ILLINOIS POLLUTION CONTROL BOARD
September 2, 2004
PEOPLE OF THE STATE OF ILLINOIS,
Complainant,
v.
SKOKIE VALLEY ASPHALT, CO., INC.,
EDWIN L. FREDERICK, JR., individually
and as owner and president of SKOKIE
VALLEY ASPHALT, CO., INC., and
RICHARD J. FREDERICK, individually and
as owner and vice president of SKOKIE
VALLEY ASPHALT, CO., INC.
Respondents.
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
PCB 96-98
(Enforcement – Water)
MITCHELL L. COHEN AND BERNARD J. MURPHY, ASSISTANT ATTORNEYS
GENERAL, OFFICE OF THE ATTORNEY GENERAL, APPEARED ON BEHALF OF
COMPLAINANT; and
MICHAEL B. JAWBIEL, LAW OFFICE OF MICHAEL B. JAWGIEL, P.C., AND DAVID S.
O’NEILL, LAW OFFICE OF DAVID S. O’NEILL, APPEARED ON BEHALF OF
RESPONDENTS.
OPINION AND ORDER OF THE BOARD (by T.E. Johnson):
On July 26, 2003, the Office of the Attorney General, on behalf of the People of the State
of Illinois (People), filed a five-count second amended complaint against Skokie Valley Asphalt
Co., Inc., Edwin L. Frederick, Jr., and Richard J. Frederick (respondents). The complaint alleges
that respondents violated Sections 12 (a) and (f) of the Environmental Protection Act (Act) (415
ILCS 5/12(a), (f) (2002)), as well as 35 Ill. Adm. Code 302.203, 304.105, 304.106, 305.102(b),
309.102(a), and 309.104(a). The complaint alleges that the violations concern respondents’
facility at Grayslake Village, Lake County.
For the reasons below, the Board finds that the respondents violated the Environmental
Protection Act (Act) (415 ILCS 5 (2002)) and Board regulations. The Board orders the
respondents to pay a civil penalty of $153,000, but will withhold a decision regarding attorney
fees and costs until the matter is fully addressed by the parties.
PROCEDURAL HISTORY
On November 3, 1995, the People filed a complaint against Skokie Valley Asphalt Co.,
Inc. (Skokie Valley). The complaint alleged violations dating from May 1986 to March 1991.
2
The People filed a first amended complaint that added an additional count against Skokie Valley,
but did not add any additional respondents on December 29, 1997. On July 26, 2002, the
complainant filed a second amended complaint. That complaint added the Fredericks as
respondents. The second amended complaint alleged that the Fredericks violated Sections 12(a)
and (f) of the Environmental Protection Act (Act) (415 ILCS 5/12(a), (f) (2002)), as well as
Sections 302.203, 304.105, 304.106, 305.102(b), 309.102(a), and 309.104(a) of the Board’s
regulations. The complaint alleged that the Fredericks falsified discharge monitoring reports,
submitted a late application for a National Pollutant Discharge Elimination System (NPDES)
permit, failed to comply with sampling and reporting requirements in their NPDES permits,
discharged oil into a drainage ditch, and violated NPDES permit effluent limits.
On October 17, 2002, the Board accepted the People’s second amended complaint.
People v. Skokie Valley Asphalt, Co., PCB 96-98, slip op. at 3 (Oct. 17, 2002). On March 20,
2003, the Board issued an order that denied the complainant’s motion for summary judgment,
accepted the respondents’ answer into the record, and directed the hearing officer to proceed to
hearing. People v. Skokie Valley Asphalt, Co., PCB 96-98 (Mar. 20, 2003). On June 5, 2003,
the Board issued an order that denied Skokie Valley’s motion to dismiss the Fredericks from the
case, and granted the People’s motion to strike affirmative defenses in part. People v. Skokie
Valley Asphalt, Co., PCB 96-98 (Jun. 5, 2003). The Board denied the respondents’ motion to
reconsider the June 5, 2003 order in a July 24, 2003 Board order.
See
People v. Skokie Valley
Asphalt, Co., PCB 96-98 (Jul. 24, 2003).
A hearing was held on October 30 and 31, 2002, at the Village Hall in Libertyville.
1
Six
witnesses testified. The People filed 42 exhibits, and the respondents filed eight exhibits. All
offered exhibits were accepted into evidence. On November 3, 2003, Board Hearing Officer
Carol Sudman issued a hearing report that set a briefing schedule and found the witnesses
credible.
On January 15, 2004, the People filed their brief accompanied by a motion for leave to
file instanter. On March 12, 2004, the respondents filed their closing brief. On April 15, 2004,
the People filed its reply brief and rebuttal arguments. The respondents filed a motion to strike
and objections to the People’s closing argument and reply brief on May 17, 2004. On May 26,
2004, the People filed a response to the motion, and a motion to strike respondents’ motion to
strike and objections.
FACTS
Skokie Valley was an asphalt-paving contractor with its main office located at 768 South
Lake Street, Grayslake, Lake County (site). Tr. at 277-78. East of the site is the Avon-Fremont
Drainage Ditch that flows to the north through the town of Grayslake into a lake called Third
Lake. Tr. at 145-46; Comp. Exs 25 and 32. The lake, Grayslake, for which the town is named,
is located to the northeast of the site. Comp. Ex. 32. On April 4, 1986, the Agency issued a site
specific NPDES permit to Skokie Valley for the storm water runoff from the site. Tr. at 137,
1
The Board cites the transcript for the hearing of October 30-31, 2003, as “Tr. at _.”
3
Comp. Ex. 1. Skokie Valley was permitted to discharge storm water into Grayslake under
NPDES permit No. IL 0065005. Tr. at 221; Comp. Ex. 1. The permit, which became effective
on May 4, 1986, and expired on March 1, 1991, required Skokie Valley to submit monthly
DMRs. Tr. at 27-29, Comp. Ex. 1. To comply with this requirement, Skokie Valley would have
an employee take a sample from a discharge pipe and deliver the sample to North Shore Sanitary
District for testing. Tr. at 283. The results were mailed to Skokie Valley and the DMR was
usually completed by Skokie Valley dispatcher Bob Christiansen and signed by Richard
Frederick. Tr. at 286, 313.
Skokie Valley was an Illinois corporation until its sale to Curran Contracting and
dissolution in 1998. Tr. at 299-300, 432. The sale included all of the records of Skokie Valley.
Tr. at 319-21. Edwin Frederick was the president of Skokie Valley from 1978 until its sale in
1998. Tr. at 432-35. Edwin Frederick’s brother Richard Frederick was the vice president of
Skokie Valley from 1978 until its sale in 1998. Tr. at 276. Edwin and Richard Frederick each
owned 50 percent of Skokie Valley, were the only shareholders of Skokie Valley and were the
only corporate officers of Skokie Valley. Tr. at 435-37.
Richard Frederick was responsible for the scheduling of all jobs, estimating, budgeting,
hiring and controlling of all employees and subcontractors, equipment purchasing and repair and
review of equipment. Tr. at 279-80. Edwin Frederick was responsible for estimating, insurance
issues, management of payroll, job-site meetings, consultation with foremen and engineers, and
liaison with government officials and customers. Tr. at 282.
Prior to 1978, Liberty Asphalt operated the Skokie Valley site. Tr. at 124. Liberty
Asphalt was an asphalt manufacturing company owned and operated by Edwin and Richard
Frederick’s parents. Tr. at 279. Edwin Frederick worked for Liberty Asphalt for over 20 years.
Id
.
From 1978 to at least 1981 the Skokie Valley site was operated as an asphalt plant. Tr. at
279, 294-96. The respondents sold the plant and had it removed in 1981 or 1982.
