ILLINOIS POLLUTION CONTROL BOARD
July 8, 2004
PEOPLE OF THE STATE OF ILLINOIS,
Complainant,
v.
QC FINISHERS, INC., an Illinois corporation,
Respondent.
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PCB 01-7
(Enforcement - Air)
ORDER OF THE BOARD (by A.S. Moore):
Today the Board rules on complainant’s motion to strike affirmative defenses that
respondent has asserted in this enforcement action. On behalf of complainant, the People of the
State of Illinois (People), the Attorney General’s Office filed a seven-count complaint against
respondent QC Finishers, Inc. (QC Finishers). QC Finishers operates a facility in Franklin Park,
Cook County, at which it coats metal and plastic parts for various industries, including
automotive, medical, military, computer, and government.
The People’s complaint alleges that QC Finishers violated air pollution control
provisions of the Environmental Protection Act (Act) (415 ILCS 5 (2002)) and the Board’s
regulations at the Franklin Park facility. QC Finishers asserts numerous affirmative defenses,
some of which are general because they relate to all seven counts of the complaint and some of
which are specific because they relate only to a particular count of the complaint. For the
reasons below, the Board grants in part and denies in part the People’s motion to strike
affirmative defenses.
In this order, the Board first sets forth the procedural background of this case. Next the
Board summarizes the counts of the complaint and gives an overview of the affirmative defenses
alleged by QC Finishers. Next, in ruling on the People’s motion to strike, the Board discusses
the affirmative defenses alleged, the motion, and QC Finishers’ response to the motion.
PROCEDURAL BACKGROUND
On July 14, 2000, the People filed a complaint against QC Finishers. QC Finishers filed
an answer setting forth 14 purported affirmative defenses on March 3, 2003.
1
On April 25, 2003,
the People filed a motion to strike 11 of the 14 affirmative defenses, to which QC Finishers
responded. In a June 19, 2003 order, the Board granted the People’s motion to strike 8 of the 11
affirmative defenses, but denied the motion to strike the other three affirmative defenses. The
Board denied QC Finishers’ motion to reconsider in a September 18, 2003 order.
1
The Board cites the People’s complaint as “Comp. at _.”
2
Numerous additional related pleadings followed, which the Board addressed in a
January 8, 2004 order. In that order, to expedite this proceeding, the Board gave QC Finishers
21 days to file a supplemental answer setting forth any affirmative defenses. On February 4,
2004, QC Finishers filed “supplemental affirmative defenses.” The People moved to strike the
supplemental affirmative defenses, which is the motion the Board rules on today. QC Finishers
filed a response to the motion to strike on March 17, 2004.
2
COUNTS OF THE COMPLAINT
The People’s complaint has seven counts, each of which is summarized below.
Count I: Constructing Without a Permit
In count I of the complaint, the People allege that QC Finishers, some time after April 14,
1972, installed spray booths, drying ovens, sanding and polishing units, a solvent distiller, and
silk screening equipment at the facility that emit or are capable of emitting to the atmosphere
volatile organic material (VOM) or particulate matter. Comp. at 3. According to the complaint,
this equipment constitutes “new emission sources” and “new air pollution control equipment.”
Id
. at 4. The People also assert that after inst
alling the equipment, QC Finishers began using
over 5,000 gallons of paint, including thinner, per year at the facility.
Id
. at 3-4.
The People allege that QC Finishers violated Section 9(b) of the Act (415 ILCS 5/9(b)
(2002)) and Section 201.142 of the Board air pollution control regulations (35 Ill. Adm. Code
201.142) by constructing “new emission sources” and “new air pollution control equipment”
without first obtaining a construction permit from the Illinois Environmental Protection Agency
(Agency). Comp. at 4. The People also maintain that QC Finishers did not qualify for an
exemption (35 Ill. Adm. Code 201.146(g)) from the construction permit requirement available to
painting operations that use less than 5,000 gallons of paint per year.
Id
. at 3-4.
Count II: Operating Without a State Permit
The People allege in count II of the complaint that QC Finishers violated Section 9(b) of
the Act (415 ILCS 5/9(b) (2002)) and Section 201.143 of the Board’s air pollution control
regulations (35 Ill. Adm. Code 201.143) by operating the equipment described above without
first obtaining an operating permit from the Agency. Comp. at 6. The People allege that the
violations began when the facility started using more than 5,000 gallons of paint per year and
continue to the present.
Id
. at 6.
2
The Board cites QC Finishers’ supplemental affirmative defenses as “Supp. AD at _”; the
People’s motion to strike as “Mot. at _”; and QC Finishers’ response to the motion as “Resp. at
_.”
3
Count III: Failing to Comply with Emission Limitations
In count III of the complaint, the People allege that the equipment at QC Finishers’
facility constitutes one or more “coating lines.” Comp. at 9. According to the complaint, from
July 1, 1991, to the present, QC Finishers violated Section 9(a) of the Act (415 ILCS 5/9(a)
(2002)) and Section 218.204 of the Board’s air pollution control regulations (35 Ill. Adm. Code
218.204) by using coatings for miscellaneous metal parts that emit VOM in excess of the
emission limitations of Section 218.204(j) (35 Ill. Adm. Code 218.204(j)). The People further
allege that from March 15, 1996, to the present, QC Finishers violated the same provisions by
using coatings for plastic automotive parts that emit VOM in excess of the emission limitations
of Section 218.204(n) (35 Ill. Adm. Code 218.204(n)).
Id
. at 9-10.
Count IV: Failing to Timely Develop and Submit Fugitive Matter Emission Program
Count IV of the complaint alleges that QC Finishers violated Section 9(a) of the Act (415
ILCS 5/9(a) (2002)) and Section 212.309 of the Board’s air pollution control regulations (35 Ill.
Adm. Code 212.309) by not timely submitting a “Fugitive Dust Program” for the parking lots at
the Franklin Park facility. Comp. at 11. The People maintain that “parking lots are regulated
emission sources pursuant to 35 Ill. Adm. Code 212.316.”
Id
. According to the People, the
program was due by May 22, 1996, but QC Finishers did not submit the program to the Agency
until December 18, 1998.
Id
.
Count V: Failing to Timely File an ERMS Application
The People allege in count V of the complaint that QC Finishers was a “participating
source” with baseline emissions of at least 10 tons of VOM per year, and accordingly was
required to submit an Emissions Reduction Market System (ERMS) application to the Agency
by March 1 1998. Comp. at 13. According to the complaint, QC Finishers did not submit the
application until December 22, 1998. The People therefore allege that QC Finishers violated
Section 9(a) of the Act (415 ILCS 5/9(a) (2002)) and Section 205.310 of the Board’s air
pollution control regulations (35 Ill. Adm. Code 205.310) by not timely submitting an ERMS
application to the Agency.
Id
.
