5 stood to profit from the activities which led to the
6 contamination. In addition, common sense dictates
7 that it is the responsible party and not the Agency
8 which is in the better position to have access to
9 records and information and personnel resources which
10 may help to determine its proportion of the
11 responsibility. And, as a policy matter, it makes
12 sense to require an entity that polluted the
13 environment, while profiting, to be responsible for
14 knowing what kinds and what amounts of pollutants it
15 is emitting. By establishing this provision, the
16 State of Illinois will be sending a strong message to
17 businesses operating within its borders that they must
18 keep accurate and detailed records of the pollutants
19 which they emit, or else face the consequences.
20 Not only will the provision act as a deterrent
21 against bad record keeping practices, but it will also
22 serve the dual purpose of insuring that the health and
23 welfare as well as the environment of Illinois
24 citizens will be sufficiently protected. Requiring
25 the Agency to be responsible in the first instance for
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1 documenting the share of contamination for which a
2 party is responsible will not further any of these
3 desired policy objectives. Instead, it would only
4 encourage irresponsible record keeping practices which
5 would, in turn, jeopardize the health and safety of
6 citizens and community members who live near a
7 contaminated site.
8 The Agency is correct to respond, as it does, that
9 this provision is not a unique provision, but rather
10 it is an accepted principle of tort law jurisprudence
11 which is relevant whenever there are two or more
12 tort-feasors whom it has been demonstrated caused or
13 contributed to a harm. It is only after the Agency
14 has already established liability, that the party
15 which is in the best position to produce the evidence
16 documenting its exact share or proportion is required
17 to do so.
18 Despite the soundness of this burden shifting
19 provision, it remains unclear, and not addressed by
20 the rule, what type of check or assurance there is for
21 the citizens of Illinois that businesses really are
22 held responsible for their fair share of the
23 contamination. In other words, how is it possible to
24 verify the accuracy of a proportionate share claim
25 made by a responsible party? And, who is responsible
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1 for doing so? Presumably, the answer to who is some
2 combination of the Agency and the Board. But it is
3 more unclear how and under what circumstances the
4 Agency would be prompted to undertake such an
5 investigation. Given the limited resources of the
6 Agency already stretched thin by other provisions in
7 this rule, the reality is such that an investigation
8 is simply not likely to occur in most instances.
9 Even if resources were not an issue, it is
10 extremely unclear how to deal with the difficult and
11 complex questions involved in dividing and
12 apportioning responsibility for waste at a site which
13 may contain hundreds of contaminants in several
14 different media. It was recognition of precisely
15 these problems which led legislators to adopt joint
16 and several liability under the federal Superfund
17 program. The larger and more troubling question then
18 becomes, what incentive does a responsible party have
19 to document fully its proportionate share, if there
20 are no harmful repercussions for potential
21 misrepresentations, and indeed no explicit provision
22 for dealing with such a situation?
23 Section 741.210(d)(3) states that any responsible
24 party unable to demonstrate its proportionate share of
25 liability may be held liable for all unapportioned
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1 costs. This section is a critically important
2 provision which serves as the only real incentive for
3 businesses operating in Illinois to be protective of
4 the environment and to maintain responsible and
5 accurate record keeping practices. Industry
6 representatives are absolutely correct to say that the
7 real issue here is which party should bear the risk of
8 the lack of site information.
9 There are several solid and common sense reasons
10 why the answer to that question must be the polluter,
11 the responsible party in the first instance. First,
12 established principles of common-law dictate that the
13 party who has been proven liable must then bear the
14 burden of demonstrating its share of liability and if
15 it cannot it must endure the consequences.
16 Secondly, holding parties who cannot document the
17 proportion of contamination for which they are
18 responsible, potentially responsible for the entire
19 orphan share is imperative as a policy matter because
20 it provides an incentive for all potential polluters
21 in the State of Illinois to maintain accurate
22 records.
23 Third, this provision is protective of human
24 health and the environment because it encourages
25 businesses to adopt more responsible practices by
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1 rewarding those that do with a definite share of
2 liability and those that do not or cannot with a
3 potentially greater share. Without this provision
4 there is absolutely no incentive for liable parties to
5 produce any information and indeed there is reason for
6 concern that a party may escape liability entirely,
7 thus leaving Illinois taxpayers to cover these costs.
8 The orphan share provision, however, remains
9 problematic because it raises more questions than
10 answers. For instance, this provision of the rule
11 fails to address the very significant issue of what
12 party is ultimately responsible for cleaning up
13 unapportioned orphan shares. The inevitable answer to
14 that question is the State. Therefore, in a situation
15 where two PRPs have been identified, and they have
16 each successfully demonstrated they are collectively
17 responsible for 60 percent of the contamination at a
18 site, the Agency has two options regarding how to deal
19 with the 40 percent unallocated orphan share. It may
20 (1) do nothing and ignore the issue of the orphan
21 share; or it may (2) try and cover the costs of
22 cleaning up the orphan share. Under either scenario
23 citizens of Illinois are the ones paying the price,
24 while industry continues to profit.
25 Industry representatives who propose that the
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1 orphan shares can be simply ignored, are not being
2 realistic about the responsibilities of the Agency in
3 the face of a threat to human health. Under the do
4 nothing alternative, the health and welfare of as well
5 as the environment enjoyed by the Illinois citizens
6 will certainly be jeopardized by waste sites that may
7 remain unremediated for years while the Agency waits
8 for the necessary resources to be able to clean up the
9 site. Meanwhile, the goal of achieving expedited
10 cleanups of abandoned industrial sites may be
11 defeated.
12 Under the second approach Illinois taxpayers will
13 be forced to cover the costs of remediation at sites
14 if the Agency deems it to be a priority due to the
15 threat which it presents to human health and the
16 environment. It is true that in some instances the
17 State may recover the costs through litigation, but it
18 is also true that in the majority of situations sites
19 will simply languish because there will not possibly
20 be sufficient funds to cover every orphan share at
21 every site in the State. The Agency is ultimately the
22 party left to shoulder all the costs, which will in
23 turn come from taxpayer dollars. Thus, even though a
24 solvent party, who has been proven to have some
25 connection to the site has been identified, this party
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1 is totally off the hook for any of the orphan share
2 costs. And what is even more frustrating is that this
3 party, unlike a party involved in a federal Superfund
4 cleanup, has absolutely no incentive and is not
5 required to assist the Agency in identifying any other
6 potentially responsible parties because it will not
7 suffer any negative consequences for failing to do
8 so.
9 So the question then becomes with what funds will
10 even a portion of these orphan shares be cleaned up?
11 The answer, according to the Agency, appears to be
12 some version of "robbing Peter to pay Paul." Several
13 sources of funding which have been identified by the
14 Agency as providing the source for orphan share
15 cleanups are problematic because they represent costs
16 recovered by the Agency for dollars already expended.
17 For example, the largest portion of the Hazardous
18 Waste Fund comes from cost recovery litigation fees.
19 This means that costs expended by the Agency to pursue
20 responsible parties in the past will not actually be
21 used to cover those costs, but will instead be relied
22 upon to fund further investigative and remedial work,
23 resulting in a net loss of monies to the State of
24 Illinois. Likewise, another source of earmarked
25 monies will come from the fees levied against a
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1 responsible party when the Agency issues a no further
2 remediation letter. Again, this sum of monies
3 represent monies which the Agency has already
4 outlayed. Its inclusion in the Hazardous Waste Fund
5 effectively deprives the Agency of reimbursement for
6 expenditures already made. Finally, as a policy
7 matter, it is worrisome that funds from the Solid
8 Waste Fund, accumulated from tipping fees levied for
9 solid waste disposal, are being used to clean up
10 hazardous waste sites. These funds were intended to
11 be used to assist the State with its recycling program
12 and not to pay for the costs of cleaning up hazardous
13 waste sites in which the State was not even
14 necessarily a party.
15 Rather than having the State of Illinois foot the
16 bill for the costs of remediating the orphan share, we
17 propose the rule be amended to require the orphan
18 share be divided proportionally between all identified
19 responsible parties. It is more equitable for the
20 costs of remediating the site to be divided amongst
21 the responsible parties identified at the site than
22 amongst Illinois taxpayers. However, in keeping with
23 the proportionate share liability scheme the costs
24 would be apportioned based on the parties' overall
25 contribution to the site. So that parties who are de
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1 minimis parties would only be responsible for a de
2 minimis portion of the share. For example, at a site
3 where three responsible parties demonstrated that each
4 was responsible for a 30 percent share, the remaining
5 10 percent orphan share would then be divided evenly,
6 with each party assuming responsibility for an equal
7 share of that ten percent, which would amount to an
8 extra three and a third percent of liability. If, on
9 the other hand, a site involved four responsible
10 parties, two of whom could each demonstrate a 20
11 percent share liability and two who claimed to be
12 responsible for 20 percent, but could not sufficiently
13 document their respective shares, then the 20 percent
14 orphan share would be divided, in its entirety,
15 between only those two responsible parties that could
16 not sufficiently document their share. Neither of
17 these provisions violates the two basic principles of
18 Section 58.9 of the legislation which establishes that
19 liability must be predicated on the cause or
20 contribution and that it should be allocated amongst
21 the parties proportionally.
22 This approach will save taxpayers untold millions
23 of dollars in cleanup costs and it places the
24 responsibility more squarely on those parties who have
25 been proven to have contributed at least some share of
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1 the contamination. By allocating the orphan share in
2 this manner, citizens in the State of Illinois would
3 be able to breathe easier knowing that sites which
4 pose a potential risk to human health and the
5 environment will be remediated, and remediated much
6 more expeditiously than under the proposed system
7 because responsible parties will now have an incentive
8 to assist the Agency with identifying other PRPs.
9 In conclusion, if all these unanswered questions
10 are left unanswered, the consequences will be an
11 unworkable and dysfunctional rule, the intended policy
12 goals of which will not be achieved. Rather than
13 definite and sure liability and quick remediation, the
14 opposite result will accrue: cleanup will languish as
15 sites compete for the scare and finite resource
16 dollars of the Agency. Such a result is not good for
17 any of the parties which seek to achieve the laudable
18 goal of environmental remediation. We urge the Board
19 to consider our proposal and its implications for
20 helping to further the worthwhile policy objectives
21 embodied in this rule.
22 I now move to have this testimony entered as an
23 exhibit to this hearing.
24 HEARING OFFICER ERVIN: Any objections to the
25 admittance of this document?