Id
. Since the
removal of the plant, the site was used as an office, and a maintenance and storage garage for
equipment, trucks, asphalt liquid, asphalt primer coats and other storage tanks. Tr. at 278, 438,
Comp. Ex. 32 and 34. The site housed the estimating department, the office and all the people
who did billing. Tr. at 277-78.
The land between the site and the Avon-Fremont Drainage Ditch is a working farm field.
Tr. at 359. A farm drainage tile ran through the site toward the Avon-Fremont Drainage Ditch.
Tr. at 340-41. The outfall from the tile drains to the ditch due east of the site. Comp. Ex. 22.
From December 1994 through April 1995, there was an oily discharge in the Avon Fremont
Drainage Ditch. Tr. at 340-41, Comp. Ex. 34. Upon discovering the oily sheen on the water in
the tile, the respondents plugged it. Tr. at 340. After the respondents plugged the drain tile on
their property, the oil discharge in the ditch subsided and stopped. Tr. at 361-62; Comp. Ex. 34
In March 1995, the Agency sampled the effluent from the farm drainage tile that ran
through the site at the Avon-Fremont drainage ditch. Tr. at 152. The concentration of oil
gravimetric of the sample contained 664 milligrams of oil per liter. Tr. at 155-56; Comp. Ex. 21.
4
The Agency does not have any records showing that Skokie Valley submitted any DMRs
in 1986 or 1987. Tr. at 49-50; Comp. Exs. 1, 8A and 26. According to the Agency’s DMR
Submission Record, Skokie Valley submitted two DMRs in 1988, five DMRs in 1989, and
eleven in 1990. Tr. at 51-52; Comp. Exs. 1, 8 and 26. The Agency does not have a record of
Skokie Valley submitting a DMR for the month of July in 1992. Tr. at 53; Comp. Ex. 8F.
The DMR submitted for December 1990, contained the same data as that submitted for
November 1990. Tr. at 37-38; Comp. Exs. 2-3. The DMR originally submitted by Skokie
Valley for February 1991 contained the same data as the report submitted for January 1991. Tr.
at 40; Comp. Exs. 4-5. Skokie Valley subsequently submitted a corrected DMR for February of
1991. Tr. at 485. Resp. Ex. 4. In a May 13, 1993 letter to counsel, Richard Frederick stated that
the respondents had inspected the two DMRs thought to be duplicate copies, and do not feel that
they are duplicated in any way; and that if a duplicating mistake occurred, it took place
somewhere other than their office. Resp. Ex. 4. Attached to the letter are non-duplicative DMRs
for the two months in question.
Id
.
The DMR that Skokie Valley submitted in August 1991 indicated a 30-day average
concentration for TSS of 55 mg/L and a daily maximum concentration for TSS of 55mg/L. Tr.
at 54; Comp. Ex. 9. The DMR that Skokie Valley submitted for September 1991 indicated that
their storm water discharge had a 30-day average concentration for TSS of 25 mg/L. The DMR
that Skokie Valley submitted for September 1991 indicated that their storm water discharge had
a 30-day average concentration for TSS of 25 mg/L. Tr. at 54-55; Comp. Ex. 10. The DMR that
Skokie Valley submitted for October 1991 indicated that their storm water discharge had a 30-
day average concentration for TSS of 41 mg/L and a daily maximum concentration of 41 mg/L.
Tr. at 55; Comp. Ex. 11. The DMR that Skokie Valley submitted for February 1992 showed that
their storm water discharge had a 30-day average concentration for TSS of 18 mg/L. Tr. at 55-
56; Comp. Ex. 12. The DMRs that Skokie Valley submitted for November and December1992
indicated that their storm water discharge had a 30-day average concentration for TSS of 22
mg/L and 24 mg/L respectively. Tr. at 56; Comp. Exs. 13 and 14. The DMR that Skokie Valley
submitted for May 1993 indicated that their storm water discharge had a 30-day average
concentration for TSS of 24 mg/L. Tr. at 56-57; Comp. Ex. 15. The DMR that Skokie Valley
submitted for June 1993 indicated that their storm water discharge had a 30-day average
concentration for TSS of 35 mg/L and a daily maximum concentration of 35 mg/L. Tr. at 57;
Comp. Ex. 16. The DMR that Skokie Valley submitted for April 1995 indicated that their storm
water discharge had a 30-day average concentration for TSS of 126 mg/L and a daily maximum
concentration of 126 mg/L. Tr. at 57-58; Comp. Ex. 17.
The Agency received Skokie Valley’s NPDES permit renewal application on June 5,
1991. Tr. at 42; Comp. Ex. 6. Because the NPDES permit expired in March of 1991, the
Agency sent a compliance inquiry letter to Skokie Valley in April 1991. Tr. at 42-46; Comp. Ex.
6. The respondents discussed the idea of coverage under a blanket permit instead of an
individual NPDES permit with an Agency representative. Tr. at 322-25.
Agency inspector Kallis inspected the site on May 21, 1991. Tr. at 139-40; Comp. Ex. 19.
Mr. Kallis left the site to avoid a confrontation, and never saw an effluent sampling point on that
date. Tr. at 141-42. Donald Klopke worked in the Agency’s Office of Emergency Response on
5
April 19, 1995, when he inspected the site, the Avon Fremont drainage ditch and the surrounding
area. Tr. at 218-22. On that day, Mr. Klopke inspected the sight with fellow Agency employee
Ken Savage and Betty Lavis – the on-scene coordinator from the U.S. EPA. Tr. at 227-28;
Comp. Ex. 25. Mr. Klopke saw the oil sheen on the surface of the ditch and noticed a strong
petroleum odor. Tr. at 222. Ms. Lavis prepared a pollution report on May 3, 1995 describing
her visit to the site on April 18, 1995, that determined the source of the petroleum release into the
Avon Fremont drainage ditch was Skokie Valley. Tr. at 227-28; Comp. Ex. 25. In her report,
Ms. Lavis wrote that she had planned to conduct additional sampling, but that she was met at the
site by Edwin and Richard Frederick who informed her that they had found a leak and would
address the problem. Tr. at 228-31; Comp. Ex. 25. The respondents signed a notice of federal
interest in an oil pollution incident and agreed to submit a clean-up project plan to the U.S. EPA
for review. Comp. Ex. 25. The U.S. EPA required Skokie Valley to search for additional
sources for the release on their site and suspected that there might be a pool of oil product
accumulated under the site.
Id
. Three USTs that were installed in 1978 were removed from the
site after the April 1995 incident. Comp. Ex. 34, pg. 8.
Agency inspector Chris Kallis also investigated the site in 1995. On March 1, 1995, Mr.
Kallis took samples from the point where the farm drainage tile discharged into the ditch,
observing at that time, a concentrated heavy oil sheen coming from the farm drainage tile and
downstream in the ditch. Tr. at 151-55. Mr. Kallis did not notice any sign of contaminant
upstream from the drainage tile. Tr. at 154.
On April 22, 1995, the respondents contacted environmental engineer James Huff after
finding a visible sheen or oil on an opened drain tile on respondents’ property. Tr. at 347-48.
On Huff’s advice, the respondents plugged the drain tile and reported the release. Tr. at 340-41.
No releases have occurred since respondents plugged the drain tile. Tr. at 348. Huff visited the
site a few days later and saw that the drain tile had been plugged and the soil brought to grade.
Tr. at 352. He saw that absorbent booms were placed in the Avon-Freemont drainage ditch by
the USEPA. Tr. at 348. He noticed an oil sheen near where the booms were in place and
observed that the oil sheen did not exist a mile downstream from where the drain tile emptied
into the ditch. Tr. at 348-49.
