ILLINOIS POLLUTION CONTROL BOARD
May 10, 1990
ILLINOIS ENVIRONMENTAL
PROTECTION AGENCY,
Complainant,
v.
)
PCB 88—71
(Enforcement)
ALLEN BARRY, individually and
ALLEN BARRY, d/b/a ALLEN
BARRY LIVESTOCK,
Respondent.
MS. PAM CIARROCCHI, ASSISTANT ATTORNEY GENERAL, APPEARED ON
BEHALF OF THE COMPLAINANT; AND
MR. DONALD A. MANZULLO, P.C.,
APPEARED ON BEHALF OF THE
RESPONDENT.
OPINION AND ORDER OF THE BOARD (by B. Forcade):
This matter comes before the Board on the April 19, l98~8
complaint of the Attorney General, filed on behalf of the
Illinois Environmental Protection Agency (‘Agency”). The
complaint alleges that respondent, Allen Barry, individually and
d/b/a Allen Barry Livestock (“Allen Barry”) violated Sections
12(a), ~d) ano (f) of the Illinois Env~rornenral Protect~o~-’Act
(“Act”) tne ~ater cuality standaras in 35 111 ?o~ Coca 02 203
and 302 212
tr-e
eff1ue~itsta~carcsof 35 Ill
~cn
Coca 304 lOS
and the oDerational rules and oermit recuirements for acricuiture
related oollutjon in 35111. Adm. Code 301.403(a), 50l.404(b)(l)
and 502.104. The Acencv comDlalr.t details the vIolations in
itur
counts described below. A Stipulation and Proposal for
Settlement was filed April 12, 1989,
leaving the issue of a
penalty for the Board’s decision here.
Procedural History
Hearinc is mandatory pursuant to Section 33 of the Act and
the case was acceDted for hearinc at the Aori! 21, 1988 Board
meetinc. Hearing was held on January 10, 1989, and continued to
March 14, 1989. No
member
of the oublic was in attendance. The
parties rii~ed tne executec
Stipulation and Proposat tor
Settlement on Aoril 12, 1989. The Agency’s Dost-hearlnc brief
support of a penalty
was
filed May 1, 1989. Alien Barry’s brief
in oPposition to a penalty was filed May 22, l~89.
111-11
The Facility
Allen Barry owns and operates a livestock operation, known
as
Allen Barry Livestock in Ogle County, Illinois. The
confinement operation handles more than 300 brood cows and
slaughter or feeder cattle on an ongoing
basis.
The facility
includes feedlots and at least one manure storage pile. A man-
made drainage ditch collects runoff from these. Rufloff, via a
man—made drainage ditch and in part via direct drainage, to an
unnamed tributary to Mill Creek in Ogle County is the subject of
this enforcement action.
Comolaint: Counts I through Count IV
Count I alleges that on or about July 27, 1982, and
continuing intermittently through April, 1988, Allen Barry
violated Section 12(a) and (d) of the Act. Those subsections
govern the discharge or demosit of
contaminants which cause or
Leno to cause water collut~on or wnicn create a water pollution
hazard.
Allen Barrys operations allegedly discharged
contaminants, livestock waste and feedlot runoff into the unnamed
tributary of Mill Creek. Agency personnel witnessed this
discharge on July 27, 1982, November 5, 1985, April 22, 1987, and
February 18,
1988. The discharge allegedly altered the chemical
and biological
nature of the water resulting
in harmful or
injurious conditions for fish
or aquatic life and harmful
conditions for public health.
Count II alleges that Allen Barry has confined more than 300
brood cows and cattle in its ongoing operation while at no time
possessing a National Pollutant Discharge Elimination System
(“NPDES”) permit for
the
related discharges. This is an alleged
violation of Section 12(f) of the Act, which requires an NPDES
permit for point source discharges. On or about July 27, 1982
through April, 1988, Allen Barry also allegedly violated 33
Ill.
Adm. Code 501.403(a), 50l.404(b)(l), and 502.104. These sections
recuire that livestock facilities maintain diversion dikes, wails
or curbs to control surface waters and contain runoff; that
manure stacks be managed to prevent runoff and leachate from
entering state waters; anc that NPDES permits oe ontatnec for
facilities of a ce~tein s~ze~n~cn disc-~arge Dolute-~ts into
navigable waters directly or through man—made devices.
Count III alleges that Allen Barry violated the ;~ater
Quality Standard regulating unnatural sludge as found in 35 Ill.
Adm. Code 302.203 and the effluent standard stated in 35
Ill.
Adm. Code 304.103 regulating effluents wnich cause a violation of
water quality standards. The Agency alleges that on or
about
July 27, 1982 and continuing through April, 1988, Allen Barry’s
oDerations caused or contr:buted
to murky, brownish, or turbid
water and manure odors in the unnamed tributary. These
conditions were specifically noted by the Agency on July 27,
1982, November 5, 1983, and April 22, 1987. Allen Barry thereby
allegedly violated Section 12(a) of the Act and 35 Ill. Adm. Code
302.203
and 304.103.
111-12
Count IV alleges that Allen Barry violated Section 12(a) of
the Act and 33 Ill. Adm. Code 304.105 also noted in Count III and
the particular water quality standard for ammonia nitrogen.
Pursuant to 35 Ill. Adm. Code 302.212, ammonia nitrogen may not
exceed 15 mg/l (milligrams per liter). On November 15, 1985 and
on February 18, 1988, levels of 59.0 mg/l and 18.5 mg/l were
recorded. The Agency alleges that on or about July’27, 1982
through April, 1988, Allen Barry therefore was in violation of
Section 12(a) of the Act and 35 Ill. Adm. Code 302.212 and
304.105 including, but not limited to, the two particular dates
above.
The Agency alleces that the violations described in Counts I
through
IV above
were continuing violations from July 27, 1982
through the April, 1988 complaint date and that they
will
continue unless halted by the Board. The relief recuested is
that the Board direct Allen Barry to cease and desist from
further vtolations,
that the Board assess a penalty not to exceed
$10,000 for Count I violations and $1,000 per each day during
which the violations continued.
StiDulation
The Stipulation and Proposal for Settlement
(with Exhibits A
through F) was executed in March of 1989 and filed with the ~oard
on April 12, 1989. It sets forth facts noted in the facility
description above and acknowledges that pursuant to Section 31(d)
of the Act, notice of apparent violations was given to Allen
Barry by letters dated October 15, 1982 and December 18, l98~5.
(Exhibits A and B.) The following additional facts are
stioulated
by the carties.
Allen Barry’s livestock operation, a sole ~roorietorship,
discharged runoff from its feedlots. Those discharges requ:re a
NPDES permit. At no time has Allen Barry possessed, nor has the
Agency issued, an NPDES permit for those discharges.
Alien Barry
caused, threatened or allowed contaminants, livestock waste and
feedlot runoff, to be discharged upon the land and into the
unnamed tributary of Mill Creek, a water of the State of
Illinois, so as to cause or tend to cause water pollution in
Illinois.
These discharges were observed on or about July 27,
1982, November 5, 1985, Aoril 22, 1987, and February 18, 1988, by
Acenc~’ oerso~ e ~o .t~’essec t’~e o~ect ctsc~a~geof l~esrock
waste and feeclot runo:f ~n:o me unnarnec
trtoutary wnich
intersects
and runs through Responcent’s property :rcm sou:n to
north and empties into Mill Creek.
(Ex. C).
On July 27, 1982; November 5, 1983; April 22, 1987; and
February 18, 1988, water samples were taken at and around Allen
Barry’s facility. These samples showed violations of water
quality standards contained in the Board regulations
for
unnatural
sludge and ammonia nitrogen.
(Ex. D).
111-13
The Terms of Settlement provide that it shall be a full
settlement of the action filed by the Agency and Allen Barry’s
liability for all violations alleged •in the complaint. The
Agency contends, and Allen Barry admits, that the facts as set
out in the Complaint constitute the following violations of the
Act and Board Regulations:
Count I: Section 12(a) and 12(d) of the Act as
these sections relate to livestock waste;
Count II: Section 12(f) of the Act and 35 Ill. Adm.
Code 501.403(a) and 502.104;
Count III: Section 12(a) of the Act and 35 Ill. Adrn.
Code 302.203 and 304.103;
Count IV: Section 12(a) of the Act and 35 Ill. Adm.
Code 302.212 and 304.103.
Allen Barry does not admit the violation of 33 Ill. Adm.
Code 501.404(b)(l) alleged in Count II. That section regulates
handling and storage of livestock waste in temporary manure
stacks to prevent runoff and leachate problems.
Allen Barry agrees to cease and desist from any and all
violations of the Act and Board regulations. As a remedial
course of action, Allen Barry agrees to submit to the Agency by
April 25, 1989 specifications for the construction of a livestock
waste handling facility, in accordance with the Act and Board
regulations, Such construction must be implemented by Allen
Barry within 180 days after Agency approval and must be completed
in accordance with Agency approved specifications no later than
August 1, 1990.
Allen Barry agrees to apply for and obtain an NPDES permit
concurrent with the start of construction of its livestock waste
handling facility. With respe~t to the unnamed tributary on the
eastern portion of his property, within 180 days of approval of
this settlement, Allen Barry agrees to do the following:
1. place a fence 25 feet from each side of
the tributary;
2. plant dense vegetation within this 25—
foot area;
3. maintain one area for crossing this
tributary; and
4. maintain a vegetative cover on pasture.
Allen Barry agrees to act in accordance with all terms and
conditions of all permits issued by the Agency.
11 1-~1~
The parties have notstipulated to a civil penalty to be
paid by Allen Barry for violations of the Act and regulations.
The Agency recuests a penalty of u~to $10,000 and Exhibits A
through E in support of a penalty. Allen Barry argues that no
penalty is necessary and provided Exhibit F in support of that
position. Exhibits A through F amount to about 78 pages of
various documents, including correspondence since 1982 and
inspection reports.
Statutory Penalty Authority
As part of a final order in an enforcement case, Section
33(b) empowers the Board to impose civil penalties in accordance
with Section 42 penalty provisions. Generally, Section 42(a) and
(b) of the Act provides for ootential civil cenalties of
UD
to
$10,000 per violation and up to $1,000 per day. Ho~ever, certain
violations, such as of Section 12(f), carry a $10,000 per day
penalty. Subsections 42(a) and (b) provide in pertir.ent part:
a. Except as provided in this Section, any
person that violates any provisions of
this Act or any regulation adopted by the
Board, or any permit or term or condition
thereof, or that violates any determi-
nation or order of the Board pursuant to
this Act, shall be liable to a civil
penalty of not to exceed $10,000 for said
violation and an additional civil penalty
of not to exceed $1,000 for etch day
during which violation continues;
b. Notwithstanding the provisions of
subsection (a) of this Section:
1. Any person that violates Sectton
12(f) of this Ac: or any
NPDES
permit or term or condition thereof,
or
any filing
requirement,
regula-
tion or order relating
to the NPDES
permit program shall be liable to a
civil penalty of not to exceed
$10,000 per day of violation;
. .
Ill. Rev. Stat. ch. ll1~, par. 1042.
In an enforcement action Section 31(c) of the Act places the
burden of proof on the Agency or other complainant to
show
either
1 Effective January 1, 1990 penalty amounts increased to S50,000
per violation and S10,000 per day, but these amounts are not
aoolicable to the violations here, which are
from
the earlier
1982—1988 time period.
111-1S
that the respondent has caused or threatened to cause air or
water pollution or that the respondent has violated or threatens
to violate any provision of (thel Act or any rule or provision of
the Board. If such proof has been made, the burden shall be on
the respondent to show that compliance with the Board’s
regulations would impose an arbitrary or unreasonable hardship.
How this burden of proof is carried was explained by the
Illinois Supreme Court in Incinerator, Inc. v. Pollution Control
Board, 59 Ill.2d 290, 319 N.E.2d 794, 799 (1974). There, the
court stated that “the EPA had the burden of proving all
essential elements of the type of air pollution violation
charge~d, and the Board must then assess the sufficiency of such
proof by reference to the Section. 33(c) criteria, basing thereon
its findings and orders.” The Suoreme Court later clarified this
in Processing
&
Books, Inc. v. Pollution Control Board, 64 Ill.2d
68, 351 N.E.2d 865 (1976). In that case, the court stated that
the Incinerator
Inc. case was not intended to place on the Agency
“the burden of proving, by evidence which it offered, the
unreasonableness of the respondents’ conduct in terms of each of
the four criteria mentioned in Section 33(c).” That
interpretation would “frustrate the purpose of the Act” and “also
render redundant or contradict the allocation of the burdens of
proof in Section 31(c). Processing
&
Books, 351 N.E.2d at 869
(emphasis added).
As to the Board’s responsibility to evaluate the evidence
offered, the Illinois Supreme Court requires that unreason-
ableness of the alleged pollution must be determined with
reference to the criteria stated in Section 33(c). Wells
Manufacturing Company v. Pollution Control Board, 73 Ill.2d 226,
383 N.E.2d~148 (1078), citing Mvstik TaDe v. Pollution Control
Board, 60 Ill.2d 330, 328 N.E.2d
5 (1975), Incinerator,
Inc., 59
Ill.2d 290 (1974) and Citvcf Monmouth v. ?ollut~onControl
Board, 57 Ill.2d 482, 313 N.E.2d 161 (1974). However, this does
not require that the Board find against the respondent with
respect to each of the Section 33(c) criteria. Nor does it mean,
“that the Board is ~rec1uded from considering additional relevant:
factors.” Wells
Manuf~~rin~ç2moanv, 383
N.E.2d at 151. See
also, Southern Illinois Asohalt Comoany, Inc.
‘1.
Pollution
Control Board, 60 Ill.2d 204, 326 N.E.2d 406, 408 (1975)
directing the Board to consider all the facts and
circumstances. As noted below, Section 33(c) specifically
directs the Board to consider all facts and
circumstances
in
enforcement cases. Section 33(c) provides:
c. In making its orders and determinations,
the Board shall take into consideration
all the facts and circumstances bearing
upon the reasonableness of the emissions,
discharges, or deposits involved includ-
ing, but not limited to:
Ill-i
(~
1. the character and degree of injury
to, or interference with the
protection of the health, general
welfare and physical property of the
people;
2. the social and economic value of the
pollution source;
3. the suitability or unsuitability of
the pollution source to the area in
which it is located, including the
cuestion of oriority
of location in
the area involved;
4. the technical practicability and
economic reasonableness of reducing
or eliminating the emissions,
discharges or deposits resulting
from such pollution source;
5. any economic benefits accrued by a
non—complying pollution source
because of its delay in compliance
with pollution control requirements;
and
6. any subsequent compliance.
Section 33(a) of the Act requires that the determinations
which the Board makes pursuant to Section 33(c) above must be in
a written opinion describing the facts and reasons for the
decision. The Board’s findings are subject to review pursuant to
Section 41 of the Act. The standard of review of the Board’s
decisions is the manifest weight of the evidence. This means
that, in carrying out its quasi—judicial function in enforcement
cases, the Board’s decision will be upheld unless contrary to the
manifest weight of the evidence. Wells Manufacturinc Comoany,
383 N.E.2d at 151.
Some enforcement cases result in settlements. The Board’s
regulations set forth procedures for settlement of enforcement
cases at 35 Ill. Adm. Code 103.180. In a 1986 air pollution case
involving a $20,000 stipulated penalty, the Fifth District
decided that “the Board has the statutory authority to accept
settlement agreements in enforcement cases where findings of
violation are precluded by the terms of the stipulation and
proposal but where the respondent is ordered
to
pay a stipulated
penalty and to timely perform agreed upon compliance
activities.” Chemetco, Inc. v. Illinois Pollution Control Board,
140 Ill.Ap~.3d 283, 488 N.E.2d 639, 643 (5th Dist. 1986). The
court noted that consistent with the primary goal of enhancing
the environment, “settlements that do not contain a finding of
violation but do impose a oenaltv and a compliance plan may more
ii 1-17
expeditiously facilitate this enhancement.” Id. (emphasis
added). This same conclusion was also reached by the Third
District in Archer Daniels Midland v. Pollution Control Board,
140 Ill.App.3d 823, 489 N.E.2d 887 (3d Dist. 1986), where the
parties stipulated to a penalty but not to a finding of
violation. Although the cases discussed below involve contested
penalties, the Chemetco case does present encouragement for
settlements involving penalty issues, which, in general, the
Board favors. The Allen Barry case involves a Stipulation and
Proposal for Settlement as to the violations only, and leaves
open the issue of a penalty.
Discussion of Penalty Determination
The Board believes that, in order to properly address the
penalty issue in this case, a broad overview of Illinois, federal
and some other states’ penalty determinations is necessary to
guide the Board in this, and future decisions. The following
discussion is intended to articulate the Illinois approach to
penalties since the Board has at times been faced with conflicts
among the reviewing courts, and the Illinois Supreme Court has
not addressed the Board’s imposition of civil penalties since
1978. To summarize and clarify the current framework for the
Board’s penalty decisions, a comprehensive analysis will follow,
concluding with a discussion of how the law applies to the facts
of the Allen Barry case. This discussion will proceed in
accordance with the Table of Contents below. These discussions
are intended only to briefly summarize the case law, and not to
provide holdings or new interpretations of those cases.
Table of Contents
I. OVERVIEW OF ILLINOIS LAW ON CIVIL PENALTIES
A. Illinois Supreme Court Cases
10
B.
Illinois Appellate
Court Cases
15
1.
Air Pollution Cases
15
2.
Water Pollution Cases
21
3.
Permit Violation Cases
24
4.
Local Government Cases
31
C. Penalty Factors Derived from Illinois Case Law
34
1. Statutory Factors
35
2. Good Faith
5
3. Other Considerations
36
a. Aiding Enforcement by Deterring Others.. .36
b. Economic Benefit from Noncompliance
37
c. Ability to Pay
38
d. Cessation and Duration of Violation
40
D. Summary Outline of Illinois Statutory and
Judicial Considerations
41
B. Illinois Legislative Intent
42
111—is
II. OVERVIEW OF FEDERAL LAW ON CIVIL PENALTIES
43
A. Federal Statutory Considerations
43
B. U.S. Supreme Court Cases:
The Tull and Gwaltney Decisions
46
1.
The Tull Case
46
2.
The Gwaltney Case
48
a.
The Gwaltney Penalty Calculation
49
b. The Gwaltney Implication of a
Mandatory Penalty
52
C.
Other Federal Decisions
53
III. PENALTY CONSIDERATIONS IN OTHER STATES
59
IV. STATISTICAL DATA ON PENALTIES
63
A. USEPA Statistical Data on Penalties
63
a. Table No. 1
64
Total USEPA Penalties for 1989
b.
Table No. 2
65
Selected USEPA Penalties
for 1988
All Regions
c.
Table No. 3
65
Selected USEPA Penalties for 1988
Region V Only
B. Illinois Statistical Data on Penalties
66
1. Pollution Control Board
a. Table No. 4
Summary of Penalties Assessed by
Illinois Pollution Control Board
2. Illinois Court Decisions
67
a. Table No. 5
67
Illinois Civil Penalties
Reviewed by Supreme Court
b. Table No. 6
68
Illinois Civil Penalties
Reviewed by Appellate Court
3.
Recent Stipulated Penalties
69
a. Table No. 7
70
Recent Stipulated Penalties
C. Comparison of Federal and State Penalties
70
a. Table No. 8
71
Comparison of Federal and
State Penalties
b. Table Nc. 9
72
Comparison of Federal and State
Average Penalties
V. CONCLUSION: RELEVANT FACTORS FOR BOARD
DETERMINATION OF THE CIVIL PENALTIES IN THIS CASE
A. Calculating the Maximum Penalty
72
B. Statutory Factors Which Must be Considered
73
C. Other Factors
73
11 1-1~
—in—
71 PENALTY DETERMINATION FOR ALLEN BARRY
74
A. The Maximum Penalty
74
B. Consideration of Statutory Factors
75
1. Character and Degree of Harm
75
2. Social and Economic Value
75
3. Suitability/Unsuitability of
Pollution Source to Its Locale
76
4. Technical Practicability and EcOnomic’
Reasonableness of Pollution Control
76
5. Economic Benefits of Non—Compliance
77
6. Any Subsequent Compliance
78
C. Other Factors
78
D. Penalty Calculation
80
I. OVERVIEW OF ILLINOIS LAW ON CIVIL PENALTIES
To provide a framework for appellate review of the Board’s
penalty decisions, a summary of a comprehensive list of Illinois
Supreme Court and Appellate Court cases follows. A total of 42
cases are briefly discussed in two sections: (A) Illinois
Supreme Court cases and (B) Illinois Appellate Court cases. Each
case will be referred to by a numbering system, (1 through 42J,
and the summary of each case will be captioned with a heading for
the case name. The summary of each case is intended as a
reference point for the Board’s discussion of P~na1ty Factors,
which begins on page 35 herein. This survey of Illinois Cases
begins with a 1974 Illinois Supreme Court decision and continues
through early 1990 decisions. The outcomes in a number of these
decisions would have been impacted by subsequent statutory
amendments to Sections 33 and 42 of the Act. However, the cases
are presented from a historical perspective and not in terms of
precedent for the Board’s decisions. The new legislative
directives to the Board are discussed separately in the section
labeled “Illinois Legislative Intent.” Cases which predate the
amendments, therefore, must be viewed in the time frame in which
the courts issued those opinions.
A. Illinois Supreme Court Cases
(1 The City of Waukegan Case
The Illinois Supreme Court first acknowledged the Board’s
authority to impose monetary penalties in 1974. See City of
Waukegan v. Pollution Control Board, 57 Ill.2d 170, 311 N.E.2d
146 (1974) affirming fines of $1,000, $250 and $250. In that
refuse disposal case, the court determined that penalties are
constitutional and consistent with the state goal to preserve and
improve the environment, and that Section 33(c) provides protec-
tion against arbitrariness and serves to guide the Board in
imposing penalties. However, the Illinois Supreme Court later
noted that, “(obviouslv the General Assembly did not intend that
the Pollution Control Board should moose a monetary fine in
111—20
every case of a violation of the Act or regulations.” Southern
Illinois Asphalt Co. v. Pollution Control Board, 160 Ill.2d 204,
326
N.E.2d 406, 408 (1975) (described in detail infra) (Case No.
