FACTUAL BACKGROUND
LACHES
ANALYSIS OF THE CULPABILITY OF THE RESPONDENTS
COUNT I
COUNT II
COUNT III
COUNT IV
COUNT V
ANALYSIS OF DAMAGES AND CIVIL PENALTY
COUNTS IV AND V
COUNT I
COUNT II
COUNT III
COUNT IV
COUNT V
NOTICE OF FILING

RE CE

CLERK’S OFFICE

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

MAR

2OO~

STATE OF ILLINOIS

Pollution Control Board

PEOPLE

OF THE

STATE

ILLINOIS,

)

Complainant,

)

PCB 96-98

)

Enforcement

)

SKOKIE VALLEY ASPHALT, CO., Inc., an

)

Illinois corporation, EDWIN L FREDERICK, JR.,

)

individually and as owner and President ofSkokie

)

Valley Asphalt Co., Inc., and RICHARD

)

FREDERICK, individually and as owner and Vice

)

President of Skokie Valley Asphalt Co.,

Inc.

)

Respondents.

)

RESPONDENTS’ CLOSING ARGUMENT

AND

POST

TRIAL I3RIEF

The Respondents, Skokie ValleyAsphalt

Co., Inc.,

Edwin

Frederick, Richard J.

Frederick,

by and through their attorney, David S. O’Neill, herein present their Closing

Argument and Post-Trial Briefpursuant to the Hearing Officer Order ofthe Illinois Pollution

Control Board ofOctober 31, 2003.

In support ofits

position, the Respondents state as follows:

FACTUAL BACKGROUND

Skokie Valley Asphalt Co, Inc. (SVA) was an Illinois corporation with offices at 768

Lake St., Grayslake, Lake County, Illinois

at all

times relevant to the alleged violations that are

the subject of this Complaint (Trial at 278).

East of SVA’s site in Grayslake is the Avon-

Fremont Drainage Ditch.

The ditch flows to the north through the city of Grayslake and into

Third Lake (Trial at

145-146,

353).

The land between SVA’s facility and the Avon-Fremont

Ditch is actively-farmed fields (Trial at 340,341).

Nearby businesses included Mitch’s

Landscaping to the west (Trial at 221).

There is also a large landfill in the vicinity.

Further

away there are other industries (Trial

at 340).

SVA was a paving contractor and a trucking and material storage business (Trial at 277,

278, 437).

The Grayslake location housed the estimating department, the office and all

the

people who did billing.

The site included a maintenance garage were theyworked on various

equipment and trucks.

Some asphalt liquid and asphalt primer coats were stored at the site.

Previously, an asphalt company had been operated at the site by other owners.

(Trial at 277, 278).

During this period, Edwin L. Frederick, Jr. was the President ofSVA (Trial at 433).

His

brother, Richard J. Frederick, was the Vice President (Trial at 278).

Each ofthe brothers owned

fiftypercent of SVA and were the only shareholders ofSVA (Trial

at 278).

Richard Frederick’s duties for the company included construction management.

He was

responsible for scheduling ofall jobs, estimating, budgeting, dealing with superintendents and

foremen, hiring and controlling all employees, union contracts, personnel issues, subcontractors,

outside shops, equipment purchasing and repair and review ofequipment

(Trial at 279,280).

also was in charge ofsafety and traffic matters

at thejob sites, approving contract matters

and

approving the payment ofinvoices (Trial at 280,281).

Edwin Frederick was President ofSVA.

Most ofhis duties related to

financial matters

and estimating.

He was responsible for estimating, insurance issues and banking matters.

(Trial

at 281).

He did work as liaison with the banks and suppliers, purchased materials, managed

payroll and reviewed accounts receivable and

accounts payable.

His duties involved job- site

meetings, reviewingjob-site work, consultation with foremen and engineers, liaison with

government officials and customers (Trial at 282).

The Fredericks were not responsible for all day-to-day operations ofSVA (Trial

at 437).

The Fredericks shared control ofthe operation ofthe company with other foreman and

superintendents (Trial at 278, 437).

Edwin and Richard Frederick made major management

decisions and decisions on spending large amounts of money on behalfof SVA.

Other decisions

were made by other management people (Trial at 439).

In 1998, the assets ofSVA were sold to Curran Contracting (Trial at

435).

The sale

included the assets including land, buildings, plants, trucks, construction equipment and

inventory (Trial at

475).

This sale included all of the records ofSVA.

In 2000,

Curran disposed

ofall ofSVA’s records (Trial at 319,321).

Consequently, many ofthe records concerning the

activities ofSVA, Edwin Frederick and Richard Frederick with respect to operations,

environmental concerns and responses and the history ofthe SVA site are not available.

The Illinois Environmental Protection Agency (TEPA) issued an NPDES permit to SVA

in April of 1986 to

allow SVA to discharge storm water into Grays Lake through a storm water

sewer (Trial at 137,221).

The permit

was issued solely to SVA and not to Edwin Frederick or

Richard Frederick either individually orjointly with SVA (Trial at 70).

One of the conditions ofthe permit stated that SVA was required to submit Discharge

Monitoring Reports (DMR) to

the IEPA on a monthly basis.(Trial at 283).

To comply with the

DMR requirement, SVA’s dispatchers would have one ofthe laborers take a water sample from

the discharge pipe that was the representative sampling point.

The sample was delivered to the

North Shore Sanitary District where it was tested for the parameters specified in the NPDES

permit (Trial

at 23).

The test results were mailed back to SVA and the test result data was used to

complete

the IEPA DMR report.

The reports were usually completed by Bob Christiansen

—

an SVA

Dispatcher (Trial at 284,285).

The reports were usually signed by Richard Frederick as an officer

of the company (Trial at 286,313).

Richard reviewed the data supplied in the DMRs

(Trial at

284,285), but Richard Frederick had no way to determine if the information submitted in the

report was accurate (Trial at 286).

Further, the certification on the DMR form does not require

the signatory to verify the information; itjust

asks them to

certify that they are” familiar with the

information contained in this report and that to the best ofmy knowledge and belief such

information is true complete and accurate” (Trial

at 74, 75).

Throughout the entire period ofthe NPDES permit for the SVA site, there were no

violations for oil, grease or pH (Trial at

284,285).

There were

a few violations for total

suspended solids.

These violations resulted as a result ofintense storm events that caused dirt

from neighboring farm fields

to wash into SVA’s retention pond (Trial at

285).

The DMR forms that are submitted by NPDES permit holders like SVA are received and

tract by the IEPA Division of Water Pollution Control Compliance Assurance Section (Trial

33).

At the time that SVA was submitting DMRs, the IEPA was receiving a lot ofDMR forms.

Errors occurred in handling the large volumes of DMRs in areas like

failing to date stamp all of

the DMRs received (Trial at 36).

There was no formal quality assurance procedure institutedby

the JEPA at that time to determine whether or not the people who were actually logging the

information were doing so correctly (Trial at

65).

There were

situations in the IEPA Division of

Water Pollution Control Compliance Assurance Section were reports were mislogged (Trial at

66).

In the late

1980’s and the early I990’s, DMRs were recorded by the IEPA Division of

Water Control Compliance Assurance Section

in a DMR Submission record.

A I)MR

submission record is a logbook of a list ofNPDES permit numbers where the date ofDMR

submissions are recorded.

The procedure was abandoned by the 1EPA in

1997

an.d replaced by

an electronic log in system

(Trial at 48).

The DMR submission records that included the NPDES permit held by SVA failed to

record the fact that DMRs had been submitted by SVA during some months covered by the

permit (Trial

50-53).

While there was no indiction that any one at JEPA checked to determine

that the recordings were accurate (Trial

66),

the lack ofa record ofsubmission created an

assumption that the reports were not submitted.

The people at IEPA who handled DMRs were not necessarily supposed to report failures

to files DMRs and IEPA’s records do not indicate that

SVA was ever notified that the IEPA had

no record of SVA’s DMRs for some months (Trial at 68,69).

SVA had no way ofknowing that

IEPA did not have a record oftheir submittals ofDMRs.

When SVA was made aware of the fact

that the IEPA did not have a record of receiving all ofthe DMRs that

SVA was required to

submit,

SVA submitted copies ofthe lab analysis reports ofits outfall samples

that were prepared

by Northshore SanitaryDistrict and copies ofsome of the missing DMRs to the Illinois Attorney

General’s Office (Trial at 317,318).

This activity took place in the mid-1990’s (Trial at 318, 478-

486).

Based on this

submittal ofinformation that indicated that the required samples were taken,

tested and reported to the IEPA, SVA was lead to believe that the issue regarding the failure to

submit DMRs was resolved

(Trial at 322, Respondents’ Exhibit

1,2,3

and 4).

The DMR report originally submitted by SVA for the month of February

1991, contained

the same data as the report submitted by SVA for the month ofJanuary,

1991

(Trial at 40).

During this period, Bob Christiansen

—

the SVA employee responsible for collecting data for and

completing and submitting SVA reports

—

was out ofwork because of a heart attack.

(Trial at

292).

The person at SVA who submitted the DMR in February of 1991

used the data from the

test ofthe sample taken in the month ofJanuary of 1991

instead ofthe data from the test ofthe

sample taken in February

1991

when completing the DMR report

(Trial at 292).

When SVA

realized this mistake, a corrected DMR report for February of 1991

was submitted

(Trial at

485).

SVA’s NPDES permit that was issued in SVA in April of 1986, expired in March of

1991

(Trial at

41).

