ILLINOIS POLLUTtON CONTROL BOARD
August 15, 1985
ILLINOIS ENVIRONMENTAL
~?ROTECTIONAGENCY,
Complainant,
v.
)
PCB 83—28
)
TOP CHOP,
INC.,
an Illinois Corporation,
)
Respondent.
JAMES L. MORGAN, ASSISTANT ATTORNEY GENERAL,
APPEARED FOR
COMPLAINANT.
BERNARD CONRADY, ROSS GATES, MARVIN CONRADY, WAYNE OVERBEY, AND
NOEL HICKS, PROSE, APPEARED FOR RESPONDENT.
ORDER OF THE BOARD (by B. Forcade):
This matter comes to the Board on a March 1, 1983, complaint
tiled by the Environmental Protection Agency (“Agency”) against
Top Chop, Inc., (“Top Chop”). The complaint charges that during
1982 and 1983 certain operations and discharges from Top Chop’s
hog lot facility (“facility”) in Palmira, Macoupin County,
Illinois were in violation of various Board regulations and
Sections of the Environmental Protection Act (“Act”), respecting
water pollution and livestock waste control.
A hearing was held on April 22, 1983, which no members of
the public attended. At hearing the parties filed a Stipulation
and Proposal for Settlement. That Stipulation called for a civil
penalty of $1,500. On June 2, 1983, the Board issued an Opinion
and Order accepting the stipulated settlement providing the
parties would agree to modification of the penalty figure from
$1,500 to $5,000. The Order provided that Top Chop was to
certify its acceptance of the modification in writing within 30
days or “the Stipulation and Proposal for Settlement wouldi be
rejected in toto by the Board and the case would be remanded to
the parties for appropriate action” (Opinion, p. 4). No written
certification of acceptance of the $5,000 penalty was filed.
On June 30, 1983, Top Chop submitted a letter to the Board
containing information relating to its financial condition. The
Agency moved that the letter be stricken and the Board granted
the Agency’s motion in a July 26, 1983, Order. On October 24,
1983, Top Chop filed what it called a “resolution for
Reconsideration and Modification of the Order of the Board” which
65-225
—2—
requested the Board to reconsider its rejection of the $1,500
penalty. On November 16, 1983, the Agency filed a response
requesting that the motion be stricken. On November 18, 1983,
the Board granted the Agency’s motion to strike, rejected the
Stipulation and Proposal for Settlement of April 28, 1983, in
toto, and remanded the matter to the parties for further action.
On January 18, 1984, another hearing was held. The Agency
read a new Stipulation and Proposal for Settlement into the
record. This new settlement proposal was essentially an updated
version of the original settlement, The background facts were
recited, the Respondent admitted the alleged violations, and a
compliance p1ac~was set forth (R 1/18, pp. 6—16). However, in
the second settlement agreement, the amount of the civil penalty
was left open
for
Board determination. Each party presented
testimony and exhibits concerning the nature of the claimed
violations, an appropriate penalty, and Respondent presented
evidence on mitigating factors and its precarious financial
position. Although the new Proposal for Settlement was read into
the record, no signed copy of the document has ever been
submitted to the Board. On December 6, 1984, the Board ordered
the parties to file a signed copy of any Stipulation and Proposal
for Settlement. On January 31, 1985, and March 14, 1985, the
Agency informed the Board by letters of continuing efforts to
secure a signed Stipulation. On May 30, 1985, the Board ordered
the parties to file within 30 days either a signed stipulation or
“a status report informing the Board of any impediments they
perceive to a final disposition of this case on the existing
record.” On June 28, 1985, the Agency filed a status report
indicating the Board should receive a signed stipulation by July
22, 1985. The status report stated that if the Board did not
receive the status report, “the Agency would have no objection to
resolution of this case upon the present record.”
No signed Stipulation and Proposal for Settlement was ever
received by the Board, The Board will proceed to adjudicate this
controversy based on the present record, as invited by the Agency
in its letter of August 7, 1985. However, since no signed
Stipulation was filed, the Board must base its decision on facts
presented at hearing rather than statements in the Stipulation.
