ILLINOIS POLLUTION CONTROL BOARD
~3une
20,
1986
CLASSIC FINISHING COMPANY, INC.,
Petith,c~er,
v.
)
PCB 84—174(8)
ILLINOIS ENVIRONMENTAL PROTECTION
)
AGENCY,
Respondent.
MS. DIXIE
LEE LASWELL OF GESSLER, WEXLER,
FLYNN, LASWELL
&
FLEISCHMANN APPEARED ON BEHALF OF PETITIONER.
MR. JOSEPH
R.
PODLEWSKI, JR. APPEARED ON BEHALF OF RESPONDENT.
OPINION AND ORDER OF THE BOARD (by 3.
Marlin):
This matter comes before the Board upon the November
21,
1984 filing by Classic Finishing Company,
Inc.
(Classic)
of
a
petition for variance from 35 Ill.Adm.Code 215.204(c)volatil.e
organic material
(VOM)
air emission limitation
for paper
coating
.
Amended petitions were filed
on March
14, July 22 and
October
21,
1985.
The Illinois
Environmental Protection Agency
(Agency) filed recommendations
to deny
on July
8
and December
2,
1985.
Hearing was held on December
17,
1985 in Chicago,
Illinois
at which time Classic outlined its fifth compliance plan.
Classic
is now in compliance with Section 215.204(c)
as
of
January
1,
1986 and implicitly requests retroactive relief to
November
21,
1984.
Some documents
in the record were previously
determined
by the Board
to be trade
secrets
(February 7,
1985
Order in PCB 84—174, Docket A;
February 6,
1986 Order
in PCB 84—
174 Docket C).
Classic is an Illinois corporation located
in a
predominantly industrial
area at 4500 West Division Street,
Chicago,
Illinois.
The facility employs
71 people.
In March
1985
the assets of Classic were acquired by Graphic Converting,
Inc.
(Graphic).
Classic
is
now. a wholly owned subsidiary
of
Graphic.
Its business
is a highly specialized one which
laminates already printed material such
as greeting cards,
book
jackets and annual report covers.
There
is only one other such
company
in the Chicago area
(R.
6).
The equipment at the facility coats and laminates paper
and
vinyl sheets.
It includes seven
roll coaters, four laminating
machines and one surlyn coater.
The roll coating machines
consist of
a coating head with fountain followed by either an
infra—red or gas—fired oven.
One
of the seven
roll coaters
applies and dries special developmental coatings with ultraviolet
70.229
2
(UV)
light.
At the time of hearing another
roll coater was being
converted to UV operation
(R.50).
There
are no VOM emissions
when UV light is used.
The topcoat
roll coater uses water—based
heat—seal coatings which produces
no VOM emissions.
The
remaining four roll coaters now use compliant VOM coatings
(R.48—
50).
The four laminating machines use liquid adhesives which do
not contain VOM.
The make—up used
in the
laminating proc~ss
likewise contains no VOM.
Section 215.204(c) provides the VOM limitation under which
Classic falls:
No owner or operator of
a coating line shall
cause or
allow
the emission
of
volatile
organic
material
to
exceed
the
following
limitations
on
coating
materials,
excluding water,
delivered
to
the coating
applicator:
kg/l
lb/gal
c) Paper Coating
0.35
(2.9)
Compliance with this VOM emission limitation was
to
be achieved
by December
31,
1982.
35 Ill.Adm.Code Appendix C.
Classic has calculated
its actual,
allowable and excess VOM
emissions from
its coating lines
for the years 1983 and 1984 as
follows
(2nd Amended Petition, Appendix F):
1983
1984
Actual tons VOM
270.3
229.4
Allowable tons VOM
53.5
67.9
Excess tons VOM
216.8
161.5
Total plant VOM emissions from Classic have decreased since 1983
even though usage has increased.
Classic exceeded allowable VOM
emissions in 1983 and 1984.
At hearing
a Classic witness
testified that
in 1984 the laminator adhesives used contained
less than 2.9 lbs. VOM per gallon less water
(R.l8—19, Ex.2).
Currently Classic
is using an exempt laminator adhesive solvent
which contains no VOM
(R.l9,
Ex.
