P97134A.PDF

ILLINOIS POLLUTION CONTROL BOARD

August 21, 1997

DAYTON HUDSON CORPORATION,

Complainant,

CARDINAL INDUSTRIES, INC., and

DANIEL E. CARDINAL, JR.,

Respondents.

)

PCB 97-134

(Enforcement -

Citizens - Land)

ORDER OF THE BOARD (by G.T. Girard):

Respondents Cardinal Industries Inc. and Daniel E. Cardinal, Jr. (Cardinal) move to

strike petitioner Dayton Hudson Corporation’s (Dayton) complaint filed on February 7, 1997.

The complaint alleges violations of Sections 21(a), 21(p), and 21(f) of the Environmental

Protection Act (Act) (415 ILCS 5/21(a), 21(p), 21(f) (1996)) regarding the open dumping of

waste, discharge and release of liquids, and operation of a facility in violation of a Resource

Conservation and Recovery Act (RCRA) permit.

Additionally, the complaint seeks injunctive

relief pursuant to Section 45 of the Act (415 ILCS 5/45 (1996)), costs for past remediation,

and attorney fees. Dayton also seeks, by separate motion, to amend its prayer for relief to

include a request for civil penalties against Cardinal, which the Board allows. In support of its

motion to strike, Cardinal argues that Dayton’s complaint is both duplicitous and frivolous.

The Board denies Cardinal’s motion to strike Dayton’s complaint because the Board

finds the complaint is neither duplicitous nor frivolous. In arguing that the complaint is

duplicitous, Cardinal relies primarily on a federal action currently pending between the parties.

However, since the federal case between the parties involves different allegations than those

allegations in the complaint before the Board, the Board concludes that this matter is not

duplicitous. Additionally, because the Board has the authority to award cleanup costs in

private cost recovery actions, we find this matter is not frivolous. Accordingly, this matter

shall proceed to hearing.

Dayton’s complaint was filed on February 7, 1997, and will be cited to as Comp. at __.

Dayton’s motion for leave to amend prayer for relief was filed on April 15, 1997, and will be

cited to as Mot. to Amend at __. Cardinal’s motion to strike complaint was filed on March

17, 1997, and will be cited to as Mot. to Strike at __. Dayton’s response to Cardinal’s motion

to strike was filed on April 7, 1997, and will be cited to as Resp. at __.

BACKGROUND

In 1957, Cardinal acquired an 80-acre parcel of land located at the southeast corner of

Army Trail Road and Schmale Road in unincorporated DuPage County, Illinois (site). Comp.

at 1. In 1962, Cardinal built a facility (facility) for the manufacture of various types of

products, including purchase display cases and shelving using painted and vinyl laminated

hardboards and particle boards. Comp. at 2. The complaint alleges that Cardinal generated

hazardous substances in their painting, laminating, and gluing processes at the facility. Dayton

alleges that Cardinal used xylene-based solvents, benzene-based lacquer thinners, 1-1-1

trichloroethane, and methylene chloride to clean the painting, filling, and gluing equipment.

Comp. at 2. Additionally, the complaint alleges that during its operations, Cardinal filled

several 55-gallon drums, pails and other containers with hazardous substances, and buried

these drums at the facility. Comp. at 3.

In 1988, Cardinal sold the site to American National Bank and Trust Company of

Chicago as a trustee under a trust agreement. Comp. at 4. Cardinal continued to operate the

facility as a lessee of the trust until the fall of 1989 when the buildings which once housed the

Cardinal facility were demolished. Comp. at 4-5. On January 29, 1991, Dayton entered into

a purchase/sale agreement to purchase the site where the Cardinal facility once stood. Comp.

at 5. Dayton closed on the sale of the site with American National Bank and Trust Company

on April 24, 1991.