On April 25, 1995, respondents excavated a trench at the site to again locate the drain tile
and Huff noticed oil in the center of the trench. On April 28, 1995, the respondents discovered
that an underground heating oil tank contained water and reported a leaking underground storage
tank incident to the Illinois Emergency Management Agency (IEMA). Tr. at 363-68. On April
28, 1995, the respondents followed Huff’s recommendation and purchased higher quality booms
and placed them in the drainage ditch. Tr. at 351-52.
After removing the underground storage tank, Huff determined that the release from that
tank was minor and now thinks the oil sheen on the drainage ditch from 1994 to 1995 was caused
by one or more items on the south side of the site. Tr. at 386-87. Huff ultimately concluded that
the release to the drainage ditch was attributed to the abandoned gasoline and diesel lines from
an above ground storage tank to the former pump island. Comp. Ex. 34.
6
After the sale of the site, and continuing at least until the time of the hearing, Edwin and
Richard Frederick continue to fund the effort to eliminate any potential source of a release from
the site. Tr. at 387-88. To date, the Fredericks have paid Huff at least $150,000 for
environmental work performed at the site. Tr. at 467-68.
PRELIMINARY MATTERS
Before the Board decides this case, a number of preliminary matters must be addressed.
Specifically, the Board must decide the motions to strike filed by the People and the respondents,
the affirmative defenses of
laches
and estoppel, and the issue of Edwin and Richard Frederick’s
personal liability.
Motions to Strike
The respondents filed a motion to strike the People’s reply brief on May 17, 2004. On
May 26, 2004, the People filed a response to the motion as well as a motion to strike
respondents’ motion to strike.
Respondents assert that any statements in the People’s reply brief that are not a reply to
the respondents’ brief, or limited to the facts in evidence, should be stricken. Resp. Mot. at 1-2.
Respondent sets forth 14 specific sections of the People’s reply brief that should be stricken for
these reasons.
The People argue that respondents’ motion to strike should not be a part of the record in
this case and ask that it be stricken without the Board’s consideration. The People assert that the
reply brief is not a pleading, and that respondents cannot rely on Section 101.506 of the Board’s
rules to challenge the reply. Peop. Mot. at 2. The People also contend that the respondents did
not ask for leave to file the motion and that the People have the burden of proof and must get the
last word. Peop. Mot. at 2-3. The People ask that respondents’ motion to strike be stricken and
that the People be allowed to amend their fee petitions to reflect time spent addressing the
motion to strike.
The Board grants the respondents’ motion to strike as follows. Specifically, that portion
of the People’s reply that addresses attorney fees and costs exceed the scope of the arguments
made in the respondents’ brief and will not be considered in this order. The respondents have
not had an adequate opportunity to respond to the request for attorney fees and costs. However,
as the Board finds willful, knowing or repeated violations of the Act and regulations in this
order, the Board may award costs and reasonable attorney fees.
See
415 ILCS 5/42(f)(2002). In
the interest of administrative economy, the People may rely on the information presented in the
reply concerning attorney fees and costs. The People will also be given 21 days after the date of
this order to file anything further on those issues. At the end of the 21-day period, the
respondents will have the standard 14-day response period to respond to the People’s request.
The Board finds the remainder of the People’s reply appropriate, as it does not exceed the
scope of the respondents’ brief or seek to proffer new facts. Further, the Board is fully capable
7
of ascertaining the relevance and accuracy of the statements set forth in the reply and will weigh
such statements accordingly. The remainder of the respondents’ motion to strike is denied.
The People’s motion to strike is denied. Although pleading is not defined in the Board’s
rules, the term will not be construed narrowly in order to prevent a party from challenging what
it believes is an improper filing before the Board. Such a procedural vehicle must exist to
prevent material prejudice. Nothing in the remainder of the People’s motion to strike is
persuasive, and the motion is denied.
Affirmative Defenses of
Laches
and Estoppel
Arguments
The respondents timely raised the affirmative defenses of
laches
and estoppel. The
respondents assert that the complainant was aware of the roles of Edwin and Richard Frederick
prior to the filing of the original complaint in 1995 and that all discovery pertinent to the parties
was completed in 2000. Resp. Br. at 10. The respondents contend that no new information or
additional allegations involving the Fredericks have been introduced to justify the untimely
addition, and that as a result of the People’s lack of due diligence; the Fredericks have been
prejudiced in their ability to produce records, recall witnesses and remember events relevant to
their defense in this matter.
Id
.
Specifically, the respondents state they made no attempt to retain any Skokie Valley or
personal records since this case had been filed and the Fredericks were not named as
respondents, and no new information was divulged through discovery that would lead a
reasonable person to suspect that they would be named as respondents. Resp. Br. at 10-11. The
respondents argue that dismissing the Fredericks as respondents will not act as impairment of the
State’s right to protect the public interest, because Skokie Valley will remain a respondent.
Resp. Br. at 12. The respondents assert that compelling circumstances are involved in this
matter; namely that the Fredericks are unable to fully defend themselves against charges of
alleged incidents that occurred up to 17 years ago, and that the respondents should be able to rely
on the representations and actions of the State to conclude they will not be required to defend
themselves against allegations raised well after their retirement. Resp. Br. at 13. The
respondents ask that the Fredericks be dismissed under the doctrines of
laches
and equitable
estoppel.
The People argue that the respondents cannot claim
laches
because they lost their own
records. Reply at 16. The People assert that respondents and their counsel knew this case was
pending in 1998 when the assets of Skokie Valley were sold, and that this case was listed within
the asset purchase agreement.
Id
. The People assert that it is not difficult to determine that
respondents had access to, and were responsible for, their own records and that the asset
purchase agreement gave full access to the property and records belonging, or relating to the
respondents. Reply at 17.
The People argue that the Fredericks were named over a year before the hearing. Reply
at 19. The People assert that the Fredericks were not prejudiced because the same three
8
witnesses – the Fredericks and Huff – were needed to defend both Skokie Valley and the
Fredericks. Reply at 20. The People assert that once the Fredericks admitted in discovery that
they were the two people responsible for the entire Skokie Valley operation, the People filed the
second amended complaint adding them as respondents. Reply at 21. The People argue that
respondents had to defend themselves against the exact same violations they had to defend on
behalf of the corporation. Reply at 22. Finally, the People assert that there are no circumstances
whatsoever to indicate respondents were misled or prejudiced by the Agency.
Id
.
Discussion
Although they have separate affirmative defenses, respondents have invoked the
doctrines of
laches
and equitable estoppel together. An affirmative defense is a “response to a
claim which attacks the
legal
right to bring an action, as opposed to attacking the truth of claim.”
Farmers State Bank v. Phillips Petroleum Co. (January 23, 1997), PCB 97-100, slip op. at 2 n.1
(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.
Laches
is an equitable doctrine that bars relief where a defendant has been misled or
prejudiced because of a plaintiff's delay in asserting a right. City of Rochelle v. Suski, 206 Ill.
App. 3d 497, 501, 564 N.E.2d 933, 936 (2nd Dist. 1990). There are two principal elements of
laches:
“lack of due diligence by the party asserting the claim and prejudice to the opposing
party.” Van Milligan v. Board of Fire and Police Commissioners, 158 Ill. 2d 85, 89, 630 N.E.2d
830, 833 (1994). Although
laches
as applied to public bodies is disfavored, it can apply under
compelling circumstances even when the public body is operating in its governmental capacity.
Hickey v. Illinois Central Railroad Co., 35 Ill. 2d 427, 447-48, 220 N.E.2d 415, 425-426 (1966)
(citations omitted). The Supreme Court reaffirmed Hickey in Van Milligan.
