ILLINOIS POLLUTION CONTROL BOARD
June 5, 2003
PEOPLE OF THE STATE OF ILLINOIS,
Complainant,
v.
PEABODY COAL COMPANY, a Delaware
corporation,
Respondent.
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PCB 99-134
(Enforcement – Water)
ORDER OF THE BOARD (by N.J. Melas):
On October 24, 2002, complainant, the Office of the Attorney General, on behalf of the
People of the State of Illinois (People), filed a third amended three-count complaint against
Peabody Coal Company (Peabody), operator of an underground coal mining facility about a mile
northwest of Shawneetown in Gallatin County. On December 20, 2002, Peabody filed an answer
in this matter along with 16 affirmative defenses. On February 5, 2003, the People filed a
motion to strike all 16 of Peabody’s affirmative defenses (mot. to strike). On April 14, 2003,
Peabody filed a response to the People’s motion to strike (response). On April 29, 2003, the
People filed a motion for leave to reply to Peabody’s response, attaching the reply.
On May 12, 2003, Peabody objected to the People’s motion for leave to reply and also
filed a motion to file a surreply. In an order dated May 20, 2003, the hearing officer assigned to
this matter granted the People’s motion for leave to file a reply and denied Peabody’s motion to
file a surreply. Peabody filed a renewed motion to file a surreply on June 4, 2003. Section
101.500(e) of the Board’s procedural rules provides that the moving party “will not have the
right to reply, except as permitted by the Board or the hearing officer to prevent material
prejudice.” 35 Ill. Adm. Code 101.500(e). Peabody’s motion is untimely and Peabody has not
sufficiently demonstrated it will suffer material prejudice if the Board does not accept this
surreply. The Board denies Peabody’s renewed motion.
For the reasons stated below, the Board grants the People’s motion to strike in part and
denies the motion in part. The Board grants the motion to strike 12 alleged affirmative defenses
raised by Peabody. Peabody has withdrawn another of its purported affirmative defenses. The
Board denies the People’s motion to strike three alleged affirmative defenses raised by Peabody.
Accordingly, the three remaining affirmative defenses may be addressed by the parties at hearing
or in further pleadings before the Board.
PROCEDURAL HISTORY
2
On March 25, 1999, the People filed a
complaint with the Board. The Board accepted
the People’s third amended complaint on November 21, 2002 (Am. Comp.).
Peabody filed an answer that included 16 affirmative defenses on December 23, 2002.
The People responded with a motion to strike all 16 of Peabody’s affirmative defenses on
February 5, 2003.
PRELIMINARY MATTERS
The Board will address two preliminary matters before discussing the substance of
Peabody’s answer and affirmative defenses. First, when alleging the affirmative defenses,
Peabody alleges each one of them to counts I, II, and III.
Second, in Peabody’s affirmative defenses and response, Peabody defines the People as
“the State.” Ans. at 1; Resp. at 1. However, Peabody uses the term “the State” throughout both
the affirmative defenses and the response to describe conduct of both the Attorney General and
the Environmental Protection Agency (Agency). Therefore, the Board assumes Peabody is
referring to the Agency when discussing the initiation of the enforcement process, issuing
permits, and failure to comply with notice and referral requirements of the Environmental
Protection Act (Act). The Board assumes Peabody is referring to the Attorney General when
discussing the “State’s claims.” In the following pages, the Board refers to the Attorney General
as “the State” when paraphrasing Peabody’s arguments, and the People elsewhere in the body of
this order as defined above.
BACKGROUND
The Site
Peabody Coal Company is a Delaware corporation authorized to do business in the State
of Illinois. In its answer, Peabody states the company is a subsidiary of Interior Holdings
Corporation, which is a subsidiary of Peabody Holding Company, Inc. Ans. at 2. The complaint
involves the Peabody Coal Eagle No. 2 Mine Site in Gallatin County near Shawneetown. The
mine site covers approximately 250 acres and Peabody operated the site as an underground coal
mine from 1968 to July 1993. Ans. at 2. Peabody operated six refuse disposal areas at the mine
site. Am. Comp. at 2.
The People allege that the mine site is located at the eastern edge of the Henry Aquifer, a
Class 1 groundwater resource. The People further allege that the Saline Valley Conservancy
District (SVCD) public water supply wells are located to the southwest and hydraulically
downgradient from the mine site. Am. Comp. at 2. Peabody disputes this statement. Ans. at 2.
There are five wells in the SVCD well field and the wells supply 27,814 people. Am. Comp. at
2.
The People state Peabody disposed 12.76 million tons of coal-related wastes in the refuse
disposal areas and that none of the disposal areas have liners or other barriers to prevent leaching
of contaminants into the underlying aquifer. Am. Com. at 2-3. Peabody denies this allegation
3
but admits that its operations included
disposing of “substantial quantities of gob and
slurry” in the areas indicated. Additionally, Peabody states the refuse contained inorganic
chemicals and that Peabody’s groundwater quality data shows that sulfates leached into on-site
groundwater. Ans. at 3.
The People allege that inorganic chemicals from the coal-related wastes (such as
chlorides, manganese, total dissolved solids, sulfates, and iron) at the mine have contaminated
the groundwater both at the site of the mine and off-site. The People also allege that the
inorganic chemicals from the coal-related wastes are the cause of deteriorating water quality at
the SVCD wells. Am. Comp. at 3. Peabody denies these allegations. Ans. at 3. Peabody also
denies that the Agency’s secondary maximum contaminant level for sulfate is 250 mg/l.
Id
.