4.
(2 The City of Monrnouth Case
The guiding ~principle articulated by the Illindis Supreme
Court is that civil penalties should aid enforcement of the Act
and that “punitive considerations were secondary.” City of
Monmouth v. Pollution Control Board, 57 Ill.2d 482, 313 N.E.2d
161, 166 (1974). In this 1974 air pollution case involving
emissions from the City of~Monmouth’s sewerage lagoon system, the
Supreme Court of Illinois found that a $2,000 penalty could not
aid enforcement where the city cooperated with the Agency and no
technological netr~oc .ias aia.~aoe to effect~ve~ic.~-e t~e
problem. Various attempts were made, but none resolved the
violation until after enforcement proceedings began. The Supreme
Court concluded that since “the City, at substantial expense,
cooperated in the implementation of every proposal, and that
through the City’s efforts the problem appears to have been
solved, we hold that the Board erred in imposing the fine.” City
of Monmouth v. Pollution Control Board, 313 N.E.2d at 166.
(3
The Incinerator, Inc. Case
In the case of Incinerator, Inc. v. Pollution Control Board,
59 Ill.2d 290, 319 N.E.2d 794 (1974), the Illinois Supreme Court
upheld civil penalties of $25,000 for air pollution violations
resulting from refuse incinerator operations. Substantial
amounts of flyash, heavy smoke emissions and foul odors
unreasonably interfered with the enjoyment of life and property
in the area, in violation of the Act and rules and regulations.
Corrective measures were not technically impracticable or
economically unreasonable. The Board was found to have properly
evaluated the unreasonableness of the interference in licht of
Section 33(c) ractors, altnougn, in tne tuture, tne Boarc was
instructed to be more specific in making written findings as to
the criteria in Section 33(c) of the Act.
The Incinerator court referred to the Board’s review of key
facts relevant to Section 33(c) factors in its decision to upnoid
the Board’s assessing a S20,000 penalty. The harm to the public
was found to be
a substantial interference with the
enjoyment of
life and property over an extended period of time. The social
and economic value of the pollution source was evaluated in terms
of alternative available incinerators and disposal facilities,
the time required to obtain and install pollution control
equipment, and the impact of a close down on the 23 employees
affected. Regarding the suitability or unsuitability of the
pollution source to its locale, evidence on zoning, uses of
prooertv in the area, and the nature of nearby industries was
considered. The Board also heard testimony on the number of
111-21
—12—
homes and buildings which predated the facilities, as well as
those constructed later. Another important factor was the
availability of technically practicable, although not fully
perfected, devices to eliminate the air pollution problem and a
clear ability to pay for
this equipment. The Supreme Court was
not persuaded by appellant’s arguments that the pollution control
systems were either technically impracticable or economically
unreasonable. The Board’s consideration of these’ factors
amounted to substantial compliance with the Act’s requirement
that Section 33(c) criteria be analyzed in Board determinations
in enforcement cases. An additional $3,000 penalty for failing
to file a required plan for reducing emissions
was
affirmed as
being neither arbitrary or excessive.
4~ The Southern :llinois Asphalt Company Case
In Southern Illinois Asphalt Co. v. PCB, 60 Ill.2d 204, 326
N.E.2d
406
(1975) (two cases consolidated), the :llinois Supreme
Court held the penalties inappropriate as abuses of the 2oards
discretion. The court found that the penalties would not aid
enforcement, but were punitive. In the first case ir.volving a
$5,000 fine for violation of air pollution permit requirements,
the appellant had ceased its asphalt plant operations prior to
the Agency’s filing of the complaint. Furthermore, when it d~d
operate, although lacking a permit, the plant operated within the
Board’s emission standards. The failure to obtain a permit was
inadvertent and in good faith reliance that the installer of its
pollution control equipment had applied for and obtained a
permit.
In the second case, involving a $11,000 penalty for water
pollution from cyanide discharges from an. auto parts manu-’
facturer, the court found that the violations ceased five months
prior to the filing of the comolaint. Furthermore, the company
“had been diligently trying to bring its operations into
conformity... and was not dilatory or recalcitrant.” The penalty
was
held “purely punitive’ under these circumstances. Southern
Illinois Asphalt, 326 N.E.2d at 412.
The court concluded as to both cases that ‘the General
Assembly intended to vest the Board with broad discretionary
powers in the imposttion or civiL penaltIes
;
nowever, the recorc
showed “substantial mIt~gat:ng circumstances” wn~cn requtrec tcat
no penalty be imposed. Southern Illinois Asohalt, 326 N.E.2d at
409. Both cases involved occoerative efforts and violaticns
which ended well before the filing of tne complaints. The court
found, therefore, that the penalties could not aid enforcement of
the Act.
While acknowledging that the Board has discretionary
authority to levy civil penalties in enforcement cases, the
Supreme Court offered a note of caution. ‘Implicit in the grant
of the discretionary authority to impose monetary c~vi1 penalties
in varying amounts is the reouirement that the sever itv of the
11 1—22
penalty should bear some relationship to the seriousness of the
infraction or conduct.” Southern Illinois AsDhalt, 326 N.E.2d at
408. This directs the Board to consider the overall significance
of the violation as part of a penalty determination.
(5 The Mystik Tape Case
In Mystik Tape, Division of Borden., Inc. v. Pollution
Control Board, 60 I11.2d 330, 328 N.E. 2d 5 (1973), an air
pollution (odor) case, a $3,500 cenalty was uoheld by the
Illinois Supreme Court. Mystik was found to have violated the
Act and rules and regulations by installing certain equipment
after it had beer. denied permits for doing so. The ~erm:t
violation warranted a penalty since tne facts were un1~ke those
of Southern Illinois Asphalt (Case No. 4, where one company
showed good faith and its failure to obtain a permit was purely
inadvertent. Also, Mystik’s behavior was not analogous to that
of the other company in Southern Ill:n.ois Asphalt, Case No. 4,
whose conduct was not dilatory or recalcitrant. Although the
case was remanded to the Board for reconsideration of the alleged
air pollution violation based on the factors set forth in Section
33(c), the penalty was upheld for the clear violation of the
relevant permit requirements. Citing to Incinerator, Inc. Case
No. 3, the court found that the penalty was not arbitrary ~r
oppressive. The court also reaffirmed “the power of the Board to
impose civil penalties primarily as a method to aid enforcer~ent
of the Act,” citing Southern Illinois Asphalt, Case No. 4L and
City of Monmouth, (Case No. 2. Mystic Taoe, 328 N.E.2d at 10.
Without a detailed discussion as to how the penalty would
aid enforcement or how each factor of Section 33(o) applies~to
the failure to obtain oerm~ts, the Mvstik Taoe court affirmed the
penalty for the permit violation. The
Mvst:~
?aoe court noted
that Mystik applied for permits for: (I) odor—ccun:eracr.ant
devices and (2) a spreader. The Agency denied the permits
because the former equipment was believed to only mas-~. tre odors
and the latter equipment was considered a potential
source of
pollution needing pollution control devices. The penalt issue
in this case thus seems to relate in part to whether
there
is an
aooarent risk of oresent or future air collution. Tnis is in
contrast to the mere technical comoliance with oCrm~t
requirements sought by the Agency in the case of Southern
Illinois .Asohalt, Case Nc. 4, where
air
oollution was not an
issue. Mvstik :nstalled tne ecu~oment desotte the per—~~~itdenIals
and, therefore, the fine was not arbitrary or oppressive since
the permit violation was knowing, and not an. inadvertent failure
to meet a technical recuirement.
6 The Metropolitan Sanitary District Case
The Illino:s Suoreme Court reiterated the theme of aiding
enforcement of the Act in another 1975 case. In that case, the
111—23
_1 ,1~_
Metropolitan Sanitary District of Greater Chicago independently
initiated plans to construct compliant facilities to cure water
pollution problems. The district had not been “dilatory or
recalcitrant.” It “fell victim to inter—agency conflicts (i.e.,
extensive negotiations with the Northeastern Illinois Planning
Commission and the Sanitary District of Elgin) resulting in
delays which made it impossible.. .to prevent the violations...”
Under these circumstances, the penalties totaling $~,000 were
found to be “purely punitive” and not an aid in enforcement of
the Act. Metropolitan Sanitary District v. Polluti~on Control
Board, 62 Ill.2d 38, 338 N.E.2d 392, 397 (1975).
(7 The Processing & Books, Inc. Case
The Illinois Supreme Court upheld a $3,000 penalty in a 1976
case involving air oollution from odors emitted from an egg and
poultry rarm.
Processing & Books, Inc. v. Pollution Control
Board, 64 Ill.2d 68, 351 N.E.2d 865 (1976). The court found that
the Board decision predated the court’s decision in Incinerator,
Inc., (Case No. 3, and, therefore, although the Board did not
make specific findings on each of the (then four) fdctors in
Section 33(c) of the Act, this did not warrant reversal since the
Board’s order made clear that each factor was considered. The
court found that, for more than one mile outside the farm,
“respondents seriously interfered with the enjoyment of life and
property in ways which could have been prevented.” ~
Books, Inc., 351 N.E.2d at 870. The court noted that the
operation had substantial social and economic value. However,
the great increase in the size of the operation, the related
negative impact on the area, and the availability of corrective
measures (which respondents did not begin until after the
complaint was filed), supported the Board’s finding that a
penalty was apDropriate.
(8 The Wells Manufacturing Company Case
The 1978 case of Wells Manufacturinc Comoanv, 73 Ill.2d 226,
383 N.E.2d 148 (1978), involved a S9,000 penalty for alleged
odor—related air pollution emitted from an iron foundry. In a
detailed analysis of Section 33(c) factors, the Illinois Supreme
Court reversed the Board’s decision as being against the manifest
weight of the evidence. ‘The court described the task of
eva1uat~nga Section 9(a) air pollution case in terms of a
balancing test. “The Board must balance the costs and beneftts
of abatement in an effort to distinguish the trifling
inconvenience, petty annoyance or minor discomfort fror~i a
substantial interference with the
enjoyment
of life and
property.” Wells Manufacturing Comoanv, 383 N.E.2d at 150,
citing Processing & Books Inc., Case No. 7. Section 33(c) must
be used to guide the Board in this determination.
111—24
The Supreme Court found that much evidence had been
developed below concerning the character and extent of the harm
pursuant to Section 33(c)(i). The Board focused on citizen
testimony and concluded that the “odors ‘unreasonably interfered
with the enjoyment of life and property’
.“
Wells Manufacturing
Company, 383 N.E.2d at 152. Regarding Section 33(c)(ii), the
company indisputably was making a major social and economic
contribution by employing approximately 500 persons ‘and supplying
parts to numerous industries. Section 33(c)(iii), involving the
appropriateness of the pollution source to its locale raised
several areas of dispute. Although the Supreme Court agreed that
the company’s “priority of location does not achieve the level of
an absolute defense,” i~t was “impressed with its significance’
here. Wells Manufacturinc Comoanv, 383 N.E.2d at 152. The
nearby residential area and hign. school were develcoed later with
notice that the adjacent area was zoned for heavy—industrial
use. The hiçh school was even built on land accuired from the
foundry.
Expansions to the foundry were made after the school
was constructed
and after some homes were built. The court held
that this weighs against the priority of location argument but
that the proof that emissions had increased was insufficient to
meet the Agency’s burden on this point. The final criteria in
Section 33(c)(iv) regarding
the technical practicability and
economic reasonableness of pollution controls ultimately Favored
the company. Financial considerations were not at Issue.
Hbwever~ the court held that the Agency had the burden “to come
forward with evidence that emission reduction is practicable
Wells Manufacturing Company, 383 N.E.2d at 153, and conflicting
expert testimony on three methods of abatement and •an inadequate
record on a fourth method defeated Agency assertions of tech~’nical
practicability. The court concluded that these factors, tak~en
together, did not establish the unreasonableness of the odocs.
Hence, no violations had occurred and the penalties were
inapproor iate.
B. Illinois Appellate Court Cases
1. Air Pollution Cases
Air pollution violations involving Section 9 of the Act have
been the subject of many contested penalty cases. These case~
may be subdivided somewhat into the two types of violations
covered by Section 9(a) based on
the alternative definitions of
air pollution offered in Section 3.02. That section defines air
pollution
both in terms of injury and in terms of inteçference
with life or property as follows:
“AIR POLLUTION” is the presence in the
atmosphere of one or more contaminants in
sufficient quantities and of such character-
istics and duration as to be in,~urious to
human, plant, or animal life, to health, or to
property, or to unreasonably interfere with
the enjoyme~ of life or property.
111-2S
—,
Section 3.02 of the Act (emphasis added).
(9 The Allied Metal Company Case
Allied Metal Co. v. Illinois Pollution Control Board,
22
Ill.App.3d 823, 318 N.E.2d 257 fIst Dist. 1974) was an early air
pollution case where a $2,500 penalty was appealed. The fine had
been imposed for violations of Section 9(a) of the Act,
particulate emission regulations and permit recuirements. The
court reversed the Board’s decision finding Section 9(a) and
emission violations as being against the manifest weight of the
evidence. Furthermore, the Board had failed to consider the
“reasonableness’ factors of Section 33(c), which thts court held
to be mandatory to estabiish:ng these violations. The permit
violation
for construction
of a potential emission source was
upheld and on that issue the court remanded for redetermination
of the penalty. For tne permit violation alone, the Board
reassessed the penalty at $750 upon remand.
(101 The Sangamo Construction Company Case
In Sancamo Construction Company v. Pollution Control Board,
27 Ill.App.3d 949,328 N.E.2d 571 (4th Dist. 1975), the court
affirmed the finding of a violation of Section 9(a) for odors and
dust emanating from petitioner’s asphalt and concrete plants and
for operating without a permit. The Fourth District extended the
Supreme Court’s rationale in. Incinerator Inc., (Case No. 3,
which held that air pollution causing interference must be
considered in light of Section 33(c) factors before a violation
is established. The district court held that both tvoes of air
pollution violation must be proved through an analysis of Section
33(c) factors. Sanca:mo Construction, 328 N.E.2d at 575. The
court stated that the Board correctly found a Section 9(a)
violation, but finding that only one plant had operated without a
permit, remanded for reimposition of the fine. A $5,000 fine had
been imposed for the three violations, and on remand to the
Board, the fine was reduced to S4,000.
The Sangamo case approaches Section 33(c) as part of the
proof of a Section 9(a) violation. However, as discussed below,
in the Aluminum Coil Anodizinc case, 40 Ill.Aoo.3d 785, 31S
N.E.2d 612, 615 (2d D~st. 1976) Case No. 111, some courts have
found that Section 33(c) is part of the penal:’; determination and
not part of the proof of a Section 9(a) air polluticn vLolation
where harm or injury occurred.
11 The Aluminum Coil Anodizing Corooration Case
In a 1976 odor case, involving the first type of Section
9(a) air pollution violation, the Second District upheld a $1,500
penalty against an anodizing pant. The court observed tnat th:s
1 11
—
20
violation, which was injurious in its effect, involves a
different burden of proof than air pollution which intrudes on or
interferes with life. “By its terms proof of the essential
elements of air pollution of the first type set forth by section
3(b) does not require any showing by the complainant of the
unreasonableness of the emissions involved, in contradistinction
to air pollution of the second type set forth in section 3(b)
Aluminum Coil Anodizing Corporation v. Pollution Corftrol Board,
40 Il1.App.3d 785, 315 N.E.2d 612, 615 (2d Dist. 1976). In this
case, the company’s emissions were associated with foul odors,
various health ailments, and property damage. Air pollution of
the first type was established based or. testimony regarding its
injurious effects including instances of breath:ng difficulties,
headaches, couching, and eye Irritations; spotting on. aluminum
doors and plants in the area; and deterioration of a nearby roof.
The court found that the Board’s opinion reflected due
consideration of Section 33(c) factors. The court noted that the
company’s not having received complaints might be a m:ticatin.g
factor. However, the record also showed no good faith efforts to
achieve compliance between the date of the complaint and the
closing of the plant over one year later, despite available
technology to control the odors. The penalty, therefore, was
appropriate, and not excessive and would “serve to aid in the
enforcement of the Act by working to secure voluntary compliance
with the Ac,t in other cases, especially by ACA at its new
facility.” Aluminum Coil Anodizing, 315 N.E.2d at 619 (emphasis
added)
12 The Lloyd A. Fry Roofing Company Case
In 1974, the First District affirmed the finding of a
violation. in the nature of the second type of air pollution, that
is, unreasonable interference with life and property in a case
involving smoke and odors from an asphalt roofing plant. Lloyd
A. Fry Roofing Comoanv v. Pollution Control Board, 20 Ill.App.3d
301, 314 N.E.2d 350 (1st Dist. 1374). Headaches, nausea, and eye
and throat irritations were associated with the emissions. The
court found that evidence regarding Section 33(c) factors was
sufficient to supPort the Board’s findings. Besides the impact
above, the Board heard evidence on the operation of the plant,
the presence of other pollut:on sources in the area, and,
notably, the availabilit of pollut:on control devices to asphalt
plants in general and their usage at petitioner’s other plants.
The court affirmed the Section 9(a) violation, but the case was
remanded for reconsideration of tn.e S50,000 ocralty since the
court reversed tne Board s f:n.c:ng or a v:olaticn or the ~oaro s
rules and regulations. On reconsideration, the Board assessed a
reduced penalty of $10,000.
111-27
l33 The Bresler Ice Cream Company Case
In contrast with the Lloyd A. Fry Roofing case (Case No.
12,
a number of cases involving the second type of Section 9(a)
violation (i.e., interference) were decided by the appellate
courts with the conclusion that civil penalties should not be
sustained. In Bresler Ice Cream Company v. Illinois Pollution
Control Board, 21 Ill.App.3d 560, 315 N.E.2d 619 (lit Dist.
1974), the court found that an air pollution violation in the
naçure of unreasonable interference with the enjoyment of life or
property resulted from the release of flyash and odors from
Detitioner’s incinerator. However, the record did not suoport
the $1,500 penalty since petitioner ultimately carried the burden
of proof as to mitigating circumstances. Notably, the company
showed good faith in. volun.taril’i attemotinc to abate the
pollution. in terminatinc use of the incinerator orior to the
corola_-’t bc_np i_ec, a~o ac~ee~gto
re:~ar~
:ron futur:
use. The violation was held to be “de minimus,” with no impact
on health. The facts stipulated to by the parties “evince a
sincere desire
...
to cooperate... This attitude should have
been noted and encouraged by the Board.” Bresler Ice Cream, 315
N.E.2d at 621. As a further note, the court compared the subject
penalty to a $1,000 penalty levied in another case for solid
waste dumping violations which posed health risks. It concluded
that petitioner’s case was a far less serious situation for which
the Board imposed a disproportionate penalty. The court gave a
clear signal to the Board to look for violator’s good faith
conduct and for consistency in its disposition of penalty cases.
(14 The Chicago Magnesium Casting Company Case
The First District reached the same conclus:on in. anotner
197~air pollution case. involving a $1,000 fine for ocors
generated by a foundry. The court found that the company had
worked with the county agency, conducted studies, attempted to
mask the odors, and then abandoned the offending chemical six
months before the complaint was filed. Although a Section 9(a)
violation was found, the court held that a oenaltv would not aid
enforcement of the Ac: given tne coooerat~ve etforts snown, tn.e
lack of reasonable means to control odors prior to the company’s
use of a new cnemical, and the fact that compliance was acnieved
six months prior to the complaint. Chicago Macnesiun Cast:nc
Comoany v. Illinois Pollution. Control Board, 22 ll.Apu.3d 489,
317 N.E.2d 689 (lstD:st. 1974).
2
The court noted, however, that “economic reasonableness and
technical practicability are but two factors to be considered by
the Board in determining whether or not the Act has been
violated.” Chicaco Macnesium Castinc, 317 N..E.2d at 632. These
do not rise to the level of a coriolete defense.
111—28
(15 The CPC International, Inc. Case
CPC International, Inc. v. Illinois Pollution Control Board,
24 Ill.App.3d 203, 321 N.E.2d 58 (3d Dist. 1975) represents
another Section 9(a) air pollution case, this time involving
regulatory standards for particulate levels. In this case, the
Third District found that a viol~tionoccurred, but ‘the $15,000
penalty assessed by the Board was vacated. As in Bresler Ice
Cream, (Case No. 13, and Chicaco Magnesium Castina, Case No.
14, the petitioner acted promptly to correct the problem. The
violations were minor and were remedied before the Board’s
decision. The penalty was arbitrary and excessive wnen compared
to three prior Board decisions imposin.9 fines of $3,000 to
$10,000 “for violations
whicn were deliberate
and long—term.”
CPC International, Inc. 321 N.E.2d at 61. The court also
observed that three adjacent industrial plants had received
variances and emitted higher levels of particulates than the
petitioner, and that this should be a major consideration in a
penalty determination. This, too, bears on the court’s
evaluation of the Board’s even—handedness in penalty cases.
(161 The Arnold N. May and Hillview Farms, Inc. Case
In a 1976 case involving odors from the application of
sludge and feedlot wastes to farmland, a penalty was again
vacated on appeal. In Arnold N. May and Hillview Farms, Inc.v.
Pollution Control Board, 35 Ill.Apo.3d 930, 342 N.E.2d 784 (2d
Dist. 1976), the Board’s findings of violations of both types of
Section 9(a) air pollution and Section 12(b) water pollution
permitting requirements were upheld. However, the S2,500 penalty
was vacated as being against the manifest weight of the evidence
and not an aid in enforcement of the Act. The court disagreed
with the conclusion which the Board drew from its analysis of
Section 33(c) factors. The court noted that the Board found
minimal impact on health and the environment. Furthermore, the
court found that the Board’s emphasis on “discomfort and
inconvenience caused to neighbors over a long period of time”
from the offensive odors could not support a penalty when the
remaining three of the four Section 33(c) factors favored the
petitioners.
