ILLINOIS POLLUTION CONTROL BOARD
June 19, 2003
2222 ELSTON LLC,
Complainant,
v.
PUREX INDUSTRIES, INC., FEDERAL DIE
CASTING COMPANY, FEDERAL
CHICAGO CORPORATION, RAYMOND E.
CROSS, BEVERLY BANK TRUST NO. 8-
7611, and LAKESIDE BANK TRUST NOS.
10-1087 AND 10-1343,
Respondents.
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PCB 03-55
(Citizens UST Enforcement)
ORDER OF THE BOARD (W.A. Marovitz):
On October 25, 2002, complainant 2222 Elston LLC (Elston) filed a 13-count complaint
against respondents alleging violations of the Environmental Protection Act (Act) 415 ILCS 5/
et
seq.
(2002) and seeking reimbursement for cleanup costs. Elston alleges that it has already
incurred $500,000 in cleaning up oils, solvents and varnish-related products from leaking
underground storage tanks (USTs) at 2228 N. Elston, Chicago, Cook County. Elston also seeks
attorney fees and expert witness fees, including interest.
Elston alleges that between 1970 and January 2000, respondents violated Sections 21(a),
(b), (d), (e), (f), 12(a), (d), and 55(a) of the Act. 415 ILCS 5/21(a), (b), (d), (e), (f), 12(a), (d) and
55(a) (2002). The respondents filed two motions to dismiss the complaint as frivolous.
As discussed below, the Board finds that portions of the complaint are frivolous, and
strikes and dismisses those portions of the complaint requesting attorney fees. The Board strikes
and also dismisses the complaint as to the Beverly and Lakeside Trusts. The Board further finds
that the complaint is not duplicative. The Board therefore denies the parties’ motions to dismiss
and accepts the case for hearing.
The Board will first address procedural matters and then set forth the applicable law.
Next, the Board addresses the arguments raised in the motions to dismiss and the responses to
the motions. The Board’s analysis follows each issue.
PROCEDURAL MATTERS
Purex Filings
On December 2, 2002, respondent Purex Industries Inc. (Purex) filed a motion to dismiss
the complaint as frivolous. Purex attached as an exhibit to the motion the affidavit of Jeffrey
2
Smith, an attorney for Purex. On April 23, 2003, Elston filed a combined motion to strike
Smith’s affidavit and a response to Purex’s motion. On May 5, 2003, Purex filed a motion for
leave to file a reply and a memorandum in support of its motion to dismiss
instanter
. On May
27, 2003, Elston filed a motion for leave to file a combined surreply in support of its response to
Purex’s motion to dismiss and reply in support of its motion to strike.
The Board's procedural rules allow the filing of a reply to a response only by permission
of the Board or hearing officer to prevent material prejudice.
See
35 Ill. Adm. Code 101.500(e).
Purex asserts that Elston’s response raises numerous factual and legal arguments to which Purex
wants to respond. The Board grants Purex’s motion for leave to file a reply.
1
The Board finds
that the surreply is not necessary to prevent material prejudice and therefore denies Elston’s
motion for leave to file the surreply. However, the Board will accept Elston’s reply in support of
its motion to strike Smith’s affidavit.
2
Federal Respondents Filings
On December 5, 2002, respondents Federal Die Casting Company (FDCC), Federal
Chicago Corporation (FCC), Raymond E. Cross (Cross), Beverly Bank Trust No. 807611
(Beverly), and Lakeside Bank Trust Nos. 10-1087 and 10-1343 (Lakeside) (collectively, Federal
respondents) filed a motion to dismiss the complaint (Federal Motion). On April 23, 2003,
Elston filed a combined motion to strike and response to Federal respondents’ motion to dismiss.
On May 12, 2003, Federal respondents filed a motion for leave to file a reply memorandum in
support of their motion to dismiss
instanter
. The Board grants the motion for leave to file a
reply.
3
APPLICABLE LAW
Citizens Enforcement Actions
In addition to providing that the Illinois Attorney General and the State’s Attorneys may
file complaints with the Board, the Act authorizes citizens to bring enforcement actions before
the Board, alleging violations of the Act or Board regulations. Section 31(d) of the Act provides:
Any person may file with the Board a complaint, meeting the requirements of
subsection (c) of this Section, against any person allegedly violating this Act or
any rule or regulation thereunder . . . . Unless the Board determines that such
1
Purex’s motion to dismiss will be cited as “Purex Mot. at __.” Elston’s motion to strike and
response will be cited as “Elston Resp. to Purex at __.” Purex’s reply will be cited as “Purex
Reply at __.”
2
Elston’s Reply in support of its motion to strike will be cited as “Elston Reply at __.”
3
The Federal Respondents’ motion to dismiss will be cited as “Federal Mot. at __.” Elston’s
motion to strike and response will be cited as “Elston Resp. to Federal at __.” The Federal
Respondents’ reply will be cited as “Federal Reply at __.”
3
complaint is duplicative or frivolous, it shall schedule a hearing . . . . 415 ILCS
5/31(d) (2002).
Section 31(c), referred to in the quoted passage, in turn states that the complaint “shall specify
the provision of the Act or the rule or regulation . . . under which such person is said to be in
violation, and a statement of the manner in, and the extent to which such person is said to violate
the Act or such rule or regulation . . . .” 415 ILCS 5/31(c) (2002). The Board’s procedural rules
codify the requirements for the contents of a complaint, including the “dates, location, events,
nature, extent, duration, and strength of discharges or emissions and consequences alleged to
constitute violations” and a “concise statement of the relief that the complainant seeks.” 35 Ill.
Adm. Code 103.204(c).
Within 30 days after being served with a complaint, a respondent may file a motion with
the Board to dismiss the complaint on the grounds that the complaint is frivolous or duplicative.
