ILLINOIS POLLUTION CONTROL BOARD
October
3,
1972
GAF
CORPORATION
)
v.
)
#
71—11
ENVIRONMENTAL PROTECTION AGENCY
Opinion of the Board on Proposal for Settlement
(by Mr. Currie):
This case began early in 1971 when GAF petitioned
for a variance to allow more time for construction of waste—
water treatment facilities at its roofing mill on the
Des Plaines River near Joliet.
No complaint seeking money
penalties for past delays was ever filed.
Following hear-
ings, we concluded that GAF had unjustifiably delayed for
about five months the construction of facilities for
treating wastes equivalent to the raw sewage of 90,000 per-
sons.
Recognizing that immediate shutdown of the plant
for this violation would impose severe hardships upon
700 employees and, because of other pollution sources, would
not render the Des Plaines immediately free from pollution,
we granted
a two—months’ variance during which GAF was re-
quired to demonstrate diligence in completing its program,
subject to extension in the event satisfactory progress
was shown.
On the other hand,
fearing that “to let the
company off Scot free”
for what we termed its “callous
disregard for its obligations,”
the Board required
GAP
to pay a penalty of $149,000 as a condition of the variance,
relying upon our statutory authority to impose such
con-
ditions
as may be required to effectuate the policy of the
Environmental Protection Act.
GAF Corp.
v. Environmental
Protection Agency,
#71—11,
1 PCB 481
(April 19, 1971).
As anticipated by our first order, GAF submitted a
petition for extension of the variance to permit completion
of construction,
alleging Significant progress and asking
interim extension pending resolution of the merits of the
new petition.
After
a hearing we concluded that the com-
pany had “shown sufflcient good faith cot~raitmentto curing
its pollution problem to
en~itie it
to continue operating
while we pass upon the merits of its program,”
and
extended
the variance pending final decision.
GAP Corp.
V.
EPt7
#71—11,
2 PCB 57
(June
28,
1971)
.
After full hearings
we concluded that GAF,
since our first order, had “elected
to proceed post haste to abate the pollutional nature of its
aqueous discharges,” and that the “history in this case
—2—
of delay
.
.
.
is now happily past.”
We approved the pro-
gram, providing for continued operation until completion
of the required secondary treatment facilities April
30,
1972.
GAF Corp.
v.
EPA,
#71—ilS,
2 PCB 393,
401
(Sept.
13
and 16, 1972).
The original penalty provision was not
impaired by
these later orders.
While pursuing its abatement program with what we
found in the above opinions constituted due diligence,
GAF
sought judicial review of our order, especially as it re-
lated to money penalties,
in the Appellate Court.
The com-
pany’s brief raises far-reaching constitutional and statutory
questions,
as yet unsettled by the courts, respecting the
powers of this Board,
and challenges certain aspects of the
particular proceeding as well.
Oral argument on the petition
for judicial review was scheduled, we were informed by the
Attorney General’s office,
for October
3,
1972.
On September 25,
1972,
we received a proposed settle-
ment agreement endorsed by both GAF and the Environmental
Protection Agency, the two parties to the proceedings before
this Board.
Reciting that GAF has now completed its program
and is in compliance with the regulations from which it
originally sought variances,
the agreement provides for the
payment of $50,000 by GAF;
for dismissal of the judicial
review proceeding with prejudice;
and for extinguishment
of any remaining liabilities under prior Board orders.
A
condition of the agreement
is
B0E’rd approval of a second
settlement in #72-50, Environmental Protection Agency v.
GAF Corp.,
an air pollution case concerning the same plant;
such approval was given September 26,
5 PCB
,
for reasons
stated in a separateopinion
adopted today
(5 PCB
Because the impending oral argument of the appeal from our
original order would impose substantial work burdens on the
parties and might eliminate the opportunity for settlement,
we passed upon the proposal September 26 and approved it by
a 4-1 vote, Mr. Dumelle dissenting
(5 PCB
),
for reasons
that we detail
in today’s opinion.
I.
Jurisdiction.
Whether the Board’s approval is required for settle-
ment
of appeals from its decisions was a threshold question,
never before resolved,
that had to be decided before reaching
the merits of the proposal.
Were we a conventional trial
court,
the disposition of our decisions on appeal would be
a matter exclusively for the parties, subject to the approval
of the appellate tribunal; for the trial court is an impartial
arbiter between adversary litigants and not an interested
party on appeal.
In many ways our function in individual
pollution cases resembles that of a trial court, especially
5
—
526
—3—
in enforcement cases.