Agency Action
Peabody agrees that it received a violation notice letter, labeled M-1997-00010, from the
Agency dated January 28, 1997, but denies that the notice concerned inorganic chemical
groundwater quality violations at the Eagle No. 2 site. Ans. at 3. In response to the notice of
violation (NOV), Peabody sent a letter to the Agency disputing the Agency’s characterization of
the groundwater quality violations at Eagle No. 2 and claimed there were no violations of
groundwater quality on or off-site at Eagle No. 2. Ans. at 3. Peabody admits that it met with the
Agency on March 13, 1997, but denies that the meeting was held pursuant to Section 31(a)(4) of
the Act. Ans. at 3-4.
The parties agree that Peabody requested an extension of time to respond to the alleged
violations on March 17, 1997, and that the Agency denied the request. The parties agree that
Peabody responded timely and that the Agency responded on April 23, 1997. Ans. at 4.
However, Peabody disputes that the Agency rejected Peabody’s compliance commitment
agreement. The parties also agree that the Agency sent a notice of intent to pursue legal action
on October 6, 1997. Ans. at 4.
The parties agree that the Agency sent a second NOV on December 23, 1997, labeled M-
1997-00133, but again Peabody denies the NOV concerned inorganic chemical Class 1
groundwater quality violations at the mine site. Ans. at 4. Again, the parties met on January 28,
1998, and the Agency sent a second notice of intent to pursue legal action on April 21, 1998,
regarding the second NOV. Ans. at 4.
REGULATORY FRAMEWORK
Section 302.208 of the Board’s regulations contains the Board’s numeric general use
water quality standards while Section 302.304 contains the Board’s limits for public and food
processing water supplies. 35 Ill. Adm. Code 302.208, 302.304. Section 620.301 is a general
prohibition against use impairment of resource groundwater. 35 Ill. Adm. Code 620.301.
Section 620.405 is a general prohibition against violations of groundwater quality standards
while Section 620.410 are the numeric groundwater quality standards for Class I potable
resource groundwater. 35 Ill. Adm. Code 620.405, 620.410.
4
STANDARD
The Board’s procedural rules provide that “any facts constituting an affirmative defense
must be plainly set forth before hearing in the answer or in a supplemental answer, unless the
affirmative defense could not have been known before hearing.” 35 Ill. Adm. Code 103.204(d).
In a valid affirmative defense, the respondent alleges “new facts or arguments that, if true, will
defeat . . . the government’s claim even if all allegations in the complaint are true.” People v.
Community Landfill Co., PCB 97-193, slip op. at 3 (Aug. 6, 1998). The Board has also defined
an affirmative defense as a “response to a plaintiff’s claim which attacks the plaintiff’s legal
right to bring an action, as opposed to attacking the truth of claim.” Farmer’s State Bank v.
Phillips Petroleum Co., PCB 97-100, slip op. at 2 n. 1 (Jan. 23, 1997) (quoting
Black’s Law
Dictionary
). Furthermore, if the pleading does not admit the opposing party’s claim, but instead
attacks the sufficiency of that claim, it is not an affirmative defense. Warner Agency v. Doyle,
121 Ill. App. 3d 219, 221, 459 N.E.2d 663, 635 (4th Dist. 1984).
DISCUSSION
Counts I and II
In counts I and II, the People allege that by allowing the discharge of inorganic chemicals
into the groundwater, Peabody has caused or tended to cause water pollution in violation of
Section 12(a) of the Act (415 ILCS 5/12(a) (2000)). Peabody denies these allegations.
Specifically, Peabody denies the alleged violations of groundwater quality and water quality
standards found in count I (Am. Comp. at 10) and count II (Am. Comp. at 28). Ans. at 5, 8. The
People also allege that by allowing the deposit of coal mine refuse and related waste, Peabody
has created a water pollution hazard in violation of Section 12(d) of the Act (415 ILCS 5/12(d)
(2000)). Am. Comp. at 23-24, 47. Peabody denies these allegations. Ans. at 6, 9.
Count III
In count III, the People incorporate by reference the alleged violations in counts I and II.
The complainant further alleges that by causing or allowing the discharge or release of inorganic
chemicals to groundwater at the mine Peabody has violated Section 12(a) of the Act. Am.
Comp. at 50. In alleging violations of Section 12(a), the People state that Peabody has violated
and continues to violate various Board regulations. Am. Comp. at 50-52. The People refer to
Peabody’s noncompliance with Sections 302.208 (1982), 302.304, 620.410(a) of the Board rules
and allege that Peabody is in violation of these regulations. 35 Ill. Adm. Code 302.208 (1982),
302.304 (1982), 302.304 (1996), 620.410(a) (1992). Am. Comp. at 47. Peabody denies these
allegations. Ans. at 9. Complainant also alleges that Peabody has violated 35 Ill. Adm. Code
620.301 (1996), 620.405 (1996), and 620.410(a) (1996). Peabody also denies these allegations.
Ans. at 11.
Affirmative Defenses
After its admissions and denials, Peabody presented sixteen affirmative defenses to the
alleged violations. The People have moved to strike all sixteen affirmative defenses. First the
5
Board will address the affirmative defenses
alleged by Peabody, the arguments presented
by both parties, and then strike allegations that have no merit. The affirmative defenses are as
follows:
1.
The Board has no jurisdiction to hear the State’s claims because the State violated
the 180-day notice requirement pursuant to Section 31(a)(1) of the Act (415 ILCS
5/31(a)(1));
2.
The State’s claims are barred pursuant to Section 31(a)(1) because the State
initiated this action more than 180 days after the State knew of the alleged
violation;
3.
