RECEIVED
CLERK’S
OFFJCE
NOV
62003
BEFORE THE ILLINOIS POLLUTION CONTROL BOA~E
OF ILLINOIS
Pollution
Control Board
McDONALD’S CORPORATION,
)
)
Petitioner,
)
)
PCB 2004-14
V.
)
(UST Appeal)
ILLiNOIS ENVIRONMENTAL PROTECTION
AGENCY,
)
)
Respondent.
)
NOTICE OF FILING AND CERTIFICATE OF SERVICE
The
undersigned
hereby
states
on
oath
that
on
this
6th
day
of November,
2003,
copies
of
Petitioner
McDonald’s
Corporation’s
Response
To
Respondent
IEPA’s
Motion
For
Summary
Judgment were
filed with
the
Illinois Pollution
Control Board and
served
by
First
Class
Mail,
postage pre-paid, upon the parties named on the attached Service List.
McDonald’s Corporation
BY:___
its attorney
Barbara A. Magel
Mark D. Erzen
Karaganis, White & Magel Ltd.
414 North Orleans Street, Suite 810
Chicago, Illinois
60610
312/836-1177
Fax 312/836-9083
MDEMCO25.DOCMQO24~nO~
SERVICE LIST
John J. Kim, Esq.
Assistant Counsel
Illinois
Environmental Protection Agency
Division of Legal Counsel
1021 North Grand Avenue East
Springfield, Illinois
62794-9276
Bradley P. Halloran
Hearing Officer
Illinois Pollution Control Board
James R. Thompson Center, Suite 11-500
100 West Randolph Street
Chicago, Illinois
60601
RE
CE
lIVED
CLERK’S
OFFICE
BEFORE THE ILLINOIS POLLUTION CONTROL BOAR~OV
62003
STATE OF ILLINOIS
McDONALD’S CORPORATION,
)
Pollution Control Board
)
Petitioner,
)
)
PCB 2004-14
V.
)
(UST Appeal)
ILLINOIS ENVIRONMENTAL PROTECTION
AGENCY,
)
)
Respondent.
)
PETITIONER
McDONALD’S CORPORATION’S RESPONSE TO
RESPONDENT IEPA’S MOTION FOR SUMMARY JUDGMENT
Petitioner McDonald’s
Corporation (“McDonald’s”) respectfully submits
this
Response
to the Motion For Summary Judgment filed by Respondent the Illinois Environmental Protection
Agency (the “IEPA”).
As discussed in greater detail
below, the IEPA’s Motion for Summary Judgment must be
denied (and McDonald’s Motion for Summary Judgment must be granted) for two reasons:
1.
The IEPA As A Matter Of Law Cannot Raise Its
“Corrective Action” Argument
In This Appeal.
The
IEPA’s June, 2003 denial statement gave one (and only one) reason for the
IEPA’s
decision
to
deny
reimbursement
—
namely,
that
the
cost
at
issue
had
not
been
demonstrated to
be
“reasonable.”
(Joint
Stipulation,
Exhibit
6.)
In its
Motion
for Summary
Judgment, however, the IEPA has totally abandoned “reasonableness” and has instead offered a
new and completely different reason for denial
that was never mentioned in the denial statement
—
namely, that
“the costs for compaction of backfill material
...
are
not
corrective action
...
.“
(See,
e.g.,
the IEPA’s Motion for Summary Judgment, p.
3.)
The
IEPA’s
attempt
to
introduce
a
“corrective
action”
argument
into
this
appeal
is
improper.
The Board has made it clear that as soon as a LUST Fund denial decision is appealed,
the IEPA cannot come forward with any new bases or arguments in an attempt to justify its prior
decision.
The IEPA is instead legally “bound on review by those
cited bases for denial
given in
its
denial statement.”
Pulitzer Community Newspapers, Inc.
v.
IEPA,
PCB 90-142 (Opinion and
Order
dated
December
20,
1990).
As
a
consequence,
the
IEPA
is
barred
from
raising
its
corrective action argument in this appeal.
That argument is not properly before the Board.
Since
the IEPA’s
Motion
For Summary Judgment
is
totally reliant upon the corrective
action
argument, and
since the corrective action
argument is
not
properly before the Board, the
IEPA’s Motion For Summary Judgment must be denied.
2.
The
Compaction
Was
A “Corrective
Action.”
Even assuming
arguendo
that the
IEPA can properly raise the “corrective action” argument during this
appeal, the IEPA’s position
on corrective action is wrong.
The cost ofcompaction in this instance was a cost arising out of a
corrective action which should be reimbursed from the LUST
Fund.
