Midwest Generation EME, LLC,
)
Petitioner
NOTICE OF FILING
To:
Dorothy Gunn, Clerk
Illinois Pollution Control Board
100 West Randolph
Suite 11-500
Chicago, Illinois 60601
Brad Halloran
Hearing Officer
Illinois Pollution Control Board
100 West Randolph
Suite 11-500
Chicago, Illinois 60601
Sheldon A. Zabel
Mary A. Mullin
Andrew N. Sawula
SchiffHardin LLP
6600 Sears Tower
Chicago, Illinois 60606
Kôith Harley
Annie Pike
Chicago Legal Clinic, Inc.
205
West Monroe,
4th
Floor
Chicago, illinois 60606
Please take notice that today we have filed with the Office ofthe Clerk ofthe
Pollution Control Board an original (1) and nine (9) copies of Respondent’s
Memorandum in Opposition to Midwest Generation’s Motion for Partial Reconsideration
ofthe Illinois Pollution Control Board’s Order ofJune 17, 2004. A copy is herewith
served upon the assigned Hearing Officer, the attorneys for the Petitioner, Midwest
Generation EMB, LLC, and the attorneys for the Sierra Club.
Dated: Chicago, Illinois
September 21, 2004
LISA MADIGAN, Attorney General ofthe
State of Illinois
BEFORE THE ILLINOIS POLLUTION CONTROL
BOARD
RECEIVED
CLERK’S OFFICE
v.
)
)
Illinois Environmental Protection Agency,
)
Respondent
)
SEP 21 2004
)
PCB 04-216
STATE OF ILLINOIS
)
Trade Secret
App?~IUti0fl
Control board
MATTHEW DUNN, Chief, Environmental Enforcement!
Asbestos Litigation Division
BY:______________________
Ann Al~ ler, Assistant Attorney General and
Environmental Counsel
Paula Becker ‘Wheeler, Assistant Attorney General
188 West Randolph Street, Suite 2000
Chicago, illinois 60601
312-814-3772
312-814-2347 (fax)
BEFORE
THE ILLINOIS POLLUTION CONTROL
BOARD
~
Midwest Generation EME, LLC
)
SEP 2
1
2O~4
Petitioner
-.
-
)
PCB 04-216
~TAT~OF ‘LIIMOP
•
)
Trade Secret Appe~IIUttOflControl
~
v.
)
)
Illinois Environmental Protection Agency,
)
-
Respondent
)
MEMORANDUM IN
OPPOSITION TO
MIDWEST
-
GENERATION’S MOTION FOR
PARTIAL
RECONSIDERATION OF
THE ILLINOIS POLLUTION CONTROL
BOARD’S ORDER
OF JUNE 17, 2004
-
Preliminary Statement
Respondent Illinois Environmental Protection Agency (“EPA”) submits this
memorandum in opposition to the motion by Appellant Midwest Generation EME, LLC
(“Midwest Generation”) forreconsideration of the portion ofthe Board’s order requiring
that the hearing in this matter be held exclusively on the EPA record pursuant to 35111.
Adm. Code 105.214(a), requesting that the issues be reviewed
4~
novo.
Midwest Generation’s request contravenes not only the Board’s regulations but
more than three decades ofconsistent Board precedent requiring that hearings be held on
the agency record, to preserve IEPA’ proper decisionmaking role and prevent forum
shopping. Nothing in Midwest Generation’s motion provides any cognizable basis for
such wholesale overthrow ofprecedent. While Midwest Generation, like all who come
before EPA and the Board, is clearly entitled to due process, the type and level of
process that is due is commensurate with the right being protected.’ Here, the process
afforded by IEPA gave Midwest Generation ample opportunity to protect its rights and
submit pertinent information. Indeed, nowhere in its motion does Midwest Generation
even provide a clue as to what particular extra-record information it would like to now
1
introduce, and why such information could not have been provided to EPA in the first
place based on the clear delineation ofrelevant issues in :t11e regulations governing trade
secrets.