See
Van Milligan,
158 Ill. 2d 85, 90-91, 630 N.E.2d 830, 833.
The Board finds that respondents do not have a valid claim of
laches
in this case. First,
as acknowledged by respondents, the Agency and the Attorney General’s Office were operating
in a governmental capacity in prosecuting this case in order to protect the public’s interest. Thus,
compelling circumstances must be shown for
laches
to apply. Although some allegations in this
matter date back to 1986, the People first filed its complaint in 1995. After that time the case has
moved, albeit slowly, forward with both parties bearing at least some responsibility for the
lengthy nature of time interval. Even though nine years seems an unduly long period of time,
nothing in the record indicates that the People were not diligent in pursuing their claim.
9
Even assuming a lack of diligence, the Board cannot find that being added to the
complaint in 2000 prejudiced the Fredericks. There is no indication that any evidence beyond
what is needed to defend Skokie Valley was needed to defend the Fredericks. The Fredericks
were aware of the suit against Skokie Valley at least as early as 1995. The asset purchase
agreement clearly gives the Fredericks the right to any records they would have needed to defend
this case. Respondents’ claim that they had no reason to suspect these records would be of value
to them in 1998 is specious. If the Fredericks failed to gather or account for the records they
needed, it was a problem of their own making, and not as a result of any lack of diligence on the
People’s part. Based on the facts in this case, the Board can find no compelling circumstances to
apply
laches
to the People in this matter.
A party may invoke the doctrine of equitable estoppel when it “reasonably and
detrimentally relies on the words or conduct of another.” Brown's Furniture v. Wagner, 171 Ill.
2d 410, 432, 665 N.E.2d 795, 806 (1996). The doctrine of estoppel “should not be invoked
against a public body except under compelling circumstances, where such invocation would not
defeat the operation of public policy.” People v. Chemetco, PCB 96-76, slip op. at 10 (Feb. 19,
1998) (quoting Gorgess v. Daley, 256 Ill. App. 3d 143, 147, 628 N.E.2d 721, 725 (1st Dist.
1993)). The Illinois Supreme Court is reluctant to apply the doctrine of estoppel against the
State because it “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;
see
also
Chemetco, PCB 96-76, slip op. at 10-11 (Feb. 19, 1998).
But, as with
laches
, it has 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. Hickey
v. Illinois Central Railroad Co., 35 Ill. 2d 427, 447-48, 220 N.E.2d 415, 425-426 (1966). The
Supreme Court reaffirmed Hickey more recently in Van Milligan.
See
Van Milligan, 158 Ill. 2d
85, 90-91, 630 N.E.2d 830, 833.
A party seeking to estop the government must prove three factors. First, it must prove
that it relied on a government agency, its reliance was reasonable, and that it incurred some
detriment as a result of the reliance. Chemetco, PCB 96-76, slip op. at 11(Feb. 19, 1998).
Second, the party “must show that the government agency made a misrepresentation with
knowledge that the representation was untrue.”
Id.
;
see also
Medical Disposal Services v. PCB,
286 Ill. App. 3d 562, 677 N.E.2d 428 (1st Dist. 1997). Third, “the government body must have
taken some affirmative act; the unauthorized or mistaken act of a ministerial officer will not
estop the government.” Chemetco, PCB 96-76, slip op. at 11 (Feb. 19, 1998);
see also
Brown’s
Furniture, 171 Ill. 2d at 431, 665 N.E.2d at 806.
The respondents did not present a sufficient case to estop the People in this instance. The
respondents presented no evidence concerning its reliance on a governmental agency that the
Fredericks would not be added as respondents, much less of any misrepresentation with
knowledge that the misrepresentation was untrue. Further, the respondents have not pointed to
any affirmative act that was made by the Attorney General’s Office or the Agency. Thus, the
affirmative defense of estoppel fails.
10
Personal Liability of the Fredericks
The respondents argue that the People presented insufficient evidence at trial to hold
Edwin or Richard Frederick liable under the complaint. Resp. Br. at 15. The respondents assert
that the Fredericks cannot be held liable for any of the counts relating to the NPDES permit
because they were not permit holders and had no duty to comply with the permit requirements.
Id
.
The respondents argue that Agency witness Garretson had no information to lead him to
believe that Edwin Frederick actually participated in any aspect of the discharge monitoring
reports (DMRs) submitted by Skokie Valley. Resp. Br. at 16. The respondents argue that the
People fail to make differentiation between the respondents based on their responsibilities under
the NPDES permit.
Id
. The respondents assert that because the Fredericks were not owners of
the property, they cannot be held liable as individuals for any release from the property. Resp.
Br. at 15.
The People argue that the Fredericks did not take precautions to prevent pollution, ran the
entire Skokie Valley operation, worked at the site, supervised employees, and much more. Reply
at 24. The People note that Edwin Frederick consulted with foremen, acted as liason with
governmental officials, signed the late NPDES permit application and letters submitted to the
Agency, and was present on site during environmental inspections and investigations.
Id
.
Likewise, the People contend, Richard Frederick dealt with foremen, signed and certified
Skokie Valley’s DMRs and was present at the site during environmental inspections and
investigations. Reply at 25. The People argue that respondents admitted in their brief that the
Fredericks made major management decisions and decisions on spending large amounts of
money on behalf of Skokie Valley.
Id
. The People assert that the Fredericks are personally
liable for the environmental violations of their company because they were personally involved
in or actively participated in at least some of the violations, and had the ability or authority to
control the acts or omissions that gave rise to all the violations. Resp. Br. at 7; Reply at 25.
Discussion
The legal precedent for personal liability is provided in People v. C.J.R. Processing,
Inc., 269 Ill. App. 3d 1013, 647 N.E.2d 1035 (3rd Dist. 1995). In that case, the court held that
corporate officers might be held liable when their active participation or personal involvement
is shown. C.J.R., 269 Ill. App. 3d at 1020. In discussing this standard in the context of a
motion to dismiss, the court in People v. Tang, 346 Ill. App. 3d 277, 805 N.E.2d 243 (1st
Dist. 2004), found that a plaintiff must do more than allege that the corporate officer held a
management position or had general corporate authority; but must allege facts that the officer
had personal involvement or actively participated in the acts resulting in liability, not just that
he had personal involvement or active participation in the management of the corporation.
Id
.
As noted in C.J.R. Processing, the General Assembly intended for the Act to be liberally
construed in imposing responsibility upon those who cause harm to the environment. C.J.R.
Processing, Ill. App. 3d at 1016, citing 415 ILCS 5/2(b), (c) (1992). Deciding whether to impose
11
personal liability on a corporate officer is often difficult. In Tang, the court likened it to a
situation in which an individual is hit by a negligently operated train. The railroad is liable in
tort, but the president of the railroad is not. However, had the president been driving the train
when it hit the plaintiff, or had been sitting beside the driver and ordered him to exceed the speed
limit, he would be jointly liable with the railroad. Tang, 346 Ill. App. 3d at 280, citing
Browning-Ferris v. Ter Maat, 195 F.3d 953,956 (7th Circ. 1999).
The Board finds that the evidence in this case shows that Edwin and Richard Frederick
are personally liable for the activities of Skokie Valley. The record is replete with active
participation or personal involvement by the Fredericks. The Fredericks, together, were
responsible for the day-to-day operation of Skokie Valley. Both were present for environmental
investigations and inspections. They also both corresponded and met with environmental
government officials. While perhaps not driving the train, the Fredericks both sat beside the
driver and gave instructions, and had the ability to control the activities that gave rise to the
instant complaint. Accordingly, the Fredericks can be held personally liable under the doctrine
set forth in C.J.R. Processing for any violations committed by Skokie Valley.
DISCUSSION
The Board first discusses each of the five counts in turn, including the purported defenses
raised by the respondents. The Board then addresses the People’s requested relief: civil
penalties and attorney fees. In order to prevail in an enforcement case before the Board, the
complainant must prove by a preponderance of the evidence that the respondents have
committed the violations alleged in the complaint. People v. Fosnock, PCB 41-1, slip op. at 19
(Sept. 15, 1994). A proposition is proved by a preponderance of the evidence when it is more
probably true than not. Nelson v. Kane County Forest Preserve, PCB 94-244 (July 18, 1996).