Count VI: Operating Without a CAAPP Permit
In count VI of the complaint, the People allege that QC Finishers violated Sections 9 and
39.5 of the Act (415 ILCS 5/9, 39.5 (2002)) and Section 270.201 of the Agency’s regulations (35
Ill. Adm. Code 270.201) by not timely submitting a complete initial Clean Air Act Permit
Program (CAAPP) application and by operating without a CAAPP permit. Comp. at 15-17. The
complaint states that QC Finishers began operating its facility before the March 7, 1995 effective
date of the CAAPP, and therefore owns and operates an “existing CAAPP source.”
Id
. at 15.
The People assert that QC Finishers was required to submit its complete initial CAAPP
application no later than nine months after the effective date of the CAAPP or by December 7,
1995. QC Finishers, however, did not submit its initial CAAPP application until March 23,
1999, according to the complaint. The People further allege that QC Finishers does not currently
have a CAAPP permit.
Id
. at 16-17.
4
Count VII: Making a Major Modification Without a Permit
According to count VII of the complaint, QC Finishers by 1985 had the “potential to
emit” over 100 tons of VOM per year from its Franklin Park facility and therefore was a “major
source.” QC Finishers in 1988 added a fourth spray booth to the facility that increased its
“potential to emit” VOM by over 40 tons per year, according to the complaint. Comp. at 19.
The People allege that this increase constituted a “major modification” to the facility for which
QC Finishers failed to obtain a permit, thereby violating Section 9(a) of the Act (415 ILCS
5/9(a) (2002)) and Section 203.201 of the Board’s air pollution control regulations (35 Ill. Adm.
Code 203.201).
Id
.
AFFIRMATIVE DEFENSES
QC Finishers’ answer set forth 14 alleged affirmative defenses. The People previously
moved to strike 11 of the 14 affirmative defenses. In its June 19, 2003 order, the Board granted
the motion in part and denied it in part—striking eight affirmative defenses, but declining to
strike three affirmative defenses. Of the eight stricken affirmative defenses, QC Finishers has
since abandoned one and, with the Board’s leave, “revised” the seven others. Those seven are
the subject of today’s order.
The seven revised affirmative defenses are set forth in QC Finishers’ filing captioned
“supplemental affirmative defenses.” The People have moved to strike those seven affirmative
defenses. Of these seven revised affirmative defenses, three affirmative defenses are “general”
in that each responds to all counts of the complaint (
e.g.
, “
Laches
”), while the other four
affirmative defenses are “specific” in that each responds to an individual count of the complaint
(
e.g.
, “First Affirmative Defense to Count III”).
The table below provides the identity (as given by QC Finishers) and the status (before
today’s rulings) of all 14 affirmative defenses, including the seven revised affirmative defenses
at issue today. Only those affirmative defenses indicated with an asterisk (*) (
i.e.
, the revised
affirmative defenses) are the subject of the People’s pending motion to strike.
Affirmative Defense
Status
General:
Laches
*
Revised
General: Estoppel*
Revised
General: Failure to Minimize Damages
Abandoned
General: Waiver*
Revised
Specific: First Affirmative Defense to Count I
Motion to strike denied 6/19/03
Specific: Second Affirmative Defense to Count I
No motion to strike
Specific: Third Affirmative Defense to Count I
No motion to strike
Specific: First Affirmative Defense to Count II
Motion to strike denied 6/19/03
Specific: Second Affirmative Defense to Count II
No motion to strike
Specific: First Affirmative Defense to Count III*
Revised
Specific: First Affirmative Defense to Count IV*
Revised
5
Specific: Second Affirmative Defense to Count IV*
Revised
Specific: First Affirmative Defense to Count VI*
Revised
Specific: Second Affirmative Defense to Count VI
Motion to strike denied 6/19/03
DISCUSSION
Below the Board discusses, in turn, the pleadings and the Board’s ruling on the People’s
motion to strike each of the seven revised affirmative defenses. Accordingly, in ruling on the
motion, the Board addresses each affirmative defense, the People’s motion to strike, and QC
Finishers’ response to the motion. The Board first sets forth the standard that applies when
considering a motion to strike affirmative defenses.
Standard
An affirmative defense is a “response to a [complainant’s] claim which attacks the
[complainant’s]
legal
right to bring an action, as opposed to attacking the truth of claim.”
Farmers State Bank v. Phillips Petroleum Co., PCB 97-100, slip op. at 2 n.1 (Jan. 23, 1997),
(emphasis in original) (quoting
Black’s Law Dictionary
);
see also
Worner Agency v. Doyle, 121
Ill. App. 3d 219, 221, 459 N.E.2d 633, 635 (4th Dist. 1984) (if the pleading does not admit the
opposing party’s claim but rather attacks the sufficiency of that claim, it is not an affirmative
defense). In an affirmative defense, respondent alleges “new facts or arguments that, if true, will
defeat . . . [complainant’s] claim even if all allegations in the complaint are true.” People v.
Community Landfill Co., PCB 97-193 (Aug. 6, 1998). Stated another way, a valid affirmative
defense gives color to complainant’s claim, but then asserts new matter that defeats an apparent
right of complainant.
See
Condon v. American Telephone and Telegraph Co., 210 Ill. App. 3d
701, 569 N.E.2d 518, 523 (2d
Dist. 1991), citing Doyle, 121 Ill. App. 3d at 222, 459 N.E.2d at
635.
Under the Board’s procedural rules, “[a]ny facts constituting an affirmative defense must
be plainly set forth before hearing in the answer or in a supplemental answer, unless the
affirmative defense could not have been known before hearing.” 35 Ill. Adm. Code 103.204(d).
A motion to strike an affirmative defense admits well-pled facts constituting the defense, and
attacks only the legal sufficiency of the facts. “Where the well-pleaded facts of an affirmative
defense raise the possibility that the party asserting them will prevail, the defense should not be
stricken.” International Insurance Co. v. Sargent and Lundy, 242 Ill. App. 3d 614, 630-631, 609
N.E.2d 842, 853-54 (1st Dist. 1993), citing Raprager v. Allstate Insurance Co., 183 Ill. App. 3d
847, 854, 539 N.E.2d 787, 791 (2d Dist. 1989).
General Affirmative Defenses to All Counts
Laches
QC Finishers’ Affirmative Defense of
Laches
.
QC Finishers argues that the People’s
complaint is barred by the doctrine of
laches
. QC Finishers quotes the Board’s decision in
People v. John Crane, Inc., PCB 01-76, slip op. at 8 (May 17, 2001), describing the doctrine of
laches
as “an equitable doctrine that bars relief when a defendant has been misled or prejudiced
6
due to a plaintiff’s delay in asserting a right. *** There are two principal elements of
laches
:
lack of due diligence by the party asserting the claim; and prejudice to the opposing party. ”
Supp. AD at 8.
Specifically, QC Finishers alleges that it began operations at its Franklin Park site in
1985, and has since then been subject to the “Cook County Environmental Control Ordinance,”
which requires operators of “combustion or process equipment to obtain Certificates of
Operation.” Supp. AD at 6. QC Finishers states that it has, and at all relevant times had, Cook
County Certificates of Operation, and that it was unaware it required to obtain State permits for
the same operation and equipment.
Id
.