•
•
Point I
BOARD REGULATIONS
AND
PRECEDENT UNAMBIGUOUSLY
REQUIRE THAT
HEARINGS
BE HELD ON THE RECORD
The relevant regulatory provision governing Board hearings, 35 Ill. Adm. Code
105.2 14(a), expressly provides,
The hearing will be based exclusively on the record before the Agency at
the time the permit or decisionwas issued, unless the parties agree to
supplement the record pursuant to 40(d) ofthe Act. Ifany party desires to
introduce evidence before the Board with respect to any disputed issue of
fact, the Board will conduct a separate hearing and receive evidence with
respect to the issue of fact.
This provision expressly applies to “any appeal to the Board ofthe Agency’s final permit
•‘
decisions and other final decisions ofthe Agency.” 35 Ill. Adm. Code. 105.200.
Accordingly, the Board held in the challenged order,
Hearings will be based exclusively on the record before EPA at the time
it issued its trade secret determination.
See 35
Iii. Adrn. Code 105.214(a).
Therefore, though the Board hearing affords petitioner the opportunity to
challenge IEPA’s reasons for denial, information developed after EPA’s
decision typically is not admitted at hearing or considered by the Board.
See
Alton Packaging Corp. v. PCB, 162 Iii. App. 3d 731, 738, 516 N.E.2d
275, 280 (5th Dist. 1987); Community Landfill Co. & City ofMorris v.
EPA, PCB 01-170 (Dec. 6,2001),
aff’d sub nom.
331111. App. 3d 1056,
772 N.E.2d 231 (3d Dist. 2002).
•
•
Board Order, PCB 04-185 (May 6, 2004).
Notwithstanding the unambiguous nature ofthe applicable regulation and the
precedent cited by the Board, Midwest Generation attempts to create room to
accommodate its unusual request by arguing that neither the regulation nor the precedent
2
are definitive statements on the matter. It argues that the second sentence ofthe
regulation should effectively be read to cancel out the first; that the lack ofan express
statutory provision applicable here in addition to the regulation diminishes the force of
the regulation; and that the cases cited by the Board do not actually support the
requirement that hearings be held on the agency record. Midwest Generation Brief at 6-
7.
None of these arguments withstand scrutiny. With respect to Midwest
Generation’s reading ofthe regulation, its argument was expressly raised and dismissed
in one ofthe matters cited by the Board, Community Landfill
—
indeed, by the same
hearing officer presiding here, Brad Halloran. In Community Landfill, the petitioner had
argued before the hearing officer, as Midwest Generation does here, that the second
sentence of
§
105.214(a)
—
“If any party desires to introduce evidence before the Board
with respect to any disputed issue of fact, the Board will conduct a separate hearing and
receive evidence with respect to the issue of fact”
—
should be read to allow it to
introduce non-record evidence into the proceeding, notwithstanding the first sentence
requiring hearings to be held on the record. Hearing Officer Halloran held, consistently
with basic principles ofinterpretation, that rather than negating the first sentence, the
second sentence should be read as modifying only the clause in the first sentence
regarding agreements under 40(d) (which does not apply here) to supplement the record
—
j~,such that the separate hearing is allowed only to address evidence brought into the
proceeding through such 40(d) agreements. ~ Community Landfill, PCB 01-170,
Transcript Volume 1 at 233-37 and December 6, 2001 Order.
3
•
Regarding the relationship between the statute and the regulations, Midwest
Generation appears to suggest that the regulation lacks force as it applies to proceedings
such as this one
—
essentially implying that inclusion ofsuch proceedings in the on-the-
record requirement was less than intentional and well thought out. See Midwest
Generation brief at 6. However, this assertion is belied by the fact that the applicable
regulations, which have since been amended, previously provided expressly for a
4~
novo
•hearing using non-record evidence in certain circumstances. See former section
105.103(b)(8))
Clearly, the Board is cognizant of how to craft regulations calling for de
novo proceedings when it so chooses, and it chose not to do so here.