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1 Seeing none, we will enter the testimony of Laurel
2 O'Sullivan into the record as Exhibit Number 13.
3 (Whereupon said document was entered into evidence
4 as Hearing Exhibit 13 as of this date.)
5 HEARING OFFICER ERVIN: Are there any questions
6 for Ms. O'Sullivan? Mr. Rieser?
7 MR. RIESER: Ms. O'Sullivan, with respect to your
8 proposal on page 13 and 14, how do you square that
9 proposal with Section 58.9 of the Act regarding
10 Proportionate Share Liability?
11 MS. O'SULLIVAN: Well, I would square it with that
12 section of the legislation on the fact that it is in
13 keeping with Proportionate Share Liability. Which
14 example under the proposal are you referring to?
15 MR. RIESER: Well, I am referring to the section
16 of the legislation that states each parties are only
17 supposed to be responsible for their proportionate
18 share.
19 MS. O'SULLIVAN: No, I am asking -- my question to
20 you is which of -- are you referring to both scenarios
21 that I presented as hypotheticals or are you referring
22 to just the latter? Or I am sorry, the prior.
23 MR. RIESER: I would say both.
24 MS. O'SULLIVAN: Okay. Well, with respect to the
25 latter, the issue becomes one of I believe the
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1 legislation reads or discusses -- uses the words may
2 be attributed. Now, in that situation you have the
3 distinct problem that that has not been clearly
4 defined. In other words, you have the inclusion of
5 two parties that have not been able to document how
6 much of the share has been attributed to them. So I
7 would say that it doesn't contradict the legislation.
8 With respect to the prior example, where you have
9 a ten percent share being divided amongst the three
10 orphan shares, I would say that this is -- that it
11 does not contradict the legislation in that it is a
12 policy decision that has to be made regarding who
13 should bear the burden of the cost of the ten percent
14 cleanup.
15 A lot of the hypotheticals that were thrown around
16 earlier this morning and this afternoon were based on
17 the presumption that the facts will work out neatly
18 and that there is not going to be any messiness
19 involved which, you know, is not, I don't think, the
20 reality of most situations. So in this situation I am
21 saying it is compromised with benefits that outweigh
22 the cost, from our perspective.
23 MR. RIESER: In preparing for your testimony, are
24 you familiar with the -- the Public Act number escapes
25 me, but it is the Public Act that resulted from the
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1 passage of House Bill 544 and Senate Bill 46 which
2 preceded the current Section Title 17?
3 MS. O'SULLIVAN: No, I am not familiar.
4 MR. RIESER: So you are not familiar that that
5 legislation set aside on the Site Remediation Advisory
6 Committee three seats for environmental
7 organizations?
8 MS. O'SULLIVAN: I read that -- I did read the
9 language regarding the Site Remediation Advisory
10 Committee, and I believe it says three other persons.
11 It didn't specify who, and I don't know that there
12 were -- I know the agencies were actively involved,
13 obviously.
14 MR. RIESER: The current legislation says that,
15 but the legislation which preceded that did identify
16 three specific environmental organizations to be
17 members of SRAC.
18 MS. O'SULLIVAN: And what happened to that?
19 MR. RIESER: Well, the question is whether you
20 know whether any representatives of those
21 organizations ever attended one of our meetings?
22 MS. O'SULLIVAN: Not that I am aware of. But are
23 you also saying that that legislation was then changed
24 and those three parties were not specifically --
25 MR. RIESER: Well, obviously, the legislation was
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1 changed, and I don't know that anyone was excluded,
2 but I don't know that anyone ever came in the first
3 instance.
4 MS. O'SULLIVAN: I am not aware of that.
5 BOARD MEMBER GIRARD: Could I ask a question for
6 the record?
7 For the record, Mr. Rieser, do you remember which
8 three groups those were?
9 MR. RIESER: We were trying to find the original
10 copy of the legislation, and I don't -- I don't have
11 it handy. But, certainly, the Citizens For a Better
12 Environment was involved in the drafting, the
13 negotiating of the legislation itself. There were --
14 I believe they were identified as one of the groups.
15 MR. GARY KING: The only other -- there was one,
16 and I wouldn't call it a citizens group, but the City
17 of Chicago was included as one of those other three
18 members. As I recall that was kind of the Agency's
19 selection process, and the City of Chicago did
20 participate. The other two slots I don't know that
21 they were formally filled, because the Petroleum
22 Council and Petroleum Marketers Association requested
23 to be selected to fill those other two slots, and we
24 didn't think that was appropriate.
25 MR. RIESER: They were not appointed but,
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1 certainly, originally there were three spots
2 specifically listed for three specific environmental
3 organizations.
4 MS. ROSEN: Just for the matter of the record,
5 there were no specific entities named. I believe the
6 legislation indicated that there should be a
7 representative of a community organization, and a
8 representative of a public interest organization. It
9 was generic terms such as that that were there. There
10 was not specific reference to Citizens for a Better
11 Environment, although they did participate in our
12 meetings on legislation and initial SRAC meetings.
13 MR. RIESER: I know that they were invited and
14 notified of the initial SRAC meetings, and that we
15 didn't have any attendance.
16 CHAIRMAN MANNING: In any event, this was SRAC as
17 was constituted prior to becoming law?
18 MS. ROSEN: No.
19 MS. O'SULLIVAN: No.
20 MR. RIESER: That was the original law.
21 MS. ROSEN: That was the original law.
22 CHAIRMAN MANNING: Okay.
23 MS. O'SULLIVAN: Do you have a copy of that,
24 because the copy that I read was that three other
25 members --
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1 MS. ROSEN: Well, that's what is in here now.
2 MR. RIESER: That is exactly what the law says
3 now.
4 MR. ROSEN: If anyone has a copy of the --
5 MR. EASTEP: I have a copy of the old one.
6 MS. O'SULLIVAN: When was the old act overridden?
7 Because that seems to be the real issue.
8 MR. HOWE: The new act even says --
9 MS. ROSEN: Well, it is three spots --
10 MR. HOWE: It says there are an additional three
11 spots that were never filled. But the point being
12 that there were offers and invitations extended to
13 public interest representatives who never showed up.
14 MR. RIESER: What the Act says, if I can read it
15 for the record, in addition, the Agency shall select
16 one member each from an environmental advocacy group,
17 a community development corporation, and a public
18 interest community organization.
19 So as originally constituted, SRAC was intended to
20 have these people. My recollection is that people
21 were invited. My recollection is that they didn't
22 attend. And that was probably why there was not a
23 representation.
24 MS. O'SULLIVAN: Well, I did consult and check
25 around with other environmental organizations, and
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1 they looked over the testimony and I apologize if I
2 somehow misrepresented that. But that was not at all
3 represented to me.
4 HEARING OFFICER ERVIN: Are there any further
5 questions for Ms. O'Sullivan?
6 BOARD MEMBER HENNESSEY: I have a quick question.
7 On your proposal, let me just take a different -- give
8 you a different hypothetical to make sure I understand
9 how this works.
10 MS. O'SULLIVAN: Sure.
11 BOARD MEMBER HENNESSEY: If there are two parties
12 at a site and they each demonstrate that they are
13 responsible for five percent of the waste then that
14 leaves a 90 percent orphan share. Under your
15 proposal, as I understand it, that 90 percent would be
16 split evenly between the two parties?
17 MS. O'SULLIVAN: No. Actually, it -- and that is
18 a very good question, and one that I had wanted to
19 address. I think that in that instance, where there
20 is an extreme disparity between the part that they
21 have been demonstrated to be responsible for, in other
22 words, five percent and you have 90 percent, I think
23 some sort of caps or range could be established
24 whereby if the orphan share amounted to, you know, I
25 don't know what would be inequitable, 50 percent more
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1 than what their demonstrated share is, you could
2 perhaps cap their responsibility for the orphan share
3 liability at a certain percentage.
4 BOARD MEMBER HENNESSEY: Okay. I guess I would
5 recommend that you make that -- through a public
6 comment indicate that. The more you can provide us
7 with specific language the easier it is for us to get
8 a handle on it.
9 MS. O'SULLIVAN: Okay.
10 BOARD MEMBER HENNESSEY: One other comment I would
11 just make for the Agency. At some point either
12 through your testimony or in a public comment I would
13 like your response to BPI's discussion of inadequate
14 funding sources. They make some discussions there
15 about where the money is going to come from. I would
16 just like to get your response on that.
17 MR. GARY KING: That could be a fairly broad
18 exercise. It depends on what you are really looking
19 for.
20 BOARD MEMBER HENNESSEY: Well, I guess I am
21 wondering -- I mean, there is statements in here that
22 some of these monies have already been earmarked or
23 have already been spent. Do you agree that that is
24 accurate? Those kinds of allegations, I am interested
25 in hearing your response on.
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1 MR. GARY KING: What I want to make sure of is one
2 of the issues that, in fact, was a little bit alluded
3 to this morning talked about at the time the
4 legislation was adopted, the Agency identified certain
5 backlogs of cleanups. And I assume we are not talking
6 about that. I mean, I don't want to revisit some
7 issue that has been decided legislatively.
8 BOARD MEMBER HENNESSEY: As I understand Ms.
9 O'Sullivan's testimony, and she can correct me if I am
10 wrong, she is talking about the future, on a going
11 forward basis, how orphan shares are to be funded.
12 MR. GARY KING: Okay.
13 MS. O'SULLIVAN: That's correct.
14 HEARING OFFICER ERVIN: I have a question for
15 you. On page seven of your testimony you are talking
16 being about information orders, and you said the
17 traditional tools for discovery are basically
18 inadequate for the Agency to obtain enough information
19 to go forward. Why do you believe that the
20 traditional tools are inadequate?
21 MS. O'SULLIVAN: Well, inadequate -- I would not
22 characterize it as inadequate. I would say that it is
23 adding another -- it is just adding one more hurdle
24 and another layer of procedure that the Agency has to
25 go through. I mean, to me, the Agency is going to
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1 appear before the Board and provide a reasonable basis
2 for the Board. It is not as if, you know, the Agency
3 is going to be going off on one of its own, you know,
4 wild goose chases or with this authority that has not
5 been already sort of provided a check against it. So
6 I guess I would not say that it is inadequate. I
7 don't think I used --
8 HEARING OFFICER ERVIN: That is my terminology. I
9 am sorry.
10 MS. O'SULLIVAN: I wouldn't characterize it as
11 inadequate. I would just say that in keeping with my
12 testimony that I think it just adds an unnecessary
13 hurdle and another burden to the Agency's -- you know,
14 identifying PRPs could be potentially a very lengthy
15 process. My comment is simply that I think these seem
16 like a reasonable tool for them to have at their
17 disposal to aid them in trying to do that, which I
18 think is in the interest of the State and the
19 citizens.