There is no
question that, under the Board’s decisions, placing backfill into an excavation
created
by
the
removal
of contaminated
soil,
for the
purpose of bringing
the
surface
of the
excavation back up to grade, is
a corrective action.
There is also no question that the cost ofthat
backfilling is reimbursable from the LUST Fund.
See,
e.g.,
Platolene 500,
Inc.
v.
IEPA,
PCB 92-
9
(Opinion
and
Order
dated
May 7,
1992),
p.
6
(“Backfilling the
site
would
be
considered
corrective action
even though it occurred after the contamination had been removed because it is
an action necessary to protect human health and the environment.”)
The
IEPA
has
stipulated
that
the
compaction at
issue
here
was
properly part of the
backfilling process at the
Site:
“...
for purposes ofthis appeal,
IEPA
...
does not contest the fact
that the compaction of the backfill soil
was
properlypart of the soil placement process.”
(Joint
Stipulation, ¶37; emphasis added.)
2
Since placing
the
backfill
into the
excavations at the
Site was a
corrective action,
and
since the
compaction of that
backfill was (by stipulation) properly part of placing the backfill,
only
one
conclusion
is
possible:
the
cost
of the
compaction
was
a
“cost
arising
out
of a
corrective action” which is entitled to reimbursement from the LUST Fund.
Consequently,
even if the “corrective action” argument raised in the IEPA’s
Motion For
Summary Judgment could properly be
considered by
the
Board
(which it cannot),
the IEPA’s
Motion For Sunnnary Judgment must still be denied.
McDonald’s therefore
respectfully requests that the
Board
deny
the IEPA’s
Motion For
Summary Judgment, grant McDonald’s Motion for Summary Judgment, find that the IEPA erred
in denying reimbursement for the
$31,515
cost
at issue in this
case, and
enter an order allowing
that cost to be reimbursed from the LUST Fund.
ARGUMENT
1.
THE
IEPA IS BARRED FROM ARGUING THAT
THE
COMPACTION IN THIS
CASE WAS NOT A “CORRECTIVE ACTION.”
The IEPA’s denial statement in this case consists of a certified letter dated June 23, 2003.
(Joint Stipulation, Exhibit 6.)
That denial statement memorialized the IEPA’s decision to
reject
McDonald’s request for reimbursement
from
the LUST
Fund for
$31,515
in
costs
relating
to
compaction.
According to the denial
statement, the
sole
basis for the IEPA’s decision was that
“the owner/operator
i.e.,
McDonald’s, had
failed to
demonstrate that
the costs of compaction
were reasonable (Section 22.1 8b(d)(4)(C) ofthe Environmental Protection Act).”
McDonald’s
timely
appealed
the
IEPA’s
decision
to
the
Board.
In
that
appeal,
McDonald’s contended, in response to
the IEPA’s denial statement, that “Petitioner McDonald’s
has demonstrated that the costs were reasonable.”
McDonald’s
Petition For Review Of LUST
Fund Payment Denial, ¶7.
3
The IEPA has now filed a Motion For Summary Judgment in the appeal.
In that Motion,
the JEPA
has completely abandoned its
earlier position that McDonald’s “failed to
demonstrate
that
the costs of compaction
were reasonable
...
~
Instead, the IEPA’ s Motion For Summary
Judgment advances a new argument in which the IEPA claims that “the costs for compaction of
backfill material
...
are
not
eligible for reimbursement from the LUST
Fund because they
are
not
corrective action
...
.“
(See,
e.g.,
the IEPA’s Motion for Summary Judgment, p. 3.)
The Board has made it absolutely clear that
such an
attempt by the IEPA to introduce
a
new argument or basis
supporting a
denial
decision,
while an
appeal of that
denial
decision is
pending before the Board,
is
forbidden.
Once the IEPA
sets
forth
the basis for its denial
of a
LUST
Fund reimbursement request in
a denial
statement, the
Agency
effectively
waives
(and
may not
on
appeal
raise)
any
other
basis
for
that
denial.
As
the
Board
stated
in
Pulitzer
Community
Newspapers,
Inc.
v.
IEPA,
PCB
90-142
(Opinion
and
Order
dated December
20,
1990), this rule is
grounded in fundamental fairness, because it is the only way to ensure that the
party contemplating an appeal can know what issues can be raised in the appeal:
Principles
offundamentalfairness require that an applicant be given notice of
the
statutory
and
regulatory
bases
for
denial
of
an
application
for
reimbursement and that the Agency
be bound on review by those cited basesfor
denial given in
its denial statement.
Fundamentalfairness would be violated if
the Agency
were free
to
cite
additional
statutory
and regulatory
reasons for
denialfor thefirst time
at the Board hearing.