As to the question ofwhetherthe cases cited by the Board support the board’s
ruling, nothing in the Board’s decision in Community Landfill suggests an entitlement to
• a
4~
novo hearing.2 That case involved a specific type ofprocedure below that is unique
to permit proceedings (a “Wells letter”), which prompted the Board to make a very
That section applied only to NPDES permit appeals, and provided in its entirety (emphasis added),
The hearings before the Board shall extend to all questions of law and factpresented by
the entire record. The Agency’s findings and conclusions on questions of factshall be
prima facie true and correct. Ifthe Agency’s conclusions of fact are disputed by the party
or if issues of fact are raised in the review proceeding, the Board may make its own
detetinination of fact based on the record. If any party desires to introduce evidence
before the Board with respect to any disputed issue of fact,
the Board shall conduct a de
novo hearing and receive evidence with respect to such issue offact.
Even this express de novo provisionwas construed narrowly when it was in effect in order not to distort the
respective roles of the board and the agency as defined in the statute. The Board held in Dean Foods v.
~
PCB 81-151 (August 22, 1984), quoting Olin Corp. v. IEPA, PCB 80-126 (February 17, 1982),
The hearing de novo provisions must be construed narrowly; otherwise permit applicants
will be tempted to withhold facts at the Agency level in hopes of a more friendly
reception before the Board. This would encourage appeals and would place the Board in
a position of being the first agency to evaluate the factual submissions. This would
distort the sepatation of functions in the Act.
2
Midwest Generation’s citation to the ‘appellate court decision in Community Landfill is entirely beside the
point. Midwest Generation brief at 8. The Appellate court affirmed on the ground that jt.lacked sufficient
information to determine whether the particular document that appellants wanted -considered by the Board
had in fact been, part ofthe agency record. 331 Ill.App.3d at 1063.
,
4
narrow allowance for certain supplemental witness testimony that had been presented at
the hearing. Nothing in that decision suggests that a wide-open
4~
novo hearing was
even considered, much less considered appropriate.3
-
Even more importantly, the purported “dicta” contained in the Board’s other
citation, Alton Packaging Corp., both directly and indirectly references a long and
consistent line ofcourt and Board decisions, dating back to 1972, expressly holding that
hearings must be conducted solely on the agency record. 162 Ill. App. 3d at 738, citing
EPA v. PCB and Album, Inc., 118 Ill.App.3d 772, 780-81 (1983), citing Soil
Enrichment Materials Corp. v. Environmental Protection Agency (1972),
5
Ill.P.C~B.Op.
715 and Peabody Coal Co. v. Environmental Protection Agency (1979), 35 Ill.P.C.B.Op.
380.
~,
~
Prairie Rivers Network v. IEPA and Black Beauty Coal Co., PCB 01-112
(August 9, 2001) (citing numerous authorities); County ofLaSalle v. EPA, PCB 8 1-10
(March 4, 1982); Amax Coal Co. v. EPA, PCB 80-63, -64 (December 19, 1980);
Environmental Site Developers, Inc. v. JEPA, PCB 80-15 (June 12, 1980). Clearly, the
authority supporting the Board’s ruling requiring an on-the-record hearing is
overwhelming; and the authority supporting Midwest Generation’s proposition that there
is ambiguity on this point is essentially nil.
•
‘
Point II
•
THE REQUIREMENTS OF DUE PROCESS ARE
SATISFIED BY THE PROCEDURES MANDATED BY
THE BOARD’S ORDER AND SUPPORTING PRECEDENT
~Notwithstanding other representations by Midwest Generation, the Board’s decision in Environmental
Site Developers, Inc. v. EPA, PCB 80-15 (June 12, 1980) is also not to the contrary. In that case, the Board
strongly reaffirmed that the issue in an appeal to the Board “is whether the Agency erred and not whether
new material which was not before the Agency persuades the Board that a permit should be granted.” It
allowed in testimony before the Board only to “verify the facts ofhis application as submitted to the
•Agency.”