Under the permit conditions,

SVA was required to reapply for a permit 180

days prior to the expiration oftheir existing permit

(Trial at 41).

However, prior to the time that

SVA would have been required to reapply for an NPDES permit they were advised both by the

Illinois

Environmental Protection Agency and by their consultants with expertise in NPDES

requirements that they did not need a NPDES permit for SVA site in Grayslake

(Trial at

322).

SVA was of the opinion that their site would be covered by a blanket permit that was being

granted to

the Illinois Asphalt Paving Association, the Illinois Truckers’ Association or some

other trade association that covered SVA operations (Trial at 322).

Their competitors and

people SVA dealt with in trade associations were receiving permits under blanket permit (Trial

322).

SVA discussed the idea with a representative ofIEPA in Springfield and SVA was lead to

believe that they would be covered by a blanket permit for NPDES (Trial at 322).

As a result,

SVA did not think it was required to

reapply for an individual NPDES permit

for its site and

consequently did not submit the application when it was due (Trial at 324-325).

In Illinois, there is

a general permit

for storm water discharges off ofindustrial properties

that require no monitoring and no submittal of DMRs.

The site owner or operator is simply

required to

develop a storm water pollution prevention plan to

assure that the facility maximizes

its efforts to minimize any impact in its storm water runoff(Trial at

416, 417).

SVA

should have

qualified for this type ofpermit.

It is

very questionable that SVA was required to reapply for an NPDES permit.

The only

expert testimony offered at trial was that an individual permit was not required for the site. (Trial

at 416,

417).

However, SVA did submit the application for renewal ofits permit (Trial at

458).

They sent a letterto the JEPA requesting an extension ofthe deadline for filing the NPDES

application and then submitted the application on June

1991

(Trial at 42).

To this date, the

IEPA has not reviewed SVA’s NPDES

application and has not issued a permit for the site

(Trial

at 44).

A farm drainage tile ran through SVA’s property toward the Avon-Fremont Drainage

Ditch.

The outfall from the farm drainage tile drains into the Avon-Fremont Drainage Ditch due

east ofthe SVA site.(Trial at 222,223)

It was never determined how many drain tiles beyond

the

SVA site fed into the farm tile in that area. (Trial at 241).

Under its NPDES permit, SVA was

allowed to discharge storm water into Grays Lake through a storm sewer.

(Trial at 221).

From December of 1994 to April of 1995 there was a discharge into the Avon-Fremont

Ditch east of the SVA site (Trial at 221,359).

The JEPA, USEPA and others failed to

determine

the source ofthe discharge. (Trial

at 234-238).

During this period, the Respondents were doing

excavation work on their property and discovered a drain tile (Trial at 340).

They contacted the

environmental consulting firm ofHuff and Huff and discussed this matter with Jim Huff.(Trial at

341).

They suspected that the drain tile was related to the discharge to

the Avon Ditch (Trial at

341).

the advise ofand with the assistance of its consulting engineer —Jim HuffofHuff and

Huff, Inc.

—

SVA plugged the drain tile, reported the release to the National Response Center as

required under 40 CFR

112

and worked with its engineer and other SVA employees and outside

contractors to address the problem on a voluntarybasis (Trial at 340, 341).

No releases have

taken place since SVA began it voluntary effort (Trial at 348).

Upon discovery ofthe drainage

tile, SVA took the lead in addressing the problems on the Avon Ditch and connected bodies on a

voluntary basis (Trial

at 347-351).

Although,

SVA was sold and no

longer exists as an entity,

Edwin Frederick and Richard Frederick continue to fund the effort to eliminate any potential

source of a release (Trial at 368).

LACHES

“Laches is an equitable doctrine which precludes the assertion ofa claim by a litigant

whose unreasonable delay in raising that claim has prejudiced the opposing party.”

Riverview

FS, Inc. V. Illinois Environmental Protection Agency, PCB 97-226 at

(May 3,

:2001

citing Tully

v. Illinois,

143

Ill.

2d 425,

432,

574 N.E. 2d

659,

662

(1991).

“There are two principal elements

of laches:

lack ofdue diligence by a party asserting a claim and prejudice to the opposing party.”

People v.

Royster-Clark, Inc., PCB 02-8 at

(January 24, 2002) citing Van Milligan

Board of

Fire and Police Commission,

158 ILL.2d at 89, 630 N.E.2d at 833.

In the case before the Board,

it is unquestionable that the Complainant has not been diligent in bringing its

allegation against

the Respondents Edwin L. Frederick and Richard J. Frederick.

The allegations that are the basis for the Complaint date back eighteen (18) years to

1986

and even the most recent allegations under the amended complaints occurred over nine (9) years

ago in 1995.

On or about November 3,

1995,

the Complainant’s filed a complaint in the above

captioned matter against the Respondent, Skokie Valley Asphalt, Inc.

Inthe complaint, the

Complainant

alleges violations dating from May of 1986 to March

1991.

On or about

December 29,

1997, the Complainant’s filed a First Amended Complaint in the above captioned

matter.

In the First Amended Complaint, no

additional Respondents were named..

The First

Amended Compliant included an additional count alleging water pollution under

Section 12(a) of

the Act,

415 ILCS

5/12

(a)

(1996) for actions that allegedly occurred from December 23, 1994

through April

18,

1995.

On January 21, 2000, Respondent,

Skokie Valley Asphalt

Co., Inc.

served its response to

the Complainant’s First Set ofInterrogatories and its Response to the

Complainant’s First Request for Production ofDocuments.

By order of the Board Hearing Officer, all discovery in this matter was ordered to be

completed by October 20, 2000.

(Hearing Officer Order ofApril 7, 2000.)

The Respondent

complied with this discovery schedule.

On September 6, 2001, the Complainant requested an

additional discovery schedule.

Over the objections of the Respondents, the Board Hearing

Officer extended the discovery schedule and ordered that all discovery be

closed by February

2002

(Hearing Officer Order ofApril 7, 2000).

Again the Respondent complied with the

discovery schedule.

No additional information concerning the liability of the Respondent or

other parties was requested or proffered during this

additional discovery period.

On July 26, 2002, the Complainant’s filed a Second Amended Complaint.

In the Second

Amended Complaint, the Complainant’s named Edwin L. Frederick Jr., individually and as

owner and President of Skokie Valley Asphalt Co., Inc., and the Respondent Richard J.

Frederick, individually and as owner and Vice President of Skokie Valley Asphalt Co., Inc.

additional

Respondents.

On December 20, 2002, the Respondents

filed their Answer and Affirmative Defense to

Complainant’s Second Amended Complaint.

In their Answer and Affirmative Defense to

Complainant’s Second Amended Complaint, the Respondents state an affirmative defense that

the

Complainant should not be allowed to amend its Complaint to include Edwin L. Frederick

Jr., .individually and

as owner and President ofSkokie Valley Asphalt Co., Inc.,

and the

Respondent Richard J. Frederick, individually and as owner and Vice President of Skokie Valley

Asphalt Co., Inc. under the doctrine oflaches and equitable estoppel.

(Respondents’ Answer of

December 20, 2002

at 8.)

The

Complainant was aware of the roles ofRespondents Edwin L. Frederick and Richard

Frederick in

the alleged violations prior to

the filing ofthe original complaint in

1995

and all

discovery pertinent to

the parties involved in this matter was completed in the year 2000.

new information or additional allegations involving Respondents Edwin L. Frederick and

Richard J. Frederick has been introduced by the Complainant to justify the untimely addition of

these parties.

The untimely addition ofthese parties is solely the result of a lack ofdue diligence

by the Complainant.

As a direct result ofthe Complainant’s lack of due diligence, the Respondents Richard

Frederick and Edwin Frederick have been prejudiced in their ability to produce records, recall

witnesses and remember events relevant to their defense in this matter.

In 1998,

during the

period ofthe Complainant’s lack of due diligence, the assets ofthe Respondent SVA were

sold

to a third party (Trial at 435,475).

These assets included all ofthe records of SVA including

records on NPDES permits, responsibilities ofemployees including Edwin Frederick and

Richard Frederick, records on DMR submittals, records on past operations at the plant, records

on environmental issues and other matters involved in

this Complaint.

Subsequent to acquiring

the assets of SVA, the new owners decided they had no need for the records of SVA and

disposed ofthe records.

Edwin and Richard Frederick had no

control over the new owners decision to dispose of

these records and

also had no reason to suspect that these records would be ofvalue

to them.

This litigation had started two years

earlier and the Fredericks were not named Respondents.

There was no knew information divulged through discovery that would lead a reasonable person

to suspect that they would be named as Respondents.

Therefore, they made no

attempt to

retain

any of SVA’s records.

For similar reasons, the did not retain any oftheir personal records

relevant to SVA beyond the periods these records would have been required for otherpurposes.

Laches is based on the notion that courts will not readily come

to the aid of a party who

has “slept on his rights to the detriment ofthe opposing party.”

Riverview FS, Inc. v. Illinois

Environmental Protection Agency, PCB 97-226 at

(May 3, 2001) citing Tully,

143

Ill. 2d

425,

432,

574 N.E. 2d 659, 662 (1991).

In this matter, the Complainant’s lack ofdue diligence has in

fact resulted in

a detriment to the Respondents Edwin L. Frederick and Richard

Ji•

Frederick and

the Board should not come to

the aid ofthe Complainants in what appears to be nothing more

than a back door effort to reopen discovery and to

increase the Respondents expense and

aggravation in

defending themselves and their company.