The Board concludes that the
Agency
cannot
rely
upon
those
regulations
not previously cited
in
the
denial
letter
as
support for
its
denial of Pulitzer’s
application for
reimbursement.
(Emphasis added.)
1
Surprisingly,
the
IEPA
now
seems
to
believe
that
the
compaction was
“reasonable.”
In
its
Motion,
the
Agency
notes
that
the
goals
underlying
the
compaction
were
“perfectly
logical
and
reasonable
...,“
and also states that it is not arguing “that the
action of compaction was unreasonable in
conjunction with the use ofthe backfill material.”
(IEPA Motion For Summary Judgment, p.
6.)
4
“Reasonableness”
and
“corrective
action” are
separate
and
distinct
bases
for
denial of
LUST Fund claims.
See, e.g,
Southern Food Park, Inc.
v. IEPA,
PCB 92-88 (Opinion and Order
dated 12/17/92) at p.
2
(three costs denied by IEPA because they are “not corrective action” and
another cost denied because the owner failed to demonstrate that “these costs
are
reasonable”).
A
denial
based
upon
“reasonableness” also
has
a
different
statutory
basis than a
denial
based
upon
“corrective
action.”
Compare
Section
22.1 8b(d)(4)(C)
of
the
Act
(repealed)
(reasonableness) with Section
22.1 8(e)(1)(C) ofthe Act (repealed) (defining “corrective action”).
The IEPA’s denial statement in this case referred only to
§22.1 8b(d)(4)(C) (reasonableness), and
did not mention §22.1 8(e)(1 )(C) (corrective action).
The impact ofthe
Pulitzer
decision in this case is,
consequently, quite clear.
In its
denial
statement (Joint Stipulation, Exhibit 6), the IEPA did not list “not a corrective action” as a basis
for rejecting McDonald’s request, so the IEPA cannot raise “corrective action” as an argument in
this appeal.
The fact that the IEPA cannot properly raise its corrective action argument in this
appeal
is
fatal
to
the
IEPA’s
Motion
For
Summary
Judgment.
The
IEPA’s
Motion
For
Summary
Judgment contains only one argument
—
namely, that the costs
are not “corrective
action.”
Since
that
argument
cannot
properly
come
before
the
Board,
the
IEPA’s
Motion
For
Summary
Judgment must be denied.
2.
THE COST OF COMPACTION AROSE OUT OF A “CORRECTIVE ACTION.”
Although (as shown above) the IEPA cannot properly argue that the compaction was not
a
“corrective
action,”
it
is
nonetheless
clear
that
the
compaction
in
this
case
was
in fact
a
“corrective action.”
5
The IEPA has stipulated that it will not contest the fact that compaction ofthe backfill at
this
Site
was
“properly part
of the
soil
placement
process”
used
to
raise the
surface
of the
excavations
at
the
Site
to
grade.
(Joint
Stipulation,
¶3 7.)
The
Board
has
long
held
that
backfilling an excavation created by the removal
of contaminated soil
is
a “corrective
action.”
See,
e.g.,
Platolene
500,
Inc.
v.
IEPA,
PCB
92-9
(Opinion
and
Order
dated
May
7,
1992).
Simple logic dictates that since the compaction was “properly part
of’
a corrective action, it too
was a “corrective action.”
The Board’s own decisions support this conclusion.
The Board has in the past found that
the cost of compaction is
entitled to reimbursement from the LUST Fund where the compaction
was part
of the
corrective
action.
See,
e.g.
State
Bank of Wittington
v.
IEPA,
PCB
92-152
(Opinion
and Order dated June 3,
1993).2
Although the facts in
State Bank
differ from the facts
here in that the compaction in the
State Bank
case was intended, in part, to prevent contamination
from entering the backfill,
State Bank
stands for a more fundamental proposition:
namely, that
the cost of soil compaction which is properly part of a corrective action should be allowed.
2
The Board did refuse to allow recovery ofthe cost ofbackfilling an excavation where the purpose
of the
backfihling
was
to
provide
“a
solid
foundation
for
a
nearby
building.”
Princeton/Beck
Oil
Company v.
IEPA,
PCB
93-8 (Opinion
and Order dated May
5,
1993).
That
is not
an
issue here.
There
are
no
buildings at the
Site
in
this
case,
and
it
is
undisputed
that the
compaction at issue
was
solely
intended to prevent voids and
severe
settling.
(See
Joint Stipulation, ~J20,26.)
6
That
is
exactly the
situation here.
The
backfilling at this
Site
was properly
part
of a
corrective
action.