3
at 7).
Classic’s efforts
to reduce
its VOM emissions dates back
to
1978.
1t investigated alternatives such
as the installation of
a
thermal/catalytic control system, reformulation of coatings
to
reduce
the VOM concentration, and installation of UV equipment.
A thermal/catalytic control system would have cost $600,000
(R.
28) and was considered
too expensive by Classic.
Classic
eventually settled on a plan of reformulating coatings plus the
installation of some UV equipment.
Besides contracting out, Classic itself has tried
to
reformulate coatings and adhesives.
“A water—based coating
developed in
1981
by a chemist retained by Classic failed
in
January of
1982 but
a developed high solids coating proved
to be
70.230
3
satisfactory.”
(Stip.
at 2).
The reformulation process proved
difficult because of the number of different coatings and
adhesives used.
“Since
1982 Classic has attempted to use
twenty—five different reformulated coatings and adhesives.
Of
the twenty—five
reformulations,
only eight were found
to be
acceptable.”
Stipulation
of Facts
(Stip.)
at
2.
Classic estimates that
it has spent between $12,000 and
$15,000 on
its reformulation efforts since 1978.
Id.
Needed UV
equipment for the final compliance plan will cost between
$250,000 and $300,000
(2nd Am.Pet.at
7—8,
R.39).
Lastly, Classic
estimates
a business loss of between $200,000
to $300,000 because
of customer dissatisfaction with the reformulated coatings
(Stip.
at
2;
2nd Am.Pet. at 7,9).
Classic has changed
its compliance plan five times during
this proceeding.
The first compliance plan was presented
in
Classic’s original petition for variance filed November
21,
1984.
It provided that compliance would be achieved by December
31,
1987 by reformulating coatings and adhesives.
The second
compliance plan in
the revised variance petition filed March 14,
1985, provided
that compliance would be achieved by December
31,
1985 by reformulating coatings and adhesives and by installing
add—on controls.
Classic’s third compliance plan, presented
in a
July 22,
1985 amended revised petition for variance, envisioned
compliance
by December
31,
1985 by reformulating
all adhesives
and most coatings.
In addition,
a non—compliant coating line
would be operated by obtaining an alternative control strategy
permit from the Agency (Part 202).
Classic’s fourth compliance
plan,
presented
in an October
21,
1985 second amended revised
petition for variance, again provided that compliance would
be
attained by December
31,
1985.
Under
this plan,
Classic’s
laminators would
apply compliant adhesives and annual coating
line emissions would be limited
to
25
tons.
This fourth plan was
legally flawed because the
25 ton limit applies to total plant
VOM emissions, not just those from
a specific source within the
plant,
such as
a coating line.
35 Ill.Adm.Code 215.206(a).
At
the hearing of December
17,
1985 Classic presented
its
fifth compliance plan (R.37—42, 48—50).
Classic proposed
to
comply with Section 215.204(c)
by two methods.
First,
the
laminators would use adhesives containing
a non—VOM exempt
solvent by December
31, 1985.
Second,
new reformulated compliant
coatings would be used by December
31, 1985
in order for the
facility
to achieve overall compliance by January,
1,
1986.
Classic has implemented
this fifth compliance plan and
is now
in
compliance.
Classic
is situated
in Cook County which
is
a nonattainment
area for ozone.
The state and federal ambient air quality
standard for ozone
is 0.12 parts
per million.
The nearest Agency
air monitoring station
is
at Lincoln Park Zoo, 2200 North Cannon,
Chicago, approximately five miles from Classic’s facility.
One
violation of
the ozone standard was recorded
at this stationin
70-231
4
1983 and one
in 1984
(Stip.at 3).
The parties have stipulated
that
it
is difficult
to assess Classic’s contribution
to these
violations.
Id.
Classic
is now
in compliance with Sectin
215.204(c).
Classic argues that to have complied before December
31,
1985 with Section 215.204(c) would have imposed on
it an
arbitrary or unreasonable hardship because
the costs of
compliance greatly exceeded any benefits resulting from earlier
compliance
(2nd Am.Pet.at 8,10;
Classic Brief at 6—7).