35 Ill. Adm. Code 103.212(b). The Board’s procedural rules define “frivolous” and
“duplicative” as follows:
“Frivolous” means a request for relief that the Board does not have the authority
to grant, or a complaint that fails to state a cause of action upon which the Board
can grant relief.
“Duplicative” means the matter is identical or substantially similar to one brought
before the Board or another forum.
Provisions Allegedly Violated
Land Pollution
Sections 21(a), (b), (d), (e), and (f) of the Act state:
No person shall:
(a) Cause or allow the open dumping of any waste.
(b) Abandon, dump, or deposit any waste upon the public
highways or other public property, except in a sanitary
landfill approved by the Agency pursuant to regulations
adopted by the Board.
(d) Conduct any waste-storage, waste-treatment, or waste
disposal operation:
(1) without a permit granted by the Agency or in
violation of any conditions imposed by such
permit, including periodic reports and full access to
adequate records and the Inspection of facilities, as
4
may be necessary to assure compliance with this
Act and with regulations and standards adopted
thereunder; provided, however, that, except for
municipal solid waste landfill units that receive
waste on or after October 9, 1993, no permit shall
be required for
(i) any person conducting a waste-storage,
waste-treatment, or waste-disposal operation
for wastes generated by such person's own
activities which are stored, treated, or
disposed within the site where such wastes
are generated, or
(ii) a facility located in a county with a
population over 700,000, operated and
located in accordance with Section 22.38 of
this Act, and used exclusively for the
transfer, storage, or treatment of general
construction or demolition debris;
(2) in violation of any regulations or standards adopted
by the Board under this Act; or
(3) which receives waste after August 31, 1988, does
not have a permit issued by the Agency, and is
(i) a landfill used exclusively for the disposal of
waste generated at the site,
(ii) a surface impoundment receiving special
waste not listed in an NPDES permit,
(iii) a waste pile in which the total volume of
waste is greater than 100 cubic yards or the
waste is stored for over one year, or
(iv) a land treatment facility receiving special
waste generated at the site; without giving
notice of the operation to the Agency by
January 1, 1989, or 30 days after the date on
which the operation commences, whichever
is later, and every 3 years thereafter. The
form for such notification shall be specified
by the Agency, and shall be limited to
information regarding: the name and address
5
of the location of the operation; the type of
operation; the types and amounts of waste
stored, treated or disposed of on an annual
basis; the remaining capacity of the
operation; and the remaining expected life of
the operation.
Item (3) of this subsection (d) shall not apply to any person
engaged in agricultural activity who is disposing of a
substance that constitutes solid waste, if the substance was
acquired for use by that person on his own property, and
the substance is disposed of on his own property in
accordance with regulations or standards adopted by the
Board.
This subsection (d) shall not apply to hazardous waste.
(e) Dispose, treat, store or abandon any waste, or transport any
waste into this State for disposal, treatment, storage or
abandonment, except at a site or facility which meets the
requirements of this Act and of regulations and standards
thereunder.
(f) Conduct any hazardous waste-storage, hazardous waste-
treatment or hazardous waste-disposal operation:
(1) without a RCRA permit for the site issued by the
Agency under subsection (d) of Section 39 of this
Act, or in violation of any condition imposed by
such permit, including periodic reports and full
access to adequate records and the inspection of
facilities, as may be necessary to assure
compliance with this Act and with regulations and
standards adopted thereunder; or
(2) in violation of any regulations or standards
adopted by the Board under this Act; or
(3) in violation of any RCRA permit filing
requirement established under standards adopted by
the Board under this Act; or
(4) in violation of any order adopted by the Board under this
Act.
6
Notwithstanding the above, no RCRA permit shall be
required under this subsection or subsection (d) of Section
39 of this Act for any person engaged in agricultural
activity who is disposing of a substance which has been
identified as a hazardous waste, and which has been
designated by Board regulations as being subject to this
exception, if the substance was acquired for use by that
person on his own property and the substance is disposed of
on his own property in accordance with regulations or
standards adopted by the Board. 415 ILCS 5/21(a), (b), (d),
(e), (f) (2002).
Water Pollution
Sections 12(a) and (d) state:
No person shall:
(a) Cause or threaten or allow the discharge of any contaminants
into the environment in any State so as to cause or tend to
cause water pollution in Illinois, either alone or in
combination with matter from other sources, or so as to
violate regulations or standards adopted by the Pollution
Control Board under this Act.
(d) Deposit any contaminants upon the land in such place and
manner so as to create a water pollution hazard. 415 ILCS
5/12(a), (d) (2002).
Used Tires
Section 55(a) of the Act states:
No person shall:
(1) Cause or allow the open dumping of any used or waste tire.
(2) Cause or allow the open burning of any used or waste tire.
(3) Except at a tire storage site which contains more than 50
used tires, cause or allow the storage of any used tire unless
the tire is altered, reprocessed, converted, covered, or
otherwise prevented from accumulating water.
(4) Cause or allow the operation of a tire storage site except in
compliance with Board regulations.
7
(5) Abandon, dump or dispose of any used or waste tire on
private or public property, except in a sanitary landfill
approved by the Agency pursuant to regulations adopted by
the Board.
(6) Fail to submit required reports, tire removal agreements, or
Board regulations. 415 ILCS 5/55(a) (2002).
PUREX MOTION TO DISMISS
Purex argues that Elston’s complaint against Purex should be dismissed as frivolous
because the Board does not have personal jurisdiction over Purex. Purex Mot. at 2. Purex
argues that Purex has no contacts with Illinois. Purex Mot. at 2. Purex further argues the
complaint fails to allege that Purex has ever done business in Illinois. Purex Mot. at 2.
