ILLINOIS POLLUTION CONTROL BOAR!)

June 20,

1984

O11T~OARDMARINE CORPORATION,

Petitioner,

PCB 84-26

ILLINOIS

ENVIRONMENTAL

PROTECTION

AGENCY

)

and AMERICAN TOXIC DISPOSAL,

INC.,

Respondents.

OPINION AND

ORDER

OF THE

BOARD

(by J.

Anderson):

This matter is before the Board on the February 29,

1984

Petition for Review of Trade Secret Determination filed by

Outboard Marine Corporation

(OMC).

It is the first appeal

of

a

trade secret determination brought pursuant to Part 120 of the

Board’s regulations

(35 Illinois Administrative Code 120)

entitled “Identification and Protection of Trade Secrets”

which

became effective November 23,

1983.

Section

120~250(a)

provides

that “an owner or requester who is adversely affected by a Final

Determination

of

either

the

Environmental

Protection

Agency

or

the

Department

of

Energy

and

Natural

Resources

pursuant

to

the

l3oard’s

regulations

governing the identification

and

protection

of trade secrets,

may petition the Board for review within

35

days after the entry of

a

final

agency

determinat.ion”.

On

April

5,

1984

the

Board issued an

interim

Order

in

this

case

outlining

the

basic

format for this type

of

appeaL

In

addition,

on

June

8;

1984

the

Board

adopted

a

Resolution

(RES 84—i)

designating personnel authorized to have access to ~trade

secret”

material

for purposes of ruling on appeals

of

this

type.

Briefly,

OMC alleges that it is adversely

affected

by ~

Illinois

Environmental Protection Agency

(IEPA)

determInation

that

certain

portions

of a permit application

filed

by

American

Tcixics

Disposal,

Inc.

(ATD)

represent

trade

secrets

within

the

meaning

of Part

120

and

the

Act.

At

issue

are

approximately

30

pages

(including

several

design

drawings)

of

an

application

for

permit

for

the

construction

and

short~terrn

operation

of

a

demonstration

project

which

would

thermally

extract

poiy~

chlorinated

biphenyls

(PCBs)

from contaminated

sediment.

The

short-term

permit

was

issued

(effective

from

February

17

to

August 31,

1984) for

“a demonstration project to thermally

extract polychiorinated biphenyls

(PCBs) from contaminated

sediment

along

with

necessary

air

pollution

control

equipment,

water

pollution

control

equipment

and

storage

facilities.,,”.

58-423

---

The

permit

limits

the

9ount

of sediment to be processed to 25

wet

tons

or

about

15

yd

.

(IEPA answer,

Attach.

1, June

1,

1984.)

OMC has urged the Board to rule quickly on this matter.

I.

STANDING

As

an

initial

matter,

the

Board

finds

that OMC has standing

to

appeal

under

Section

120.250(a)

as

an

adversely

affected

party.

The Environmental Protection Act’s general mandate that

“all

files,

records,

and

data

of

the

Agency,

to the Board, and

the

Department

shall

be

open to reasonable public inspection”

requires that the Board adopt a broad construction of the

required

standing

to

contest

determinations affecting public

access to information.

In this type of

appeal,

a

petitioner

is

adversely affected if he can demonstrate that he made a request

for access to an article within the possession of an agency and

that the agency has made

a final determination which denied the

request.

The

Board

notes

that

this

broad

construction

of

stand-

ing

comports with the federal courts’ interpretation of standing

under

the

“Freedom

of

Information

Act”

(5

USC

552,

as

amended).

On

a

related

issue,

the

Board

also finds that OMC’s amended

petition

was

properly

verified

in

that

the

attached

affidavit

of

John

Roger

Crawford

contained

the

allegations

of fact in

question.

II.

CO4PLIANCE

WITH

THE

PART

120

PROCEDURES

FOR

IDENTIFYING

A

TRADE

SECRET

OMC

alleges

that

ATD

failed

to comply with the Part 120

procedures for claiming a trade secret and that as a result OMC

was ~rejudicedin

its ability to comment on the experimental

pernuit prior to its issuance,

The specific question is whether

ATD

complied

with

Section

120.201(a)

in making its claim.

Section

120.201(a)

provides...