The Board takes no part in the in-
vestigation or presentation of cases but sits to decide on
the basis of a record made by adversary parties.
The
Administrative Review Act, however, explicitly makes the
Board a party to every proceeding seeking judicial review
of its decisions.
Ill.
Rev.
Stat.,
ch.
110,
§ 271.
From
the language of that statute alone it would be open to us
to view our position, like that of the judge whose decision
is sought to be reviewed by a writ such as mandamus,
as a
purely
formal one arid to leave the fate of our orders on
appeal to the parties who appeared before us.
Consideration
of our position under the Environmental Protection Act
arid
comparison with our accepted role in the settlement of cases
still pending before us, however, convinces us that we cannot
view our position on appeal as that of a disinterested trial
court.
In setting up the Pollution Control Board as part
of
a “unified, state—wide program
.
.
.
to restore, protect
and enhance the quality of the environment”
(Environmental
Protection Act, ~ 2(b)),
the General Assembly did not create
simply another court with limited jurisdiction.
Board
members were required to be “technically qualified”
in matters
relating to pollution control, ~ 5(a),
and the Board was
directed
to
“determine,
define
and
implement
the
environ-
mental control standards applicable
in the State of Illinois,”
§
5
(b)
.
As Governor
Ogilvie stated in recommending adoption
of the Act (Special Message on the Environment, April
23,
1970,
p.
5)
,
“the principal job of defining what may or may
not be done to the environment would be left,
under the
proposed act, to the new Pollution Control Board.”
Thus the
Board was designed to be the final interpreter,
subject to
judicial review, of what is required to effectuate the
policies of the Environmental Protection
Act; not merely a
disinterested arbiter, the Board
is entrusted with
affirmative responsibility to see to
it, through appropriate
orders
in
matters
brought
before
it,
that
the
policies
of
the
Act
are
carried
out.
The Board is to exercise this
responsibility
in
rule-making
matters,
by
adopting regulations
defining,
for
example,
prohibited
levels
of
discharge
as
re-
quired “to promote
the purposes” of the Act
(e.g., ~ 13).
It is to do so in enforcement cases, by considering “all
the facts and circumstances bearing upon the reasonableness
of the emissions,
discharges,
or deposits” and by entering
“such final order” or making
“such final determination,
as
it shall deem appropriate under the circumstances”
(~
33(c),
33(a)).
It
is to do
so in variance cases, such as this one,
by determining whether or not compliance “would impose an
arbitrary or unreasonable hardship” and by imposing ~‘such
conditions as the policies of this Act may require”
—4—
(~635,
36(a)).
In all its functions the Board operates
as an affirmative instrument of the statutory policies of the
Environmental Protection Act, responsible for entering
orders on the basis of its own best judgment, form the record,
as
to
what
“may
or
may
not
be
done
to
the
environment”
con-
sistent with those policies.
As a body thus charged with
carrying out statutory policy,
the Board has a continuing
interest in the resolution of matters brought before it that
we cannot in good conscience delegate to others.
The special interest of the Board in cases brought
before it was expressed very early in our history in the
adoption,
in October 1970, of our procedural rule 333,
which provides a special procedure to be followed if the
parties desire to settle cases pending before us.
In light
of our affirmative responsibility under the Act for deter-
mining what would constitute an appropriate order consistent
with statutory policy,
that rule provides that
“no case
pending before the Board shall be disposed of or modified
without an order of the Board.”
Written statements as to the
reasons for settlement are required, and the Board may require
the parties to appear to supply further information to
guide the Board in making the ultimate decision whether
or not the proposed settlement is consistent with statutory
policy.
PCB Regs.,
Ch.
1,
Rule 333.
We spelled out these
requirements in EPA v. City of Marion,
#71-25,
1 PCB 591
(May 12,
1971)
Rule 333 requires the parties to submit to the Board
adequate information on which we can base an intelligent
evaluation of whether any proposed settlement
is in
the public interest.
After all it
is the Board and
not the Agency or its attorneys that is given statutory
responsibility to determine whether a violation
exists and what is the appropriate remedy.
.
.
.
Such
information must contain a full stipulation of the
relevant facts pertaining to the nature,
extent, and
causes of the violations, the nature of the respondent’s
operations and control equipment,
any explanations
of past failures to comply, and details as to future
plans for compliance, including descriptions of
additional control measures and the dates for imple-
menting them, as well as a statement of reasons why
no hearing should be conducted.
Opportunity will also
be provided by the Board for individual citizens
to
express their views as
is contemplated by the statute.
In exercising
this responsibility we have not hesitated to
reject proposed settlements that we believed were not consis-
tent with statutory policy.