To support Purex’s motion, Purex attached the affidavit of Jeffrey M. Smith, who is
Purex’s counsel. Purex Mot. at Exh. A. His affidavit states that since Purex’s creation, Purex
has had no offices in Illinois, has not done any business in Illinois, and has not had any contacts
with Illinois. Purex. Mot. at Exh. A.
Elston Motion To Strike and Response
Elston moves the Board to strike the Smith affidavit attached to Purex’s motion. Elston
Resp. to Purex at 1. Elston argues that the affidavit is inadequate to support a challenge to the
Board’s personal jurisdiction, and is nothing more than conclusions that recite the legal standards
in the Illinois long-arm statute. Elston Resp. to Purex at 2. Elston asserts that the Board’s rules
do not address how the Board should handle affidavits supporting motions contesting personal
jurisdiction. Therefore, Elston notes that under 35 Ill. Adm. Code 101.100(b), the Board may
look to the Supreme Court’s rules for guidance. Elston Resp. to Purex at 10-11, citing 35 Ill.
Adm. Code 101.100(b). Supreme Court Rule 191 states that affidavits regarding a motion to
contest personal jurisdiction shall, among other things “set forth with particularity the facts upon
which the claim. . . is based; shall. . . not consist of conclusions but of facts admissible in
evidence. . . .” Elston Resp. to Purex at 10, citing Supreme Court Rule 191. Elston asserts that
Smith’s affidavit fails to state facts with particularity and is a series of conclusory statements.
Elston Resp. to Purex at 11.
Elston also argues that Purex is the lawful corporate successor to Purex Corporation
(Purex Corp.), which purchased the site from the T.F. Washburn Company (Washburn) in 1961
and operated it before selling the site in 1978. Elston Resp. to Purex at 2. As Purex Corp.’s
successor in interest, Elston asserts that Purex Corp.’s jurisdictional ties are imputed to Purex
automatically and as a matter of law. Elston Resp. to Purex at 3; Elston Resp. at Exh. 1 at 194:1-
195:16, 197:3-197:19.
To support its claim that Purex is the successor in interest to Washburn and Purex Corp.,
Elston states that Purex Corporation Ltd. acquired Washburn (the owner and operator of the site)
in 1961. Elston Resp. to Purex at 4. In 1964, Purex Corporation Ltd. liquidated and dissolved
8
Washburn, and merged Washburn into Purex Corporation Ltd.
Id
. In 1974, Purex Corporation
Ltd. changed its name to Purex Corporation.
Id.
In 1978, Purex was incorporated in Delaware
and acquired all Purex Corp.’s stock.
Id
. In 1982, Purex Corp. changed its name to T.P.
Industrial Inc., as a part of a leveraged buyout.
Id
. In 1986, T.P. Industrial Inc. merged with
Purex (the respondent in this case).
To further support its assertion that Purex is Purex Corp.’s corporate successor, Elston
states that Purex admitted being the corporate successor in a federal suit in New Jersey. Elston
Resp. to Purex at 5, citing United States v. Farber, 86-3736, (N.J. 1988). Elston also cites a
California Water Resources Board decision that stated that Purex was civilly liable for a site
cleanup and held that “Purex Industries, Inc. is the successor to Purex Corporation.” Elston
Resp. to Purex at 6, citing Petition of Purex Industries, Inc. Order WQ 97-04 (May 14, 1997),
Exh. 6. Further, Elston states that Purex itself argued Purex was the corporate successor to Purex
Corp.’s insurance rights in Associated Aviation Underwriters, Inc. v. Purex Indus., Inc., 121 Cal
Rptr. 2d 259, 261 (Cal. Ct. App.). Elston Resp. to Purex at 7.
Elston further argues that in these proceedings, Purex has asserted the attorney-client
privilege and other “evidentiary immunities” over documents created by Purex Corp. Elston
Resp. to Purex at 7. Additionally, Elston states that Purex has had environmental contacts in
East St. Louis, Illinois, and paid the Illinois Environmental Protection Agency $50,000 to resolve
its liability related to the site in East St. Louis. Elston Resp. to Purex at 8,citing Exh. 12 at 1-3.
Elston’s remaining arguments allege Purex is collaterally and judicially estopped from
denying it is the lawful successor to Purex Corp. Elston Resp. to Purex at 20-21.
Purex Reply
Regarding the motion to strike Smith’s affidavit, Purex replies that the Board should not
strike the affidavit because it is reliable under Illinois law and the affidavit can be corroborated
independently. Purex Reply at 17. Purex also provides additional affidavit testimony (Smith
affidavit #2) attached to the reply, that Purex argues “further verifies the veracity” of Smith’s
original affidavit. Purex Reply at 19.
Regarding the acquisition of Washburn, Purex offers its version of events in its reply.
Purex argues that Purex Corporation Ltd. (Purex California) acquired Washburn’s stock in 1961.
Purex Reply at 3. Washburn’s operations included the site on Elston Avenue. Purex Reply at 3.
In 1974, Purex California sold the Washburn business on Elston Avenue to Syncon Resins,
which operated the site for three years. Purex Reply at 3. In 1977 or 1978, Purex California
repossessed the site and sold it to Federal Die Casting in 1978. Also in 1978 Purex Industries
Inc. (Purex NYSE) was created to serve as the parent corporation of Purex California. Purex
Reply at 3. Purex California was a wholly-owned subsidiary of Purex NYSE from 1978-1982.
Purex Reply at 3.
Purex was created under PII Holdings, Inc. (PII) in 1982 to effect a leverage buyout of
Purex NYSE. Purex Reply at 4. PII (the parent) underwent a name change to Purex Industries,
Inc. (the Purex in this case) in 1982. During all of the corporate transactions, Purex argues that
9
Purex’s sole role was as a parent corporation, and that Purex was not involved in the acquisition
or distribution of assets and liabilities. Purex Reply at 5.