The five-year statute of limitations found in 735 ILCS 5/13-205 bars the State’s
claims in counts I through III;
4.
The State’s claims are barred by
laches
;
5.
The State’s claims are barred by waiver;
6.
The State’s claims are barred by estoppel;
7.
The State failed to join the Saline Valley Conservancy District, a necessary party
to this action;
8.
Pursuant to Section 12(f) of the Act, Peabody did not violate applicable
groundwater quality standards or cause water pollution because Peabody
discharged in accordance with the terms of NPDES permits;
9.
The State’s claims violate due process because they attempt to impose retroactive
liability upon Peabody for activities that were lawful at the time they occurred;
10.
The State’s claims deny Peabody of equal protection under the United States and
Illinois constitutions because the State enforced certain statutes and regulations
discriminatorily against Peabody as compared to other similarly situated parties;
11.
The State failed to fulfill the procedural prerequisites of Section 31(a) and (b) of
the Act (415 ILCS 5/31(a) and (b));
12.
The State’s claims are duplicative and therefore barred by the doctrine of
res
judicata
;
13.
The State’s claims are barred because the Board exceeded its authority in
promulgating 35 Ill. Adm. Code 620.410(a);
14.
The State’s claims are barred because the Board exceeded its authority in
promulgating 35 Ill. Adm. Code, Part 620;
6
15.
The State’s claims violate the due process clauses of the United States and Illinois
constitutions because Peabody’s allegedly unlawful activity was not unlawful at
the time the State initiated this proceeding; and
16.
The State’s claims are barred because the Agency failed to establish a
groundwater management zone with respect to groundwater located in and around
Eagle Mine No. 2, as required by 35 Ill. Adm. Code 620.250.
First Affirmative Defense – Section 31 180-day Jurisdictional Prerequisite
Peabody argues that compliance with Section 31(a)(1) is a jurisdictional condition
precedent to the State bringing an enforcement action. Peabody claims that the State did not
issue and serve notice upon Peabody within 180 days after the State possessed knowledge of the
alleged violations. Ans. at 12. Accordingly, Peabody argues that the Board lacks jurisdiction
over this matter. Peabody further contends that Board cases decided otherwise were decided
incorrectly. Resp. at 11. Peabody emphasizes that the Illinois appellate courts have not
addressed this issue, and therefore, preserves this position for future proceedings in this action.
Id
.
The Board has held that the People do not have to plead in the complaint or prove at
hearing that the Agency complied with Section 31 of the Act. People v. Crane, PCB 01-76, slip
op. at 7-8 (May 17, 2001);
see also
People v. Panhandle Eastern Pipe Line Co., PCB 99-191, slip
op. at 3 (Nov. 16, 2000). The Board held in Crane that the 180-day timeframe within which the
Agency must issue a notice of violation, thereby beginning the pre-referral process, is directory
rather than mandatory in nature. Crane, PCB 01-76 at 12. In striking the respondent’s
affirmative defense alleging lack of jurisdiction for failure to comply with Section 31, the Board
concluded “any facts about when the Agency became aware of the alleged violations have no
bearing on the Board’s jurisdiction over this matter.”
Id
. at 17.
The Board has further held the notice and meeting requirements of Section 31 apply only
to the Agency, not to the Attorney General. People v. Eagle-Picher-Boge, L.L.C.
, PCB 99-152,
slip op. at 8 (July 22, 1999). In Eagle-Picher-Boge
, the Board denied the respondent’s motion to
dismiss for lack of jurisdiction in which the respondent alleged the Agency failed to comply with
the procedural requirements of Section 31 of the Act.
Id
. The Board reasoned that Section 31
contains no restriction on the Attorney General’s authority to proceed with an enforcement case
and file a complaint on his own initiative.
Id
. The Board notes that lack of jurisdiction can be a
valid affirmative defense when properly pled. However, Peabody has not properly pled lack of
jurisdiction in this proceeding. Accordingly, the Board grants the People’s motion to strike
Peabody’s first affirmative defense.
Second Affirmative Defense – Section 31 180-day Statute of Limitations
Peabody claims that Section 31(a)(1) of the Act establishes a period of limitations. Ans.
at 12. Peabody further alleges that because the State did not initiate enforcement within 180
7
days after the State was aware of the alleged
violations, as provided by Section 31(a)(1) of
the Act, the State’s claims are barred. Resp. at 12.
The People argue Peabody’s second affirmative defense is insufficiently pled because the
terms it uses to state the defense, “limitations provision” and “enforcement process,” are vague.
Mot. to Strike at 6. The People further argue that this affirmative defense lacks facts sufficient
to support Peabody’s claim that the Agency failed to meet the 180-day time frame set forth by
statute.
Id
. at 7. The People therefore ask the Board to strike this affirmative defense.
The Board had held that Section 31 of the Act does not operate as a limitation on the
People’s right to file a complaint with the Board after that right accrues. Crane, PCB 01-76, at
10-11. Rather Section 31 is an administrative tool meant to trigger a pre-referral negotiation
process between the Agency and potential violators. Eagle-Picher-Boge, PCB 99-152, at 6, 14.
It is well-settled that “there is no statute of limitations that applies to enforcement actions
brought by the State pursuant to Section 31 of the Act.” Crane, PCB 01-76 at 11; citing Pielet
Bros. Trading, Inc. v. PCB, 110 Ill. App. 3d 752, 758, 442 N.E.2d 1374, 1379 (5th Dist. 1982);
People v. American Disposal Co. & Consolidated Rail Corp., PCB 00-67, slip op. at 2-3 (May
18, 2000).
