McDONALD’S CORPORATION,

Petitioner,

ILLINOIS ENVIRONMENTAL

PROTECTION AGENCY,

Dorothy M. Gunn,

Clerk

Illinois Pollution Control Board

James R. Thompson Center

100 West Randolph Street

Suite

11-500

Chicago, IL 60601

Respondent.

Bradley P. Halloran, Hearing Officer

fllinois Pollution Control Board

James R. Thompson Center

100 West Randolph Street

Suite 11-500

Chicago, IL

60601

RECEIVED

CLERK’S OF~’FtCE

NUV

10

2003

Mark D. Erzen

Karaganis, White & Magel, Ltd.

414 North Orleans Street

Suite 810

Chicago, IL 60610

PLEASE

TAKE NOTICE

that

I have

today

filed

with the

office of

the

Clerk

of the Pollution

Control Board a RESPONSE TO PETITIONER’S MOTION FOR SUMMARY JUDGMENT, copies

of

which are herewith served upon you.

Respectfully submitted,

~

ENVIIWNMNTAL

PROTECTION AGENCY,

Assistant Counsel

Special Assistant Attorney General

Division of Legal Counsel

1021 North Grand Avenue, East

P.O. Box 19276

Springfield, fllinois 62794-9276

217/782-5544

217/782-9143 (TDD)

Dated: November 6, 2003

OF THE STATE OF ILLINOIS

V.

STATE OF IWNOIS

Pollution

Control

Board

)

)

)

PCBNo.04-14

)

(LIST Appeal)

)

)

NOTICE

---

RECEiVED

CLERK’S

OFFICE

BEFORE THE POLLUTION CONTROL BOARD

NOV

102003

OF THE STATE OF ILLINOIS

STATE OF IWNOIS

McDONALD’S CORPORATION,

)

Pollution

Control Board

Petitioner,

)

V.

)

PCB No. 04-14

ILLINOIS ENVIRONMENTAL

)

(UST Appeal)

PROTECTION AGENCY,

)

Respondent.

)

RESPONSE TO PETITIONER’S MOTION FOR SUMMARY JUDGMENT

NOW COMES

the Respondent, the Illinois

Environmental Protection

Agency

(“Illinois

EPA”), by

one of its

attorneys, John J. Kim,

Assistant Counsel

and

Special Assistant Attorney

General, and,

pursuant to 35

Ill.

Adm.

Code

101.500,

101.504

and

101.516,

hereby respectfully

responds to

the

Motion for

Summary

Judgment (“Petitioner’s

motion”) filed by the Petitioner,

McDonald’s Corporation (“McDonald’s”). In response to thePetitioner’s motion, the Illinois EPA

states as follows:

I.

THE COMPACTION OF BACKFILL WAS NOT CORRECTIVE

ACTION

The Petitioner’s argument that the compactionofbackfill at the site was corrective action is

based on two statements.

First, as a matter oflaw, the compaction was corrective action since the

Illinois EPA did not deny the costs related to the compaction on the basis that the compaction was

not corrective action.

Second, as a matter offact,the compaction constituted corrective action and

thus was eligible for reimbursement.

Based on informationbefore the Board and legal precedent,

both ofthese arguments fail.

A.

The Illinois EPA Properly

Denied

The Compaction Costs

ThePetitioner first argues that the final decision issued by theIllinois EPAon June23, 2003

(Exhibit 6 to the Joint Stipulation ofFacts), which forms the basis forthis appeal, does not support

1

---

the Illinois EPA’s position that the reimbursement was denied because the compaction was not a

corrective action.

Petitioner’s motion, p.

12.

The Petitionerstates that nothingin the Illinois EPA’s

final decision states orsuggests that the claim forreimbursement submitted by McDonald’s for the

cost of compaction was not paid because the Illinois EPA determined that the compaction was

something otherthan corrective action.

Petitioner’s motion,

p.

13.

This argument is wholly unsupported by the clear language ofthe final decision.

The exact

wording ofAttachment A, Accounting Deductions, ofthe final decision is as follows:

Item #

Description ofDeductions

1.

$31,515.00

deduction

in

costs

that

the

owner/operator

failed

to

demonstrate

were

reasonable

(Section

22.1 8b(d)(4)(C)

of

the

Environmental Protection Act).

A

deduction

in

the

amount

of $7,680.00

was

made on

the

R.W.

