RECE~VED
CLERK’S OFFICE
BEFORE
THE ILLINOIS POLLUTION CONTROL BOARD
JUN
012004
ILLINOIS AYERS OIL CO.,
)
STATE
OF ILLINOIS
)
Pollution Control Board
Petitioner,
)
)
v.
)
PCBO3-214
)
(UST Appeal)
ILLINOIS ENVIRONMENTAL
)
PROTECTION AGENCY,
)
)
Respondent.
)
NOTICE OF FILING
AND
PROOF OF SERVICE
TO:
Dorothy
Gunn,
Clerk
Carol Sudman
Illinois Pollution Control Board
Hearing Officer
100 West Randolph Street
Illinois Pollution Control Board
State ofIllinois Building, Suite 11-500
1021 North Grand Avenue East
Chicago, IL 60601
P.O. Box
19274
•
Springfield, IL 62794-9274
John Kim
Division ofLegal Counsel
Illinois Environmental Protection Agency
1021 North Grand Avenue East
P.O. Box
19276
Springfield,
IL 62794-9276
PLEASE BE ADVISED THAT we are
today filing with the Pollution Control Board by
Federal Express overnight delivery the original and nine copies of Motion for Motion for Leave to
File Reply Instanter, a copy ofwhich is
attached hereto.
The undersigned hereby certifies that a true and correct copy ofthis Notice ofFiling, together
with a copy ofthe document described above, were today served upon the hearing officer and counsel
ofrecord of all parties to this cause by enclosing same in envelopes addressed to
such attorneys at
their business addresses as disclosed by the pleadings ofrecord herein, with postage fullyprepaid,
and by depositing same in the U.S.
Mail in
on the
28th
day ofMay, 2004.
MOHAN, ALEWELT, PRILLAMAN & ADAMI
1
North Old Capitol Plaza, Suite 325
Springfield, IL 62701
Tel:
(217) 528-2517
Fax:
(217)
528-2553
THIS
FILING SUBMITTED ON RECYCLED PAPER
C:\Mapa\CSD Environmental\Notice of F11ing052804.doc\crk\5/28/04
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
ILLINOIS AYERS
OIL CO.,
)
OTATE OF ILLINOIS
~-Ollut:on
Control Board
Petitioner,
)
)
v.
)
PCB 03-214
)
(UST Appeal)
ILLINOIS ENVIRONMENTAL
)
PROTECTION AGENCY,
)
•
)
Respondent.
)
MOTION FOR LEAVE TO
FILE REPLY
INSTANTER
NOW COMES Petitioner, ILLINOIS
AYERS OIL
CO.,
by its undersigned attorneys, and
pursuant to
Section
101.500(e) ofthe Board’s Procedural Rules
(35
Ill.Admin.Code
§
101.500(e)), moves the Illinois Pollution Control Board for leave to
file a reply instanter,
stating as follows:
1.
On April 30, 2004, Petitioner filed its motion for authorization ofpayment of
attorneys’ fees as costs ofcorrective action.
2.
On May 19,
2004, the Respondent filed a response.
3.
Generally, a movant does not have a right to reply.
However, the Board’s
procedural rules authorize a motion for leave to file a reply, to be filed within fourteen (14) days
afler service ofthe response.
(35
Ill.Admin.Code
§
101.500(e))
4.
Petitionerwould be materially prejudiced if it were not
allowed to
replyto the
novel and complex legal
arguments presented by the Agency for the
first time in its response.
WHEREFORE, Petitioner prays for leave to
file the attached reply instanter.
•
Respectfully submitted,
•
ILLINOIS AYERS
OIL CO., Petitioner
•
•
By MOHAN, ALEWELT, PRILLAMAN & ADAMI
By______
IP~rick
D. Shaw
MOHAN, ALEWELT, PRILLAMAN & ADAMI
1
North Old Capitol Plaza, Suite 325
Springfield, IL
62701
Phone:
(217) 528-2517
Fax:
(217) 528-2553
C:\Mapa\CSD Environmental\MotionLeaveFileReplylnstanter.doc
2
~CE~VED
BEFORE THE
POLLUTION CONTROL
BOARD
CLERK’S OFFICE
OF
THE STATE
OF
ILLINOIS
JUN
012004
ILLINOIS AYERS
OIL COMPANY,
)
STATE OF ILLINOIS
PQI1~ti~~
Control Board
Petitioner,
)
)
v.