Classic
further argues that had
it been forced
to comply immediately with
Section 215.204(c),
a shutdown of
a substantial portion of the
facility,
resulting in
a loss of 71
jobs, would have occurred
(R.42—3, Classic Brief
at 9).
The Agency, noting that Classic
is
in compliance and
that
the relief being asked
for
is retroactive
relief,
addresses the
issue
of whether there
is sufficient hardship by addressing
whether the
requisites for
a retroactive variance have been
met.
First,
the Agency,
citing Borden Chemical
Co.
v.
IEPA,
(PCB
82—82,
December
5,
1985)
and Quaker Oats Co.
v.
IEPA,
59 PCB 25
(PCB 83—107, July 19,
1984)
argues that there have been no
exceptional circumstances as articulated
in Borden and Quaker
Oats to warrant the grant
of retroactive relief
in this case.
Thus,
the Agency argues that retroactive relief
is requested only
because
of Classic’s repeated changes
in its compliance plan
(Ag.
Brief at 4).
Second,
the Agency questions that even
if there
are
exceptional circumstances, at which point
in time does Classic
become entitled
to retroactive relief?
The Agency asserts
that
the necessary elements for variance
relief
——
a technically
feasible plan
to attain compliance by
a date certain and the
existence of an arbitrary or unreasonable hardship arising from
immediate compliance
——
are not present
(Ag.Brief at 4—5).
While
each compliance plan
is described above,
the Agency’s comments as
to each compliance plan will
be described below.
The Agency argues that retroactivity cannot be applied to
November
21,
1984 because that petition had been filed by
a
previous owner and that any hardship
to that owner could not be
asserted by Graphic,
the new owner
as
of March
1,
1985.
As
for
the March 14,
1985 petition,
the Agency argues that Classic did
not allege an arbitrary or unreasonable hardship.
Even
if
it
did, such hardship was self—imposed, hypothesizes the Agency,
if
add—on controls were available and would have led Classic to
compliance
if installed.
Classic waited for two years after
December
31,
1982,
the compliance deadline,
to even file
a
varian.ce petition
(Agency Rec.
of July 11,
1985 at
8—9).
Further, Classic’s new owners decided
to abandon the add—on
control compliance plan after
a few months upon determining that
such controls cost too much money
(Agency Brief
at 6).
70-232
5
The Agency asserts that relief should not
be granted
retroactively
to the July 22, 1985 amended petition because the
compliance plan therein lasted only 39 days.
Id.
(See Classic
Response
to Agency motion filed August
29,
1985).
The Agency
asserts that retroactive relief should not
be granted back to the
October
21, 1985 amended petition because the compliance plan
therein was legally flawed
(Agency Brief at
7).
Classic’s
response
is that despite many changes to its
compliance program,
the ultimate date
for compliance has remained
unchanged.
It states:
the
change
in
compliance
strategies
became
necessary
as
a
result
of
the
ongoing
studies
and
efforts
to
achieve
unquestioned compliance
with
the
Board’s emission standards.
However, while the means
to
achieve
unquestioned compliance may
have
changed,
the
compliance
date
did
not
change,and,
in
fact,
greater
reductions
in
VOM
emissions
were
achieved
than
could
have
been achieved
under
the strategy
of
add—on controls.
Classic
Brief
at
7—8, emphasis
in
original
-
Classic also mentioned that compliant coatings only recently
became available and
to have immediately complied would have
resulted
in the closing
of
a substantial portion of
the
facility.
The Agency counters that
a firm compliance date
is only one
of many requisite elements for variance relief
(Agency Brief
at
7).
The Agency argues that the fact that Classic
is now in
compliance should have no bearing
on its eligibility for variance
relief.
If not entitled
to relief
at the time of
filing
the
different amended variance petitions,
then Classic
is not
entitled to relief now (Agency Brief
at
7).
Classic’s perceived
need for retroactive relief arises from repeated changes
to
its
compliance plan and
its
“need”
is self—imposed.
Id.at 7—8.
A~the Board has previously stated,
there must be
exceptional
circumstances for
it
to grant retroactive variance
relief.