(171 The Draper and Kramer, Incorporated Case
In the case of Draper and Kramer, Incoroorated v. Illinois
Pollution Control Board, 40 fll.Aop.3d 918, 353 N.E.2d 106 (1st
Dist. 1976), the court reversed both the violation. of Section
9(a) and the $1,000 penalty for the alleged discharge of a toxic
mist from petitioner’s cooling tower. The emissions were said to
result in eve, ear, nose, throat and skin irritations. However,
the court round that the cescr~oed inter:erence w~tn l~:ecouid
not be attributed conclusively to petitioner’s equipment. The
111 -2
court noted that use of the chemical purportedly responsible was
discontinued, but the physical complaints continued for almost
nine more months. Petitioner also took prompt and cooperative
action to prevent any further release of the spray upon learning
at hearing that the sPray itself, and not just the chemical, was
objectionable. Neither the record nor the complaint had
previously focused the violation on other than the one
chemical. The court concluded that, under these cir’cumstances,
the penalty could not aid enforcement of the Act.
181 The Marblehead Lime Company Case
Contrasting with the above cases, a penalty of $20,000 was
affirmed in a 1976 case for a Section 9(a) air oolluticn
violation ;h~o~unreasonably ~nterferec ~_th life a~’corooerty
In Marblehead Lime Comoanv v. Pollution Control Boaro, 42
Ill.App.3d 116, 355 N.E.2d 607 (1st Dist. 1976), petitioner’s
lime manufacturing plant subjected area residents to constant
fallout of dust which blanketed nearby property indoors and
outdoors and caused skin, eye and throat irritations and
breathing problems. The court concurred with the Board’s
evaluation of Section 33(c) factors, noting several mitigating
factors. In finding no abuse of the Board’s discretion to impose
a penalty, the court highlighted the extent of the negative
impact of the pollution and the availability of “housekeeping and
maintenance” alternatives to control it. “The penalty was
imposed after extensive hearings which indicated that petitioner,
for a long period of time, had i~terferedwith the enjoyment of
life and property in ways that reasonably could have been
avoided.” Marblehead Lime, 355 N.E.2d at 612, 613. Thus, as. in
Lloyd A. Fry ?.oofinc, (Case No. 12, the accessibility of
pollution control procedures or equipment weighs heavily in favor
of a penalty.
(19 The Hillside Stone Corporation Case
In another case’ involving the second type of air pollution,
the First District reduced a penalty from $10,000 to S2,000. In
Hillside Stone Corporation v. Illinois Pollution Control Board,
43 Ill.App.3d 158, 356 N.E.2d 1098 (1st Dist. 1976), the
unreasonable interference with life and property due to heavy
dust emission from the limestone quarry was much like that in
Marblehead Lime, (Case No. 18. After affirming the finding of
the violation based on sufficient evidence on the Section 33(c)
criteria, the court agreec with tne pet1t~oner tnat tne fine was
excessive. Evidence that oetitioner nad taken substantial steps
to control emission, had spent S600,000 to control pollution, and
had already paid a $10,000 fine as a result of a suit by the Cook
County Department of Environmental Control persuaded the court to
reduce the fine to S2,000. This amount was considered “adequate
to aid enforcement of the Act and as a warning to Hillside of the
necessity properly to maintain its equipment and to avoid delay
11 i—3~
in the filing of a corporate approved plant for compliance.”
Hillside Stone, 356 N.E.2d at 1102.
20 The Joliet Railway Equipment Company Case
In a 1982 case involving air pollution and open burning in
violation of Section’ 9(a) and (c), the Third Distridt court
upheld a $10,000 penalty assessed, not by the Board, but by the
Circuit Court of Will County. P~oole of the State of Illinois v.
Joliet Railway Ecuioment Co., 108 Ill.App.3d 197, 483 N.E.2d 1205
(3d Dist. 1982). Although the case was remanded with respect to
injunctive relief granted~ the lower court’s penalty was affirmed
as being supported by the evidence. The record included
testimony of dizziness, vomiting, r.ausea, headaches, and tearing
of the eyes in conne~tionwith a fire at petitioner’s salvage
yard. The reaular coerations resulted in reoeated instances of
fires and of toxic fumes emissions.
2. Water Pollution Cases
(21 The Meadowlark Farms, Inc. Case
In a .1974 water pollution case, the Board assessed a minor
$141.66 penalty against the owner of surface rights in land on
which coal mining refuse piles produced seepage containing acid
mine drainage. Meadowlark Farms, Inc. v. Illinois Pollution
Control Board, 17 Ill.App.3d 851, 308 N.E.2d 829 (5th Dist.
1974). The seepage entered a tributary of a larger stream,
resulting in periodic fish kills from the contaminated flow. The
$141.66 penalty was assessed for the value of the fish kill, and
not unde,r the Board’s discretionary powers to assess penalties of
up to $10,000 per violation and $1,000 per day. However, the
court determined an imoortant enforcement issue, finding that the
owner of the water pollution source need not be shown to have
created the hazard nor to have had knowledge of the discharge.
“The Environmental Protection. Act is malum prchibitum~ no proof
of guilty knowledge or mens rea is necessary to a finding of
guilt.” “(Kinowledge is not an element of a violation of Section
12(a) and lack of knowledge is no defense.” Meadowlark Farms,
308 N.E.2d at 837.
22 The Freeman Coal Mining Corporation Case
Citing Meadowlark Farms, (Case No. 21, the Fifth District
again found a water poll~itionviolation where a mine refuse pile
on petitioner’s land produced acidic runoff in the case of
Freeman Coal Mmmc Corooration v. Illinois Pollution Control
Board, 21 Ill’.Aop.3d 137, 313 N.E.2d 616 (5th Dist~ 1974). The
court held that the water pollution threatened the health and
welfare of the surrounding residents, may have made nearby crop
land unproductive, and seriously impacted the fish and insect
111-31
po~ulation of the stream and adjacent vegetation. The totality
of circumstances, however, did not support the $5,000. penalty
assessed by the Board. The court reduced the penalty to $500
based on numerous mitigating circumstances, including
petitioner’s efforts and expenses to control the pollution
through a water treatment system, the Board’s use of a
performance bond to ensure compliance, and the disproportionate
size of the penalty compared to the less than $200 penalty in
Meadowlark Farms, Case No.
21.
23 The Allaert Rendering, Inc. Case
Water pollution violations and related permit violations
were the subject of an appeal in Allaert Renderin~ Inc. v.
Illinois Pollution Control Board, 91 Ill.ApP.3d 153, 414 N.E.2d
492 (3dDist. 1980). The Board assessed a S3,000 penalty in
Connection with the wastewater treatment system of petitioner’s
rendering plant. Petitioner’s highly contaminated lagoons
created a hazard of water pollution to surface waters from.
flooding. The court held that it was not necessary to show
actual pollution had already occurred since Section 12(a) of the
Act prohibits the threat of contamination. Flooding, which was
shown to have previously occurred, could reoccur. The court also
found that the lagoons were illegally constructed and operated
without permits. Given the environmental risks and the five—year
history of delayed compliance with the Act and regulations, the
court approved the penalty in a cursory statement, noting that
“(the Board stated that it found the amount of the fines to be
‘...
the minimum necessary to ensure future compliance...’”
Allaert Renderinc, 414 N.E. 2d at 497. The court affirme.d the
penalty, T~tding no abuse of discretion in either its imposition
or amount.
(24 The Archer Daniels Midland Case
In Archer Daniels_Midland v. Illinois Pollution_Control
Board, 119 I1l.A~o.3d 428, 456 N.E.2d 914 (4thDist. 1953) Case
No. 24a, petitioner aooealed a sizable $40,000 oenalty imposed
for water pollution and NPDES permit violations, which resulted
in fish kills and oily scum problems at a nearby lake. Contami-
nation resulted from storm water discharges carrying organic
material from petitioner’s soybean and corn germ extraction
plants and vegetable oil refinery. The Board assessed a $40,000
penalty after hearing evidence on the environmental impact on
violations occurring from 1976 through 1981, on petitioner’s
efforts and $4,500,000 in expenditures for pollution control, on
an Agency calculation of possible savings from non—compliance
ranging from about S53,000 to $108,000, and on other factors such
as the social and economic value of the pollution source and its
suitability to the area. On appeal, the court remanded the case
for redetermination of
the penalty. The court found that’the
Board erroneously relied on evidence of the savings to
111-32
petitioner, which the court believed was based on spurious
assumptions and lacked adequate foundation. At hearing, the
Agency’s witness testified that he used computer generated
calculations, based on USEPA’s “Noncompliance Penalty Formulae,”
which ultimately were too complicated to explain. Also, in
response to theBoard’s assertion that $40,000 was de minimus
given petitioner’s financial strength, the court stated:
We are not aware of any authority which makes
the ability to pay the proper basis for a
civil oenalt’, and in the case of a multiolant
corooration, it ignores any internal
accounting system wh~cn mignt attr~oute tne
entire penalty to one profit center.
Archer Daniels Midland, 456 N.E.2d at 99.
The court then distinguished Wasteland Inc., 118 I11.Aop.3d 1041,
456 N.E.2d 964 (3d Dist. 1983), Case No. 34, which gave support
to a penalty which reflected savings from noncompliance. That
case focused more on the violator’s “continuing blatant
disregard” of environmental laws, which this court believed
contrasted substantially from the.facts here. The court went on
to emphasize that the Board inadequately considered the major
efforts and $4,500,000 in expenditures already made and the
willingness of petitioner to spend another $1,000,000 if that
would remedy the problem.
On remand, the Board imposed a $32,500 penalty, after
rejecting a $15,000 settlement proposed by the Agency and
petitioner. That decision was appealed, and in Archer Daniels
Midland v. Pollution Control Board, 149 Ill.App.3d 301, 500
N.E.2d 580 (4th Dist. 1986) (Case No. 24b, the court reduced the
penalty to $i5,000~ The court based this decision on the
substantial mitigating factors, including the large sums spent,
and to be spent, towards compliance, good faith in reporting the
violations, and value to the community. The court believed
“$15,000 is adequate to aid in enforcement of the Act and to
serve as a deterrent to
ADM
against future violations.”
Archer
Daniels Midland, 500 N.E.2d at 584 (4th Dist. 1986) Case No.
24b
(emphasis added).
Noticeably,
the court limited the scope
of the deterren.t effect to this petitioner only, and concluded
that a much smaller penalty than the Board assessed would achieve
that end.
(25 The Russell Perkinson, d/bia Porkville Case
In a case involving the discharge of liquid swine waste into
a stream, the Third District upheld a SlO,000 penalty as well as
an additional $10,376 for the value of 101,219 fish killed.
Russell Perkinson., d~b/a Porkville v. Illinois Pollution Control
Board, 135 Ill.Dec.
333, 543 N.E.2d 901 (3d Dist. 1989).
In. 1983
and 1984 petitioner’s swine farm, which had experienced prior
Ii 1—33
—.J
seepage problems with its waste lagoons, discharged waste to an
adjacent field where drain tiles connected to a discharge pipe
carried the waste into a stream. The Board assessed respective
fines of $10,000 and $1,000 for 1983 and 1984 violations of the
Act, rules and regulations and NPDES permit conditions requiring
notification of any discharge. Costs assessed for the 1983 and
1984 fish kills were $10,376.84 and $443.26. Petitioner appealed
the 1933 fines and costs as an abuse of the Board’s ‘discretion.
In affirming the Board’s decision, the court found that the
violations did not require proof of knowledge or intent regarding
the discharges. See Russell Perkin.son, 543 NLE.2d at 903,
citing Meadowlark Farms, Case No. 21; Hindman, (Case No. 28;
Freeman Coal Mmmc, Case No. 22; and Bath Inc., 10 Ill.Aoo.3d
507, 294 N.~.2o 7i8 (~~tnD:st. l9i3) Case No. 34. Furthermore,
the court observed that although petitioner claimed that a trench
constructed by vandals caused the 1983 violations, the court
found no evidence that petitioner tried to prevent vandalism or
lacked the caoability to control the source of pollution.
The case before us is controlled by the long
line of precedent in Illinois which holds that
the owner of the source of the pollution
causes or allows the pollution within the
meaning of the statute and is responsible for
that pollution unless the facts establish the
owner either lacked the capability to control
the source, as in Phillips Petroleum or had
undertaken extensive precautions to prevent
vandalism or other intervening causes, as in
Union Petroleum.
Russell Perkinson, 543 N.E. 2d at 903, citing
Phillios Petroleum Co. v. Illinois Environ-
mental Protection Acencv, 72 Ill.Apo.3d 217,
390 N.E.2d 620 (2d Dist. 1979) and Union
Petroleum Core. v. United States, 651 F.2d
734, (Ct. Cl., 1981).
Furthermore,
the continuing seepage from the lagoon also
supported the Board’s order. The court pointed out that the
$10,000 penalty assessed was less than the Agency had requested
and referred to the violation. as a “major pollution event.”
3. Permit Violation Cases
26 The Highlake Poultry Inc. Case
Penalties assessed for violations of various permitting
requirements have been the basis of a number of reversals of
Board decisions. In the case of Hichlake Poultry Inc. v.
Pollution Control Board, 25 Ill.Apo.3d 956, 323 N.E.2d 512 (2d
Dist. 1975), the petitioner began construction of a sewage
ill
-
—25-
treatment plant without a permit. The court reversed penalties
totalling $2,500 upon a showing that the Agency contributed to
delays in securing a permit, and the petitioner had been
cooperative and had achieved substantial compliance. Showing
little tolerance for this particular enforcement action the court
stated:
It appears, further, that in this case a
relatively small business was being put to
considerable trouble and expense, was trying
to cooperate with the various governmental
bodies which seemed to be aligned against it,
and was ultimately penalized for being too
early rather than too late in making improve-
ments to its sewage treatment system, on the
instigation of an agency responsible in some
measure for the company’s oredicament.
~ih1ake Poultry, 323 N.E.2d at 615.
(27 The Freeman Coal Mining Case
Other cases reinforce the Second District’s implication in
H~~ake’Poultry, Case No. 26, that permit violations in the
face of good faith efforts and substantial compliance
expenditures present a weak case for a penalty finding. The case
of Freeman Coal Minin~v. Illinois Pollution Control Board, 29
Il1.App.3d 441, 330. 1~T~72d524 (5th Dist. 1975) demonstrates that
the appellate courts are not always impressed with the
seriousness of permit violations, which may appear to be more
form than substance when genuine efforts toward compliance have
been made.
The Freeman Coal Mining case involved violations of both
permit requirements and regulatory standards for air pollution
(density
of smoke) established by the
Board’s predecessor agency,
the Air Pollution Control Board. The court remanded the decision
to the Board on the basis that only two of three alleged
violations could be sustained. It directed the Board to
reevaluate the $1,500 penalty in light of the reduced number of
violations and mitigating factors. ‘The court specifically noted
that with respect to the petitioner’s failure to secure permits
on a timely basis, “in determining the penalty for such
violation., the Board should take into consideration that the
installation of the rnulticlones was cart of the acoroved ACERP’
(Air Contaminant Emission Reduction Program). Freeman Coal
Mining, 380 N.E.2d at 529. On remand the penalty was reduced to
$850.
111-33
—~rz
-
281 The Hindman Case
In Hindman v. Environmental Protection Agency, 42 Ill.App.3d
776, 356 N.E.2d 669, (5th Dist. 1976), the court reduced
penalties for open burning of refuse at a landfill and for permit
violations by 60, on finding some mitigating circumstances and
good faith efforts at compliance. The court reduced the arguably
nominal penalties from $250 and $500 to $100 and $20’O. In
dropping the open burning fine to $100, the court stated that
“the fine of $250 could not prevent the recurrence of fires for
which he was not fully responsible.” As to the permit violation,
the court added that “a fine of $200 would have accomplished what
the $500 fine sought to accomplish and would have been more
closely related to the nature of the violation involved.”
Hindman, 356 N.E.2d at 672. This case illustrates a reluctance
of the court to imoose fines and the difficulty faced by the
Board in setting amounts which might
encourage compliance in
similar circumstances.
(29 The Harris—Hub Company, Inc. Case
In another permit violation case, the First District found
that the. good faith, inadvertent failure to obtain a permit in
the absence of a pQllution violation could not support a $500
penalty. In Harris—Hub Company, Inc. v. Pollution Control Board,
50 Ill.App.3d 608, 365 N.E.2d 1071 (1st Dist. 1977), the court
found that the company’s good faith was shown by changing the
plant’s heating system, installing an afterburner, ceasing to
burn refuse entirely, and beginning a plan to convert forklift
trucks and tractors from gas or diesel to electric power. The
comPany had a good faith belief that no permit was required and
was not recalcitrant. It had also begun the permit application
process before the complaint was filed, and the record did not
reveal any economic advantage gained from its failure to obtain a
permit. In a forceful commentary on seeking a penalty for permit
violations, the court stated:
Here, however, ‘it is apparent that the
resources of the EPA and the PCB would have
been better served by obtaining compliance by
polluters rather than by seeking the sanctions
of a civil penalty for a technical noncom-
pliance by Harris.
Harris—Hub, 365 N. E.2d at 1073 (emphasis
added)
(30 The Darrel Slager, d/b/a Rapid Liquid Waste Case
Darrel Slaaer, d/b/a Rapid Licuid Waste and Rubbish Removal
v. Illinois
Pollution Control Board, 96 Ill.Aop.3d
332, 421
N.E.2d 929, (1st Dist. 1981) presents the kind of case in which
111—30
the courts readily uphold a penalty for a permit violation. Here
a $1,000 penalty was affirmed where petitioner showed “conscious
disregard” of an Agency warning and the liquid wastes posed “an
especially great hazard to the environment because of their
tendency to spread quickly and react with other wastes.” Darrel
Slager, 421 N.E.2d at 934. Giving a measure of support for the
function of permits, the court noted that, “one of the reasons
for the permit requir~men’tis to enable the Agency t’o supervise
economically safe disposal methods for such substances.”
Penalties, therefore, may be most appropriate where safety
hazards and the Agency’s need to regulate those risks are at
issue. See also: R.E. Joos Excavating Co. v. Environmental
Protection Agenca, 58 Ill.Aop.3d 309’, 374 N.E.2d 486 (3d Dist.
1978) Case No. 31, affirminc $1,500 oenaltv for ooeratinc a
refuse disoosal site without a oermjt; ?ielet Bros. Tradinc, Inc.
v. Pollution Control Board, 110 Il1.App.3d 752, 442 N.E.2d 1373
(5th Dist. 1982) Case No.
32, affirmin.g $7,500 penalty for
operating a solid waste management site without a permit and
other violations for on-site practices and open burning on a 80
acre automobile shredding and junk site.
(33 The Wasteland, Inc. Case
In a 1983 case also involving a solid waste landfill site, a
$75,000 penalty was upheld for numerous violations of the Act and
regulations where operations were far beyond the scope of the
permit. Wasteland, Inc. v. Illinois Pollution Control Board, 118
Ill.App.3d 1041, 456 N.E.2d 964 (3d Dist. 1983). Among other
violations, the firm accepted unpermitted refuse, carried on
salvage operations, failed to properly cover the waste, caused
leachate problems, and handled almost three times the
amount of
waste estimated in its permit application. The court summarized
the facts as “a case of.continuinc blatant disregard for
requirements and procedures designed to protect the environment
while permitting useful operations.” Wasteland, Inc., 456 N..E.2d
at 976. The court found that real dartqers were oresent with
these extensive violations, and this gave support to the
“severity oi the punishment.” Id.
The court noted that the civil pena1t~was not in excess of
the maximum $10,000 per violation and S1,000 per day, given that
violations were committed for over a year. The court also found
it was within the Board’s discretion to assess this oenalty in
light of the Board’s finding that Wasteland had saved Sl7,000 to
$25,000 by burying unpermitted wastes and saved $45,000 due to
violations occurring at
a paper recovery site. This penalty was
found by the court to a~o enrorcement or the Act,
for tnrough
penalties upon those who blatantly disregard applicable rules and
regulation, others who might consider cutting corners at the
expense of the environment, are deterred.” Id. Here, where the
court did not find good faith efforts at comoliance, and the
violators benefited at the clear expense of the environment, the
court favored a high penalty which might deter others as well as
ii 1-37
the violators. (For an early case involving violations of
landfill rules and regulations for spreading, compaction, ‘cover,
salvage, and for underground burning, see Bath, Inc. v. Pollution
Control Board, 10 Ill.App.3d 507, 294 N.E.2d 778 (4th Dist. 1973)
(Case No. 34. The case did not involve permit violations, but
did support a $2,000 penalty
for illegal landfill
practices,
including burning, which the court held did not require proof of
knowledge, intent, or sc’ienter.)
35 The Citizens Utility Company of
Illinois
Case
Another example of the courts general reluctance to impose
penalties for permit violations absent a showing of actual
pollution or harm is found in Citizens Utilities Company of
Illinois
v. Illinois
Pollution Control Board, 127 Ill.Apo.3d 504,
468 N.E.2d 992 (3d Dist. 1984). In this case, the N?DES permit
for operation of, and discharges from, a sewage treatment plant
was allegedly violated due to inadequate operation and
maintenance practices. The court reversed the $1,000 penalty,
finding that no adverse environmental impact had occurred.
36 The Standard Scrap
Metal Company Case
In Standard Scrap Metal Company v. Pollution Control Board,
142 Ill.App.3d 655, 491 N.E.2d 1251, 1259 (First District, 1986),
the court found that the company’s operation of a furnace and
incinerator for nine years and the associated air pollution
“exhibited a blatant disregard for the rules and procedures
designed to
protect the environment.” Affirming a $30,000
penalty, the court held that petitioner had acted in bad faith
and that the permit violation had been accompanied by heavy smoke
emissions which “endangered the public health and safety,”
“created a safety hazard” on the nearby highway, and caused
nearby workers to become ill. Standard Scrap Metal, 491 N.E.2d
at
1255.
The court found support for the amount of the penalty in the
Board’s
consideration of Section 33(c) factors as well as the
savings derived from noncompliance and the company’s history of
profits
spent for officers’ compensation instead of pollution
controls.
The court cited Wasteland, Inc., Case No. 33, where
the violations had also involved “dangers to the environment” and
the “petitioner was a private party who reaped an economic
benefit from violations.” Standard Scrap Metal, 391 N.E.2d at
1257, 1258. (But see also: Archer Daniels Midland (1983), Case
No. 24a, where the Fourth District rejected the savings evidence
and assertion of financial ability to
pay.)