“An agency shall consider any article submitted to

or

other-

wise obtained by the agency as claimed to represent a trade

secret and shall protect such article form disclosure pur-

suant to Subpart C of this Part, only if the agency is

provided with the following.,,

3)

Either a Statement of Justification for the claim

meeting the requirements of Section 120.202 or a

limited waiver of the statutory deadlines for any

agency decision as provided in Section 120.203.”

On December 5,

1983, when the request was made ATD had

neither a Statement of Justification nor a Limited Waiver on file

with the IEPA.

Under Section 120,201(a), the absence of both of

these documents would relieve the agency from considering the

article as claimed to represent a trade secret.

However, Section

58-424

---

—3-.

.120.265(b) provides a 60 day “grace

period”

for articles which

were claimed to represent a trade secret prior to the effective

date of Part 120.

During this “grace

period”

such an article is

deemed to have been claimed to represent a trade secret for the

purpose

of Part 120.

The dates involved here are not in dispute.

The articles in

question were filed

and

claimed to represent a trade secret on

November

8, 1983.

Thus, Section 120.265(b) applies.

The request

for access to these articles was

made

on December 5,

1983.

Since

Part 120 became effective on November 23, 1983, the 60 day grace

period was

in

effect

at

that

time

and

extended

until

January

22,

1984.

During

this

time

IEPA

properly

treated

the

articles

in

question

as

though

they had

been

claimed

pursuant

to

Section

120.201(a).

On January 18, 1984 ATD fulfilled the Section

120.201(a)

requirements

by

filing

its

Statement of Justification.

Thus,

the Board finds that the “claim” and IEPA’s treatment of

the claim

complied

with Part 120.

CNC did

not directly address the effect of the 60 day grace

period, but

rather

argued

that

ATD

should

have

been

required

to

extend

the

IEPA

decision

date

by

the 30 plus days that had been

taken for submission of the Statement of Justification.

As

noted

above, the Section 120.203 “Optional Limited Waiver of Statutory

Deadlines” was not required to be filed in this situation, and

IEPA was therefore bound by the statutory 90 day decision period.

(See Section 39(a) of the Environmental Protection Act (Act),

Ill. Rev. Stat.

1981,

cli.

111½, par. 1039(a).)

The Board notes

that,

absent this waiver,

EPA

did not have the option of

extending this deadline pursuant to Section 120.270 even if that

Section were found to apply in this situation.

III.

DATA

REQUIRED TO

BE DISCLOSED BY STATUTE

Having

found

that

the

respondents

properly

complied

with

the

Part

120

procedures

regarding

the

claim,

the

next

issue

to

be

addressed is

the

substantive

question

of

fact

as

to

whether

the

undisclosed

articles

contain

emissions,

effluent

or

waste

data

which

is

required

to

be

disclosed

by

Section

7(b),

(c)

or

(d)

of

the

Act.

These

statutory

provisions

require

disclosure

of

certain

articles

notwithstanding

their

trade

secret

(or

otherwise

confidential

or

privileged)

status.

Thus,

this

is

always

among

the

first

questions

that

must

be

addressed

by

agencies

making

trade

secret

determinations.

ONC

states

that

in

reviewing

the

permit

application

in

question

it found certain information relating to

projected

emissions

to

the

atmosphere to

be

unavailable,

and

no information

concerning

the

point

of

discharge

of

the

wastewater

from

the

dredged

spoils

or

the

pilot

plant

itself.

From

this,

plus

the

fact

that

some

of

the

undisclosed

application

material

was

submitted

by

ATD

in

response

to

specific

IEPA

questions

about

58-425

---

emissions, wastewater and waste solids, OMC infers that the

undisclosed articles contain the type of data which is

statutorily required to be disclosed,

ATD responds that neither the permit application nor the

permit

itself

allow discharge into the receiving waters of the

State or to any sewers,

nor does

it allow incineration or

landfill deposits.

With regard to air emissions,

ATD states that

any data relating to emissions in the confidential portion of the

application is also set forth in the disclosed portion.

The question here is obviously one of fact requiring the

Board to review the undisclosed articles.

The Board will review

each of these catagories of data individually.

A.