In May 1992, during construction work on the subject site for a Target “Greatland”

retail store, Dayton encountered 55-gallon drums, pails, and other containers and materials

containing hazardous substances and contaminated soils. Comp. at 5. As a result, Dayton

ordered its general contractor and subcontractors to cease any further construction. Dayton

retained an environmental consultant to perform an emergency response and to assess the

extent of contamination at the site. Comp. at 6. In accordance with directives issued by the

Illinois Environmental Protection Agency, Dayton then removed the drums, pails, and other

materials containing hazardous waste, contaminated soils, and contaminated groundwater from

the site. Comp. at 7.

ALLEGATIONS AND RELIEF SOUGHT

In its complaint, Dayton alleges that during the course of Cardinal’s ownership and

operation of the site, Cardinal caused or allowed the open dumping of waste in violation of

Section 21(a) of the Act (415 ILCS 5/21(a) (1996)). Comp. at 7. Further, Dayton alleges

that, by causing or allowing open dumping of waste, Cardinal caused standing or flowing

liquid to be discharged and released from the site in violation of Section 21(p) of the Act (415

ILCS 5/21(p) (1996)). Comp. at 7. Finally, Dayton alleges that Cardinal operated the

hazardous waste disposal operations without a RCRA permit in violation of Section 21(f) of

the Act (415 ILCS 5/21(f) (1996)). Comp. at 8.

As a result of the alleged violations, Dayton seeks injunctive relief under Section 45 of

the Act (415 ILCS 5/45 (1996)) because further environmental investigation and remediation

of any remaining contamination on the site is necessary as required by the Act. Comp. at 8.

Dayton also requests all cleanup costs as a result of Cardinal’s violations of the Act. Comp. at

8. Finally, Dayton requests that it receive its costs, attorney fees, civil penalties, and any

other relief the Board deems equitable and just. Comp. at 9; Mot. to Amend at 2.

ARGUMENT AND ANALYSIS

Cardinal maintains that the Board should strike Dayton’s complaint because it is

duplicitous and frivolous. In support of its position, Cardinal argues first that the complaint is

duplicitous of a currently pending federal action before the Northern District of Illinois.

Second, Cardinal argues that the complaint is frivolous because the Board does not have the

authority under the Act to adjudicate private cost recovery actions or to award any costs arising

out of such an action.

Section 103.124(a) of the Board’s procedural rules (35 Ill. Adm. Code 103.124(a))

which implements Section 31(b) of the Act (415 ILCS 5/31(b) (1996)), provides that this

matter shall be placed on the Board agenda for the Board’s determination as to whether or not

the complaint is duplicitous or frivolous. Section 103.124(a) further states that if the

complaint is duplicitous or frivolous, it shall enter an order setting forth its reasons for so

ruling and shall notify the parties of its decision. If the Board rules that the complaint is not

duplicitous or frivolous, this, however, does not preclude the filing of motions regarding the

insufficiency of the pleadings. 35 Ill. Adm. Code 103.124(a).

An action before the Board is duplicitous if the matter is identical or substantially

similar to one brought in another forum. Brandle v. Ropp (June 13, 1985), PCB 85-68. An

action before the Board is frivolous if it fails to state a cause of action upon which relief can be

granted by the Board. Citizens for a Better Environment v. Reynolds Metals Co. (May 17,

1973), PCB 73-173. A complaint should not be dismissed unless it clearly appears that no set

of facts could be proven that would entitle a complainant to relief. Miehle v. Chicago Bridge

and Iron Co. (November 4, 1993), PCB 93-150, citing Callaizakis v. Astor Development Co.

4 Ill. App. 3d 163, 280 N.E.2d 512 (1st Dist. 1972). At this time, the Board finds that,

pursuant to 35 Ill. Adm. Code 103.124(a), the evidence before the Board does not indicate that

this complaint is either duplicitous or frivolous.

Duplicitous Determination

Cardinal states that Dayton’s complaint should be stricken because Dayton has also

filed a case in federal court, and therefore the complaint before the Board is duplicitous. Mot.

to Str. at 3. In support of its argument, Cardinal asserts that because a “release” under the

Comprehensive Environmental Response, Compensation, and Liability Act of 1980

(CERCLA) and “open dumping” under the Act are in essence the same claims, the complaint

filed before the Board is duplicitous of the federal action. Mot. to Strike at 4; see

e.g.