20 HEARING OFFICER ERVIN: Are there any other
21 questions?
22 MR. HOWE: Could we have just a moment, please?
23 HEARING OFFICER ERVIN: Sure. Ms. Tipsord, do you
24 have a question?
25 MS. TIPSORD: Yes. Marie Tipsord with the
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1 Illinois Pollution Control Board. I would like to
2 kind of follow-up also on the information orders
3 aspect of your testimony. Your testimony seems to say
4 that you think this is an acceptable practice based on
5 common-law principles and jurisprudence, tort law
6 jurisprudence.
7 MS. O'SULLIVAN: Wait. I am sorry. The
8 information orders are based on common-law
9 jurisprudence?
10 MS. TIPSORD: Oh, I am sorry. I skipped over. I
11 am looking at something else. My question is what do
12 you believe is the Board's authority or the Agency's
13 authority for using these information orders or
14 requesting these information orders?
15 MS. O'SULLIVAN: I know that comments were made
16 that it was not provided for specifically in the
17 legislation. I don't know what you are getting at
18 there with your observation, but it seems to me as
19 though it is just, you know, a reasonable tool. I
20 don't know if I answered it.
21 HEARING OFFICER ERVIN: Mr. Howe?
22 MR. HOWE: Just a couple of questions, if you
23 will. Referring to page ten of your testimony,
24 towards the bottom, there is the statement that says,
25 "established principles of common-law dictate that
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1 the party who has been proven liable must then bear
2 the burden of demonstrating its share of liability and
3 if it cannot, it must endure the consequences."
4 What established principles of common-law are
5 those?
6 MS. O'SULLIVAN: Are you specifically -- I guess I
7 would amend that sentence to perhaps stop after the
8 liability. Are you taking issue with, "if it cannot
9 it must endure the consequences?"
10 MR. HOWE: No, actually, I am taking issue with
11 the entire --
12 MS. O'SULLIVAN: I believe --
13 MR. HOWE: It says, "that the party who has been
14 proven liable must then bear the burden of
15 demonstrating its share of liability."
16 MS. O'SULLIVAN: I believe that perhaps what is
17 missing from that sentence is if there has been one or
18 more parties identified as liable then the burden
19 shifts. I believe it is just straight out of the tort
20 treaties that if you have demonstrated liability and
21 you have two or more parties who have been
22 demonstrated to be liable, then the burden is on them
23 to demonstrate which party is responsible.
24 MR. HOWE: I believe there are other elements that
25 need to be --
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1 HEARING OFFICER ERVIN: Can you speak up a little
2 bit? When you turn your head we can't hear you.
3 MS. O'SULLIVAN: I am sorry. Would you like me to
4 repeat my answer?
5 HEARING OFFICER ERVIN: That's okay.
6 MR. HOWE: I believe that there are other elements
7 that have to be established for that to be put into
8 place, but we will go on.
9 MR. HOWE: There is a statement on page eight in
10 the middle, "common sense dictates that it is the
11 responsible party and not the Agency which is in the
12 better position to have access to records and
13 information which may help determine its proportion of
14 the responsibility."
15 I will agree that a responsible party or a company
16 will have records and information to the extent that
17 it might dealing with its own activities. But with
18 regard to the activities of others or the denominator
19 that would show the proportionate part of that
20 liability, are you trying to say that a company should
21 also have information with regard to the total amount
22 of waste contributed at a site or what other parties
23 have done?
24 MS. O'SULLIVAN: No, I am not trying to make that
25 a -- it was solely intended to be related to their
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1 share.
2 MR. HOWE: Well, if it involves share, that
3 indicates that there has to be some knowledge of the
4 total amount contributed. Would you agree that it
5 would only be an amount, rather than a share?
6 MS. O'SULLIVAN: Yes, I would agree to that.
7 MR. HOWE: And on page eight at the end of that
8 paragraph, concerning accurate and detailed records,
9 are you aware of the current record keeping
10 requirements of permitted disposal facilities in
11 Illinois?
12 MS. O'SULLIVAN: I am not intimately familiar with
13 them, no.
14 MR. HOWE: In the event that those facilities are
15 required to keep those kinds of records, do you
16 believe that would be sufficient?
17 MS. O'SULLIVAN: If they are required under
18 current and existing law, I am not going to quibble
19 with that law, but I still believe that it is -- you
20 are making, through this provision, that you are going
21 to provide that incentive. It is another incentive.
22 I don't know that I would say that I think that law
23 alone is sufficient.
24 MR. HOWE: Okay. Thank you.
25 HEARING OFFICER ERVIN: Are there any further
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1 questions? Mr. King?
2 MR. GARY KING: Ms. O'Sullivan, in response to one
3 of Mr. Rieser's questions I think you mentioned
4 something about that other public interest groups had
5 looked at your testimony in this proposed form; is
6 that correct?
7 MS. O'SULLIVAN: Yes.
8 MR. GARY KING: Can you share what other groups
9 were involved?
10 MS. O'SULLIVAN: I am not sure if I can do that.
11 I think in one instance there may be -- I think that
12 there is some --
13 THE REPORTER: I am sorry. Could you please
14 repeat?
15 MS. O'SULLIVAN: I think that in some instances
16 there are some privacy issues at this point.
17 MR. GARY KING: Okay. That's fine. Thank you.
18 HEARING OFFICER ERVIN: Ms. Rosen?
19 MS. ROSEN: Just for my own information, I would
20 like to know more about what the Business and
21 Professional People for the Public Interest is.
22 MS. O'SULLIVAN: Sure. As I said, we are a
23 nonprofit law and policy center in Chicago. Amongst
24 other --
25 HEARING OFFICER ERVIN: Could you speak into the
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1 microphone, please.
2 MS. O'SULLIVAN: Yes. I am sorry. Amongst other
3 issues that BPI provides advocacy on are, in addition
4 to the environment, we are involved in school reform
5 and housing and civil rights activities. We are not a
6 membership organization, but we do have active
7 involvement, and our board consists of many business
8 and professional people from the Chicago area.
9 MS. ROSEN: How are you guys funded?
10 MS. O'SULLIVAN: We are funded through private
11 donations and grants.
12 MS. ROSEN: Do you -- you referenced activities.
13 Do you operate like actively involved in legislative
14 issues, regulatory issues, or just --
15 MS. O'SULLIVAN: A mix. We are involved in some
16 litigation, some regulatory issues, some just policy
17 advocacy issues. It is a mixture.
18 MS. ROSEN: Thank you.
19 HEARING OFFICER ERVIN: Any further questions for
20 Ms. O'Sullivan?
21 Seeing none, I would like to thank you for
22 participating today.
23 MS. O'SULLIVAN: Thank you.
24 HEARING OFFICER ERVIN: Next, we will turn it back
25 over to the Agency.
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1 Mr. Wight, do you have any introductory comments
2 you would like to make?
3 MR. WIGHT: No introductory comments, as such.
4 Once again, I would like to introduce the panel of
5 witnesses today. They are the same witnesses that
6 appeared in the previous hearings on behalf of the
7 Agency.
8 To my immediate right is Gary King, who is the
9 Manager of the Division of Remediation Management in
10 the Bureau of Land.
11 To my immediate left is Bill Ingersoll, who is
12 Associate Counsel for the Agency, Division of Legal,
13 and supervises the Enforcement Unit, Division of Legal
14 Counsel.
15 To Bill's left is John Sherrill, who is supervisor
16 of the unit in the Remedial Projects Management
17 Section within the Bureau of Land.
18 Behind me and slightly to my left is Larry Eastep,
19 who is the Manager of the Remedial Projects Management
20 Section within the Bureau of Land.
21 Today we would like to continue with our
22 presentation in support of our proposal. We have a
23 couple of items of unfinished business to take care
24 of. The first of those is the Agency has, as
25 promised, proposed revisions to our initial proposal,
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1 and so we have put those together in the form of an
2 errata sheet, which we will be introducing as an
3 exhibit. Secondly, we have some responses from the
4 last hearing which were deferred until today.
5 We would like to go first with the errata sheet,
6 because we think some of the language changes will
7 answer some of the questions that were carried over
8 from the previous hearing, and so we will be able to
9 avoid taking additional time answering those.
10 HEARING OFFICER ERVIN: Why don't we go ahead and
11 swear in -- they have been sworn in on previous
12 hearings, but for the record we will just go ahead and
13 swear them in again.
14 MR. WIGHT: Okay.
15 HEARING OFFICER ERVIN: Will the court reporter
16 swear them in.
17 (Whereupon, Gary King, John Sherrill, Larry Eastep
18 and William Ingersoll were sworn by the Notary
19 Public.)
20 MR. WIGHT: I have a document here which has not
21 been marked as an exhibit for identification. I
22 believe it will be Exhibit 14.
23 HEARING OFFICER ERVIN: That's correct.
24 MR. WIGHT: Okay. Mr. King, I am handing you a
25 document that has been marked Agency's Errata Sheet
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1 Number 1. Can you please take a look at the
2 document?
3 MR. GARY KING: Yes.
4 MR. WIGHT: Would you describe the document,
5 please?
6 MR. GARY KING: It is a document simply entitled,
7 Agency's Errata Sheet Number 1, and it lists various
8 sections and proposed changes to our proposal.
9 MR. WIGHT: Okay. I have to admit error. I have
10 a mistake in the caption here. It states,
11 Proportionate Share Liability, 35 Illinois
12 Administrative Code 740. That, of course, should be
13 741.
14 Also, we have made a commitment to serve everyone
15 on the service list with this document prior to the
16 time of the hearing scheduled for June the 10th, so in
17 addition to those of you receiving it today it is on
18 the service list and you will receive it and have an
19 opportunity to comment in that hearing.
20 At this time I would move to admit the Agency's
21 Errata Sheet Number 1 as an exhibit.
22 HEARING OFFICER ERVIN: Are there any objections
23 to the Agency errata sheet? Mr. Rieser is out.
24 We will admit the Agency's Errata Sheet Number 1
25 as Exhibit Number 14.
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1 MR. WIGHT: Thank you.
2 (Whereupon said document was entered into evidence
3 as Hearing Exhibit 14 as of this date.)
4 MR. WIGHT: What we would like to do with the
5 errata sheet is just go through the items one by one
6 and explain the changes to our proposal that we are
7 proposing in this document. Gary King will start, and
8 Bill Ingersoll will discuss the changes in the
9 procedures that we have added for the information
10 orders, and we will go through them as they appear in
11 the documents.
