RECE~VED

CLERK’S OFFICE

DEC 012004

STATE OF ILLJNOIS

Pollution Control Board

OFFICE OF THE ATTORNEY GENERAL

STATE OF ILLINOIS

Lisa Madigan

ATTORNEY GENERAL

November 30, 2004

The Honorable Dorothy Gunn

Illinois Pollution Control Board

State of Illinois Center

100 West Randolph

Chicago, Illinois 60601

Re:

PCB No. 00-104.

Dear Clerk Gunn:

Enclosed for filing please find the original and ten copies of a NOTICE OF FILING and

COMPLAINANT’S RESPONSE TO RESPONDENT MURPHY FARMS, INC.’S MOTION TO

DISMISS SECOND AMENDED COMPLAINT in regard to the above-captioned matter. Please file

the original and return a file-stamped copy of the document to our office in the enclosed self-

addressed, stamped envelope.

Thank you for your cooperation and consideration.

Very truly yours,

~

~yp~_~

“i~neE. McBride

Environmental Bureau

500 South Second Street

Springfield, Illinois 62706

(217) 782-9031

JEM/pp

Enclosures

500 South Second Street, Springfield, Illinois 62706

•

(217) 782-1090

•

TTY: (217) 785-2771

•

Fax: (217) 782-7046

100 West Randolph Street, Chicago, Illinois 60601

•

(312) 814-3000

•

TTY: (312) 814-3374

•

Fax: (312) 814-3806

1001 East Main, Carbondale, Illinois 62901

•

(618) 529-6400

•

TTY: (618) 529-6403

•

Fax: (618) 529-6416

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RE CE ~

V

E~

CLERK’S OFFICE

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

DEC 012004

PEOPLE OF THE STATE OF ILLINOIS,

)

)

STATE

OF ILLINOIS

Complainant,

)

Pollution Control Board

v.

)

PCB NO. 00-1 04

)

(Enforcement)

THE HIGHLANDS, LLC, an Illinois limited

)

liability corporation, MURPHY FARMS, INC.,

)

(a division of MURPHY-BROWN, LLC, a

)

North Carolina limited liability corporation,

)

and SMITHFIELD FOODS, INC., a Virginia

)

corporation)

)

-

Respondents.

)

NOTICE OF FILING

To:

Mr. Jeffery W. Tock

Mr. Charles M. Gering, Esq.

Harrington, Tock & Royse

McDermott, Will & Emery

201 W. Springfield Ave., Ste. 601

227 West Monroe Street

P.O. Box 1550

Chicago, IL 60606-5096

Champaign, IL 61824-1550

PLEASE TAKE NOTICE that on this date I mailed for filing with the Clerk of the Pollution

Control Board of the State of Illinois, Complainant’s Response to Respondent Murphy Farms, Inc.’s

Motion to Dismiss Second Amended Complaint, a copy of which is attached hereto and herewith

served upon you.

Respectfully submitted,

PEOPLE OF THE STATE OF ILLINOIS

LISA MADIGAN

Attorney General of the

State of Illinois

MATTHEW J. DUNN, Chief

Environmental Enforcement/Asbestos

Litigation Division

• BY:

~~_—~

/~fANEMcBRIDE

Assistant Attorney General

Environmental Bureau

500 South Second Street

Springfield, Illinois 62706

217/782-9031

Dated: November 30, 2004

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CERTIFICATE OF SERVICE

I hereby certify that I did on November 30, 2004, send by First Class Mail, with postage

thereon fully prepaid, by depositing in a United States Post Office Box a true and correct copy

of the following instruments entitled NOTICE OF FILING and COMPLAINANT’S RESPONSE

TO RESPONDENT MURPHY FARMS, INC.’S MOTION TO DISMISS SECOND AMENDED

COMPLAINT

To:

Mr. Jeffrey W. Tock

Mr. Charles M. Gering, Esq.

Harrington, Tock & Royse

McDermott, Will & Emery

201 W. Springfield Avenue, Ste. 601

227 West Monroe Street

P.O. Box 1550

Chicago, IL 60606-5096

Champaign, IL 61824-1 550

and the original and ten copies by First Class Mail with postage thereon fully prepaid of the

same foregoing instrument(s):

To:

Dorothy Gunn, Clerk

Illinois Pollution Control Board

State of Illinois Center

Suite 11-500

100 West Randolph

Chicago, Illinois 60601

A copy was also sent by First Class Mail with postage thereon fully prepaid

To:

Mr. Brad Halloran, Hearing Officer

Illinois Pollutio,n Control Board

State of Illinois Center, Ste. 11-500

100 West RandoJph

Chicago, IL 60601

,,,~eE. McBride

Assistant Attorney General

This filing is submitted on recycled paper.

---

•

RECE~VE1D

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

CLERK’S OFFICE

•

0EC012004

PEOPLE OF THE STATE OF ILLINOIS

•

))

Pollution

STATE OF

Control

ILLINOIS

Board

Complainant,

)

v.

)

PCB No. 00-104

•

)

(Enforcement)

THE HIGHLANDS, LLC, an Illinois limited

)

liability corporation, and MURPHY

)

FARMS, INC., (a division of MURPHY-

)

BROWN, LLC, a North Carolina limited

)

liability corporation, and SMITHFIELD

)

FOODS, INC., a Virginia corporation).

)

•)

Respondents.

)

MOTION TO DISMISS SECOND AMENDED COMPLAINT

NOW COMES,

Complainant, PEOPLE OF THE STATE OF ILLINOIS,

ex rel

Lisa

Madigan, Attorney General of the State of Illinois, and responds as follows to Respondent

Murphy Farms, Inc.’s Motion to Dismiss Second Amended Complaint:

I.

INTRODUCTION

• In response to Respondent Murphy Farms Inc.’s motion to dismiss, asserted based

upon its contention, described as affirmative matter, that Respondent Murphy Farms Inc.

(“Respondent Murphy”, “Respondent”, “Murphy Farms, Inc.”, “Murphy Farms” or “Murphy”)

does not own the subject facility and does not control the subject facility, Complainant responds

as follows (1) Respondent Murphy has sufficient ownership and control of the facilrty and

operation to meet the premise set forth in

Phillips Petroleum Co. v. Illinois Environmental

Protection Agency,

72 Ill.App.3d 217 (2d Dist. 1979), 390 N.E.2d 620; (2) that, as the 3rd District

• held in the case of

People v. McFalls,

313 llI.App.3d 223 (3rd Dist. 2000), 728 N.E.2d 1152,

ownership and control of the site is not the sole controlling factor in a determination of the

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liability of the person who has caused pollution; (3) Respondent’s reliance upon nuisanöe

standards is misplaced in that the Illinois Pollution Control Board (the “Board”) is not authorized

by the legislature to determine and proceed against common law nuisances, and violations of

the Act alleged in the complaint are not defined in terms of nuisance; and (4) Respondent’s

reliance upon the case of

Village of Goodfield v. Jamison,

188 IIl.App.3d 851 (4th Dist. 1989),

544 N.E.2d 1229, regarding decisions concerning the concentration of large numbers of

livestock, falls short in light of the recent decision of

Nickels v. Burnett,

343 III.App.3d 654, 798

N.E.2d 817..

II.

RESPONDENT’S MEMORANDUM

As stated in Respondent’s motion, Respondents The Highlands. LLC and Murphy

Farms, Inc. operated the subject sow facility pursuant to an agreement. A true and correct

copy of said agreement is attached hereto as Exhibit 1 attached to the Affidavit of Jane

McBride.

Given the terms and conditions of its agreement with Respondent The Highlands, LLC

(“Respondent The Highlands”, “The Highlands, LLC” or “The Highlands”), the only swine that

could be maintained at The Highlands facility were swine owned by Respondent Murphy.

Respondent Murphy is identified as “Owner” pursuant to the conditions and terms of the

agreement, and Respondent The Highlands is identified as “Producer”. Pursuant to Item 18 on

page 3 of the agreement, under the section entitled “Producer Hereby Agrees”, The Highlands

agreed not to own or have possession of, either as agent, producer or otherwise, any swine not

owned by Respondent Murphy Farms. Item 14 of the “Producer Hereby Agrees” section of the

agreement states: “To house the breeding stock delivered by Owner only for the purposes of

producing weaned pigs for Owner and to own no swine.” Respondent Murphy, and exclusively

2

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Respondent Murphy, owned every hog on the site. Therefore, under this agreement, without

Murphy’s hogs, there is no swine facility because there are no hogs.