In Hickey v. Illinois

Central Railroad Co.,

35 Ill. 2d 427, 220 N.E.2d 415

(1966), the

Illinois

Supreme Court established the standard for applying laches to the state.

in that case, the

court stated:

It is, of course, elementary that ordinary limitations statutes and principles of

laches and estoppel do not apply to

public bodies under usual circumstances, and

the reluctance ofcourts to hold government bodies estopped to

assert their claims

is particularly apparent when the governmental unit is the State.

There are sound

basis for such policy.

Application

of laches or estoppel doctrines may

impair the functioning ofthe state in the discharge ofits government function, and

valuable

public

interests may be jeopardized or lost by its negligence, mistakes

or inattention ofpublic officials.

But it seems equally true that the reluctance to apply equitable principles

against

the State does not amount to

absolute immunity ofthe State from

(aches and

estoppel under all circumstances.

The immunity is a qualified one

and the

qualifications are variously stated.

It is sometimes

said laches and. estoppel will

not be applied against the state in its

governmental, public or sovereign capacity,

and it cannot be estopped from its

exercise ofits police powers or in its power of

taxation or the collection ofrevenue.

It has, however, been stated with frequency that the State may be estopped when acting in

a proprietary, as distinguished from its

sovereign or governmental, capacity and

even, under more

compelling circumstances, when acting in its governmental capacity.

Therefore, laches can be applied to the state under “compelling circumstances”, even

when the state is acting in a governmental capacity.

People v.

State Oil Company, William

Anest et. al. PCB 97-103 (May 18, 2000) citing Hickey v. Illinois Central Railroad Co.,

35 Ill. 2d

427, 220 N.E.2d

415

(1966).

In the present case, it is not apparent that the State’s ability to discharge its

government

function is impaired or that any valuable public

interest is jeopardized or lost if the doctrines of

laches and equitable estoppel are imposed to disallow the naming ofadditional Respondents.

The granting ofthis

motion to

dismiss will not act as impairment ofthe State’s right to discharge

its government function and protect public interests because the State will still be able to protect

the public

interest and perform its government function by enforcing against the remaining party

—

Skokie Valley Asphalt Inc.

Dismissing the Respondents under the doctrine of lEaches will allow

the Respondents

the protection against undue prejudice and the Claimants efforts to use

administrative proceedings to increase the cost

and effort

to the Respondents ofdefending

themselves in this

matter,

withoutjeopardizing the State’s ability to pursue its

case against the

Respondent it selected as the culpable party at the time it was in possession ofall

discovery

material, had full knowledge ofall ofthe parties involved, knew the roles each party played in

the matter and was fully informed ofall other facts of the case.

There is nothing in the record to ensure that the Claimant’s unjustifiable delay in naming

the additional Respondents was solely the result of a lack of due diligence, negligence, mistake

or inattention.

The Respondents

offer that the amending of the complaint to include additional

Respondent without adding allegations was an attempt to extend discovery in this matter,

increase the Respondents’

cost and effort in countering the Claimant’s procedural maneuvering

and further delay the hearing and final determination by the Board.

The Board needs to release the Respondents, Richard J. Frederick and Edwin L.

Frederick

from

liability in this matter not only to protect the Respondents against the prejudice that has

resulted from the unreasonable delay of the Claimants in naming additional Respondents but also

to protect the Board from becoming a harbinger for indifferent or intentionally manipulative

prosecution.

Under the standard established in the Hickey decision, “compelling circumstances”

must exist for the Board to invoke laches and equitable estoppel against the state when the state

is acting in its

governmental capacity.

People v. State Oil Company, William Anest et.

al. PCB

97-103 (May 18, 2000) citing Hickey.

The “compelling circumstances” in this matter, include

the fact that the Respondents’ were unable to fully defend themselves against charges ofalleged

incidents that occurred up to seventeen (17) years ago, five

(5)

years after the Respondents

terminated their employment with the entity involved in the matter and three (3) years after

discovery related to the liability ofthe parties was completed.

The “compelling circumstances”

include the fact that a party in the position ofthe Respondents

should have every right to rely on

the representations

and actions ofthe State to conclude that it will not be required to

defend

themselves

against allegations raised well after their retirement and after it had justifiably

determined that it had completed its responses to discovery requests.

For the Board to find that “compelling circumstances” are not established by the fact

pattern

in this matter, the Board would need to find that the term “compelling circumstances”

has

no meaning and that laches can never be applied against the State.

Such a ruling would be

contrary to the decisions ofthe Illinois Supreme Court on the issue.

The Illinois Supreme Court

has also

stated that “mere nonaction of governmental officers is

not sufficient to

work an

estoppel

...

there must be some positive acts by the officials which may have induced the actions

of the adverse parties”

See also Van Milligan v.

Board ofFire and Police Commissioners,

158

Ill 2d

85,

630 N.E. 2d 830 (1994); People v. ESG Watts (February

1998), PCB 96-107

7; People v. Bigelow Group Inc.

(January

1998), PCB 97-217, at 2.

In the case before the Board, the filing of the First Amended Complaint on December 29,

1997 without naming the Respondents as additional parties, the failure of the State to name the

Respondents as parties after requesting and receiving all information concerning all ofthe parties

involved after the discovery period that ended on October 20, 2000

and the fact that the

Claimants requested a second discoveryperiod without making

a request ofthe Claimants for

additional information regarding the parties, all were positive acts by the officials which induced

the Respondents to take actions which have prejudiced the Respondents ability to properly

defend themselves in this matter.

Wherefore, the Respondent respectfully requests that the Board dismiss the Respondent

Edwin

L. Frederick Jr.,.individually and as owner and President ofSkokie Valley Asphalt Co.,

Inc., and the Respondent Richard J. Frederick, individually and as owner and Vice President of

Skokie Valley Asphalt Co., Inc.

under the doctrines oflaches and equitable estoppel.

LEGAL STANDARD

OF LIABILITY

Because the Illinois Attorney General’s Office introduced this action against the

Respondents, it has the burden ofproofin this case.

(415 ILCS 5/31

(e) (2002).

The Illinois

Attorney General’s Office needs to show by a “preponderance ofthe evidence” that the violations

did occur and the individual Respondents were the parties responsible for causing the violation.

The Complainants named Richard Frederick and Edwin Frederick, both individually and

as officers ofSVA.

The burden ofproof forindividuals would be the afore stated

“preponderance ofthe evidence” standard.

However, to

hold the Fredericks responsible as

corporate officers, the Complainant must meet the standard ofproofestablished by Illinois law

for corporate

officers in environmental

enforcement cases.

The standard for the burden ofprooffor corporate officer in Illinois environmental

enforcement actions is

established People v. C.J.R. Processing, Inc et.

al.

269 Ill.

App.

3d 1013,

647 N.E. 2d 1035

(3d Dist.

1995).

The C.

J. R.

Court held that a corporate officer can only be

held liable for his

company’s environmental violations if he was personally involved in or

actively participated in a violation ofthe Act,

or ifhe had the ability or the authority to control

the acts or omissions that gave rise to

the violation (Id. at 1018).

The Complainant presented insufficient evidence at trial to

hold either Richard Frederick

or Edwin Frederick liable under any ofthe Counts.

In fact, the Fredericks can not he held liable

of the violations of the Counts related to

failure to comply with the terms ofthe NPDES permit

because they were not the permit holders and had no duty to comply with the permit

requirements.

Similarly, they were not owners of the property and can not be held liable, as

individuals

for any release from the property. For either Richard or Edwin Frederick to be held

liable in this matter, the standard established in People v. C.J.R. Processing, Inc etal.

that the

officer was personally involved in or actively participated in a violation of the Act, or if he had

the ability or the authority to control the acts or omissions that gave rise to the violation must be

established.

The application ofthis standard to the evidence presented in this case does not

support an argument by the Complainants that Richard and Edwin Frederick were responsible for

the violation, even if it is

shown that a violation occurred.

ANALYSIS OF THE CULPABILITY OF THE RESPONDENTS

COUNT I

The Complainant maintains that the Respondents, SVA, Edwin L. Frederick, Jr.

and Richard J. Frederick, violated Section

12(f) ofthe Act, 415 ILCS

5/12(f)2002 by failing to

comply with NPDES Permit.

The Complainant’s

contention that the Respondents, Edwin

Frederick, Jr.

and Richard Frederick, violated the requirements ofthe NPDES Permit that the

IEPA issued

SVA are frivolous and

contradict the testimony provided by the witnesses in

support ofthe case presented by the JEPA.

Mr. Michael Garretson, the acting manager of the

Compliance Assurance Section of the Illinois Environmental Protection Agency, testified that

SVA was the responsible party for reporting the DMRs under the NPDES Permit

(Trial at 70).

The NPDES Permit requires the perrnitee to

submit the DMR.

(Trial at 74).

Mr. Garretson had

no information

which would lead him to believe that the Respondent, Edwin L. Frederick, Jr.,

actually participated in any aspect ofthe DMRs

submitted by SVA

(Trial at

69).

The

certification on the DMR, signed by the Respondent, Richard Frederick, in his capacity as Vice-

President ofSVA, merely requires the signator to attest to the best ofhis knowledge

and belief

that the information provided in the DMR is true, complete and accurate.

(See Complainant’s

Exhibit 3).

The certification does not require this signator to verify the information contained in

the DMR.

The DMR merely requests

that the signator report to the best ofhis knowledge

(Trial

75).