EFFLUENT DATA REQUIRED TO BE DISCLOSED UNDER SECTION

7(b) OF THE ACT

Section 7(b)

states that effluent data may under no circum~

stances be kept confidential where the information involved is

from or concerns persons subject to NPDES permit requirements~

By its own terms this provision does not apply in this case as

there is no NPDES permit involved.

The permit in fact

specifically prohibits the discharge of treated or untreated

wastewater without obtaining additional approvals or permits~

All wastewater generated by the demonstration project is to be

stored in tanks onsite.

(See Special Condition 10 of the

February

17,

1984 permit,

ATD Exhibit “A”.)

After a review of

the undisclosed material the Board finds that this material

contains no data relating to effluent from a point source which

would be subject to an NPDES permit.

B,

EMISSIONS DATA REQUIRED TO BE DISCLOSED UNDER SECTION

7(c) OF THE ACT

Section 7(c),

in pertinent part,

requires that all emission

data

reported to IEPA in connection with any proceeding under the

Act shall be available to the public to the extent required by

the Federal Clean Air Act Amendments of 1977

(P,L,

95—95),

as

amended.

Section 114 of the Clean Air Act, which was readopted

in P.L.

95—95,

(42 USC 7414) requires disclosure of any “emission

data” which the USEPA Administrator

(or the State when so

authorized) may reasonably require of any person who owns or

operates an emission sources

Both the disclosed and undisclosed

material at issue here appears

to contain data on emissions, i,e~

gases which are being emitted to the atmosphere.

The

question

before the Board is whether Section 7(c) requires that such data

be disclosed repeatedly where ever it appears in the permit

application.

In this case the Board finds that there is no

apparent advantage to the public interest in requiring the

agency

handling the information to “white-out” or “cut and paste” around

the trade secret material.

Therefore,

the Board will not require

that this be done.

58~426

---

The question remains whether there is

any

emissions

data

in

the undisclosed material which has not been identified as having

been disclosed elsewhere in the disclosed portions of

the

article.

Answering this question

has

presented

the

Board

with

the

difficult task of deciphering and comparing the undisclosed

material

with

the

disclosed

material,

In

particular,

the

Board

encountered certain information

in the undisclosed material which

may or may not be emission data depending upon whether it is

exiting into the atmosphere.

The Board was unable to

determine this from the record before it,

The Board believes the

respondents bear the responsibility of demunstr~tiu~

that

this

information does not

fall

within

the

statutory

mandate

for

disclosure.

Therefore,

the Board will reverse the IEPA

determination

with

regard

to

this specific

piece

of

information,*

With

regard

to

the

rest

of

the

undisclosed

material,

the

Board

finds

that

it

contains

r~onew emlesione data,

C.

SUBSTANCES

REQUIRED TO BE DISCLOSED UNDER SECTION 7(d)

OF

THE

ACT

Section 7(d)

states that ~‘the

quantity

and

identity

of

substances

being

placed

or to be

placed

in

landfills

or

hazardous

waste

treatment,

storage

or

disposal

facilities...

may

under

no

circumstances be

kept

confidential.~

As

the

permit

a1ic~ti~n

which

is the subject of the

OMC

request

does

not

authorize

landfilling or

placing

any

substance

in

a

hazardous

waste

treatment,

storage or disposal facility,** the question before

the Board is how to interpret the statutory phrase ~to be

placed.”

Broadly construed,

this phrase could require disclosure

of products and consumer items as they come off the assembly line

on the basis that they are eventually destined for landfilling or

hazardous waste facility.

In this instance,

a residue is in-

volved which is to be stored on—site and may eventually be

incinerated in a hazardous

waste

incinerator.

In

addition,

there

is

reference

to

a

non-hazardous

sludge

which

is

also

to be stored

on~site

and

eventually

landfilled

off-site,

Special

Condition

7

of

the

permit

states

that

~Residues

generated

at

this

site

as a

result

of

the

treatment

process

for

disposal,

storage,

incin-

eration

or further treatment elsewhere shall be

transported

to

the

receiving

facility

under

the

Agency~s supplemental

waste

stream

permit

and

manifest

system.~

Thus,

another

permit,

specifically

authorizing

transport

for

treatment,

storage

or

*The Board

notes

that

in

the

future

where

an

owner

argues

that

this

problem of

p14~f

inn

exists,

the

owner

must

clearly

indicate

for

the

Board

exactly

what

and

where

the

information

is

duplicated.