The
IEPA
has
stipulated
that
the
compaction
was
properly
part
of the
backfilling.3
When an
activity
such as
compaction is a
proper part of a corrective action,
that
activity
is itself a
corrective action,
eligible
to be reimbursed from the LUST Fund.
The cost of
compaction here is therefore reimbursable from the LUST Fund.
The IEPA nonetheless argues
that the compaction in this
case was akin to pouring new
concrete and is therefore not reimbursable.
(See, e.g.,
IEPA Motion For Summary Judgment, p.
5.)
The
IEPA’s
argument
completely
misses
the
mark
both
legally
and
factually.
Placing
backfill into an excavation is not in either a legal or a factual sense akin to pouring concrete, and
the Board has never treated the two as being “directly analogous.”
(IEPA Motion For Summary
Judgment,
p.
4.)
The Board
decisions cited
by the
IEPA show that pouring new concrete at a
LUST site, in almost all instances, is not
part of the remedial action, is
not necessary to
protect
against
a
risk
to
human
health
and
the
environment,
and
is
a
benefit
primarily
to
the
owner/operator.
Pouring concrete is therefore not eligible forreimbursement.
Board decisions
such as
Platolene
and
State Bank of Wittington
show that
even though
backfilling normally
takes place after the removal of the
contaminated
soil,
it
is
necessary
to
protect against a risk to human health and the environment
and is not primarily for the benefit of
the owner/operator.
Backfilling
is therefore
eligible for reimbursement.
The
IEPA’s
Motion
For
Summary
Judgment
also
asks
the
Board
to
apply
the
“two-
prong” test which has been used to determine (for example) the eligibility ofthe cost ofpouring
The
reasons that the compaction was properly part ofthe backfihling are
now clear to the IEPA.
As
the
IEPA
noted
in
its
Motion
For
Summary
Judgment,
the goals
underlying the compaction
were
“perfectly logical and reasonable
...,“
and the EPA
is not arguing “that
...
compaction was unreasonable
in conjunction with the use ofthe backfill material.”
(IEPA Motion For Summary Judgment,
p. 6.)
7
concrete for reimbursement from the LUST Fund.
(See
IEPA’s Motion For Summary Judgment,
pp.
5-7.)
Application ofthe two-prong test to
the facts ofthis
case is
unnecessary.
The Board
has already ruled in
Platolene, supra,
that backfilling meets the two-prong test (even though the
backfilling takes place after the remediation
is complete), because backfilling addresses a health
and
safety
issue.
As
the
Board
held in
Platolene:
“Backfilling
the
site would
be
considered
corrective action
even though it occurred after the contamination had been removed because it is
an action necessary to protect human health
and the environment.”
Consequently,
even though
the
backfilling
at
the
Site
may
not
have
directly
“stoped,
miimized,
eliminated,
or
cleaned
up a release ofpetroleum,” it was nonetheless a “corrective action” under the rulings of
this Board.4
Backfilling
is,
under
long-standing
rulings
of the
Board,
properly
a
corrective action.
The
Board
and
the
IEPA
should
therefore
be
supportive of any effort
by
an
owner
(such
as
McDonald’s) to backfill excavations in a reasonable,
cost effective way.
In this
case, the most
r~asonab1e,
most cost effective way to
backfill the
Site (as MACTEC demonstrated) was to take
soil (supplied at no cost
by Oak Brook), place that soil
in the excavations at the Site, and do the
minimum compaction necessary
to
prevent
voids
and
settlement.
The reasonableness of this
It must be noted that the IEPA did not disallow any costs related to backfihling at this Site other
than the cost of compaction
—
a clear indication that the EPA
understands that the cost of backfilling is
reimbursable.
It
should
also
be
noted
that
IEPA’s
argument
that
any
expense
that
is
not
“stopping,
minimizing, eliminating or cleaning up”
is non-reimbursable goes much too far.
Ifthat argument is taken
literally, all LUST Fund reimbursement would
stop as soon as the last bit ofpetroleum is removed.
That
would mean that the
LUST Fund
would not
reimburse the
post-remediation
removal of equipment, the
post-remediation decommissioning oftreatment facilities, the post-remediation filling ofexcavations, and
other expenses which are now being
reimbursed and which are,
beyond
debate,
a necessary and proper
cost ofa corrective action.
The EPA’
s
argument is not only at odds with the facts and present practice, it
would (if adopted) also
discourage cleanups, because the LUST
Fund will
(under the EPA’s
argument)
reimburse
the
cost of digging
out
contaminated
soil,
but
force
the
owner/operator
to
pay
to
fill
the
resulting hole
by
himself.