The court likewise
adopted
the Wasteland, Inc., (Case No. 33, reasoning that the
fine would aid enforcement of the Act by deterring others. The
court noted
with favor that the Board considered Standard
Scrap’s
financial condition as
a
mitigating
factor. However, the court
also allowed the Board to take judicial notice of petitioner’s
ii 1-38
noncompliance with an earlier Board order, requiring the
installation of pollution control devices, as a matter in
aggravation. The court. noted that it was inconsequential that
the petitioner was a different legal entity than that in the
earlier order, finding that petitioner was the successor—in—
interest to the first entity. Standard Scrap Metal, 491 N.E.2d
at 1258.
Ascribing more significance to permit violations than some
other court opinions have, the First District stated:
Contrary to Standard Scrap’s contention,
violation of the Act’s permit requirements is
not a mere “oaoer” or “minor” violation.
Rather, the violation
of a permit requirement
goes directly to the heart of the state’s
enforcement program and ability to protect
against environmental camage. The permit
program is a method through which the State of
Illinois
can control emitters of contaminants
into the atmosphere, as well as emissions that
may result in the presence of contaminants in
the environment.... (The Act provides that
where a permit requirement imposes an
arbitrary or unreasonable hardship, a party
can seek and obtain a variance from the permit
requirement.
Standard Scrap Metal, 491 N.E.2d at 1256
(emphasis added).
The court went ‘on to note that despite Agency efforts, Standard
Scrap did not comply with peririit requirements and did not appeal
its permit denials or seek a variance. The court seemed to be
addressing these points in the context of lack of good faith, but
it should be noted that failure to seek a variance was held by
the Second District in 1990 to be an inappropriate element in a
consideration of Section 33(c) factors. See Modmn.e
Manufacturinq, 193 Ill.P.pp.3d 643, 549 N.E.2d 1379 (2d Dist.
1990). (Case No. 381 below.
37 The Trilla Steel Drum Corporation Case
A 1989 appeal involving a $10,000 penalty for the
failure to
secure an operating permit for manufacturing operations which
resulted in ~iO~1em:ssions endec in reversal ann remana on the
issue
of the penalty.
Trilla Steel Drum Corooration
v. Pollution
Control Board, 180 Il1.App.3d 1010, 536 N.E.2d 788 (1st Dist.
1989). The penalty was based on the lack of a permit and not on
any finding of violation of emission regulations or of bad
faith. Standing alone, then, the permit violation was found to
he an inadequate basis for what the court labele.d “the maximum
penalty of $10,000.” Id., 536 N.E.2d at 791 (emphasis added).
I 11—30
The court did not explain how it calculated that $10,000 would be
the maximum penalty for a violation of the Act for a period in
excess of 15 months. In the court’s view, the record showed that
the violation lacked the requisite seriousness to warrant this
penalty. This was found to be especially true since an expired
permit and a variance application pending at the time of the
complaint put Trilla within “the regulatory awareness of the
Agency.” “The Board has not shown that Trilla’s omrssion has
harmed in a serious manner either the information gathering or
oversight roles of the Agency.” Trilla Steel Drum, 536 N.E.2d at
790. Discouraging the use of a penalty as a general deterrent to
violations, the court advised that “the Board should not
attempt to make an example of Trilla since such a practice has
been expressly disapproved of by this court...” Id., at 791
citing Southern Illinois Asphalt Case No. 4 and City of Chicago
v. Illinois Pollution Control Board, 57 Ill.App.3d 517, 373
N.E.2d 512 (1st Dist. 1978) Case No. 39. This case illustrates
how, absent proof of actual or threatened harm, most large
penalties for permit violations have not been affirmed by the
courts.
(38 The Modine Manufacturing Company Case
Modine Manufacturing Company v. Pollution Control Board, 193
Ill.App.3d 643, 549 N.E.2d 1379 (2d Dist. 1990), was an appeal of
a $10,000 civil penalty imposed by the Board on remand after an
earlier appeal. The $10,000 penalty was imposed for operating
without a permit in violation of Section 9(b) of the Act.
The 1990 court ocinion noted that beginning in late 1981,
Modine’s emission levels were found by the Agency to exceed
regulatory limits. Despite efforts made by Modine, emissions
remained excessive and the renewal of ‘its operating permit was
denied in 1983. Contact with the Agency and corrective efforts
continued, with Modine also spending $22,000 in 1984 and $310,000
in early 1985 to achieve compliance. At a June 1985 pre—
enforcement meeting, the parties agreed that Modine
would replace
its pollution control process with one based on technology it
purchased at the $310,000 cost above, and that the Agency would
refrain from bringing an enforcement action for emission.
violations. The Agency brought an enforcement action in
February, 1986 and the Board imposed a $10,000 fine for operating
without a permit since October, 1983 and for violations of
particulate emission limitations. In the original appeal, the
court found that the Agency could not pursue the emissions
violation and remanded to the Board on the sole issue of the
appropriate penalty for the permit violation. Id., 549 N.E.2d at
1381, citing Modine Manufacturing Company v. Pollution Control
Board, 176 Ill.App.3d 1172, 549 N.E.2d 359 (1988). On remand,
the Board imposed a SlO,000 penalty for the permit violation
alone. Modine appealed the Board’s decision and the court
reduced the fine to $1,000.
111—40
The Second District rejected appellant’s argument that a
penalty could not aid enforcement since the violation had ended
before the complaint was filed. “(We decline to hold
categorically that penalties may not ~e imposed for wholly past
violations.” Modine Manufacturing, 549 N.E.2d at 1382, citing
City of East Moline v. Pol1uti~onControl Board, 136 Ill.App.3d
687, 693, 483 N.E.2d 642 (3d Dist. 1985) (Case No. 41. However,
when the court reviewed the Board’s decision, the cdurt found
that although some penalty could be sustained, the amount was
influenced by not only Section 33(c) factors, but Modine’s good
faith, candor, cooperation, sincere efforts and exper.diture of
substantial amounts of money to remedy the problem. Modine
Manufacturing, 549 N.E.2d at 1384. The court found that $1,000,
and not $10,000, was in keeping with the Supreme Court’s ruling
in Southern Illinois Asphalt, Case No. 4, that all the facts
and circumstances bearing on
the reasonableness of the complained
of conduct and
the seriousness of the infraction must be
considered in a penalty determination. Citing Trilla Steel Drum,,
C~se No. 3~, the court found that Modine had become a part of
the regulatory program and, therefore,
the Board’s estimate of
the seriousness of the failure
to secure a permit was of
diminished importance. Interestingly, the court also found that
Modine’s failure to seek a variance was not relevant to the
Board’s ev~luation of technical practicality or economic
feasibility. This was a “procedural consideration” only, which
the court found excusable. Modine Manufacturing, 549 N.E.2d at
1383. Again, a permit violation without attendant harm or bad
faith did not support a lar’ge penalty, much less the statutory
fine of up to $10,000 per violation, which the court here
referred to as the “maximum penalty of $10,000,” while noting
that the Board had argued that the statute also provides for a
$1,000 per day additional penalty. Id., 549 N.E.2d at 138$
(emphasis added). As in Trilla Steel Drum, Case No. 37, the
court did not explain how it calculated that $10,000 would be the
maximum penalty for several years
of non—compliance with the
permit requirements.
4. Local Government Cases
Penalty cases involving local governments reflect a certain
deference to the needs and workings of those governir.g bodies.
The courts seem to recognize the nature of the economic impact of
a civil oenaltv on the community. Comoliance alternatives are
pernaps more l:m:tea for a public coc~consicering tne range or
public services which oust be delivered consistently to the
public. Among other services, water, sewer, and garbage
collection are imoortant health services orovided by local
governments. Their costs are borne by the oublic and the ability
to finance them involves a variety of issues, such as the health
of the local economy, the availability of bond financing and the
oossibilities of state or federal aid. Pollution control
measures
ann
any penaities
tor v~o1ations a~so ratse tnese
questions. Loo~z1ng to these facts, the courts seem to allow less
latitude
to the Board where th~ Board has attempted to impose
111-41
penalties for violations of environmental laws. The appellate
case law therefore shows a pattern of frequently reduced or
vacated penalties.
39 The City of Chicago Case
In 1978, the First District reversed a $10,000 penalty for
operation of a municipal incinerator without a permit in
violation of Section 9(b) of the Act, and for air pollution and
particulate emissions which violated Section 9(c). The court
found that “first, petitioner demonstrated a sincere desire to
eliminate, or at least reduce, stack emissions.... Secondly, the
Board’s Order failed to consider economic and technological
factors.” City of Chicago v. Illinois Pollution Control Board,
57 Ill.App.3d 517, 373 N.E.2d 512 (1st Dist. 1978). The court
was favorably impressed by petitioner’s studies and efforts to
minimize air pollution with respect to all its facilities, and
not just the one involved here. Furthermore, to modify the
incinerator in question would require a two
year shutdown or
inordinate expense, given that the City had ‘decided to abandon it
and develop a new plant. The court found that the Board had
assessed a large penalty despite mitigating circumstances and the
failure of the Agency to request a penalty. “Consequently, we
believe the Board’s primary purpose was to make an example out of
petitioner. Such a purpose is improper and in this case violates
the requirement that the penalty bear some relationship to the
seriousness of the infraction.” City of Chicago, 373 N.E.2d at
516.
One more caveat was delivered by the court. That was a
caution to the Board in cases involving local government. “Many
of the considerations facing petitioner directly involved the
public sector. The public would be the ultimate loser if
petitioner were to shutdown operations.” City of Chicago, 373
N.E.2d at 516 (emphasis added).
(40 The City of Moline Case
In The City of Moline v. Pollution Control Board, 133
Ill.App.3d 431, 478 N.E.2d 906 (3d Dist. 1985), the court vacated
a $90,000 fine imposed by the Board for water pollution
violations associated with the city’s sewage treatment plant.
Tne court agreed that tne city had v~o~atedthe Act, recunations,
and its NPDES permit. However, the court found that the serious
pollution problems were substantially cured before the complaint
was filed. The court concluded, therefore, that the penalty
could not aid enforcement of the Act. It reversed the penalty,
highlighting two facts:
111-42
Two significant facts dictate against the
imposition ,of any mandatory penalty by the
Board.
First, the ends sought did ‘not
necessarily require the bringing of the
instant complaint. In working with Moline to
solve its problems, the LEPA chose an
effective and appropriate course of action.
Instead of jumping the gun in September r980
and bringing
an action against
an
obvious
polluter, the IEPA took
the prudent course of
seeking alternative means to assure com-
pliance. The main.taining of this course
produced, if’ not with any great immediacy, the
initially
desired result.
This was
parti-
cularly aoorooriate in that the IEPA was
dealinq with neither a wilful and callous
oillaqer of the environment nor a orivate
party for whom delayed compliance would
translate into oersonal gain. Second, one
must consider the identity of the respon-
dent. The burden of the fine would be borne
by the taxeavers of Moline. While the Board
points out that the under—assessment of these
taxpayers was a contributing reason for
Moline’s noncompliance, it would serve no
useful purpose to punish them further for the
violations charged. It should also be noted
that an increase by 165 in sewer assessments
was necessary to finance the measures
instituted by Moline.
City of Moline, 478 N..E.2d at 908, 909
(emphasis added).
The court seemed to be distinguishing municipalities which
make some efforts at compliance from private parties who might
personally profit from noncompliance. Economic gain from
noncompliance might be relevant in assessing a penalty, but the
court implied that this factor is not as meaningful for a
munici~ality, since the benefit is not personal in. nature.
The
court reached this conclusion despite the Board’s finding that
Moline’s delayed compliance resulted in savings in excess of $1.3
million. (See IE?A v. City of Moline, 60 PCB 01, 17, PCB 82—154,
Sept. 6, 1984.) ‘The court also observed that the burden of a
penalty would be borne by the taxoayers who ultimately pay for
the municipality’s
environmental programs.
The court seemed
sympathetic to Moline’s situation, and, therefore, reversed the
$90,000 fine completely, even though the Board had calculated the
maximum penalty at $43,697,000.
11-
~‘.
3
_, ~1
(41) The City of East Moline Case
The case of City of East Moline v. Pollution Control Board,
136 Ill.App.3d 687, 483 N.E.2d 642 (3d Dist. 1985) involved
violations of permits and of various regulations governing the
city’s sanitary landfill, such as clay cover requirements,
control of leachate and vectors (animals/insects), and dumping
practices. The court reduced the penalty from $30,dOO to
$10,000, finding that many of the violations had ended before
enforcement proceedings began (including ~some of which were cured
by the issuance of permits). It also held that the Agency’s
conduct from the early 1970’s until 1980 “represent(ed an
accommodation to and an acceptance of an inappropriate level of
compliance which can not now be characterized as bad faith.”
City of East Moline, 483 N.E.2d at 648. The court was willing to
impose a penalty for violations which were related to “conditions
existing at the time the enforcement proceedings were
instituted,” which ...“might well promote compliance with the
violated sections of the regulations.” Id. at 648. A penalty
might then help bring about a municioaliE~s compliance if
enforcement relates to violations of a current nature.
42 The City of Freeport Case
In a 1989 decision, the Second District showed much less
deference where a City’.s sanitary sewer backed up and overflowed
into homeowners’ yards and flooded basements over a 20-year
period. In City of Freeport v. Pollution Control Board, 135
Ill.Dec. 644, 544 N.E.2d 1 (2d Dist. 1989) a $10,000 penalty was
affirmed based on the court’s concurrence with the Board’s
evaluation of Section 33(c) factors. The court noted that the
long—standing violations imposed “an extreme inconvenience on
homeowners as well as health risks.” City of Freeport’, 544
N.E.2d at 4. The Board found that the solutions were neither
technically impracticable or economically unreasonable. Firmly
supporting the Board’s decision, the court also noted that the
Board had authority to impose a fine of $1,000 per day, but did
not.
C. Penalty Factors Derived From Illinois Case Law
The courts have reviewed the Board’s penalty decisions by
balancing statutory and other factors relevant to the reason-
ableness of the pollution offense. The statutory guidelines are
delineated in Section 33(c)(l) through (6). The other consider-
ations are discussed in the cases under the Section 33(c)
directive to consider all the facts and circumstances. Some ,of
these factors addressed in the body of case law are good faith,
any deterrent effect of a penalty, economic benefits of non-
compliance, ability to pay, and cessation and duration of a
violation. Court-enunciated principles on these factors are
discussed below.
I. i j’+—~I,
—~
1. Statutory Factors
The six statutory
criteria
of Section 33(c) to be considered
in enforcement
cases provide only the starting point in a penalty
determination. The statute specifically states that “the Board
shall take into consideration all the facts and circumstances
bearing upon the reasonableness of the emissions, discharges, or
deposits involved including, but not limited to” th4 six
criteria.
See also Modine
Manufacturing, (Case No. 38, and
Southern Illinois Asphalt, (Case No. 4. Those enumerated
factors may be characterized as (1) harm, (2) social and
economics value,
(3) acorooriateness
of location of the oollution
source, (4) technic-al practicability and economic reasonableness
of pollution control,
(5)
economic benefits of noncompliance, an.d
(6) any subsequent compliance.
The courts have not weighted
these factors in terms of relative importance. However, in
keeping with the Supreme Court’s emphasis in Southern Illinois
Asohalt,
(Case No.
4, on the seriousness of the offense or
infr~Eion, physical ailments or serious health risks have
generally warranted imoosing penalties. See Marblehead Lime,
Case No. 18 Darrel Slacer, (Case No. 30, Wasteland, Inc.,
Case No. 33. On the other hand, permit violations, absent bad
faith or harm, generally have not been sufficient to support a
penalty. See Southern Illinois Asphalt, (Case No. 4, Harris-
Hub, Case No. 29. Another key fact, the availability of
control technology that is not prohibitively costly, has
generally justified a penalty. See Aluminum Coil Anodiz~,
Case No. 11; Lloyd A. Fry Roofing, (Case No. .121; Standard
Scrap Metal, Case No. 36). However, no formulae exist, and
essentiaIT~, the Board must make a case—by—case determination.
2. Good Faith
The courts have found evidence of the presence or absence of
good faith to be a very significant determinant of a penalty.
Good faith has not been found to be a matter of intent, since
intent or guilty knowledge is not a necessary element to finding
a violation. Rather, good. faith has been inferred from behavior
which reflects diligence and which is reasonably directed towards
the goal of achieving compliance. The acceptable efforts have
included hiring engineers to find a cure for pollution,
attempting to secure permits, installing pollution control
equipment at considerable expense, and abandoning offensive
practices all together. See, e.g., Citvof Chicaao, Case No.
39), Harris—Hub, Case No.
291, Archer Daniels Midland, Case
No.
24), Modine Manufacturinc, (Case No. 38.
The quantum of goon fa~tneffort to achieve success may nave
fallen short of successful pollution abatement, and yet the court
has found that no penalty was justified, even though some
violation had been found. Bresler Ice Cream, (Case No. 13,
Chicago Magnesium Castinc, Case No. 14), CPC nternational,
(Case No. 15, Arnold N. May, 16. Bad faith or clatan.t
disregard of en~ironmental laws, however, stroncly supports a
111- $5
penalty. See Wasteland, Inc., (Case No. 33, Standard Scrap
Metal, Case No. 36).
3. Other Considerations
a. Aiding Enforcement by Deterring Others
Some conflict exists over whether deterring others from
violating environmental laws is an appropriate element in
assessing civil penalt-ies. In the 1976 case, Aluminum Coil
Anodizing, Case No. 11, the court
explained that a $1,500
penalty would aid enforcement “by working to secure voluntary
compliance with the Act in other cases, especially by ACA at its
new facility. Id., 315 N.E.2d at 619 (emphasis added). Here,
the company had made no good faith efforts at curing an odor
problem for over one year after the complaint was filed. In the
absence of further explanation from the court, the penalty might
be considered as generally deterring similar bad faith in others,
and thereby, indirectly fostering compliance.
Similarly, in 1983 the court in Wasteland, Inc., Case No.
33, held that the $75,000 penalty for blatant disregard of
landfill rules and regulations would aid enforcement since
“others, who might consider cutting corners at the expense of the
environment, are deterred.” Id., 456 N.E.2d at 976. This
position was specifically adopted in 1986 by the First District
in Standard Scrap, Case No. 36. That court found that a
$30,000 penalty for the bad faith violation of air pollution laws
would aid enforcement of the Act by deterring others.
However, in 1989 the First District admonished the Board not
“to make an example” of a company against whom the Board assessed
a $10,000 penalty for failure to secure an operating permit.
Trilla Steel Drum, 536 N.E.2d at 791. In this case neither harm
in the form of excessive emissions nor bad faith was proved. The
court relied on the Supreme Court decision in Southern Illinois
Asphalt, (Case No. 4, and its
own
decision in City of Chicago,
Case No. 39,
both of which involved permit violations. In both
of these early cases, the courts found that in light of all the
facts and circumstances, the violations were not sufficiently
serious to justify the penalties, and the primary purpose of a
penalty is to aid enforcement of the Act. In the City of
~
(Case No. 39, the First District reversed a $10,000
penalty since it believed that despite
the City’s substantial
efforts, the Board’s primary purpose “was to make an example out
of petitioner. Such a purpose is improper...” Id., 373 N.E.2d
at 516. Thus, while the Board has some appellate
court
support
for assessing penalties which might deter others, some Illinois
decisions suggest that this cannot be the Board’s primary purpose
in assessing penalties, although
higher penalties may be
warranted for relatively more serious violations or those
evidencing bad faith.
111 —0 0
b. Economic Benefit From Non—Compliance
Independent. of the 1987 statutory amendment requiring
consideration of economic benefits, some appellate courts have
acknowledged that the Board may consider whether a violator has
gained an economic benefit or cost savings from delayed
compliance as part of a penalty determination. In Wasteland,
Inc., Case No.
33, total cost savings of $62,000
to
$70,000
were considered in affirming a $75,000 penalty for blatant
violations of landfill requirements. Similarly, in Standard
Scrap Metal, (Case No. 361, the court noted that “in Wasteland,
as in this case, the petitioner was a private party who reaped an
economic benefit-from violations.” Id., 491 N.E.2d at 1258. In
affirming a $30,000 penalty for nine years of blatant violations,
the court supported the Board’s reliance on an Agency estimate of
cost savings of approximately $104,500. The court found that the
evidence showed “a substantial economic savings by Standard Scrap
at the expense of the public health and welfare,” which was
properly considered by the Board. Id., 491 N.E.2d at 1259.
The cost savings was found to be estimated conservatively
and was based on the following evidence:
James Levis, economist employed by the Agency,
testified that Standard
Scrap saved approx-
imately $104,500 by failing to install the
afterburner required by the 1974 order. This
figure was arrived at based on a computer
progtam adopted by the United States Environ-
mental Protection Agency (USEPA).
Levis
testified that the computer program utilizes
the following data: the estimated cost of the
afterburner at the time that it was initially
to be installed; the prevailing rate of
inflation for the relevant time period; the
discount rate, based on Standard Scrap’s
average return on stockholders’ equity; the
interest rate on Standard Scrap’s long term
debt; Standard Scrap’s marginal income tax
rate; the investment tax credit rate; Standard
Scrap’s capital structure; and the
depreciation life of the afterburner
equipment.
Id., 491 N.E.2d at 1255
These
two cases relied on
cost savings by a violator
who was
found to have acted in bad faith. Other cases suggest that the
cost savings may carry less weight when good faith efforts have
been shown. In Harris-Hub, (Case No.
29, for
example, the court
reversed a $500 penalty based on good faith and inadvertence in
failing to obtain a permit. Further
support for vacating the
penalty was the absence of apparent benefit
from non-
compliance. “Tihe record fails to disclose that Harris was
111—47
gaining any economic
advantage over its business competitors
considering the expense incurred in controlling possible
pollution in its manufacturing procedures.” Id., 365 N.E.2d at
1075. Good faith was of primary importance, but economic benefit
was nonetheless relevant.