The Complainant has failed to

present any evidence in support ofits allegations that the

Respondents, Edwin L. Frederick, Jr. and Richard Frederick, were individually responsible for

submitting the DMRs under the permit that the IEPA issued to SVA.

The Complainant’s

Closing Argument and Post Trial Brieflumps the Respondents together and fails to make the

differentiation between the Respondents based on their responsibilities under the NPDES Permit.

(Section B of the Closing Argument and Post Trial Brief ofthe Complainant).

The

Complainant’s Closing Argument and Post Trial Briefignores

the testimony of Mr. Michael

Garretson

and exemplifies a theme that runs throughout the Complainant’s case, namely a

perpetual failure to meet its burden ofproof and to provide sufficient evidence in support ofits

allegations.

According to

Mr. Michael Garretson, the purpose behind the DMRs is to

send out

a compliance letter if a DMR is not in

compliance and to

gain compliance from the permitee as

soon as possible.

(Trial at 87).

The individual from the IEPA who reviews the DMR submitted

would send out a compliance letter, if the individual reviewing the report thought something was

suspicious about a report or a series ofreports submitted by permitee.

(Trial

at 89).

Mr.

Garretson could not find the log books ofthe DMRs submitted by SVA from the years

1994 and

1995

(Trial at 49).

Between the late 80’s and early 90’s, Mr. Michael Garretson was not aware of

the Illinois EPA suspecting that SVA had submitted suspicious DMRs

(Trial at 89).

Mr.

Garretson did not look for reports

or other communications from SVA correcting its

DMRs

(See

Trial at 91).

At the direction ofthe Attorney General’s office, Mr. Garretson gathered the

information regarding the DMRs submitted by SVA

(Trial at

95-97).

Under the NPDES Permit,

SVA was only required to

maintain its DMRs

for three years from the effective date ofthe permit

(Trial at

103-106).

The Complainant has submitted only two compliance

letters sent from the

Illinois EPA to SVA dated October 31,

1988 and January

1990

(See Complainant’s Exhibit

19).

In response to the October 31,

1988 compliance letter ofthe JEPA, SVA responded on

November 9,

1988

stating that it was unaware that it was obligated to submit DMRs as long as

SVA was not discharging into the area.

In addition, SVA explained that it was unable up to a

few months prior to the letter to obtain a new easement to replace the existing tile and was not

able to discharge into the area.

SVA indicated that it would submit reports as required.

(See

SVA letter dated November 9,

1988 presented

in complainant’s Exhibit

19).

In response to the letter ofthe Illinois EPA dated January

1990., SVA sent

letter apologizing for its

oversight in submitting the DMR and

explained that a newly hired

employee was assigned the task oftaking the sampling, but forgot to do so.

SVA explained its

corrective measures and stated that the sample from January

1990 had already been taken to the

lab

(See SVA letter dated January

17,

1990 presenting in complainant’s Exhibit

19).

The

complainant has not presented any evidence at the IEPA issued

additional compliance letters to

SVA regarding suspicious or missing DMRs.

It can be reasonably deducted, based on the

testimony of Mr. Michael Garretson, that the other alleged incidences ofwhich the complainant

alleges SVA failed to comply with the requirements ofthe NPDES Permit by timely filing

DMRs, were determined by IEPA to be insignificant

and did not merit even a compliance letter.

The Attorney General’s Office has also manipulated the evidence by failing to

request Mr.

Michael Garretson to search for DMRs submitted by SVA correcting the allegedly duplicative

DMRs submitted by SVA although the Attorney General’s Office was well aware that SVA had

affirmatively stated it timely submitted corrective DMRs once this situation was

discovered by

SVA.

That SVA had affirmatively stated in its pleadings that it had submitted DMRs in

correction ofthe duplicative DMR once SVA became aware ofit.

However, SVA was unable to

support its position with documentation on account ofthe complainants failure to bring the

present cause ofaction in a timely manner.

Further, the JEPA has historically mislogged information submitted in the DMRs,

misplaced reports, misfiled reports, sent reports to the wrong individuals and sent

documents to

the wrong regions

(See Trial at 66 and

197).

At no point in time did the representative ofthe

IEPA who was responsible for verifying the information contained in the DMR submitted by

SVA, namely Mr. Christopher Kallis, Ever notify SVA that the information contained in its

DMRs was

inaccurate or suspicious.

(See Trial

195).

The Complainant has failed to present

any evidence that Mr. Kallis notified SVA that the information contained in its

DMRs was

suspicious, unusually elevated for the type ofindustry and region or inaccurate in anyway.

The

representative ofthe IEPA, Ms. Jan Hopper, whose responsibility was to review the DMRs

submitted by SVA and compare the information in the report to the NPDES Permit to determine

if a violation had occurred was not even called as a witness by the Complainant.

(Trial

at 67).

Ms. Hopper did not receive a DMR report from a NPDES permitee, she was not suppose

report the missing DMR

or take corrective action unless a pattern ofnon-submission

occurred.

The JEPA, would only issue a compliance inquiry letter to

the permittee

once a pattern of non-

submission occurred. (Trial at 68).

Only the Attorney General has made an issue of the DMRs

and the compliance requirements ofthe NPDES permit ofSVA.

The JEPA, the governmental

entity in charge ofadministering, reviewing and determining compliance ofthe NPDES permit

and the DMRs, through its

actions, has accepted the DMRs ofSVA and the determined SVA’s

DMRs and pattern

so submitting DMRs substantially complied with the NPDES

permit.

The

Complainant has presented no evidence to support that the Illinois EPA at the time ofreceiving

the DMRs of SVA thought that the levels ofTSS reported

in the DMRs were significant or

merited corrective action on either the EPA or SVA.

On the contrary, Mr. Michael Garretson,

the Complainant’s expert on the requirements under the NPDES permit and the interpretation of

DMRs, opined that numerous factors that are temporary and beyond the control ofthe permitee,

can effect the levels ofTSS reported in a DMR, including excessive rain

(Trial at 78).

SVA

substantially complied with its

NPDES permit although it was under

significantly more

stringent

requirements regarding effluent limit levels than other industrial facilities across the United

States

(Trial at 4 14-415).

COUNT II

The Complainant alleges that SVA failed to renew its NPDES permit in

a timely

manner.

The arguments presented in Count I above regarding the requirements ofthe

Respondent’s, Edwin L. Frederick, Jr. and Richard Frederick, under the NPDES Permit are

applicable to Count II.

The permitee under the NPDES permit was SVA.

The Respondents,

Edwin L. Frederick, Jr. and Richard Frederick, had no obligation individually to renew the

NPDES permit.

A violation ofSection 309.102 (a) of the Illinois Pollution Control Board Water

Pollution Regulations,

35 Ill.

Adm.

Code 309.102

(a), if any, would be limited to

the actions of

SVA and would not apply to

the Respondents Edwin

L. Frederick, Jr. and Richard Frederick.

The actions ofSVA were not malicious and were based upon a reasonable

interpretation of its obligations under the Act.

Complainant’s Exhibit

19, in particular the SVA

letter dated April 22,

1991

as well as the SVA letter dated May 7,

1991

clearly shows that SVA

upon advise ofits

retained civil engineer were

diligently attempting to determine whether SVA

was required to renew its NPDES permit.

Once advised by its

environmental engineering

consultant that

a NPDES permit maybe required under the amended Act,

SVA requested a

reasonable extension ofthree weeks to

file its application.

The Complainant has not provided

any evidence that the requests for an extension oftime for SVA to file an application was

rejected by the IEPA.

To this date, whether SVA was required to renew its NPDES

permit in

1991, is questionable. According to the only expert testimony on this issue,

SVA wais eligible

for a General Storm Water Permit instead ofan individual Storm Water Permit and was not

required to file DMRs

(Trial at 416-417).

COUNT III

The allegations ofthe Complainant that SVA failed

to take water discharge

samples

at a point representative ofthe discharge before it entered the stream

is based on pure

speculation and conjecture.

The Complainant has not provided any testimony through its

witnesses that the levels ofTSS reported in the DMRs submitted by SVA were unusual or

aberrant when compared to other similar industries in the same region.

Although Mr.

Kallis was

the responsible

field representative ofthe JEPA to

determine whether SVA’s DMRs

were

accurate, he did not testify that he ever took samples and compared them to the test results

reported in

SVAs DMRs.

The Complainant

relies solely on Mr. Kallis’ opinion expressed in his

report dated August 9,

2001 that referenced an inspection visit on May 21,

1991

where Mr.

Kallis

concluded that SVA did not have a representative sampling point because he left the premises

when “tempers

flared” and there was some hostility on the part ofEdwin

L. Frederick, Jr.

and

Richard Frederick.

Mr. Kallis thought they wanted him

to go so he just left to

avoid a

confrontation

(Trial at 38-42).

However, the last time Mr. Kallis took samples ofthe discharge

water was in 1992,

SVA had an accessible representative sampling point.

(Trial at

192).

Mr.

Kallis did not know how long the accessible

representative sampling point had been in

existence, but believed the point may not have been present

1987

(Trial at

19:2-193).

Complainant has not established that the representative discharge point observed, by Mr. Kallis in

early 1992 was not present since the issuance of the NPDES Permit to

SVA.

Since the alleged

incident by Mr. Kallis he has never experienced any further hostilities although he has been out

to the SVA

site more than five times

and took samples during those other visits

(Trial at 164-

166).