)
PCBNo.03-214
)
ILLINOIS ENVIRONMENTAL
)
PROTECTION AGENCY,
)
)
Respondent.
)
REPLY IN SUPPORT OF MOTION FOR ATTORNEYS’ FEES
NOW COMES Petitioner, ILLINOIS
AYERS OIL CO., by its
undersigned attorneys, and
replies in support
ofits Motion for Attorneys’ Fees as follows:
INTRODUCTION
A discretionary fee-shifting provision raises thee questions.
First, does the fee-shifting
provision apply to this situation?
All that Section 57.8(1) of the Act requires is that the owner or
operatorprevail before the Board.
The Agency’s response is the primary subject of this reply.
Second, how will the Board exercise its discretion?
Petitioner has pointed out that in
similar fee-shifting statutes, the presumption has been to award legal fees to
a prevailing party
unless some injustice would result.
While the Agency takes issue with much ofPetitioner’s
largerpolicy pronouncements, only one argument specifically addresses how the Board’s
discretion should be exercised under the particular facts ofthis case.
The Agency argues that the
Board should not reimburse costs incurred challenging the number ofsoil borings.
Third, are the
fees reasonable?
Since the Agency has not rebutted the reasonableness of
the fees, this issue has been waived.
Shortino v.
Illinois Bell Telephone Co., 279
Ill. App. 3d
769,
775
(1St
Dist.
1996).
L
SECTION 57.8(1) OF THE ACT AUTHORIZES THE PAYMENT OF “LEGAL
FEES,” A
TERM
DISTINCT FROM “LEGAL COSTS.”
Section 57.8(1) ofthe Act authorizes the payment of “legal fees,” one of three terms used
in Section 57.8(1) ofthe Act to describe a category oflegal
expenses:
Corrective Action does not include legal defense costs.
Legal defense
costs include
legal costs for seeking payment under this Title unless the
owner or
operator prevails before the Board in which case the Board
may
authorize payment of legal fees.
(415 1LCS
5/57.8(1)
(emphasis added))
“Generally, when the legislature uses certain words in one instance and different words in
another, different results were intended.”
Emerald Casino. Inc.
v. Ill. Gaming Bd.,
346 Ill. App.
3d
18,
35
(1St Dist. 2003)
Different terms are usedin Section
57.8(1)
ofthe Act to
accomplish
different purposes, to
distinguish different procedures and as a result ofdifferent histories.
Section 57.8(1) serves two purposes: (1) it authorizes the Board to
award legal fees to a prevailing
owner or operator and (2) it prohibits the Agency from approving legal defense costs as
corrective action.
These objectives are implemented in different procedural
contexts.
The “legal
defense costs” prohibition governs the Agcncy’s review and approval of plans and budgets under
Section
57.7(c)(4)(C).
(415
ILCS
5/57.7(c)(4)(C));
see
also City of Roodhouse v.
IEPA, PCB
92-31
(Sept.
17,
1992) (reversing Agency’s refusal to
reimburse legal expenses, not deemed
“legal defense costs”).
In contrast, the Board’s authority to
grant “legal fees” arises in an appeal
2
in which an
owner or operator prevails.
~
Ted Harrison Oil Co.
v. JEPA, PCB No. 99-127
(Oct.
16, 2003).
Perhaps most significantly,
however, the term “legal defense costs” originated
in 1989 amendments to the Act, while the term “legal fees” originated in 1993 amendments.
$~
Appendix A hereto.
Therefore, the “legal fees” provision is best
viewed as an amendatory act,
written to serve a new and different objective than that heretofore provided by the
“legal defense
costs” exclusion.
“Every amendment to a statute is presumed to have a purpose, and a court must
consider the language ofan amended statute in light ofthe need for amendment and the purpose
it serves.”
People v. Woodard,
175 Ill.2d 435, 444 (1997).
The fundamental flaw in the Agency’s argument is that it is premised on the assumption
that the legislature intended for the different terms to be used interchangeably.
The Agency does
not explain why the legislature would adopt different terminology or explain why other
substitutes were not used.1
Given the Agency’s failure to even address this crucial point, its
argument is incomplete and unpersuasive.