The Board emphasizes that a violation of the statute of limitations can be a valid
affirmative defense when properly pled. However, statute of limitations as an affirmative
defense does not apply to this proceeding. Accordingly, the Board grants the People’s motion to
strike Peabody’s second affirmative defense.
Third Affirmative Defense – General Statute of Limitations
Peabody withdraws this affirmative defense. Resp. at 12.
Fourth Affirmative Defense –
Laches
Peabody argues the State’s claims are barred by the doctrine of
laches
because the State
knew of Peabody’s conduct at the Eagle No. 2 mine yet failed to address the conduct in a timely
fashion. Ans. at 12. Peabody contends the State has condoned Peabody’s activities because for
nearly 30 years the State issued permits authorizing Peabody’s disposal practices. Resp. at 12-
13. Peabody also states that the State did nothing to prohibit Peabody from continuing its
disposal practices.
Id
. at 13. Peabody alleges that because of the State’s inaction, Peabody is
prejudiced because the amount, duration, and magnitude of potential penalties to be assessed
have increased significantly compared to what they would have been had the State taken action
diligently. Peabody therefore claims the affirmative defense of
laches
applies to some or all of
the State’s claims.
Id
. at 14.
The People cite Board precedent for the principle that applying laches to public bodies is
disfavored, but that the doctrine can apply under compelling circumstances. Crane
, PCB 01-76
at 18; citing Hickey v. Illinois Central Railroad Co.,
35 Ill. 2d 427, 220 N.E. 2d 415 (1966). The
People acknowledge there are two principle elements of
laches
: lack of due diligence by the
party asserting the claim; and prejudice to the opposing party. Crane
, PCB 01-76, slip op. at 18;
8
citing Van Milligan v. Board of Fire & Police
Commissioners, 158 Ill. 2d 84, 89, 630 N.E.2d
830, 833 (1994).
The People allege first that
laches
does not qualify as an affirmative defense. Mot. to
Strike at 10. Alternatively, the People contend Peabody has failed to plead its fourth affirmative
defense with sufficient specificity.
Id
. In particular, Peabody has failed to show that the People
lacked due diligence, failed to show how Peabody was prejudiced, and failed to plead facts
showing exceptional circumstances. Consequently, the People state, Peabody’s fourth
affirmative defense is insufficiently pled and should be struck.
Id
. at 11.
Pursuant to Section 103.204 of the Board’s procedural rules, “any facts constituting an
affirmative defense must be plainly set forth before hearing in the answer or in a supplemental
answer, unless the affirmative defense could not have been known before hearing.” 35 Ill. Adm.
Code 103.204(d). The Board finds that while not specific, Peabody has pled sufficient facts to
raise the affirmative defense of
laches
and that there is a chance Peabody may prevail. In this
proceeding, Peabody must also meet the burden of proving that “compelling circumstances”
warrant application of
laches
. The Board denies the People’s motion to strike this affirmative
defense.
Fifth Affirmative Defense – Waiver
Peabody alleges that the State agencies should have been aware of their right to take
enforcement against Peabody ever since disposal at the mine began. Ans. at 14. Additionally,
Peabody argues that State agencies have addressed environmental conditions at the mine site by
means other than enforcement action. Resp. at 15. Peabody also states it was prejudiced by the
State’s action after an inordinate amount of time.
Id
. As a result, Peabody contends, the State
has waived some or all of the claims stated in the complaint.
Id
.
The People assert that Peabody has not sufficiently pled the elements of waiver. Mot to
Strike. at 12. The People claim Peabody failed to plead that the People knew a right existed,
failed to plead the People intentionally relinquished that known right, and failed to show the
People intended to relinquish the right.
Id
. at 11. The People also assert that Peabody failed to
plead the affirmative defense with sufficient factual specificity. The People claim Peabody
failed to specifically state what right the People relinquished, facts that support the element of
intention, or facts showing the People intentionally relinquished a known right.
Id
. at 12.
The Board notes that waiver applies when a party intentionally relinquishes a known
right or his conduct warrants an inference to relinquish the right. Crane
, PCB 01-76 at 20; citing
Hartford Accident and Indemnity Co. v. D.F. Bast, Inc., 56 Ill. App. 3d 960, 962, 372 N.E.2d
829, 831 (1st Dist. 1977). Peabody alleges it will show that by continually issuing permits to
Peabody, the People relinquished their right to bring the claims alleged in the amended
complaint. Furthermore, Peabody states it will show it has been prejudiced. The Board will
allow Peabody the opportunity to meet the burden of establishing waiver against People. The
Board denies the People’s motion to strike this affirmative defense.
9
Sixth Affirmative Defense – Estoppel
Peabody alleges that the People’s claims are barred by the doctrine of estoppel. Ans. at
13. Peabody contends it relied to its detriment on the State’s authorization of its disposal
practices. Resp. at 16. Peabody further alleges that the State both intended Peabody to so rely,
and knew that Peabody would then cause the violations alleged in the People’s complaint.
Id
. at
17. Peabody alleges these facts establish the elements of estoppel adequate to bar some or all of
the State’s claims in this proceeding.
Id
.