The Complainant’s allegation that SVA failed to take water discharge samples at a

point representative ofthe discharge before the water entered the stream has not been supported

by any reliable evidence whether factual or opinion. It is curious that JEPA first inspected the

SVA site for a representative discharge point nearly six years after the NPDES permit was issued

SVA.

The statement by the Complainant that the Respondents “did not maintain an accessible

affluent sampling point for the discharge from the SVA lagoon therefore, did not and

could not

take samples representative of the discharge” is based on the speculation ofMr. Kallis regarding

when the SVA established the representative discharge point.

COUNT IV

The Complainant has failed to provide any evidence thatthe SVA facility was the

source ofthe oily substance found in the Avon-Fremont drainage ditch.

Further, the

Complainant’s allegations that the Respondents, Edwin L. Frederick, Jr. and Richard Frederick,

were responsible for the presence of an oily substance on the Avon-Fremont Drainage Ditch are

baseless.

The Complainant relies upon pure speculation and

conjecture to support

allegations that the Respondents were responsible for the presence ofan oily substance on the

Avon-Fremont Drainage Ditch.

Mr. Kallis, who inspected the SVA facility on March 22,

1995

and walked all

over the property as well as looked into a manhole located on the propertyof SVA

did not find any evidence that the contamination was coming from the SVA facility

(Trial at

158).

Although Mr. Kallis inspected

SVA’s property in March of 1995 he did not take any

samples of materials he saw at the SVA site to

analyze them and compare those

samples with

samples from the drainage ditch

(Trial at 176).

Mr. Kallis readily admits that his

opinion that

SVA was the source ofthe contamination in the Avon-Fremont Drainage Ditch was pure

speculation.

(Trial at

176).

He was not aware of any entity taking samples from SVA

afterthe

contamination of the Avon-Fremont Drainage Ditch was discovered to compare

the samples

from SVA with the material found in the drainage ditch (Trial at

177).

Mr. Kallis stated that he

was aware other drain tiles contributed to the farm tile that was emitting the oily substance into

the Avon-Fremont Drainage Ditch (Trial at

177), but he never looked into the sources ofthose

contributory drain tiles (Trial at

178).

Mr. Kallis admitted that the oily substance coming from

the farm tile

could have come from sources other than the SVA site.

(Trial at

178).

Mr. Kallis

could even state whether the oily substance he collected from the Avon-Fremont Drainage Ditch

was gasoline, a gasoline based product,

motor oil, diesel fuel or any other product

(Trial at 180).

Further, Mr. Kallis testified that he had no information that Edwin L.

Frederick,

Jr. or anyone

at Edwin L. Frederick, Jr.’s direction placed the oily substance in

the farm tile

which trained into the Avon-Fremont Drainage Ditch

(Trial

182).

Mr. Kallis also had no

information whatsoever that Richard Frederick or anyone at Richard Frederick’s direction place

an oily substance in the farm tile which drained into the Avon-Fremont drainage ditch.

(Trial at

182).

Mr. Kallis had no information which would lead anyone to believe that anyone

from SVA

actuallyplaced the oily substance in the farm tile that drained into the Avon-Frernont Drainage

Ditch.

(Trial at

183).

The opinion ofMr. Christopher Kallis and Mr. Don Klopke, representatives of the

IEPA, relied heavily on the report ofMs.

Betty Lavis ofthe United States Environmental

Protection Agency (USEPA) dated May 3,

1995 presented as Exhibit 25

(Trial at

184 and 227

respectively~.The pertinent section ofMs.

Lavis’ report appears in the second paragraph under

section III on page 2 wherein she states that she met the owners at the site who said they found a

leak and would address the problem.

Based on this statement Mr. Kallis and Mr. Klopke through

the conclusion that a leaky underground storage tank on the SVA property was the source ofthe

oily contamination found in the Avon-Fremont Drainage Ditch.

USEPA was also told by the

consultant for SVA, Mr. James Huff, in May of 1995 that he thought a leaky underground storage

tank on the SVA property the possible source ofcontamination in the Avon-Frernont Drainage

Ditch.

(Trial at 425).

Mr. Huff’s opinion regarding the source ofthe contaminat:ion at that point

in time was conveyed to the Respondents, Edwin

L. Frederick, Jr. and Richard Frederick.

However, when the leaky underground

storage tank was removed and soil borings were taken,

Mr. Huff changed his opinion and no

longer thought that the leaky underground storage tank on

the SVA facility was the source ofthe oily substance found in the Avon-Fremont Drainage Ditch

(Trial at

385).

Mr. Huff furthered opined that there is a possibility that the oily substance found

in the Avon-Fremont Drainage Ditch may have originated from a former gasoline tank which

was removed somewhere in the

1970’s

(Trial

at 386-387).

However, the Complainant

did not

establish whether ornot this possible source was most

likely the source ofthe oily substance

found in the Avon-Fremont Drainage Ditch.

Mr. Klopke who also performed an investigation to

determine the source ofthe oily substance

in the Avon-Fremont Drainage Ditch stated that

Mitch’s Green Thumb Nursery was an equally potential source for the oily substance found in the

Avon-Fremont Drainage Ditch. (Trial at 248).

However, neither Mr. Huffor Mr. Klopke have

any personal knowledge based on empirical evidence such as testing ofsubstances, smell, touch

or observation which would

lead them to believe that SVA was most likely the source ofthe oily

substance found in the Avon-Fremont Drainage Ditch

(Trial at 234,

235 and 238).

Mr. Klopke

went as far as to state that his sole basis for his opinions regarding the source ofthe oily

substance found in the Avon-Fremont Drainage Ditch was a report authored by the consulting

firm Huff & Huff sent to the

JEPA on May 1,

1995 (Trial at 24).

However, as previously stated,

the author ofthat

report, Mr. James Huff, came to the conclusion that the leaky storage tank was

not the source ofthe oily substance found in the Avon-Fremont Drainage Ditch.(after the leaky

storage tank was removed and soil testing was conducted around the excavated area)

The Complainant has failed to meet its burden ofproofin showing that the oily

substance in the Avon-Fremont Drainage Ditch more likely than not

came from the SVA facility.

An equally probable source, if not more probable source, of the oily contamination exists,

namely Mitch’s Green Thumb Nursery.

The Complainant has failed to

show the samples ofthe

oily substance taken from the drain tile matched any substance found on the SVA property.

The

IEPA did not

investigate further, although SVA has been under the intense scrutinyofthe IEPA

and USEPA for an extensive period oftime,

even after witnesses from the IEPA testified that

other tiles contributed to the farm tile, whether other sites

emitted the oily substance. The

Complainant through

the IEPA rushed judgment and made it a decision early in the investigation

that SVA was the source ofthe oily substance but failed to substantiate its allegations and

assumption with empirical evidence. The Complainant relied on conjecture to support its

change.

COUNT V

It is uncontroverted that SVA has been subject to more stringent requirements

regarding effluent limit levels then similar industries across the United States and in particular

Illinois.

(Trial at 414-415).

Mr. Garretson ofthe EPA

admitted in his testimony that

as a matter

ofcourse

the IEPA does not take action if a singular DMR reflects levels higher then allowed

under the NPDES permit. (Trail at 80). Even two reports back to back may only possibly lead to

action on the part ofthe IEPA. The decisionwhether or not to take action was left up

Ms.

Hopper and the individuals in the field. (Trail at 80). The Complainant puts forth Exhibits 9-17

as examples ofexcessive discharge ofTSS on the part of SVA.

However, the IEPA with respect

to the singular monthly reports reflecting elevated TSS levels has admitted that no action has

been taken or should be taken regarding those reports. Further, the EPA with respect to

the

reports that reflect elevated TSS levels for consecutive months, JEPA has already chosen its

remedy and either decided to do

nothing or to issue a compliant letter. In light ofthe numerous

environmental factors that are beyond the control ofa permitee that influence the level ofTSS at

any given point, SVA has a commendable record in accurately reporting the levels of TSS, even

if elevated. The IEPA did not seek legal action contemporaneous to receiving the DMR from

SVA. This charge is clearly an

attempt by the Attorney General’s office to

pad its case with

issues that the Illinois EPA has reviewed and historically considered inconsequential. Mr.

Garretson freely admits that he first became aware ofthe particular levels when he was asked by

the Attorney General’s office to prepare documentation for this case (Trial

at 84). Overten years

have elapsed since SVA submitted the DMRs at issue reflecting elevated TSS levels without the

head ofthe compliance

department ofthe Illinois EPA expressing any concern on his own

volition or even becoming

aware of the situation until he was approached by the Attorney

General’s office. The purpose ofthe DMRs, which is to gain compliance from the permitee as

soon as possible (Trial at 87) and not to fine companies like SVA making a good faith effort to

comply with the requirements ofits NPDES permit has been achieved.

Even more egregious, as discussed above, the NPDES permit was issued to SVA.

The entity responsible for complying with the NPDES permit was SVA.

The Complainant has

not presented any evidence, (as a matter offact the witnesses called from the Illinois EPA by the

Complainant have even supported the fact) that the Respondents, Edwin Frederick and Richard

Frederick were not the individuals responsible to

report and maintain the requirements ofthe

NPDES permit. On the contrary, the Complainant’s witnesses have testified to the contrary.

The

have admitted to

a lack of evidence that the Respondents, Edwin L. Frederick, Jr. and Richard

Frederick, personally through their authority violated the requirements ofthe NPDES permit. The

Complainant has not provided any evidence to support its charges against these Respondents.