Count I – Failure to Comply with Reporting Requirements
In count I of the complaint, the People allege that the respondents violated Section 12(f)
of the Act (415 ILCS 5/12(f) (2002)) and 35 Ill. Adm. Code 305.102(b) by falsifying their
December 1990 and January 1991 discharge monitoring reports (DMR). Am. Comp. at 4. The
People allege that respondents falsified the reports by altering the dates of previously submitted
reports and submitting the duplicates to the Agency.
Id
.
Section 12(f) of the Act provides:
No person shall:
f. Cause, threaten or allow the discharge of any contaminant into the waters
of the State, as defined herein, including but not limited to, waters to any
sewage works, or into any well or from any point source within the State,
without an NPDES permit for point source discharges issued by the
Agency under Section 38(b) of this Act, or in violation of any term or
condition imposed by such permit, or in violation of any NPDES permit
filing requirement established under Section 39(b), or in violation of any
12
regulations adopted by the Board or of any order adopted by the Board
with respect to the NPDES program. 415 ILCS 5/12(f) (2002).
The Act defines “contaminant” as “any solid, liquid, or gaseous matter, any odor,
or any form of energy, from whatever source.” 415 ILCS 5/3.165 (2002).
The Act defines “water pollution” as:
[S]uch alteration of the physical, thermal, chemical, biological or radioactive
properties of any waters of the State, or such discharge of any contaminant into
any waters of the State, as will or is likely to create a nuisance or render such
waters harmful or detrimental or injurious to public health, safety or welfare, or to
domestic, commercial, industrial, agricultural, recreational, or other legitimate
uses, or to livestock, wild animals, birds, fish, or other aquatic life. 415 ILCS
5/3.545 (2002).
The Act defines “waters” as “all accumulations of water, surface and
underground, natural, and artificial, public and private, or parts thereof, which are
wholly or partially within, flow through, or border upon this State.” 415 ILCS
5/3.550 (2002).
Section 305.102(b) of the Board’s water pollution regulations provides:
Reporting Requirements.
b. Every holder of an NPDES Permit is required to comply with the
monitoring, sampling, recording and reporting requirements set forth in the
permit and this chapter. 35 Ill. Adm. Code 305.102(b).
Standard Condition No. 19 of NPDES Permit No. IL 0065005 provides:
The permittee shall not make any false statement, representation or
certification in any application, record, report, plan or other document
submitted to the Agency or the U.S. EPA, or required to be maintained
under the permit.
Analysis
The record is clear that the DMRs submitted for December 1990 and February 1991
contained the same data as that submitted for the November 1990 and January 1991 DMRs
respectively. The People allege that respondents’ falsified the DMRs for December 1990 and
February 1991 by duplicating previous reports. Skokie Valley’s DMRs were usually filled out
and submitted by Skokie Valley employee Bob Christiansen. Mr. Christiansen suffered a heart
attack during the time period in question. Tr. at 292.
It is undisputed that DMRs with data duplicating that contained in previously filed
reports were submitted to the Agency. In fact, a review of the January 1991 DMR reveals that
13
respondents cite the reporting period for January as having only 28 days – from 91/01/01 to
91/01/28. Comp. Ex. 4. The Board finds the People have shown by a preponderance of the
evidence that the respondents made a false statement, representation or certification to the
Agency in at least these two instances. The Board finds the respondents have violated Section
12(f) of the Act (415 ILCS 5/12(f) (2002)) and 35 Ill. Adm. Code 305.102(b). However, the
Board will consider the health issues surrounding Skokie Valley employee Mr. Christiansen as a
mitigating factor in considering the penalty for this violation.
Count II – Late Application for Renewal of NPDES Permit
Count II of the complaint alleges that the respondents violated Section 12(f) of the Act
(415 ILCS 5/12(f) (2002)) and 35 Ill. Adm. Code 309.102(a) and 104(a) by not applying for a
reissuance of Skokie Valley’s National Pollutant Discharge Elimination System (NPDES) permit
180 days prior to the expiration date contained in its existing permit. Am. Comp. at 6.
Section 12(f) of the Act, which is set forth above under count I, prohibits discharge in
violation of any regulations adopted by the Board or of any order adopted by the Board with
respect to the NPDES program. 415 ILCS 5/12(f) (2002).
Section 309.102(a) of the Board’s Water Pollution Regulations provides:
a. Except as in compliance with the provisions of this Act, Board regulations,
and the CWA (33 U.S.C. 1251 et seq.), and the provisions and conditions
of the NPDES permit issued to the discharger, the discharge of any
contaminant or pollutant by any person into waters of the State from a
point source or into a well shall be unlawful. 35 Ill. Adm. Code
309.102(a).
Section 309.104(a) of the Board’s Water Pollution Regulations provides:
Renewal
a. Any permittee who wishes to continue to discharge after the expiration
date of his NPDES permit shall apply for reissuance of the permit not less
than 180 days prior to the expiration date of the permit. 35 Ill. Adm. Code
309.104(a).
Analysis
The respondents do not dispute that Skokie Valley’s NPDES permit renewal application
was not filed within 180 days prior to the expiration date of the permit. The NPDES permit
expired in March of 1991, and the Agency did not receive the application until June 5, 1991 –
approximately nine months late. The respondents argue, rather, that it is questionable that
Skokie Valley was required to reapply for an NPDES permit. The respondents argue that Skokie
Valley should have qualified for a general permit for storm water discharges off of industrial
properties that require no monitoring or submitting of DMRs. The respondents further assert that
14
they discussed this and were advised by consultants and Agency representatives that they did not
need a NPDES permit for the site.
The Board is not convinced by respondents’ arguments. The simple fact is that Skokie
Valley did have a NPDES permit. The regulations require that any permittee wishing to continue
to discharge must file for a renewal prior to 180 days before the NPDES permit expires. Skokie
Valley did not timely apply for renewal. Any additional arguments are chaff.
The time to contest the need for the NPDES permit was at the time of issuance or
reissuance. At that time, the respondents could have appealed the Agency’s determination that a
permit was needed. Instead, respondents failed to follow the clear requirement for renewal. The
respondents have also argued that they were told by the Agency that an NPDES permit would
not be required at the site. This assertion is not borne out in the record.
The Board finds respondents in violation of Section 12(f) of the Act (415 ILCS 5/12(f)
(2002)) as well as 35 Ill. Adm. Code 309.102(a) and 309.104(a).
Count III – Failure to Comply with Sampling and Reporting Requirements
The People allege in count III of the complaint that respondents violated Section 12(f) of
the Act (415 ILCS 5/12(f) (2002)) and 35 Ill. Adm. Code 309.102(a) and (b) by not maintaining
an accessible effluent sampling point for Skokie Valley’s discharge from the lagoon, and by
failing to submit DMRs to the Agency as required by Skokie Valley’s NPDES permit. Am.
Comp. at 8.
Section 12(f) of the Act and Section 309.102(a) of the Board’s Water Pollution
Regulations are set forth above under counts I and II.
Section 305.102(b) of the Board’s Water Pollution Regulations provides:
Reporting Requirements
b. Every holder of an NPDES Permit is required to comply with the
monitoring, sampling, recording and reporting requirements set forth in
the permit and this chapter. 35 Ill. Adm. Code 305.102(b).
Special Condition No. 4 of NPDES Permit No. IL 0065005 provides:
The permittee shall record monitoring results on Discharge Monitoring
Report forms using one such form for each discharge each month. The
completed Discharge Monitoring Report form shall be submitted monthly
to IEPA, no later than the 15
th
of the following month, unless otherwise
specified by the Agency.