Purex replies that none of Elston’s arguments contradict Purex’s claim that is has no
contacts with Illinois that subject Purex to personal jurisdiction in this proceeding. Purex Reply
at 6. Purex argues that Elston has failed to show that Purex had sufficient contacts with Illinois.
Purex Reply at 7. Purex also replies that the personal jurisdiction contact of another corporation
may not be imputed to respondent. Purex Reply at 8. Even if the contacts could be imputed,
Elston has failed to show that Purex succeeded to contacts of any subsidiary (that may have been
liable for the operations at the site). Purex Reply at 10. Purex argues that Elston has failed to
show that Purex succeeded to the assets and liabilities of any predecessor corporation relating to
Washburn or the site. Purex Reply at 10.
Purex declares that Elston cannot rely on the California Water Resources Board’s
decision to argue that Purex is collaterally estopped from alleging it did not succeed the
liabilities relating to site. Purex Reply at 12. Purex also claims that judicial estoppel does not
apply to Purex. Purex Reply at 13. Purex also argues that Elston has not proven that Purex is the
successor. Purex Reply at 16.
Elston Reply
Elston replies that Smith’s affidavit should be stricken because Purex employed him in
1984, which is 23 years after Purex acquired Washburn, and six years after Purex sold the assets
of the Washburn division at the Elston site. Elston Reply at 15. Elston argues that Smith cannot
have knowledge of the facts that occurred before Purex employed him.
Id.
Elston argues that
Smith has not met the factual allegations described in the complaint, and argues the affidavit is
conclusory.
Id
. at 16. Purex argues that both the original Smith affidavit, and Smith affidavit #2
(attached to Purex’s reply) should be stricken. Elston Reply at 17
Analysis
Regarding Elston’s motion to strike the Smith affidavit, the Board's procedural rules do
not provide detail on the parameters of an affidavit. MDI Limited Partnership #42 v. Regional
Board of Trustees for Boone and Winnebago Counties and Board of Education of Belvidere
District 100, PCB 00-181 (May 2, 2002). The Board may then look to the Supreme Court
Rules for guidance and the Board does so here.
Supreme Court Rule 191 provides in part that an affidavit:
shall be made on personnel knowledge of the affiants; shall set forth with
particularity the facts upon which the claim, counterclaim, or defense is
based; shall have attached thereto sworn or certified copies of all papers
upon which the affiant relies; shall not consist of conclusions but of facts
admissible in evidence; and shall affirmatively show that the affiant, if sworn
as a witness, can testify competently thereto. 145 Ill. 2d R. 191.; S. Ct. Rule
191.
10
The Board has examined both affidavits and Supreme Court Rule 191. Based on the Board's
examination, the Board strikes both Smith affidavits. The affidavit attached to Purex’s motion
to dismiss is conclusory. Furthermore, it is not clear from either affidavit that Smith could
testify to the facts presented in the affidavits. Therefore, the Board will strike both Smith
affidavits. The Board notes that Purex is not precluded from presenting the information in the
affidavits by another means.
Regarding the issue of personal jurisdiction, both Elston and Purex supply documentation
to support their arguments that Purex is either a successor in interest to the company that
contaminated the site, or parent company to the company that contaminated the site. The Board
must dismiss a case as frivolous if the Board determines that the complaint requests relief that
the Board does not have the authority to grant, or fails to state a cause of action upon which the
Board can grant relief.
The Board finds the complaint requests relief that the Board has authority to grant and
states a cause of action upon which the Board can grant relief. Pursuant to Section 31(d) of the
Act, a person can file a complaint against any person allegedly violating the Act. A “person”
includes a corporation, “or any other legal entity, or their legal representative, agent or assigns”.
Purex is a “person” under the Act who has received service of a complaint alleging violations of
the Act. Specifically, Purex is alleged to, among other thing, have “caused or allowed” pollution
in Illinois in violation of the Act. Based on the current record, the Board cannot find that no set
of facts could be proven that would entitle Elston to relief from Purex. The Board therefore
denies Purex’s motion to be dismissed from this case.
Elston Motion to Strike
Elston moves the Board to strike the nine exhibits attached to Federal respondents’
motion to dismiss. Elston Resp. to Federal at 3. Elston argues that in ruling on a motion to
dismiss, the Board must rely only on only the facts alleged in the complaint, and may not
consider facts extrinsic to the complaint, including supporting affidavits. Elston Resp. to Federal
at 3, citing Johnson v. ADM-Demeter, PCB 98-31 (July 8, 1998) and Davis v. Weiskopf, 108 Ill.
App. 3d 505, 439 N.E.2d 60, 63 (2d Dist. 1982). Elston further argues that even if the Board
could consider extrinsic facts, the Federal respondents have failed to provide competent
testimony authenticating the documents they have submitted and verifying the facts they have
alleged. Elston Resp. to Federal at 3-4, citing Giertych v. 4T’s Mgmt, LLC, PCB 00-133 (Apr.
20, 2000) and Krautsack v. Patel, PCB 95-143 (June 15, 1995).
Besides asking the Board to strike the nine exhibits, Elston asks the Board to strike the
portions of the motion that rely entirely on the facts presented in the exhibits, including pages 2-
4 of the motion; the third argument at Section III.A at pages 6-8 of the motion; and Section III.C
at pages 10-11 of the motion. Elston Resp. to Federal at 4.
The Federal respondents reply that the Board has denied similar motions at this stage of
the proceedings. Federal Reply at 1, citing Kelly-Mack Partners v. Robertson-Ceco Corp., PCB
99-162 (July 22, 1999).