New

York v. Shore Realty Corp., 759 F.2d 1032 (2nd Cir. 1985); Colorado v. Asarco, Inc., 616

F.Supp. 822 (D. Colo. 1985). Cardinal also argues that the relief sought by Dayton in both

causes of action are the same. Therefore, Cardinal argues that Dayton’s action before the

Board is duplicitous of the federal action.

In response to Cardinal’s allegations, Dayton argues that the Board previously held in

Lake County Forest Preserve District v. Ostro (July 30, 1992), PCB 92-80, that an action

before the Board is not duplicitous when there is another action pending between the same

parties in federal court and relating to the same piece of property. Dayton further notes that in

Ostro, the Board highlighted that the remedy sought in the Board complaint was a cease and

desist order and statutory penalties, none of which were available in the federal court action.

Resp. at 11.

Dayton further maintains that while the parties are the same in both the Board and the

federal actions, the two actions are rooted in separate statutes and distinguishable legal

theories. Resp. at 11. Dayton alleges that the federal action against Cardinal is a private cost

recovery action brought under CERCLA (42 U.S.C.

9607), under which liability is triggered

by a release of hazardous waste or ownership of property. Resp. at 12-13. To be held liable

under the Act, however, Dayton argues that Cardinal must have caused or allowed open

dumping of waste, caused or allowed standing or flowing liquid to be discharged from the

dump site, or conducted hazardous waste disposal operations without a RCRA permit. Resp.

at 12. Moreover, Dayton asserts that Cardinal can be held liable for not having a RCRA

permit and operating illegally in the Board action, while no such liability exists for a CERCLA

defendant. Resp. at 13.

Finally, Dayton alleges that the relief sought by Dayton in the federal action and

Illinois action are distinguishable and therefore not duplicitous. In support of this assertion,

Dayton argues that the action before the Board for response costs under the Act are different

than a claim for CERCLA costs in federal court. Resp. at 13; see Ostro (March 31, 1994),

PCB 92-80. In the Board action, Dayton maintains that it is entitled to injunctive relief and

statutory penalties under Section 45 of the Act. Comp. at 8-9; see 415 ILCS 5/45 (1996).

Dayton further alleges that injunctive relief, civil penalties, and cost reimbursement are

available remedies under the Act, but are unavailable to Dayton in the federal action. Resp. at

12; see 415 ILCS 5/33, 45 (1996). For all of these reasons, Dayton asserts that the action

before the Board is not duplicitous.

The Board finds that this matter is similar to Ostro. In that case, a cause of action was

pending both before the Board and in the federal district court. Ostro (July 30, 1992), PCB

92-80. The Board found that although both actions were filed on the same day, involved the

same parties, the same time frame, and the same actions, the federal action was based on

statutes and legal theories other than the Act. Ostro (July 30, 1992), PCB 92-80, slip op. at 2.

The Board further concluded that the federal action involved liability under CERCLA, as well

as other common law counts, while the Board action was strictly based on the Act.

Accordingly, the Board denied respondent’s motion to strike, holding that the federal action

was not duplicitous of the Board action.

Similarly, in the instant matter, although the complaints involve the same parties (and

several more in the federal action), the same time frame, and the same actions, they are based

on statutes and legal theories that are separate and distinct from the Act. Like Ostro, this

matter presents a similar situation. In both Ostro and this case, the federal actions involve

CERCLA and common law counts. Additionally, both cases before the Board involve

allegations of the Act. Based on Ostro, the Board finds that the complaint here is not

duplicitous. For these reasons, the Board will not strike this complaint on the ground that it is

duplicitous.

Frivolous Determination

Cardinal also maintains that the complaint should be stricken as frivolous because the

Board lacks the authority to award damages. Cardinal asserts that because Dayton is a private

party and not a citizen of the State, Dayton is not entitled to bring an action for cost recovery.