Borden Chemical, Quaker Oats,
supra.
In Borden Chemical
a prospective variance was granted based
on
an arbitrary
or
unreasonable hardship but
a retroactive one was denied on the
basis of delay
and presentation of less than optimal
environmental effects information.
In Quaker Oats,
a retroactive
variance was requested but was denied because of lethargic
attempts at compliance,
the filing of
a variance petition
to
avoid enforcement,
and the failure
to show arbitrary
or
unreasonable hardship.
Clearly these two petitioners did not
show exceptional circumstances to warrant retroactive relief.
The Board herein, however, finds
an arbitrary or
unreasonable hardship.
The Board will grant retroactive variance
relief only because of
the facts of this case,
including a change
70-233
6
of
ownership,
the nature of the coated materials,
the constant
updating of the amended petitions, and the fact that Classic came
into compliance prior
to Board decision, which the Board believes
constitute exceptional circumstances.
The regulation at issue
is
technology forcing, and compliance
is technically difficult
without going
to great expense or develQping new coatings.
Variances from such rules have commonly been granted
to companies
while they await development of coatings that meet the
requirements
of the rule or while they
install control
equipment.
National Can Corporation v.
IEPA,
62 PCB 405
(PCB 84—
108, January 24, 1985); American Can Co.
v.
IEPA,
62 PCB 399
(PCB
84—106, January
24, 1985). The March 14, 1985 petition states
that acceptable compliance coatings were not available at the
time and that the owners intended to achieve compliance by
December
31,
1985 using
any available compliance coatings
in
combination with controls
to collect and incinerate VOC
emissions.
This time frame was reasonable given that equipment
would have to be purchased and installed.
In this situation,
it
would not be
reasonable to close the non—compliant lines
or the
plant for nine months until compliance was achieved.
The
petition would have been much improved
if
it had contained more
economic data and explicit claims of arbitrary
or unreasonable
hardship.
The Board
is also impressed by the good faith efforts of
Classic’s new owners.
They have achieved compliance, although by
a means not envisioned
in the March 14 petition.
The subsequent
petitions are viewed
as attempts by Classic to keep the Board
informed of
changes
in
its compliance effort.
These petitions
restarted the variance clock and lengthened the proceeding.
The Board sees no benefit to the environment
or public
in
leaving the present owners of Classic open
to enforcement and
will grant
a retroactive variance from March
14 up to and
including December 31,
1985.
This Opinion constitutes
the Board’s findings of
fact and
conclusions
of law in this matter.
ORDER
Classic Finishing Company,
Inc.,
is hereby granted variance
from 35 Ill.Adm.Code 215.204(c) for its facility at 4500 West
Division, Chicago, Illinois subject
to the following conditions:
1.
This variance covers
the period between March 14, 1985 and
January
1,
1986.
2.
Within forty—five
(45)
days after
the date
of this Order,
Classic Finishing Company,
Inc.
shall execute and send
to:
70-234
7
Mr. Joseph
R.
Podlewski,
Jr.
Illinois Environmental Protection Agency
Enforcement Division
1701
S. First Avenue, Suite
600
Maywood,
Il 60153
a certification of acceptance of this variance by which
it agrees
to be bound
by
its terms and conditions.
This forty—five
(45)
day period shall
be held
in abeyance during any period which
this
matter
is appealed.
The form of the certification shall
be as
follows:
CERTIFICATION
Classic Finishing Company has received and understands the Order
of the Illinois Pollution Control Board
in PCB 84—1748 dated June
20,
1986 and hereby accepts said Order and agrees
to be bound
to
all
of the terms and conditions thereof.
Petitioner
By:
Authorized Agent
Date
Title
IT
IS SO ORDERED.
J.D. Dumelle concurred.
I, Dorothy M.
Gunn, Clerk
of the Illinois Pollution Control
Board, hereby certify that the abo~Opinion and Order was
adopted
on the
,-~
~—
day of
________________,
1986,
by a vote
of
7-O
.
f//I
t~J
Dorothy M.
GurX’n,
Clerk
Illinois Pollution Control Board
70-235