The People assert the defense of equitable estoppel requires a showing of six elements by
the respondent:
(1)
words or conduct by the party against whom the estoppel is alleged
constituting either a misrepresentation or concealment of material facts;
(2) knowledge on the part of the party against whom the estoppel is
alleged that representations made were untrue; (3) the party claiming the
benefit of an estoppel must not have known the representations to be false
either at the time they were made or at the time they were acted upon; (4)
the party estopped must either intend or expect that his conduct or
representations will be acted upon by the party asserting the estoppel; (5)
the party seeking the estoppel must have relied or acted upon the
representations; and (6) the party claiming the benefit of the estoppel must
be in a position of prejudice if the party against whom the estoppel is
alleged is permitted to deny the truth of the representation made. Mot. to
Strike at 13; Reply at 11; citing People v. Environmental Control and
Abatement, Inc., PCB 95-170, slip op. at 7 (Jan. 4, 1996).
The People cite Illinois caselaw for the principle that applying the doctrine of estoppel against
public bodies is not favored and that a public body cannot be estopped for an act performed by
its agent that exceeds the authority given to him. Citing County of Cook v. Patka, 85 Ill. App. 3d
5, 12-13, 405 N.E.2d 1376 (1st Dist. 1980).
The People contend that Peabody has failed to plead the elements of this defense with
requisite specificity. Mot. to Strike at 16. Additionally, the People argue that Peabody has not
plead sufficient facts in support of its allegation.
Id
. at 17. The People allege that for these
reasons Peabody’s sixth affirmative defense should be struck.
The Board finds that Peabody has adequately pled estoppel as an affirmative defense.
Without making a determination on the merits of the parties’ assertions at this juncture, the
Board will allow Peabody the opportunity to meet the substantial burden of establishing estoppel
against the People at hearing or in future pleadings. Accordingly, the Board does not strike this
affirmative defense.
Seventh Affirmative Defense – Failure to Join a Necessary Party
10
Peabody contends that the Saline
Valley Conservancy District (District) is a
necessary party to this proceeding. Peabody alleges that because the District caused excessive
groundwater concentration levels of sulfates and contaminants of concern as alleged by the
People, a complete determination of the controversy cannot be made without the District. 35 Ill.
Adm. Code 101.403(a); Resp. at 20. Peabody requests that the Board direct the State to file an
amended complaint naming the District as a party. Resp. at 20.
The People assert that pursuant to Section 101.403(b) of the Board’s rules, the Board will
not dismiss an adjudicatory proceeding for failure to name a necessary party without first
providing a reasonable opportunity to add the persons as parties. Mot. to Strike at 17; 35 Ill.
Adm. Code 101.403(b). The People also assert that pursuant to Section 101.403(a), Peabody
itself should move the Board for joinder of the District.
Id
. at 18; 35 Ill. Adm. Code 101.403(a).
Finally, the People argue that failure to join a necessary party is not an affirmative defense
because it is not an affirmative matter that avoids the legal effect or defeats a cause of action.
Id
.
Accordingly, the People request the Board to strike the Peabody’s seventh affirmative defense.
The Board finds that failure to join a necessary party is not an affirmative defense. As
noted by the People, the Board’s procedural rules provide Peabody the opportunity to move the
Board to join the District as a co-respondent or to ask the Board for leave to file a third-party
complaint. 35 Ill. Adm. Code 101.403, 103.206. The Board need not discuss whether the
District is a necessary party because the Board finds that failure to join a necessary party is not
an affirmative defense and grants the People’s motion to strike this alleged affirmative defense.
Eighth Affirmative Defense – NPDES Permit Shield
Peabody argues that because it has always complied with any National Pollutant
Discharge Elimination System (NPDES) permit issued to it by the Agency, it is shielded from
the alleged water pollution violations. Ans. at 13-14. Pursuant to Section 12(f) of the Act,
compliance with an NPDES permit issued by the Agency shall be deemed compliance with the
effluent discharge provisions of Section 12(f) of the Act. Resp. at 18; 415 ILCS 5/12(f).
Peabody contends the People have alleged violations of Sections 12(a) and (d) of the Act, but
that those violations arose out of a discharge from the mine pursuant to an NPDES permit issued
by the Agency. Resp. at 19. Peabody contends that because its discharges have complied with
the terms and conditions of an NPDES permit, Section 12(f) of the Act dictates that Peabody is
therefore “shielded” from other water pollution violations of Section 12. Resp. at 19. In its
response to the People’s motion to strike, Peabody also alleges new facts disputing that Peabody
caused groundwater contamination downgradient from the mine and instead alleges that the
Saline Valley Conservancy District caused the contamination. Resp. at 17-18.
The People argue that not only is the District not responsible for the high sulfate levels
found in the groundwater, but the NPDES permit shield is not an affirmative defense. Reply at
13-14. The People argue that while the permit shield allegation may be a mitigating factor to the
water pollution violations and exceedences of the Board’s groundwater standards alleged in the
amended complaint, it is not an affirmative defense that avoids the legal effect of or defeats a
cause of action.
Id
. at 14; Mot. to Strike at 19. The People conclude that Peabody’s eighth
affirmative defense, therefore, should be struck.
Id
.
11
Section 12(f) of the Act provides a permit shield only from subsection (f) regarding
effluent limitations. 415 ILCS 5/12(f). The People have alleged violations of Sections 12(a) for
creating water pollution, and (d) for creating a water pollution hazard of the Act. 415 ILCS
5/12(a) and (d). Therefore, Peabody has not alleged new facts or arguments that would shield it
from liability under Sections 12(a) and (d) of the Act. The Board finds that Peabody’s permit
shield argument is not a valid affirmative defense. The Board strikes this affirmative defense.