Moreover, Cardinal asserts that since Ostro did not involve a private party suing for cleanup

costs, it cannot stand for the proposition that private parties have standing to recover cleanup

costs under the Act. Mot. to Strike at 10. If cleanup costs can be awarded to private parties

by the Board, Cardinal maintains that such costs must be allowed pursuant to a theory other

than a direct action for damages under the Act. Mot. to Strike at 10. Therefore, Cardinal

argues that subsequent Board cases citing Ostro were in error. Mot. to Strike at 10; see Herrin

(September 1, 1994), PCB 94-178; Streit (September 7, 1995), PCB 95-122.

Cardinal further asserts that even if Ostro can be read to provide for private cost

recovery, Cardinal requests that the Board reconsider and clarify its decision in that case, as its

reliance on the decision, People v. Fiorini, 143 Ill.2d 318, 574 N.E. 612 (1991) is misplaced.

Mot. to Strike at 8-9. Cardinal asserts that Fiorini does not stand for the proposition that

private parties can recover cleanup costs under the Act. Mot. to Strike at 9; see Fiorini, 143

Ill.2d 318, 574 N.E. 2d 612 (1991). For all of these reasons, Cardinal states that the Board

erred in its post-Ostro decisions. Mot. to Strike at 10; see Herrin (September 1, 1994), PCB

94-178; Streit (September 7, 1995), PCB 95-122.

Additionally, in support of its argument, Cardinal alleges that the Board recently

decided in Farmers State Bank v. Phillips Petroleum Company (January 23, 1997), PCB 97-

100, that it does not have the discretion to award attorney fees or interest for costs incurred by

a citizen complainant. Mot. to Strike at 7. Cardinal therefore concludes that Dayton’s request

for attorney fees should be stricken as the Board does not have the authority to award such

fees.

Finally, Cardinal maintains that in this case, and in Ostro and its progeny, the

complainant was seeking to recover for injury to property which occurred prior to the transfer

of property. Mot. to Strike at 10. Cardinal alleges that because Illinois law favors finality in

real estate transactions, the common law principle of

caveat emptor

is strictly applied to claims

arising out of the condition of the property prior to its conveyance. Mot. to Strike at 10; see

Heider v. Leewards Creative Crafts, 245 Ill. App.3d 258, 613 N.E. 805 (2nd Dist. 1993),

appeal denied

, 152 Ill.2d 559, 622 N.E.2d 1206 (1993) and

In re

Illinois Bell Switching

Station Litigation, 161 Ill.2d 240, 641 N.E.2d 440, (1994).

In its response, Dayton asserts that the Board has the authority under the Act to grant

Dayton response costs and injunctive relief. Resp. at 6. Citing Ostro and its progeny, Dayton

alleges that the Board has already held that a private party is entitled to recover its response

costs from a responsible party. Resp. at 6; see Ostro (March 31, 1994), PCB 92-80.

Dayton argues that, contrary to Cardinal’s claims, there is nothing in the Ostro decision

suggesting that its holding should be limited to a governmental entity. Resp. at 6. Dayton

cites to recent Board and federal court actions which have held that private citizens have an

implied right to bring a cost recovery action under the Act. Resp. at 6-7; See

e.g.,

Midland

Life Ins. Co. v. Regent Partners, 1996 U.S. Dist. LEXIS 15545, 44 ERC (BNA) 1019 (N.D.

Ill. October 17, 1996); Krempel v. Martin Oil Marketing, Ltd., 1995 U.S. Dist. LEXIS

18236 (N.D. Ill. December 8, 1995); Streit v. Oberweis Dairy, Inc., (September 7, 1995),

PCB 95-122; Herrin Security Bank v. Shell Oil Co. (September 1, 1994) PCB 94-178. In

addition, Dayton argues that there is no basis for Cardinal’s claim that because Dayton is a

Minnesota corporation, and therefore not a citizen of the State of Illinois, it is not entitled to

the protections of the Act. Resp. at 9. In reply to Cardinal’s claim, Dayton suggests that

neither Ostro, Herrin, Streit, nor Section 31 of the Act purports to limit non-governmental

actions to “citizen suits.” Resp. at 9.