ANALYSIS OF DAMAGES AND CIVIL PENALTY

The Respondents maintain that no violations of the Act have been shown in this matter.

The

Respondents Edwin Frederick and Richard Frederick also maintain that no showing of violation

against them should be allowed by the Board because the Respondents unreasonable delay in

pursuing the case against them has unreasonably prejudiced their ability to defend themselves.

However, even if the Board were to find that a violation has occurred and that the Complainants

have proven by a preponderance ofthe evidence that one or more ofthe Respondents were

responsible for the violation, the Respondents argue that the standard for damages under the five

counts brought under this complaint do no justify the imposition ofany penalties.

Section

33 ofthe Act, 415

ILCS

5/33©)

(2002) requires the Board to make a

determination whether the violations

are unreasonable.

Section

states in pertinent part:

In making its

orders and determinations, the Board shall take into consideration all of the

facts and circumstances bearing upon the reasonableness ofthe emissions, discharges or

deposits involved including, but no limited to:

The character and degree ofinjury to, or interference with, the protection ofthe

health,

general welfare and physical property of the people;

The social and economic value ofthe pollution source;

The suitability or unsuitability ofthe pollution source to

the area in which it is

located, including the question of priority or location in the area involved;

The technical practicality and economic reasonableness ofreducing or eliminating

the emissions, discharges or deposits resulting from such pollution source;

and

Any subsequent compliance.

COUNTS IV AND V

Because only Counts IV and V involve “emissions, discharges or deposits”, this

analysis should only be applied to these Counts.

Count

involves the release ofdischarge from

a drainage tile into the Avon Drainage Ditch.

To date it has not been confirmed by a

preponderance ofthe evidence that this accidental release came

from the SVA site and if it was

from the SVA site, it was not shown that the discharge was “caused” by any ofthe Respondents.

It definitelywas not “caused” by the Respondents Edwin Frederick or Richard Frederick who did

not own the site and only became involved in the incident in their attempt to

alleviate the

problem.

With respect to the character and degree of injury to, or interference with, the protection

ofthe health, general

welfare and physical property ofthe people, there is no

evidence that any

such factors exist. The Complainant’s witness, Mr. Donald Klopke,

who has responded to

hundreds of emergency situations ofbehalfofthe EPA (Trial at

215,216),

testified that the

damaged caused by the release to the Avon Drainage Ditch were ofa temporary nature.

He noted

the sheen on the water in the ditch that was gone shortly afterthe incident and the possibility of

odor problems while the released materials were exposed.

However, he did not l:estify as to any

permanent health concerns or concerns for property damage as a result ofthis release (Trial at

272,273).

In fact, the JEPA

Emergency Response Unit, which included Mr. Klopke, considered

this

release to be ofsuch minor impact that they did not even bother to identify the number of

drain tiles

that fen into farm tile, what

farm tiles fed into the Avon Drainage Ditch (Trial at 241),

take samples ofthe materials in the drainage ditch and attempt to

match the released materials to

at the SVA site (Trial at 234), investigate the tanks at the SVA site to determine if they were the

source ofthe contamination or even how many tanks were

at the site (Trial at 235), fully

investigate other potential sources (Trial at 247) or even attempt

identify other sources ofthe

contamination and definitively show what source was responsible for the release to

the Avon

Drainage Ditch (Trial at 238).

An additional indication ofthe lack ofconcern that the EPA had for this release

is the

fact that neither the Emergency Response Unit or any other response group from the EPA

revisited the site after their initial

visit on April

19,

1995,

even though

they had not identified the

source of the release and the release to the Avon Drainage Ditch continued

(Trial at

255).

If the

release represented any notable degree ofpotential injury to, or interference with, the protection

of the health, general welfare and physical property ofthe people, the EPA

surely would have

follow through with their duty to rectify the situation.

The fact that the TEPA determined that this

release was so minor that it did not require any follow up

the clearest indication ofthe minor

impact this incident had regarding interference with, the protection ofthe health, general welfare

and physical property ofthe people.

Mr. James Huff also testified that actions taken at the request and at the expense of Edwin

Frederick and Richard Frederick such as placing oil absorbing booms on the waters to collect the

sheen materials were effective in

collecting and limiting the spread ofthe discharge material

(Trial at 351,352).

The Fredericks continue to take the actions necessary to ensure that

discharges to

the Avon-Fremont Drainage Ditch are avoided (Trial

at 347).

The social and economic value of the pollution source was never questioned in the

Complainant’s presentation ofits

case and should be unchallenged here.

SVA was an asphalt

paving contractor (Trial at 277,

278, 437) with a need for a facility to store materials and

equipment.

Asphalt payers are an essential part ofour present social structure and economy that

is highly dependent on

good roads and highway maintenance.

Facilities to host companies in the

paving business that allow these companies to properly store materials and equipment and to

operate their businesses are equally important in value.

Therefore, this

factor should heavily in

favor ofthe Respondents position that no penalty should be assessed in this matter. This

argument pertains to both Count IV and Count V.

The suitability or unsuitability ofthe pollution source to

the areain which it is located,

including the question ofpriority or location in the area involved

also was unquestioned in the

Complainant’s case and supports an argument against any assessment ofpenalty.

The clearest

evidence that the source is suited to the area it is located is the fact that local authorities that are

in the best position to

determine the suitability of a business to

an area, have issued to permits

SVA to operate at the site.

Prior to SVA being located at the site, a company with similar

operations was also allowed to

operate their and presently, a company with operations almost

identical to SVA’s is still in operation at the site.

Absent any information presented by the

Complainant

to indicate that the pollution

source in unsuitable to the area in which it is located,

including the question ofpriority or location in the area involved needs to be interpreted as a

strong indication that the source was suitable to the area and this factor should weigh strongly in

support ofthe argument that no penalty should be

assessed under either Count IV or Count V.

Consideration ofthe fourth factor under Section

—

the technical practicality and

economic reasonableness ofreducing or eliminating the emissions, discharges ordeposits

resulting from such pollution source

—

highlights the unreasonableness ofpursuing

a penalty in

this case against any ofthe Respondents.

With respect to Count IV, the technical practicability

and economic reasonableness are not even issues to be considered in mitigation until

the source

was identified.

Regardless ofwhether there existed a practical technical solution or an

economically reasonable solution, none ofthe Respondents were in a position to

take the

necessary action to

reduce or eliminate the discharge until the source had been identified.

Only after Richard Frederick and Edwin Frederick accidentally discovered the drain tile

that went through the SVA property and after Mr. James Huff theorized that the drain tile was a

probable source ofthe discharge into the Avon Drainage Ditch was it possible to

even consider

factors of technical practicality and economic reasonableness in

reducing or eliminating the

discharge.

Once the probable source was identified, the consideration ofthe technical

practicality and economic reasonableness not only support an

argument that these are mitigating

factors but also show that the Respondents

acted in good faith to

eliminate the discharges.

Both Richard Frederick and Edwin Frederick took all actions necessary arid available to

reduce and eliminate the discharge as soon as they identified the suspected source.

Although

neither of these Respondents

had a clear responsibility for the discharge because neither was

personally involved in or actively participated in the cause ofthe discharge or had the ability to

control the acts or omissions that gave rise to

the violation, they authorized action to

address the

situation.

At no point did any ofthe Respondents attempt

to hinder the effort to eliminate the

discharge because the remediation action would technically impractical or economically

unreasonable.

The extent ofthe technical effort

is shown by the fact that Respondents Edwin

Frederick and Richard J. Frederick continue to employ and pay Mr. James Huff and his firm to

identify and remediate possible pollution sources at the SVA

site to

this date (Trial at 463).

The

extent ofthe economic commitment is illustrated by the fact that the Respondents has spent in

excess of$ 150,000 in their effort to eliminate the discharge (Trial at 468).

With respect to

Count V, technical practicality and economic reasonableness ofreducing

or eliminating the emissions,

discharges or deposits resulting

from such pollution source are

critical

factors in understanding the complete unreasonableness ofthis Count.

Testimony by both

Mr. Huff and Mr. Kallis confirmed that the violations sited in Count V resulted as a result of

runoffof soil from neighboring farm fields

during intense rain events (Trial at 200, 516-517).

The Respondents had installed a retention pond to allow the

solids to settle before discharge and

this

activity did reduce the level ofTSS in the discharge (Trial at

516-517).

However, it is

technically impossible and consequently economically unreasonable for the Respondents to

control rain events.

The unreasonableness ofthis

event is illustrated by the testimony of Mr.

Kallis who stated that the state seldom enforced violations that involved accedences ofTDS

and

TSS releases in circumstances similar to those reported by SVA ((Trial at 201), and the testimony

of Mr. Huff who pointed out that the IEPA had made a mistake in placing this requirement in a

storm

water NPDES permit like the one issued to

SVA and that the IEPA had corrected their

mistake when they issued a draft renewal permit in

1996 (Trial at

518).

The strongest factor to be considered in determining that no fine should be imposed under

this count is the subsequent compliance efforts of the Respondents

—

especially Richard

Frederick and Edwin Frederick.

The Fredericks acting individually work with IEPA and USEPA

on addressing the problems at the Avon Drainage Ditch even before it was known that the source

of the contamination was from the SVA site.

It was the Respondents Richard Frederick and

Edwin Frederick that continue to look for the source ofthe contamination even after the JEPA

Emergency Response Unit had completed their investigation and

decided the small release was

not worth their continued effort to identify the

source.