Under the agreement, pursuant to item 3 under the “Owner Hereby Agrees” section,

appearing on page 3 of the agreement, Respondent Murphy had sole ownership and control of

all supplies and feed that went in and on the hogs. Also, it had sole control of the management

of all procedures for the care and productivity of the hogs, and reserved the right to change the

management of these procedures from time to time (Item 2 under the “Owner Hereby Agrees”

section, page 1 of the agreement). Item 15 of the “Producer Hereby Agrees” section of the

agreement, states (page 3 of the agreement): “To take measures deemed necessary by Owner

to provide for the herd.” There is no definition of the term “measures” contained in the exhibit.

It is apparent from the face of the document that this provision is purposefully broad and vague,

with the intent of allowing Respondent Murphy to dictate any action it deems necessary for the

care and production of its swine.

As is obvious from this agreement, Respondent Murphy owned all of the hogs

maintained at The Highlands facility, and dictated all management procedures for the care and

productivity of the breeding herd and all swine maintained at the facility.

Further evidence of the agreement between Respondent The Highlands and

Respondent Murphy is found in Exhibit 4 attached to the Affidavit of Eric Ackerman, which is a

true and correct copy of a description of The Highlands operation generated by The Highlands,

LLC provided to the Illinois EPA. A description of the contractual arrangement between Murphy

Family Farms and The Highlands is included on the fourth page of the exhibit. It is stated that

Murphy Farms, Inc. provides the following: Feed, Breeding Stock, Training of Employees,

Transportation of Pigs, Medication & Veterinary service and anything that goes in or on the

animal, i.e. syringe, needles, marking sticks, etc.

In further support of this aspect of control exerted by Respondent Murphy in the

3

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operation of the subject hog facility, attached as Exhibits 2 and 3 to the Affidavit of Jane

McBride, are, as Exhibit 2, a memorandum from Doug Lenhart describing the terms and

conditions of The Highlands’ employee Don Bybee’s training at the Murphy Missouri facility.

Despite Respondent Murphy’s claim that The Highlands’ employees were not its employees, it

is apparent from the content of Exhibit 2 that Mr. Bybee was to complete a Murphy of Missouri

Application for Employment and would be receiving housing and a salary pursuant to Mr.

Lenhart’s instruction. Exhibit 3 is a Murphy Family Farms document listing training

competencies of The Highlands’ employees.

It is obvious that Respondent Murphy exerted control of The Highlands’ operation by

requiring that The Highlands’ employees be trained at Murphy facilities by Murphy personnel

regarding Murphy management procedures.

In its memorandum in support of its motion, on page 2 of the memorandum,

Respondent states that no Murphy personnel were employed at The Highlands’ farm. It states

that The Highlands employed management personnel and workers to operate the farm, and

The Highlands’ management determined how the farm would be operated. Yet it is all too clear

from the agreement between Respondents The Highlands and Murphy that Murphy had very

significant managerial control of the operation, and, even though the employees may have been

paid by The Highlands, they were trained by Murphy in Murphy’s management procedures.

Respondent’s statement on page 2 of its memorandum in support of its motion, that The

Highlands had “unfettered control of the operation of the farm,” is a disturbing characterization.

By the terms and conditions of its agreement with The Highlands, it is obvious that this

characterization is blatantly untrue, It is noteworthy that Respondent Murphy did not include a

copy of the agreement as an exhibit to Mr. Lenhart’s affidavit.

It is also apparent from the agreement that Respondent Murphy was heavily involved in

the financial management of The Highlands facility. In Exhibit 1, attached to and attested to in

4

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the affidavit of Jane McBride, is a Contract Addendum to the agreement between The

Highlands and Murphy Family Farms.

Item 1 of the Addendum states: “The parties herein agree that all terms and conditions

under this addendum shall be effective May 1, 2001. All adjustments to the existing contract

dated December 6, 1996 are subject to Highlands’ agreement to the items listed under

paragraph no. 4, which shall be mandatory criteria for continuance of the contract addendum.”

Paragraph No. 4 states: “Highlands agrees to comply with the following criteria in

consideration of an increase in production payment. The criteria is (sic) as follows:”

Paragraphs “a” through “j” of Item 4 set forth financial information The Highlands was to submit

to Murphy Farms,, as well as transactions that were not to proceed without approval of

Respondent Murphy Farms, such as all transactions executed between The Highlands and

Baird Seed Farm (paragraph “e”) and Baird Family Members (paragraph “f”). Exhibit 4 attached

to the Affidavit of Jane McBride is the Illinois Secretary of State’s registration of The Highlands,

LLC. It shows that the make-up of this limited liability corporation exclusively consists of Baird

family members.

Paragraph “g” states: All monthly repair and maintenance expenditures that exceed

budgeted amount by $1,000 or more will require written explanation and cost justification to be

included in the distribution of monthly financial statements to MFI (Murphy Farms, Inc.) and

FCS (Farm Credit Services).

In its memorandum, Respondent Murphy represents that Respondent The Highlands

determined where the farm would be sited and the inference is that Respondent Murphy had no

control or participation in the siting of the facility. Complainant contends that Respondent

Murphy did participate in the siting of the facility and exercised a very active role in the

determination of the siting of the subject sow facility. As evidence of its participation,

Complainant offers Exhibit I attached to the affidavit of Eric Ackerman, which is a

5

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memorandum of a phone conversation with Doug Lenhart regarding the siting and

establishment of a sow operation in the Illinois EPA’s Peoria Region, dated July 5, 1996. In that

phone conversation, Mr. Lenhart indicated that he himself would be moving to Illinois to become

Director of Illinois Operations with Murphy Farms. Mr. Ackerman documents that Mr. Lenhart

indicated “they” intended to construct a 3,600 sow operation in western Peoria County. Mr.

Lenhart informed Mr. Ackerman of the particulars regarding the location and design of the

facility, and how it would be operated. Mr. Lenhart was calling to discuss the requirements of

the Illinois Pollution Control Board’s Subtitle E: Agriculture Related Pollution Regulations. In

that conversation, he advised Mr. Ackerman that Mr. Lenhart, personally, had previously

contacted IDOA (Illinois Department of Agriculture) regarding the requirements of that

department, which were, as stated in Mr. Ackerman’s affidavit, the siting requirements the

Illinois Department of Agriculture administered under the Livestock Management Facilities Act.

Mr. Lenhart himself, as the Director of Illinois Operations for Murphy Farms, was ascertaining

the siting requirements for this 3,600 sow operation and was also contacting the Illinois EPA

about the Subtitle E requirements.

Exhibit 2 attached to the affidavit of Eric Ackerman is another phone memorandum, this

one hand written. It is dated October 3, 1996. It documents a phone conversation with Doug

Lenhart, in which Mr. Lenhart is inquiring as to whether any other state regulatory personnel

should be brought out to the site. It clearly says that he, Doug Lenhart, was seeking regulatory

agency input on site selection for the sow operation. Exhibit 3, attached to the Affidavit of Eric

Ackerman, clearly states that Mr. Lenhart represented that Respondent Murphy operates hog

production facilities in Illinois and conducts programs at these facilities that address

environmental controls. This would lead agency personnel to believe Respondent Murphy does

have control of operations at its facilities to the extent that programs it conducts impact local

environmental concerns at these facilities. As attested to in Mr. Ackerman’s affidavit, all of the

6

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hog production facilities in which Respondent Murphy was involved in Illinois at the time were

contract operations. Thus, based on Mr. Lenhart’s letter, it could be garnered that Respondent

Murphy considered itself to have operational control at its contract facilities and so represented

itself in this letter to regulatory personnel.

Exhibit 4 attached to the affidavit of Bruce Yurdin, attested to as a true and accurate

copy of an email written by Dan Heacock and received by Mr. Yurdin, documents a

conversation in which Doug Lenhart, identifying himself as a representative of Murphy Farms,

called regarding “a potential” Murphy Family Farm operation in Peoria County south of

Elmwood.

If Mr. Lenhart truly had nothing to do with the siting of the sow production facility

established as The Highlands facility, why was he calling state agencies, asking for their input

in siting the facility and ascertaining the requirements of pertinent regulations? If he had no

authority, no control, no influence, no participation in the determination of the siting of the

facility, why would he be calling state agencies, extending invitations to view the site, requesting

input and asking the questions documented in these exhibits? Were the state agencies to rely

on his representations then, and provide him with the information he was seeking, cooperate

with his requests at that time, in full acknowledgment of his representation that he had the

authority of Murphy Farms, Inc. to be making these calls seeking assistance with the siting of

the sow production facility, and yet now, in the case of an enforcement action, be told, under

oath, that Mr. Lenhart had no authority to make these calls and make such representations to

state regulatory personnel?