This may

be

done

in

a

~

addendum

to the

owner9s brief.

**The

storage

involved

~reis

not

~hazardous

waste storage”

within the context of the Act and the Board~sregn1~tinn~.

58~427

---

disposal must be obtained before the substances involved

can be

moved

off-site,

The Board believes that this

is the

point

at

which these substances can be said to be substances

which

are

“to

be placed”

in a landfill or hazardous waste facility.

To

rule

otherwise,

especially in

this

instance,

could

lead

to

absurd

results.

The

data

contained

in this application for a

construction

and

operating permit relates only to the

anticipated

content

of

the

residues and sludges from the process.

In

con-

trast,

the

focus

of Section 7(d)

is on the disposition

of

the

waste

stream

and

its actual content or “identity”.

Thus,

the

Board finds that Section 7(d) does not require

disclosure

of

data

on the

anticipated

residues of the process at this time.

IV,

APPLICATION

OF THE SECTION 120.230 STANDARDS

FOR

DETERMINING A TRADE SECRET

Having concluded that the articles involved are not required

to be

disclosed

by Section

7 of the Act, we now turn to

the

question of whether IEPA correctly determined that the

undis-

closed

articles

represent trade secrets within the Act’s

definition of

“trade secret” and the standards established

in

Section

120.230.

As stated previously,’ the record

supports

a

finding that ATD substantially complied with the Part

120

procedures

for making a claim and justifying it.

The remaining

question

is

whether

the statement of justification

demonstrates

that

1)

the

articles

have

not

been

published,

disseminated

or

otherwise

become

a

matter

of

general

public knowledge;

and

2)

the

articles

have

competitive value.

A.

HAVE

THE

ARTICLES BEEN PUBLISHED, DISSEMINATED

OR

OTHERWISE BECOME A MATTER OF GENERAL PUBLIC KNOWLEDGE?

Both the statutory definition of “trade secret” and Section

120,230(b) provide for a presumption of

secrecy

when the owner

has

taken

reasonable

measures

to

prevent

an article

from

becoming

available

to

other

than

selected

persons

for

limited purposes.

This

type

of

presumption is

useful

in

a

situation

such

as this

where the claimant

is

asked

to

“prove

a

negative.”

Pursuant to

Section 120.202, the claimant has provided in the Statement of

Justification a detailed description of the

procedures

used to

safeguard

the

articles

as well as

a list of the

persons

to whom

the

articles

have

been

disclosed,

The

Board notes

that

the

owner

has

limited,

and

accounted

for,

access

to both originals

and

copies of the articles, and has

kept

all

copies

stored

in locked

quarters when not in use,

(Statement of Justification,

.

1.)

ATD lists 11 persons to

whom

the

articles

have

been

disc

osed,

The list consists of regulators, equipment vendors, engineering

consultants, investors and potential investors and business

associates

who

have signed

non-disclosure

agreements, and

attorneys

of

the

owner

and

other

permit application signatories.

(Statement of Justification,

p.

1.)

ATD has also submitted a

certification signed by its chairman and vice-president

that it

58428

---

has no knowledge that the undisclosed information has ever been

published, disseminated or otherwise become a matter of

general

public knowledge.

(See IEPA~s“Agency Record of Decision”.)

The

Board finds that the Statement of Justification and Certification

provide an adequate basis for raising the rebuttable presumption

in Section 120.230.

This presumption having been established, the burden

shifts

to the requester to rebut this presumption with facts demon-

strating that the secrecy of the article has been breached.

OMC

argues that the articles

in question have in fact been

published

because the process for which the permit was sought has

been

patented.

OMC

concludes that because the patent process

is

sought to

be

permitted here, none of the information in the

permit application can be withheld as a trade secret.

(Petitioner’s Memorandum of Law

in Support of Amended Petition,

p.

9.)

The

Board

acknowleges the legal proposition that the

subject

of

a patent is by definition

publicly

disclosed,

However,

OMC~s

conclusion that the existence of a patent for the process requires

disclosure of all information in the permit application is

unsupported.