In asking the Board to reconsider Ostro, Dayton maintains that Cardinal ignores the

plain language of People v. Fiorini, 143 Ill.2d 318, 574 N.E.2d 612 (1991), upon which the

Ostro decision was based. Resp. at 7. Dayton suggests that Ostro interpreted Fiorini to mean

that in its discretion the Board could award costs under “appropriate facts.” Resp. at 7. Ostro

further concluded that “allowing the award of cleanup costs in some cases will further the

purposes of the Act, by encouraging parties to remediate a threat to the environment

immediately, knowing that their costs will be reimbursed.” Resp. at 7, citing Ostro (March

31, 1994), PCB 92-80. Moreover, Dayton argues that in Ostro, the Board noted that Section

33(a) of the Act specifically allows the Board to enter such final orders as it deems

appropriate. Resp. at 7.

With regard to attorney fees, Dayton argues that the Board has not expressly stated that

it does not have the authority to award attorney fees. Resp. at 9. Dayton states that the Board

held in Farmers State Bank v. Phillips Petroleum Company (January 23, 1997), PCB 97-100

that generally the Board does not have the discretion to award attorney fees. Resp. at 9.

Dayton further notes that the Board found that “at this time, the Board does not want to make

a determination regarding the request for attorney fees and accrued interest.” Resp. at 9

(citing Farmers State Bank v. Phillips Petroleum Company (January 23, 1997), PCB 97-100).

None of the arguments put forth by Cardinal convinces the Board that the complaint

should be stricken for frivolous reasons. As noted previously, the Board has already stated

that it has the authority to award cleanup costs to private parties in a cost recovery action and

Cardinal has not presented any arguments that persuade the Board to change its position here.

See Ostro (March 31, 1994), PCB 92-80; Streit v. Oberweis Dairy, Inc. (September 7, 1995),

PCB 95-122; Herrin Security Bank v. Shell Oil Co. (September 1, 1994) PCB 94-178; Richey

v. Texaco Refining and Marketing, Inc. (August 7, 1997), PCB 97-148. As the Board stated

in Ostro:

[w]e also find that allowing the award of clean up costs in some cases will

further the purposes of the Act, by encouraging persons to remediate a threat to

environment immediately, knowing that their costs could be reimbursed.

Section 33(a) specifically allows the Board to enter into such final orders as it

deems appropriate. We find that this broad grant of authority, coupled with the

supreme court’s refusal in Fiorini to find that the award of cleanup costs is not

available under the Act, gives the Board the authority to award cleanup costs.

Ostro (March 31, 1994), PCB 92-80, slip. op. at 13.

The Board continues to agree with the Ostro decision. Current owners should be

entitled to recover the cost of performing cleanup as a result of a prior party’s actions on the

property. As Section 2(b) of the Act states: “the purpose of this Act . . . [is] . . . to establish

a unified, state-wide program supplemented by private remedies, to restore, protect and

enhance the quality of the environment, and to assure that adverse effects upon the

environment are fully considered and borne by those who cause them.” 415 ILCS 5/2(b)

(1996). The Act establishes that “[t]he Board shall determine, define and implement the

environmental control standards applicable in the State of Illinois...” 415 ILCS 5/5 (1996).

The Board believes that reading the Act to allow for private cost recovery actions furthers the

intent of the Act and promotes good public policy since private cost recovery actions ensure

that the party responsible for contaminating the property pays for

its proportionate share of the

costs of the cleanup. See 415 ILCS 5/58

et seq

. (1996)

Moreover, the Board has the authority, pursuant to Section 33(b) of the Act (415 ILCS

5/33(b) (1996), to order a party to cease and desist from violations of the Act or of the Board’s

regulations. In determining whether the Board shall enter a cease and desist order, it applies

31, 1994), PCB 92-80. We note that, contrary to Dayton’s allegations, the Board does not

have the authority to award injunctive relief. 415 ILCS 5/33(b) (1996). However, as

previously mentioned, the Board can order a violator of the Act to cease and desist from

further violations of the Act. 415 ILCS 5/33(b) (1996). A party may seek enforcement of a

Board order in circuit court by “injunction, mandamus, or other appropriate remedy” in

accordance with Section 33(d) of the Act. 415 ILCS 5/33(d) (1996).