15
Special Condition No. 1 of NPDES Permit No. IL 0065005 provides:
Samples shall be taken in compliance with the effluent monitoring
requirements and shall be taken at a point representative of the discharge,
but prior to entry into the receiving stream.
Analysis
Skokie Valley, as a NPDES permit holder, must comply with the reporting requirements
detailed in its permit. See 35 Ill. Adm. Code 305.102(b). Special condition number 4 of Skokie
Valley’s NPDES Permit makes it clear that DMRs must be submitted no later than the 15th of
the month following that being reported. The Agency does not have any records showing that
Skokie Valley submitted any DMRs during the years of 1986 and 1987, or on 19 occasions
thereafter.
Skokie Valley asserts that the Agency historically mislogs or misplaces information
submitted in the DMRs. However, the record does not reveals a historic mishandling of
submitted DMRs on the part of the Agency, but only an Agency witness’ awareness that DMRs
have been misfiled in the past. Tr. at 66, 197. In addition, the record contains correspondence by
respondents acknowledging a failure to properly file DMRs with the Agency. The Board finds
that the People have shown by a preponderance of the evidence that the respondents did not
timely submit DMRs.
The People base their allegation that respondents did not maintain an accessible effluent
sampling point on the testimony of Agency inspector Mr. Kallis. Mr. Kallis inspected the site on
May 21, 1991, but left before he found a representative sampling point because of an incident
with Edwin and Richard Frederick. Mr. Kallis stated that he “got the impression they wanted me
to go, so I left just to avoid confrontation.” Tr. at 141. Mr. Kallis did not provide any specific
testimony concerning threatening language, or even a request that he leave, nor did he testify that
he looked for, but failed to find a sampling point. A sampling point was available when Mr.
Kallis took samples in 1992. The Board finds that the People failed to prove that respondents
did not maintain an accessible sampling point. The People have not offered any testimony or
exhibits describing a full inspection wherein a sampling point wasn’t found. Mr. Kallis did not
verify that no effluent sampling point was available on May 21, 1991, and a sampling point was
available when he next sought one.
The Board finds respondents in violation of Section 12(f) of the Act, as well as 35 Ill.
Adm. Code 309.102(a), 305.102(b) and special condition number 4 of NPDES permit IL
0065005 for failing to properly submit DMRs on a regular basis. However, the Board finds
respondents did not violate special condition number 1 of NPDES permit IL 0065005, and the
accompanying portions of the statute and regulations, for failing to maintain an accessible
sampling point.
16
Count IV – Water Pollution
In count IV of the complaint, the People allege that respondents violated Section 12(a) of
the Act (415 ILCS 5/12(a) (2002)) and 35 Ill. Adm. Code 302.203, 304.105 and 304.106 by
causing or allowing the discharge of contaminants into the Avon Drainage Ditch so as to cause
water pollution. Am. Comp. at 13.
Section 12(a) of the Act provides:
No person shall:
a. Cause or threaten or allow the discharge of any contaminants into the
environment in any State so as to cause or tend to cause water pollution in
Illinois, either alone or in combination with matter from other sources, or
so as to violate regulations or standards adopted by the Pollution Control
Board under the Act. 415 ILCS 5/12(a) (2002).
Section 302.203 of the Board’s Water Pollution Regulations provides:
Offensive Conditions
Waters of the State shall be free from sludge or bottom deposits, floating
debris, visible oil, odor, plant or algal growth, color or turbidity of other
than natural origin…35 Ill. Adm. Code 302.203
Section 304.124(c) of the Board’s Water Pollution Regulations provides:
Offensive Conditions
c. Oil may be analytically separated into polar and nonpolar components. If
such separation is done, neither of the components may exceed 15 mg/l
(i.e. 15 mg/l polar materials and 15 mg/l nonpolar materials. 35 Ill. Adm.
Code 304.124(c).
Section 304.105 of the Board’s Water Pollution Regulations provides:
Violation of Water Quality Standards
In addition to the other requirements of this Part, no effluent shall, alone
or in combination with other sources, cause a violation of any applicable
water quality standard…35 Ill. Adm. Code 304.105.
Contaminants, water pollution and waters were previously defined above under
count I.
17
Analysis
From December 1994 through April 1995, there was an oily discharge in the Avon
Fremont Drainage Ditch. The Board finds this was a discharge of a contaminant to the
environment so as to cause water pollution,
i.e.
, a discharge to State waters that will or is likely
to create a nuisance or render such waters harmful or detrimental or injurious. The respondents
do not dispute that an oily discharge existed in the drainage ditch.
Instead, respondents argue that the People did not establish whether the Skokie Valley
site was the most likely source of the discharge into the drainage ditch because an equally
probable, if not more probable, source exists – the nearby Mitch’s Green Thumb Nursery. In
reviewing the record, however, the Board finds that the People met its burden and proved by a
preponderance of the evidence that the oily sheen in the Avon-Fremont drainage ditch was
caused, threatened or allowed by the respondents.
Not only did the respondents admit to the U.S. EPA that they had found the leak and
would address the problem, no releases occurred once the respondents plugged the drain tile on
their site. Further, Agency inspector Kallis investigated the site when the oil sheen was on the
water in the drainage ditch, and did not notice any sign of contaminant upstream from the
drainage tile. Accordingly, the Board finds that respondents violated Section 12(a) of the Act as
well as 35 Ill. Adm. Code 302.203, 304.105, and 304.106.
The Agency took a water sample in March 1995, and had it tested for oil and grease
content. Laboratory analysis revealed that the sample far exceeded 15 mg/l of oil. The Board
finds that respondents violated Section 304.124(c) of the Board’s Water Pollution Regulations.
35 Ill. Adm. Code 304.124(c).
Count V – Violation of NPDES Permit Effluent Limits
Count V of the complaint alleges that respondents violated Section 12(f)(2) of the Act
(415 ILCS 5/12(f) (2002)) and 35 Ill. Adm. Code 304.141(a) and 309.102(a) by causing or
allowing the discharge of effluent from the Skokie Valley facility to exceed concentration limits
for total suspended solids (TSS) as set forth in Skokie Valley’s NPDES permit.
Section 304.141(a) of the Board’s water pollution regulations provides:
NPDES Effluent Standards
a. No person to whom an NPDES Permit has been issued may discharge any
contaminant in his effluent in excess of the standards and limitations for
that contaminant which are set forth in his permit. 35 Ill. Adm. Code
304.141(a).
Section 12(f) of the Act and Section 309.102(a) of the Board’s Water Pollution
Regulations are set forth above under counts I and II.
18
Analysis
NPDES Permit No. IL 0065005 contains the following effluent limits for total suspended
solids: 15 mg/l for a 30-day average, and 30 mg/l for a daily maximum. A review of the DMRs
submitted by the respondents reveals nine exceedences of the 30-day average concentration limit
for TSS, and four exceedences of the daily maximum concentration limit for TSS. See Comp.
Exs. 9-17.
The respondents argue that the Agency admitted at hearing that it does not take action if a
singular DMR reflects levels higher than allowed under the NPDES permit and that even two
reports back-to-back may only possibly lead to action by the Agency. This is immaterial,
however, to whether or not the respondents violated the limits in its permit. The fact that the
Agency may choose not to enforce isolated exceedences of NPDES permit limits does not alter
that fact that such exceedences occurred, and are violations of the Act and regulations. Further,
the respondents violated the limits in the NPDES permit for two consecutive months twice and
for three consecutive months in 1991.
The respondents also argue that, in light of the numerous environmental factors beyond
the control of a permittee that influence the level of TSS at any given point, Skokie Valley has a
commendable record in accurately reporting the levels of TSS even if elevated. This argument
must fail. The respondents do not have a commendable record in accurately submitting DMRs.