As is obvious from the terms and conditions of the agreement, the whole reason that the

waste was at this facility, in the volume that existed at the facility, was due to the presence of

Respondent Murphy’s hogs and all the inputs Respondent Murphy delivered for the care of the

animals. The facility was operated pursuant to management procedures dictated by

7

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Respondent Murphy and executed by personnel trained by Murphy personnel, at Murphy

facilities in Murphy management procedures. Respondent Murphy had the ability, under the

provisions of the agreement to require any measure be undertaken at the facility “deemed

necessary” by Respondent Murphy “to provide for the herd.” It is clear from the exhibits, that

Respondent Murphy intended to establish a 3,600 sow facility in the Peoria area in Illinois. See

Exhibit 4 attached to the affidavit of Bruce Yurdin, a July 8, 1996 email from Dan Heacock

documenting a conversation with Doug Lenhart, and Exhibit I attached to the affidavit of Eric

Ackerman, ~ July 5, 1996 phone conversation record documented by Eric Ackerman,

documenting Murphy’s intention to construct a 3,600 sow operation. Respondent Murphy

intended to establish a 3,600 sow facility, it was Respondent Murphy’s target operating

capacity, which thus would result in the generation of waste in the volume that exists at The

Highlands facility.

Respondent Murphy had sole ownership and control of every interest that resulted in the

production of waste at this facility. It controlled, solely, the source of the waste. In that it had

supplied all the feed and inputs for the hogs, and had sole control of the management of all

procedures for the care and productivity of the hogs, and reserved the right to change the

management of these procedures from time to time (Item 2, page 1 of the agreement), it had

sole ownership and control of the rate of production of the waste and the content of the waste.

If anything, such as, but not limited to, any aspect of the structure of the waste

management system, fumes from the waste management system, or the ventilation system,

were to impact the productivity of Respondent’s Murphy’s swine at The Highlands facility, it is

very clear from the agreement that Murphy would have sufficient ownership and control of the

operation to dictate a change in the operation for the benefit of the hogs.

To paint a picture as to how this might impact facts relevant to the Count I of the second

amended complaint, it is obvious that Respondent Murphy ultimately had the final say as to the

8

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rate of ventilation in the facility, to ensure a healthful environment for its hogs. On any given

day, due to weather conditions, due to power failures, or any variety and combination of

conditions arising in the interior of the hog confinement structures, Respondent Murphy could

certainly dictate the rate of ventilation in the buildings should the well-being of the hogs become

threatened in the buildings due to a build-up of unhealthful conditions, or should physical

failures require compensatory adjustments to other portions of the operation. Respondent

Murphy’s control and ownership of the hogs, as well as its provision of and control over all feed

and inputs or the hogs, as well as its ability to control all measures deemed necessary for the

well-being of the herd, certainly gives Respondent Murphy control over the original rate of

ventilation necessary to accommodate the inputs and procedures involved in the operation at

the facility, as well as a change in the ventilation, which in turn certainly dictates the rate and

composition of air emissions from the facility.

With regard to Count II of the second amended complaint, a count alleging water

pollution due to the over application of waste, it is obvious from the terms of the agreement, that

as long as Respondent Murphy maintained hogs at the facility, it owned and controlled the

source of the waste and all of the components of the waste at the facility. Respondent Murphy

owned and controlled every aspect of the source of the waste. Under the agreement, the very

fact that this facility was a hog farm during the term of the agreement, is due to the components

of the operation that Respondent Murphy owned and controlled.

Complainant also contends and believes that Respondent Murphy had a significant role

in the selection of the BION waste management system for The Highlands facility. Complainant

intends to pursue this theory further, in discovery. The basis of this contention includes

information gathered in 1997 and 1998, documented in Exhibits 1, 2 and Group Exhibit 3

attached to the affidavit of Bruce Yurdin, wherein it is stated that information gathered to date

indicated a strong relationship between BION Environmental Technologies, Inc. and Murphy

9

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Family Farms and significant involvement on the part of Doug Lenhart with BION personnel with

regard to the BION system installed at The Highlands facility. It is Complainant’s contention

that Respondent Murphy is responsible for the introduction of Doug Baird and The Highlands

LLC to BION Technologies, and that Respondent Murphy had a significant role in the

installation and operation of the BION system at The Highlands facility.

Given Respondent Murphy’s level of participation in the selection and establishment of

the BION system, there remains a question to be developed in discovery as to its participation

in later modifications of the facility’s waste management system. Given Respondent Murphy’s

interest in all hogs at the facility, and its capability, pursuant to its agreement with The

Highlands, to control all management and procedures relative to the well being and productivity

of the hogs, and the productivity and profitableness of the operation, it is a reasonable question,

for development in discovery for the purpose of presentation of evidence at hearing, to inquire

as to the extent of Respondent Murphy’s involvement in modifications to The Highlands waste

management system during the duration and term of its agreement with The Highlands.

Respondent Murphy claims in its memorandum that to the extent that The Highlands’

waste management program involved land application of waste, Highlands controlled the land

application process, and Murphy was not involved in any way with land application of waste

materials from The Highlands’ farm.

It is clear from the affidavits and exhibits attached thereto, that Respondent Murphy was

most likely involved in the selection of the waste management system utilized at the facility, and

certainly was involved with the establishment of that system at the facility. Thus, Respondent

Murphy not only owned and controlled the source of the waste, but also participated in the

control of how its waste was to be handled at The Highlands facility. Land application is a part

and parcel of the waste handling system utilized at The Highlands. Respondent Murphy owned

the source of the waste, it shared in the control of the planning, siting, design and

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establishment of the facility, including the waste management system, and it retained control of

all hogs maintained and delivered to the facility, including the number of hogs and composition

of the herd during the term of its contract with the Highlands that resulted in the volume and

composition of waste that was generated and handled at the site. Given the terms and

conditions of its agreement with The Highlands, the facility would not be a swine production

facility and the waste would not be at the site but for Respondent Murphy’s participation in this

sow operation. Respondent Murphy, and exclusively Respondent Murphy, owned every hog on

the site.

-

In its memorandum, at the bottom of page 2, Respondent Murphy states that Highlands

controlled all aspects of the operation of its farm, and Murphy had no ability to cause Highlands

to make, or to refrain from making, any particular decision with respect to any issue concerning

Highlands’ farm. Complainant quotes this representation only to highlight the absurdity of the

statement when held up against the actual terms and conditions of the agreement between The

Highlands and Respondent Murphy.

In its memorandum, also on page 2, Respondent Murphy makes the statement that The

Highlands determined whether it would follow Murphy’s recommendations. Respondent goes

on to represent that The Highlands sometimes did deviate from Murphy’s recommendations.

First, the very fact that Respondent Murphy made recommendations, and took note

when The Highlands did not follow its recommendation, indicates that Respondent Murphy had

the right and ability to make recommendations, as is clear from the agreement now that the

agreement is available for consideration in this proceeding, and that, pursuant to the provisions

of the agreement, The Highlands was to follow these recommendations.

Further, it is clear from the terms and conditions of Respondent Murphy’s agreement

with The Highlands, that Respondent Murphy had control of management procedures

concerning the care of the hogs, and pursuant to Item 15 of the “Producer Hereby Agrees”

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section of the agreement, Respondent Highlands agreed “To take measures deemed

necessary by Owner to provide for the herd.” It is very apparent from the agreement, that, if

Respondent Murphy so chose, it could claim a breach of contract at any time The Highlands

deviated from Murphy’s management procedures for the care and productivity of the breeding

herd or measures deemed necessary by Respondent Murphy to provide for the herd, and

Respondent Murphy could choose to enforce the contract or end the contract, thereby exerting

significant control over the operation of the Highland sow production facility. In fact, as

indicated inits memorandum, Respondent Murphy did ultimately terminate its contract with The

Highlands.

III.

LEGAL STANDARD FOR DISMISSAL

Generally, section 2-619 affords a “means of obtaining . . . a summary disposition of

issues of law or of easily proved issues of fact, with a reservation of jury trial as to disputed

questions of fact.”

Kedzie and 103” Currency Exchange, Inc., v Hodge,

156 III.2d 112, 115

(1993), 619 .E.2d 732 citing Ill.Ann.Stat., ch. 110, par 2-619, Historical & Practice Notes, at 662

(Smith-Hurd 1 ~83);see

Barber-Colman Co. v. A & K Midwest Insulation Co.