II.
THE PLAIN LANGUAGE OF THE STATUTE AUTHORIZES THE BOARD TO
AWARD
THE PAYMENT OF LEGAL FEES.
The primaryobjective in construing the meaning of a statute is to
ascertain and
give
effect to
the intention ofthe legislature.
Carver v. Sheriff of La Salle
County, 203 Ill. 2d 497,
507
(Ill. 2003).
The most reliable means ofdoing so
is by careful examination ofthe language of
the statute.
~
Statutory language must be
given its plain, ordinary and popularlyunderstood
1
It would have been far easier to draft the 1993
amendments
using the pre-existing
terminology or shortened forms thereof.
For example, the Board could have been authorized to
make a “payment oflegal
costs for seeking payment under this Title,” to make a “payment of
such legal costs,” or even make a “payment oflegal costs.”
3
meaning, while “affording
the statutory language the fullest, rather than the narrowest, possible
meaning to which it is susceptible.”
~
The Board’s authority in this matter originates from the final clause in Section
57.8(1):
unless the owner or operator prevails before the Board in which case the
Board may authorize payment of legal fees.
(415 ILCS
5/57.8(1))
The Board’s authority is unambiguous:
In the event an owner or operator prevails before
theBoard, the Board may authorize the payment oflegal
fees.
The only condition imposed upon
the Board’s authority is that an owner or operatorprevail before it.
The word “unless” does not
address or limit the Board’s authority, it is a reservation or condition imposed upon the
immediately preceding proposition concerning
“legal defense costs.”
The sentence can be
diagramed as follows:
A include B, unless C, in which case D.
Where A
=
Legal defense costs
B
=
Legal costs for seeking payment under this Title
C
=
The owner or operator prevails before the Board
D
=
The Board may authorize payment oflegal fees
The Agency’s erroneously argues that the Board’s authority is limited or confinedby
whether the owner or operator is seeking reimbursement for legal costs for seeking payment
under this Title.
This
limitation is not expressed in the language of the statute.
At most,
the
statute states that if the owner or operator prevails before the Board,
legal costs for seeking
payment under this Title are no longer legal defense costs.
In other words, the Board’s authority
4
is unrestricted by any expressed or implied limitation arising from the definition oflegal defense
costs.
The Board should reject the Agency’s invitation to read into the plain language of the
statute any unexpressed “exceptions, limitations or conditions.”
Carver, 203
111. 2d at 507.
III.
THE AGENCY’S INTERPRETATION WOULD SUBSTANTIALLY DIMINISH
THE TYPES OF LEGAL
EXPENSES
BARRED FROM REIMBURSEMENT AS
“LEGAL DEFENSE COSTS.”
While Petitioner believes that the Board’s authority to award “legal fees” is premised
solely upon an owner or operator prevailing before the Board, Petitioner does not agree that its
legal costs incurredpursuing this appeal are not the type that would normally be categorized as
legal costs incurred “seeking payment under this Title.”
(415 ILCS
5/57.8(1))
This conclusion is
reached based upon the plain language ofthe “legal defense costs” exclusion and the legal
precedents and legislative amendments which have helped define it.
Essentially, the “legal defense costs” exclusion bars some, but not all, legal expenses
from reimbursement as corrective action.
The Board’s decision in City ofRoodhouse v.
IEPA,
PCB No.
92-31
(Sept.
17,
1992), illustrates the limits of the exclusion.
There, the City of
Roodhouse incurred legal fees running a water supply line to the remediation site.
In reversing
the Agency’s refusal to reimburse those legal fees, the Board recognized that the term “legal
defense costs” did not necessarily preclude reimbursement ofall legal costs. j~at pp. 39-40.
Specifically, the legal expenses ofnegotiating contracts with the municipal water authority,
obtaining easements
from property owners and meeting with clients were deemed to be
corrective action costs
and thus reimbursable.
5
Under the City ofRoodhouse holding, there are
two categories oflegal
expenses: (1)
legal defense costs, which are never reimbursable and
(2) all
other legal costs, which are
reimbursable if they are associated with corrective action.
In Clarendon Hills Bridal Center v.
TEPA, PCB No.
93-55
(Feb.