12 MR. GARY KING: Beginning on page one, we have
13 proposed changes to Section 741.105 dealing with
14 applicability. And what we have done with those
15 changes is really moved to an approach that I think is
16 entirely consistent with where SRAC was recommending
17 that this provision go. We had changed some things a
18 little bit. We don't have some of the introductory
19 language they add to their provision. After looking
20 at that, it is in depth and it was not necessary.
21 We tried to resolve an issue that the hearing
22 officer brought up this morning about does this apply
23 to B and C. We have -- we think it should apply to B
24 and C, Subparts B and C. So we have included this
25 exemption provision under 741.105(c). We just lumped
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1 everything together so that we wouldn't have those
2 reference problems.
3 One of the things that -- the way the SRAC's
4 proposal -- if you look here, we have got six contacts
5 in which this would not be -- this part would not be
6 applicable. Under the SRAC proposal item number six
7 would be limited to items four and five. So, in
8 essence, you could only -- you would not be able to
9 use this, this procedure, under anytime for two or
10 three. We thought that was -- we thought that was too
11 narrow, and there might be situations where a site,
12 even if it was on the NPL list, if there was a federal
13 approval given to use this type of procedure on, you
14 know, that that should be -- that that possibility
15 should be there. So we have included that.
16 As I said initially, in general I think that this
17 meets the concerns that SRAC had raised with regards
18 to what we had proposed earlier. As I said, it is
19 somewhat different than theirs, but I think it is
20 conceptually consistent.
21 The next changes on the definitions, 741.110, we
22 have included a definition of unallocated share. That
23 was a question that we got at the first hearing. And
24 we are kind of trying to distinguish unallocated and
25 orphan. As we said back then, we did not think that
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1 orphan share should be a defined term. We agreed that
2 unallocated share probably should be. And so we have
3 put together a definition of that here.
4 Then the next section is on information orders.
5 MR. INGERSOLL: In response to some of the
6 questions about information orders and whether or not
7 we needed procedures, we tried to put together some.
8 In the Subsection A we made it clear that the Agency
9 would be filing a petition that would start this
10 process.
11 Down to Subsection B, we included kind of what we
12 would expect the process -- how we would expect the
13 process to take place. The notice would include
14 information that we would expect the respondent to
15 respond within 14 days. We have a list of the
16 elements or the components of the petition.
17 Specifically on C we would like to point out that we
18 felt it necessary to put in a time frame so that the
19 Board would not be acting in a vacuum and would exceed
20 our expectations, that would partially respond to our
21 need for the information, and how fast we would need
22 it, and how long it might take to put it together.
23 But we did put a 30-day minimum on that.
24 Subsection (2)(d) shows that we would expect that
25 the petition would be supported by affidavits and
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1 briefing would be available. We provided for a 14-day
2 response time for the respondent. And they would also
3 support, as needed, their response by affidavits, and
4 briefing is an option. And then the Agency would have
5 seven days for a response. We would expect that
6 service and filing be done consistent with other
7 service and filing requirements in the Board's
8 procedural rules. However, to make sure that personal
9 jurisdiction was obtained, the initial petition must
10 be served personally or by registered or certified
11 mail or by messenger service so that the Board can be
12 assured that that service was, in fact, effected.
13 In Subsection C, I think our point is that the
14 petition will be evaluated on the pleadings, not on
15 any hearings, and that the Board will issue the order
16 and specify the time for compliance.
17 Subsection D is similar to the compliance method
18 that we had on our prior version. Subsection E points
19 out what we would expect to occur if we believe that
20 the respondent has failed to comply. We feel that in
21 the first instance we could pursue injunctive relief
22 under Section 42, but we split this apart with
23 penalties that were available under Section 42. And
24 we took the fails without sufficient cause language, I
25 believe, 22.2(k), in the provisions for failure to
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1 adequately respond to a 4(q) notice, such that we
2 would have to demonstrate that the respondent failed
3 without sufficient cause to respond in order to obtain
4 monetary penalties. And Subsection F was I think in
5 there as well. I would think that if we asked a court
6 or the Board for monetary penalties that the
7 respondent would be expected to show that they did, in
8 fact, have sufficient cause for failing to comply.
9 MR. WIGHT: We can move ahead and explain the rest
10 of this rather than take questions.
11 HEARING OFFICER ERVIN: Please.
12 MR. GARY KING: Just a minor change on Section
13 741.120(d). It is just a typographical change.
14 741.210(d)(3) is really kind of the perhaps the most
15 important. It certainly is a large part of what we
16 discussed the last -- at these three hearings. We
17 have totally rewritten that provision. However, we
18 have not rewritten the intent there. It is still --
19 the testimony that we use to support the first draft
20 is the same testimony that goes to support this new
21 provision. We are not intending a generic change in
22 position or intent by this language change. We did,
23 however, want to redraft it to clarify some of the
24 issues that came up relative to the way that (d)(3)
25 was phrased.
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1 First of all, we put it in an active voice as
2 opposed to a passive voice so it is very clear. It is
3 explicitly clear that it is a Board determination. We
4 made it real clear that it is a Board discretionary
5 determination, that it is a Board discretionary
6 determination based upon the facts and circumstances
7 before it.
8 There was an inference in the previous draft of
9 (d)(3) that the Board -- if there was an inability of
10 the respondent to prove its degree of proportionate
11 share that the Board -- that the result would be to
12 jump to the extreme, jump to an extreme position. We
13 wanted to make it clear here that the Board's
14 authority was allocating any or all of the unallocated
15 shares. So that there is a complete range of the
16 Board's discretion on those things, rather than
17 emphasize one end of the spectrum as opposed to the
18 other. So we rewrote it for purposes of
19 clarification. It still presents the same generic
20 issues that have been discussed in the previous
21 hearings.
22 Relative to Subpart C, there were questions about
23 it that were general in nature that I think we will
24 respond to later on. Then there were questions that
25 were very specific as to potential language changes.
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1 What we have done here is responded to those specific
2 questions relative to language changes, and have made
3 those in the way that we thought would be the
4 appropriate way to make those. That is not making a
5 comment relative to the general issues which we will
6 discuss later on. That would be true for each of the
7 changes on 305(d), 315(a), 320(b)(3) and 325(b).
8 MR. WIGHT: If you prefer, we can take questions
9 on this now or we can continue. Certainly, I know
10 people are just seeing this for the first time and may
11 have some initial questions and may have some
12 follow-up questions for the fourth hearing after they
13 have had a chance to take the document and kind of
14 digest what we have proposed here.
15 HEARING OFFICER ERVIN: Are there any questions
16 right now that people have?
17 I have one that -- yes, Mr. Rieser.
18 MR. RIESER: With respect to the information
19 order, will it be part of the Agency's petition to
20 identify what documents are to be produced?
21 MR. INGERSOLL: Well, it might be. I think we
22 would more likely be describing the nature of the
23 information that we want to see.
24 MR. RIESER: At what point would a respondent see
25 the extent and be able to comment on the extent of the
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1 information that they are being asked to produce?
2 MR. INGERSOLL: In the response to the petition?
3 MR. RIESER: So that information would be in the
4 petition?
5 MR. INGERSOLL: I guess I am not following your
6 question.
7 MR. RIESER: The question is whether -- I think we
8 are talking about the same thing, but the question is
9 will the Agency identify in their petition exactly
10 what documents or types of documents the respondent is
11 to produce so that the respondent, in its response,
12 can comment that the extent is too broad given the
13 subject matter or the issues being discussed?
14 MR. INGERSOLL: Well, I would hope to be as
15 specific as I can. I can't guarantee that we will
16 know exactly which documents you may have or don't
17 have. If we ask for a type of information, you may,
18 in your response, point out that you don't have what
19 we are asking for. You may have it in document form
20 or some other form.
21 MR. RIESER: Would the respondent be able to
22 withhold documents on the basis of trade secret or
23 legal privileges?
24 MR. INGERSOLL: On trade secrets, no. Privileges,
25 yes.
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1 MR. RIESER: So trade secret protections of the
2 Act wouldn't apply to documents you requested through
3 this?
4 MR. INGERSOLL: Trade secret protection does.
5 That doesn't mean that you can withhold it from the
6 Agency.
7 MR. RIESER: Okay. I understand.
8 MR. INGERSOLL: You can submit it marked --
9 MR. RIESER: Right. I understand.
10 MR. RIESER: Would a respondent be able to get
11 more time to respond to the request from the Board?
12 MR. INGERSOLL: You mean the response date from
13 the order or the response date from your 14 days?
14 MR. RIESER: You have 14 days. Can that be
15 extended?
16 MR. INGERSOLL: I would assume the Board would
17 have discretion pursuant to your motion to extend your
18 time. I also expect that we wouldn't like it much.
19 MR. RIESER: I don't have anything further.
20 HEARING OFFICER ERVIN: You don't have any further
21 questions?
22 MR. RIESER: No. Thank you.
23 HEARING OFFICER ERVIN: I have a quick question
24 for you. Under your new Section 741.305(d), basically
25 the provision says if you have a Subpart C action
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1 pending and a Subpart B action is filed the Board may
2 stay the Subpart C action. Why does a Subpart B
3 action trump the Subpart C action? Can we stay
4 either, or is it just we can only stay the Subpart C?
5 (Mr. Wight and Mr. King confer briefly.)
6 MR. GARY KING: The reason we did it this way, the
7 way we have it phrased here under D is to maintain
8 organizational consistency with the rest of the
9 proposal. If you look in 741.105(b) it provides that
10 Subpart B is applicable when -- Subpart C is
11 applicable when no complaint has been filed by the
12 State. It was our belief that because of the fact
13 that a Subpart B proceeding is more often going to be
14 addressing complete remediation of a site that that
15 should be the primary focus. We didn't want to have a
16 Subpart C proceeding end up delaying efforts to get a
17 site cleaned up under Subpart B.
18 HEARING OFFICER ERVIN: Are there any additional
19 questions at this time on the errata sheet?
20 I am sure we will probably have additional
21 questions for you on the fourth hearing after we have
22 digested this a bit more. Would you like to continue
23 on with your testimony?
24 MR. WIGHT: Yes. We have several responses from
25 the last hearing which were deferred until today. I
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1 will do as I did the last time and try to paraphrase
2 the question or comment to which we are responding and
3 describe where it can be found in the transcript, and
4 then one of the witnesses will reply.