When the Fredericks identified the drain

tile on the SVA property, the immediately contacted the engineering consulting

firm of Huff and

Huff Inc. to ensure the proper course ofaction.

Both the Fredericks and SVA gave Mr. James

Huff a freehand to do what ever he

thought was right and necessary even going so far as to

replace the ineffective booms that USEPA had placed in the waters to

collect the discharge with

more expensive, more effective booms paid for by the Respondents.

It was the Respondents who continued to control the problem ofthe discharge and who

continued to eliminate the potential

sources ofcontaminants long after EPA and USEPA lost

interest in the situation.

It is Edwin and Richard Frederick who continue this eflbrt even through

this time to get closure on all of the potential sources ofcontaminants identified at a cost of in

excess of$150,000.00 to outside contractors and considerable costs on payments to SVA

employees.

The Complainant’s own witness, Mr. Klopke,

stated that it is highly unusual that

people or companies that are not truly responsible for a release to take responsibility for the

environmental problems caused by the release (Trial

at 270-271).

Yet this type of subsequent

compliance effort is exactly what Richard Frederick and Edwin Frederick undertook both on

behalfof SVA and then as individual with no duty to perform.

This type of compliance effort

should not be rewarded with

additional penalties to

the Respondents because ofa release from a

source that had been installed by a previous owner of the property, that they were not aware of

and

that they could not prevent or discover until after the release occurred.

As stated in the

argument the fourth consideration ofSection 33, it is technically impractical to address a source

before you are aware ofit and it is unreasonable to

expect any ofthe Respondents

to undertake

any compliance effort until they know what action needs to

be taken to

comply.

Consideration of

this

fifth factor as well as the other factor delineated in Section 33,

clearlyindicate that no

penalty can be justified under

Section 33.

Section 42 ofthe Act, 415 ILCS 5/42

(from Ch.

111

‘A, par.

1042) addresses civil

penalties for any person that violates any provision ofthe Act or any regulation adopted by the

Board,

or any permit or term or condition thereofor that violates any determination or order of

the Board pursuant to the Act.

Paragraph (h) ofSection 42 authorizes the Board to consider any

matters of record in mitigation or aggravation ofpenalty. The section states:

(h)

In determining the appropriate civil penalty to be

imposed under subdivisions (a),

(b)(1), (b)(2), (b)(3) or

(b)(5)

ofthis

Section, the Board is authorized to

consider

any matters of record in mitigation or aggravation ofpenalty, including but not

limited

to the following factors:

(1)

the duration and gravity ofthe violation;

(2)

the presence or absence ofdue diligence on the part ofthe respondent in

attempting to comply with requirements ofthis Act and regulations

thereunder or to

secure relief therefrom

as provided by this Act;

(3)

any economic benefit accrued by the respondent because ofdelay in

compliance with requirements, in which case the economic benefits shall

be determined by the lowest cost alternative for achieving compliance;

(4)

the amount ofmonetary penalty which will serve to deter further violations

by the respondent and to otherwise aid in enhancing voluntary compliance

with this Act by the respondent and other persons similarly subject to the

Act;

(5)

the number, proximity in time,

and gravity or previously adjudicated

violations ofthis Act by the Respondent;

(6)

whether the respondents self-disclosed in accordance with

subsection (I) of

this Section,

the non-compliance to

the Agency; and

(7)

whether the respondent has agreed to undertake a “supplemental

environmental project” which means an

environmentally beneficial project

that a respondent agrees to undertake in settlement ofan enforcement

action brought under this

Act, but which the Respondent is not otherwise

legallyrequired to perform.

In determining the appropriate civil penalty to be imposed under

subsection (a) or paragraph (1), (2), (3), or

(5)

of subsection (b) of this

Section,

the Board shall ensure,

in all cases, that the penalty is at least as great as the

economic benefits, if any, accrued by the respondent as a result of the violation,

unless

the Board finds

that imposition ofsuch penalty would result ion

a arbitrary

or unreasonable financial hardship.

However, such civil penalty may be off-set in

whole or in part pursuant to a supplemental environmental project agreed to by the

complainant and the respondent.

(I)

A person who voluntarily self-discloses non-compliance to

the

Agency, ofwhich the Agency has been unaware, is

entitled to a 100

reduction in

the portion ofhe penalty that

is not based on the economic benefit ofnon-

compliance if the person can establish the following:

(1)

that the non-compliance was discovered through an

environmental audit,

as defined in Section 52.2 ofthis Act, and the person waives

the environmental audit privileges as provided in that Section with respect to that

non-compliance;

(2)

that the non-compliance was disclosed in writing within 30

days ofthe date on which that person discovered it;

(3)

that the non-compliance was discovered and

disclosed prior

to:

(I)

the commencement of an Agency inspection,

investigation orrequest for information;

(ii)

notice of a citizen suit;

(iii)

the filing ofa complaint by a citizen, the Illinois

Attorney General, or the State’s Attorney ofthe

county in which the violation occumred;

(iv)

the reporting ofthe non-compliance by an

employee

ofthe person without that person’s knowledge; or

(v)

imminent discovery ofthe non-compliance by the

Agency;

(4)

that the non-compliance is being corrected and any

environmental harm is being remediated in a timely fashion;

(5)

that the person agrees to prevent a recurrence ofthe non-

compliance;

(6)

that no related non-compliance events have occurred in the

past three years

at the same facility or in the past

years as part of a pattern at

multiple facilities owned or operated by the person;

(7)

that the non-compliance did not result in serious actual

harm or present an imminent and substantial endangerment to human health or he

environment or violate the specific terms of any judicial or administrative order or

consent agreement;

(8)

that the person cooperates

as reasonably requested by the

Agency after the disclosure; and

(9)

that the non-compliance was identified voluntarily and not

through a monitoring, sampling, or auditing procedure that

is required by statute, rule, permit, judicial or

administrative order, or consent agreement.

Ifa person can establish all of the elements under this

subsection except the

element set forth in paragraph (1) ofthis

subsection, the person is entitled

to a

reduction in the portion ofthe penalty that is not based upon the economic

benefit ofnon-compliance.

The provisions ofsubsection (I) do not apply to the Counts brought under the Complaint and

therefore need not be analyzed.

The remainder ofSection 42 needs to

be applied to all ofthe

Counts to

determine the appropriate damages.

However, such an application ofthe remainder of

section 42

would indicate that no penalty should be assessed against any of the Respondents.

The threshold question that needs to be addressed under this section is the economic

benefit accrued by the Respondent as a result of the violations.

The penalty must be at least as

great as the economic benefit, unless the Board finds that imposition ofsuch penalty would result

an arbitrary or unreasonable financial hardship.

In this matter the Complainant was unable to

establish that any economic benefit was accrued by any of the Respondents.

In fact, no

economic

benefit was realized by anyof the Respondents and a review of the violations and the activities of

the Respondents

would clearly indicate that no economic benefit could have accrued.

COUNT I

In Count I, the Complainant accused the Respondents ofmaking false statements in the

DMRs it submitted to the IEPA under SVA’s NPDES permit.

SVA was able to

show that the

mistake was due to a clerical error as a result of an inexperienced employee submitting the wrong

month’s data.

The correct information was subsequently submitted to the JEPA.

Since the required testing and report preparation were performed, SVA

did not avoid any

expense by submitting

the wrong data.

In fact, they incurred substantial additional cost in

making the required correction and addressing the problem through their lawyers with

the

Attorney General’s Office. There can be no

argument that the Respondents received an economic

benefit

from this mistake.

Consideration ofthe other factors delineated in Section 42 also support

a finding that no

civil penalty is justified under Count I.

The duration of the alleged offense was only for one

reporting period.

The gravity is minor considering it was only a reporting matter that did not

involve any harm to the public health or the environment.

The Respondents acted diligently as

soon as theywere

informed that a mistake had been made and they subsequently submitted the

proper data.

No economic accrued as a result of the delay in compliance.

None ofthe

Respondents presently possess a NPDES permit so there

is no need to

impose a monetary penalty

to deter further violations.

There were no previous adjudicated violation of the Act by any ofthe

Respondents.

The Respondents were not in

a position to

self-disclose the violation because they

were not aware ofthe alleged violation until the EPA made them aware ofthe mistake.

The

Respondents activities with respect to addressing the discharge to the Avon Drainage Ditch

and

Grays Lake represent a de

facto supplemental environmental project because the Respondents

—

especially Edwin Frederick and Richard Frederick

—

took actions beyond the actions required to

address the discharge from the SVA site.

The expenditures for this additional should be credited

against any possible penalty.

COUNT II

In Count

II,

the Complainant maintained the Respondents failed to

make timely

application for renewal oftheir NPDES permit.

SVA did not apply for the renewal because they

were told by IEPA officials and other experts familiar with NPDES

permits that theywould not

be required to have an

individual permit for the site.

SVA did subsequently apply forthe permit

even though their remains an issue as to whether or not

a permit is required.

Since the required application was subsequently completed and submitted, SVA did not

avoid any expense by submitting the wrong data.

In fact, they incurred substantial additional cost

in trying to clarify this matter and in attempting to get the EPA to

issue the permit.

To date,

IEPA has not issued a permit renewal. There can be no argument that the Respondents received

an economic benefit from this mistake.

Consideration ofthe other factors delineated in Section 42 also support a finding that no

civil penalty is justified under Count I.

The duration ofthe alleged offense was only a delay of a

few months

from the date the application was supposed to be filed and the date it was actually

file.