In Archer Daniels Midland, Case No. 24a, the court focused
more particularly on the relative importance o’f good faith and
cost savings from non—compliance. Here, the court rejected the
savings data, finding that the purported savings couldnot be
calculated and the penalty had been based on improper and
incompetent evidence of savings. The court distinguished
Wasteland, Inc., (Case No. 33, holding that Wasteland’-s
continuing blatant disregard was of greater significance than the
violator’s savings. The court implied that multi—million dollar
environmental expenditures might outwiech cost savings even if
adequately proved. Yet the court did not reject savings as a
penalty factor per Se.
In vacating the penalty against the city in The City of
Moline, Case No. 40, the court relied in part on the contrast
between the city and a “private party for whom delayed compliance
would translate into personal gain.” Id., 478 N.E.2d at 908,
909. Clearly, this reflects the relevance of possible econ,omic
benefits due to non-compliance
,
but would limit the savings
factor to non—governmental entities.
Consideration of the economic benefits of non—compliance
became part of the statutory factors listed in Section 33(c) when
Sec.tion 33(c)(5) was added in 1987. That Section now requires
the Board to consider “any economic benefits accrued by a non-
complying pollution source because of its delay
in compliance
with pollution control requirements.” Section 33(c)(5).
c. Ability to Pay
In Standard Scrap Metal, Case No. 36, (1986) the court
considered evidence of five years financial history in deciding
that petitioner could have installed pollution control equipment
many years prior to the filing of the complaints Rejecting
arguments of current inability to pay, the court found that the
hardship was self—imposed, even if the economic viability of the
business was endangered.
If Standard Scrap does not now have funds to
cover both penalty and compliance costs, as
well as cease and
desist operations until
compliance is achieved, that hardship is self—
imposed. The company should have taken the
necessary steps to bring
its facility into
compliance when firstS notified by the
Agency
and at a time when sufficient funds were
available to do so. Standard Scrap cannot now
be allowed to pass off a necessary cost of
111—48
doing business in this state, and one borne
equally
by competitors, by arguing that
compliance with environmental laws will put it
out of business. If that were the case, no
business would ever be inclined to comply with
Illinois’ environmental requirements.
Id., 491 N.E.2d at 1257
This was considered in the court’s discussion of technical
practicality and economic reasonableness under 33(c).
That this
petitioner could have afforded to control pollution weighed in
favor of imposing a penalty. The court distinguished the City of
Moline, Case No. 40, since Standard Scrap’s violations were
wilful, ongoing, of longer duration, and not involving a
governmental entity.
A separate issue is whether petitioner could afford to pay a
penalty of $30,000. Here, the court noted that “the Board, in
determining the amount of the fine, took into account Standard
Scrap’s financial condition as a mitigating factor.” Id., 491
N.E.2d at 1258 (emphasis added). The court also observed that
the Board indicated that an extended payment plan thight be
possible, otherwise payment would be due within 90 days. The
court thus supported an inability to pay as a factor which rttight
warrant a smaller penalty or modified payment plan.
The converse of this principle may not be .true. Financial
strength may not warrant a larger penalty than would be imposed
solely on the basis of the seriousness
of the violations. In
fact, the Fourth District in Archer Daniels Midland, Case No.
24a, rejected the Board’s argument that $40,000 was a de minimus
penalty for a large financially strong petitioner. The court
stated, “We are not aware off ~nv authority which makes the
ability to pay the proper basis for a civil penalty.” Id., 456
N.E.2d
at
99. Thus, the Board may not approach penalties like a
progressive tax, growing in proportion to net worth and income.
Yet this is not to say
that
economic reasonableness pursuant to
section 33(c) is any less relevant or that the Board may
not
consider ability to pay in
mitigating the penalty. (See also
pages 45—46
herein for applicability of ability
to pay in federal
penalty decisions.)
The City of
Moline
case, Case No.
40, suggests that the
consideration of ability’to pay differs in the case of local
governments as compared with private parties. Since a local
government’s expenses must
be
borne by its taxpayers, a penalty
may be more punitive that it is an aid to enforcement. A
municipality’s limited ability to pay, therefore, may be
considered in mitigation of a penalty, although it certainly does
not wholly negate the possibility of a penalty. (See, e.g., City
of Freeport, (Case No. 42, upholding $10,000 penalty.)
11 1—4”
As the earlier discussion
of Illinois Supreme Court
and
~ppel1ate Court decisions reveals, the courts have reversed a
high percentage of the Board’s penalties against
nunicipalities. (See footnote 7 at page 58 and Tables ‘Nos. 5 and
6, at page 68, 69.) The theme that compliance by municipalities
involves unique circumstances is often stated in state and
federal court decisions. At the federal level, for example, this
is reflected in the USEPA’s highlighting in its l98~report that
it had just secured its highest penalty against a municipality
—
$1,125,000. This is about half of what USEPA highlighted for
penalties against non—municipalities for RCRA and Clean Water Act
violations. (See discussion herein at page 63.)
Similarly, for
Illinois, the highest penalty against a municipality was the
$10,000 penalty, noted above, assessed against the City of
Freeport. The status of a violator as a
unit of local government
thus seems to be relevant in a penalty case, and appears closely
related to issues’ such as who re,ally pays
the penalty. Although
the Board would not quantify or predict the degree to which
municipal status may affect a penalty decision, this is part of
the totality of facts and circumstances to be considered.
d. Cessation and Duration of Violation
In the City of East Moline, Case No. 41, the Third
District reviewed other decisions on the subject of whether a
penalty can aid enforcement of the Act if the violation has
ended. That court drew the following conclusion:
If compliance with proper environmental
practices is the primary purpose for imposing
civil penalties then prohibited practices long
discontinued are not an appropriate basis for
the assessment
of civil penalties. This does
not mean that cessation of the violation
before the enforcement proceeding commences
should bar the assessment of a pena~~if such
penalty is related to compliance with the Act.
Where previous conduct constituting
environmental violations has been discon-
tinued, penalties assessed by the Board have
been reversed in such cases as Southern
Illinois Asphalt Co., Inc. v. Pollution
Control Board 60 Ill.2d 204, 326 N.E.2d 406
(1975);
Bresler
Ice Cream Co. v. Pollution
Control Board 21 Ill.App.3d 560, 315 N.E.2d
619 (1974), Chicago Magnesium Casting v.
Pollution Control Board 22 Ill.App.3d 489, 317
N.E.2d 689 (1974); CPC International, Inc. v.
Pollution Control Board 24 Ill.App.3d 203, 321
N.E.2d 58 (1974). A review of the afore-
mentioned cases reveals a pattern indicating
the relationship of the enforcement proceeding
1,11—50
and the discontinuance of the violation. The
longer the time period, the lapse between
cessation of the violation and commencement of
the enforcement proceeding, the more likely
such enforcement proceeding is apt to be
considered punitive only having no relation to
securing compliance with the Act.
City of East Moline, 483 N.E.2d at 647, 648.
See also City of Moline, Case No. 40)
(emphasis added).
The absence of a continuing violation has persuaded the
courts to vacate or reduce penalties,
as in.the case of Citvof
East Moline where the fine was reduced because some violations
had long since been cured. However, in 1988 the Act was amended
to add to Section 33(a) that “(it
shall not be a defense to
findings of violation.
. .
or a bar to the assessment of civil
penalties
that the person has come into compliance subsequent to
the violation.” This fact was noted in the 1989 case, Modine
Manufacturing, Case No. 38, where the Second District stated
that “we decline to hold categorically that penalties may not be
imposed for wholly past violations.” Modine Manufacturing, 549
N..E.2d at 1382. The court reaffirmed the Illinois Supreme
Court’s ruling in Southern Illinois Asphalt, Case No. 4, that
all the relevant facts and circumstances must be examined in a
penalty determination. Section 33(c) was also amended in 1988,
and now Section 33(c)(6) provides that the Board shall consider
“any subsequent compliance”. This is now to be considered in any
penalty determination but neither negates nor mandates a penalty.
D. Summary Outline of Illinois Statutory and Judicial
Penalty Cons iderat ions
The statutory factors which the Board must consider are
summarized as follows:
*
All the facts and circumstances, Section
33(c).
*
Character and degree of injury or
interference. Section 33(c)(l).
*
Social and economic value. 33(c)(2).
*
Suitability/unsuitability of pollution
source to its locale.
Section 33(c)(3).
* Technical practicability and economic
reasonableness of pollution abatement.
Section 33(c)(4).
*
Economic benefits of non-compliance.
Section 33(c)(5).
111-51
* Any subsequent compliance.
Section
33(c) (6).
In addition to these statutory factors, according to the
Illinois courts, several other considerations appear to be
significant:
*
Conduct suggesting the presence or
absence of good faith.
*
Whether the penalty will aid enforcement
of the Act by deterring non—compliance.
*
Ability to pay. (Including governmental
or private party status).
*
Duration of the violation.
*
Cessation of the violation prior to
commencement of enforcement proceedings.
E. Illinois Legislative Intent
The Illinois Legislature has responded to’the need for the
effective use of penalties
in enforcement cases by revising both
Section 33 and Section 42 of the Act. As previously discussed,
Section 33 provides for the Board’s issuance of final orders and
determinations in enforcement cases and authorizes cease and
desist orders and penalties. The Board is required to consider
various factors.including, but not limited to, those specified in
Section 33(c)(l) through (6). Penalty amounts are governed by
Section 42.
Section 33(a) was amended in response to various Illinois
court decisions wher’e the penalties were held inappropriate since
compliance had been achieved before the Board made its findings
and assessment of penalties. One particular court decision which
spurred this legislative initiative was the Moline case, (Case
No. 40, In IEPA v. City of Moline, 60 PCB 01, PCB 82—154, Sept.
6, 1984, the Board imposed a $90,000 penalty for many years of
violation,
but the court reversed the penalty, primarily due to
Moline’s eventual compliance. City of Moline v. PCB, 133
Ill.App.3d 431, 478 N.E.2d 908 (3d Dist. 1985). The following
sentence was added to Sect’ion 33(a) in 1988, and addresses this
kind of fact situation:
It shall not be a defense to findings of
violations of the provisions of the Act or
Board regulations or a bar
to
the assessment
of civil penalties that the person has come
111—52
into compliance subsequent to the violation,
except where such action is barred by any
applicable State or federal statute of
limitation.
This section essentially fortified the Board’s enforcement
authority. A reviewing court could no longer predicate reversal
of a Board decision on the mere fact of subsequent c’ompliance.
Last minute or delayed compliance thus could not be used to
shield a violator fr,om enforcement and possible penalties.
Section 33(c)(5) was added in 1987 and requires the
consideration of “an-y’economic benefits accrued by a non-
complying pollution source because of its delay in compliance
with pollution control requirements.” Thus, the Legislature
authorized
the Board to recapture the gain derived from
polluting, thereby removing the incentive to defer compliance.
Although this is one of several Section 33(c) factors, this added
section mandates that the Board consider whether a pollution
source has profited frOm its violations.
Section 33(c)(6) was added in 1988 and, requires the Board to
consider
“any subsequent compliance.” Later compliance, then, is
but one of many factors to be considered by the Board. This
factor is to be evaluated as part of the totality of facts and
circumstances. Other factors remain significant in the Board’s
determination, even if subsequent compliance has been achieved.
Section 42(a) was amended in 1989 to increase the maximum
statutory penalty from $10,000 per violation to ‘$50,000 per
violation. The additional penalty of $1,000 for each added day
of violation
was increased to $10,000 per day of continuing
violation. The effective date of this increased statutory
penalty was January 1, 1990. The higher Illinois penalties are
now more consistent with federal enforcement penalties.
Overall, the Board must conclude that legislative amendments
since 1970 have almost all been in the direction of increasing
the amount of civil penalty which would be recovered from a
violator.
II. OVERVIEW OF FEDERAL LAW ON CIVIL PENALTIES
A. Federal Statutory Considerations
Various federal statutes mandate that Illinois conform its
regulatory and enforcement activities with federally established
requirements. As an example, the 1965 Amendments to the Federal
Water Pollution Control Act required that every state adopt water
quality standards subject to federal approval. Later amendments
to this Act also established National Pollutant Discharge
Elimination System (NPDES) permit requirements by which the state
Agency issues permits and is charged with continuing enforcement
duties (See 33 U.S.C. 1342 and Section 39 of the Illinois Act).
111—53
Similarly the Clean Air Act requires state adoption and
enforcement of state implementation plans (SIP’s) to achieve
national goals for ambient air quality. For this reason federal
statutes, case law, and policy pronouncements should help to
guide enforcement actions, including penalty determinations, at
the state level.
As one example, the Federal
Water Pollution Codtrol Act,
commonly known as the Clean Water Act, includes an enforcement
scheme that contemplates primary enforcement by the state and,
alternatively, enforcement by the Administrator of the United
States Environmental Protection Agency (“USEPA”). Section
309(a), 33 USC 1319(a). The Administrator has authority to seek
injunctive relief, criminal penalties, and civil penalties
(Section
309(b), (c), ,(d), respectively). Section 309(d)
provides for civil penalties of up to $25,000 per day for each
violation and requires the court to evaluate various factors,
just as Section 33(c) of the Illinois Act requires consideration
of certain factors.
In determining the amount of a civil penalty
the court shall consider the seriousness of
the violation or violations, the economic
benefit (if any) resulting from the violation,
any history of such violations, any good-faith
efforts to comply with the applicable require-
ments, the economic impact of the penalty on
the violator, and such other matters as
justice may require. For purposes of this
subsection, a single operational upset which
leads to simultaneous violations of more than
one pollutant parameter shall be treated as a
single violation.
Section 309(d) of the Clean Water Act, 33
U.S.C. 1251 et seq.
Section
309(g) provides a more expeditious alternative to
judicial enforcement. It creates a system for administrative
penalties, which are assessed, after consultation with the state,
in dollar amounts which are less than the $25,000 per day for
judicial enforcement provided under Section
309(d) above.
Administrative penalties are grouped under class I or class II
civil penalties. A class I civil penalty “may not exceed $10,000
per violation, except that the maximum amount of any class I
civil penalty...shall not exceed $25,000.” Sec. 309(g)(2). This
carries a right to a limited-hearing to “provide a
reasonable
opportunity to be heard and to present evidence.” Section
309(g)(2)(A). A class II civil penalty has the same $10,000 per
day maximum, but the total assessed shall not exceed $125,000 and
the right to a hearing is in accordance with section 554 of title
5, United States Code.” Section 309(g)(2)(3). Section 309(g)(3)
provides guide1ine~similar to the 5 factors off Section’309(d)
above’:
111— 54
—.*~—
In determining the amount of any penalty
assessed under this subsection,’ the
Administrator or the Secretary, as the case
may be
,
shall take into account the nature,
circumstances, extent and gravity of the
violation, or violations, and
,
with respect
to the violator, ability to pay, any pr’ior
history of such violations, the degree of
culpability, economic benefit or savings (if
any) resulting from the violation, and such
other matters as justice may require. For
purposes of this subsection, a single
operational upset which leads to simultaneous
violations of more than one pollutant
parameter shall be treated as a single
violation.
Section 309(g)(3) of the Clean Air Act, 33
U.S.C. 1251 et seq.
Obviously, these federal statutory factors, which must be
considered in
setting the amount of the penalty, are similar to
the Illinois statutory directives in Section 33(c). Noticeably
different, however, is the federal focus on the history of past
violations, the degree of culpability, and the economic impact of
the penalty on the violator or the ability to pay. Of these
considerations, only the federal acceptance of .the relevance of
ability to pay seems at odds with at least one Illinois Appellate
Court decision. In the ‘1983 Archer Daniels Midland decision,
Case No. 24a, the court was “not aware of any authority which
makes the ability to pay the proper basis, for a civil penalty.”
Id., 456 N.E.2d at 99. Certainly the 1987 Clean Water Act
Amendments in Sections 309(d) and (g) now provide at least
conceptual authority on this issue.
Furthermore, the legislative history of the Clean Water Act
indicates that certain factors, including the economic impdct of
the ‘penalty on the violator, have long been held relevant to a
penalty determination. In 1977 at the time of the enactment of
amendments to the Clean Water Act, Senator Muskie cited the
USEPA’s
penalty calculation policy with favor. 123 Cong. Rec.
39193 (1977). The penalty policy was used in settlement
negotiations with violators. Factors to be considered in
negotiations
were the seriousness of the offense, prior
violations, good faith efforts toward compliance and the economic
impact of the penalty. (For detailed discussion of legislative
history, see: W. Andreen, “Beyond Words of Exhortation: The
Congressional Prescription for Vigorous Federal Enforcement off
the Clean water Act.” 55 Ceo. Wash. L. Rev. 202 (1987). See
also: M. Brown, D. Cerger, C. Harris, The Water Quality Act of
1987: Expansion of the Government’s Criminal, Civil and
Administrative Enforcement Authority. 144 PLI/Lit
95 (1987);
Tuilv.U.S., below)
111—55
B. U.S. Supreme Court Cases: The Tull and Gwalney Decisions
1. The Tull Case
A 1987 U.S. Supreme Court case also sheds light on the
nature of penalty determinations in environmental cases. In Tull
v. U.S., 481 U.S. 412 ,107 S.Ct. 1831 (1987), the p4titioner
appealed the district court’s findings of violations of the
dredge a,nd fill res-trictions of
the Clean Water Act which
resulted in a $325,000 civi,l penalty. The Supreme Court remanded
the case, concluding ,that the Seventh Amendment entitled
petitioner to a jury trial to determ~nehis liability, but not to
determine the amount of any penalty.~
In this case the government had sought the maximum civil
penalty of $22,890,000 and the district court assessed a S325,000
penalty. The Supreme Court found that the penalty determination
was within the district court’s discretion and that calculating
the amount did not warrant a jury trial. The Court held that
Congress has the authority to set civil penalties and it may
delegate the penalty determination to trial judges. The Court
found that this was Congress’ intent based on the legislative
history.
The legislative history of the 1977 Amendments
to the Clean Water Act shows, however, that
Congress intended that trial judges. perform
the highly discretionary calculations
necessary to award civil penalties after
liability is found. 123 Cong. Rec. 39190—
39191 (1977) (remarks of Sen. Muskie citing
letter from EPA Assistant Administrators of
Enforcement of. Dec. 14, 1977). (“Penalties
assessed by judges should be sufficiently
higher than penalties to which the Agency
would have agreed in settlement to encourage
violators to settle”.)
Id., 481 U.S. at 425.
Most importantly for today’s discussion of civil penalties,
the Supreme Court found that the civil penalty was, by its very
nature, punitive. “The more important characteristic of the
The Court noted also that it has “considered the practical
limitations of a jury trial and its functional compatibility with
proceedings outside of traditional courts of law in holding that
the Seventh Amendment is not applicable to administrative proce-
edings”. Tull v. U.S., $81 U.S. at $18 citing Atlas Roofing Co.
v. Occupational Safety and Health Review Coram’n, 430 U.S. $42,
454 (1977); Pernell v. Southall Realty, 416 U.S. 363, 365 (1974).
111—50
remedy of civil penalties is that it exacts punishment
—
a kind
of remedy available only in courts of law. Thus,, the remedy of
civil penalties is similar to the remedy of punitive damages.”
This U.S. Supreme Court holding seems clearly to diverge from
some
earlier Illinois case law. The Supreme Court then looked at
the legislative history of the Clean Water Act concerning USEPA
penalty policy and concluded that Congress clearly intended that
the maximum penalty of $10,000 per ‘day’ of violation ‘should serve
to punish violators and not just equitably recover profits’ gained
from violations.
The legislative history of the Act reveals
that Congress wanted the district court to
consider the need for retribution and deter-
rence, in addition to restitution when it
imposed civil penalties. 123’ Cong. Rec. 39191
(1977) (Sen. Muskie citing EPA memorandum
outlining enforcement policy).
(Footnote
omitted.) A court can require retribution for
wrongful conduct based on the seriousness of
the violations, the number of prior viola-
tions, and the lack of good—faith efforts to
comply with the relevant requirements.
Ibid. It may also seek to deter future
violations by basing the penalty on its
economic impact. Ibid.’ Subsection l3l9(d)’s
authorization of punishment to further
retribution and deterrence clearly evidences
that this subsection reflects more than a
concern to provide equitable relief. In the
present case, for instance, the District Court
acknowledged that the petitioner received no
profits from filling in properties in Mire
Pond and Eel, Creek, but still imposed a
$35,000 fine. ‘App. to Pet. for Cert. 60a.
Thus, the District Court intended not simply
to disgorge profits but also to impose
p,~nishment.
Id., $81 U.S. at 422, 423 (emphasis added).
This federal concern with punishing environmental violations
contrasts with dicta in one 15 year old Illinois Supreme Court
decision, which vacated oen~ltieswhere the court labeled the
civil penalty “punitive.” Southern Illinois Asonalt, Luase No.
4. As the Tull decision makes clear, punishment is an essential
element in federal environmental enforcement actions, and many
factors must be considered in determining the amount of a civil
penalty. To uniformly implement national environmental laws
which also impact the state, Illinois must strive for consistency
with federal penalty considerations even if Illinois penalties
remain less in dollar amounts than those imposed under Federal
law.
111—57
2. The Gwaltney Case
Not only may the federal government or state agency bring
environmental enforcement
actions, but citizens may also bring
civil enforcement suits for penalties and injunctive relief.~*
Citizens suits have particularly arisen under the Clean Water
Act. One such case, the subject of several appeals, reached the
U.S. Supreme Court in Gwaltney
of Smithfield v. Chesapeake
Bay
Foundation, 484 U.S. 49, 108 S.Ct. 376, 26 ERC 1857 (1987). In
the Gwaltney case the Supreme Court resolved a conflict between
three circuits over the statutory interpretation of citizens’
rights to, bring
suit against any person “alleged to be in
violation of”’effluent provisions
or related orders under the
Clean Water Act. Section 505(a)(l), 33 U.S.C. 1365(a)(l).
Essentially, the issue was whether citizens could sue for
injunctive relief and/or civil penalties for wholly past
violations. The Supreme Court concluded that with respect to
citizens suits only the remedy was prospective, that is, geared
toward achieving ptesent or future compliance. Section 505
“confers jurisdiction over citizen
suits when the citizen—
plantiffs make a good—faith allegation of continuous or
intermittent violation”, and does not extend to wholly past
violations. Gwaltney, 484 U.S. at
64 (emphasis added).