QC Finishers argues that the State may be imputed with knowledge of the Cook County
ordinances and knowledge that the “Cook County Environmental Control Ordinance created a
situation that was confusing and misleading for Cook County sources” complying with County
requirements but also subject to separate State permitting for the same operations. Supp. AD at
6. QC Finishers quotes from Section 4(b) of the Act (415 ILCS 5/4(b) (2002)), providing that
the Agency “shall have the duty to collect and disseminate such information . . . as may be
required to carry out the purposes of this Act.”
Id
. QC Finishers then alleges that the State did
not attempt to, or failed to effectively, inform emission sources holding Cook County
Certificates of Operation, but not State permits, of the State’s additional requirements.
Id
. at 6-7.
QC Finishers asserts that in concluding it was complying with all applicable
environmental laws, it reasonably relied on the Cook County Environmental Ordinance,
assurances of a Cook County Inspector that the company needed no State permits, and the lack
of any contact from the State. Supp. AD at 7. QC Finishers characterizes itself as a “small
company with no more than 47 employees at any time” and asserts that it did not have “any
reason to believe that it had to further investigate its compliance status.”
Id
. According to QC
Finishers, the failure to satisfactorily inform small businesses of their State environmental
obligations was a problem acknowledged publicly by the State in a 1994 Governor’s Task Force
report published by the Agency and in a 1997 rulemaking public comment filed with the Board
by the Agency.
Id
. QC Finishers argues that the State could have easily identified this small
group of businesses by reviewing the Cook County Certificates of Operation, and in turn notified
them of the need for further permitting and emission controls.
Id
.
QC Finishers concludes that both elements of
laches
are present. First, QC Finishers
asserts that the State failed to exercise due diligence: QC Finishers “was part of a small, easily
identifiable group of sources,” yet the Agency “did not contact [QC Finishers] to assert [the
Agency’s] right to permits, to inspect its air emission units or to initiate the inquiries that led to
the instant Complaint, from 1985 until 1998.” Supp. AD at 8. Second, QC Finishers argues that
it was prejudiced by:
Complainant’s failure to act in a timely manner in that it was not given
information that would have enabled it to achieve compliance earlier and as a
result it is incurring legal costs and is being pursued for penalties. In addition,
[QC Finishers] will show that if it had known of the regulations and permit
programs that were applicable to it, it could have approached the growth and
7
direction of its business differently, enabling it to use less expensive controls or
eliminating the need for controls.
Id
. at 8-9.
People’s Motion to Strike.
The People argue that QC Finishers has failed to adequately
plead “key elements of a
laches
defense.” Mot. at 7. The People assert that QC Finishers’
allegations lack sufficient specificity and fail to allege any “delay in bringing the suit.”
Id
. at 6-
7.
Even if QC Finishers has properly pled laches, the People argue that Illinois courts have
been “reluctant to apply
laches
when it might impair the State in the discharge of its government
function” and in “protecting a substantial public interest.” Mot. at 7 (citing Cook County v.
Chicago Magnet Wire Corp., 152 Ill. App. 3d 726, 727-28, 504 N.E.2d 904, 905 (1st Dist.
1987)). The People assert that, with the complaint, the State seeks to exercise its government
function, namely “the enforcement of environmental statutes and regulations.”
Id
. Further, the
People state that “the enforcement of standards relating to air quality is a substantial and vital
public interest.”
Id
. at 9.
According to the People, “[l]ooking behind the ‘
laches
’ label, [QC Finishers] is really
alleging that it is the State’s responsibility to educate [QC Finishers] on the requirements of the
law.” Mot. at 10. The People assert, however, that the “Act and regulations place the
responsibility for compliance on the business operating in the State and impose consequences on
those who fail to comply.”
Id
. The People conclude that the defense of
laches
is unavailable to
QC Finishers and therefore should be stricken.
Id
. at 9-10.
QC Finishers’ Response to the Motion.
QC Finishers’ responds that, contrary to the
People’s suggestion, QC Finishers “is not trying to assert that ignorance of the law is an excuse.”
Resp. at 8. Rather, according to QC Finishers, “given this particular and extraordinary set of
facts it is possible that the Board will find as a matter of equity that the Agency’s delay should
foreclose it from punishing QC Finishers for the violations that occurred as a result of that
delay.”
Id
.
QC Finishers reiterates that the State, in 1994 and 1997, “made public statements
bemoaning the fact that information was not being disseminated to ‘smaller users.’” Resp. at 8-
9. QC Finishers argues that it was such a “smaller user” and was “making reasonable attempts to
ensure that it was in compliance by contacting its local inspector” and “was misadvised.”
Id
.
According to QC Finishers, the State, besides publicly acknowledging that the compliance
information needed to be provided, had the information and had a duty under the Act to
disseminate the information, and yet delayed. QC Finishers characterizes the State’s
enforcement action “for [QC Finishers] not acting on the information that the Agency was
withholding from it” as “uniquely unfair.”
Id
.
QC Finishers also argues that, in pleading the affirmative defense of
laches
, it is not
necessary to plead a delay in “bringing a suit,” but rather only a delay in “asserting a right.”
Resp. at 9. According to QC Finishers, the “right” asserted in a particular instance may be a
“suit,” but need not be. QC Finishers states that it was harmed not by delay in filing the
complaint but instead by delay in being contacted by the Agency about the State’s permitting
8
and emission controls. The harm, QC Finishers asserts, was caused in the years before the
delayed initial contact—the Agency inspector’s first site visit took place in 1998 and was
followed shortly by a Notice of Violation.
Id
.
According to QC Finishers, it was harmed by the State’s delay and lack of diligence. QC
Finishers argues that the State’s failure to fulfill its “duty to disseminate information” by
asserting its “right to permitting and emission controls” with an “easily identifiable group of
sources” gave “rise to many years of unknowing and unintentional violations.” Resp. at 10-11.
Board Ruling on the People’s Motion to Strike
Laches
.
Laches
is an equitable
doctrine that bars relief when a defendant has been misled or prejudiced due to a plaintiff’s delay
in asserting a right.
See
City of Rochelle v. Suski, 206 Ill. App. 3d 497, 501, 564 N.E.2d 933,
936 (2d Dist. 1990); Crane, PCB 01-76; People v. State Oil Co., PCB 97-103 (May 18, 2000).
There are two principal elements of
laches
: lack of due diligence by the party asserting the
claim; and prejudice to the opposing party.
See
Van Milligan v. Board of Fire & Police
Commissioners, 158 Ill. 2d 84, 89, 630 N.E.2d 830, 833 (1994); State Oil, PCB 97-103, slip op.
at 2. Although applying
laches
to public bodies is disfavored, the Illinois Supreme Court held in
Hickey v. Illinois Central Railroad Co., 35 Ill. 2d 427, 220 N.E.2d 415 (1966), that the doctrine
can apply to governmental bodies under compelling circumstances.
The Board agrees with QC Finishers that
laches
may apply when there has been delay in
asserting a “right,” not solely delay in bringing a “suit.” For example, in Crane, the Board
denied a motion to strike an affirmative defense of
laches
that was pled based on alleged Agency
delay in issuing a Notice of Violation, which precedes a suit under the Act. Crane, PCB 01-76.