Collins

invoice

numbered

1132324

for

the

ineligible

costs

for

compaction.

A deduction

in

the amount of $2,2025.00

was made on

the R.W.

Collins

invoice

numbered

113255

for

the

ineligible

costs

for

compaction.

A deduction

in

the amount of $21,810.00

was made

on the

R.W.

Collins

invoice

numbered

#113293

for

the

ineligible

costs

for

compaction.

The wording ofthe final decisionprovides a more than sufficient basis for the Petitioner to

understandthe nature ofthe denial.

First, the Illinois EPAproperlycited to Section 22.1 8b(d)(4)(C)

ofthe Illinois Environmental Protection Act (“Act”) as being the statutory basis for denial.

That

section provides that, in a request for a partial or final payment for claims under Section 22.1 8b of

the Act, the owner or operator must provide an accounting ofall costs, demonstrate that the costs

incurred to perform the corrective action were reasonable,

and provide proof ofpayment of the

2

---

applicable deductible amount.

Inthis instance, theIllinois EPA’s concern wasnot whethertherewas

a proper accounting ofall costs orwhetherproofofpayment ofthe applicable deductible had been

provided.

Rather,

the

Illinois

EPA’s

denial

was

based

on

the

second

criteria,

namely,

that

the

owner/operator submitting

the request

for payment must

demonstrate that

the

costs

incurred

to

performthe correctiveaction were reasonable.

Thatreference is made in the Attachment to the final

decision.

Further, in the attachment there is a description of each ofthe invoices on which the

subject costs are referenced, along with the statement that the compaction costs were “ineligible

costs.”

The Illinois EPA’s argument raisedin its motion forsummaryjudgment is entirelyconsistent

with the

description set

forth in

the Attachment to

the final decision;

specifically,

the cost

for

compaction was ineligible for reimbursement since it was not a corrective action, and therefore the

Petitioner failed to demonstrate that the costs related thereto were reasonable.

A

very

similar

situation

arose

in

the case of Paul

Rosman

v.

Illinois

EPA, PCB

9 1-80

(December

19,

1991).

There,

the

Illinois

EPA

issued

a

final

determination

that

included an

adjustment in tank removal costs.

The wording usedby the Illinois EPA in the final decision was

that the adjustmentwas warrantedsincethe owner/operator failed to providea demonstration that the

costs were reasonable as submitted, citing to Section 22.1 8b(d)(4)(C) ofthe Act.

The Illinois EPA

did not believe that those costs met the two-prongtest forcorrective action that was discussed fully

in the present case in the Illinois EPA’s motion for summaryjudgment.

Rosman, pp.

5-6.

An argument was raised by the Petitionerthat the final decision was insufficientto conform

to the precepts offundamental fairness as discussed by the Board in Pulitzer v. Illinois EPA, PCB

3

---

90-142 (December

20,

1990).

The Pulitzer case discussed the need for fundamental fairness

in

Illinois

EPA final decisions, finding that it would

be

unfair to allow the Illinois

EPA to cite

to

additional statutory and regulatory reasons for denial at the time ofhearing.

Rosman, pp.

4-5,

citing,

Pulitzer, p.

7.

Rosman argued that since it obtained numerous bids for the tank removal in question, its

costs were reasonable.

The Illinois EPA argued that the costs were inherentlyunreasonable since

theywere outside the scopeofcorrective action.

The Board held that the final decisionissued by the

Illinois EPA was not fundamentally unfair

and was consistent with the Illinois EPA’s argument.

Rosman,

p. 6.

The Board did note that the letter in that case was “poorly articulated,” and that it

could have been framed more precisely.

~

But it did find that the wording was sufficient for the

Illinois EPA to make its arguments. The Board concluded that the Illinois EPA’s failure to be more

specific resulted in a denial offundamental fairness.

Rosman, p. 7.

Similarly, in the present situation the Board is reviewing a letter that also

cites to Section

22.1 8b(4)(d)(C) ofthe Act, one that also

denied costs for an

activity that the Illinois EPA did not

believe met the definitional testfor corrective action.

There is a difference though, in that the final

decision under

appeal here does contain a

specific reference that the

costs

for compaction were

ineligible.

It is

true that the Illinois EPA could have been more specific in

its

wording, but the

questionis not whethermorespecific words couldhave been used, but ratherwhether thewords that

were used meet the test for fundamental fairness and whether theyare consistent with the position

taken by the Illinois

EPA.