The Agency presented one witness at hearing, their field
inspector, Mr. Ross Manning. Mr. Manning testified that during a
field inspection March 29, 1982, he observed the waste lagoon to
be full and overflowing to the draw and creek, that the discharge
continued during his inspection until he requested an employee to
raise the lagoon elbow pipe, and that the draw and creek were
septic and discolored. Mr. Manning testified that he again
visited the facility on May 13, observed a discharge to the creek
on that date, and observed pockets of liquid waste and dry
manure in the
draw beneath the waste
lagoon. On that date, he
observed that Goose Creek upstream
of
the discharge was clear and
normal but at
the point of discharge and downstream the creek was
black and
septic~
On November 8, Mr. Manning visited the site
65-226
—3—
and found the lagoon to have about 12 inches of freeboard,
bringing the level of liquid up to the level of the discharge
pipe. Mr. Manning visited the site one more time after November
8, and he observed the lagoon to be full, and indications of a
recent discharge from the lagoon. Based on his observations, Mr.
Manning concluded that the lagoon did not contain adequate
freeboard to handle any precipitation event CR. 1/18, pp. 18—31).
Mr. Manning also prepared a calculation of the amount of
waste which would be generated at the facility and the cost of
removing such wastes from the facility (Hearing 1/18, Pet. Ex. 1;
R 1/18, pp. 34—37), However, the record does not have any
showing regarding the amount of waste that may have been
discharged to receiving waters and; therefore, cannot be used in
any calculation of revenues saved by non—compliance. Neither
does the record reflect any estimates of actual waste removed so
that the Board might estimate total wastes improperly disposed.
Respondent’s Exhibit *2 and *7, indicates that Top Chop has taken
some measures to remove waste (See also Record 1/18, p. 76).
Consequently, the Board is left with inadequate information to
draw any conclusions regarding the amount of wastes discharged or
cost savings.
Evidence presented by Top Chop focused on two points: the
difficulty of waste management during the times in question due
to high rainfall and the precarious financial position of Top
Chop. The waste management difficulty resulted from rainfall
about twice the annual amount (R 1/18, p. 51).
Top Chop was incorporated in 1977 with an original
investment by the incorporators of approximately $250,000. Gross
income
from
1977 to 1982 increased from $404 to $384,591.
However, net taxable income during that period ranged from a loss
of $802 to a loss of $93,019; each year reflected a net taxable
income loss, Total losses for the six—year period are
$395,352. Additionally, Top Chop’s lending institution has
established that maximum total debt shall not exceed 60 of the
totals assets CR 1/18, pp. 54—68).
In essence, the Board is presented with a corporation in
extremely precarious financial condition.
Perhaps the most disturbing aspect of the entire cases is
the following exchange, in which the Agency Attorney was cross—
examining Mr. Obery of Top Chop:
Q
(By Mr. Morgan) I’ll rephrase my
question. The people that are shareholders in
Top Chop are also shareholders in Tasty Lean,
aren’t they?
A
Not 100 percent.
65-227
—4—
Q
There are some shareholders in both
corporations that are the same?
A
Yes, sir.
Q
In your discussions with Agency
Inspector) Ross Manning regarding Tasty Lean
and Top Chop, it is possible that one facility
will be discussed when another is being
inspected; isn’t that correct?
A
Yes, sir.
Q
Do you recall telling Ross Manning
during the inspection of Tasty Lean that the
owners knew they violated the E.P.A.
regulations when they deliberately pumped
waste effluent to Top Chop!
A
Yes, sir.
Q
You did make that statement?
A
Yes sir. We were
——
Q
Wait a minute.
A
——
anticipating going through this
filtration. CR 1/18, pp. 48—49)
while the Board would be especially concerned with a
situation where one corporation was being operated at a loss so
that another corporation with common stockholders could operate
at a profit due to reduced costs of waste transfer, the case here
does not prove that situation. There was no allegation or proof
that the transfer of waste from Tasty Lean to Top Chop was
anything other than a normal business transaction for which
normal business fees were charged.
Based on the evidence presented the Board finds that Top
Chop caused or allowed the discharge of hog wastes from their
waste lagoon to the draw and Goose Creek on March 29, 1982; May
13, 1982 and just prior to the Agency inspection in November of
1982. Further, the Board finds that those discharges resulted in
deposits of hog manure in the draw and a black and septic
condition in Goose Creek. The Board also finds that the waste
lagoon had inadequate storage capacity to prevent overflows.
After evaluating the factors listed in Section 33(c) of the
Act, the Board finds that the discharges from Top Chop have had
an adverse impact on the general welfare of the people in that
the quality of Goose Creek was degraded and rendered septic. The
Board finds that. Top Chop is of social and economic value. The
Board finds that
Top
Chop is suitable to the area in which it is
85-228
—5—
located if it does not cause discharges from its waste lagoon.
The Board was not presented with a priority of location issue in
this proceeding.