The Board also finds that QC Finishers has adequately pled an affirmative defense of
laches
.
QC Finishers alleged harm resulting from delay in asserting a right, and the facts constituting the
defense are plainly set forth in a “response to a [complainant’s] claim which attacks the
[complainant’s]
legal
right to bring an action, as opposed to attacking the truth of claim.”
Farmers State Bank, PCB 97-100, slip op. at 2 n.1 (emphasis in original) (quoting
Black’s Law
Dictionary
).
A motion to strike an affirmative defense must admit the well-pled facts constituting the
defense, and attack only the facts’ legal sufficiency. “Where the well-pleaded facts of an
affirmative defense raise the possibility that the party asserting them will prevail, the defense
should not be stricken.” International Insurance, 242 Ill. App. 3d at 630-31, 609 N.E.2d at 853-
54. The Board has many times denied motions to strike the affirmative defense of
laches
.
See
People v. Stein Steel Mills Services, PCB 01-2 (Apr. 18, 2002); State Oil, PCB 97-103; Crane,
PCB 01-76. Here, the Board finds that QC Finishers has raised the possibility of prevailing on
laches
.
While the affirmative defense of
laches
carries an elevated standard of proof when
applied to the State, the Board is now ruling on a motion to strike an affirmative defense, not
deciding the merits of the defense.
See
People v. Panhandle Eastern Pipe Line Co., PCB 99-191
(Nov. 15, 2001) (Board held respondent failed to prove
laches
where respondent argued Agency
failed to exercise due diligence by not discovering violations when inspecting and permitting
facility, allegedly resulting in “undue delay” of the enforcement action). The Board denies the
9
State’s motion to strike this affirmative defense.
See
Crane, PCB 01-76 (denying motion to
strike
laches
from answer under similar circumstances).
Equitable Estoppel
QC Finishers’ Affirmative Defense of Equitable Estoppel.
QC Finishers argues that
the People should be estopped from bringing this enforcement action because elements of the
doctrine of equitable estoppel are present: the company reasonably and detrimentally relied on
the conduct of another. Supp. AD at 9. QC Finishers maintains that the Agency’s “failure to
disseminate information and address confusion caused by the Cook County Environmental
Ordinances, induced Respondent to rely on the Cook County Inspector’s erroneous assessment
of Respondent’s compliance status.”
Id
. According to QC Finishers, its reliance “on the state’s
silence and the county’s incorrect information was reasonable given the circumstances and the
small size and lack of sophistication of the company.”
Id
. at 10.
QC Finishers quotes from the Illinois Supreme Court’s decision in Geddes v. Mill Creek
Country Club, Inc., 196 Ill. 2d 302, 751 N.E.2d 1150, 1157 (2001), for the proposition that
silence can amount to misrepresentation:
[T]he representation need not be fraudulent in the strict legal sense or done with
an intent to mislead or deceive . . . . “Estoppel may arise from silence as well as
words. It may arise where there is a duty to speak and the party on whom the
duty rests has an opportunity to speak, and, knowing the circumstances, keeps
silent
. . . . He cannot by his silence induce or encourage commission of the act and
then be heard to complain.” Supp. AD at 9 (Geddes quoting Bondy v. Samuels,
333 Ill. 535, 546, 545, 165 N.E. 181 (1929)).
QC Finishers asserts that the Agency’s “silence in the face of its duty to disseminate, its
acknowledgment that such dissemination was needed and its awareness of particular problems in
Cook County amounts to a misrepresentation.” Supp. AD at 9.
QC Finishers reiterates that the Agency’s “statements to the Board and the Governor’s
office” show that the State was aware that “distribution of information to certain small sources
was necessary to obtain compliance.” Supp. AD at 10. QC Finishers argues that it can therefore
be inferred that the State “expected that its failure to distribute the information would result in
those sources being in noncompliance.”
Id
. The State’s conduct, concludes QC Finishers,
“encouraged the creation and continuance of a noncompliance situation.”
Id
.
People’s Motion to Strike.
In characterizing this purported affirmative defense, the
People state that QC Finishers “seeks to relieve the Respondent from knowing and following the
law and makes the alleged incompetence of a Cook County inspector the State’s responsibility.”
Mot. at 11.
The People assert a respondent must show the six elements of the defense of
equitable estoppel:
10
(1) words or conduct by the party against whom the estoppel is alleged
constituting either a misrepresentation or concealment of material facts; (2)
knowledge on the part of the party against whom the estoppel is alleged that
representations made were untrue; (3) the party claiming the benefit of an
estoppel must have not known the representations to be false either at the time
they were made or at the time they were acted upon; (4) the party estopped must
either intend or expect that his conduct or representations will be acted upon by
the party asserting the estoppel; (5) the party seeking the estoppel must have
relied or acted upon the representations; and (6) the party claiming the benefit of
the estoppel must be in a position of prejudice if the party against whom the
estoppel is alleged is permitted to deny the truth of the representation made. Mot.
at 11-12 (citing Vaughn v. Speaker, 126 Ill. 2d 150, 533 N.E.2d 885, 890 (1989);
Elson v. State Farm Fire and Casualty Co., 295 Ill. App. 3d 1, 691 N.E. 2d 807,
817 (1st Dist. 1998)).
The People allege that to establish estoppel against the State, “there must be an
affirmative act by the State inducing reliance on the part of the defendant to its detriment.” Mot.
at 12-14 (citing Pavlakos v. Dept. of Labor, 111 Ill. 2d 257, 265, 489 N.E.2d 1325, 1328 (1985)
(“estoppel applies against the State only when some positive acts by the State officials may have
induced an action by the adverse party under circumstances where it would be inequitable to
hold the adverse party liable for the act so induced; mere inaction by the State is not sufficient to
invoke estoppel”; citing Hickey); People
ex rel
. Northfield Park District v. Glenview Park
District, 222 Ill. App. 3d 35, 582 N.E.2d 1272, 1280 (1st Dist. 1991). The People argue that QC
Finishers has failed to plead the first of the six elements against the State—namely, any positive
or affirmative act by the State.
Id
. at 12-13.
The People further assert that QC Finishers has failed to plead the necessary “exceptional
circumstances” that must exist before the estoppel doctrine can be invoked against the
government. Mot. at 14. The People therefore move to strike this affirmative defense.
QC Finishers’ Response to the Motion.
QC Finishers insists that its case is “uniquely
compelling” and that Geddes, recognizing silence as sufficient for the defense, is a more recent
Illinois Supreme Court statement of what may constitute a misrepresentation for purposes of
estoppel. Resp. at 13-14. QC Finishers also argues that the case law suggests an affirmative act
by the government may be required to establish estoppel
only
when the government, unlike here,
has no duty to act, and further that an affirmative act may be found from “maintaining the status
quo.”
Id
. at 13. Moreover, QC Finishers argues that its reliance Cook County inspector’s advice
and the Agency’s silence was reasonable for a “small and unsophisticated company.”
Id
. at 14.