5 The first question for which we have a response,
6 of the 85 sites receiving 4(q) notices, at how many
7 was recovered and all the costs achieved. This
8 question was found in the transcript of the second
9 hearing at approximately page 85. John Sherrill has a
10 response for that.
11 MR. SHERRILL: At seven of the 85 sites receiving
12 4(q)s, cost recovery was achieved in, like I said,
13 seven of those. To kind of further elaborate on that,
14 this is kind of a progression here. At 61 of these 85
15 sites, because then the question becomes, well, what's
16 the balance at some of these sites, the outstanding
17 monies due. At 61 of the 85 sites, the balance is
18 greater than $5,000.00. At 36 of the 85 sites, just
19 to kind of give you a range, the balance is greater
20 than $50,000.00, and at 28 of the 85 sites, the
21 balance is greater than $100,000.00.
22 BOARD MEMBER McFAWN: That's the outstanding
23 balance?
24 MR. SHERRILL: Yes, monies that the Agency spent
25 and that we have not recovered all of the monies.
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1 HEARING OFFICER ERVIN: Is there a follow-up
2 question to this answer?
3 BOARD MEMBER HENNESSEY: I take it for those 36
4 sites, the recovery amount outstanding is between 50
5 and 100?
6 MR. SHERRILL: At 36 of the sites, of these 85,
7 the balance is greater than $50,000.00.
8 BOARD MEMBER HENNESSEY: I am just wondering, is
9 there an overlap between that and then this category
10 where there are 28 over $100,000.00?
11 MR. SHERRILL: Correct. Yes. They all overlap
12 there, yes.
13 BOARD MEMBER HENNESSEY: Okay.
14 MR. SHERRILL: Probably the most significant
15 figure of those is that 28 of the 65 -- 28 of the 85
16 sites the balance is greater than $100,000.00. That's
17 probably -- of all the numbers I gave you that is
18 probably the most significant.
19 MR. RIESER: At those 28 sites or at any one of
20 those 28 sites are there efforts underway to recover
21 those monies?
22 MR. SHERRILL: Yes.
23 MR. RIESER: At all of them?
24 MR. SHERRILL: I don't know.
25 HEARING OFFICER ERVIN: Are there any other
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1 questions?
2 Mr. Wight, would you like to continue with the
3 next response?
4 MR. WIGHT: Yes. The next question I believe was
5 a question by Charles King at page 60 of the second
6 transcript. What does Section 741.115(c) do that is
7 not already part of the law under Section 42 of the
8 Act?
9 We have proposed some language changes to that
10 subsection. However, the question still seems to
11 apply even with the new language.
12 MR. INGERSOLL: It doesn't necessarily add
13 anything new. I think it points out if this were
14 implemented by the Board, the Board's intentions with
15 what can and should be done for noncompliance with one
16 of these orders.
17 HEARING OFFICER ERVIN: Mr. King, do you have a
18 follow-up question?
19 MR. CHARLES KING: No.
20 HEARING OFFICER ERVIN: Thank you. Mr. Wight.
21 MR. WIGHT: The next question there may actually
22 have been a series of questions here, questions by
23 Board Member Hennessey, page 72 to 73 of the last
24 transcript. I believe these arose out of -- these
25 were follow-ups to a question about whether the
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1 applicability Section 741.105 applies to the
2 information order provision.
3 The question was along the lines of what if there
4 were a RCRA site but it was unclear that it was a RCRA
5 site, would the Agency have to have good faith belief
6 that the Proportionate Share Liability rule would
7 apply in a situation where they were asking the Board
8 to issue an information order with regard to one of
9 these sites. The question actually was answered, but
10 we would like to clarify that answer.
11 MR. GARY KING: I am not sure if I am going to
12 create a whole lot more clarity to the answer, but
13 what I was struggling with at the time was the notion
14 of the term good faith belief and how much
15 subjectivity that would be adding to matters. And
16 what I think is that we want to try to have the
17 Board's inquiry be as objective as possible. It is
18 really the issue of whether the site is a RCRA site or
19 not, not what the Agency believed as to its regulatory
20 status. I think it is an issue that would be raised
21 by the respondent if they are willing to.
22 I would think most of the time if we were
23 contending a site was not a RCRA site, it would be a
24 rare occasion that the respondent would be willing to
25 say it was a RCRA site because then he is, in essence,
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1 subjecting himself to a more stringent regulatory
2 process and enforcement criteria. You know, if
3 somebody did that I can't -- I wouldn't think that we
4 would object to them saying now that they are a RCRA
5 site. So we were trying to do something -- in
6 conclusion, I just didn't think that we should set up
7 a good faith belief that would be too subjective.
8 MR. WIGHT: Mr. King, would it be the Agency's
9 duty to make some demonstration in its petition or
10 would it be the responsibility of the respondent to
11 raise that more or less as a defense?
12 MR. GARY KING: I saw it as something being raised
13 by the respondent.
14 HEARING OFFICER ERVIN: Are there any follow-up
15 questions?
16 MR. RIESER: Is that identified among the things
17 that a respondent can raise a response to in an
18 information order in the language that you proposed?
19 MR. INGERSOLL: It is not specified. I would
20 think that applicability of the process at all would
21 be something that you would raise.
22 MR. RIESER: Thank you.
23 HEARING OFFICER ERVIN: Mr. Wight, would you like
24 to continue?
25 MR. WIGHT: Yes. Next was a question asked by
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1 David Rieser. A discussion took place at
2 approximately 105 and 110 of the transcript. What
3 percentage of the Hazardous Waste Fund was spent on
4 remediation in fiscal 1997.
5 Then the second question, of the 5 million dollars
6 we said was spent on remediation in fiscal 1997, what
7 percentage is that of the total amount in the
8 Hazardous Waste Fund.
9 John Sherrill has a response.
10 MR. SHERRILL: I would like to clarify that.
11 Approximately 5 million dollars was spent by the
12 Hazardous Waste Fund in fiscal year 1997. Of that 5
13 million dollars, 4.216 million was Bureau of Land
14 remedial related expenses. So 4.216, and actually the
15 figure was 4.952 million, so the percentage was 85
16 percent. The other $736,000.00 was Bureau of Water
17 groundwater related expenses. They have various
18 programs mandated by the Act.
19 BOARD MEMBER McFAWN: So those were not remedial
20 actions? They were --
21 MR. SHERRILL: Correct. The Bureau of Water has
22 various programs with various cities providing grant
23 money, identifying water resources, groundwater
24 resources and so forth.
25 HEARING OFFICER ERVIN: Mr. Rieser, do you have a
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1 follow-up question?
2 MR. RIESER: Yes. When you say Bureau of Land
3 remedial resources, does that mean specifically
4 cleaning up specified sites or what?
5 MR. GARY KING: What that means is the entire
6 amount, okay, that goes toward remedial activities.
7 We did not separate it out into specific contractual
8 items or that kind of thing. That is the entire
9 amount going to land related remedial activities.
10 MR. RIESER: That includes --
11 MR. GARY KING: To give you an example, for
12 instance, within the Bureau of Land there are payrolls
13 where we run our voluntary cleanup program off of
14 that. That money comes out of the Hazardous Waste
15 Fund. So that's an amount of money that is related to
16 remedial activities.
17 MR. RIESER: So a portion of that 4.07 million; is
18 that correct?
19 MR. SHERRILL: 4.216.
20 MR. RIESER: 4.216. Thank you. That went to the
21 payrolls for people working in the voluntary
22 remediation program?
23 MR. GARY KING: Right.
24 MR. RIESER: Okay. And other portions went to
25 people who were working in the remedial project
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1 management program?
2 MR. GARY KING: Right. There were other people --
3 in John's unit, that goes to pay salaries in John's
4 unit.
5 MR. RIESER: How much of it went to actually
6 directly remediating specific sites?
7 MR. SHERRILL: I guess I would argue that all of
8 it went to remediating sites, because every activity
9 we do -- I mean, it is paying for my salary now. But
10 every activity we do is on an effort to get people to
11 cleanup the site.
12 MR. RIESER: Right. But it is paying for your
13 salary now.
14 MR. SHERRILL: Right.
15 MR. RIESER: I guess is there a portion of that
16 that represents payments to contractors to remediate
17 sites or for sampling?
18 MR. SHERRILL: Correct.
19 MR. RIESER: Or sampling that the Agency performs
20 at the sites?
21 MR. SHERRILL: Correct.
22 MR. RIESER: Do you know what the percentage of
23 that is?
24 MR. SHERRILL: No.
25 MR. RIESER: Okay. Thank you.
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1 BOARD MEMBER McFAWN: Do you have a ballpark
2 figure how much that might be?
3 MR. GARY KING: It is real difficult to do that
4 because we have different contracts for different
5 types of activities, and we have a division of
6 laboratories, and we -- some of the samples go to
7 them, and then we have other contract laboratories and
8 then some of the samples go to them. So it is a whole
9 conglomeration of things under the Hazardous Waste
10 Fund. We thought the simplest way to look at the
11 issue was to just break it out to Bureau of Land and
12 Bureau of Water.
13 BOARD MEMBER McFAWN: So, no, you don't have a
14 ballpark figure?
15 MR. GARY KING: No, I don't.
16 MR. SHERRILL: It would take us one whole
17 afternoon to come up with that number, the four of us.
18 HEARING OFFICER ERVIN: Mr. Wight, would you like
19 to continue with the next response.
20 MR. WIGHT: Yes. There were a series of questions
21 by Dr. Flemal, Dr. Girard, and other Board Members
22 regarding Subpart C and the hearing officer proposal.
23 It also included questions -- excuse me -- these are
24 at approximately pages 118 to 123 of the transcript.
25 Also all of questions by Board Member McFawn and
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1 Chairman Manning as to whether we wanted the hearing
2 officer to act as a mediator or arbitrator or some
3 sort of a mixed role.
4 Then a comment by Dr. Girard concerning whether or
5 not the enhanced role for the hearing officer was
6 contrary to the requests from other participants for a
7 simple, timely process.
8 So we just kind of lumped a response to all of
9 those together.
10 MR. GARY KING: I saw the Site Remediation
11 Advisory Committee people this morning on the hot seat
12 talking about this, so I guess it is my turn now to
13 talk about it a little bit.