16,
1995), a case which arose under the pre-1993
LUST provisions,
the Agency refused to reimburse the legal costs of appealing an OSFM tank registration decision.
The Board affirmed the Agency’s decision that these costs were legal defense costs incurred
seeking payment from the LUST Fund. ~
at
3 8-39.
The Agency’s current argument is
entirely contrary to the holding affirmed in Clarendon
Hills Bridal Center.
There, the legal costs of “seeking payment” were broadly defined to
include
the costs ofappealing a tank registration decision made by OSFM.
In the present case, the
Agency recognizes that planning and budgeting were “necessary precursors” to payment under
the LUST Fund, but concludes that a line must be drawn somewhere. (Response, at p.
11)
The
problem is
that the line has already been drawn at the tank registration stage.
The phrase “legal
costs for seeking payment” cannot be interpreted in an
outcome-driven manner so that it means
one thing when fees
are sought before the Agency and another when fees
are sought before the
Board.
Ifthe Agency’s narrow interpretation of the “legal
costs for seeking payment” is
accepted,
it would expose the LUST Fund to
a wide variety ofnew claims for reimbursement for legal
expenses that would no longer be excluded
as “legal
defense costs.”
For example, if a corrective
action plan is approved by the Board over the Agency’s objection, thenthe cost ofperforming
corrective action necessarily includes the legal costs of surmounting the obstacles presented by
the Agency.
The legal costs ofseeking the Agency’s approval (or reversal) are no
different than
6
the legal costs ofseeking the third-party approvals in
City ofRoodhouse, so long as the legal
costs before the Agency are not considered “legal defense costs.”
Petitioner does not believe that
this is the outcome intended by the legislature.
Instead, the costs of“seekingpayment” was
intended to be
interpreted broadly so that the costs of litigating with the Agency would not be
reimbursable unless
the dispute was resolved favorably by the Board.
~
Carver,
203 Ill. 2d at
506 (statutory language should be afforded its “fullest, rather than the narrowest, possible
meaning to which it is susceptible.”)
The
1993 amendments further support a broad interpretation.
While the
1993
amendments did not alter the basic language ofthe “legal defense costs” exclusion, one slight,
but significant, change was made:
Legal defense
costs
include legal
costs
for
seeking payment under Section
22.18b.
Ill. Rev.
Stat.1991, ch.
lllV2, par.
1022.18 (emphasis added)
Legal defense costs include legal costs for seeking payment under this Title....
415
ILCS
5/57.8(1)
(emphasis added)
Had the legislature intended for a narrow interpretation of the legal costs ofseeking
payment, the reference to
Section 22.1 8b would have been replaced by a citation to
Section 57.8
of the Act.
Forthe purpose ofthis provision, however, the legal costs for seeking payment arise
under the entire Title, not merely a single section in which payment is
actually requested.
Prior to
1993, Section 22.18b ofthe Act essentially contained the entire LUST Fund
program, under which the owner or operator applied for reimbursement and the Agency decided
7
which costs were eligible and reasonable.
(Ill.Rev.Stat.
1989, ch. lilY2 ,par.
1022.18)2
In 1993,
planning
and budgeting provisions were
added, such that many of the issues previously made at
the reimbursement stage were now made at various points on a procedural continuum.
For
example, an owner or operator intending to
“seek payment from the Fund” must submitbudgets
before performing physical soil classification and groundwater
activities (415 ILCS
5/57.7(a)(2))
and before performing corrective action (415 ILCS
5/57.7(c)(1)(B)).
In reviewing the plan and
budget, the Agency decides whether “costs.
.
.
will not be used for corrective action activities in
excess ofthose required to
meet the minimum requirementsof this title.”
(415 ILCS
5/57
.7(c)(4)(C))
The Agency’s approval ofthe plan and budget constitutes “final approval for
purposes ofseeking and obtaining payment from the Underground Storage Tank Fund if the costs
associated with the completion of any such plan are less than or equal to the amounts approved in
suchbudget.”
(415 ILCS
5/57.7(c)(4)(A)(emphasis added))
These provisions show that
planning and budgeting are part ofthe process ofseeking payment from the Fund, not merely
obtaining payment from the Fund through a request for payment.
In summary, Section
57.8(1)
ofthe Act must be construed in light ofits
dual role as “legal
defense costs” exclusion and “legal fees” authority.