Board Ruling on the People’s Motion to Strike Equitable Estoppel.
The doctrine of
equitable estoppel may be applied when a party reasonably and detrimentally relies on the words
or conduct of another.
See
Brown’s Furniture, Inc. v. Wagner, 171 Ill. 2d 410, 431, 665 N.E.2d
795, 806 (1996); Crane, PCB 01-76; People v. Chemetco, Inc., PCB 96-76, slip op. at 10
(Feb. 19, 1998); White & Brewer Trucking, Inc. v. IEPA, PCB 96-250, slip op. at 10 (Mar. 20,
1997). However, the doctrine “should not be invoked against a public body except under
11
compelling circumstances, where such invocation would not defeat the operation of public
policy.” Gorgees v. Daley, 256 Ill. App. 3d 514, 518, 628 N.E.2d 721, 725 (1st Dist. 1993).
As the Illinois Supreme Court explained:
This court’s reluctance to apply the doctrine of estoppel against the State has been
motivated by the concern that doing so may impair the functioning of the State in
the discharge of its government functions, and that valuable public interests may
be jeopardized or lost by the negligence, mistakes or inattention of public
officials. Brown’s Furniture, 171 Ill. 2d at 431-32, 665 N.E.2d at 806, citing
Hickey, 35 Ill. 2d at 447-48, 220 N.E.2d at 426;
see also
Chemetco, PCB 96-76,
slip op. at 11; White & Brewer Trucking, PCB 96-250, slip op. at 10.
Consistent with this reluctance, parties seeking to estop the government must
demonstrate that their reliance was reasonable and that they incurred some detriment as a result
of the reliance. A party seeking to estop the government also must show that the government
made a misrepresentation with knowledge that the misrepresentation was untrue.
See
Medical
Disposal Services, Inc. v. IEPA, 286 Ill. App. 3d 562, 677 N.E.2d 428, 433 (1st Dist. 1997);
Chemetco, PCB 96-76, slip op. at 11; White & Brewer Trucking, PCB 96-250, slip op. at 10.
Additionally, the courts have required that the governmental body must have taken some
affirmative act. Hickey, 35 Ill. 2d at 448-49, 220 N.E.2d at 426; Gorgees, 256 Ill. App. 3d at
518, 628 N.E.2d at 725.
QC Finishers cites the Illinois Supreme Court’s decision in Geddes to argue that silence
alone may constitute a sufficient misrepresentation for purposes of estoppel. However, the
Board notes that the Geddes case, though recent, did not involve a government plaintiff or
expressly overrule the court’s holding in Hickey that some affirmative act must have been taken
by the government. The Illinois Supreme Court stated in Hickey:
While situations may arise which justify invoking the doctrine of estoppel even
against the State when acting in its governmental capacity, [citation] we have
always adhered to the rule that mere nonaction of governmental officers is not
sufficient to work an estoppel and that before the doctrine can be invoked against
the State or a municipality there must have been some positive acts by the
officials which may have induced the action of the adverse party under
circumstances where it would be inequitable to permit the corporation to stultify
itself by retracting what its officers had previously done. Hickey, 35 Ill. 2d at
448-49, 220 N.E.2d at 426 (quoting City of Quincy v. Sturhahn, 18 Ill. 2d 604,
614).
The Board is not persuaded that the Illinois Supreme Court in Geddes, without mention,
swept away decades of precedent requiring an affirmative act
by the government
as a
precondition to estopping the government. It is true that “[w]here the well-pleaded facts of an
affirmative defense raise the possibility that the party asserting them will prevail, the defense
should not be stricken.” International Insurance, 242 Ill. App. 3d at 630-31, 609 N.E.2d at 853-
54. Here, however, QC Finishers has not raised that possibility because it has not pled an
12
affirmative act by the State. The Board accordingly grants the People’s motion to strike the
affirmative defense of estoppel. QC Finishers still may introduce evidence related to the
elements of estoppel, not as a defense, but as it may be relevant to any remedy.
See
415 ILCS
5/33(c), 42(h) (2002).
Waiver
QC Finishers’ Affirmative Defense of Waiver.
Building upon the allegations of the
two prior general affirmative defenses, QC Finishers argues that the Agency’s conduct also
“warrants an inference that the State relinquished its right to pursue a cause of action for past
violations, by not making such efforts as were required by statute and principles of equity to
better serve small, known Cook County sources by making contact with them through notices
and inspections.” Supp. AD at 11. QC Finishers adds that the State “chose knowingly, and for
its own purposes not to pursue contacts with small, county permitted sources . . . while also
being fully aware that such contacts could have averted noncompliance.”
Id
. By doing so,
according to QC Finishers, the State waived its right to pursue this complaint “for past violations
during the period that it refrained from contacting QC Finishers and allowed it to continue in
unknowing violations.”
Id
.
People’s Motion to Strike.
The People argue that waiver is an intentional
relinquishment of a known right. According to the People, the State, while “certainly aware of
its right to pursue violators of environmental statutes and regulations,” has not, “explicitly or
implicitly,” waived any rights to pursue these alleged violations against QC Finishers. Mot. at
15. The People accordingly move to strike this affirmative defense.
Id
.
QC Finishers’ Response to the Motion.
QC Finishers asserts that, on the contrary, the
People have implicitly waived their right to pursue this cause of action as inferred from the
State’s conduct. Resp. at 15. Further, QC Finishers argues that whether waiver may be implied
here is a question of fact, and contrary to the law on considering motions to strike, the People do
not admit the well-pled facts of the affirmative defense.
Id
.
Board Ruling on the People’s Motion to Strike Waiver.
Waiver is “the intentional
relinquishment of a known right.” Ryder v. Bank of Hickory Hills, 146 Ill. 2d 98, 104 585
N.E.2d 46, 49 (1991). “There must be both knowledge of the existence of the right and an
intention to relinquish it.” Pantle v. Industrial Commission, 61 Ill. 2d 365, 372, 335 N.E. 2d 491,
496 (1975). “Waiver may be made by an express agreement or it may be implied from the
conduct of the party who is alleged to have waived a right.” Ryder, 146 Ill. 2d at 105, 585
N.E.2d at 49. The doctrine of waiver applies “when a party intentionally relinquishes a known
right or his conduct warrants an inference to relinquish the right.” Hartford Accident and
Indemnity Co. v. D.F. Bast, Inc., 56 Ill. App. 3d 960, 962, 372 N.E.2d 829, 831 (1st Dist. 1977)
(
citing
Pantle);
see also
Crane, PCB 01-76; People v. Douglas Furniture of California, Inc., PCB
97-133, slip op. at 5 (May 1, 1997).
At this point in the proceeding, the Board is ruling on a motion to strike an affirmative
defense, not deciding the parties’ ultimate dispute over whether the facts justify implying waiver
by the State. The Board finds that QC Finishers has adequately pled an affirmative defense of
13
waiver. QC Finishers alleges that the State, as inferred by its conduct, has intentionally
relinquished the known right to pursue this enforcement action. QC Finishers has pled “new
facts or arguments that, if true, will defeat . . . [complainant’s] claim even if all allegations in the
complaint are true.” Community Landfill, PCB 97-193.