Ninth Affirmative Defense – Due Process
Peabody alleges that the People’s claims against it are barred by the due process clauses
of the United States Constitution (U.S. Const. amend. V, Ill. Const. art. 1, §2) and the Illinois
Constitution because the claims attempt to impose liability upon Peabody for conduct that was
lawful at the time it occurred. Ans. at 14; Resp. at 21. Peabody claims that the People’s attempt
to impose retroactive liability violates Peabody’s substantive due process rights and constitutes a
taking in violation of the takings clause of the Fifth Amendment of the U.S. Constitution.
Eastern Enterprises v. Apfel, 524 U.S. 498, 118 S. Ct. 2131, 141 L. Ed. 2d 451 (1998). Resp. at
22. Peabody alleges all of its conduct was lawful at the time it occurred pursuant to permits
issued by the State, and that the Board should only require the prospective application of the
Groundwater Protection Act and the Board’s water quality standards. Resp. at 24.
The People contend the Board should strike Peabody’s ninth affirmative defense because:
(1) Peabody has failed to plead any facts in support of its claim; and (2) because the affirmative
defense is not an affirmative matter that attacks the legal sufficiency of the facts alleged. Reply
at 16. The People also contend that Peabody’s ninth affirmative defense should be struck
because it does not request relief from the People’s allegations. Reply at 15-16. The People do
not allege that Peabody’s
disposal practices
were unlawful, rather the People allege that Peabody
has caused water pollution and water pollution hazards at the Eagle No. 2 mine.
Id
. at 16.
The Board again assumes that Peabody is referring to the Agency when stating that its
“Disposal Practices were expressly authorized by permits issued to PCC by the State.” Resp. at
23. The Board assumes that elsewhere in its response brief Peabody is referring to the Attorney
General when discussing “the State” as it defines the term on page one. Resp. at 1. The Board
finds that while retroactive liability may be a valid affirmative defense, Peabody misapplies the
doctrine here and accordingly strikes this affirmative defense.
The Board has held “an
ex post facto
law is ‘[a] law passed after the occurrence of a fact
or commission of an act, which retrospectively changes the legal consequences or relations of
such act or deed.’” Shephard v. Northbrook Sports Club
, PCB 96-206, slip op. at 7 (Sept. 5,
1996) (citing to
Black’s Law Dictionary
). Illinois courts have upheld the principle that merely
maintaining a legal situation prior to the passage of prohibitive legislation could give rise to
liability after it. Freeman Coal Mining Corp., v. PCB
, 21 Ill. App. 3d 157, 165-165, 313 N.E.2d
616, 622 (1974); citing People v. Jones
, 329 Ill. App. 503
,
69 N.E.2d 522 (4th Dist. 1946);
see
also
Meadowlark Farms, Inc. v. PCB
, 17 Ill. App. 3d 851, 308 N.E.2d 829 (5th Dist. 1974). In
Meadowlark Farms, the petitioner could not persuade the court that the Act was retroactive and
an
ex post facto
law. The court in that case held that because the petitioner was guilty of
12
violations of the Act that took place after the
effective date of the Act, the Act was not
retroactive as applied to the petitioner.
Id
. at 862.
Here, the People do not allege any retroactive application of the Act or any Board
regulation. Each count alleged violations of the Act or Board regulations in effect at the time
each individual discharge occurred. Neither the Groundwater Protection Act nor the water
quality standards violate Peabody’s substantive due process rights under the U.S. or Illinois
constitutions because they are not retroactively applied as alleged. Accordingly, the Board
grants the People’s motion to strike Peabody’s ninth affirmative defense.
Tenth Affirmative Defense – Equal Protection
In summary, Peabody asserts that because its disposal practices are substantially similar
to those of other coal mine operators, yet the State has not taken enforcement action against the
operators of other mines, the People have violated Peabody’s right to equal protection under the
law. Resp. at 24. Peabody therefore alleges that the People’s claims are barred by the equal
protection clauses of the U.S. and Illinois constitutions. Ans. at 14.
In their motion to strike, the People set forth the general legal principles that apply to
claims of equal protection. Mot. to Strike at 23-24. Furthermore, the People emphasize that
Illinois caselaw provides “the application of the equal protection clause is limited to instances of
purposeful or invidious discrimination rather than erroneous or even arbitrary administration of
state powers.” Mot. to Strike at 24; citing Summers v. Illinois Commerce Comm’n, 58 Ill. App.
3d 933, 936, 374 N.E.2d 1111, 1113 (1978). The People again allege that Peabody failed to
plead an adequate factual basis for its assertions and failed to plead an affirmative matter that
defeats any cause of action set forth in the People’s complaint. Mot. to Strike at 26. For these
reasons, the People argue, this affirmative defense should be struck.
Peabody has alleged no facts showing that the People purposely and invidiously
discriminated against Peabody in bringing this action. The Board finds Peabody has not met the
Board’s minimum requirement of plainly setting forth facts establishing this affirmative defense.
35 Ill. Adm. Code 103.204(d). The Board grants the People’s motion to strike this affirmative
defense.
Eleventh Affirmative Defense – Failure to Comply with Section 31(a) and (b)
Count I Claims
. Peabody claims that the State failed to comply with Section 31(a) and
(b) because the violations described in the two NOV’s differ from the claims the State asserted in
count I of the amended complaint. Resp. at 28. Peabody contends the State issued NOVs
alleging violations of “the regulations and standards” clause of Section 12(a) of the Act, while
count I of the State’s complaint alleges violations of the “water pollution” clause of Section
13
12(a) and of Section 12(d) of the Act.
1
Id
.
Peabody concludes that as a result, Peabody
was deprived of the Section 31 process with respect to the State’s claims as set forth in count I.