Given the number of required DMRs that were not submitted, Skokie Valley may have exceeded
TSS concentration limits with regularity. However, because of respondents’ lack of compliance
with the Act and regulations, as noted in count III, whether or not such exceedences occurred
will remain unknown.
The Board finds that respondents violated Section 12(f) of the Act (415 ILCS 5/12(f)
(2002)) and 35 Ill. Adm. Code 309.102(a) and 305.102(b).
Relief
Having found that respondents violated the Act and Board regulations, the Board will
now decide the appropriate relief. The People ask the Board to impose a civil penalty of
$493,000 on the respondents. The People also request the Board order respondents to pay
$135,500 for the People’s attorney fees and $5,574.84 for the People’s legal costs.
Civil Penalties
The Board considers the factors set forth in Section 33(c) of the Act (415 ILCS 5/33(c)
(2002)) to determine whether a civil penalty should be imposed on a respondent for a violation.
The factors provided in Section 33(c) bear on the reasonableness of the circumstances
surrounding the violation. Specifically, Section 33(c) reads as follows:
In making its orders and determinations, the Board shall take into consideration all the
facts and circumstances bearing upon the reasonableness of the emissions, discharges, or
deposits involved including, but not limited to:
19
i. The character and degree of injury to, or interference with the protection
of the health, general welfare and physical property of the people;
ii. The social and economic value of the pollution source;
iii. The suitability or unsuitability of the pollution source to the area in which
it is located, including the question of priority of location in the area
involved;
iv. The technical practicability and economic reasonableness of reducing or
eliminating the emissions, discharges or deposits resulting from such
pollution source; and
v. Any subsequent compliance. 415 ILCS 5/33(c) (2002).
If the Board, after considering the Section 33(c) factors, finds that a civil penalty should
be imposed, then the Board considers the factors of Section 42(h) of the Act (415 ILCS 5/42(h)
(2002)) to determine the appropriate penalty amount. The Board now turns to the Section 33(c)
factors.
The respondents failed, in large part, to comply with Skokie Valley’s NPDES permit.
They did not submit the required DMRs for almost two years after the effective date of the
permit and only sporadically thereafter. Further, respondents repeatedly exceeded the effluent
limitations in the NPDES permit. The water pollution in the Avon-Fremont drainage ditch
threatened the public health. The Board weighs Section 33(c)(i) against respondents.
The Board acknowledges the importance of good roads and highway maintenance as well
as the need for asphalt paving companies such as Skokie Valley as part of that system. The
Board weighs Section 33(c)(ii) in favor of respondents. Skokie Valley has been located at the
site since 1978, and Liberty Asphalt operated in the same location for years prior to that date.
The People have not argued that Skokie Valley is unsuitable to its area, and the Board weighs
Section 33(c)(iii) in favor of the respondents.
Complying with the requirements of the NPDES permitting system is part of doing
business in the State of Illinois. It was technically practicable and economically reasonable for
the respondents to comply with the requirements of its permit. Additionally, it was technically
practicable and economically reasonable for respondents to have prevented the discharge into the
Avon-Freemont drainage ditch prior by addressing the contamination on their site prior to
discharge. The Board weighs Section 33(c)(iv) against respondents.
Compliance with the requirements of the NPDES permit and the associated provisions of
the Act and regulations occurred sluggishly if at all. Respondents did, ultimately, address the
water pollution in the Avon-Freemont drainage ditch, but only when under scrutiny by the U.S.
EPA and the Agency. The Board weighs this factor against the respondents.
20
Protecting public health was compromised by the respondents repeatedly failure to
comply with the NPDES permitting requirements and associated regulations. The water
pollution in the Avon-Fremont drainage ditch also threatened the protection of public health.
These facts outweigh the social and economic value of the site, the suitability of location, and the
efforts made by respondents to comply and remediate.
It was also technically practicable and economically reasonable to have complied with
the requirements of the NPDES permit and to have remediated the site prior to the release that
resulted in water pollution in the Avon-Freemont drainage ditch. Subsequent remediation came,
but only after State and Federal enforcement was commenced. Based on the Section 33(c)
factors, the Board finds that civil penalties against the respondents are warranted.
The Appropriate Amount of Civil Penalties.
The maximum civil penalties the Board can assess are established in Section 42(a) of the
Act:
[A]ny person that violates any provision of this Act or any regulation adopted by
the Board . . . shall be liable for a civil penalty of not to exceed $50,000 for the
violation and an additional civil penalty of not to exceed $10,000 for each day
during which the violation continues . . . . 415 ILCS 5/42(a) (2002).
Pursuant to Section 42(a) of the Act, the Board could require each respondent to pay a
$50,000 civil penalty for each of his respective violations and a $10,000 civil penalty for each
day that violation continued.
The People do not seek the statutory maximum penalties. Instead, the People ask the
Board to impose a total civil penalty of $493,000. The Board considers the factors of Section
42(h) of the Act (415 ILCS 5/42(h) (2002)) to determine the appropriate amount of a civil
penalty. Section 42(h) sets forth factors that may mitigate or aggravate the civil penalty amount.
Section 42(h) of the Act specifically provides:
In determining the appropriate civil penalty to be imposed under subdivisions (a),
(b)(1), (b)(2), (b)(3), or (b)(5) of this Section, the Board is authorized to consider
any matters of record in mitigation or aggravation of penalty, including but not
limited to the following factors:
(1) the duration and gravity of the violation;
(2) the presence or absence of due diligence on the part of the violator in
attempting to comply with requirements of this Act and regulations
thereunder or to secure relief therefrom as provided by this Act;
(3) any economic benefits accrued by the violator;
21
(4) the amount of monetary penalty which will serve to deter further violations
by the violator and to otherwise aid in enhancing voluntary compliance
with this Act by the violator and other persons similarly subject to the Act;
and
(5) the number, proximity in time, and gravity of previously adjudicated
violations of this Act by the violator. 415 ILCS 5/42(h) (2002).
2
The Board will now consider the Section 42(h) factors in turn.
Section 42(h)(1): Duration and Gravity of Violation
.
The water pollution in the Avon-
Fremont drainage ditch threatened the public health. However, the record indicates that the
damage caused by the release was not extensive, and of a temporary nature. Agency Inspector
Kallis testified that other than the sheen and odor, the water pollution resulted in no observable
environmental impact. Respondents’ violations relating to the NPDES permit were numerous
and ongoing. They did not submit the required DMRs for almost two years after the effective
date of the permit, and failed to submit them on a regular basis thereafter. Respondents exceeded
the effluent limitations for TSS in the NPDES permit 13 times. Not complying with the NPDES
permitting requirements interferes with the protection of public health by creating potential
environmental hazards and undermining the permitting system. Respondents continuing
disregard for that permitting system highlights the gravity of this type of violation.
The Board weighs this factor against respondents, primarily because of the number of
repeated violations involving the NPDES permit.
Section 42(h)(2): Presence or Absence of Due Diligence
.
Respondents exercised little
or no diligence in attempting to comply with the Act and Board regulations. Many of the
violations occurred repeatedly over the course of years. Efforts to remediate the water pollution
in the Avon-Fremont drainage ditch did occur, and the Fredericks continue to fund the effort to
eliminate any potential source of a release from the site. Further, the Fredericks have paid at
least $150,000 in order to remediate the site. However, remediation efforts occurred only after
the respondents came under the purview of the Agency and the U.S. EPA, and the State
enforcement process was well underway. The Board ultimately weighs this factor against
Respondents, but will consider the remediation and cost thereof, in mitigation of the ultimate
penalty.
Section 42(h)(3): Economic Benefit from Delayed Compliance
.