The Agency seeks to defeat Petitioner’s
claim to legal fees by ignoring the established meaning ofthe “legal defense
costs” exclusion.
2
The reimbursement appeal in Ted Harrison Oil Co.
v.
IEPA, PCB No. 99-127 (Jan. 24,
2003) arose under Section 22.18b ofthe Act,
Id. at pp.
11-12, and therefore does not provide any
guidance as to what constitute “the legal costs ofseeking payment under this
Title.”
•
8
IV.
PETITIONER’S
PLAN AND
BUDGET WERE REJECTED SOLELY FOR
FINANCIAL REASONS.
The Agency argues that the primary issue in this case was the Agency’s “technical
decision” that the number ofborings proposed in the corrective action plan was “excessive.”
(Response, at
¶
18)
Section 57.7(c)(4)(C) of the Act directs the Agency to
ensure that “costs
associated with the plan.
.
.
will not be used for corrective action activities
in excess ofthose
required to meet the minimum requirementsof this Title.”
(415 ILCS
5/57.7(c)(4)(C))
Under
the Board’s procedural rules, the financial review of a plan should include identification of
“excessive” costs.
(35 Ill. Admin. Code
§
732.505(c))
HadPetitioner submitted a corrective action plan, proposing one-thousand borings, but
not sought payment from the LUST Fund, the Agency would not have rejected the number of
borings as excessive, nor could it have, since it is
only the costs that those borings represent that
would be objectionable under Section
57.7(c)(4)(C)
ofthe Act.
While it is true that a proper
number ofborings
is a technical issue, it is an issue that can only arise when the owner or
operator is seeking payment from the Fund for the borings.
Consequently, all issues in the
underlying appeal arose because Petitioner was seeking payment from the Fund.
In any case, Petitioner questions the wisdom of inventing the distinction sought by the
Agency.
This distinction would discourage technical challenges to
Agency decisions,
to the
detriment ofthe environmental objectives ofthe Act.
Many less responsible owners and
operators would have been tempted to
accept the Agency’s reduction in the number ofsoil
borings, safe in the knowledge that the Agency would issue a letter releasing them of any future
liability.
Instead ofinvented distinctions, the Board should exercise its discretion in light ofthe
9
degree ofPetitioner’s
success, the importance ofthe Board’s rulings to
the administration of the
LUST Fund and the potential benefits to the environment.
V.
AWARDING
ATTORNEY
FEES
TO A PREVAILING PARTY DOES NOT
ENCOURAGE
FRIVOLOUS LITIGATION.
The Agency mischaracterizes Petitioner’s explanation ofthe policy reasons behind fee-
shifting statutes as a rejection of compromise and settlement.
(Response, at ¶22)
In discussing
the purposes served by fee-shifting statutes, courts invariably find that they encourage
specific
types oflitigation.
Chicago v Illinois Commerce Corn.,
187 Ill. App.
3d 468,
470 (1St Dist.
1989).
The Agency may not agree with that policy, but that is entirely irrelevant when analyzing
the legislature’s intent.
Compromise and settlement must be distinguished from what the Agency desires, which
is capitulation through the failure to appeal the Agency’s final decision.
(Response, at
¶
21)
A
party that appeals an Agency decision still has incentive to negotiate a resolution ~sincelitigation
is always doubtful and expensive.
Any abuses in legal expenditures are within the Board’s
discretion to
remedy.
To the extent that the Agency’s decisions are motivated in part, or too
much, by the desire to protect the assets of the Fund (instead of the environment), this
fee
provision gives the Agency an economic incentive to compromise that would not otherwise exist.
In sum, the fee-shifting provision in Section
5
7.8(1) ofthe Act may encourage
litigation, but it in
no way discourages settlement.
10
CONCLUSION
For the foregoing reasons, Petitioner renews its request for the relief sought in the Motion
forAuthorization ofPayment ofAttorneys’
Fees as Costs ofCorrective Action.
Respectfully submitted,
ILLINOIS AYERS
OIL COMPANY, Petitioner
By MOHAN, ALEWELT, PRILLAMAN & ADAMI
By~
~
•
Patri~~ShaW~
~
Fred C. Prillaman
Patrick D.