(1992), 236

lIl.App.3d 1065, 1071, 603 N.E.2d 1215.) Subsection (a)(9). . . permits dismissal where “the

claim asserted . . . is barred by other affirmative matter avoiding the legal effect of or defeating

the claim.”

Kedzie,

156 Ill.2d at 115, citing Ill.Rev. State.I989, ch. 110, par 2-6I9(a)(9).

The phrase “affirmative matter” encompasses any defense other than a negation of the

essential allegations of the plaintiff’s cause of action.

Kedzie,

156 lII.2d at 115 (See 4 R.

Michael, Illinois Practice § 41.7 (1989).) For that reason, it is recognized that a section 2-

61 9(a)(9) motion to dismiss admits the legal sufficiency of the plaintiff’s cause of action much in

the same way that a section 2-615 motion to dismiss admits a complaint’s well-pleaded facts.

12

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Kedzie,

156 llI.2d ati 15, citing

Barber-Colman,

236 lll.App.3d at 1073, 603 N.E.2d 1215.

The term “affirmative matter” as used in section 2-619(a)(9) has been defined as a type

of defense that either negates an alleged cause of action completely or refutes crucial

conclusions of law or conclusions of material fact unsupported by allegations of specific fact

contained in or inferred from the complaint.

Consumer Electric Company, v. Cobelcomex, Inc.,

149 lll.App.3d 699, 703 (1st Dist. 1986), 501 N.E.2d 156, citing

Ralston v. Casanov,

129

llI.App.3d 1050 (1984), 473 N.E.2d 444. By contrast, where the affirmative matter is merely

evidence upon which defendant expects to contest an ultimate fact stated in the complaint,

section 2-619(a)(9) should not be used.

Consumer Electric Company, v. Cobelcomex, Inc.,

149

IIl.App.3d 699, 703 (1st Dist. 1986), 501 N.E.2d 156, citing

Connelly v. Estate of Dooley,

96

lII.App.3d 1077 (1981), 422 N.E.2d 143.

If the “affirmative matter” asserted is not apparent on the face of the complaint, the

motion must be supported by affidavit.

Kedzie,

156 lll.2d at 116, citing lII.Rev.Stat 1989, ch

110, par 2-619(a); see also 4 R. Michael, Illinois Practice § 41.7 (1989) (observing that

“materials of the same nature as are used to support motions for summary judgment” may

serve as support for the motion). By presenting adequate affidavits supporting the asserted

defense (see 134 Ill.2d R. 191), the defendant satisfied the initial burden of going forward on

the motion. The burden then shifts to the plaintiff.

Kedzie,

156 lll.2d at 116.

The plaintiff must establish that the defense is unfounded or requires the resOlution of

an essential element of material fact before it is proven. The plaintiff may do so by “affidavit or

other proof.”

Kedzie,

156 lII.2d at 116, citing llI.Rev.Stat 1989, ch 110, par 2-619(c).) A counter

affidavit is necessary, however, to refute evidentiary facts properly asserted by affidavit

supporting the motion else the facts are deemed admitted.

Kedzie,

156 llI.2d at 116.

Although similar to a summary judgment motion, a section 2-619 motion differs in that

the court may, in its discretion, decide questions of fact “upon the hearing of the motion.”

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Consumer Electric Company, v. Cobelcomex, Inc.,

149 lll.App.3d 699, 703 (1st Dist. 1986), 501

N.E.2d 156, citing

North Park Bus Service, Inc. v. Pastor,

39 Ill.App.3d 406 (1976), 349 N.E.2d

664; lll.Rev.Stat 1985, ch 110, par 2-619(c). However, in deciding the merits of the motion, a

trial court cannot determine disputed factual issues solely upon affidavits and counter-affidavits.

If the affidavits presented disputed facts, the parties must be afforded the opportunity to have

an evidentiary hearing.

Consumer Electric Company, v. Cobelcomex, Inc.,

149 lll.App.3d 699,

703-704 (1st Dist. 1986), 501 N.E.2d. 156, citing

Premier Electrical Construction Co. v. LaSalle

National Bank,

132 III.App.3d 485 (1984), 477 N.E.2d 1249;

Dickman v. Country Mutual

Insurance Co.,

120 Ill.App.3d 470 (1983), 458 N.E.2d 199.

If it cannot be determined with reasonable certainty that the alleged defense exists, the

motion should not be allowed.

Consumer Electric Company, v. Cobelcomex, Inc.,

149

Ill.App.3d 699, 703 (1st Dist. 1986), 501 N.E.2d 156, citing

Dangeles v. Marcus,

57 IIl.App.3d

662 (1978), 373 N.E.2d 645;

Loughman Cabinet Co. v. C. Iber & Sons, Inc.,

46 lll.App.3d 873

(1977), 361 N.E.2d 379;

House of Realty, Inc. v. Ziff,

9 Ill.App.3d 419 (1973), 292 N.E.2d 71.

IV.

CASE LAW REGARDING EVIDENCE OF OWNERSHIP OR CONTROL OF THE

PREMISES OR CONTROL OVER THE SOURCE OF POLLUTION TO BE A

SUFFICIENT CONDITION FOR A FINDING OF LIABILITY UNDER THE ACT.

In the case of

Perkinson v. the Illinois Pollution Control Board,

187 lll.App.3d 689, 693,

(3rd

Dist. 1989), 543 N.E.2d 901, the court reviewed case law pertinent to the concepts as

ownership and control with regard to liability under the Act:

Two cases involving railroad tank cars are cited by Perkinson in support of his

contention that he neither caused nor allowed the swine waste discharge here.

In

Phillips Petroleum Co. v. Illinois Environmental Protection Agency

72

Ill.App.3d 217 (2d Dist. 1979), 390 N.E.2d 620, a tank of anhydrous

ammonia owned by Phillips was under the sole control of the transporting

railroad when it was punctured in a derailment and released poisonous gas into

14

---

the air. Since there was no evidence showing that Phillips, the alleged polluter,

had the capability of controlling the pollution or was even in control of the

premises where the pollution occurred, the appellate court affirmed a finding the

Phillips did not cause or allow the pollution.

The second tank car case is

Union Petroleum Corp. v. United States

(Ct.Cl.1981), 651 F.2d 734, where the valves on two cars were opened by

vandals during a labor strike. The cars were at a loading rack at Union’s

terminal in Massachusetts, and the spilled oil eventually reached Chelsea Creek.

As soon as the oil spill was discovered, Union took appropriate measure to

contain the spill and to clean up the oil. The litigation arose when Union sought

to recover the cost of clean up from the United States government. The Court

of Claims noted that, under the federal statute, a claimant cannot recover where

a vandal or third party caused the spillage if the claimant does not prove that

reasonable actions were taken to prevent or forestall such intervention by a third

party. The trial judge ruled in favor of Union, concluding that the discharge was

caused by unknown vandals in spite of the company’s reasonable precautions

against vandalism, and Court of Claims affirmed. Union had fenced in the most

accessible part of its terminal, had installed 1000-watt mercury streetlights in the

vicinity of the tank cars, and had employed additional security guards to patrol

the area during the strike. There was also persuasive evidence that Union had

adequate oil containment facilities and took reasonable care to prevent the spill.

***

Many cases have held that the owner’s lack of knowledge of the discharge is no

defense under the Environmental Protection Act. The leading case is

Meadowlark Farms v. Illinois Pollution Control Board,

17 Ill.App.3d 851

(5th

Dist.

1974), 308 N.E.2d 829, where water pollution was caused by seepage through

mine refuse piles. The PCB found that Meadowlark Farms owned the surface

rights of the property and thus owned the source of the pollution and had the

capability of controlling the pollutional discharge. The reviewing court affirmed

and stated’:

“Petitioner’s so-called lack of knowledge that the discharge existed

provides no defense. The Environmental Protection Act is

malum

prohibitum,

no proof of guilty knowledge or

mens rea

is necessary to a

finding of guilt.” 17 lll.App.3d at 861, 308 N.E.2d at 837.

A similar holding is found in

Freeman Coal Mining Corp. v. Illinois Pollution

Control Board,

21 lll.App.3d 157

(5th

Dist. 1974), 313 N.E.2d 616, another case

where water pollution occurred when rainwater seeped through a mine refuse

pile. Again, the court ruled that the fact that pollution came from the seepage off

the owner’s land was sufficient proof that the owner allowed the discharge within

the meaning of the statute. It was no defense that the discharges were

accidental and not intentional or that they were the result of an “Act of God”

(rain) beyond its control. The court relied in part upon a case from another

jurisdiction which held that the legislature had imposed a duty to take all prudent

measures to prevent pollution.