14 Our concern with fundamentally why we thought this
15 might be an advisable way to proceed was because there
16 could be an extreme case. Now, in the remediation
17 program that we operate sometimes we have seen cases
18 where there will be literally hundreds of respondents,
19 and we have had to proceed with litigation relative to
20 those. And we were concerned that if for that type of
21 mega case if that got thrown into Subpart C, with the
22 existing Board hearing format, that that hearing
23 officer might not have strong enough authorities to
24 move things all the way through to progression. So we
25 included this provision because we were concerned that
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1 there might be that eventuality.
2 Now, as the Site Remediation Advisory Committee
3 was saying this morning, it is not a fundamental part
4 of the proposal. It clearly is -- for the Board, if
5 the Board was going to go this way and go to an
6 alternative approach I think it would be a significant
7 step for the Board as far as a different type of
8 procedure. So we are not wedded to that concept,
9 although we think it would be good, particularly if
10 the Board was encountering that type of very large
11 case.
12 I think what you can really take from the
13 presentation from both the Site Remediation Advisory
14 Committee and from us is that if the Board chooses to
15 go that route of having this stronger hearing officer
16 authority that there is not going to be opposition
17 from either the Advisory Committee or from the Agency
18 going that route. Again, as I was saying, it is not
19 something that is fundamental to the nature of our
20 proposal.
21 In response to Board Member McFawn's question
22 about it, we did see that it was more of an arbitrator
23 type role as opposed to a mediator type role, but with
24 the recognition that if you did have one of these mega
25 cases where you have several hundred defendants or
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1 something like that, that any hearing officer is going
2 to do a type of mediation in terms of trying to focus
3 the issues, just as a matter of good case management.
4 Board Member Flemal asked about the statement as
5 to ruling on issues of fact and law presented at the
6 hearing and why that language was chosen. Again, I
7 will -- we took a lot of this -- as the SRAC people
8 were saying this morning, this was, quite a large
9 measure, their proposal and we supported it. We did
10 look at -- it is a concept that has been used by other
11 state agencies and the language that was questioned
12 about there, it is a type of language that we have
13 seen in other types of hearing rules that other state
14 agencies have.
15 HEARING OFFICER ERVIN: Are there any follow-up
16 questions?
17 Seeing none, Mr. Wight, would you like to continue
18 with the next response.
19 MR. WIGHT: The next response was to a question by
20 David Howe. Generally the question was found at page
21 143 of the transcript, and it concerned the absence of
22 language providing opportunity to reach a settlement
23 under Subpart B, I believe, in particular, although it
24 may have also extended to Subpart C, as well. There
25 was a discussion then following that about a provision
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1 in the Act that provided for de minimis settlements
2 and some concerns as to whether or not other
3 settlement options would be available under our
4 proposal.
5 MR. GARY KING: The section there was referred to
6 there by Mr. Howe and his question at the last hearing
7 was Section 22.2 A. And that's not 22.2(a) but 22.2
8 A. That was a section that was passed in September of
9 1989. Actually, it is modeled after a provision that
10 appears in the federal law that was passed in 1986.
11 If you read Subsection C of 22.2 A, which I will go
12 ahead and do, it says that nothing in this section
13 shall be construed to affect the authority of the
14 State to reach other settlements with other
15 potentially responsible parties.
16 So the fact that there is -- this provision
17 relative to de minimis parties and how the State would
18 settle with them would not prevent the State and
19 defendants to reach an agreement and settle
20 independently in other proceedings.
21 HEARING OFFICER ERVIN: Is there a follow-up
22 question? Mr. Wight.
23 MR. WIGHT: The last response was a response to a
24 request by Dr. Girard concerning the types of evidence
25 and the examples that would be submitted under the
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1 allocation factors and what weight would be given to
2 each and whether or not the Agency would provide
3 examples.
4 John Sherrill has a response to that. Before he
5 responds, there was some perhaps confusion on our
6 part. Based on notes, I felt that you just wanted a
7 narrative description of those types of evidence, what
8 types of evidence we might expect to see and what we
9 would find in them. Upon getting the transcripts
10 later there was some disagreement as to whether you
11 wanted actual concrete examples of that type of
12 information. I made the call that we would just bring
13 in the narrative description today.
14 However, if after hearing the narrative
15 description, if your intent was to have specific
16 examples of that type of information, we can certainly
17 bring those in at the fourth hearing and give you
18 specific types of documents from our files.
19 BOARD MEMBER GIRARD: Thank you. I will look at
20 what you have.
21 MR. WIGHT: With that today, John will go ahead
22 and provide an overview of the types of things we have
23 seen. I might add that typically in the past we have
24 looked at this information with the idea towards
25 identifying the PRPs but not always so much to
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1 determine the proportionate share. But they might
2 also be useful in a proportionate share context.
3 With that, John, why don't you continue.
4 MR. SHERRILL: Yes, I will answer -- this will be
5 about a five to ten minute answer, and then I think
6 Gary will follow-up somewhat on it.
7 Dr. Girard's question of what type of concrete
8 evidence the Agency typically reviews, I am going to
9 discuss specifically manifests, invoices, county
10 property records and aerial photographs.
11 Since 1979 manifests documented the cradle to
12 grave concept of hazardous waste. A manifest
13 documents the name of the waste generator, the waste
14 transporter, the facility the waste is being put to
15 grave, the volume of waste, and identifies the waste.
16 A manifest is signed and dated by a representative of
17 the waste generator, and is signed and dated by the
18 waste transporter and signed and dated by a
19 representative of the facility receiving the waste.
20 Other types of information that the Agency reviews
21 are site inspection reports, and those could be by
22 Illinois EPA field inspectors or other government
23 field inspectors or public health field inspectors,
24 photographs, newspapers, and when I say newspapers, it
25 could be a 1950 newspaper that talks about a
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1 particular plant and what they are producing and so
2 forth, interviews with local citizens and interviews
3 with former employees, interviews with site owners and
4 interviews with site operators.
5 And then if there are any company records, we
6 touched on that a little bit today, manifests, which I
7 just talked about, courthouse records, tax records,
8 property titles, Secretary of State records, and
9 interviews with former employees of the site and
10 interviewing local neighbors of the site, and then
11 also like a Dunn & Bradstreet business publication
12 review.
13 Just to reiterate, under the new proportionate
14 share rules this PRP or RP identification and RP
15 contributions are more critical than ever if the State
16 is able to continue to initiate State cleanups. Also
17 a good site investigation report establishes the type
18 and extent of contamination and in conjunction with
19 TACO provides an indication of why and what needs to
20 be remediated. The Agency typically in the 4(q)
21 notices establishes why and what needs to be
22 remediated. What I mean by a good site investigation
23 is that a lot of times the Agency will perform the
24 site investigation and determine the nature and extent
25 of contamination, and then will issue a 4(q) notice
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1 saying that these type of contaminants need to be
2 cleaned up. So it is real evidence in the 4(q) what
3 needs to be cleaned up.
4 In the Agency proposed Section 741.215 there is
5 three factors for allocating costs among the
6 responsible parties: The volume that we discussed,
7 the volume of regulated substance or pesticides caused
8 or contributed by a party; the risk and hazard
9 potential of the contaminants; and the degree of
10 involvement of the party of the generation,
11 transportation, treatment, storage, or disposal of the
12 regulated substance or pesticide causing or
13 contributing to the contamination at the site.
14 And touching on what we have said before, you
15 know, for those parties that can show that their
16 volume contribution to the environmental damage is
17 relatively small in terms of their amount of waste
18 generation, they stand in a better position to be
19 allocated a smaller portion of the responsibility.
20 The actual weighing factors of allocation are site
21 specific, and I would anticipate that one or more of
22 the responsible parties will propose a weighing system
23 or they may propose a percentage system as we have
24 discussed earlier, or a simple dollar system. They
25 may propose this at the pre-remedial or the
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1 post-remedial phase of the project. And what I mean
2 by that, we may have one allocation scheme where just
3 simple dollar figures are assigned, party A is
4 $10,000.00, and party B $10,000.00 and so forth. I
5 can see another example we would assign cost on a
6 percentage basis, party A 15 percent and party B 15
7 percent and so forth.
8 I am just going to talk a little bit about
9 invoices for a minute. Invoices detail a list of
10 service or products rendered with an account of all
11 costs between two parties. Invoices are part of a
12 company's records, and not of the Illinois EPA's
13 records. The reason I bring this up, the Illinois EPA
14 and the Attorney General, just within the last year
15 and a half, we have been settling a multiparty waste
16 drum oil cleanup site. Our principal evidence or
17 concrete evidence, as you have asked for, was from
18 invoices that we were able to obtain from the
19 company.
20 Much of how we identify the responsible parties
21 and the volume of responsibility were by these
22 invoices. There were 15 banker boxes of invoices.
23 The invoices documented how many times a responsible
24 party utilized the services of this waste oil company,
25 this waste oil drum company. On the specific invoice
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1 was the letterhead of the waste oil drum company, and
2 written on each invoice was the party who used that
3 waste oil services, and the date of the services. I
4 would like to point out that this is rare that the
5 Illinois EPA comes across invoices such as this. In
6 this particular case we did have invoices but it was
7 rare that we had these type of records.
8 The next type of evidence are county property
9 records and aerial photographs used in conjunction
10 together. In each of Illinois' 102 counties are
11 records that provides a legal description of a
12 property, the owners of the property, and the date of
13 ownerships. Combining the county property records
14 with aerial photographs, a model of site operations
15 begin to develop. This concept was touched upon by
16 Gary King and myself at previous hearings. We really
17 didn't go into it very far, what we meant by that.
18 Aerial photographs are taken by the Illinois
19 Department of Transportation approximately every seven
20 to ten years. They are also taken by private firms
21 such as Sidwell Company and the U.S. Department of
22 Agriculture. The aerial photographs are dated, and
23 the picture quality is excellent. Actually, the
24 picture quality is better than excellent. The
25 photographs are outstanding, and can be blown up
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1 several times before the picture becomes fuzzy. The
2 picture quality details small outbuildings, trucks,
3 small vehicles, roads, truck traffic patterns,
4 effluent discharges, lagoons, drainage ditches, stock
5 ponds, building placement, and just property use in
6 general.
7 So you think what can we get from an aerial
8 photograph. For an example, the last set of
9 photographs that I saw at a particular site, the
10 initial photograph was taken in the 1950s and the
11 latest photograph we have was taken in 1996 with two
12 intervening years in between. Well, combining these
13 photographs with the county property records, we can
14 depict what was occurring at a particular site, the
15 phases of the operation, were lagoons built, were
16 lagoons not there during certain phases of these time
17 periods.