Shaw
MOHAN,
ALEWELT, PRILLAMAN & ADAMI
1 North Old Capitol Plaza
Suite 325
Springfield, IL 62701
Phone:
(217) 528-2517
Fax:
(217) 528-2553
11
LEGISLATIVE HISTORY OF “LEGAL DEFENSE
COSTS”
(APPENDIX A)
OLD
LUST PROGRAM (PRE-1993)
The term “legal defense costs” was initially used solely as a limitation on the amounts
reimbursable as indemnification costs from the LUST Fund:
(D)
“Indemnification”
means
indemnification
of
an
owner
or
operator
for
the
amount of
any judgment
entered
against
such
owner
or
operator
in
a
court
of
law,
for
the
amount
of
any
final
order
or
determination
made against such
owner
or
operator
by
an
agency of State
government
or
any subdivision thereof,
or
for the amount of any settlement
entered
into
by
such
owner
or
operator,
if
such
judgment,
order,
determination
or
settlement
arises
out
of an
injury
suffered
to
person
or
property
as
a
result of a
release of petroleum from an
underground
storage
tank owned
or
operated
by
such
owner
or operator.
Indemnification
shall
not include legal defense costs.
P.A.
86-125,
§1,
eff.
July
28,
1989
(codified
at Ill.Rev.Stat.
1989,
ch.
lilY2
,
par.
1022.18)
(emphasis added).
Later, the limitation was expanded to
applyto “corrective action” and to costs for seeking
payment:
(C)
“Corrective action”
means an action to stop, minimize,
eliminate,
or
clean
up
a
release
of petroleum
or
its
effects
as
may
be
necessary
or
appropriate
to
protect human
health
and
the environment.
This
includes,
but
is
not
limited
to,
release
investigation,
mitigation
of
fire
and
safety
• hazards,
tank
removal,
soil
remediation,
hydrogeological
assessments,
and
the provision of alternate water supplies.
Corrective action
does not include
removal
of
an
underground
storage
tank
if
the
tank
was
removed
or
permitted for
removal by the Office of the State Fire
Marshall prior to the
owner
or
operator providing
notice
of a
release of petroleum
in
accordance
with applicable notice requirements.
Corrective action
does not include legal
defense
costs.
Legal
defense
costs include
legal
costs
for
seeking
payment
under Section 22.18b.8
(D)
“Indemnification”
means
indemnification
of
an
owner
or
operator
for
the
amount
of
any
judgment
entered
against
the
owner
or
operator
in
a
court
of
law,
for
the
amount
of
any
final
order
or
determination
made
against
the
owner
or
operator
by
an
agency
of State
8
Paragraph 22.1 8b of this chapter.
from
original
1
government
or
any subdivision thereof,
or
for
the amount of any settlement
entered into
by the owner or
operator, if the judgment, order, determination,
or
settlement
arises
out
of bodily
injury
or
property
damage
suffered as
a
result of a release of petroleum from an underground
storage tank owned or
operated
by that owner or operator.
Indemnification
shall not include
legal
defense costs.
Legal
defense
costs include
legal
costs
for
seeking
payment
under Section 22.18b.
P.A.
87-323,
§1, eff.
Sept.
16,
1991
(codified at Ill.Rev.Stat.
1991, ch.
lilY2,
par.
1022.18)
(emphasis added).
Section
22.1 8b ofthe Act essentially constituted all ofthe LUST Fund provisions at that
time.
(Ill.Rev.Stat.
1989,
ch. lilY2 ,par.
1022.l8b).
II.
NEW PROGRAM (1993-2002)
Title XVI ofthe Act separated the legal
defense cost provisions and authorized the Board
to pay legal fees:
•
(I)
Corrective
action
does
not
include
legal
defense
costs.
Legal
•
defense costs include
legal costs for
seeking
payment under this Title unless
the
owner or
operator prevails
before
the Board
in
which
case
the
Board
may authorize payment of legal fees.
P.A.
88-495,
§15,
eff. Sept.
13,
1993
(codified
at 415 ILCS
5/57.8(1))
(emphasis added).
In addition, the citation to
Section
22.1 8b was replaced with a reference to the entire
Title.
C:\Mapa\CSD Environmental\LegislativeHistory.doc\crk\5/28/04
2