Based on the Rosman case, there is no

doubt that the language ofthe

Attachment in the June 23, 2003 final decision wasmore thanadequate to meet thePulitzer standard.

In Rosman, the Board also noted that there were other provisions of Section 22.1 8b ofthe

4

---

Act that the Illinois EPA could have cited to for the proposition that costs that were not corrective

action

were ineligible

for reimbursement.

Rosman,

pp.

6-7.

In a later case,

though,

the Board

addressed an

argument by a Petitioner that the Illinois EPA could not rely

on all ofthe statutory

provisions ofa general citation to a statute ifa more specific denial reason is given.

TheBoard there

found that although

a more specific denial reason is often given in a final decision, any failure to

meet the requirements ofthe Act is an appropriatereason fordenial.

Ted Harrison Oil Company v.

Illinois EPA, PCB 99-127 (July 24, 2003).

Thus, even though there may have been other statutory

provisions that the Illinois EPA could have cited to, the section that was cited to in thedenial letter is

nonetheless appropriate.

The Petitioner is arguing that the Illinois EPA did not raise a concern that the compaction

was not corrective action, and thus it is improper to raise that argument now.

As has been shown,

the

Attachment to

the

denial letter does

raise

that concern,

contains more information than

a

similarly-worded letter that was

considered by the Board in Rosman,

and

is

consistent with the

arguments presentedin the Illinois EPA’s motion for summaryjudgment.’

Forthe samereasonsthat

the Board

ruled

in Rosman

that

the

Illinois

EPA’s

argument

that

the tank removal

costs

were

unreasonable

since they were not related to

corrective action, the Board should here find that the

June 23, 2003

decision letter contains more than sufficient language to support the Illinois EPA’s

arguments that compaction was not corrective action.

At no time did the Illinois EPA concede that

point, and no language in the final decision warrants that finding.

B.

As

A Matter

Of Fact, The Compaction Was

Not Corrective Action

As

was argued in Rosnian,

the fact that the compaction activities at the McDonald’s site do notmeet the definition

of

corrective action makes the costs related thereto inherently unreasonable.~The language of Section 22.1 8b(d)(4)(C) of

the Act in question, requiring that an owner/operator demonstratethat the costs incurredto perform the corrective action

were reasonable, implicitly(if notexplicitly) include the

requireinentthatth

.~costsherelatedto correctiveactiontobegin

5

---

.1

The Petitioner also

argues in its motion that in fact the compaction at the McDonald’s site

was corrective

action.

Petitioner’s motion, p.

14.

This

is an erroneous statement, unsupported by

fact or law.

In support ofthis contention, the Petitionerfirst directs theBoard’s attention to theJoint

StipulationofFact (“Stipulation”), in which the parties stipulatedthat the compactionofthe

bac~kfill

was properly part ofthe soil placement process.

Petitioner’s motion,

p.

14;

Stipulation,

par.

37.

Unfortunately, the Petitioner is attempting to read far more into that particular stipulation than is

there.

The Illinois EPA does not dispute the notionthat, aspart ofanybackfilling ofsoil ormaterial

into an excavation at a site in which an underground storage-thnk(“UST”) was removed, itmaybe a

proper part ofthe soil placement to compact that soil.

However, thereis a clear distinction between

what maybe a normal part ofa soil placement process and what is, by definition, corrective action.

By analogy, it is clear from a long line ofBoard cases that replacementofconcreteat an UST

excavation may be appropriate, if for no otherreason than to provide an area ofsafe

footing.

But

those Board

cases also

examine the need for use of such concrete replacement in the context of

whether the

action meets the definition of corrective action.2

Simply put,

whether an activity

is

considered to be prudent or proper in the context ofrestoring a site is not the sameissue as whether

that same activity

is corrective action that may be reimbursable.

Was it proper to McDonald’s to

compact ortamp thebackfill that wasplaced intothe excavatiotrtupreventvoidsor settling? Likely

so.

But that act ofcompaction, which was a task clearly set apart from the actual placement ofsoil

into the excavation (as noted by the invoices that clearly referenced compaction), clearly did not

meet the two-prongtest ofwhether an activity is corrective action.

The Illinois EPA notes that costs

with.