In contrast, the state or federal government is not so
limited in bringing enforcement actions.
It is little questioned that the Admin-
istrator may bring enforcement actions to
recover civil penalties for wholly past
violations
.
***
A comparison of (section) 309 and (Section)
505 thus supports rather than refutes our
conclusion that citizens, unlike the Admin-
istrator, may seek civil penalties only in a
suit brought
to enjoin or otherwise abate an
ongoing violation.
Gwaltnev, 484
U.S. at 58, 59.
See, e.g., the Clean Air Act Section 304, 42 U.S.C. §7604;
Federal Water Pollution Control Act, Section 505, 33 U.S.C. §
1365; Comprehensive Environmental Response, Compensation, and
Liability Act (“CERCLA”)
Section 310,42 U.S.C. §
9659;
Resource
Conservation and Recovery Act (“RCRA”) Section 7002, 42 U.S.C.
§6872; Safe Drinking Water Act Section 1449, 42 U.S.C. § 300j—8;
and
Toxic Substances Control Act Section 20, 15 U.S.C. § 2619.
11 1—5S
Drawing on the Supreme Court’s statutory interpretation of
Section 309 of the Clean Water Act, it seems clear that, at the
federal level, penalties for wholly past violations were thought
by Congress to serve the Clean Water Act’s goals. Those goals
expressed in Section 101(a) are “to restore and maintain the
chemical, physical, and biological integrity of the Nations’
waters.” It likewise seems an inescapable conclusion that
penalties for wholly past violations of Illinois’ environmental
statutes and regulations may further state environmental goals.
Thus, although some Illinois Appellate Court decisions have, in
dicta, minimized
the effectiveness of penalties for past
violations, the Board
will consider the U.S. Supreme ,Court
decision
in Gwaltnev as
suPporting the imposition of penalties in
state initiated action even when violations have ended. This is
particularly appropriate since the Supreme
Court in Gwaltnev
pointed to the federal government’s reliance on the State to
enforce federal environmental laws,
with citizens’ suits being a
final resort.
The bar on citizen suits when governmental
enforcement action is underway suggests that
the citizen suit is meant to supplement rather
than to supplant governmental action. The
legislative history of the Act reinforces this
view of the role of citizen suit. The Senate
Report noted that “the Committee intends the
great volume of enforcement actions (to be
brouaht by the State,” and that citizen suits
are proper only “if the Federal, State, and
local agencies fail to exercise their enforce-
ment responsibility.” S. Rep. No. 92-414, p.
64 (1971), reprinted in 2A Legislative History
of the Water Pollution Control Act Amendments
of 1972, p. 1482 (1973) (hereinafter 2 Leg.
Hist.
Gwaltnev, 484 U.S.
at 60.
a. The Gwaltney Penalty Calculation
The Gwaltnev legacy is also rich in that the 1985 district
court decision provided an extensive analysis of penalty
calculation considerations. Chesapeake Bay Foundation v.
Gwaltney of Smithfield, 611 F. Supp. 1542, 22 ERC 2121 (1985).
In the initial suit in district court, plaintiffs sought the
maximum penalty of $3,300,000 for violations of pollution limits
in Gwaltney’s
NPDES permit. In a detailed analysis based on
USEPA’s
penalty policy (cited as Env’t Rec. (BNA) 41:2991 June 1,
1984), the District court imposed a $1,283,322 penalty, which
took into account: (1) economic benefit, (2) a gravity component
111—5’)
and (3) adjustments. A rate of return, reflecting the time value
of money for the period of delayed compliance, was used to
calculate the economic benefit of delaying expenditures for
pollution control. Varying per diem amounts, such as $4,000 per
day of fecal c’oliform violations and $250
—
$1,000 per day for
total Kjeldahl nitrogen (“TKN”) (nitrogen compound) violations,
were multiplied by the days of violations and tallied to arrive
at a final penalty. Briefly summarized, the compone’nts were as
follows (the Board notes that the figures in “B” are taken
directly from the court’s Appendix B; however, there appea.rs to
be $1,000 discrepancy in the court’s addition):
111—60
—51—
A. Chlorination viclations
—econorric benefit:
$
1,500
—gravity—fecal coliform
($4,000 x 213 days of violaticn)
$852,000
—gravity-chlorine
($1,000 x 17 days of violation
of
iraxirrurr hint):
$ 17,000
—adjustrr.ent for delay
($1,000 x 125 days of delay):
125,000
$
995,5C0
B. Biological Treatrrer.t System Violations
—eccnorric benefit:
$
54,C22
—gravity corrpcnent
—pre—start—up
TKN
violations
winter ‘81—82:
(90 x days
x $250/day—)
22,500
sururer
‘82:
(30 days x $1,000/day=)
30,C00
winter ‘83:
(151 days x $25C/day-)
37,750
sumner ‘83:
(61 days x $1,000/day-)
61,0CC
—start—up violations:
(including dowrr~ard
adjust.rr’ent. because
start—up is involved)
296 days (199 days T~,
+
61 days TES,
+
33 days
fecal cohiforrr,
+
3 days
oil
&
grease) x $50/day-
14,800
$166 ,050
—further adjustrr~nts:
delay: 283 days x $250/day-
70,750
$
289,622
Total
111-61
—32—
Though certainly not the only approach or a required
approach to penalty calculation, this methodology was approved by
the Fourth Circuit in 1986 as that court noted in its 1989
Gwaltney opinion. See: Chesapeake Bay Foundation, Inc. v.
Gwaltney of Smithfield, Ltd., 890 F.2d 690, 692, 30 ERC 1593 (4th
Cir. 1989) citing Chesapeake Bay Foundation Inc. v. Gwaltney of
Smithfield, Ltd., 791 F. 2d 304, 24 ERC 1417 (4th Cir. 1986).
The $1,285,322 penalty was reduced to $289,822 in the 1989
decision since the chlorination violations were found to have
been wholly past’ violations which the ~citizens could no~prove to
be ongoing or likely to continue at the time the citizens brought
suit.
b. The Gwaltney Implication of a Mandatory
Penalty
In the 1989 Cwaltney decision, the Fourth Circuit observed
that the Supreme Court’s
Gwaltnev decision “effectively approved
the assessment of penalties based on past violations (the only
possibleFoundation,basisInc.forv. assessingGwaltnev aof penalty)”.Smithfield, CheasaDeake~,~Ltd.,
890 F.2d
1690,
696, 697, 30 ERC 1593 (4th Cir. 1989), (emphasis added).
Besides emphasizing the need to look to t~epast to assess a
penalty, the court also looked at whether the Court has the
discretion to not assess a penalty. The court decided that the
penalty was virtually mandated.
At the time of assessment of penalties in the
case, the statute stated, “Any person who
violates
...
any permit condition or
limitation
...
shall be sub.ject to a civil
penalty not to exceed $10,000 per day of such
violation.” 33 U.S.C. §1319(d). The statute
has been amended to allow up to $25,000 per
day.
Id., 890 F.2d at 696, Note 6. 6
***
hf the plaintifffs.prove an ongoing violation
at trial, the violations are related to
present wrongdoing. Section 1319(d) of the
Act states that any person’ who violates a
permit condition shall be subject to a civil
penalty. This language coupled with §1365(a)
indicates that, once an ongoing violation is
shown, the court is virtually obligated to
assess penalties.
Stoddard v.
Western
Carolina Renional Sewer Auth., 784 F.2d 1200,
1208 (23 ERC 2105 (4th Cir. 1986).
Id., 890 F.2d at 697 (emphasis added)
111—62
The “shall be subject” language of
the federal statute is
quite similar to the “shall be liable” penalty language of
Section 42 of the Illinois Act. The, federal court’s presumption,
then, would seem to favor imposing penalty of some amount, even
if nominal, where violations are established. One can argue that
any Illinois case which finds a violation, but sets no penalty,
should have a minimal penalty.
C. Other Federal Decisions
Work v. Tyson Foods, Inc., 720 F.Supp. 132, 30 ERC 1580
(W.D.Ark. 1989), was a citizen suit brought in connection with
tort claims and with Clean Water Act violations by Tyson, a food
processor. In
a
jury trial Tyson
was
found to have caused
violations of NPDES permit requirements on 43 separate
occasions. The court found a reasonable likelihood of
recurrence, relying on the Gwaltnev decisions, despite over
$1,000,000 in expenditures alleged to have cured the problem.
Tyson was held liable for damages to real property and other
compensatory damages with respect to 40 plaintiffs. Besides
damages, the court assessed a $43,000 civil penalty ($1000 for
each of 43 separate days of violations), refraining from imposing
what it viewed as a maximum penalty of
$430,000.
The court noted that the EPA had drawn the court’s attention
to
two
documents, the EPA “Policy on Civil Penalties” and “A
Framework for Statute—Specific Approaches to Penalty Assess-
ments.” The court also considered recent Consent Judgments in
Arkansas covering civil penalties. The court specifically
identified ability to pay and litigation considerations as
factors to be reviewed in setting a just and equitable penalty.
(The court observed earlier that Tyson had been involved in many
pollution controversies and litigation since the 1970’s).
Without further explanation the court held that the maximum
penalty would be “unnecessary,” and based on the facts before it,
set the penalty at 10 of the maximum penalty. Work v. TysOn,
720 F.Su~p. at 139.
Following on the heels
of the Tyson decision, the U.S.
District Court for
New
Jersey issued a vociferous opinion and
imposed a $3,200,000 penalty for
11 ‘years of NPDES permit
violations. Public Interest Research Group v. Powell Duffryn
Terminals, Inc., 720 F.Supo. 1158, 30 ERC 1201, (D.N.J. 1989).
That court introduced its opinion as follows:
The case before this Court presents another
chapter in the never ending American
tragedy. A recalcitrant company in the
private sector ‘of the economy combined with
the lethargic enforcement of the applicable
statutes and regulations by the New Jersey
Department of Environmental Protection and the
Federal Environmental Protection Agency, has
caused a continuing, if not constant, 11 year
111—63
contribution to the pollution of the Kill Van
?(ull. It is indeed sad that none of the
participants cared sufficiently about the
public trust
—
the environment
—
to take
meaningful steps to avert the tragedy. This
Court will not stand idly by to either,
explicitly or tacitly, condone such
inaction. For the reasons hereafter set
forth, significant monetary penalties are
necessary.
Id., 720 F.Su~p. at 1159.
In choosing a penalty of $3,200,000, and rejecting
plaintiff’s request for the maximum statutory penalty of
$4,205,000 for 386 violations, the
court gave separate
consideration to several factors described in the Clean Water
Act, 33 U.S.C. 1319(d). These included seriousness of
defendant’s violations; the economic benefit resulting from the
violations; defendant’s history of violations; defendant’s good
faith efforts to comply with its permit; and the economic impact
of the penalty on the violator.
Powell Duffryn’s bulk chemical storage and transfer facility
caused violations of eleven different effluent limitations. The
court found this to be very serious since the effluent concen-
trations were 100 to 1000 in excess of permit limitations; two
pollutants were toxic; and the number of violations was great.
The defendant benefitted from these violations, saving an amount
far in excess of the statutory maximum penalty, which would
“compel”
a higher or maximum penalty. Id., 720 F.Supp. at 1163.
The violations persisted for 11 years, during which time the,
defendant procrastinated and the state and federal agencies made
sporadic and minimal attempts to enforce the permit’s terms. The
court also declined to infer defendant’s good faith, but the weak
governmental efforts did not favor a maximum penalty. The court
found that defendant had “failed to demonstrate
that assessing a
severe penalty would jeopardize defendant’s continued operation.”
Id., 720 F.Supp. at 1166, citing, Gwaltn~y, 611 F. Supo. 1542.
In setting the penalty amount the Court relied on USEPA’s
penalty policy. In explaining
this, the court cited its earlier
1989 opinion in SPIRG v. Hercules, Inc., 29 ERC 1317, 1418 (D.
N.J. 1989), which stated:
(Although the EPA penalty policy does not
have the force of law, it is consistent with
the Congressional policy behind the Act.
***
The 1987 amendments, while not incorporating
the language and detail expressed
in the EPA
penalty policy, serve as a reasonable summary
of that policy.
111-64
The court then held that since “civil penalties seek to
deter pollution by discouraging future violations,” the amount
must be sufficiently high so that a profit maximizing firm cannot
choose to absorb the penalty as a cost of doing business which
would be less than the compliance cost. Powell Duffryn, 30 ERC
at 1207, citing SPIRG v. Hercules, 29 ERC 1417 (D.N.J. 1989),
SPIRG v. A.T. & T. Bell Laboratories, Inc., 617 F. S~pp. 1190, 23
EP.C 1201 (D.N.J. 1985) and EVA, “Policy on Civil Penalties”
(February 16, 1984) at p. 3.~ The court concluded that,
unfortunately, it could not achieve this goal since economic
savings exceeded the maximum statutory penalty. The court found
that a $1 million reduction from the maximum $3,205,000 penalty
would be appropriate since the government’s lack of diligence
prolonged the violations. The court rejected defendant’s
assertion that the waterway was already heavily polluted. Even
if the harm could not be measured, defendant’s NPDES violations
meant that “the restoration and enhancement of the river’s water
quality was inhibited and therefore, the objective of the Act was
frustrated.” Powell Duffrvn,
720 F.SuDp. at 1167.
The sizable $3.2 million penalty certainly gave a loud
warning to others. The court offered little hope of a smaller
penalty unless
it would put the company out of business. (But see
also the Illinois case, Standard Scrap Metal, Case No. 36,
rejecting this kind of argument). The NPDES violations were
quite serious for this federal court sitting in New Jersey, and
should be viewed with equal gravity in Illinois. As with this
federal court which assumed the role of protecting the
environment, the Board has a responsibility to set penalties
which will deter noncompliance.
U.S. v. Key West Towers, Inc., 720 F.Suop. 963, 30 ERC 1635,
(S.D.Fla. 1989) was another decision, in which the District Court
in Florida systematically discussed the penalty factors of the
~ For other federal decisions, see also U.S. v. Shaffer Muffler
Shops, Inc., No. C—86—240, 30 ERG 1658, (S.D.Tex. Feb. 28, 1989),
($36,750
—
Clean Air Act); U.S. v. Phelps Dodge Industries, Inc.,
589 F.Supp 1340 (S.D.N.Y. 1984); U.S. v. Danube Carpet Mills,
Inc., 540 F.Supp. 507 (N.D.Ga. 1982) aff’d 737 F.2d 988 (11th
Cir. 1984); U.S. v. Cumberland Farms, Inc., No. 85—0846—1, 25 ERG
1077, (D.Mass. Sept. 25 and Oct. 16, 1986), ($530,000
—
Clean
Water Act; $390,000 would be refunded if wetlands restored); U.S.
V.
Mac’s Muffler Shops, Inc., No. C85—138R, 25 ERG 1369, (N.D.Ga.
Nov. 4, 1986), ($21,000
—
Clean Air Act);
U.S. v. Environmental
Waste Control, Inc., 710 F.Suoo. 1172, 29 ERC 1757, (N.D.Ind.
March 29, 1989), ($2,778,000— RCRA); Student Public Interest
Research Group off New Jersey, Inc. v. Monsanto Co., 29 ERG 1078,
(D.N.J. Mar. 30, 1988), ($240,000— Clean Water Act); Student
Public Interest Research Group off New Jersey, Inc. v. Hercules,
Inc., 29 ERG 1417, (D.N.J. 1989), ($1,680,000— Clean Water Act).
11 1—65
Clean Water Act, 33 U.S.C. l3l9(~). In this case the District
Court imposed a $250,000 penalty for filling approximately 2.7
acres of wetlands in violation of the Clean Water Act, 33 U.S.C.
1311. Although the government sought only a $250,000 penalty,
the Court communicated’in a footnote that the maximum penalty
would have approximated $25,000,000. The Court imposed the
requested penalty largely due to the seriousness of the
offense. “Any destruction of these rare and fragile’ natural
resources requires a substantial penalty.” Id., 30 ERG at 1637.
(emphasis added). The lack of good faith efforts also strongly
compelled the Court’s imposing a substantial penalty. Together,
the five factors indicated that “a $250,000 fine would promote
the soeciffic and general deterrence theories behind a civil
penalty”. Id., citing Tull, 481 U.S. 412 (emphasis added).
In
Illinois, NPDES
permit violations by the City of Joliet
were the subject of a federal enforcement action brought in 1988
in the District
Court for the Northern District of Illinois by
the U.S. Attorney General, on behalf of the USEPA. U.S. v. The
City of Joliet,
No. 88—5661, (N.D.Ill.
1988).
The action was for
injunctive relief and civil penalties under the Clean Water Act
for violations of the state—issued NPDES permit for Joliet’s
sewage treatment facility. Joliet discharged pollutants in
excess of
permitted levels for biochemical oxygen demand (“BOD”),
total, suspended solids, and fecal coliform bacteria. USEPA
requested permanent injunctive relief as to future violations;
that Joliet comply with its permit; and that Joliet pay civil
penalties
up to $10,000 per day for violations prior to February
4, 1987 and $25,000 per day of violation after that date, in
accordande wi’th the upward revision in the Clean Water Act’s
penalties.
A consent decree was entered in 1988 requiring remedial
action to achieve and maintain compliance with the NPDES permit;
payment of a $160,000 penalty; and stipulated penalties for any
subsequent violation of the decree.
Corrective action included
upgrading facilities; constructing a new nitrification facility;
and operating and maintenance requirements. Stipulated
penalties, which would not limit other remedies or sanctions,
included $250 to $750 for each day of violation, increasing to
$1,000 per day if compliance was not achieved by June 1, 1991;
$250 to $1,000 for daily, weekly, or monthly violations of
effluent limitations; and $300 per day for reporting or other
violations. Quite obviously, the NPDES violations involved
6
Alternatively, the Court felt that the direction of 33 U.S.C.
1319(d), to consider “such other matters as justice may require”
enabled the court to allow defendant the option of deeding a 1.9
acre pond involved here to a charitable
group
to serve as a
nature reserve.
ii 1—66
significant penalties, and federal enforcement against the
municipality entailed much stiffer penalties than those upheld
against local governments by Illinois state courts.
Just as NPDES permits under the Clean Water Act tie the
state to a federal water pollution enforcement program, so, too,
does the Clean Air Act’s requirement of a state implementation
plan (“SIP”) commit the state to achieve national ai’r quality
standards. Section 110
of the Clean Air Act, 42 U.S.C. 7410,
requires Illinois, and every state, to adopt “a plan which
provides for implementation, maintenance, and enforcement” of
national ambient air quality standards. To meet this requirement
the Board has adopted various emissions r~gulations which are
subject to federal approval. Upon approval, the various aspects
of the comprehensive plan are federally enforceable. The vast
majority of Board air pollution regulations have been federally
approved, and enforcement actions under state law may thus be
brought in federal district court. Similar federal enforcement
of state environmental laws occurs with respect to other federal
environmental laws such as the Safe Drinking Water Act, 42 U.S.C.
300, et seq. and RCRA, 42 U.S.C. 6901, et.
seq.
These federal
statutes continue to be the basis for. state promulgation off laws
derived from and intended to implement federal laws and policies.
In 1988 a federal action was brought to enforce Illinois’
emission limitations pursuant to the Clean Air Act, 42 U.S.C.
7410, inthe case of U.S. v. General Electric Company, No. 88 C
2564 (N.D.Ill. 1989). The U.S. Attorney General, on behalf of
the USEPA, sought injunctive relief and
civil penalties from
General Electric Company (“G.E.”) for excessive emissions of
volatile organic compounds (“VOGs”). Pursuant to Section 113(b)
of the Clean Air Act, 42 U.S.C. 7413(b), notice off the federal
action was given to the state agency, the Illinois Environmental
Protection Agency (“IEPA”).
G.E.’s paint coating operation for large appliances in
Cicero, Illinois released VOGs in excess of the limitations
established by the Board in Rule 205(n)(l)(H). 35 Ill. Adm. Code
205(n)(l)(H). This rule was adopted as part of the federally
required Illinois SIP. The rule’s VOC limitation, which has been
federally approved, is part of the SIP’s means to achieve the
National Ambient Air Quality Standard for ozone. Because
violations posed a threat to the public health and welfare, the
U.S. Attorney General sought to halt operations, to require that
the facility be brought into compliance, and to obtain penalties
of up to $25,000 per day of violation.
7’ See Illinois cases discussed herein, City of Waukegan; City of
Monmouth; Municioal Sanitary District of Greater Chicago; City of
Chicaqo; City off Moline; City off East Moline and City of
Freeport. The highest penalty upheld by the state courts was
$10,000.
111—67
This suit culminated in the lodging of a Joint Stipulation
with the District Court, and the issuance of a consent decree by
the court in 1989. The decree required that G.E. systematically
reduce emissions based on daily ozone forecasts; close the
coating operations permanently by June 30, 1990; post a
$3,000,000 bond to assure compliance; pay a $150,000 civil
penalty; and pay additional penalties of $5,000 to $25,000 per
day for various unexcused violations of the decree.
This
extensive relief was based on Illinois air rules and rendered in
a federal forum.
On January 8, 1990 the Federal District Court for the
Northern District of Illinois a,ddressed important penalty issues
in assessing a $100,000 civil penalty for RCRA violations in the
case of U.S.
v.
Maiorano, No. 87 G
4491 (N.D.Ill. Jan. 8,
1990). Defendants’
violations grew out of the storage and
disposal of hazardous wastes generated by their electroplating
business. Defendants h’ad failed to respond to USEPA’s
information requests and failed to timely submit initial and
revised closure plans as ordered. For these violations the
government sought penalties for 909 days of violations (some of
which were for different violations on the same days). Based on
the $25,000 fine per violation provided in Section 3008(g) of
RCRA, 42 U.S.C. 6928(g), the maximum penalty was calculated at
$22,725,000.