18 The latest set of photographs that I saw at a site
19 that I won't mention, the 1962 picture clearly showed
20 striped clay mines. And then the 1996 picture shows
21 that the strip mines have been covered. Well, it was
22 reported to the Illinois EPA that there was buried
23 waste in these strip mines. If you were to go out
24 there today, you would not see any evidence of buried
25 waste, but looking at the past history of these aerial
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1 photographs you can see a progression in history of
2 what was occurring at this site.
3 These invoices, county property records and aerial
4 photographs provide input into what we call this model
5 of site operations. These all relate to the volume
6 allocation factor, the risk allocation factor, and the
7 degree of participation. For example, the invoices in
8 this case that we just are settling now, the invoices
9 may tell us how much of a waste was contributed by a
10 particular party, which they did, and it also told us
11 the waste volume and waste type. Which this addresses
12 all three allocation factors that the Agency is
13 proposing.
14 For example, party A may be identified as a waste
15 old generator who used the services of this waste oil
16 facility two different times. For example, 500
17 gallons of waste oil each time for a total of 1,000
18 gallons. The company records of the waste oil firm,
19 the site investigation, or even the aerial photographs
20 may indicate what was done with that 1,000 gallons of
21 waste oil. There again, for an example, if we can
22 show a common example maybe someone taking drums of
23 ways to a site, and they are not being a lagoon there,
24 and then another aerial photograph ten years later
25 showing a lagoon and they are receiving waste oil and
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1 they are dumping it in the lagoon. So that was a
2 contribution to that site's waste. So these aerial
3 photographs may show the lagoon being utilized for
4 waste oil dumping.
5 Or another example, the waste oil company records
6 may show that the oil was being subsequently coal
7 burned as fuel in a coal fire generator. There again,
8 we are looking at what caused the contamination at
9 that site. So it is not uncommon for waste oil
10 companies in the 1960s and 1970s to receive waste oil
11 and then coal burn some of that in some type of coal
12 fire generator.
13 So the volume of regulated substance or pesticides
14 caused or contributed by a party indicate the waste
15 volume, as we have touched upon. So the greater the
16 waste volume the party caused or contributed, the
17 greater, we would say, the proportion of
18 responsibility allocated.
19 I would like to touch upon -- I went over this a
20 little bit more in my written testimony. When records
21 that depict the amount of waste contributed by
22 individual parties are not available, the length of
23 time an owner or operator owned or operated the site
24 should be considered as a surrogate measure for
25 volume. For example, in an allocation proceeding,
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1 where the precise amount of waste caused or
2 contributed by each owner or operator is unknown, the
3 number of years an owner or operator used the site
4 should be used as a surrogate measure for the volume
5 amount.
6 I will give you a little example. Suppose the
7 facility generated the same waste for 40 years, from
8 1950 to 1990. The facility generated approximately
9 the same amount of waste each year. Party A owned the
10 property for ten years, from 1950 until 1960. Party B
11 owned the property for 25 years, from 1960 until
12 1985. And party C owned the property for five years,
13 from 1985 until 1990.
14 Therefore, everything else being equal, party A's
15 volume estimate would be ten years since they owned
16 the site for ten years, divided by the 40 years, which
17 equals 25 percent.
18 Party B's volume estimate is 25 years divided by
19 40 years, which equals 62.5 percent.
20 Party C's volume estimate is five years divided by
21 40 years, which equals 12.5 percent.
22 I just give that example to show that there are
23 other measures other than volume such as this time
24 that a party owned a facility that may be used as a
25 surrogate. We believe that time is a surrogate value
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1 is reasonable and should provide consistency among all
2 other allocation factors.
3 The second allocation factor, this risk and hazard
4 potential should be based upon a waste's toxicity and
5 persistence in the environment. All other factors
6 being equal, the more toxic and more persistent the
7 waste, the greater the percentage of responsibility
8 allocated.
9 In my written testimony I reference a U.S. EPA
10 publication, EPA 530-D-97-004. That is in my written
11 testimony. It is called the Draft Prioritized
12 Chemical List. It provides answers to the question
13 which waste are of greatest concern based on the
14 chemicals they contain and potential risk that they
15 may pose. And it lists 879 chemicals. So it ranks
16 all these chemicals and provides a ranking of them.
17 We have made it clear that together with this toxicity
18 and persistent potential of a waste the site specific
19 remediation objectives are to be developed consistent
20 with TACO to derive this risk and hazard potential.
21 So we would like to reiterate, you know, if we were
22 cleaning up a site for benzene and some other PRP or
23 RP contributed lead and we were not out there for lead
24 concerns, then we are not interested in that
25 responsible party that caused the lead.
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1 (Board Member Flemal exited the hearing room.)
2 MR. SHERRILL: So we would believe that all sites
3 would have some developer remediation objectives in
4 conjunction with TACO. In other words, we would be
5 asking the question why are we cleaning up a site.
6 You know, is it due to PCB, PNAs, lead, mercury and so
7 forth. So a focus of the allocation factor would be
8 to determine the harm that each party causes the
9 environment and that the party should bear those
10 responsibilities that are attributed to them to that
11 specific harm.
12 In other words, if we were to base allocation
13 simply on waste volume alone that makes the
14 simplifying assumption that a unit of any site waste
15 creates the same remedial cost. We are not stating
16 that, because we are saying the risk and hazard
17 potential allocation refines this simple volumetric
18 approach by considering the TACO characteristics of
19 the specific waste.
20 Then this third factor that we have proposed, this
21 degree of a party's involvement in generating,
22 transporting, treating, storing, disposing, or
23 otherwise improperly managing waste by an act or
24 omission is meaningful, we believe, to determine the
25 apportionment. We had expressed 741.215(a), that the
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1 Board may consider any or all factors related to a
2 liable party's causation of or contribution to a
3 released or a substantial threat.
4 741.215(b) states the Board shall not be required
5 to determine precisely all relevant factors provided
6 substantial justice is achieved. That kind of gets to
7 the party may cause or contribute to the environmental
8 problem by various acts or participation or omission.
9 I can give you one site example there. We had
10 provided written approval of a site to go ahead and
11 build a building on a particular piece of property.
12 That owner or operator of that site started putting --
13 we also stated that nothing beneath the ground could
14 be disturbed, because there was waste in place. Well,
15 that particular party started putting footings in for
16 this building and an oil sheen contaminated product
17 started going into the footings and they just started
18 dumping it right into the river. Well, that violated
19 it. And so there this new party that really didn't
20 generate the waste on the site but accepted that
21 condition, you know, I would argue that they were
22 contributing to the contamination because they did not
23 leave it in place. So that may fall under this third
24 allocation factor.
25 Gary, did you want to follow-up?
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1 MR. GARY KING: It is kind of hard to figure out
2 what to follow-up on, John.
3 What I wanted to just talk about a little bit,
4 just to give you kind of a visual image of what we are
5 faced with with some of these projects, what John has
6 outlined is we are trying to develop this skeleton of
7 what was the site operations all about so we can
8 figure out who the responsible parties were, what kind
9 of remediation needs to be done and so forth.
10 But if you think about it in terms of like these
11 photographs, when it is a fly over, and these are
12 done, you know, once every ten years or so, well, once
13 every ten years we get a snapshot of a facility, and
14 we know what happens on the date of that snapshot. We
15 have a pretty good idea what maybe going on. But what
16 has happened in that intervening ten years and who has
17 the information relative to that. That is something
18 that we really don't have. You know, we have some
19 public records that we go through and that, but really
20 if you are talking about a site operation that
21 intervening ten years, the information as to what was
22 going on during that time frame belongs to the people
23 who were doing the operation at the site, and that is
24 one -- it is one of the things that has really driven
25 us to see the need for the burden of proof on that
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1 allocation issue to be somewhere else other than us.
2 CHAIRMAN MANNING: You know, just to follow-up on
3 that, I appreciated the testimony presented by Mr.
4 Sherrill in terms of all of the things that the Agency
5 looks at and all of the documents that you need to
6 determine these questions and these factors. But what
7 still I think would be helpful for the Board to know,
8 and you don't need to do it today, but maybe for
9 purposes of preparing for the next hearing, if you
10 could delineate for us, if you could, what it is that
11 you have in your offices and how it is organized, I
12 mean, a lot of this stuff you are talking about you
13 wouldn't even have yet. Correct me if I am wrong, but
14 manifests --
15 MR. SHERRILL: Well, the manifests that I was
16 discussing was the mandated RCRA type manifest.
17 CHAIRMAN MANNING: So for a RCRA site you would
18 have manifests?
19 MR. EASTEP: For 809.
20 CHAIRMAN MANNING: Okay.
21 MR. SHERRILL: And then, like, the aerial
22 photographs, those are public records of the U.S.
23 Department of Agriculture, the Illinois Department of
24 Transportation. They do fly-bys for all of the major
25 roads, but it is so -- their aerial photographs are
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1 basically all of Illinois. I know of no place that
2 they don't have aerial photographs.
3 CHAIRMAN MANNING: So do you like have one room in
4 the Agency that has all of your photographs that you
5 look at at a site and you point to a particular point
6 in Vermilion County and look at a photograph for it?
7 How do you know where to begin and how your
8 information is organized in terms of whatever it is
9 you have at your disposal? I understand you have a
10 permit file, you have a generator, you would have
11 files related to the permit and the generator of the
12 waste and that sort of thing but --
13 MR. SHERRILL: What usually initiates it, and this
14 was kind of touched on in my written testimony, is
15 let's say a complaint is issued to our field office
16 that some site is causing contamination. Let's say a
17 complaint is issued to our field office that some site
18 is causing contamination. Let's say I see something
19 emanating through a stream. Well, basically, we would
20 assign a project manager to that site or field person,
21 and they basically start with a clean slate knowing
22 nothing of that site and they start gathering
23 information.
24 CHAIRMAN MANNING: And you keep that all in a file
25 in the field manager's office and that file would grow
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1 over the years and all the site inspection reports
2 that you are talking about are in that file?
3 MR. SHERRILL: Right.
4 CHAIRMAN MANNING: And manifests are in that
5 file? Not necessarily manifests, but the site
6 inspection reports?
7 MR. SHERRILL: Right, the site inspection reports.
8 CHAIRMAN MANNING: Okay.
9 MR. SHERRILL: But, I mean, some of these sites it
10 is not -- it is typical that some of these sites have
11 been in environmental violation for years prior to us
12 issuing, let's say, a 4(q) notice. So we kind of
13 build a site history of environmental -- of course,
14 our focus is on the environmental part, but in
15 conjunction with that we are identifying responsible
16 parties along the way.