If the costs to relate to correctiveaction, then the owner/operator must demonstrate that they are reasonable.

Ifthe

costs are not related to corrective action, then the owner/operator hasfailed to make that demonstration.

2

example, see:

Salyer v. Illinois EPA, PCB 98-156 (January 21, 1999); Miller v. Illinois

EPA, PCB 92-49 (July9,

1992);

Warren’s

Service v. Illinois

EPA, PCB 92-22 (June 4,

1992);

Strube

v. Illinois EPA, PCB 91-205

(May 21,

6

---

for backfillingofthe material were not denied as part ofthe final decision, only those costs related to

the compaction ofthat backfilled material.

For the reasons more fully set forth in the Illinois EPA’s motion for summaryjudgment, the

compaction here

did

not

meet

either prong of the test

and

therefore

cannot be

considered as

corrective action.

Not every component ofwork that

is done during remediation at a site that has

experienced a release from an UST is corrective action, though those components maybe desirable

or acceptable.

That is the reason the Board has utilized the corrective action test, to

allow for a

distinction between what

tasks

are and

are not

corrective action.

Here,

factually speaking,

the

compaction was not corrective action.

The Petitioner also cites to the case ofState Bank ofWhittington v. Illinois EPA, PCB 92-

152 (June 3, 1993), when making the statement that the Board has on at least one occasion allowed

for reimbursement ofcosts associated with

compaction ofbackfilling.

Petitioner’s motion,

p.

14.

But as the Petitioner itself concedes, the Board allowed for reimbursement in that instance since

there was a demonstration by the owner/operator in State Bank that the compaction had a remedial

purpose.

~.

Here, to the contrary, the Petitioner has stated that the only reason for the compaction

wasto prevent voids and settlement ofthe soil.

Those are laudable goals, but certainlynot rising to

the

level of being a component of the

site’s remediation.

Therefore,

after examining all of the

Petitioner’s

arguments,

the Board

should

find

that

as a

matter of fact the compaction was not

corrective action.

II.

THE PETITIONER DID NOT DEMONSTRATE THE COSTS

FOR COMPACTION WERE REASONABLE

The Petitioner contends that the costs forcompaction were demonstrated to be reasonable,

1992);

Platolene 500. Inc.

v.

Illinois EPA. PCB 92-9 (May 7, 1992).

7

---

but in doing so tries to impose upon the Illinois EPA two

supposedrationales as to whythe Illinois

EPA’s reached its determination.

The Petitionersupposes that the Illinois EPA decided that either

McDonald’s should have backfilledthe excavation with a different material orthe soil should have

been placed into the excavation without any compaction.

Petitioner’s motion, p.

15.

Not only are

thesestatements pure speculation on the part ofthe Petitioner, theyare also entirelyirrelevant to the

decision at hand.

Also, neither ofthe two suppositions by the Petitioner is based in any fact or is

representative ofany finding or decision by the Illinois EPA.

In attempting to portraythe Illinois EPA’s decision as falling into one ofthe two described

scenarios, the Petitioner is movingthe Board’s focus away from the real issue.

The questionbefore

the Board is not whether the Illinois EPA’s mindset was one ofthe two imaginedby thePetitioner,

but rather whether the compaction itself is

corrective action.

In response to what it guesses

are

concerns of the

Illinois

EPA,

the Petitioner

states

that

a

letter

from

MACTEC

(McDonald’s

remediation contractor) to the Illinois EPAdated May20, 2003 (Stipulation, Exhibit

5),

satisfactorily

addressed any questions.

Ifthe Illinois EPAbelieved that the backfillmaterial used atthe siteshould haveinsteadiyeen

replaced with crushed stone, the MACTEC

letter explained that the backfill material was a better

option.

Or, if the Illinois EPAbelieved that thebackfill should havebeenplaced intcrthe excavation

without compaction, the MACTEC letter again spoke to the need ofpreventing voids and settling.

Unfortunately, none ofthose passages is relevant to the Board’sreview ofthe decisionunder

appeal.

The Illinois EPA obviously did not taketheposition that the crushed stone should havebeen

used instead ofthe backfill material, since none ofthe costs related to the deposition ofthe backfill

material were denied(only compactionwas denied). Whether thecrushed stone would haverequired

8

---

compaction is irrelevant, since the Illinois EPA’s decisionwas based on whetherthe compaction of

any material used forfilling the excavationmet the defini-tion-o-f corrective action.