11
The Board denies Elston’s motion to strike the Federal respondents’ attachments, as well
as the motion to strike the portions of the motion to dismiss that rely on the facts in the exhibits.
At this stage of the proceedings, all that the Board has considered is whether the complaint is
frivolous or duplicative, and whether the complaint contains sufficiently well-plead allegations
that, if accepted as true, could result in a set of facts proven that may entitle Elston to relief. In
the course of this inquiry, Elston has suffered no prejudice from the presence of attachments in
the Federal respondents’ filings. This ruling does not bar any future motions by either party, nor
does it dictate the future outcome of any evidentiary rulings during the course of hearing.
FEDERAL RESPONDENTS MOTION TO DISMISS
The Federal respondents move the Board to dismiss the complaint as frivolous for three
reasons. They assert that the complaint seeks relief that the Board does not have authority to
award, the complaint fails to state its claims with specificity, and the complaint fails to state a
cause of action. Federal Mot. at 5, 8, 10 and 11.
Attorney Fees and Action for Cleanup Costs
The Federal respondents argue that the Board does not have the authority to grant
attorney fees and other expenses incurred during the litigation of citizen’s suits. Fed. Mot. at 5,
citing ESG Watts Inc. v. PCB and IEPA, 676 N.E.2d 299, 307-09 (3rd Dist. 1997). The Federal
respondents also argue that this case is a “direct action for costs” and argues Elston does not ask
the Board to “enforce” any requirements of the Act. Federal Mot. at 5-6, citing People v. State
Oil Co., PCB 97-103 (May 18, 2000). The Federal respondents argue that in State Oil the Board
distinguished between a direct action for costs and an enforcement action that requests costs as a
discretionary remedy for a violation of the Act. Fed. Mot. at 5.
The Federal respondents conclude that the Board is not authorized to grant cost recovery
for disappointed real estate purchase. Fed. Mot. at 6, citing NBD Bank, 686 N.E.2d at 709. In
the alternative, the Federal respondents argue that this is not a case where the Board should
exercise its discretion and award costs because the contract for the sale of the site included a
clause that Elston was obliged to investigate the property before closing. Fed. Mot. at 7. The
Federal respondents claim Elston waived this right and agreed to limit the seller’s liability to
$50,000. Fed. Mot. at 6-7.
Elston responds that the Federal respondents’ motion must be denied because Elston’s
case is a statutorily-authorized enforcement action. Elston Resp. to Federal at 5. Elston argues
that its complaint clearly states the eight sections of the Act the Federal respondents have
violated.
Id.
at 6. Elston argues that it seeks reimbursement for cleanup costs as a discretionary
remedy for the Federal respondents’ violations of the Act.
Id.
at 6. Elston claims that in State
Oil the Board explained that NBD Bank set forth the test to determine whether a statue creates a
private right of action in the nature of a tort claim.
Id.
at 7. In State Oil, the Board explained
that tort claims brought in a state court may include recovery costs incurred in connection with a
cleanup, but those claims must be distinguished from enforcement actions brought before the
Board.
Id.
at 7. Elston argues it is not bringing a direct action in tort for damages, but seeks
reimbursement of cleanup costs through an enforcement action under Section 31(d) of the Act,
so that the motion to dismiss should be denied.
Id.
at 8.
12
Regarding the issue of attorney fees, Elston asserts that the Board has the discretion to
award fees that are “closely tied to the actual cleanup” as opposed to “litigation related” fees,
even though such fees may be paid to attorneys.
Id.
at 8. Elston argues this issue is one of first
impression before the Board and cites to federal Comprehensive Environmental Response
Compensation and Liability Act (CERCLA) cases for the proposition that “some lawyers’ work
that is closely tied to the actual cleanup” may be awarded costs at the discretion of the trier of
fact.
Id.
at 8, citing Key Troni Corp. v. United States, 711 U.S. 809, 819-20 (1994); Lai v.
Nudelman, No. 94 C 4585 (ND Ill. June 19, 1995). Elston summarizes its request as asking the
Board “to consider whether its broad authority to “enter such final order . . . as it shall deem
appropriate under the circumstances,” 415 ILCS 5/33(a) (2002), gives the Board “discretion to
award attorney’s fees that are not related to litigation, but rather are closely tied to the actual
cleanup.”
Id.
at 9. Elston suggests the Board reserve ruling on this issue until the Board has an
opportunity to consider the “details and evidence” of the “cleanup-related fees Elston has had to
bear.”
Id.
at 10.
Regarding the Federal respondents’ argument that Elston’s complaint should be
dismissed because the contract for the sale of the site included a clause that Elston was obliged to
investigate the property before closing and Elston waived this right and agreed to limit the
seller’s liability to $50,000, Elston responds that only Lakeside was a party to the contract.
Id.
at
11. Elston further responds that the Board has held that contract law principles are not a defense
in enforcement actions.
Id.
at 11, citing Dayton Hudson Corp. v. Cardinal Indus., Inc., PCB 97-
134 (Aug. 21. 1997).
In their reply, the Federal respondents reiterate all of their previously addressed claims.
Federal Reply at 2-10.
Analysis
The Board has previously held that Section 42(f) of the Act authorizes the award of
attorney fees only in cases in which the Attorney General or a State's Attorney prevails on behalf
of the People of the State of Illinois. See 415 ILCS 5/42(f) (2002);
see also
Charter Hall
Homeowner's Association v. Overland Transportation System, Inc., PCB 98-81 (Jan. 22, 1998),
and Dayton Hudson Corp. v. Cardinal Industries Inc., PCB 97-134 (Aug. 21, 1997). The Board
cannot award attorney fees and other ordinary expenses of litigation in citizen's enforcement
suits. ESG Watts v. PCB and IEPA, 286 Ill. App. 3d 325, 337, 676 N.E.2d 299, 307 (3rd Dist.