E.g., EPA v. Packaging Corp
of America,
#72—10
(consolidated with #71—352)
,
5
PCB____
(August
8 and
15,
1972)
5
—
528
—5—
Thus even in enforcement cases,
in which there are
by definition two adversary parties, our consistent rule has
been that our special statutory position requires our affirma-
tive approval of the
merits of any settlement proposal.
In variance cases the matter is
even more clear;
for al-
though the statute makes every effort to assure the active
participation of the Environmental Protection Agency in
variance cases
to avoid the undesirability of our having
to decide upon records made entirely by one party
(~
37;
see Kelberger v.
EPA,
#72-177,
5 PCB
(September
26, 1972)),
the Agency is not a true adversary in every case,
for it
may properly recommend that the variance be granted.
We are
directed even in such cases
to examine the record for ourselves,
and moreover public participation in variance proceedings is
encouraged,
in order that the decision wilibe based upon the
Board’s best judgment and not simply upon the Agency’s agree-
ment with
the petitioner.
In short the statute is quite
explicit that variances are to be granted only by the Board,
and not by the Agency;
complete deference to Agency
recommendations in variance cases would effectively transfer
that power to the Agency.
Thus our position is clear that cases pending before
us may not be settled without our approval on the merits.
To hold that we have no concern with the terms on which our
orders are settled after they are entered would thoroughly
undermine that position;
any time we rejected a settlement
~ile
the case was before us the parties could circumvent our
policy by compromising our order on the basis of their
original insufficient proposal.
We do not mean to suggest
that we anticipate any such action on the part of responsible
public officials, but only that our authority to review
proposed settlements after our orders have been entered and
appealed is an essential safeguard if our authority over
settlements of pending cases is to have any meaning.
In-
deed the case for our evaluation
of settlements may be even
stronger after we have entered an order than before,
since agreement to any modification would appear
to constitute
a variance from our order,
~ihich only this Board
is authorized
to grant.
We have thus concluded, a~we have been urged
by
the Agency and Attorney General to conclude, that our
approval is necessary to the settlement
of a petition for
judicial review of
a Board decision.
II,
The
Merits of the Settlement.
The terms
of
the settlement are simple:
GAF will
drop its appeal and pay $50,000
if
the Agency and the Board
will accept that sum in full payment of the penalty we
first assessed at $149,000,
Both GAP and the Agency are
willing
to sacrifice
a $149,000—or-nothing gamble for the
5
—
529
—6—
certainty of
a $50,000 penalty.
When we set penalties, we do not do so with compro-
mise in mind; we do not artificially inflate them in hopes
of precipitating
a favorable settlement.
We set them
in amounts that we think are appropriate to further statutory
policy,
after
considering
all
relevant
factors,
such
as
the
harm
done,
the
length
of
the
delay,
the
difficulties
facing
the
company,
the
sums
saved
by
violating
the
law,
and
so
on.
See
the
discussion
in
EPA
v.
CPC
International,
#71-338,
5
PCB
,
decided today.
It must necessarily
be the extraordinary case in which, after entering an order
on
the
basis
of
all
relevant
facts
before
us,
we
consent
to
a modi~ficationof our decision.
If it were otherwise there
would be no finality to our orders, and pollution control
would be impeded.
When we enter a penalty order we mean the
specified sum should be paid,
not that the figure is
a basis
for further negotiations.
At the same time, we have recognized
a limited
power and duty to entertain petitions for rehearing in order
to correct manifest errors or to consider the impact of
changed circumstances.
See,
e.g., North Shore Sanitary
District v.
EPA,
#71—343,
3 PCB 697 (March
2,
1972)
Finality is thus not an absolute.
And,
in consideration of
the Board’s special interest in the effectuation of
statutory policy, we think finality may be forced to yield
in extraordinary situations
in which, because the Board
has been made respondent in a judicial proceeding
challenging its orders,
some thodification of those orders
appears necessary to afford maximum assurance that the
underlying policy of the Board
arid of those orders them-
selves will not be frustrated.
As an interested litigant,
in other words,
the Board must have some flexibility to
protect the interests of
the pollution control program.
This flexibility must he employed rarely and with
great care,
lest the mere filing of
a petition for review
be
taken
the
occasion
for
negotiating
downward
any
penalty
imposed by the Board.
We emphatically reject any such
notion.
We hold only that, in extraordinary cases in which
reexamination of a prior order in light of the original
record and of the risks of reversal strongly indicates that
pollution control policy would be best served by modification
of our order,
it
is appropriate for us to modify it.