A motion to strike an affirmative defense admits well-pled facts constituting the defense,
and attacks only the legal sufficiency of the facts. “Where the well-pleaded facts of an
affirmative defense raise the possibility that the party asserting them will prevail, the defense
should not be stricken.” International Insurance, 242 Ill. App. 3d at 630-31, 609 N.E.2d at 853-
54. The Board finds that QC Finishers has raised the possibility of prevailing on waiver. The
Board accordingly denies the People’s motion to strike this affirmative defense.
Specific Affirmative Defenses to Particular Counts
First Affirmative Defense to Count III on Failing to Comply with Emission Limitations
The People allege in count III of the complaint that, from dates in 1991 and 1996 to the
present, QC Finishers violated Section 9(a) of the Act and Section 218.204 of the Board’s air
pollution control regulations by using coatings that emit VOM in excess of the emission
limitations of Sections 218.204(j) and (n). Section 9(a) of the Act provides that “[n]o person
shall . . . [c]ause or threaten or allow the discharge or emission of any contaminant into the
environment . . . so as to violate regulations or standards adopted by the Board under the Act.”
415 ILCS 5/9(a) (2002).
QC Finishers’ Affirmative Defense of Alternative Compliance.
In its first affirmative
defense to count III, QC Finishers states that it admitted to using coatings that exceed the Section
218.204 emission limitations, but maintains that it can use these coatings because it is complying
with the “alternative emission limitation” of another provision of the regulations—Section
218.207 (35 Ill. Adm. Code 218.207). Supp. AD at 2. According to QC Finishers, an owner or
operator of a coating line subject to Section 218.204 may choose to comply instead with Section
218.207. QC Finishers argues that a facility can use coatings that do not comply with Section
218.204 by controlling the emissions from those coatings pursuant to Section 218.207.
Id
.
QC Finishers states that it installed emission control equipment and two of its six coating
booths were ducted to the control equipment. Supp. AD at 3. According to QC Finishers, the
control equipment began operating in 2000 and has been used to the present. QC Finishers
argues that under Section 218.207, the company “was able to use, and did use, coatings in the
controlled booths which exceeded the [Section] 218.204 [emission] limits without violating
Board rules.”
Id
. QC Finishers further states that the “remaining four booths were to be used
solely for coatings which did not exceed the limits in [Section] 218.204.”
Id
.
According to QC Finishers, even if the facts pled in the complaint are correct, the use of
emission controls constitutes “new facts” that “will serve to defeat the allegation of a violation of
[Section] 218.204 for the period of time during which all of the coatings that exceeded the limits
of [Section] 218.204 were controlled pursuant to [Section] 218.207.” Supp. AD at 3.
14
People’s Motion to Strike.
The People argue that under Section 33(a) of the Act (415
ILCS 5/33(a) (2002)), subsequent compliance is not an affirmative defense. Motion at 4. The
People concede that subsequent compliance “may be used for other purposes but it certainly does
not make the Respondent less liable for its earlier violations.”
Id
.
QC Finishers’ Response to the Motion.
QC Finishers emphasizes that the People
alleged in Count III that the violations of Section 218.204 continue “to the present.” Resp. at 3.
QC Finishers again concedes that “noncompliance with [Section] 218.204 does continue to the
present however it does not constitute a violation in the present because [Section 218.207]
provides an alternative means of compliance.”
Id
.
QC Finishers maintains that its compliance with Section 218.207 in lieu of Section
218.204 constitutes “new information” outside of the complaint that will defeat the alleged
violation of Section 218.204 “for the period of time” it controlled emissions pursuant to Section
218.207 when using coating that exceeded the limits Section 218.204. Resp. at 3. QC Finishers
clarifies that it “is not pleading that subsequent compliance should excuse previous violations”
and that this affirmative defense “does not address the period before 2000,” when the company
allegedly began using emission controls.
Id
. at 3-4.
Board Ruling on the People’s Motion to Strike the First Affirmative Defense to
Count III.
For the following reasons, the Board denies the People’s motion to strike the first
affirmative defense to count III. Initially, the Board notes, and the People do not dispute, that
Section 218.207, entitled “Alternative Emission Limitations,” does provide an alternative to
complying with the emission limitations of Section 218.204, the provision allegedly violated.
Section 218.207(a) states:
a) Any owner or operator of a coating line subject to Section 218.204 of this
Subpart may comply with this Section, rather than with Section 218.204 of
this Subpart, if a capture system and control device are operated at all
times the coating line is in operation and the owner or operator
demonstrates compliance [with this Section] . . . . 35 Ill. Adm. Code
218.207(a).
Section 33(a) of the Act makes clear that it “shall not be a defense to findings of
violations . . . that the person has come into compliance subsequent to the violation . . . .” 415
ILCS 5/33(a) (2002). It is also true that the Board considers proof of subsequent compliance a
mitigating factor in determining the appropriate civil penalty for a violation.
See
415 ILCS
5/33(c) (2002)). QC Finishers, however, concedes that its alleged subsequent compliance
through the use of emission controls does not excuse violations before the controls were
operating. Nor does QC Finishers merely seek to introduce evidence of subsequent compliance
to mitigate penalty, though it may do so. Rather, QC Finishers argues that the alternative
compliance it allegedly achieved in 2000 defeats the People’s claim
for part of the time period
of
alleged violations in the complaint. In count III of the complaint, the People allege violations of
Section 218.204 from dates in 1991 and 1996 “through the present.” Comp. at 9.
15
The issue then is not whether subsequent compliance excuses prior violations. It does
not.
See
415 ILCS 5/33(a) (2002). Instead, the issue is whether a respondent can allege a valid
affirmative defense that defeats
part
,
but not all
, of a claim. Here the Board looks to the Code of
Civil Procedure “for guidance” because “the Board’s procedural rules are silent.” 35 Ill. Adm.
Code 101.100(b). Section 2-613(d) of the Code of Civil Procedure provides:
The facts constituting any affirmative defense . . . and any defense which by other
affirmative matter seeks to avoid the legal effect of or defeat the cause of action
set forth in the complaint . . .
in whole or in part
, and any ground or defense,
whether affirmative or not, which, if not expressly stated in the pleading, would
be likely to take the opposite party by surprise, must be plainly set forth in the
answer or reply. 735 ILCS 5/2-613(d)(2002) (emphasis added).
Consistent with this provision of the Code of Civil Procedure, the Board finds that an
affirmative defense may be properly pled to defeat either all or part of a claimed violation. QC
Finishers’ affirmative defense of alternative compliance through Section 218.207, if true, would
defeat part of the People’s claim of violations as alleged in count III “even if all allegations in
the complaint are true.” Community Landfill, PCB 97-193. QC Finishers would not be liable
for violating Section 218.204, and in turn Section 9(a) of the Act, during the time it was
complying with Section 218.207. The alleged use of emission controls for alternative
compliance constitutes “new facts or arguments” not set forth in the complaint.
Id
.