15

---

In

Hindman v. Environmental Protection Agency,

42 lIl.App.3d 766 (5th Dist.

1976), 356 N.E.2d 669, the operator of a Iandfilll site was held accountable for a

fire that was not started by either the operator or his employees. The court relied

upon the Meadowlark Farms case and upon

Bath, Inc. v. Pollution Control

Board,

10 III.App.3d (4th Dist. 1973), 294 N.E.2d 778, and ruled that a violation is

not predicated upon proof of guilty knowledge or intentional harm. In the Bath

case, the owner of a landfill was held to be responsible for underground burning

even though the cause was unknown and not the result of the owner’s

affirmative act.

The case before us is controlled by the long line of precedent in Illinois which

holds that the owner of the source of the pollution causes or allows the pollution

within the meaning of the statute and is responsible for that pollution unless the

facts establish the owner either lacked the capability to control the source, as in

-

Phillips Petroleum

or had undertaken extensive precautions to prevent vandalism

or other intervening causes, as in

Union Petroleum.

Here Perkinson plainly had

control of the lagoons and the land where the pollutional discharge occurred.

The PCB concluded that he is liable for the pollution that had its source on his

land and in a waste facility under his control. Under well-established Illinois law,

that is sufficient to support a finding of a violation of the Environmental Protection

Act.

Complainant attaches hereto as Exhibit A, a copy of the United States District Court,

Western District of Kentucky, opinion and order regarding issues raised in motions for summary

judgment in the case of

Sierra Club, Inc. v. Tyson Foods.

2003 WL 22595989, 299 F. Supp.2d

693. The decision included a ruling that found Tyson Chicken to be a “person in charge” under

the Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”) and

an “operator” under the Emergency Planning and Community Right-to-Know Act (“EPCRA”)

with respect to two facilities Tyson claimed to be independent contractors. The analysis and

findings are found on page 718 through 721 of the decision. Tyson Chicken’s contract and

relationship with its growers is not identical to the working arrangement and agreement

between Respondent Murphy and The Highlands. However, there are some similarities in the

analysis the court undergoes in making its ruling and, to the extent the court’s analysis in

Sierra

Club v. Tyson

is relevant to questions currently before the Board in the instant matter,

Complainant incorporates said analysis herein by reference.

16

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V.

PEOPLE EX REL. RYAN V. MCFALLS

In the case of

People ex rel Ryan v. McFalls,

313 Ill.App.3d 223 (3~Dist. 2000), 728

N.E.2d 1152, the court held that an off-site generator of waste to be a person who may cause

open dumping within the plain meaning of Section 21(a) and 21(p)(l) of the Illinois

Environmental Protection Act (the “Act”). 415 ILCS 5/21(a), (p)(1). The court provided the

following analysis as the basis of its reasoning.

The Act does not define “cause.” In the absence of a statutory definition,

“cause” should be given its plain and ordinary meaning. See

Moran

Transportation Corp. v. Stroger,

303 lll.App.3d 459, 708 N.E.2d 508 (1999). The

verb “cause” ordinarily means “to serve as cause or occasion of or to bring into

existence . . . .“ (Webster’s Third New International Dictionary 356 (1993)).

The Act contains a broad definition of “person.” The definition contains no

qualifying language limiting its scope to entities having an ownership interest in,

or control over, a disposal site. Moreover, neither ownership, nor control, of an

allegedly illegal disposal site is necessary to effect the consolidation of refuse

there. Therefore, an off-site generator, as a “person,” may “cause” “open

dumping” within the plain meaning of subsections 21(a) and 21 (p)(1).

Accordingly, we hold that off-site generators fall within the class of persons who

may violate these subsections.

***

Finally, we do not agree that a long line of precedent limits the scope of the

subsections at issue to parties having an ownership interest in, or exercising

control over, the allegedly illegal disposal site. Rather than establishing

ownership or control of the premises as a necessary condition to liability under

the Act, the cases cited by appellees merely hold that ownership or control of the

premises or control over the source of pollution is a sufficient condition where an

owner or operator is alleged to have passively permitted pollution to enter the

environment. See

Perkinson v. Pollution Control Board,

187 III..App.3d 689, 546

N.E.2d 901 (1989);

Phillips Petroleum Co.

V.

Pollution Control Board,

72

lll.App.3d 217, 390 N.E.2d 620 (1979);

Freeman Coal Mm. Corp. v. Pollution

Control Board,

21 lll.App.3d 157, 313 N.E.2d 616 (1974);

Meadowlark Farms,

Inc.

17 IIl.App.3d 851, 308 N.E.2d 829. Therefore, we must reject the argument

that these cases control the disposition of the case at bar.

17

---

VI.

RESPONDENT MURPHY’S APPLICATION OF NUISANCE PRINCIPLES TO AN

ALLEGATION OF SECTION 9(A) IS IMPROPER, IN LIGHT OF THE COURTS

HOLDINGS THAT THE ILLINOIS POLLUTION CONTROL BOARD IS NOT

AUTHORIZED BY THE LEGISLATURE TO DETERMINE AND PROCEED AGAINST

COMMON LAW NUISANCE, AND THAT THE BOARD IS TO APPLY STATUTORY

CRITERIA IN ITS ANALYSIS OF A SECTION 9(A) ALLEGATION.

In its

memorandum, Respondent Murphy asserts that a common law nuisance claim is

analogous to the State’s claim under Section 9(a) of the Act, and goes on to apply nuisance

principles to the allegations of the complaint. Respondent Murphy’s attempt to apply nuisance

principles to an allegation of Section 9(a) is improper and incorrect.

The standards to be utilized in a Section 9(a) analysis were plainly set forth in the cases

of

City of Monmouth v. Pollution Control Board,

57 lll.2d 482 (1974), 313 N.E.2d 1,

Incinerator,

Inc. v. Pollution Control Board,

59 Ill.2d 290 (1974), 319 N.E.2d 794; and

Mystik Tape v.

Pollution Control Board,

60 lll.2d 330 (1975), 328 N.E.2d 5, wherein the Illinois Supreme Court

held that section 9(a), when read in conjunction with section 3(b), 3(d) and 33(c),contained

sufficient standards for determining what constitutes air pollution, that is, the unreasonable

interference with the enjoyment of life or property. These standards were further defined in

terms of the statutory criteria within the Act, specifically for causes brought before the Pollution

Control Board, in the case of

Wells Manufacturing Company v. Pollution Control Board,

73 Ill.2d

226 (1978), 383 N.E.2d 148.

The courts have held that the Illinois Pollution Control Board is not authorized by the

legislature to determine and proceed against common law nuisance. Rather, it must proceed

strictly within the authority defined by the Act.

Incinerator, Inc. v. Pollution Control Board,

59

Ill.2d 290, 299 (1974), 319 N.E.2d 794, 799;

W.F. Hall Printing Company v. Environmental

Protection Agency,

16 lll.App.3d 864, 869 (4th Dist. 1973), citing

Mystik Tape v. Illinois Pollution

Control Board

16 llI.App.3d 778 (4th Dist. 1973), 306 N.E.2d 574,

aff’d in part and rev’d in part

on other grounds,

60 lIl.2d 330; 328~N.E.2d.

18

---

Therefore, Respondent’s argument contained in the second paragraph of page 6 of its

memorandum, in which it encourages the Board to rely on nuisance standards in its analysis of

a claim of a Section 9(a) violation, and its contention in the first full paragraph of page 8 that

Respondent Murphy’s conduct must be the focus of the Board’s analysis, is terribly flawed and

outright incorrect.

VII.

IN THE RECENT DECISION OF

NICKELS V. BURNETT,

BASED ON A SUFFICIENT

SHOWING OF THE POTENTIAL HARMS AND SUBSTANTIAL CERTAINTY THAT

THE HARMS WOULD OCCUR, THE COURT UPHELD THE GRANTING OF

INJUNCTIVE RELIEF THAT PROHIBITED THE CONSTRUCTION AND OPERATION

OF A FACILITY HOUSING A LARGE NUMBER OF HOGS.

Despite the fact that Respondent’s reliance on nuisance standards is completely

misplaced, Complainant cannot allow to go unchallenged Respondent’s argument that it is “well

settled” that the mere introduction of livestock into an area — even large numbers of animals —

without more, does not establish the requisite conduct to support a nuisance claim.