The court agreed with the government that a substantial
penalty was “warranted for reasons of deterrence.” slip op. at
5, citing U.S. v. T
& S
Brass and Bronze Works, Inc., 681 F.Supp
314, 322 (D.S.C. 1988) aff’d in relevant part at 28 ERG 1649 (4th
Cir., 1988) and U.S. v. Environmental Waste Control, Inc., 710
F.Supp. 1172, 1244 (N.D.Ind. 1989). The court found that the
violations were serious and
that defendants showed complete
disregard of the law and USEPA and judicial orders. “To impose. a
perfunctory or token penalty would send a message to similarly
situated persons that they may flout the law without
consequence.” slip op. at 6. Delays allegedly caused by IE?A
would not excuse defendants’ conduct. The court also
acknowledged that defendants’ alleged inability to pay was not
proved and, nonetheless, would be unpersuasive given defendants
intransigence. The court granted the government’s request for a
$100,000 penalty, noting that while it was a small percentage of
the maximum penalty, it wa’s substantial and would achieve the
deterrence purposes of the RCRA penalty provision.
Both Illinois and federal law are intended to achieve
consistency in setting comparable civil penalty amounts for
violations. Federal law requires that state enforcement programs
be quite similar to the federal program. See 40 CFR 123.27
(1989), or equivalent to the federal program. See Section 3006
of RCRA.
11 1-6~
r
-J
III. PENALTY CONSIDERATIONS IN OTHER STATES
State courts outside Illinois have reiterated the same
principles articulated in federal and Illinois penalty
decisions. Many states look to factors such as the seriousness
and duration of the offense and good faith. Some states rely
more heavily on USEPA’s penalty policy. Others address statutory
cons~derations similar to those in Section 33(c) of ‘the Illinois
Act. Sometimes, however, other states conclude that much higher
penalties should be imposed than ‘Illinois has typically seen in
its state court decisions.
As one example, in 1982 the Supreme Court of Ohio, addressed
the civil penalty issue in State,
ex. rel. Brown v. Dayton
Malleable, Inc., 1 Ohio St. 3d 151, 38 N.E. 2d 120 (1982). The
case involved a $493,500 civil penalty for the NPDES permit
violations of an iron foundry. Noting that the parties had
agreed to the application of LJSEPA civil penalty, the Supreme
Court approved the trial court’s use of that policy statement as
a proper approach to penalty calculation.
The Ohio Supreme Court recited the various components of the
trial court’s 1978 calculations. These included an amount for
not complying with the permit’s schedule of compliance. The
Supreme Court held that such a schedule is a permit term or
condition, and that, under USEPA policy, a penalty could be
assessed for recalcitrance or indifference with respect to
meeting the schedule. This was, in fact, the largest element of
the penalty calculation, which the Ohio Supreme Court summarized
as follows:
8 See Selmi, “Enforcing Environmental Laws: A Lqok at the State
Civil Penalty Statutes”, 19 Loy. L.A.L. Rev. 1279 (1986).
111—69
-
Harm or risk of harm
($50 x 683 days)
$ 34,150
Economic benefit from noncompliance
S 8,000
Recalcitrance or indifference re:
Compliance Schedule ($750 x 714 days)
$ 535,500
Subtotal
S 577,650
Mitigating factors
Delays due t.o strike
$500 x 98 days
(5 49,000)
Delays due to exceptional weather
$250 x 52 days
(S 13,000)
Delays in equipment delivery
$250 x 90 days
(5 22,500)
Subtotal
($ 84,500)
Total Penalty
$ 493,150
A second significant issue was the Ohio Supreme Court’s
review of the trial court’s consideration of the defendant’s
financial condition. The court found that the information was
used, not to increase the penalty, but “merely to insure that the
penalty
...
would not be so large as to send DM1 into bankruptcy
but would be large enough to deter future violations.” Id., 438
N.E. 2d at 125. The court noted, too, several federal decisions
and other support for the principle that civil penalties should
deter further violations and be lar~eenough to remove the
financial benefit of noncomp1iance.~ Id. Hence, ability to pay
is relevant to whether a penalty.may achieve the desired
deterrent effect’and eliminate any financial incentive to violate
the law.
A third factor favoring
the appropriateness
of the trial
court’s penalty assessment was
that the amount was less than 10
of the maximum of about $7,000,000. According to expert
testimony, the penalty was also in the lower one third of the
range in which it would have a “material effect”. Id. As a
general rule, the Supreme Court stated that as long as the amount
was less than the statutory maximum, “discretion to fix that
amount lies in the trial court.” Id., citing United States v.
Ancorp National Services, Inc., 516 F.2d 198, 202 (C.A. 2d, 1975)
and United States v. J.B. Williams Co., Inc., 354 F.Supp. 521,
For another state decision considering the need to remove the
economic benefit of noncompliance, see State v. Schmitt, 145 Wis.
2d 724, 429 N.W. 2d. 518 (Wis. App., 1988), supporting trial
court’s imposition of $232,939 forfeiture; see also
State ex rd.
Brown v. Howard, 3 Ohio App.3d 189, 43 N.E.2d 469 (1981).
Ii 1-70
548. The Ohio Supreme Court thus found no abuse of discretion
when it compared the maximum allowable penalty and the one
actually imposed under USEPA guidelines.
A 1988 state administrative decision from Tennesse provides
another
example
of how other states also use a
multi—faceted
framework for penalty determinations. An enforcement action,
referred to as In the Matter of: J. C. McCanless, Sr’., Case No.
87—3198 (Feb. 26,
1988), involved water pollution from feedlot
runoff. Although only
$808.75 in damages
was assessed for
enforcement efforts and the value of fish killed, the
Administrator of the Tennessee Department of Health and
Environment explained in his Order that the following factors
were considered in that decision:
(a) the facts alleged herein;
(b) whether the civil penalty imposed will be
a substantial economic deterrent to the
illegal activity;
(c) damages to the state, including
compensation for loss or destruction of
wildlife, fish, and other aquatic life,
resulting from the violation, as well as
expenses involved in enforcing this
section and the costs involved in
rectifying any damage;
(d) cause of the discharge or violation;
(e) the severity of the discharge and its
effect upon the quality and quantity of
the receiving waters;
(f) effectiveness of action taken by the
violator to cease the violation;
(g) the technical and economic reasonableness
of reducing or eliminating the discharge;
(h) the social and economic value of the
discharge source; and
(i) the economic benefit gained by the
violator.
Id.,
p. XVI
Quite obviously, these considerations closely parallel the
factors found in Section 33(c) of the Illinois
Act. This is one
example of how the manner in which the Illinois Board approaches
penalty determinations seems consistent with considerations which
have been discussed in other states.
111—71
In their 1989 treatise, “State Environmental Law”,
Professors Selmi and Manaster observed that the body of state
case law is relatively limited on the issue of civil penalties
for environmental violations. They noted that Illinois cases
represent the b~k of state decisions discussing penalty
determinations. Their analysis pointed to good faith as the
most critical decision factor, with recalcitrance being most
important in deciding whether a large penalty is impbsed. Proof
of economic benefit from non—compliance was found to be very
helpful to success in having the penalty sustained on review.
The review process is not generally predictable, however,
Selmi and Manaster note that the degree off deference given to
agency penalty assessments can vary widely. They cited Fee Plan,
Inc. v. Dept. of Envtl. Conservation, 118 A.D.2d 855, 500
N.Y.S.2d 344,
345 (1986) for the New York Court’s position that
the courts
will not overturn an Agency’s penalty unless “so
disproportionate
to the offense as to shock one’s sense
of
fairness”.
They noted in contrast that Illinois courts have
engaged in some intensive reviews of Board decisions based on the
Illinois Supreme Court’s holdings in Southern Illinois Asphalt,,
Case No. 4, and City of Monmou.th, (Case No. 2, that the
penalties should primarily
“aid in the enforcement of the Act”
and that “punitive considerations” are secondary. The authors
observed this consequence of
the review process in Illinois:
This standard has allowed the lower courts
considerable freedom in their review
——
freedom that in some instances plainly amounts
to a de novo review of the agency’s penalty
assessment. The result has been a series of
decisions in which the Pollution Control
Board’s assessments have been overturned by
reviewing courts which have concluded that the
assessments will not aid in the enforcement of
the Act. At the same time, however, the
opinions in that state on this issue have an
ad hoc aualitv to them and Drovide the oenaltv
decisionmaker with very little cuidanceon
whether a oenaltv assessment will be upheld on
review.
Selmi and Manaster, at 16—69 (emphasis added).
The Board’s own extensive review in this case suggests that
while the aiding—enforcement-versus-punishing princtole has been
less helpful
than the courts intended, Illinois decisions which
have more fully explored Section 33(c) factors do provide some
guidance.
The heart of the penalty decision must be review of
10 See, D.
Selmi and K. Manaster, “State Environmental Law”,
Clark Boardm-~nCompany, Ltd., N.Y., N.Y., 1989 pp. 16—63
—
16—74.
111—72
“all the facts and circumstances”, both in aggravation and
mitigation. State and federal decisions now typically address
many factors, whether from statutory guidelines or USEPA policy
statements. Illinois decisions are generally consistent with
those from these other forums. However, some inconsistencies do
exist, and the Board has indeed struggled at times to find
guidance in court opinions reviewing the Board’s penalty
assessments.
IV. STATISTICAL DATA ON PENALTIES
A. USEPA Statistical Data on Penalties
Information on federally imposed penalties can provide a
useful background for a state approach to assessing civil
penalties. Two USEPA reports, “Enforcement Accomplishments
Report: Fl 1989” (Feb. 1990) and “Overview of EPA Federal Penalty
Practices Fl 1988” (May 1989), reveal important penalty data.
From its inception through 1989,
USEPA
assessed $185.9 million in
civil penalties. Of this amount, approximately 19 or $34.9
million was assessed in 1989 and approximately 20 or $36.8
million was assessed in 1988 (the record high year for total
penalties). These annual figures compare with amounts totalling
less than ss million per year imposed in the late 1970’s. Sjnce
1985 the total annual penalties have been consistently much
larger.
The 1988 report,
referenced above, attributes that year’s
higher penalties to new enforcement initiatives, increased
penalties in established programs, and more cases in
traditionally higher dollar amount genre, e.g., the Clean Water
Act program. Interestingly, “penalties were levied in 92
percent
of the cases concluded in Fl 1988.” See 1988 report, supra, at
p. 1. And it was Region V, where Illinois is located, which in
1988 had the highest number of cases with penalties (228).
Suora, at p. 2. Federal cases certainly seem to suggest a
general policy of imposing penalties where violations are found.
For 1989 the various federal programs were the basis of the
following assessments of total civil penalties:
111—73
_u4 -
Table 1: Total USEPA Penalties for 1989
Clean Air Act
$64.8 million 35
Clean Water Act
64.3
35
Toxic Substances Control Act
28.5
15
RCRA
24.0
13
Federal Insecticide, Fungicide,
and Rodenticide Act
2.4
1
Safe Drinking Water Act
1.5
1
Superfund
.4
Total
$185.9 million
100
Certain of these programs, the Clean Air Act, the Clean
Water Act, and RCRA are the principal subject of similar
enforcement efforts at the state level. Federal penalties for
these programs will, therefore, be discussed in greater detail
below.
The 1989 report highlights a number of large civil penalties
assessed for 1989, some of which set new records. These are
relevant to show an upward trend in penalty amounts and may be
useful as the upper limit in state penalty determinations. For
example, a 1989 cons~ent decree imposed the highest Clean Water
Act civil penalty ever imposed against a municipality. That
$1,125,000 penalty was against the Metropolitan Denver Sewage
District No. 1, the Denver Water Board, and others. See 1989
report, suora, at o. 6. This report also notes that a civil
penalty of $2,778,000 was entered against Environmental Waste
Control, Inc. This penalty was the largest ever imposed by a
court for RCRA violations. Suora at
p.
8. Another case,
involving the removal of cat~~ic converters from vehicles,
resulted in the highest civil penalty per violation ($1,750) for
such tampering under the Glean Air Act. Supra at p. 24. A
$2,200,000 fine was imposed for Clean Water Act violations by
Koch Refining Company. This was one of the largest ever assessed
against a single discharger at a single facility. Su~j~at p.
24. Numerous other cases are referred to in the 1989 report
under the section labeled, “Major Enforcement Litigation and Key
Legal Precedents”, suora, pp.21-47.
Compared to the broad brush approach off the available 1989
report, the 1988 report issued in May of 1989 offers more detail
on the scope of penalty assessments. Since comparable data for
Fl 1989 is not yet available, the statistical information for
1988 will be summarized below. While these penalty figures would
probably be higher than most comparable state figures, they mc’
It 1—74
—6’S—
provide some framework for future state penalty determinations.
Only Clean Air Act, Clean Water Act, and RCRA data will be
reviewed as these programs involve enforcement actions most
analogous to state actions. The chart below presents the median,
average, and highest penalties assessed for these programs.
Table 2: Selected USEPA Penalties for 1988
—
All Regions
Median**
Average***
Highest
Clean Air Act*
judicial
$30,000
$125,555
$1,750,000
administrative
39,397
37,028
61,500
Clean Water Act
judicial
$37,500
$139,834
$2,000,000
administrative
8,500
13,545
60,000
RCRA
judicial
$96,479
$209,791
$1,100,000
administrative
9,440
17,576
150,000
*
Stationary Source Air violations only
**
Median Equal number of penalties above and below this
figure
~ Average
=
Arithmetic average. (Total dollars divided by
total number of penalty cases.)
Of particular interest for Illinois, Region V, in which
Illinois is located, assessed the following median, average, and
highest penalties
for 1988.
Table 3: Selected USEPA Penalties for 1988
—
Region V Only
Median
Average
Highest
Clean Air Act
judicial
$27,500
$133,041
$1,750,000
administrative
50,273
50,273
61,500
Clean Water Act
judicial
$40,000
$61,700
$ 60,000
administrative
20,900
20,900
34,000
111—75
B. Illinois Statistical Data on Penalties
Some statistical information is available to provide a broad
overview of historical figures in Illinois penalty decisions.
Table 4 below is derived solely from IE?A reports labeled “State
of Illinois Environmental Protection Agency Summary Penalties
Assessed by Pollution Control Board.” These reports were
available through July 31, 1988, and are presumed by the Board to
be reasonably accurate. Average penalties were calculated by
dividing the reported total amounts by reported number of
penalties. As can be seen,
the average penalties are quite
modest, predominately in the $2,000
—
5,000 range. These amounts
obviously are significantly less than the federal administrative
penalties for Region V refferrred
to in the preceding table. More
specific data is summarized below based on the earlier discussion
of Board decisions which were appealed.
I. Pollution Control Board
Table 4: Summary of Penalties Assessed by
Illinois Pollution Control Board
RCRA
judicial
administrative
$78,000
$96,218
$ 280,000
12,500
15,620
60,000
Fiscal Year Total
Number
of
Average
Ending On
Amounts
Penalties
Penalty
6/30/71
$
96,950
18
$5,386
6/30/72
422,862
7’S
5,638
6/30/73
374,381
148
2,530
6/30/74
226,082
94
2,405
6/30/75
239,374
92
2,602
6/30/76
275,350
135
2,040
6/30/77
221,722
84
2,640
6/30/78
106,475
59
1,805
6/30/79
164,118
104
1,578
6/30/80
198,812
77
2,582
6/30/81
262,392
87
3,016
6/30/82
196,273
72
2,726
6/30/83
222,758
36
6,188
6/30/84
37,423
11
3,402
6/30/85
175,700
14
12,550*
6/30/86
61,008
13
4,693
6/30/87
13,200
6
2,200
6/30/88
37,500
3
9,375**
111 --7 ~
*
Noticeably higher due
to one $75,000 penalty
**
Noticeably higher due to one $25,000 penalty
2. Illinois Court Decisions
The Illinois Appellate and Supreme Court opinions discussed
earlier represent virtually all Illinois Court pronouncements on
Board assessed civil penalties for environmental violations.
They provide more meaningful information than the above table of
penalties assessed by the Board. Court decisions summarized
below indicate
that penalties of as little as $100 and as much as
$75,000 may be upheld on appeal. Penalties off less than $3,000
predominate, but nine decisions upheld penalties of $7,500 to
$75,000. Notably, in 1989 and early 1990, two penalties were
upheld for $10,000 against Perkinson/Porkville and against the
City of Freeport; one $10,000 penalty was reduced to $1,000 in
the case of Modine Manufacturing; and another SlO,000 penalty was
remanded to the Board in the case of Trilla Steel Drum.
Table 5: Illinois Civil Penalties Reviewed by Supreme Court
_____
_____________
_______
I~l1 in oi
S
Supreme
City of Waukegan
5 1,000
(a municipality)
250
250
1974
City of Monmouth
$
2,000
(a municipality)
1974
Incinerator, Inc.
$25,000
1975
Southern Illinois Asphalt
$ 5,000
(2 cases consolidated)
$11,000
Mystik Tape
Metropolitan Sanitary Dist.
(a unit of local government)
Processing & Books
$ 3,000
$ 3,000
Wells Manufacturing
$ 9,000
—0—
The appellate courts have reviewed a far greater number of
cases regarding civil penalties. This allows the decisions to be
Year
1974
Petitioner
Board
1975
1975
1976
1976
$ 1,000
250
250
—0—
$25,000
—0—
—0—
$ 3,500
—0—
$ 3,500
$ 6,000
111—77
broken down into categories for comparison. The following Table
6 groups the decisions into those where the court was primarily
discussing issues relating to violation of air pollution
requirements, water pollution requirements, and cases where the
primary issue was failure to have a permit for certain
activities. For clarity,
cases involving a local government
defendant are grouped separately.
Table 6: Illin’ois Civil Penalties Reviewed by ADoellate Court
Water_Gases
1974
Meadowlark Farms Inc.
(Value of fish kill)
Allaert Rendering Inc.
Archer Daniels Midland
1989
Perkinson/Porkville
1975
Freeman Goal Mining
Air
Petitioner
Board
Appellate
Cases
Court
1974
Allied Metal
On remand
$ 2,500
5 750
Remanded
1975
Sangamo Construction
On remand
$ 5,000
$ 5,000
Remanded
1976
Aluminum Coil Anodizing
$ 1,500
$ 1,500
1974
Lloyd A. Fry Roofing
On remand
$50,000
$10,000
Remanded
1974
Bresler Ice Cream Co.
$ 1,500
—0—
1974
Chicago Magnesium Casting
$
1,000
—0—
1975
CPC International Inc.
$15,000
—0—
1976
May/Hillview Farms
$
2,500
—0—
1976
Draper & Kramer
$ 1,000
—0—
1976
Marblehead Lime
$20,000
$20,000
1976
Hillside Stone
$10,000
$ 2,000
1980
1983
$ 141.66
$
131.66
On remand
$ 3,000
$40,000
$32,500
$10 ,000
SlO,376 .84
$ 5,000
$ 3,000
Remanded
$,1 5,000
$10,000
$10,376.84
$ 500
Ii 1—78
—
r,
-~—
Petitioner
Permit Cases (Air/Water/Land)
Board
Appellate
Court
1975
1975
1976
1977
1981
1978
1982
1983
1973
1986
1989
1984
1990
$
2,500
$
1,500
$ 250
$ 500
$ 500
$ 1,000
$ 1,500
$ 7,500
$75,000
$ 2,000
$30,000
$10,000
No decision
$
1,000
$10,000
—0—
$
850
$
100
$
200
—0—
S 1,000
$ 1,500
$ 7,500
$75,000
$ 2,000
$30,000
Remanded
—0—
$ 1,000
Municipalities (See also Supreme Court Cases Above)
Petit ioner
Board
Appellate
Court
1978
City of Chicago
$10,000
0
1985
City
of Moline
$90,000
0
1985
City
of East Moline
$30,000
$10,000
1989
City of Freeport
$10,000
$10,000
3. Recent Stipulated Penalties
Examples of other penalties recently imposed by the Board
are listed below. (These do not include penalties imposed under
the Administrative Citation program established under Section
31.1 of the Act.) These penalties were assessed pursuant to
settlement and stipulation agreements between the parties:
Highlake Poultry
Freeman Coal Mining (air)
Hindman
Harris—Hub
Slager/Rapid Liquid Waste
Joos Excavating Go
Pielet Bros.
Waste Land Inc.
Bath Inc.
Standard Scrap Metal
Trilla Steel Drum
Citizen Utilities
Modine
Mfg.
yet
111—70
Table 7: Recent Stioulated Penalties
As summarized below, federal judicial decisions typically
imposed the highest single penalties and largest average
penalties, followed by federal administrative penalties.
Penalties imposed by administrative and judicial processes in
Illinois generally, but not always, will be less than similar
federally imposed penalties.
Date
Case
Penalty
3/22/90
3/8/90
3/8/90
2/8/90
12/6/89
11/20/89
8/10/89
8/10/89
7/13/89
PCB
PCB
PCB
PCB
PCB
PCB
PCB
PCB
PCB
89—192
89—161
89—160
89—65
89—69
88—36
89—18
89—67
88—201
$10,000
$ 3,000
$ 1,500
S 600
5 1,000
$12,500
$ 1,000
$ 2,500
$11,000 (1st
(?lus S3,000
reimbursement
$ 1,000 (2nd
Respondent)
)
Respondent)
Date
Case
Penalty
6/22/89
6/8/89
4/27/89
4/6/89
2/23/89
2/2/89
1/19/89
1/13/89
1/13/89
PCB
PCB
PCB
PCB
PGB
PCB
PCB
PCB
PCB
89—24
88—200
89—2
84—92
88—177
87—104
88—135
86—104
88—124
SlO,000
$ 1,000
5 1,000
‘5 6,500
$12,000
5 6,500
$ 5,000
5 7,500
$11,250
C. Comoarison
-~
Federal and State Penalties
111—Sn
Table 8: Comparison of Federal and State Highest Penalties
Federal
Judicial
Administ rat ive
All Federal (1988)
Clean Air Act
Clean Water Act
RG RA
$1,750,000
2,000,000
1,100,000
$
61,500
60,000
150,000
Federal—Region V (l9’88)
Clean Air Act
Glean Water Act
RCRA
$1,750,000
160,000
280,000
5 61,500
34,000
60,000
Illinois
—
Penalty Determinations After 1973
Judicial
Review
Board
Deci sion
Non—Municipality
Municipality
$
75,000
10,000
$ 75,000 Upheld
90,000 Reversed
1989 Board Decisions (Stipulations)
(From Table
7)
$ 12,500
Table 8 above draws comparisons regarding maximum penalties
assessed in the Federal system and the State of Illinois. The
Illinois penalties are further divided into those maximum dollar
amounts supported by the courts in reviewing Board decisions and
maximum set by the Board in any case (prior to any review). The
maximum based on a stipulated penalty is listed separately.