Additionally, as an affirmative defense must, QC Finishers’ pleading admits the complaint’s
claim of noncompliance with Section 218.204. The Board therefore finds that QC Finishers has
properly pled an affirmative defense and denies the People’s motion to strike this affirmative
defense.
First Affirmative Defense to Count IV
on Failing to Timely Develop and Submit Fugitive
Matter Emission Program
The People allege in count IV of the complaint that QC Finishers violated Section 9(a) of
the Act and Section 212.309 of the Board’s air pollution control regulations by submitting a
“Fugitive Dust Program” for the parking lots at the Franklin Park facility over two and a half
years late. Section 212.309 provides in part:
a) The emission units described in Sections 212.304 through 212.308
and
Section 212.316
of this Subpart shall be operated under the provisions of
an operating program . . . and prepared by the owner or operator and
submitted to the Agency for its review. Such operating program shall be
designed to significantly reduce fugitive particulate matter emissions. 35
Ill. Adm. Code 212.309(a) (emphasis added).
Section 212.309 refers to emission units described in Section 212.316. The People assert
“parking lots are regulated emission sources pursuant to 35 Ill. Adm. Code 212.316.” Comp. at
11. Section 212.316 provides in part:
16
a) Applicability. This Section shall apply to those operations specified in
Section 212.302 of this Subpart
and that are located in areas defined in
Section 212.324(a)(1)
of this Part.
***
c) Emission Limitations for Roadways or Parking Areas. No person shall
cause or allow fugitive particulate matter emissions from any roadway or
parking area
to exceed an opacity of 10 percent, except that the opacity
shall not exceed 5 percent at quarries with a capacity to produce more than
1 million T/yr of aggregate. 35 Ill. Adm. Code 212.316(a), (c) (emphasis
added).
QC Finishers’ Affirmative Defense Based on Geographic Applicability.
In its first
affirmative defense to count IV, QC Finishers concedes the complaint is correct that parking lots
are regulated by Section 212.316. Supp. AD at 4. However, QC Finishers argues that Section
212.316 is further limited to operations located in areas defined in Section 212.324(a)(1) (35 Ill.
Adm. Code 212.324(a)(1)). QC Finishers maintains that Section 212.324(a)(1) describes
locations “comprised of areas in the vicinity of McCook in Cook County, Lake Calument in
Cook County, and Granite City in Madison County.”
Id
. QC Finishers states that even if its
Franklin Park parking lot is an emission unit, it is not regulated under Section 212.316 because it
is not located in any of these geographical areas.
Id
.
People’s Motion to Strike.
The People argue that Section 212.309 “refers to emission
units described in Section 212.302, which includes parking lots.” Motion at 4. According to the
People, “Section 212.302 states that all manufacturing operations located in any townships of
Cook County are subject to Section 212.309.”
Id
. The People then move to strike this
affirmative defense because it “does not allege any new facts or arguments.”
Id
.
QC Finishers’ Response to the Motion.
QC Finishers maintains that Section 212.316,
by its terms, applies only to operations that are
both
specified in Section 212.302
and
located in
geographic areas identified in Section 212.324(a)(1). Resp. at 5. QC Finishers emphasizes that
the provision allegedly violated, Section 212.309, refers to all of Section 212.316. According to
QC Finishers, because Section 212.309 refers to the entire Section 212.316 and not to specific
subsections of Section 212.316 that describe particular types of emission units, the Board must
have intended to include the geographical limits of Section 212.316: “If [the Board] had
intended to refer to specific units regardless of where they were located, it would have referred
to the specific subsections of [Section] 212.316 that described those units.”
Id
. at 5.
Board Ruling on the People’s Motion to Strike the First Affirmative Defense to
Count IV.
The parties disagree over the scope of applicability of Section 212.309. QC
Finishers interprets geographical limits on the Section’s applicability that the People do not. At
this juncture, however, the Board is not considering a motion for summary judgment or other
final disposition of this legal question on the merits after full briefing. Rather, the Board is
ruling on a motion to strike affirmative defenses.
For the following reasons, the Board denies the People’s motion to strike this affirmative
defense. QC Finishers has pled a valid affirmative defense by admitting the complaint’s
17
assertion that parking lots are regulated under Section 212.316, but raising the new argument that
Section 212.316 is limited geographically and does not cover its Franklin Park location. Because
Section 212.316 is the complaint’s basis for applying Section 212.309 to QC Finishers, QC
Finishers raises the possibility of defeating the People’s claim. “Where the well-pleaded facts of
an affirmative defense raise the possibility that the party asserting them will prevail, the defense
should not be stricken.” International Insurance, 242 Ill. App. 3d at 630-31, 609 N.E.2d at 853-
54, citing Raprager, 183 Ill. App. 3d at 854, 539 N.E.2d at 791.
Accordingly, the Board finds
that QC Finishers has properly pled an affirmative defense and denies the People’s motion to
strike this affirmative defense.
Second Affirmative Defense to Count IV on Failing to Timely Develop and Submit Fugitive
Matter Emission Program
As discussed, the People allege in count IV of the complaint that QC Finishers violated
Section 9(a) of the Act and Section 212.309 of the Board’s regulations by not timely submitting
a “Fugitive Dust Program” for the company’s parking lots.
QC Finishers’ Affirmative Defense Based on Parking Lot Not Being an Emission
Unit.
In its second affirmative defense to count IV, QC Finishers argues that the Section
212.309 requirement for submittal of a fugitive dust operating program, by its terms, applies only
to “emission units.” Supp. AD at 4. According to QC Finishers, its parking lot is not an
“emission unit.” An “emission unit” is defined in Board regulations (35 Ill. Adm. Code
211.1950) as “any part or activity at a stationary source that emits or has the potential to emit.”
Id
.
QC Finishers states that its parking lot has been paved at all times relevant to this count
of the complaint, and that because it is paved, it does not generate dust. Supp. AD at 4. QC
Finishers argues that the paved parking lot “does not emit or have the potential to emit” and
accordingly is not an “emission unit” subject to the fugitive dust program requirement allegedly
violated.
Id
.
People’s Motion to Strike.
The People state that even if the parking lot is paved,
because of the nature of the business on the premises, particulate matter could still be emitted by
activities on the lot such as trucks driving. Mot. at 5. The People conclude that this affirmative
defense should be dismissed because it is “argumentative, and merely raises an interpretation of
the law.”
Id
.
QC Finishers’ Response to the People’s Motion.
QC Finishers responds that it has
“raised a new fact that will defeat the allegation”—namely, that its “parking lot is paved and
therefore not capable of emitting.” Resp. at 6. QC Finishers further states that the People give
no reason for why a defense should be dismissed for being “argumentative” or for raising an
“interpretation of the law.”
Id
. at 6-7.
Board Ruling on People’s Motion to Strike the Second Affirmative Defense to Count
IV.
The Board grants the People’s motion to strike because
QC Finishers’ assertion that its
parking lot is not an emission unit is not an affirmative defense. An affirmative defense is a
18
“response to a [complainant’s] claim which attacks the [complainant’s]
legal
right to bring an
action, as opposed to attacking the truth of claim.” Farmers State Bank, PCB 97-100, slip op. at
2 n.1 (emphasis in original) (quoting
Black’s Law Dictionary
).