Put anotherway,

backfillingthe excavation was not the problem, compactingthe material followingthe backfill was

the problem.

Similarly, the Illinois EPA stipulated

that the compaction ofthe soil was proper, in that it

likely did serve the useful function ofpreventing voids and settlementofthe soil.

But as the Illinois

EPA argued

in

its motion

for summary judgment,

the Petitioner never made the statement that

compaction was needed to stop, minimize, eliminate or clean up the release ofpetroleum.

Rather,

the Petitioner’s explanation forthe compactionwas one related more to restoration and maintenance

ofa level

grade at the site, with a desire to reduce future costs forrepairs stemming from voids and

settling.

As was stated earlier, the Illinois EPA agrees that compactionwas not inappropriateforthe

purposes that the Petitioner provided, but those purposes do not meet the definition ofcorrective

action

and

therefore

are

not

reimbursable.

The

standards

and

implications

of

those

two

considerations (i.e., is something a good idea for long-term maintenance ofa level grade versus is

something

corrective

action)

are

separate

and

distinct.

The

Petitioner

makes

the mistake

of

confusing the two, and itseeks to drawthe Board into themistaken conclusionthat one consideration

is the same as the other.

III.

CONCLUSION

The Petitionerhas failed to meet its burden in this appeal, and insteadhas offeredmisleading

or erroneous

arguments in an attempt to divert the Board’s review from the relevant issues.

The

Illinois EPA’s final decision in this matterwas appropriate and sufficient, specifically meeting the

standard set forth in theRosman case. The Illinois EPA’s arguments within its motion for

summary

9

---

judgment are consistent

with the final decision, and

therefore consistent with the dictates of the

Board’s decision

in

Pulitzer.

The Illinois

EPA did

not

make

any concession as argued by the

Petitioner, and

its

arguments are in-line

with

the

final decision and the

statutory provisions

of

Section 22.1 8b(d)(4)(C) ofthe Act.

As a matteroflaw and fact, the compaction atthe McDonald’s

site was not corrective action.

Based on the arguments set forth in the Illinois EPA’s motion

for

summary judgment,

and

the

Petitioner’s

failure

to

meet

its

burden

by

virtue of its

attempt

to

misdirect the Board away from the real issue, the Illinois EPA respectfully requests that the Board

grant summaryjudgment to the Illinois EPA and affirm the Illinois EPA’s decision dated June 23,

2003.

Respectfully submitted,

ILLINOIS ENVIRONMENTAL PROTECTION AGENCY,

JohiTI

~.ii

Assistant Counsel

Special Assistant Attorney General

Division ofLegal

Counsel

1021 North Grand Avenue, East

P.O.

Box 19276

Springfield, Illinois 62794-9276

217/782-5544

217/782-9143 (TDD)

Dated: November 6, 2003

This

filing submitted on recycled paper.

-4

10

---

1

CERTIFICATE OF SERVICE

I, the undersigned attorney at law, hereby certify that on November 6, 2003, I served true

and

correct

copies

of

a

RESPONSE

TO

PETITIONER’S

MOTION

FOR

SUMMARY

JUDGMENT,

by

placing

true

and

correct

copies

thereof

in

properly

sealed

and

addressed

envelopes

and

by

depositing

said

sealed

envelopes

in

a

U.S.

mail

drop

box

located within

Springfield,

Illinois,

with

sufficient

First

Class

postage

affixed

thereto,

upon

the

following

named persons:

Dorothy M.

Gunn,

Clerk

Bradley P. Halloran, Hearing Officer

Illinois Pollution Control Board

Illinois Pollution Control Board

James R. Thompson Center

James R. Thompson Center

100 West Randolph Street

100 West Randolph Street

Suite

11-500

Suite 11-500

Chicago, IL 60601

Chicago, IL

60601

-

Mark D. Erzen

Karaganis,

White &

Magel, Ltd.

414 North Orleans Street

Suite 810

Chicago, IL 60610

ILLiNOIS ENVIRONMENTAL PROTECTION AGENCY,

Re~ponn~~~

Assistant Counsel

Special Assistant Attorney General

Division ofLegal Counsel

1021 North Grand Avenue, East

P.O. Box

19276

Springfield, Illinois 62794-9276

217/782-5544

217/782-9143 (TDD)