,
•
•
5
•
•
•
•
Midwest GeneratiOn’s argument that the long-standing hearing procedures
codified in the regulations and recogmzed in the Board’s order deprive it ofdue process
is withoutbasis. Although, as Midwest Generation st’ates, procedural rules are not finally
definitive ofdue process requirements, such rules “are a useful reference because they
- ,
represent standards that the General Assembly and the Department concluded were
sufficient” Lyon v Department ofChildren and Family Services, 209 Ill 2d 264 (2004)
Here, Midwest Generation had ample opportunity to make its views known to
EPA, and did so The limited basis for a trade secret claim is unambiguously laid out in
the statute and regulations. ~ 415 ILCS3/490; 35,111. Adm. Code 130.208. Under
•
•
these provisions, a trade secret claimant must prove (i) that the article has not been
published or disseminated or otherwise become a matter of general public knowledge,
- •
~
and (ii) that it has competitive value. The statute also exempts from trade secret
protection all “emission data” as expressly defined under Clean Air Act
§
114, 42 U S C
•
7414 andassociated regulations. See 415 ILCS
5/7,
40 C.F.R. 2.301(a~(2)(i)~B),35 Ill.
Adm. Code 130.110. Under the applicable regulations, a trade secret claimant may
•present the basis for its claim in a Statement of Justification, provided either at the outset
or in response to a request from the agency., 35 Ill. Adm. Code 130.200 et ~ci~
Midwest Generation submitted information in its Statement ofJustification
pertinent to bo,th statutory prongs ofthe, trade secret definition
—
i.e., public availability
and competitive value. EPA’ s subsequent denial oftrade secret protection was grounded
• •‘
specifically in these two prongs. Midwest Generation nowhere states either what specific
additional information regarding these prongs it would have submitted upon learning of
IEPA’s unsurpnsing reliance upon them, nor why it could not have submitted that
6
information before receiving the denial.
EPA’s denial ofprotection was based additionally in the status of the documents
as
§
114 emission data. Midwest Generation states in its brief that it “thought it obvious”
that the information in question does not constitute emission data. Midwest Generation
brief at 6. However, the definitions cited above ought to have made obvious exaCtly the
opposite proposition: that emission data includes any documents containing information
necessary to determinehow much a particular facilitywas “authorized to emit”
—
i.e., that
would determine whether the facility’s emissions constitute a violation ofthe Clean Air
Act.4 Here, as Midwest Generation is well aware, the United States Environmental
Protection Agency (“USEPA”) informationrequests, the responses to which are the
subject ofthis proceeding, were all directed specifically toward determining whetherits
facilities were, emitting pollutants in violation ofthe Clean Air Act New Source Review
standards, which require heightenedpollution controls in connection with certain types of
non-routine modifications that have the effect ofincreasing emissions.5 The information
that Midwest Generation seeks to protect includes, among other things, a list ofcapital
“40 C.F.R. 2.30 1(a)(2)(i)(B), promulgated pursuant to
§
114, includes in the definitionof emission data
“Information necessary to determine the identity, amount, frequency, concentration, or other characteristics
(to the extent related to air quality) ofthe emissions which, under an applicable standard or limitation, the
source was authorized to emit (including, to the extent necessaryfor such purposes, a description of the
manner or rate of operation of the source).” The Illinois definition at
35
Ill. Adntin. Code. 130.110 is
substantially the same.
•
•
•
‘
~The New Source Review provisions of the Clean Air Act define a plant modification that triggers
heightened pollution control standards as follows:
The term “modification” means any physical change in, or change in the method of
operation of, a stationary source which increases the amount of any air pollutant emitted
by such source or which results in the emission of any pollutant not previously emitted.”
Clean Air Act
§
11 l(a)(4), 42 U.S.C. 741 1(a)(4). In the
§
114 information request, USEPA sought
information concerning, inter alia, capital projects undertaken at Midwest Generation facilities (some of
which may constitute
§
111(a)(4) modifications) and net generation, coal heat content, and net heat rate for
each plant,, which is necessary for a determination ofwhether emissions have increased.