Here, QC Finishers is disputing the truth of the People’s claim that the parking lot is an
emission unit. Because QC Finishers does not admit the People’s claim, but instead attacks the
sufficiency of that claim, the company’s argument is not an affirmative defense.
See
Worner
Agency, 121 Ill. App. 3d at 221, 459 N.E.2d at 635. QC Finishers may nevertheless introduce
evidence probative of whether the parking lot is an emission unit in trying to defend against this
alleged violation.
First Affirmative Defense to Count VI
on Operating Without a CAAPP Permit
In count VI of the complaint, the People allege that QC Finishers violated Sections 9 and
39.5 of the Act and Section 270.201 of the Agency’s regulations by not timely submitting a
complete initial CAAPP application and by operating without a CAAPP permit. Comp. at 15-
17.
3
The complaint states that QC Finishers was required to submit its complete initial CAAPP
application by December 7, 1995, but did not submit its initial CAAPP application until March
23, 1999. The People further allege that QC Finishers does not currently have a CAAPP permit.
Id
. at 16-17.
QC Finishers’ Affirmative Defense Based on FESOP.
QC Finishers concedes that it
does not have a CAAPP permit but argues that it is exempt from the requirement because it has a
federally enforceable State operating permit (FESOP). Supp. AD at 5. QC Finishers states that
Section 39.5(3)(c) of the Act (415 ILCS 5/39.5(3)(c) (2002)) authorizes the Agency to exclude a
source from the CAAPP permit requirement. According to QC Finishers, Section 39.5(3)(c) is
“[i]n essence . . . an exception” to the prohibition of Section 39.5(6)(b) (415 ILCS 5/39.5(6)(b)
(2002)), the provision allegedly violated.
Id
.
Section 39.5(6)(b) states:
After the applicable CAAPP permit or renewal application submittal date, . . . no
person shall operate a CAAPP source without a CAAPP permit unless the
complete CAAPP permit or renewal application for such source has been timely
submitted to the Agency. 415 ILCS 5/39.5(6)(b) (2002)).
Section 39.5(3)(c) provides:
The Agency shall have the authority to issue a State operating permit for a source
under Section 39(a) of the Act, . . . which includes federally enforceable
conditions limiting the “potential to emit” of the source to a level below the major
3
In its June 19, 2003 order, the Board denied the People’s motion to strike QC Finishers’ second
affirmative defense to count VI, which asserts that the Board lacks the authority to hear an
alleged violation of 35 Ill. Adm. Code 270.201 because it is an Agency rule, not a Board rule.
19
source threshold for that source as described in paragraph 2(c) of this Section,
thereby excluding the source from the CAAPP . . . . 415 ILCS 5/39.5(3)(c)
(2002).
QC Finishers asserts that it was granted a FESOP on May 3, 2002—State operating
permit #99030080 containing federally enforceable conditions limiting its “potential to emit” to
a level below the “major source” threshold described in Section 39.5(2)(c) of the Act (415 ILCS
5/39.5(2)(c) (2002)). Supp. AD at 5. QC Finishers maintains that it is accordingly excluded
from the CAAPP and “was able to operate and continues to operate without a CAAPP permit
and without violating the Illinois Environmental Protection Act.”
Id
.
QC Finishers states that “[e]ven assuming that the facts and law pled in the Complaint are
correct,” the granting of the FESOP is new information that defeats the alleged violations “for
the period of time, May 3, 2002 to the present,” during which QC Finishers has had the FESOP.
Supp. AD at 5.
People’s Motion to Strike.
The People assert that any “compliance at a later date [by
obtaining the FESOP] does not excuse violations from 1995 until May of 2002.” Mot. at 5.
According to the People, QC Finishers “has not alleged any new facts or arguments.”
Id
.
QC Finishers’ Response to the People’s Motion.
QC Finishers argues that the FESOP
is an alternative means of compliance so that its continuing failure to have a CAAPP permit is
irrelevant. Resp. at 7. QC Finishers emphasizes that by raising this affirmative defense, it does
“not seek to excuse past noncompliance” and that the defense applies “for the period of time
only from May 3, 2002 to the present.”
Id
. In other words, the FESOP information “is being
offered as an absolute defense for
part
of the allegation.”
Id
. at 8 (emphasis in original). QC
Finishers also reiterates that, contrary to the People’s statement, the allegation of the FESOP is
new information outside of the complaint.
Id
. at 7.
Board Ruling on the People’s Motion to Strike the First Affirmative Defense to
Count VI.
For the following reasons, the Board denies the People’s motion to strike the FESOP
affirmative defense. QC Finishers argues that the alternative compliance it allegedly achieved in
May 2002 defeats the People’s claim
for part of the time period
of alleged violations in the
complaint. As the Board held above, subsequent compliance does not excuse prior violations,
but a respondent can allege a valid affirmative defense that defeats either all or part of a claimed
violation.
QC Finishers’ affirmative defense of alternative compliance through a FESOP, if true,
would defeat part of the People’s claim of violations as alleged in count VI “even if all
allegations in the complaint are true.” Community Landfill, PCB 97-193. The alleged FESOP
constitutes “new facts or arguments” not set forth in the complaint.
Id
. Additionally, as an
affirmative defense must, QC Finishers’ pleading admits the complaint’s claim that the company
lacks a CAAPP permit. The Board therefore finds that QC Finishers has properly pled an
affirmative defense and denies the People’s motion to strike this affirmative defense.
20
CONCLUSION
For the reasons above, the Board grants in part and denies in part the People’s motion to
strike QC Finishers’ seven revised affirmative defenses. The Board strikes two of the seven
revised affirmative defenses. Specifically, the Board grants the People’s motion to strike (1) the
affirmative defense of equitable estoppel as to all counts of the complaint and (2) the second
affirmative defense to count IV. The Board denies the People’s motion to strike (1) the
affirmative defense of
laches
as to all counts, (2) the affirmative defense of waiver as to all
counts, (3) the first affirmative defense to count III, (4) the first affirmative defense to count IV,
and (5) the first affirmative defense to count VI. The Board directs the parties and the hearing
officer to proceed expeditiously to hearing or with any dispositive motions.
ORDER
1. The Board grants the People’s motion to strike the affirmative defense of
equitable estoppel as to all counts of the complaint and the second affirmative
defense to count IV of the complaint.
2. The Board denies the People’s motion to strike the affirmative defense of
laches
as to all counts of the complaint, the affirmative defense of waiver as to all counts
of the complaint, the first affirmative defense to count III of the complaint, the
first affirmative defense to count IV of the complaint, and the first affirmative
defense to count VI of the complaint.
IT IS SO ORDERED.
21
I, Dorothy M. Gunn, Clerk of the Illinois Pollution Control Board, certify that the Board
adopted the above order on July 8, 2004, by a vote of 5-0.
Dorothy
M.
Gunn,
Clerk
Illinois
Pollution
Control
Board