1997); Village of Park Forest v. Sears, Roebuck, & Co., PCB 01-77 (Feb. 15 2001). An
administrative Agency such as the
Board
is a
“
creature of statute”
and, therefore, the statute that
created the Board
provides it with its authority. Granite City Div. of National Steel Co. v.
Illinois Pollution Control Board, 155 Ill. 2d 149, 171, 613 N.E. 2d 719, 729 (1993).
It is a settled issue that the Board does not have authority to award attorney fees in
citizen’s cases. Because an action before the Board is frivolous if it requests relief that the Board
cannot grant, Lake County Forest Preserve Dist. v. Ostro, PCB 92-80 (July 30, 1992),
the Board
dismisses as frivolous those portions of the complaint in which Elston requests attorney fees.
13
The Federal respondents argue that Elston’s complaint should be dismissed as frivolous
because the complaint is a direct action for costs, and Elston does not ask the Board to enforce
any requirements of the Act. The Federal respondents argue that the Board should dismiss the
complaint because the Board is not authorized to grant cost recovery for a disappointed real
estate purchase. In the alternative, the Federal respondents argue the contract for sale of the
property included a provision that Elston must investigate the property before closing (which
Elston waived), and limited the seller’s liability to $50,000. For these reasons, the Federal
respondents assert the claim is frivolous.
The Board finds that Elston’s complaint plainly states the Sections of the Act it seeks to
have enforced. Specifically, Elston alleges all of the respondents violated Sections 21(a), (b),
(d), (e), (f), 12(a), (d), and 55(a) of the Environmental Protection Act (Act). 415 ILCS 5
et seq
.
(2002). The Board denies the Federal respondents’ motion to dismiss on the grounds that
Elston’s complaint is frivolous because it is not an enforcement action.
The Board further finds that the complaint is not frivolous because its authority to grant
cost recovery is a settled issue. The Board has already stated that it has the authority to award
cleanup costs to citizen complainants as a remedy for a violation of the Act.
See, e.g.,
Lake
County Forest Preserve District v. Ostro, PCB 92-80 (Mar. 31, 1994), PCB 92-80; Streit v.
Oberweis Dairy, Inc., PCB 95-122 (Sept. 7, 1995); Herrin Security Bank v. Shell Oil Co., PCB
94-178 (Sept. 1, 1994); Richey v. Texaco Refining and Marketing, Inc., PCB 97-148 (Aug. 7,
1997); MDI v. Regional Board of Trustees, PCB 00-181
(May 2, 2002)
;
. As the Board stated in
Ostro:
we 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, PCB
92-80 (Mar. 31, 1994).
Whether or not Elston is a disappointed real estate purchaser, the Board finds that Elston is
alleging violations of the Act over which the Board has jurisdiction. The claim is not frivolous.
Moreover, the Board has previously found that the Act “supplanted [
caveat emptor
] with a
liability scheme that holds responsible parties liable for their actions.” Dayton Hudson
Corporation v. Cardinal Industries, Inc., PCB 97-134 (Aug. 21, 1997). The issue before the
Board is whether Federal respondents’ violated the Act. The contract between the parties does
not divest the Board of jurisdiction in this matter. The Board finds that the complaint is not
frivolous.
Lack of Specificity
The Federal respondents argue that Elston’s complaint should be dismissed as frivolous
because the complaint fails to comply with 35 Ill. Adm. Code 103.204(c)(2) and Section 31(c) –
14
(d) of the Act. Namely, the Federal respondents assert that the complaint is devoid of
information regarding the dates, events, nature, extent, duration and strength of the alleged
discharges alleged to violate the Act. Federal Mot. at 8. The Federal respondents further argue
that each of the eight counts fails to provide any specific information with respect to any
particular Federal respondent. Federal Mot. at 8. Additionally, the complaint does not specify
which Federal respondent was allegedly responsible for discharging which contaminant. Federal
Mot. at 9. Moreover, Elston fails to specify when any of the alleged discharges occurred.
Federal Mot. at 9.
The Federal respondents claim that because of these alleged deficiencies it is impossible
for them to answer the complaint or prepare a defense. Federal Mot. at 9.
Elston responds that the causes of action are factually sufficient to state a claim. Elston
Resp. to Federal at 13. Elston cites to portions of its complaint that plead with “great specificity
the dates, location, events, nature, extent, duration, and strength of discharges” as they relate to
the Federal respondents.
Id.
at 14, citing paragraphs 1-40 of the complaint. Elston also argues
that the claims raised in its complaint are comparable to other enforcement actions accepted by
the Board where parties sought reimbursement for cleanup costs associated with leaking USTs.
Id.
at 13, citing, among other cases, Village of Park Forest v. Sears Roebuck & Co., PCB 01-77
(June 6, 2002).
Elston argues that it sufficiently identifies the precise contaminants that each of the
Federal respondents discharged and the dates the contamination occurred.
Id.
at 19-20. Elston
states that its complaint alleges that FDCC or FCC stored or disposed of “oils, solvents, varnish-
related products and by-products, PCB containing materials, and petroleum related products and
by-products,” and “waste tires, bricks and other discarded material in each of the 17 USTs at the
site.” Elston Resp. to Federal at 20. Elston argues that the leaking occurred or continued to
occur between 1978 and January 2000.
Id.
at 20. During the time of the leaking, “Cross,
Beverly and Lakeside owned, operated, possessed, controlled or had authority over the site and
the die casting operations conducted there, including FDCC or FCC’s storage, disposal or
abandonment” of these contaminants.
Id.
at 20.