We note that the Federal District Court cases cited

by OMC do not address this issue,

In fact the quotation from the

~f~nPro4uc~

case

cited

by

OMC may support the opposite

proposition,

i.e.

that a patent is public disclosure only of

trade secrets described in the patent specifications,

(See

~ain

Products

Inc.

v,

U.S.

Matt

and

Rubber Com an,Inc,,

489 F.

Supp.

108

(E.D.

Pa,

1980)

as cited

in Petitioner~s

Memorandum of Law, pp. i0~11,) The Board agrees with ATD that

the fact that a patent exists on a portion of a process

does

not

strip the rest

of

the process or all related information

of

its

otherwise trade secret status,

ATD’s position is clearly sup-

ported by the case law as well as the common sense notion

that

the implementation of

a patented process may require a work

product,

whether

developed before or after the issuance of a

patent,

that goes well beyond the abstraction contained in the

patent.

The question remains as to whether any of the undisclosed

articles has been published in the patent,

After reviewing the

undisclosed articles,

the Board finds that to the extent that any

patented material exists in the undisclosed articles it cannot be

conveniently separated from other trade secret material, and that

furthermore such patented material

is disclosed elsewhere in the

application.

In conclusion on this point,

the Board finds that OMC has

failed to rebut the presumption that the undisclosed articles

have never been published, disseminated or otherwise become a

matter

of

general

public

knowledge.

58-429

---

8—

B.

DO THE ARTICLES HAVE COMPETITIVE VALUE?

The second component of a trade secret under the Act and

Section 120.230 is that it must have competitive value,

In its

Statement of Justification

(p.

2) ATD argues that the

undisclosed

articles contain paid-for work product the public closure of

which would make costly secret design and planning information

readily available to potential competitors.

ATD also notes that

the system involved is

the

first

of

its kind to be developed and

that the potential market for a system which economically

extracts

hazardous

material

from

sludge

is

enormous.

OMC

incorrectly

states

that “the

sole

justification given for

non—disclosure was that ATD would incur economic harm because it

would have to spend time defending patent claims rather than

developing the process~” (Petitioner~sMemorandum of Law, p.

14.)

While ATD does mention this under the heading “ANY OTHER

PERTINENT INFORMATION WHICH WILL SUPPORT

THE

CLAIM,”

ATD

also

provides a detailed

and

persuasive discussion of the competitive

value of the system in the preceding paragraph.

On this basis,

the Board finds that the undisclosed

materials

do

have

competitive value,

This Opinion constitutes the Board~sfindings of fact and

conclusions of law in this matter,

ORDER

For the reasons stated in paragraph III

(B)

above,

the Board

reverses IEPA’s determination that with regard to the sentence

beginning on line

9 and ending on line 10 of page 47, excluding

the last four words on line

9 and the first word on line 10.

Pursuant to Section 120.240

(c)

and

(d),

the IEPA and the Clerk

of the Board are hereby ordered to continue to protect this

article as a trade secret pursuant to Subpart C of Part 120 for

35 days from the date of this Order,

If within that 35 days, the

Board does not receive notification of a petition for review of

this Order by a court with

proper

jurisdiction with regard to

this article, this article shall be made available for public

inspection and both the petitioner and respondents shall be so

notified.

In accord with the rest of the above discussion, the Board

upholds IEPA~sdetermination that the other articles and portions

thereof

which are the subject of this appeal represent trade

secrets which are not subject to disclosure,

Pursuant to Section

120,245(a), IEPA and the Clerk of the Board are hereby ordered to

continue to protect these articles as trade secrets pursuant to

Subpart C of Part 120,

IT IS SO ORDERED.

58-430

---

Board

Member

J.

Theodore

Meyer

absent

for

the

vote

on

the

Opinion

due

to

other

Board

business.

I,

Dorothy

M,

Gunn,

Clerk

of

the

Illinois

Pollution

Control

Board,

hereby

certify

that

the

above

Opinion

was

adopted

by

a

vote

of

5-c

and

the

above

Order was adopted

by

a

vote

of

~

on

the

o~V~-

day

of

~~~____

,

1984.

~hyM.unn,Clerk

Illinois Pollution Control Board

58431