17 CHAIRMAN MANNING: Do you have documents that have
18 the history of the site just for the current owner, or
19 do they go back? What kind of information on
20 historical contamination do you have? Do you purge
21 all of your records after five years?
22 MR. SHERRILL: As far as I know we have all of our
23 records.
24 MR. EASTEP: We keep all the records. After so
25 many years we microfilm them. Those are still
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1 available. And then as long as there is any kind of
2 Agency involvement we will keep a hard copy of the
3 record or the microfiche at the Agency. If we have
4 fiche, we will take the boxes of the hard copies and
5 store that somewhere. We won't destroy it.
6 MR. SHERRILL: But like some of these waste oil
7 site that occurred in the 1960s and 1970s and even in
8 the 1980s, we did not have -- I mean, we would
9 document that a waste oil facility, let's say a
10 recycling facility, that they had bad environmental
11 housekeeping principles. But we don't sit there and
12 document who is bringing in the waste. In other
13 words, they send a waste oil truck to various
14 companies picking up waste oil, and we don't
15 necessarily review that information at that time.
16 MR. GARY KING: They may have just a one-step
17 permit. They may have a permit that --
18 MR. EASTEP: That information will be kept at the
19 site that receives the waste material. They are
20 supposed to keep a copy -- if they have a multi-stop
21 permit, they are supposed to keep an ongoing log of
22 all the generators. If you want to get the exact
23 amount that each generator gets, then you would have
24 to go back into their invoices, because these get
25 fairly small as opposed to larger companies that might
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1 bring in a truck load of their own waste, for
2 example. Those would be at the site that received
3 it. So you might have records collected from the
4 generator site and from the receiving site. So you
5 would have two files that might contain information in
6 this type of case.
7 MR. GARY KING: But when we start we don't have
8 that kind of information. That is something that we
9 acquire as we go through the process.
10 CHAIRMAN MANNING: If there is a new generator,
11 what kind of information do you see that they have
12 refrained from the prior generator? What kind of
13 legal obligation are they under to retain any sort of
14 information or documentation in terms of manifests?
15 Are they under any?
16 MR. EASTEP: There is an obligation to keep the
17 manifest records for a certain period of time. That
18 escapes me. I think there was something under 809 for
19 the nonhazardous.
20 CHAIRMAN MANNING: We can check that as well,
21 too. I am just sort of concerned about how much
22 information is at your disposal in your offices versus
23 how much is available at the site, and trying to
24 ascertain those kinds of things.
25 MR. GARY KING: One of the things that I think you
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1 should think about in terms of the relationship
2 between the private sector and the Agency on this,
3 under our system of government, a private party who is
4 a PRP is given the power through FOIA to know whatever
5 it is that the State knows. We, however, don't have
6 that authority. We don't have the authority to FOIA
7 private businesses. So it is -- again, that is one of
8 those issues that causes us to see where we should
9 shave things. When we start into a cleanup case we
10 get FOIA'd for all those documents, so they know what
11 we know as we go through the process.
12 HEARING OFFICER ERVIN: Does the Agency have any
13 further testimony today?
14 MR. WIGHT: No, we don't. That concludes our
15 presentation.
16 HEARING OFFICER ERVIN: Thank you. Are there any
17 additional questions for the Agency today?
18 BOARD MEMBER GIRARD: Yes.
19 HEARING OFFICER ERVIN: Board Member Girard.
20 BOARD MEMBER GIRARD: I have a question in terms
21 of the waste oil generator example you gave us. You
22 seemed to indicate that the records you had in that
23 case were unusual. They were unusual in their volume
24 and their continuity; is that correct?
25 MR. SHERRILL: It was unusual in that we were able
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1 to, in this particular case we had invoices from the
2 facility, the waste oil facility, of people that they
3 had invoiced. In other words, they had invoiced A, B,
4 C company for this amount of waste. It was unusual
5 that we were able to get ahold of those records. We
6 spent quite a bit of effort, and it was kind of almost
7 the ideal type of allocation proceeding, because we
8 had, like I said, 15 boxes of records and we were able
9 to go through -- I don't know how many RPs were on
10 that site.
11 MR. GARY KING: What makes that case unusual is
12 that usually a guy who is running a sloppy
13 environmental operation is doing so because he also
14 has sloppy business practices which means he is
15 probably not maintaining invoices relative to his
16 business records. This case was unusual in that we
17 had a sloppy operator who kept good records of what he
18 had done.
19 BOARD MEMBER GIRARD: Also, when you have waste
20 oil, would you be able to sort of start from the
21 assumption of the risk factor involved with one barrel
22 of waste oil is the same as the risk factor involved
23 in another barrel, so it sort of reduces some of that
24 uncertainty.
25 MR. SHERRILL: It kind of did in that instance
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1 that we would just assume it was all -- we had waste
2 oil that was all mixed together, you could say. I
3 mean we do have sites where we have the example of
4 they have benzene over here in this corner and lead
5 over here, but the lead does not have to be cleaned up
6 or some other metal type contamination. In this one
7 all the waste oil you could kind of say was equally
8 contributing to this one big probably.
9 MR. EASTEP: If I could follow-up a little bit to
10 that. You also have to realize that over the years
11 practices have changed substantially from -- there
12 used to be, for example, a lot of open burning of
13 fuel. It was relatively unregulated years ago. There
14 also was a lot of people prior to the passage of RCRA
15 and CERCLA in 1980, there was a lot of mixing of
16 solvents of the waste oils. So, of course, as time
17 went on that practice sort of stopped. Now if you get
18 waste oil picked up and the company is doing it
19 legally or trying to make sure that the waste oil that
20 they pick up from every generator is the same and it
21 doesn't contain solvents or PCBs or anything else
22 mixed in it. So overtime that has changed. Over time
23 our records have changed, because we didn't have
24 manifests before 1979, and I am told that a lot of
25 business was done on a cash basis. So there was
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1 probably never a bill given out or never a receipt.
2 They literally did business on a cash basis. I think
3 we probably have got some sites where that is alleged
4 now. Then you had manifesting and you had RCRA
5 manifesting.
6 MR. SHERRILL: The sheet I provided on the number
7 of sites we 4(q)'d, a lot of those were landfills.
8 Several of those landfills were not your municipal
9 type landfill. What they were, they were landfills
10 run for the pleasure of several area industries that
11 only several industries contributed to, and so the
12 records that we were relying on were the waste
13 transporter and site landfill operator. This landfill
14 was centrally located among four or five big
15 industries. They were only receiving waste from those
16 four or five industries. So people would give
17 affidavits saying I hauled waste from company X to
18 this landfill, you know, eight hours a day 365 days a
19 year. So that is kind of the record we have there.
20 Then when I say we would do a site investigation, we
21 would investigate the landfill and determine the
22 nature and type of contaminants and the extent of it
23 and was consistent with the type of waste that company
24 X would have been generating for those numbers of
25 years.
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1 HEARING OFFICER ERVIN: Ms. Rosen.
2 MS. ROSEN: Yes. I had a question for Mr.
3 Sherrill. It goes back to the discussion that we had
4 kind of at the beginning of your testimony. You
5 indicated that the Agency felt like time could serve
6 as a surrogate factor almost when you are trying to
7 determine the volume as an allocation factor.
8 You gave an example of, you know, A was at the
9 site for so many years and B was at the site for so
10 many years, and C was at the site for so many years,
11 and that you could use that length of time each entity
12 had been at the site to decide the amount of volume of
13 a certain company. And I just wanted to make sure, I
14 would understand that your statement would mean you
15 would also have to -- the Agency would also have to
16 have some sort of information that company A, company
17 B, Company C had each generated a certain type of
18 chemical --
19 MR. SHERRILL: Correct.
20 MS. ROSEN: -- and whatnot?
21 MR. SHERRILL: Correct. That is kind of a
22 simplifying assumption, because usually what happens
23 is that company A generates the same amount of waste
24 that company B did. Then company C comes along and
25 there new manufacturing processes. It is, like, well,
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1 company C only did this for five years, and even
2 though they were there ten years or five years of
3 their time they have actually improved their
4 manufacturing process and had less waste. That is
5 actually more typical. So in that case you would
6 adjust your time surrogate value downward.
7 MS. ROSEN: Right. So you certainly wouldn't be
8 looking at time in a vacuum in relation to what else
9 was going on at a facility?
10 MR. SHERRILL: Correct.
11 MS. ROSEN: Thank you.
12 HEARING OFFICER ERVIN: All right. Are there any
13 other additional questions for the Agency at this
14 time?
15 Seeing none, then I will note the fourth hearing
16 in this proceeding has been scheduled for June 10th at
17 10:00 a.m. in the same room, Sangamon County Building,
18 County Board Chambers, Room 201, at 200 South Ninth
19 Street here in Springfield. The fourth hearing will
20 deal with any remaining issues.
21 I will just remind the Agency that we will
22 probably have some additional questions on the errata
23 sheet.
24 The Board will also be asking for comments on the
25 fact that the Department of Commerce and Community
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1 Affairs has not produced an Economic Impact Study for
2 this rulemaking pursuant to the Act. Also, if there
3 is anyone else who would like to testify at the next
4 hearing, the Board will hear the testimony as the time
5 allows.
6 The Board has requested an expedited transcript
7 for this hearing, so the transcript should be
8 available next Tuesday in the board offices. Again,
9 as we have in the past two hearings, if anybody would
10 like a transcript they can contact myself or the
11 Board's Chicago office and they will give you a
12 transcript free of charge. That goes as well for
13 copies of the transcripts from the past two hearings.
14 Are there any other matters that need to be
15 addressed at this time?
16 All right. Seeing none, I would thank you very
17 much for -- this has been a long day for a lot of
18 people. I thank you for your participation. We will
19 adjourn and hopefully we will see you back on June the
20 10th.
21 (Hearing Exhibits 10 through 14
22 were retained by Hearing Officer
23 Cynthia Ervin.)
24
25
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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 ^ pages comprise a true,
9 complete and correct transcript of the proceedings
10 held on the 27th of May A.D., 1998, at 200 South Ninth
11 Street, Springfield, Illinois, In the Matter of:
12 Proportionate Share Liability, 35 Illinois Adm. Code
13 741, in proceedings held before the Honorable Cynthia
14 Ervin, Hearing Officer, and recorded in machine
15 shorthand by me.
16 IN WITNESS WHEREOF I have hereunto set my hand and
17 affixed my Notarial Seal this 29th day of May 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
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KEEFE REPORTING COMPANY
Belleville, Illinois