When the figures in the Agency exhibit on waste disposal
(Pet. Ex. 4) are adjusted to reflect the correct number of hogs
(R 1/18, p. 33), it is clear that 1982 waste disposal costs by
contract hauling would be less than $7,500 for all wastes.
Actual waste disposal costs would be less since much of the waste
could be applied to farmland with Top Chop’s equipment. Thus,
the Board finds that proper waste disposal was technically
feasible and (for a business with a 1982 gross income of
$384,591) economically reasonable.
FINDINGS OF VIOLATION
Count I of the Agency’s complaint claims violations of the
Act and regulations relating to discharges without an NPDES
permit. As no information was introduced at hearing regarding
whether Top Chop had an NPDES permit, Count I must be
dismissed. Counts III and IV of the Agency’s complaint claim
violations of numerical water quality standards for Ammonia
Nitrogen and Dissolved Oxygen resulting from Top Chop’s
discharges. As no information regarding numerical water quality
values was introduced Counts III and IV must be dismissed also.
Count II of the Agency complaint claims that Top Chop’s
discharges have caused water pollution in violation of the Act
and board Regulations, which provide:
Section 12(a) of the Act provided:
“No person shall:
a. Cause or threaten or allow the discharge
of any contaminants into the environment
in any State so as to cause or tend to
cause water pollution in Illinois, either
alone or in combination with matter from
other sources, or so as to violate
regulations or standards adopted by the
Pollution Control Board under this Act.”
Section 304.105 of Subtitle C of Title 35,
Chapter 1 provides in pertinent part:
“In addition to the other requirements of this
Part, rio effluent shall, alone or in
combination with other sources, cause a
violation of any applicable water quality
standard....”
65-229
—6—
Section 302.203 provides:
“Waters of the State shall be free from
unnatural sludge or bottom deposits, floating
debris, visible oil, odor, unnatural plant or
algal growth, unnatural color or turbidity, or
matter of other than natural origin in
concentrations or combinations toxic or
harmful to human, animal, plant or aquatic
1if e “
The Board holds that Top Chop has violated 35 Ill. Adm. code
304.105 and Section 12(a) of the Environmental Protection Act.
Count V of •the Agency complaint claims that Top Chop has
violated Rule 104(d)(3)(c) and Rule 104(d)(3)(D)(ii) of Chapter 5
“Livestock Waste Regulations” of the Pollution Control Board
Rules and Regulations, which provide in pertinent part:
Chapter 5 of the Illinois Pollution Control
Board’s Rules and Regulations, Rule
104(d)(3)(C)) provides:
“The contents of livestock waste—handling
facilities shall be kept at levels such that
there is adequate storage capacity so that an
overflow does not occur except in the case of
precipitation in excess of a 25—year 24—hour
storm.”
Rule 104(d)(3)(D)(ii) of Chapter 5 provides:
“New livestock waste—handling facilities which
handle the waste in a liquid form shall
provide a minimum of 120—day storage with a
liquid manure—holding tank, lagoon, holding
pond, or any combination thereof unless the
operator has justifiable reasons
substantiating that a lesser storage volume is
adequate. If inadequate storage volumes cause
or threaten to cause a violation of the Act or
applicable regulations, the Agency may require
corrective measures.”
The Board holds that Top Chop did violate Rule 104(d)(3)(C)
based on the Agency testimony that the lagoon had inadequate
capacity for any precipitation e1~ent. However, as the Agency did
not introduce evidence on the size of the lagoon, the Board holds
that Top Chop did not violate Rule l04(d)(3)(D)(ii).
CIVIL PENALTY
The Board finds that a civil penalty of $3,500.00 is
appropriate for the facts and circumstances of this case.
65-230
—7—
This opinion constitutes the Board’s findings of fact and
conclusions of law in this proceeding.
ORDER
1. The Board finds that Top Chop has violated 35 Ill. Mm.
Code Section 304.105, Section 12(a) of the Environmental
Protection Act, and Chapter 5, Pollution Control Board
Rules and Regulations, Rule l04(d)(3)(C).
2. Within 90 days of the date of this Order, Top Chop shall
pay a civil penalty of $3,500.00. Such sum shall be
payable to the Environmental Protection Trust Fund.
3. Top Chop shall cease and desist from all discharges from
their hog waste lagoon, except as such discharges may be
authorized by a valid NPDES permit.
IT IS SO ORDERED
Board Member J. Theodore Meyer dissented.
I, Dorothy M. Gum, Clerk of the Illinois Pollution Control
Board, hereby certify that the above Order was adopted on
the
~
day of
________________________,
1985, by a vote
oC
~-/
.
Ill
Pollut Control Board
65-231