The record lacks any
specific estimates of
economic
benefit respondents enjoyed by delaying compliance. The People
assert that a significant amount of benefit is clear in light of the fact that the respondents sold
Skokie Valley’s assets for over $8.2 million. However, the record indicates that the
2
Section 42(h) of the Act was substantially amended by P.A. 93-575, effective January 1, 2004.
Among other things, the amendments establish that a violator’s economic benefit from delayed
compliance is to be the minimum penalty amount. Because the record in this proceeding was
complete before January 1, 2004, the Board did not use the amendments in determining the
appropriate penalties to impose on respondents.
22
environmental issues were known at the time of the sale in 1998, and the respondents have
maintained financial liability for environmental matters. The benefit derived from not
submitting DMRs appears marginal, and the respondents did, eventually, apply for a renewal of
the NPDES permit. Accordingly, the Board does not consider this an aggravating factor.
Section 42(h)(4): Penalty Amount That Will Deter Further Violations and Enhance
Voluntary Compliance
.
The size or financial capacity of an entity that violated the Act is
relevant to setting a penalty amount that will deter future violations by the entity and those
similarly situated.
See
People v. Panhandle Eastern Pipe Line Co., PCB 99-191, slip op. at 34
(Nov. 15, 2001). As noted in the previous factor, the assets of Skokie Valley were sold for a
significant amount of money. However, Edwin and Richard Frederick testified that they netted
only a small amount after the liabilities of Skokie Valley were accounted for.
Considering all of the circumstances, the Board finds that a significant civil penalty on
respondents will assist in deterring further violations. The Board finds, however, especially
given the lack of observable environmental harm other than sheen and odor, that the $493,000
civil penalty the People request is too high.
Section 42(h)(5): Previously Adjudicated Violations of the Act
.
The Board is not aware
of any previously adjudicated violations of the Act by respondents. The Board weighs this factor
in respondents’ favor.
Board Finding on the Appropriate Amount of Civil Penalties.
The violations in this
case lasted a long time and the permitting violations indicate a wanton disregard for the
importance of the State’s NPDES permitting system. The respondents did not exhibit due
diligence in complying with the permitting system. Respondents did remediate the water
pollution, and have spent in excess of $150,000 in environmental work on the site. This
compliance regarding the water pollution in the Avon-Freemont drainage ditch should be
considered in determining the penalty amount.
The People are seeking a civil penalty of $493,000. The maximum allowable penalty for
these violations, without considering the continuation of any of the violations, is $4,600,000. In
light of the ongoing nature of many of the violations, adding $10,000 for every day the violations
continued would exponentially increase the maximum penalty. The Board found against the
People regarding their allegation that respondents did not maintain an accessible effluent
sampling point in count III. The People asked for $50,000 for failure to maintain an accessible
effluent sampling point in count III. Reducing the penalty amount by those amounts means the
People are seeking a penalty of $443,000 for the found violations. The People are seeking
$250,000 for the water pollution violation of count IV, and $193,000 for the remainder of the
found violations alleged in the complaint.
As discussed previously, the water pollution was temporary in nature and the resulting
damage to the environment limited in nature and restricted to the odor and sheen. Thus, the
penalty sought for the water pollution is excessive and will be reduced. Further, the penalty
sought for count I will be mitigated by the circumstances surrounding the violations – namely the
absence due to health reasons of the employee usually responsible for filling out and submitting
23
the DMRs. However, the remaining requested penalty amounts are justified by the respondents’
disregard of the NPDES permitting system and will be fully imposed.
In reducing the penalty from that sought by the People, the Board notes that the
respondents have no previously adjudicated violations and have spent a significant amount of
money on mitigation. Based on the Section 42(h) factors, the Board imposes a $153,000 civil
penalty on the respondents. Under Section 42(a) of the Act (415 ILCS 5/42(f)(2002)), these
funds must be deposited in the Environmental Protection Trust Fund. The Board finds that the
penalty amounts ordered today will aid in enforcing the Act.
Attorney Fees
Section 42(f) of the Act provides:
Without limiting any other authority which may exist for the awarding of
attorney’s fees and costs, the Board or a court of competent jurisdiction may
award costs and reasonable attorney’s fees, including the reasonable costs of
expert witnesses and consultants, to the State’s Attorney or the Attorney General
in a case where he has prevailed against a person who has committed a willful,
knowing or repeated violation of the Act. 415 ILCS 5/42(f)(2002).
The People request that the Board require respondents to pay the People’s
attorney fees of $130,500 and costs of $5,574.84. People Br. at 40-41. The
Board finds that respondents committed willful, knowing, or repeated violations
in this case. For example, respondents repeatedly failed to file DMRs on a
monthly basis as required by permit and regulation. Section 42(f) of the Act, set
forth above, authorizes the Board to award attorney fees to the People where a
respondent has committed a willful, knowing, or repeated violation of the Act.
Therefore, the Board may award attorney fees to the People.
As discussed earlier in this draft, the Board partially grants the respondents’
motion to strike in regards to attorney fees and costs, but in the interest of
administrative economy will allow the People to rely on the information presented
in the reply. The People are also given 21 days after the date of this order to file
anything further on those issues. At the end of the 21-day period, the respondents
will have the standard 14-day response period to respond to the People’s request
for attorney fees and costs.
CONCLUSION
The Board finds that respondents violated the Act and the Board’s Water Pollution
Regulations by not timely applying for renewal of NPDES Permit No. IL 0065005, by failing to
comply with reporting requirements of NPDES Permit No. IL 0065005, by causing, threatening
or allowing water pollution, and exceeding the effluent limits of NPDES Permit No. IL 0065005.
The Board orders respondents to pay a civil penalty of $153,000.
24
This opinion constitutes the Board’s findings of fact and conclusions of law.
ORDER
1.
The Board finds that Skokie Valley Asphalt Co., Inc., Edwin L. Frederick, Jr. and
Richard J. Frederick (respondents) violated Section 12 (a) and (f) of the Act (415
ILCS 5/12(a) and (f) (2002)), and 35 Ill. Adm. Code 302.203, 304.105, 304.106,
305.102(b), 309.102(a), and 309.104(a).
2.
No later than October 18, 2004, which is the 60th day after the date of this order,
respondents must pay $153,000 in civil penalties. Respondents must pay the civil
penalty by certified check or money order, payable to the Environmental
Protection Trust Fund. The case number, case name, and respondents’ social
security numbers or federal employer identification number must be included on
each certified check or money order.
3.
Respondents must send each certified check or money order to:
Illinois Environmental Protection Agency
Fiscal
Services
Division
1021 North Grand Avenue East
P.O.
Box
19276
Springfield,
Illinois
62794-9276
4.
Penalties unpaid within the time prescribed will accrue interest under Section
42(g) of the Act (415 ILCS 5/42(g) (2002)) at the rate set forth in Section 1003(a)
of the Illinois Income Tax Act (35 ILCS 5/1003(a) (2002)).
IT IS SO ORDERED.
Section 41(a) of the Environmental Protection Act provides that final Board orders may
be appealed directly to the Illinois Appellate Court within 35 days after the Board serves the
order. 415 ILCS 5/41(a) (2002);
see also
35 Ill. Adm. Code 101.300(d)(2), 101.906, 102.706.
Illinois Supreme Court Rule 335 establishes filing requirements that apply when the Illinois
Appellate Court, by statute, directly reviews administrative orders. 172 Ill. 2d R. 335. The
Board’s procedural rules provide that motions for the Board to reconsider or modify its final
orders may be filed with the Board within 35 days after the order is received. 35 Ill. Adm. Code
101.520;
see also
35 Ill. Adm. Code 101.902, 102.700, 102.702.
I, Dorothy M. Gunn, Clerk of the Illinois Pollution Control Board, certify that the Board
adopted the above opinion and order on September 2, 2004, by a vote of 5-0.
Dorothy M. Gunn, Clerk
Illinois Pollution Control Board