7
projects at Midwest Generation facilities’ (the continuing property record, or “CPR”),
including modifications to those facilities That Midwest Generation may not have put
two andWhere,two togetheras
here,toanrecognizeagency hasthatprovidedconnectiona proceduralis
not a problemopportunityofduetoprocess.submit6
information in connection with a decision, due process does not require in every
circumstance that a hearing be provided with a full panoply ofprocedural rights On the
contrary, as observed by the Illinois Supreme Court in Lyon, “what due process entails is
a flexible concept in that not all situations calling for procedural safeguards call for the
dame kind ofprocedure.” 209 .lll.2d at 272 (citing various United States Supreme Court
decisions) Clearly there are circumstances
—
~g, criminal proceedings, license
deprivations, etc.
—
where every available procedural right must be in place and adhered
to rigOrously, including the right tO cross-examine and rebut unfavorable testimony. But
the~Board has appropriately determined that, in a trade‘secret matter, the Statement of
Justification process outlined in the regulations at 35 Ill. Adrn. Code 130.200 ç~~q. is
sufficient to protcct the interest oftrade secret claimants.
• , ,
,
‘,
,
Conclusion
• -
For the foregoing reasons, EPA respectfully requests that Midwest Generation’s
•request for reconsideration ofthe Board’s Order and review of this matter
4~
novo be
denied.
, ,
,
,
Dated: Chicago, Illinois
,
September 21, 2004
,
Respectfully submitted,
6
In any event, given that the question ofwhether information constitutes “emission data” according to the
Clean Air Act definition is essentially a legal one, it is tinlikely that Midwest Genera~tionwould have had
any pertinent factual information to submit.
‘
‘
,
8
LISA MADIGAN, Attorney General of the
State ofIllinois
MATTHEW DUNN, Chief, Environmental
•Enforcement!
Asbestos Litigation Division
BY
Ann~Alexander,AssistantAttorney
General and Environmental Counsel
Paula Becker Wheeler, Assistant
Attorney General
188 West Randolph Street, Suite 2001
Chicago, Illinois 60601
312-814-3772
312-814-2347 (fax)
‘9
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
Midwest Generation EME, LLC
)
Petitioner
)
PCB 04-216
•
)
Trade
SEI~IED’
)
CLERK’S
OFFICE
Illinois Environmental Protection Agency,
)
,
SEP 212004
Respondent
)
•
Pollution
STATE OF
Control
ILLINOIS
Board
CERTIFICATE OF SERVICE
I hereby certify that I did on the 21st Day ofSeptember 2004 send by First Class
Mail, with postage thereon fully paid and deposited into the possession ofthe United
States Postal Service, one (1) original and nine (9) copies ofthe following instruments
entitled Notice ofFiling and Memorandum in Opposition to Midwest Generation’s
Motion forPartial Reconsideration ofthe Illinois Pollution Control Board’s Order of June
17, 2004, to
To:
Dorothy Gunn, Clerk
Illinois Pollution Control Board
100 West Randolph
Suite 11-500
Chicago, Illinois 60601
and a true and correct copy ofthe same foregoing instruments, by First Class Mail with
postage thereon fully paid and deposited into the possession ofthe United States Postal
Service, to:
Sheldon A. Zabel
Keith Harley
Mary A. Mullin
Annie Pike
Andrew N. Sawula
Chicago Legal Clinic, Inc.
SchiffHardin LLP
205 West Monroe, 4th Floor
6600 Sears Tower
Chicago, Illinois 60606,
Chicago, Illinois 60606
Dated: Chicago, Illinois
September 21, 2004
LISA MADIGAN, Attorney General ofthe
State ofIllinois
MATTHEW DUNN, Chief, Environmental Enforcement!
Asbestos Litigation Division
~
7’:
,
BY:
(~ ~
Ann Alexander, Assistant Attorney General and
Environmental Counsel
188 West Randolph Street, Suite 2000
Paula Becker Wheeler, Assistant Attorney General
Chicago, Illinois 60601
312-814-3772
,
312-814-2347 (fax)