Count II and III Claims
. Peabody also claims that the State did not comply with
Section 31 with respect to counts II and III. Resp. at 29. Peabody states that according to Board
precedent, if the State independently developed the claims set forth in counts II and III, Section
31 does not apply.
Id
. However, Peabody does not believe the State developed these claims
independently. Peabody believes the Agency assisted the People in developing the claims, and
this constitutes a
de facto
referral of those claims by the Agency to the People. Resp. at 30.
Consequently, Peabody argues the People, by referral of claims, are subject to the requirements
of Section 31 of the Act.
The People argue that the NOVs the Agency sent to Peabody clearly allege violations of
Section 12 of the Act and the applicable water quality standards. Reply, Exh. 2, 3. The People
claim that the NOVs made no distinction between the “regulations and standards” clause of
Section 12 and the “water pollution” clause of Section 12. Therefore, the People allege Peabody
was on notice and the NOVs do not limit the People to alleging only a violation of the
“regulations and standards clause of Section 12 of the Act in count I. Reply at 19.
Regarding Counts II and III, the People argue that Board precedent clearly provides that
the Attorney General’s office is not subject to the requirements of Section 31 of the Act. People
v. Geon Company, Inc., PCB 97-62, slip op. at 21 (Oct. 2, 1997). Alternatively, the People
argue that Peabody’s eleventh affirmative defense does not constitute an affirmative matter that
defeats a cause of action set forth in the People’s complaint. Reply at 21.
The Board finds, as discussed above, the People are not required to plead in the
complaint or prove at hearing that the Agency complied with Section 31 of the Act.
See
Crane,
PCB 01-76, at 7-8. In Crane, the Board stated that while the procedural requirements of Section
31(a)(1) of the Act are directory, “the substance of the Section 31 referral process is mandatory.”
Crane
, PCB 01-76, slip op. at 17. Here, Peabody was given two notices of violations at Eagle
No. 2 mine as well as an opportunity to meet with the Agency and negotiate a settlement.
Finding Peabody was not denied the substance of Section 31 of the Act, the Board strikes
Peabody’s eleventh affirmative defense as to counts I, II, and III.
Twelfth Affirmative Defense – Duplicative/ Res judicata
Peabody claims that on at least two occasions in the past, in 1984 and 1992, the State
alleged exactly the same violations of Illinois law against Peabody and thereafter addressed and
resolved the allegations. Resp. at 32-33. Peabody alleges, therefore, that these issues have
already been enforced, and the doctrine of
res judicata
bars the State’s claims. Ans. at 15.
1
Peabody stated in the response that it attached copies of the NOVs as exhibits 1 and 2, but they
were not attached. The People subsequently attached these NOVs as exhibits 2 and 3 to their
reply brief. Reply Exh. 2, 3.
14
The People argue that the notifications that Peabody alleges are enforcement actions were
not enforcement actions at all. The People state that in 1992, the Agency sent a request issued
pursuant to a permitting process in attempt to achieve compliance at the mine. Reply, Exh. 1.
The People contend that in 1992, the Agency considered an enforcement action initiated when an
enforcement letter was issued pursuant to Section 31 of the Act. Reply at 22. The People further
contend that the notification in 1984 was a permit application denial by the Illinois Department
of Natural Resources (DNR). Resp. at 32. The People state that the DNR does not have
enforcement authority with regard to the allegations in the People’s complaint, and further, the
action taken was a permit denial, not an enforcement action. The People claim, therefore, that
the violations alleged in the People’s complaint have not yet been enforced and/or resolved in a
court of competent jurisdiction and the doctrine of
res judicata
does not apply here. Reply at 22.
The People finally argue that Peabody’s twelfth affirmative defense does not meet the standard
of an affirmative defense and should be struck.
Id
.
The Board finds that the doctrine of
res judicata
may be a valid affirmative defense in
some cases. Under the doctrine of
res judicata,
once a court decides a cause of action, it cannot
be retried between the same parties. People v. Jersey Sanitation Corp., PCB 97-2, slip op. at 4
(Apr. 4, 2002). The bar extends to what was actually decided in the first action, as well as those
matters that could have been decided in that suit.
See
River Park, Inc. v. City of Highland Park,
184 Ill. 2d 290, 302, 703 N.E.2d 883, 889 (1998). In general,
res judicata
applies when three
elements are present: (1) a final judgment on the merits rendered by a court of competent
jurisdiction; (2) an identity of the parties or their privies; and (3) an identity of cause of action.
Jersey Sanitation, PCB 97-2, slip op. at 4-5
.
However, in this situation, Peabody has not alleged any new facts or arguments that if
true will defeat the People’s claim even if all allegations in the complaint are true. The
assertions that the DNR issued a permit denial in 1984, and the Agency sent a request issued
pursuant to a permitting process in 1992 do not qualify as final judgments on the merits rendered
by a court of competent jurisdiction. Accordingly, the Board grants the People’s motion to strike
Peabody’s twelfth affirmative defense.
Thirteenth and Fourteenth Affirmative Defenses – Board Authority
(Health/Technical/Economic)
Peabody claims the Board exceeded its authority in promulgating Part 620 of the Board’s
rules. 35 Ill. Adm. Code 620; Ans. at 15. In its thirteenth affirmative defense, Peabody claims
the Board’s water quality standards for chlorides, sulfates, and total dissolved solids (35 Ill.
Adm. Code 620.410(a)) are not “health-based” as mandated by the Groundwater Protection Act
(415 ILCS 55/8(a). In its fourteenth affirmative defense, Peabody claims it is not technically
feasible or economically reasonable for operators of coal mines to comply with these same
standards. Resp. at 36.