In the instant matter, Complainant has pled and alleged all facts necessary to meet

pleading standards. Respondent Murphy’s motion is not based in a Section 2-615 claim, but

rather Respondent’s motion is a Section 2-619(a)(9) claim. Complainant has pled a sufficient

factual basis for its allegation of unreasonable interference consistent with applicable statutory

criteria, and, particularly, Complainant has alleged facts relevant to actual unreasonable

interference experienced by neighbors of the subject facility. As such, Complainant’s assertion

of a concentration of a large number of hogs at the subject operation — an operation for which it

is requisite that there be a concentration of over 3,000 sows — is one allegation among many

specific factual allegations iii support of its claim of unreasonable interference. As stated

above, a section 2-619(a)(9) motion to dismiss admits the legal sufficiency of the plaintiff’s

cause of action much in the same way that a section 2-615 motion to dismiss admits a

19

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complaint’s well-pleaded facts.

Kedzie,

156 lIl.2d at 115, citing

Barber-Colman,

236 IIl.App.3d at

1073, 603 N.E.2d 1215.

In the recent decision of

Nickels v. Burnett,

343 Ill.App.3d 654, 798 N.E.2d 817, the

court upheld a grant of injunctive relief prohibiting the construction and operation of a facility

that housed a large number of hogs.

Nickels

was an action in which plaintiffs claimed

prospective nuisance, and based on the record of the case, the court upheld the trial court’s

decision to grant a preliminary injunction enjoining defendants from constructing a hog

confinement facility. The court found no abuse of discretion in the trial court’s decision, and

that injunctive relief was available in the matter to redress substantially certain prospective

harm. Relying on the case of

Wilsonville v. SCA Services, Inc.,

86 Il’I.2d 1, 25 (1981), 426

N.E.2d 824, the court stated that it is well settled that a plaintiff may seek to enjoin an activity

that may lead to substantial future harm. In

Nickels,

the court found that the plaintiffs had

presented extensive evidence of the potential harms to their health and to the values of their

lands should the hog facility begin to operate. Further, the court found the evidence submitted

by the plaintiffs to indicate that the harms described were substantially certain to occur should

the hog facility begin operations in its present proposed location. Therefore, with a sufficient

showing of the potential harms and substantial certainty that the harms would occur should

large numbers of hogs be moved into the proposed facility, the court upheld the lower court’s

finding of a prospective private and public nuisance and upheld the injunctive relief granted by

the lower court.

VIII.

ARGUMENT

As set forth above, section 2-619 affords a “means of obtaining . . . a summary

disposition of issues of law or of easily proved issues of fact, with a reservation of jury trial as to

20

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disputed questions of fact.”

Kedzie,

156 lll.2d at 115. The term “affirmative matter” as used in

section 2-61 9(a)(9) has been defined as a type of defense that either negates an alleged cause

of action completely or refutes crucial conclusions of law or conclusions of material fact

unsupported by allegations of specific fact contained in or inferred from the complaint.

Consumer Electric,

149 lII.App.3d at 703. The plaintiff must establish that the defense is

unfounded or requires the resolution of an essential element of material fact before it is proven.

Kedzie,

156 lll.2d at 116. If it cannot be determined with reasonable certainty that the alleged

defense exists, the motion should not be allowed.

Consumer Electric,,

149 lll.App.3d at 703.

The terms and conditions of Respondent Murphy’s and Respondent Highland’s,

operating agreement certainly afforded Respondent Murphy, as the owner of the source of

pollution, that being the hogs themselves and the hogs and all’ inputs into the hogs as the

source of the waste at the facility, sufficient ownership and control to meet the standards for a

finding of liability under the Illinois Environmental Protection Act, as defined in the cases of

People v. A.J. Davinroy Contractors,

249 III. App.3d 788, 793 (Sth Dist. 1993), 618 N.E.2d 1282

Perkinson v. Pollution Control Board,

187 lll..App.3d 689, 546 N.E.2d 901 (1989);

Phillips

Petroleum Co. v. Pollution Control Board,

72 lll.App.3d 217, 390 N.E.2d 620 (1979);

Freeman

Coal Mm. Corp. v. Pollution Control Board,

21 lIl.App.3d 157, 313 N.E.2d 616 (1974);

Meadowlark Farms, Inc.

17 llI.App.3d 851, 308 N.E.2d 829.

In the case of

People ex rel Ryan v. McFalls,

313 Ill.App.3d 223 (3m’ Dist. 2000), 728

N.E.2d 1152, the court found that the Illinois Environmental Protection Act does not define

“cause.” In the absence of a statutory definition, “cause” should be given its plain and ordinary

meaning. The verb “cause” ordinarily means “to serve as cause or occasion of or to bring into

existence. . . .“ (Webster’s Third New International Dictionary 356 (1993)). Further, the Act

contains a broad definition of “person.” The definition contains no qualifying language limiting

its scope to entities having an ownership interest in, or control over, a disposal site. Moreover,

21

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neither ownership, nor control, of an allegedly illegal disposal site is necessary to affect the

consolidation of refuse there. Not unlike the off-site generator that was’the subject of

McFaII,

a “person” that “caused” “open dumping” within the plain meaning of subsections 21(a) and

21 (p)(1), Respondent Murphy has served as cause or occasion to bring into existence the

source of pollution that existed at The Highlands facility, and thus, consistent with the holding in

McFall,

has liability under Section 9(a) of the Act, as a person who, as alleged in the second

amended complaint, caused, threatened or allowed the discharge or emission of a contaminant

so as to cause or tend to cause air pollution, and who failed to practice adequate odor control

methods and technology at The Highlands livestock management facility and livestock waste-

management facility so as not to cause air pollution.

With regard to Count II of the complaint, in that Respondent Murphy owns and controls

the source of the pollution, that being the hogs and all elements of the generation of the waste,

Respondent Murphy, under its agreement with The Highlands and in its actual participation in

The Highlands facility operations, had sufficient ownership and control in the facility to meet the

standards for a finding of liability under the Illinois Environmental Protection Act, as defined in

the case law set forth above, including the

McFall

case. Respondent Murphy’s participation in

the planning, siting and design of the facility, a facility Respondent Murphy established with a

requisite of over 3,000 sows, and which included the selection and establishment of the BION

system, as well as any other system that might have later been installed at the facility, definitely

qualifies as an allegation of specific facts that support Complainant’s contention that

Respondent Murphy is liable for the water pollution allegations contained in Count II of the

second amended complaint.

As set forth in paragraph 22 of Count II of the second amended complaint, Respondents

Highlands and Murphy were land applying waste from the facility via a traveling gun irrigation

unit on June 18, 2002. On that date, Respondent Murphy had as much, if not more, of an

22

---

interest in land applying the facility’s waste as part and parcel of the waste management system

at lhe facility, as was the interest of The Highlands. For the production of swine at the facility,

swine that it exclusively owned, Respondent Murphy had to move the waste out from under its

hogs, into waste management structures and ultimately dispose of it upon the land in order to

properly provide for its hogs and properly conduct a swine production operation and facility.

Pursuant to Illinois law, Respondent Murphy, who owned and controlled the very source of the

pollution, is liable for its compliance with the Illinois Environment Protection Act and regulations

promulgated thereunder in the operation of this swine production facility.

With regard to Respondent Murphy’s reliance on nuisance principles in its

memorandum, it is obvious from the recitation of applicable case law that the analysis of an

allegation of a Section 9(a) violation, in a case brought before the Board, and also in circuit

court for that matter, is to be based upon statutory criteria. The case law sets forth, in detail,

the considerations that are to be included in a proper analysis. Further support for

Complainant’s contention that the law is not nearly as favorable to Respondent Murphy’s

position as Respondent Murphy would like the Board to believe, is found in Respondent’s

misplaced reliance on the case of

Village of Goodfield v. Jamison,

188 lll.App.3d 851 (4th Dist.

1989), 544 N.E.2d 1229. It is obvious from the holding in

Nickels,

343 lll.App.3d at 663, that

plaintiffs in this state have presented sufficient showings of potential harm and substantial

certainty that the harms would occur should a large number of hogs be established in a given

location, to uphold the grant of injunctive relief prohibiting construction and operation of facilities

housing large numbers of hogs.