The facts of the present case led us to conclude
that this is such a situation.
First of all, $50,000
is a
very considerable penalty, especially for no more than
five months’
delay in constructing treatment facilities.
The
3oard was
aware
that
additional
time
had elapsed
since
the deadline first set by the Sanitary Water Board,
but
as
our
opinion
recognized
that
Board
had
granted
ex-
tensions
forgiving
all but the last
five
months
of
de-
lay.
350,000
is equal
to the largest money penalty ever
imposed
by the Board in any other fully
litigated
case.1
See
Bemmerich v.
Lloyd
A.
Fry
Roofing
Co.,
#71-33
(con-
solidated with 471—4)
,
2
PCE
581
(October
14,
1971)
,
in
which asphalt plant emissions estimated at seven times
those
cermitted
by
the regulations since
1967
had
“caused headache, nausea, burning to the
eves,
nose
and
throat, ccu~hinc,u~setstomach,
and,
in many
instances,
foreclosed
outdoor activities.”
In
Incinerator,
Inc.,
471—69,
2
?CB
505
(Sectember
30,
1971),
a
penalty
of
S25,000
was
imoosed
for
unexcused
failure
since
1967
to
ccntzcl odors and
carticulate
emissions
at
least
three
times
those
allowed from
a
large
incinerator,
which
we
found
“with its frecuent, almost
daily,
shower
of
marticulate
matter emd the
accomoanvinc
odors,
constitutes
nothing
short
ci a nuisance to the
neighborhood.’
The penalty in the
present
case
was
computed
at
the statutor7 maximum rate of
$10,000
for
the initial offense
and
81,005
a day thereafter.
To
have
applied
such
a
formula in
the
Fry
or
Incinerator
cases
would
have
resulted
in
penalties
of
over
half
a
million
dollars
from
the
date
the
Act
took
effect,2
Comparing
the
seriousness
of
GAF’s
I.
in
two
instances
we
have
approved
settlements
providing
for
the
~ayment of larger
sums
under
special
cir—
cumstances:
EPA
v.
Granite
City
Steel
Co.,
#70-34,
4
PCI
347
(April
25,
1972)
,
in
which
the
company
agreed
to
establish
a
$150,000
scholarship
fund
(presumably
tax-deductible
at
least
in
part,
unlike
a
straight
~enalty)
as
a
result
of
a
complaint
alleging
severe
and
long-standing
air-pollution
violations
from
multiple
oom~cnents
of
a
large
steel
mill;
and
EPA
V.
Puasell,
Burd.sall
&
Ward
Bolt
and
Nut
Co.,
#71—369,
4
PCI
751
(Tune
27,
1972)
,
in
which
the
company
agreed
to
nay
040,000
in
addition
to
the
$13,449.96
estimated
-;alue
of
nealiy
100,000
fish
killed
by
a
large
cyanide
discharge.
2.
We
do
not
say
the
use
of
that
formula
can
never
be
~u~tified,
for
it
was
put
in
the
~atute
to
be
used
when
necessary.
5
—
531
—8—
violations with that of Fry’s
is no exact science, but we
do not think it immediately apparent that the one case was
three times more serious than the other.
Roughly equal
treatment of persons similarly situated is fundamental to
our law,
and the Fry case is an important part of the develop-
ing experience of this relatively new Board in determining
the appropriate penalty to be assessed.
Our experience
in
that regard,
especially in serious cases, was severely limit-
ed at the time GAP was first decided; the largest penalty
we had previously imposed was $10,000, and that in a case
involving well over a year’s unexcused delay in controlling
particulate emissions from a giant cement plant
(Marquette
Cement Mfg.
Co.
v.
EPA,
#70-23,
1 PCB 145
(January
6,
1971).
We do not say that the penalty we initially imposed
in this case was too high.
It represented our best judg-
ment at the time on the basis of the facts that were before
us and on the basis of our experience.
We adhere to the
conviction that GAP’s violation,
like Fry’s, was a very
serious one, and that it
is important to the credibility
and success of the pollution control program that a sub-
stantial money penalty he paid.
As we said in setting the
penalty, for the company to
go
scot free would encourage
future violations,
The point we make today
is simply that
there
is
room
for
a
significant degree of variation in the
amount of penalty without materially affecting the purposes
that
the
penalty
serves.
ifl
a
case
like
this
one
it
is not
so much the dollar amount of the
penalty
as the fact of a
substantial
penalty
that serves as notice to GAP and to
others
that
the
State
is serious about enforcing the pollution
laws.