In moving to strike these two affirmative defenses, the People respond that the Board’s
water quality standards were established pursuant to Board order. Furthermore, Section 41(c) of
the Act precludes a challenge to any Board order in the context of an enforcement action under
15
Title XII of the Act as to any issue that could
have been raised in a timely petition for review
under this Section.
See
415 ILCS 5/41(c) (2002);
see also
People v. Wood River Refining
Company, PCB 99-120, slip op. at 16 (Aug. 8, 2002). Peabody responds that this enforcement
proceeding was not brought under Title XII, but pursuant to Section 31, which is part of Title
VIII. Resp. at 34. Peabody contends that accordingly, Section 41(c) is irrelevant on its face with
respect to count I.
Pursuant to Section 29 of the Act, Board rules are not subject to review regarding their
validity or application in any subsequent proceeding under Title VIII, Title IX, or Section 40 of
the Act. 415 ILCS 5/29(b) (2002). Rather, a person adversely affected by any Board rule or
regulation may challenge its validity under Section 41 of the Act. 415 ILCS 5/29(a) (2002).
This action was brought pursuant to Section 31 of the Act. Am. Comp. at 1. Accordingly, the
Board strikes Peabody’s thirteenth and fourteenth affirmative defenses.
Fifteenth Affirmative Defense – Due Process
Peabody alleges the State’s claims are barred by the due process clauses of the U.S. and
Illinois constitutions. Ans. at 16. Peabody contends the People attempt to impose liability for
conduct that was allegedly unlawful at the time the conduct occurred, but was lawful on the date
this complaint was filed. Resp. at 37.
The People argue in turn that Peabody has failed to plead sufficient facts to support this
defense. Mot. to Strike at 31. The People also argue Peabody has not plead an affirmative
matter that avoids the effect of or defeats a cause of action in the People’s complaint. Reply at
25.
The Board finds Peabody’s fifteenth alleged affirmative defense is not a valid affirmative
defense. Peabody’s seems to argue that if the allegedly unlawful discharges would occur today
they would be lawful under current law. Peabody contends that, as a result, due process of the
law bars the State’s claims in counts I, II, and III. Without discussing the truth of the matter, the
Board finds this argument could not defeat the People’s claims even if all the allegations in the
complaint are true. The People allege the People violated the Act by discharging at the Eagle
No. 2 mine site so as to cause water pollution and create a water pollution hazard. The
applicable law in this proceeding is the law in force at the time of discharge. Therefore,
Peabody’s ninth alleged affirmative defense is not valid and the Board grants the People’s
motion to strike this defense.
Sixteenth Affirmative Defense – Failure to Establish a Groundwater Management Zone
Peabody argues that the Agency’s failure to concur with Peabody’s request to establish a
groundwater management zone in accordance with Section 620.250 of the Board rules is the
reason Peabody may be found liable for possibly hundreds of violations of the Act. Resp. at 40;
35 Ill. Adm. Code 620.250. Peabody alleges that were there a groundwater management zone at
and around the mine site, no water quality standards regarding contaminants of concern would
apply within that groundwater management zone. 35 Ill. Adm. Code 620.450(a)(3). Peabody
further contends the Agency’s refusal to accept Peabody’s request for a groundwater
16
management zone at the mine is unlawful
because the refusal is arbitrary, capricious, and
contrary to law. Resp. at 39. Peabody concludes that the Agency’s failure to concur with
Peabody’s plan for a groundwater management zone thereby bars the State’s claims of
continuing violations of Section 620.410(a) water quality standards.
The People argue that Section 620.250 of the Board rules does not mandate the Agency
to establish a groundwater management zone as Peabody contends. The People further contend
that Peabody’s sixteenth alleged affirmative defense is not an affirmative defense but rather a
factor that may, if anything, mitigate any imposed penalty. Reply at 26. The People claim that a
defense that goes to the duration and gravity of the violation and due diligence of the respondent
to correct the situation does not constitute an affirmative defense. People v. Midwest Grain,
PCB 97-197, slip op. 4-5 (Aug. 21, 1997). Such a defense does not impact the question of
whether the respondent has violated the Act.
Id
.
The Board finds that Peabody’s sixteenth affirmative defense addresses information
relevant to the amount of penalty, if any. As noted by the People, the Board has previously held
that defenses that address mitigation factors are not affirmative defenses to an allegation that a
violation has occurred. Here, Peabody argues that even if a violation occurred, the Agency’s
conduct is responsible for the violations to be continuing. This argument goes to the duration
and gravity of the violation.
Additionally, Peabody could have appealed the Agency’s denial of Peabody’s request to
establish a groundwater management zone to the Board at the time it occurred. However,
Peabody failed to do so. The Board strikes Peabody’s sixteenth alleged affirmative defense
because it is not an affirmative defense. The Board notes that at hearing the parties may
introduce evidence regarding factors that may mitigate an assessed penalty, if any.
CONCLUSION
The Board grants the People’s motion to strike in part and denies the motion in part. The
Board grants the motion to strike 12 of the 16 alleged affirmative defenses raised by Peabody.
Peabody has withdrawn its third affirmative defense. The Board denies the People’s motion to
strike regarding 3 of the alleged affirmative defenses.
IT IS SO ORDERED.
I, Dorothy M. Gunn, Clerk of the Illinois Pollution Control Board, certify that the Board
adopted the above order on June 5, 2003, by a vote of 6-0.
Dorothy M. Gunn, Clerk
Illinois Pollution Control Board