With regard to attorney fees and costs, we find that the Board generally does not have

the discretion under the Act to award attorney fees and costs incurred by citizen complainants.

415 ILCS 5/42(f) (1996); see Farmers State Bank v. Phillips Petroleum Company (January 23,

1997), PCB 97-100. Such costs and fees are allowed by Section 42(f) of the Act only when

the Attorney General or a State’s Attorney prevails in an enforcement action on behalf of the

People of the State of Illinois. See 415 ILCS 5/42(f) (1996); see also Bill Aden, John

Schroder, Velma Schroder, Joe Kendall, Lamorn Morris et al. v. City of Freeport (September

The Board notes, however, that the Act provides for some circumstances for the recovery of

attorney fees. See

e.g.

, Public Water Supplies (Title IV of the Act); Water Pollution Control

(Title IV-A of the Act); and Land Pollution and Refuse Disposal (Title V of the Act).

8, 1988), PCB 86-193. When the language of the statute does not specifically indicate that

ordinary expenses of litigation or attorney fees are recoverable, the courts will not give the

language expanded meaning. See ESG Watts, Inc. v. Illinois Pollution Control Board, 286 Ill.

App. 3d 325, 679 N.E.2d 299 (3rd Dist. 1997) (citing Sanelli v. Glenview State Bank, 126

Ill. App. 3d 411, 466 N.E. 2d 1119 (1st Dist. 1984); Qazi v. Ismail, 50 Ill. App. 3d 271, 364

N.E.2d 595 (1st Dist. 1977)). Accordingly, the Board concludes that it does not have specific

statutory authority to order attorney fees under the statutory sections in which this case was

filed and, accordingly, strikes the request for this relief.

Finally, the Board notes that Cardinal’s reliance on the common law principle of

caveat

emptor

is obsolete. Dayton maintains that it is now the policy of the State under 415 ILCS

5/2(b) (1996) that those who have caused hazardous waste contamination should be held

responsible for cleaning the property they have contaminated. Resp. at 10. The Board finds

that holding Dayton to the common law principle of

caveat emptor

, as Cardinal argues, is

improper. The enactment of the Act has supplanted this principle with a liability scheme that

holds responsible parties liable for their actions.

For the above reasons, the Board will not strike this complaint on grounds that it is

frivolous. The Board will, however, strike the request for attorney fees. This case shall

proceed to hearing.

Having determined that this case is neither duplicitous nor frivolous, the hearing must

be scheduled and completed in a timely manner consistent with Board practices. The hearing

officer shall inform the clerk of the Board of the time and location of the hearing at least 30

days in advance of hearing so that a 21-day public notice of hearing may be published. After

hearing, the hearing officer shall submit an exhibit list, a statement regarding the credibility of

witnesses, and all actual exhibits to the Board within five days of the hearing.

If after appropriate consultation with the parties, the parties fail to provide an

acceptable hearing date or if after an attempt the hearing officer is unable to consult with the

parties, the hearing officer shall unilaterally set a hearing date in conformance with the

schedule above. The hearing officer and the parties are encouraged to expedite this proceeding

to the extent possible.

CONCLUSION

For the foregoing reasons, the motion to strike is denied with the exception of the

request for attorney fees which the Board hereby strikes. We find that the allegations of the

complaint are sufficient to warrant a hearing on the facts. Pursuant to 35 Ill. Adm. Code

103.124(a), the complaint is neither duplicitous nor frivolous. A hearing officer will be

designated and this matter will be set for hearing.

IT IS SO ORDERED.

Board Member R.C. Flemal dissented.

I, Dorothy M. Gunn, Clerk of the Illinois Pollution Control Board, hereby certify that

the above order was adopted on the 21st day of August 1997, by a vote of 5-1.

Dorothy M. Gunn, Clerk

Illinois Pollution Control Board