The
company’s
savings as
a result of delay, offset
perhaps to a degree we cannot ascertain by rising con-
struction costs, are a matter of speculation, not of
proof
in
this
case.
The effect
on
the
public
was
to in-
sult
further
a
stream
already
badly
polluted
by
others.
Either $50,000 or $149,000, we believe, would substantially
promote the statutory deterrent policy underlying our
original decision, and the lesser figure appears to he
in the range of subseouent Board decisions
in other serious
cases.
Second, while the filing of a petition for review
by no means automatically justifies the reduction~ofa
penalty once imposed,
it
poses
the
risk
that
the
entire
order
may be overturned by an
appellate
court,
The
likelihood
of
5
—
532
—9—
reversal, and the consequences of possible reversal, are
of legitimate concern to the Board in assessing how best to
effectuate
statutory
policy.
Even
though
we
are
not
con-
vinced that an order was erroneous,
it may be proper to accept
a modification that will still carry out statutory purpose
in
order
to
avoid
a
significant
risk
of
a
court
decision
that would seriously frustrate the program.
GAP raises on appeal
a
number
of
constitutional
objections
to
the
essential
features
of
the
Environmental
Protection
Act.
While
we
are
firmly
convinced
that
those
contentions
should
be
rejected,
see
EPA
v.
GraniteCity
Steel Co.,
#70—34,
1 PCB 315
(March 17, 1971); EPA v.
Modern
Plating
Corp.,
#70—38,
1
PCB
531
(May
3,
1971)
,
and
while
we
believe
the
courts
will
reject
them, we see no
reason
to
provoke
unnecessary
court
challenges
if
a
company
agrees
to
pay
a
penalty
substantial
enough
to
serve
the
statutory
purpose.
Nor
do we believe, for numerous reasons,
that the present case is theideal one in which such issues
should be presented
to the courts.
The amount of the penalty
is
quite
high
in
comparison
to
other
Board
decisions,
and the company has raised questions concerning
the adequacy of notice.
We believe we correctly
construed our authority and correctly
interpreted the
record in entering our initial order, but
we recognize the risk of reversal, and the consequences of
reversal would be quite severe.
Possibly, GAF would get
off without penalty for its serious violations, contrary to
the policy underlying our original decision; at best a
penalty might be imposed after still another hearing, long
after the events in question took place, subject to further
judicial review and exhausting the resources of the control
agencies as well as of thecompany.
Moreover, an adverse
decision might have consequences far beyond this case,
by
affecting
the authority of the Board to take vigorous
action against others found in violation.
We prefer to
face
that
possibility
in
a
case
less
complicated
by
extraneous
arguments than this one, where the merit of our position can
he
made
unconfusedly clear to the court and attention
focused on the central issues.
Finally,
for reasons in-
dicated
above, we think that the significant dangers to
pollution control policy both
in the present case and in the
long run posed by judicial review of our initial order
can be avoided without substantially impairing the force of
our icoision by approving the payment of $50,000
in full
sat:Lsfeo~:ionof the penalty in consideration of the dismissal
of the ru~titionfor review.
5
—
53:3
—10—
Had
the
Board not conditioned the original variance on
the payment
of a penalty, GAF might indeed have gone “scot
free,” as we then observed,
since no complaint was ever filed.
By
the
same
token,
had
the
Board
insisted
upon
collection
of
the
entire
$149,000
originally
assessed,
GAF
might
have
ended
up
scot
free
and
the
Board
might
have
been
crippled
in
its
future
efforts
as
a
victim
of
the
maxim
that
hard
cases
have
a tendency to make bad law.
Aesop
summed
it
up
some
years
ago:
It
happened
that
a
Dog
had
got
a
piece
of
meat
and
was
carrying
it
home
in
his
mouth
to
eat
it
in
peace.
Now
on
his
way
home
we
had
to
cross
a plank lying across
a running brook.
As he
crossed,
he
looked
down
and.
saw
his
own
shadow
reflected
in
the
water
beneath.
Thinking
it
was
another
dog
with
another
piece
of
meat,
he
made
up his mind to have that also.
So he made a snap
at the shadow in the water, but
as
he
opened
his
mouth
the
piece
of
meat
fell
out,
dropped
into
the
water
and
was
never
seen
more.
Beware
lest
you
lose
the
substance
by
grasping
at
the
shadow.3
3.
J.
Jacobs, the Fables of Aesop
(MacMillan,
1943),
p.
7.
I, Christan Moffett, Clerk of the Pollution Control Board,
certify
that
the
Board
adopted
the
above
Opinion
on
Proposal
for Settlement this
day of October, 1972,
by a vote
of
5
—
534