Respondent Murphy had sufficient ownership and control in The Highlands facility, and

sufficient participation in the operation, siting, design, and establishment of both the facility and

the waste management system to qualify as a person who caused or allowed both air pollution

and water pollution under the statutory criteria applicable to the allegations contained in Count I

23

---

and II of the Act. In light of the affidavits and accompanying exhibits, attached hereto and

incorporated herein by reference, Respondent Murphy’s assertion of affirmative matter

completely fails. If,

arguendo,

Complainant’s response is found short of bringing to light the

complete failure of Respondent Murphy’s assertion, the affidavits presented with this response

and attached exhibits certainly establish that, without completion of discovery and an

evidentiary hearing, it cannot be determined with reasonable certainty that the alleged defense

exists.

WHEREFORE, on the foregoing grounds and for the foregoing reasons, Complainant

respectfully requests that the Board deny Respondent Murphy Farms, Inc.’s Motion to Dismiss.

Respectfully submitted,

PEOPLE OF THE STATE OF ILLINOIS,

ex reL LISA MAD IGAN, Attorney General

of the State of Illinois

MATTHEW J. DUNN, Chief

Environmental Enforcement Division

BY:

/~ JANE E.MCBRIDE

Assistant Attorney General

500 South Second Street

Springfield, Illinois 62706

(217) 782-9031

24

---

STATE OF ILLINOIS

)

SS

COUNTYOFSANGAMON )

AFFIDAVIT

I, JANE E. MCBRIDE, after being duly sworn and upon oath, state as follows:

1.

I am the assistant attorney general assigned to the matter of

People v. The

Highlands, LLC and Murphy Farms, Inc.,

PCB No. 00-104. I have been lead counsel

representing the Complainant in this matter since the case was originally filed with the Illinois,

Pollution Control Board.

2.

Included in the materials contained within the Office of the Attorney General’s

case file on this matter is a copy of the Weaned Pig Production Agreement dated December 6,

1996, signed by an executive vice president for Murphy Farms, Inc, and James R. Baird. This

agreement includes a contract weaned pig payment schedule, attached to the agreement as

Exhibit A. The agreement includes a contract addendum, signed by the same representative of

Murphy Farms, Inc. and Douglas Baird for the Highlands, LLC, in April 2001. These

documents were included in a response to a request for production, produced by the Thielen

Law Offices, representing The Highlands, LLC in the matter of

Roy Kell and Diane Kell, v. The

Highlands LLC and Murphy Family Farms, Inc.,

Knox County Circuit Court Case No. 99-L-62.

The agreement, payment schedule and contract addendum are attached to this affidavit as

Exhibit 1.

3.

Included in the production from the Thielen Law Offices representing The

Highlands, LLC in the matter of

Roy Kell and Diane Kell, v. The Highlands LLC and Murphy

Family Farms, Inc.,

Knox County Circuit Court Case No. 99-L-62, was a copy of a

memorandum from Doug Lenhart, dated January 12, 1998, regarding the training of Highlands’

employee Don Bybee, and attached hereto as Exhibit 2, and a copy Murphy Family Farms

employment training record, attached hereto as Exhibit 3, that reports the results of The

---

Highlands’ employees competency tests. These two documents present evidence of the

employee training agreement and arrangements between The Highlands and Murphy Farms,

Inc., pursuant to their operating agreement.

4.

The Attorney General’s case file in this matter includes The Highlands articles of

organization as a limited liability company, filed on December 4, 1996, a copy of a document

filed with the Illinois Secretary of State to return The Highlands LLC to good standing in 1997,

and copies of The Highlands LLC annual reports field in November 1997 and October 1998.

These reports indicate the members of The Highlands LLC to be James R. Baird, Patricia A.

Baird and Douglas B. Baird. The documents were obtained from the Illinois Secretary of States

office upon request of the Illinois Attorney General’s Office. The facsimile cover letter

transmitting the documents from the Illinois Secretary of State’s office to the Attorney General’s

office is included with the exhibit. The return cover transmission sheet is superimposed on the

cover sheet utilized for the Attorney General’s Office’s original request for the documents. The

documents are attached hereto as Exhibit 4.

5.

Under the penalties as provided by law pursuant to Section 1-109 of the Code of

Civil Procedure, the undersigned certifies that the statements set forth in this instrument are

true and correct, except as to matters stated to be on information and belief and as to such

matters the undersigned certifies as aforesaid that he verily believes the same to be true.

Further affiant sayeth not.

~

/~JANE E. MCBRIDE

Subscrib~iand swornAo before me

this, ~

day of

,/JL~i

Q~n4I/,

2004.

NO~’1AF~YPUBLIC

OFFICIAL SEAL

2

PEGGY J. POITEVINT

NOTARY PUBLIC STATE OF ILLINOIS

MY CCMMISS~ONEXPIRES 4’l6-2006

---

MURPHY

FAMILY FARMS.

n

P.O.

BOX

759

ROSE HILL, NORTH CAROLNA 28458

WEANED PIG PRODUCTION AGREEMENT

THIS AG~EME~Tmade this

___________

day of___________

1996,

between M~hy

Farms, Inc. Andlor Quarter M Farms, Inc. Doing business in Illinois as Murphy Family Farms,

North Carolina Corporations with their principal place of business in Rose Hill, North Carolina

(hereinafter- called Owner) and

\4~n\o~~

LLC~.

,

whose address is

I~’t2.2- ‘~(v~o~

~

t~ ~

‘

,

of

E\bo~

Township,

Kv~pK1

CL.

County, State

of

“I!—.

(hereinafter called Producer) whose farm

shall be known as

________________________________________“.

Each’ party to this contract is an

independent contractor and neither party has any responsibility’or liability for any of the debts or

obligations ofthe other party. Neither shall either party be liable to the other for failure to act in any

waydue to any unforseen circumstances beyond their control.

IN CONSIDERATION of the mutual benefits to evolve from Producer breeding, farrowing, and

producing weaned pigs for Owner in facilities owned by Producer and from breeding stock owned

and provided by Owner, the parties hereby agree to the following:

OWNER HEREBY AGREES:

1.

To deliver to Producer’s premises a total breeding herd of ~—“~U~

gifts and

the necessary boars for that size herd. The quality, time of delivei~~dnumber of

animals of each delivery shall be the discretion of Owner which agrees to strive to

deliver said stock for maximum utilization ofProducer’s facilities.

2.

To provide management procedures for the care and productivity of the Breeding

Herd which may change from time to time.

Exhibit 1

Eff 1/1/96

1

---

3.

To provide all fe~d,medications and veterinary service deemed necessary at the

discretion ofOwner.

4.

To provide from information furnished by Producer all records regarding herd

productivity considered to be necessary by Owner.

5.

To deliver and pick up all necessary Breeding Stock at Producer’s premises and to

haul all pigs to and from farm.

6.

To pay producer in accordance with payment schedule attached marked “Exhibit A.”

-

‘

PRODUCER HEREBY AGREES:

1.

To provide facilities, housing and equipment as specified by Owner, and

bear all

costs ofproducing weaned pigs except those covered by Owner described in item 3

under “OWNER HEREBY AGREES”.

2.

To. receive the breeding herd and thereafter, provide the proper husbandry for

maximum productivity by following the management’s procedures specified by

Owner.

3.

To provide an all weather road from the public road to the premises suitable or the

delivery and/or pick up of feed and breeding stbck. If Owner incurs any wrecker

bills due to poor road conditions, then to reimburse Owner for wrecker cost.

4.

To deliver acceptable commercial weaned pigs to off-site nurseries as scheduled by

Owner.

5.

To select qua:lity weaned pigs from those sows designated for replacement gilt

production and place those pigs into the on-site nursery as scheduled by the Owner.

These pigs will be raised to provide replacement gilts forthe breeding herd.

6.

To properly maintain the premises, including grass and weed mowing, adequate rat

and fly control measures and provide security to facility such as to exclude access by

outside animals, birds and unauthorized humans.

.7.

To ‘follow the weaned pig production program furnished by Owner.

8.

To provide Owner with information deemed necessary by Owner for maintenance of

proper records.

9.

To permit any authorized representative of Owner to enter the premises to inspect

the animals and facilities at any time.

Eff 1/1/96’

2

---

10.

To recognize the security interest of any secured creditor in the feed, medication,

breeding stock and its offspring as superior to and having priority over any rights

which Producer may have therein: furthermore, Producer agrees to permit any

secured creditors of Owner to have access to the premises and facilities at all

reasonable times for the purpose of exercising any right, including the rights of

inspection and possession; with respect to the secured creditors security interest.

11.