That additional
cost will likely
result in owner/operators being reluctant to
begin remedial projects.
8
approach should be obvious to the Board and the IEPA: it saved more than an estimated $50,000
compared with the use of washed stone.
The IEPA and
the
Board
should
encourage
actions,
such as those here, which minimize to the extent possible the need to draw on the LUST Fund.
Finally,
the
IEPA
contends
(without
citation
to
the
record)
that
the
“main
intent
for
compaction was
to
restore the
site.”
(IEPA
Motion
For
Summary Judgment,
p.
7.)
This
is
grossly misleading and wrong.
First, there is no
evidence showing how the Site looked prior to
the remediation.
The pictures ofthe Site that are in the record (Joint
Stipulation, Exhibits
1
and
2) show that there is
nothing on the Site at this time.
The IEPA’s claim that the “main intent of
the compaction was to restore the Site”
is completely baseless.5
Second,
the
EPA’s
claim
flies
in
the
fact of the
stipulated
facts.
The
parties
have
stipulated
that
“McDonald’s
used
the
sheepsfoot
roller to
roll over
the
backfill
soil
after the
backfill
soil
was placed
into
excavations
at
the
Site
solely to
compact
the fill
sufficiently
to
prevent voids and
severe settlement”
and
that
“McDonald’s
wished to
avoid
the presence of
voids and the possibility of severe settlement because voids and
severe settlements would cause
the
surface of the
Site
to
sink
below
grade
at the
Site.”
(Joint
Stipulation, ¶~J20-2
1.)
These
stipulations show that McDonald’s intent was to insure that there are no
future health and safety
issues at the Site, not restoration.
The
EPA
argues that McDonald’s had “reasons”
for using
soil (which required compaction) as
backfill
—
namely, to
re-use
a potential
waste material
and to
save
a substantial
amount
ofmoney
—
as
though those reasons were a basis to deny reimbursement for the cost ofcompaction.
See
EPA’s
Motion
For Summary Judgment, p.
4.
These “reasons” for using
soil as backfill are simply facts that
arose from
the use ofthe soil
as backfill.
None ofthem
is objectionable
per se,
nor
should they be objectionable to
the Board.
In fact, the EPA’s
suggestion that saving money on
backfilling is somehow wrong is absurd.
McDonald’s use ofwaste soil
saved more than $50,000
in remediation costs in comparison to
the use of
fully reimbursable washed stone.
It also used excess soil for a beneficial purpose.
These
are not reasons
to complain.
9
Notwithstanding
the IEPA’s
attempt
to
falsely color the
situation,
the
facts
show
that
McDonald’s and
its
contractor simply backfilled the Site in a manner that was both reasonable
and
low-cost.
That
backfilling
was
a
proper
“corrective
action,”
and
the
compaction
was
properly part ofthe backfilling.
Consequently, even if the “corrective action” argument raised in
the IEPA’s Motion For Summary Judgment could properly be
considered by the Board
(which it
cannot), the IEPA’s Motion For Summary Judgment must still be denied.
CONCLUSION
The
IEPA’s
argument
that
compaction is
not
a
“corrective
action”
is
improper.
That
argument
was never
part
of IEPA’s
denial
statement,
and
it
cannot be
raised now
on
appeal.
Since the IEPA’s Motion For Summary Judgment is totally reliant upon its new corrective action
argument, and since the corrective action argument cannot properly be brought before the Board,
the IEPA’s
Motion For Summary Judgment must be denied.
In addition, the compaction ofthe fill was a corrective action under the precedent of the
Board.
Consequently,
even if the “corrective action” argument raised in the IEPA’s Motion For
Summary Judgment could properly
be
considered by
the Board
(which
it cannot),
the IEPA’s
Motion For Summary Judgment must still be denied.
McDonald’s
therefore
respectfully
asks
the
Board
to
deny
the
IEPA’s
Motion
For
Summary
Judgment
and,
based
upon
the
same
reasoning
and
finding,
to
enter
summary
judgment
finding:
(1) that
the IEPA
erred
in
denying reimbursement
for the
$31,515
cost of
compaction at the Site;
(2) that the $3 1,515
cost was (and was demonstrated to be)
a reasonable
cost ofcorrective action
at this Site; and (3) that under the Illinois Environmental Protection Act,
IEPA must now allow the
$31,515
cost of compaction for reimbursement from the LUST Fund.
10
McDonald’s Corporation
BY:______________
the r attorney
BarbaraA. Magel
Mark D. Erzen
Karaganis, White &
Magel Ltd.
414 North Orleans Street, Suite 810
Chicago, Illinois
60610
312/836-1177
Fax 312/836-9083
11