Table 9 below provides the same information, but based on the
average (arithmetic mean) rather than maximum penalty amount.
the
111—81
—-~I’-
-:‘~~
Table 9: Comparison of Federal and State Average Penalties
Federal
Judicial
Administrative
All Federal (1988)
Clean Air Act
$ 125,555
$ 37,028
Clean Water Act
139,834
13,545
RCRA
209,791
~7,576
Federal—Region V (1988)
Clean Air Act
$ 134,041
$ 50,273
Clean Water Act
61,700
20,900
RCRA
96,218
15,620
Illinois
—
Penalty Determinations After 1973
Judicial
Board
Review
Decision
Non_Municipality*
$5,975
$ 13,639
Municipality*
3,000
21,285
1989 Board Decisions (Stipulations)
$ 5,983
(From Table
7)
*Derived from tables 5 and
6 detailing
Illinois court decisions,
using initial Board-imposed penalty and final court
determination of penalty amount.
V. CONCLUSION: RELEVANT FACTORS FOR BOARD DETERMINATION
OF CIVIL PENALTIES IN THIS CASE
A. Calculating the Maximum Penalty
In this case, the Board will begin the penalty determination
process by considering the maximum civil penalty under the statute
where such information is available. This is a natural or logical
benchmark from which to begin considering factors in aggravation and
mitigation of the penalty amounts. This is consistent with the
discussions in the
U.S.
Supreme Court Tull and Gwaltnev decisions,
with U.S. EPA Penalty Policy; and with Illinois decisions discussing
a maximum penalty. As discussed earlier, the Illinois statute
now
provides for a penalty of up to $50,000 per violation and an
additional $10,000 for each day of violation. Section 42(a) of the
Act.
In deriving a range off appropriate penalties, the Board may
also consider the penalties for similar offenses which have been
imposed in other forums (federal and other states). The Board may
also consider relevant any penalties imposed by Illinois courts or
the Board in similar circumstances.
ii 1—82
A final consideration as to the range of appropriate penalties,
though not necessarily binding on the Board in all circumstances, is
whether the parties have stipulated to a maximum penalty or whether
the complaint requests a maximum penalty which is less than the
amount permitted by statute.
B. Statutory Factors Which Must be Considered,
Section 33(c) factors provide the minimum factors which must be
considered in fine tuning a penalty assessment. These will be
considered by the Board in each penalty determination to the extent
relevant evidence exists. These factors affect the calculation of
the penalty by increasing or decreasing the penalty amount depending
on whether the statutory factor, when evaluated by the Board, weighs
in favor of a larger or smaller penalty within the range of
penalties derived pursuant to the first part of the penalty
evaluation. The statutory penalty criteria are:
*
All the facts and circumstances. Section
33(c)
*
Character and degree of injury or inter-
ference. Sedtion 33(c)(l)
*
Social and economic value. 33(c)(2)
*
Suitability/unsuitability of pollution
source to its locale. Section 33(c)(3)
*
Technical practicability and economic
reasonableness of pollution abatement.
Section 33(c)(5)
*
Economic benefits of non-compliance.
Section 33(c)(5)
*
Any subsequent compliance.
Section
33(c) (6)
C. Other Factors
In this case, viewing all the facts and circumstances
pursuant to Section 33(c) and in keeping with state and federal
court decisions, the
Board will evaluate other factors, notably:
*
the presence or lack of good faith;
*
whether the penalty may aid enforcement
by deterring future non—compliance by
this violator and others;
111—83
*
the economic impact of the penalty on the
violator in terms of the violator’s
ability to pay. (Note, however, the
Board is not bound to maintain a
violator’s economic viability, but may
consider this.)
*
totality of circumstances surrounding the
violation, including, but not limited to,
the duration of the violation, any
cessation, and any prior history of
violations.
Like the Section 33(c) factors, these other factors aid the
Board in weighing the gravity of the harm and the conduct, in
removing the economic incentive to violate the law, and in
assigning appropriate dollar amounts in a penalty calculation.
An example of how this process takes place in federal Glean Water
Act settlements is attached as Exhibit A for illustration
purposes only.
VI. PENALTY DETERMINATION FOR ALLEN BARRY
A. The Maximum Penalty
The stipulation between the parties sets forth four separate
days in 1982, 1985, 1987 and 1988 where violations of Section
12(a), 12(d) and 12(f)
of the
Act and Sections .501.403(a),
502.104, 302.203, 304.105, and 302.212 of the Regulations have
been admitted. The Board views these violations, under the
particular facts of this case, as constituting five separate
violations encompassing four days
of violations. (Note, in the
four counts described earlier, Count II describes two separate
violations, i.e., NPDES.oermitting requirements and livestock
facility and waste handling requirements.) Clearly, the
violations persisted for a period of up to nearly six years for
some or all of the violations. However, in the absence of an
allegation and proof by the Agency that the violations were
continuing, the Board chooses not to engage in an assessment of
the number of days on which each off the violations continued.
For the purposes of calculating the maximum penalty the Board
will view the five violations as occurring on each of four
days. This results in a maximum penalty of $65,000 (($10,000 x
5)
+
($1,000 x 3d x 5).
The Agency has agreed in the Stipulation and Proposal for
Settlement to seek a penalty not greater than $10,000. The Board
will abide by the stipulation in limiting its penalty inquiry in
the range of $0
—
$10,000, while recognizing that its evaluation
would otherwise cover a much broader penalty range in the absence
of such settlement by the parties.
Other Illinois decisions are in keeping with the $0
—
$10,000 range agreed to above. The Perkinson/Porkville case,
111-84
(1989) Case No. 25, affirmed a Board—imposed penalty of $10,000
for swine waste discharges. A stipulated penalty of $600 in the
case of IEPA v. Russell G. Wake, PGB 84—79, 62 PCB 503 (Feb. 7,
1985) represents a slightly dated penalty assessment also
involving swine waste discharges. These decisions support the
stipulated maximum of $10,000 and suggest that the respondent’s
request that no penalty be imposed would not be in keeping with
Illinois precedents.
B. Consideration of Statutory Factors
1. Character and Degree off Harm
The livestock waste runoff from Allen Barry’s operation has
had a deleterious impact on the chemical and biological nature of
the receiving stream. Essentially, the elevated ammonia nitrogen
levels, unnatural sludge, and murky, turbid conditions, and foul
odors create a hostile environment for aquatic life and harmful
conditions for public health. The Board finds that this kind of
harm to state waters flowing through the Barry property and
further downstream is serious in nature both in terms of
immediate and long—term environmental impact. These violations
date back to 1982 and run through 1988, further indicating
environmental harm that spans many years. The injuries here are
more pervasive than the violations from 1982—1983 which were
stipulated to in the Russel G. Wake case noted above.
The Board finds that the violations are indeed serious; this
is a situation which calls for imposing a $10,000 penalty.
2. Social and Economic Value
The Board acknowledges that Allen Barry’s livestock
operation makes a social and economic contribution to the
community and the state. However, that value was diminished by
Allen Barry’s failure to contain livestock waste runoff, as
required, and to secure and comply with an NPDES permit intended
to regulate any such discharges. The Agency has been required to
engage in efforts since 1982 to secure compliance with the
Act
and regulations. This, too, reduces the social ,and economic
value of Allen Barry’s business for the state. Businesses which
comply with the state’s enviromental regulatory scheme do,
however, make a sizable contribution socially and economically.
As Allen Barry has agreed to take remedial action to achieve
compliance, his facility will be of benefit to the community and
state.
However, the value of this operation does not in the Board’s
opinion justify a significant reduction in the penalty amount.
This is not an enterprise which is critically linked to the
social and economic lifeblood of a community. The record does
not establish, for example, that Allen Barry is a major employer
or a key supplier of goods. If that were the case, the Board
could evaluate whether enforcement and a penalty would have a
111—85
—76—
far—reaching negative impact on the community, such as if the
remedy caused a major employer to go out of business. The Board
finds, therefore, that this is not a factor which warrants
imposing a minimal penalty, but rather suggests a penalty in the
middle ground.
3. Suitability/Unsuitability of Pollution Source to Its
Locale
The record does not disclose any significant conflict
between the livestock operation and its locale. The area appears
to
be primarily rural and the business, therefore, seems to be
reasonably adapted
t~ the locale. This rather neutral f’acto.r
would not here have a noticeable impact on the amount of penalty.
The Board finds that the penalty’ should not be increased, as
in the case of an offending industry in perhaps a primarily
residential area. A moderate penalty would thus seem
appropriate.
4. Technical Prac.ticability and Economic Reasonableness of
Pollution Control
The availability of means to control livestock waste runoff
is not at issue here. The feasibility of maintaining curbs,
dikes, walls or similar means of containing runoff as the
regulations require is not controverted. The respondent did make
some efforts to control runoff in 1982, bu’t these efforts were
not successful in resolving the problem. Since receiving the
Agency’s Pre—Enforcement Conference letter dated October 15,
1982, Allen Barry was on notice of violations, which could have
been eliminated by readily anticipated or discoverable methods.
The Board is persuaded that remediation was within
Respondent’s means despite letters from Allen Barry’s counsel
which requested a state agency—designed plan. Polluters cannot
thrust the burden of compliance back on the state and win delayed
compliance with impunity. The State has no obligatio.n to
formulate conceptual and/or engineering plans for the thousands
of enterprises within the State which must comply with the Act
and regulations.
It remained within Allen Barry’s responsibility
to control runoff
in a timely manner. Although the Agency’s
letter of December 18, 1985, recommended that he engage a
consulting engineer, Allen Barry did not hire an engineer until
early 1989 (R. 48). Respondent’s contacting the Illinois Soil
and Conservation Service ultimately resulted in a November, 1987
preliminary plan, which has yet to be implemented by
Respondent. These “efforts” at compliance are well—papered but
quite ineffective in bringing about technically practical
pollution control. An eight point recommendation of needed
remedial measures was made in the Agency’s letter of December 18,
1985. A reminder that the responsibility for the solution was
Respondent’s, not the Agency’s, was made in a June 17, 1986
letter from the Agency. Thus, the availability of means to solve
11 l—S6
the problem weighs heavily against Allen Barry and the State
should not be faulted for attempting to help him to achieve
compliance. This is not a case where technology was unavailable
to cure pollution.
Similarly, economic reasonableness is not really at issue.
The costs of walls, curbs, and dikes to contain runoff or of such
remedial measures as fencing and maintaining vegetat!ive cover are
not alleged to be prohibitively expensive in relation to the kind
of industry involved here. The Board finds no support for a
proposition that the pollution control methodology was
economically unreasonable for livestock operations such as
conducted here. Such expenses would appear to be reasonable for
commercial livestock facilities in general, and perhaps more so
here, where many years’ operations are involved. Although
respondent’s brief alludes to these costs as being expensive for
his situation, these costs are not inordinate, but are to be
reasonably expected by those engaging in this industry.
The Board finds that the considerations of technical
practicability and economic reasonableness of reducing and
eliminating the water pollution from Allen Barry’s operations
warrants imposing a higher penalty than would be appropriate
where technological and economic considerations make pollution
control less accessible or disproportionately expensive.
5. Economic Benefits of Non—Compliance
The cost savings of delayed compliance take into account the
time—value of money. This is to say that by postponing capital
improvements or operating and maintenance costs for pollution
control, those funds are available for other uses or investments
or to reduce the, need to borrow, creating a better position
relative to competitorswho voluntarily comply. Some rate of
return (an interest rate factor) can be used to calculate an
economic savings or benefit
from not expending capital and
operating funds at an earlier point in time.
In the case of Allen Barry, some economic benefit probably
dates back at least to 1982 when he was notified in writing of
violations. A November 25,
1987 letter from the U.S. Department
of Agriculture, attached to the Stipulation as part of
Respondent’s Exhibit F, indicates that costs of $29,710 would be
incurred for capital improvements to eradicate the runoff
problem. Another cost figure of approximately $40,000 is noted
in Respondent’s brief (page 9). This estimate is more fully
developed in Exhibit 3 to the March 14, 1989 hearing
111-37
—
transcript. That document is Respondent’s February, 1989
preliminary co~ estimate, which total $42,500. At only a 6
rate of return~-’-, cost savings in the range of $1,783 to $2,550
could be expected each year, based on $29,710 to $42,500 in
capital expenditures. Since the 1982 written notice of
violation, Allen Barry would have reaped at least 7 years of
savings from deferred compliance. Without compounding the
savings, a simple calculation indicates that total ~avings could
be in the range of $12,481 to $17,850, clearly in excess of the
maximum penalty sought by the Agency. The savings would, of
course, be greater if annual maintenance charges were included.
However, such information on economic benefit is not adequately
presented to the Board. This factor requires the Board to look
to the middle to upper range of penalties to eliminate the
economic incentive to avoid compliance.
6. Any Subsequent Compliance
The issue of subsequent compliance is not before the
Board. Where the courts and the Board have considered this
factor the respondent had complied with the Act and regulations
either before the complaint was filed or at least before the
Board’s decision.
Compliance by Allen Barry is still prospective based on the
record before the Board. The injunctive relief sought by the
Agency describes acts yet to be performed to achieve full
compliance. For this reason, the penalty calculation will not be
reduced since this is not a situation where the respondent’s
independent acts, rather than enforcement, has brought about
compliance.
C. Other Factors
The presence or absence of good faith must be gleaned frcm
respondent’s conduct over the many years of this protracted
enforcement process. According to an IEPA report dated July 27,
1982, to gain access to the Barry property an administrative
inspection warrant had to be obtained by the Agency. At that
time, the runoff conditions were found
to be basically the same
as conditions found at the time
of an October 16, 1979 Agency
inspection. A Pre—Enforcernent Conference Letter was mailed
October 15, 1982, which stated that, “(the Agency has previously
informed you of aooarent non—comoliance,” and gave notice of the
Agency’s intention to file a :ormai complaint. ~nese cocuments
In the absence of a calculation by the Agency, the Board here
will estimate the economic benefit based on cost data from the
record before it. The 6 interest rate is used here as a modest
attempt to reflect an annual savings from deferring payment, much
as the courts use a 9 statutory rate of interest for
judgments. Ill. Rev. Stat. 1987, ch. 110, par. 2—1303.
111—SO
-~
a
•.1
suggest that early cooperation
was certainly lacking and that
ultimate compliance has required Agency efforts which span a
decade.
More disturbing than the longstanding compliance problem,
the nature of respondent’s conduct in 1979
and 1980 warrants the
Board’s comment. A May 19, 1980 report describes that an initial
visit on October 16, 1979 was met with belligerence’from Allen
Barry. A July 22, 1980 memorandum notes that a personal visit to
explain the Agency’s role and need for water samples ended in
Allen Barry becoming angry, yelling, and ordering the Agency’s
representative to leave and not return. A September 23, 1980
inspection report describes how Allen Barry attempted to grab an
Agency inspector’s camera and followed after him yelling. Three
Agency inspectors were involved in the incident which included a
man not from the Agency jumping on and riding on the hood of the
car and Allen Barry grasping the arm of a woman from the Agency
who
was attempting to close the car door to leave. A police
report was filed.
On November 26, 1980 a memorandum reported that on November
19, 1980, inspectors twice drove by the facility and observed
several thousand beef cattle on open dirt lots near the stream.
The report notes that runoff was probably entering the stream,
but the Agency was deterred from making closer inspection due to
the previous hostile actions of Allen Barry.
This recalcitrance and threatening behavior is clearly an
extreme example of bad faith. The Board finds that this factor,
if considered alone, would justify imposing the maximum penalty.
Slightly offsetting this egregious conduct is later evidence
in a December 18, 1985 letter of a cooperative visit on November
5, 1985. In that letter, details of needed remedial action were
outlined. However, a June 11, 1987 report notes that contact
with Allen Barry was again harsh and very uncooperative. (See
also transcript
pp.
61-63.) Far too much of the Agency’s
resources appear to have been spent to accomplish eventual
compliance. From 1979, Agency efforts were thwarted by hostile
behavior and numerous delays.
The Board acknowledges that some efforts, including
blacktopping an area and installing tile, a dike and holding
basin were made in 1982. And in 1988, Allen Barry straightened
the receiving stream. Yet Allen Barry remains in violation,
never having made enough effort to cure the problem.
Some delays might be excusable due to intervening illnesses
of Allen Barry in 1983 and his attorney in 1987. However, the
trail of correspondence from 1982 through 1988 does not support a
finding of reasonable delays but rather pays “lip service” to the
notion of cooperation. The heart of whether action was really
forthcoming can be seen in the letter of June 8, 1988 from Allen
Barry’s attorney.
ill—SO
20. On February 18, 1988, we sent you a
letter showing we were having independent lab
tests made and in the last paragraph of that
letter I stated, “If Mr. Barry sees on his own
tests that he is in violation, then
we can
work from there.” It appears that his own
tests(emphasispushedadded)the limit on the COD and
go0~
Contrary to the assertions by respondent’s attorney in the
June 8, 1988 letter, the Board does not find “past and continuing
cooperation” and “good faith effort.” An Agency report of a June
11, 1987 visit with Allen Barry notes that he expressed his
unwillingness to change any part off his operation as a result of
Agency action. Thus, despite numerous attempts to work
with
Allen Barry over the years, the Agency ultimately had to file its
complaint to accomplish its enforcement goals. The Board views
the lack of good faith over many years as supporting a penalty in
the higher range. Failure to come into compliance is an
aggravating factor here.
In’ such a case of recalcitrance and bad faith, the need to
aid compliance by deterring this violator, as well as others,
becomes very important. The state’s environmental goals could
never be met if similar responses to enforcement were
tolerated. This factor, too, suggests a penalty in a higher
range.
Very little information is available to inform the Board of
the economic impact of the penalty on the violator. The Board
will therefore approach this factor as relatively neutral, with
any consideration of respondent’s ability to pay favoring a
smaller penalty to Allen Barry’s benefit.
D. Penalty Calculation
Integrating the various elements which suggest a higher or
lower penalty amount, the Board concludes that, separate and
distinct from recouping the economic benefit from noncompliance,
a penalty should be imposed in the amount of $1,000 each for
violations of Sections 12(a) and (d) of the Act and for
violations of ammonia nitrogen and unnatural sludge standards and
livestock management and waste handling regulations. 35 Ill.
Adm. Gode 302.212, 302.203, 304.105 and 501.403. Besides this
$4,000 penalty, an added $100 per day for each violation’s
additional 3 days of violation, causes the penalty to be
increased by $1,200. For the violation of N?DES permit
rquirements under 35 Ill. Adm. Code 502.104 a fine of $500, plus
$50 per day for each of 3 additional days of violations, shall be
imposed. ‘The minimum penalty, therefore, is $5,850, which is
well within the range defined earlier, and significantly less
than the amount imposed in the Perkinson/Porkville case.
11 1—flO
However, as the Agency alleged (but did not specificially
calculate), an economic benefit accrued to Allen Barry from not
expending funds to achieve compliance. The Board has calculated
this benefit as being not less than $12,481. The total penalty,
therefore, to aid enforcement of the Act and to recapture the
profit or gain from non—compliance should be at a level near
$18,331 ($5,850 + at least $12,481). Since the Board is willing
to limit the penalty to not more than $10,000, the ~oard finds
that Allen Barry is liable for a SlO,000 civil penalty.
ORDER
It is the Order of the Illinois Pollution Control Board
that:
1. The Respondent, Allen Barry, has violated Sections
12(a), 12(d) and 12(f) of the Illinois Environmental
Protection Act and 35 Ill. Adm. Code 501.403(a),
502.104, 302.203, 304.105, and 302.212.
2. Within 30 days of the date of
this Order, the Respondent
shall, by certified check or money order payable to the
State of Illinois, pay the penalty of $10,000, which is
to be sent to:
Illinois Environmental Protection Agency
Fiscal Services Division
2200 Churchill Road
Springfield, Illinois 61706
Allen Barry shall also state its Federal Employer
Identification number upon the certified check or money
order.
3. The Respondent shall comply
with all the
terms and
conditions of the Stipulation and Proposal for
Settlement filed on April 12, 1989, which is
incorporated by reference as if fully set forth herein.
Section 41 of the Environmental Protection Act, Ill. Rev.
Stat. 1987,
oh. 111—1/2, par. 1041, provides for appeal of
final
Orders of the Board within 35 days. The Rules of the Supreme
Court of Illinois establish filing requirements.
IT IS SO ORDERED.
Board Member Joan Anderson concurred.
111—91
I, Dorothy M. Gunn, Clerk of the Illinois Pollution Control
Board, hereby certifj’ that the above Opinion and Order was
adopted on the
~
day of
f..~
,
1990, by a
vote of
~7—O
.
~
~.
Dorothy M. ~inn, Clerk
Illinois Po~lutionControl Board
111—92
Exhibit A
CLEAN WATER ACT
PENALTY POLICY FOR CIVIL SETTLEMENT NEGOTIATIONS
CWA Penalty Summary Worksheet
(1) No. of Violations
________
x
$10,000 stat. max.
S________
(2) Economic Benefit (“BEN”)
(period covered/
months)
= _____
$
(3) Total of Monthly Gravity
Components
$
(4) Benefit
+
Gravity TOTAL
S
(5) Recalcitrance Factor
_____
(0—150) x Total (Line 4)
=
$_________
(6) Preliminary
TOTAL (Line 4
+
Line 5)
$
ADJUSTMENTS
(7) Litigation Considerations
(Amount off reduction)
$
(8) Ability to Pay
(Amount of reduction)
$
(9)
SETTLEMENT PENALTY TOTAL
$
Name and Location
___________
_____________
of Facility
Date of Calculation
____________________________
UNITED STATES
ENVIRONMENTAL PROTECTION F.GENCY
EFFECTIVE DATE: FEB 11 1986
11 1-°3