Analysis
For purposes of ruling on a motion to dismiss, all well plead facts contained in the
pleading must be taken as true and all inferences from them must be drawn in favor of the
nonmovant. People v. Stein Steel Mills Services, Inc., PCB 02-1 (Nov. 15, 2001). A complaint
should not be dismissed for failure to state a claim unless it clearly appears that no set of facts
could be proven under the pleadings that would entitle complainant to relief. Shelton v. Crown,
PCB 96-53 (May 2, 1996).
The Board’s review of the complaint shows that Elston alleges that all of the Federal
respondents “owned, operated, possessed, controlled or had authority over the site and relevant
operations conducted there. . . at various times during the period 1970 through January 2000.”
Comp. at 9. Elston further alleges that oils, solvents, varnish-related products and by-products,
PCB-containing materials, and petroleum related products were released from USTs at the site
15
while respondents were the owners and operators of the site. Comp. at 9. The complaint further
alleges claims of waste or contaminant dumping, abandoning, depositing, disposing, and
discharging against all of the respondents.
The Board finds that the complaint alleges facts in sufficient detail. Although the Federal
respondents object to Elston arguing the same allegations for each respondent, the Board finds
that this is not cause to dismiss the complaint as frivolous.
Failure to State a Cause of Action
The Federal respondents also argue that the complaint should be dismissed if not as to all
of the Federal respondents, then as to some of the Federal respondents. Federal Mot. at 10.
Specifically, the complaint should be dismissed as frivolous against the Beverly and Lakeside
Trusts because the trusts have all been dissolved.
Id.
at 10, citing Fed. Exh. G.
4
The complaint
against Cross should be dismissed because he never owned the site, and his alleged status as
shareholder, officer or director of FDCC or FCC is insufficient to establish liability under the
Act.
Id.
at 11, citing Fed. Exh. B. The complaint
against FCC should be dismissed because it
never conducted any operations at the site.
Id
. at 11. FCC was only a holding company and
never did anything that would subject it to liability under the Act.
Id
. at 11, citing Exh. I.
The Federal respondents further argue that five of the eight counts should be dismissed as
frivolous against all Federal respondents except FDCC (collectively, non-FDCC Federal
respondents) because they fail to state a cause of action.
Id
. at 11. The non-FDCC Federal
respondents allege that no facts could support the liability as a matter of law as to counts II, III,
IV, V, and VII because all require some affirmative act (abandon, dump, deposit, etc.) that the
parties without operations at the site could not possibly have undertaken.
Id
. at 12.
Similarly, the Federal respondents argue Elston failed to state a claim under Section 21(d)
and (f) of the Act because Elston failed to allege that the non-FDCC Federal respondents
“conducted” any sort of waste-treatment, waste disposal, etc. because the non-FDCC Federal
respondents did not conduct any operations at all at the site.
Id
. at 12-13. Additionally, the
Federal respondents allege Elston failed to state a claim under Section 21(e) of the Act because
the non-FDCC Federal respondents did not have any waste to begin with and could not have
disposed, treated, stored, or abandoned it.
Id
. at 13.
Finally, Federal respondents claim that Elston failed to sufficiently allege that the non-
FDCC Federal respondents violated Section 12(d) of the Act (prohibiting depositing
contaminants on the land). Elston failed to allege that the non-FDCC Federal respondents
deposited any contaminants because the non-FDCC had no contaminants to deposit.
Id.
. at 13.
Elston responds that its allegations against Beverly, Lakeside and Cross are sufficient.
Elston Resp. to Federal at 21. Elston argues that Beverly, Lakeside and Cross owned the site and
leased it to FDCC to conduct die casting operations.
Id.
at 21. Elston argues that Beverly,
4
Exhibits attached to the Federal Respondents’ motion will be cited as “Fed Exh. __.”
16
Lakeside and Cross had the authority to control and did control operations at the site relating to
the treatment, storage and disposal of waste.
Id.
at 21.
Regarding Beverly and Lakeside, Elston argues that as trustees for certain land trusts that
owned the site, they are liable as owners, controllers and lessors.
Id.
at 23. Elston argues the
Board has held that the liability of trustees will depend on the circumstances of each case.
Id.
at
23, citing IEPA v. City of Waukegan, PCB 71-298 (Dec. 21, 1971). Elston argues its claims
against Beverly and Lakeside are sufficient and Elston is entitled to take discovery of the entities
that succeeded to the liabilities of Beverly and Lakeside.
Id.
at 23.
Regarding Cross, Elston argues that the beneficiaries of land trusts typically possess the
attributes of ownership sufficient to establish liability for violations of the Act.
Id.
at 24, citing
Montgomery County v. Crispens, AC 95-43 (Feb. 1, 1996). Because Elston asserts that Cross
was the beneficiary of the trust that owned and operated the site, and because in his individual
capacity that he operated by the site, Elston argues the motion to dismiss must be denied as to
Cross.
Regarding FCC, Elston responds that the motion to dismiss must be denied because the
Federal respondents admit that FCC owned the site from at least 1978 through 1983 and as the
owners, they are liable for violations of the Act.
Id.
at 27.
Lastly, in response to the non-FDCC Federal respondents’ allegation that no facts could
support the liability as a matter of law as to counts II, III, IV, V and VII because all require some
affirmative act (abandon, dump, deposit, etc.) that the parties without operations at the site could
not possibly have undertaken, Elston states that it has sufficiently pled allegations for those
counts.
Id.
at 27. Elston cites to the paragraphs 1-40 of its complaint in support of its response.
Id.
at 27.