This period is much shorter than the number ofyears it is taking the IEPA to issue the actual

NPDES permit.

The gravity is minor considering it was only a reporting matter that did not

involve any harm to the public health orthe environment.

SVA continued to control discharges

from the site as it had during the period the NPDES permit was in place.

The Respondents acted

diligently as soon as theyrealized that there was a question as to whether or not a permit was

required and they subsequently submitted the proper application.

No economic accrued as a

result ofthe delay in applying.

None ofthe Respondents presently possess a NPI)ES permit so

there

is no need to impose a monetary penalty to deter further violations.

There were no previous

adjudicated violation ofthe Act by any ofthe Respondents.

The Respondents did in fact self-

disclose this

violation through

its inquiries

to the state concerning the need to

file an

application.

The Respondents activities with respect to

addressing the discharge to

the Avon Drainage Ditch

and Grays Lake represent a de facto supplemental environmental project because the

Respondents

—

especially Edwin Frederick and Richard Frederick

—

took actions beyond the

actions required to

address the discharge from the SVA site.

The expenditures for this

additional

should be credited

against any possible penalty.

COUNT III

In Count III, the Complainant falsely accused the Respondents offailure to comply with

sampling and reportingrequirements by failing to submit DMRs to

the JEPA as required under

SVA’s NPDES permit.

SVA was able to show that they had taken all the required samples, had

the

samples analyzed and prepared the requiredDMR reports.

This information ‘was submitted to

the EPA and the Attorney General’s Office as soon as SVA realized there was an issue

involving there compliance with the reporting requirements.

Based on the IEPA’s previous

record ofmishandling DMRs and the lax procedures used in handling DMRs, there is a

presumption that the DMRs were submitted by lost by EPA.

Since the required testing and report preparation were performed, SVA did not avoid any

expense by submitting the wrong data.

In fact, theyincurred substantial additional cost

addressing the problem through their lawyers with the Attorney General’s Office. There can be

no argument that the Respondents received an

economic benefit from this mistake.

Consideration ofthe other factors delineated

in Section 42

also

support a finding that no

civil penalty is justified under Count I.

Even if it were somehow determined thai: SVA

failed to

file some of the reports, the duration ofthe alleged offense only for a few reporting periods

through the life of the permit.

The gravity is minor considering it was only a reporting matter

that did not involve

any harm to

the public

health or the environment.

The Respondents acted

diligently as soon as theywere informed that DMRs were missing and they supplied copies ofthe

report to the JEPA

and the Attorney General’s Office.

No economic accrued

as a result ofthe

loss of thesereports.

None ofthe Respondents presently possess

a NPDES perm:it so there is no

need to

impose a monetary penalty to deter further violations.

There were no

adjudicated violation ofthe Act by any ofthe Respondents.

The Respondents were not in a

position to

self-disclose the violation because theywere not aware ofthe alleged violation until

the EPA made them aware of the mistake.

The Respondents activities with respect to

addressing the discharge to the Avon Drainage Ditch and Grays Lake represent

a. de facto

supplemental environmental project because the Respondents

—

especially Edwin Frederick and

Richard Frederick

—

took actions beyond the actions required to address the discharge from the

SVA site.

The expenditures for this additional

should be credited against any possible penalty.

COUNT IV

In Count IV, the Complainant maintain the Respondents allowed or caused the discharge

of an oily substance to

the Avon-Fremont Drainage Ditch.

None of the Respondents

caused or

allowed the discharge and none ofthe Respondents were in a position to prevent the discharge.

However, after potential sources ofthe discharge were identified, the Respondents Richard

Frederick and Edwin Frederick took extra ordinaryefforts to address the problem. Because ofthe

large expenditures to address the discharge and the elimination ofthe potential sources, the

Respondents did not avoid any expense by allegedly “allowing or causing” the discharge.

In fact,

they incurred substantial

additional cost on a voluntarybasis, much ofwhich they were not

required to spend in trying to

ensure that the releases would stop. There can be no argument that

the Respondents received an economic benefit from this activity.

Consideration ofthe other factors delineated in Section 42 also

support a finding that

civil penalty is justified under Count IV.

The duration ofthe alleged offense was only for a short

period and it has not reoccurred since the Respondents took the lead in addressing the problem.

This period is much shorter than the number ofyears the problem would have persisted ifthe

IEPA actions to

address the problem had been the only action taken.

The gravity is minor

considering that all ofthe witnesses at trial

stated that the main problem was a slight petroleum

odor concern and a temporary sheen on a drainage ditch.

The incident did not involve

any lasting

harm to the public health

or the environment.

SVA continued

to control discharges from the site

as it had during the period the NPDES permit was in place.

The Respondents acted diligently as

soon as they identified the potential

source ofthe release and worked with the IEPA and the

USEPA even before they thought that the release could possibly be coming from SVA’s

property.

No economic accrued as a result of the release to any of the Respondents.

None of the

Respondents presently are involved in the ownership or operation ofthe site, so there is no need

to impose a monetary penalty to deter further violations.

There were no previous adjudicated

violation ofthe Act by any of the Respondents.

The Respondents did in fact self-disclose the

potential source ofthe release

immediately upon discovery the source.

The Respondents

activities with respect to addressing the discharge to

the Avon Drainage Ditch and Grays Lake

represent a de facto supplemental environmental project because the Respondents

—

especially

Edwin Frederick and Richard Frederick

—

took actions beyond the actions required to address the

discharge from the SVA site.

The expenditures for this

additional should be credited against any

possible penalty.

COUNT V

In Count V, the Complainant accused the Respondents ofexceeding the dLischarge limits

established in

SVA’s NPDES permit.

This Count presents petty and vindictive allegations that

illustrate the Complainant lack ofrespect for the Board and the people ofthe state ofIllinois. The

Complainant knows that these permit requirements could not be complied with under periods

following intense storm events and consequently the Complainants never take action with respect

to such accedences except when it elect to

harass certain permit holders such as SVA.

The fact

that the Complainant would waste the resources of the Board and the Respondents to address

such trivial charges in an attempt to cause undue hardship to the Respondents should not be

rewarded by the Board.

Since the required testing and report preparation were performed, SVA did not avoid any

expense by submitting the wrong data.

Regardless of the effort and expenditures made by the

Respondents,

they would probably not have been able to

avoid the accedences.

Therefore, they

did not avoid any expense by not avoiding the problem.

In fact, theyincurred substantial

additional cost in

addressing the problem through their lawyers with the Attorney General’s

Office. There can be no argument that the Respondents received an economic benefit from this

mistake.

Consideration ofthe other factors delineated in

Section 42

also support a finding that

civil penalty is justified under Count

The duration ofthe alleged offense was only for a few,

isolated reporting periods following intense storm events.

The gravity is minor considering it

was only a reporting ofslightly elevated solid levels that do not result in any harm

to the public

health orthe environment.

The Respondents

acted diligently as soon as theywere aware of the

problem by addressing the problem with the consulting environmental engineer but even acting

diligently to investigate the problem, there was nothing the Respondents could do to alleviate the

potential for slight accedences from the poorly established standard..

No economic accrued as a

result ofthe delay in

compliance.

None ofthe Respondents presently possess a NPDES

permit

so there is no need to

impose a monetary penalty to deter further violations.

There were no

adjudicated violation of the Act by any ofthe Respondents.

The Respondent SVA self-

disclosed the violations through its

DMR reports.

The other Respondents

were not involved

the

activities involved in this Count V and therefore had no duty to self report.

The Respondents

activities with respect to addressing the discharge to the Avon Drainage Ditch and

Grays Lake

represent a de facto supplemental environmental project because the Respondents

—

especially

Edwin Frederick and Richard Frederick

—

took actions beyond the actions required to address the

discharge from the SVA site.

The expenditures for this additional should be credited against any

possible penalty.

David

S. O’Neill

David

S. O’Neill, Attorney at Law

5487 N. Milwaukee Avenue

Chicago,

IL 60634-1249

(773) 792-1333

PEOPLE OF THE STATE OF ILLINOIS

)

R E C

E iv

E D

Complainant

)

CLERK’S

OFFICE

)

PCB 96-98

MAR

122004

)

Enforcemej~TATE

OF ILLINOIS

)

~‘oUution

Contro’ Board

SKOKIE VALLEY ASPHALT, CO.,

)

Respondent

)

NOTICE OF FILING

PLEASE take notice that on March 12, 2004, I Have filed with the Office ofthe

Clerk of the Pollution Control Board the Respondent’s Post Trial Briefand Closing

Arguments, a copy ofwhich is hereby

served upon you.

March

12,

2004

David

O’Neill

5487 N. Milwaukee Avenue

Chicago, Illinois

60630

(773) 792-1333

REcE~vrD

CLERK’S OFFICE

CERTIFICATE

OF SERVICE

MAR

122004

The undersigned, being first duly sworn upon oath, deposes and states that4~~v&fj:aILL,NOIS

copy ofRESPONENT’S POST TRIAL BRIEF AND CLOSINGARGUM

Board

true and correct copy thereofto the below named attorney(s) ofrecord at their respective

addresses and depositing the same in the U.S. mail with proper postage prepaid, on

MARCH

12, 2004.

To:

Mitchell Cohen

Environmental Bureau

Assistant Attorney General

100 W.

Randolph,

11th

Floor

Chicago, Illinois

60601

NOTARY SEAL

SUBSCRIBED AND SWORN TO ME

this

/cR

Day of

,2004

NY*YP*~4TA1~LUNO~S

Notary Public