Analysis
Elston does not refute the Federal respondents’ claim that the Beverly and Lakeside trusts
have been dissolved. Rather, Elston argues it is entitled to take discovery of the entities that
succeeded to the liabilities of Beverly and Lakeside. While the Board agrees that Elston may
pursue the matter against the entities that succeeded the liabilities of the trusts, the Board
dismisses the complaint against the Beverly and Lakeside trusts because the evidence shows the
trusts have been closed. Elston cites no authority for the proposition that a closed trust is a
proper entity against which a complaint for violations of the Act may be filed. This ruling does
not preclude Elston from seeking leave to amend the complaint to name the entities that
succeeded Beverly and Lakeside’s liabilities, if Elston later determines who the entities are.
See
35 Ill. Adm. Code 103.206.
The Board denies the motion to dismiss as to Cross. Section 21 prohibits a “person”
from illegally disposing of waste. Section 3.315 of the Act defines “person” as, among other
things a “trust. . . or any other legal entity, or their legal representative, agent or assigns.” 415
ILCS 5/3.315 (2002). Because a set of facts could be proven under the pleadings that would
entitle Elston to relief, the Board denies the motion to dismiss as to Cross.
17
The Board finds that the Federal respondents’ statements that FCC owned the property
from 1978-1932 and was the lessor of the property is sufficient to deny the motion to dismiss as
to FCC. Because a set of facts could be proven under the pleadings that would entitle Elston to
relief, the Board denies the motion to dismiss as to FCC.
Lastly, the Federal respondents argue that the Board should dismiss counts II, III, IV, V
and VII as to the non-FDCC Federal respondents because all of the counts require an affirmative
act that the non-FDCC respondents could not possibly have undertaken. The Board denies the
motion to dismiss counts II, III, IV, V, and VII as to the non-FDCC Federal respondents because
a set of facts could be proven under the pleadings that would entitle Elston to relief.
DUPLICATIVE DETERMINATION
An action before the Board is duplicative if the matter is identical or substantially similar
to one brought before the Board or in another forum. Brandle v. Ropp, PCB 85-68 (June 13,
1985); 35 Ill. Adm. Code 101.202. The Board has not identified any other cases, identical or
substantially similar to this, pending in this or other forums. Therefore, based on the record
before us, this matter is not duplicative.
CONCLUSION
The Board strikes the two affidavits of Jeffrey Smith. The Board declines to dismiss the
Purex complaint on personal jurisdiction grounds. The Board denies Elston’s motion to strike
the Federal respondents’ attachments. The Board denies the Federal respondents’ motion to
dismiss the complaint as frivolous for failing to ask the Board to enforce the Act’s requirements.
The Board denies the motion to dismiss the complaint because the Board does have authority to
grant cost recovery. The Board finds that the complaint alleges facts in sufficient detail. The
Board denies the motion to dismiss as to Cross and FCC.
The Board strikes and dismisses as frivolous the portions of Elston’s complaint that
requests attorney fees. The Board strikes and dismisses the complaint as to the Beverly and
Lakeside Trusts because the evidence shows those trust have been closed.
The Board finds this matter is not duplicative.
The Board accepts the complaint for hearing.
See
415 ILCS 5/31(d) (2002); 35 Ill. Adm.
Code 103.212(a). A respondent’s failure to file an answer to a complaint within 60 days after
receiving the complaint may have severe consequences. Generally, if the respondents fail within
that timeframe to file an answer specifically denying, or asserting insufficient knowledge to form
a belief of, a material allegation in the complaint, the Board will consider the respondents to have
admitted the allegations. 35 Ill. Adm. Code 103.204(d). Motions to dismiss stay the 60-day
answer period. 35 Ill. Adm. Code 103.212(b). All respondents have 60 days from receipt of this
order to file an answer. 35 Ill. Adm. Code 103.204(e).
The Board directs the hearing officer to proceed expeditiously to hearing.
Among the
hearing officer’s responsibilities is the “duty . . . to ensure development of a clear, complete, and
18
concise record for timely transmission to the Board.” 35 Ill. Adm. Code 101.610. A complete
record in an enforcement case thoroughly addresses, among other things, the appropriate remedy,
if any, for the alleged violations, including any civil penalty.
If a complainant proves an alleged violation, the Board considers the factors set forth in
Sections 33(c) and 42(h) of the Act to fashion an appropriate remedy for the violation.
See
415
ILCS 5/33(c), 42(h) (2002). Specifically, the Board considers the Section 33(c) factors in
determining, first, what to order the respondent to do to correct an on-going violation, if any,
and, second, whether to order the respondent to pay a civil penalty. The factors provided in
Section 33(c) bear on the reasonableness of the circumstances surrounding the violation, such as
the character and degree of any resulting interference with protecting public health, the technical
practicability and economic reasonableness of compliance, and whether the respondent has
subsequently eliminated the violation.
If, after considering the Section 33(c) factors, the Board decides to impose a civil penalty
on the respondent, only then does the Board consider the Act’s Section 42(h) factors in
determining the appropriate amount of the civil penalty. Section 42(h) sets forth factors that may
mitigate or aggravate the civil penalty amount, such as the duration and gravity of the violation,
whether the respondent showed due diligence in attempting to comply, any economic benefit that
the respondent accrued from delaying compliance, and the need to deter further violations by the
respondent and others similarly situated.
Accordingly, the Board further directs the hearing officer to advise the parties that in
summary judgment motions and responses, at hearing, and in briefs, each party should consider:
(1) proposing a remedy for a violation, if any, including whether to impose a civil penalty, and
supporting its position with facts and arguments that address any or all of the Section 33(c)
factors; and (2) proposing a civil penalty, if any, including a specific dollar amount, and
supporting its position with facts and arguments that address any or all of the Section 42(h)
factors.
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 19, 2003, by a vote of 6-0.
Dorothy M. Gunn, Clerk
Illinois Pollution Control Board