To account for all death losses daily, submit a weekly mortality report to the

OWner’s accounting office in a timely manner and dispose of all dead animals

according to ILLINOIS state regulations.

12.

To dispose ofall animal waste according to federal, state and county regulations.

13.

To hold Owner harmless from any damages, loss or expense, including attorney fees

-

and court costs, resulting from the negligent, unlawful or willful acts oromissions of

Producer, Producer’s employees, representatives or invitees or from Producer’s

failure to perform any obligation imposed upon Producer by law’ or by the

provisions of this Agreement, with respect to the maintenance and operation of the

facilities used for the production of weaned pigs for Owner.

14.

To use the breeding stock delivered by Owner only for the purposes of producing

weanedpigs for Owner and to own no swine.

15.

To take measures deemed necessary by Owner to provide for the herd.

16.

To allow Owner to withhold from proceeds und~rthis contract any amounts due to

Owner by Producer for the purchase of materials and supplies from Owner or for

advances to Producer or to others for the benefit ofProducer by Owner.

17.

For the purpose of this agreement, a weaned pig shall be defined as a pig of

sufficient age and size, as determined by owner, to survive in a nursery.

18.

To not own or have possession of, either as agent, producer or otherwise, ~anyswine

not owned by Owner. Producer shall not permit any swine not owned and

designated for the swine facilities herein contracted for, to come within 500 feet of

the swine facilities, unless permitted in writing by Owner. It is specifically

understood and agreed that under no circumstances shall the requirement for written

approval be waived.

)

EU 1/1/96

---

THiS AGREEMENT shall continue in force for a period of

~

years from this date

Hove.v~t6e.r

C)

I

,

1997. At the conclusion of this term, this agreement will

automatically renew on an annual basis. Should either party wish to terminate the agreement,

written notice will be required within 90 days ofthe expiration date ofthis agreement. In the event

that Producer fails to provide necessary facilities, husbandry or security ofthe animals as set out in

the management programs by Owner, Owner reserves the right, without notice to remove Owner’s

property from Producers premises.

MURPHY FARMS, INC

-

Titie:

~

J~c~

/;

_____

SSNorFrN~3~/-r~3

r9~.v

Telephone:c.~~-

~—

~

H: USE

T~’CON A~CON T1.RGE\1LLWP~DOC

Eff 1/1J~9~6.

Witne

.7

7

4

---

I’

I

EXHIBIT “A”

CONTRACT WEANED PIG PAYMENT SCHEDULE

Murphy Family Farms will pay Producer for the pigs produced and delivered by Producer to

Murphy as follows:

Pigs accepted by Murphy and moved to a nursery from Producer’s farrowing building will be

paid

~per pig moved. It is the intent of Murphy and the understanding of the Producer

that pigs should weigh an average of 10 pounds. If Producer ships pigs weighing less than 8

pounds on an ir4dividual basis, then payment on those individual pigs are subject to a discount

of

er pig at Murphy’s discretion. Injured, ruptured or non viable pigs are subject to

ayment. The net payment will be paid within 10 days of pig movement. Murphy’s

decision on discounted pigs is final.

Pigs accepted by Murphy and moved from Producer’s Unit will also earn a

iner pig

reserve to be paid to Producer for essential repairs and maintenance on his Unit which are

approved in advance by Murphy Farms, Inc. service representative.

A production incentive bonus will also be paid to Producer for production above ~pigs

per

sow per year. This bonus will be paid within 30 days after the end of each of Murphy2s fiscal

quarters based upon pigs produced during that quarter. However, the bonus will not be paid

until after the first quarter in which Producer was farrowing pigs in the first week of the

quarter. Pigs produced during a quarter will be calculated by taking pigs shipped during the

quarter, adding the end of quarter on farm pig inventory and subtracting the beginning of

quarter on farm pig inventory. Pigs discounted for light weight will, not be considered in

calculating the pigs produced during the quarter. The average of weekly sow inventories for

the quarter will be used in computing production level.

The production bonus per pig roduced will be calculated by dividing the annualized

pigs/sow/year for thea~~rterby

id subtracting

_____

However, the maximum bonus per

pig cannot exceed

,~

per pig.

Example:

“s/soy “““~irdivided by~=

bonus per pig produced

This bonus will be paid for all eligible pigs produced during the quarter.

Before the Producer will have produced pigs for a full quarter, he probably will have farrowed

pigs during the preceding quarter. At the time that the Producer is paid his first quarterly

production bonus, he will also be paid a bonus at the same rate per pig for all pigs produced

before the first full production quarter.

Murphy Family Farms will pay_Producer for fmished gilts produced in the on-site nursery and

finishing facilities at the rate of

______

for each gilt placed back into the breeding herd or moved

from the Producer’s Unit. This gilt production fee is in addition to the pig payments described

above and will be paid within 10 days ofthe gilt movement.

Eff L/1../96

---

Highlands Sow Farm

Contract Addendum

1. The parties herein agree that all terms and conditions under this addendum shall be effective

May 1, 2001. All adjustments to the existing contract dated December 6, 1996 are subject to

Highlands agreement to the items listed under paragraph no. 4 which shall be mandatory

criteria for continuance ofthe contract addendum.

I

a. Failure to carry out the items listed will constitute a voiding of the new contract

payment and an inimediate return to the previous payment structure. Such violation

ofthe criteria shall constitute a default under the contract addendum.

b. Notice of default may be given by written notice by United States Mail or facsimile.

Highlands shall have seven (7) days in which to cure such notice of default.,

c. It is agreed by all the parties herein that this agreement shall remain confidential in all

respects. All information exchanged will remain confidential and will not be

disclosed to any person or entity without the expressed written consent of the

respective parties.

2. In response to cost of production unique to Illinois an adjustment for the remainder of the

production contract will be made to the base payment in the amount of

per pig.

3. Recognizing that these costs have been incurred since the beginning of production, a payment

equal to

____

per pig for all wean pigs shipped from the Highlands up to the date of

implementing the new payment program will be made.

a. The back payment will first ofall retire all money due to Murphy Farms

and the remainder will be distributed directly to the Highlands.

4. Highlands agrees to comply with the following criteria in consideration of an increase in

production payment. The criteria is as follows:

a. Highlands will prepare an Annual Operating Budget. The Budget will be reviewed by

Murphy Farms, Inc. (MFI) and by Farm Credit Services (FCS) in its final copy before

November 30th of each year. This review is for Highlands business purposes and benefit.

It is understood and agreed that MFI and FCS review of the annual operating budget is

for evaluation purposes and not for the purpose of giving advice or direction of the

management ofHighlands operations.

---

b. Highland shall provide monthly financial statements distributed to MFI and FCS by the

2~Friday after month end. Statements will include:

1. Comparative balance sheet

2. Budget to actual income statement with a narrative explanation of

significant variances

3. Cash flow statement

4. An aged AlP listing by vendor

S. Pay report by employee

6. Listing ofall transactions between Highlands and Baird Seed Farm (‘BSF)

7. Listing ofall transactions between Highlands and any Baird Family Member

c. Highland shall retain a professional accounting service who will be used! to record all

frnancial transactions and produce timely and accurate Financial Statements.

d. Highland agrees to provide a copy ofthe annual Highlands tax return and distribute to MFI

and FCS no later than April 15 ofeach year.

e. Highland agrees to provide a schedule of the terms of all planned transactions between

Highlands and BSF. No additional transactions will be executed without prior consent

from MFI and FCS.

f. Highland agrees to provide a schedule of the terms of all planned transactions between

Highlands and any Baird Family Member. No additional transactions will be executed

without prior consent from MFI and FCS.

g. All monthly repair and maintenance expenditures that exceed budgeted amount by $1,000

or more will require written explanation and cost justification to be included in the

distribution ofmonthly financial statements to MN and FCS.

h. Capital expenditures or leases (operating or financing) which exceed $1,000 will require

written explanation and cost justification to be included in the distribution of monthly,

financial statements to MIFI and FCS.

i. Quarterly meetings to review Highlands financial statements will be conducted no later

than the end ofthe month following the calendar quarter close. Attending will be Mr. &

Mrs. Doug Baird, Mr. & Mrs. Jim Baird, Doug Lenhart, Mike Sherman and Cecil Ccx.

j. Legal and professional fees will be segmented on the income statement between legal,

accounting and secretarial costs. Copies of all professional service invoices will be

forwarded to MN and FCS monthly.

~

High1añ~LLC

-

~p~_3~

o -~

MuFpl’iy Fa~sIr~c.

/

//

Date

Date.

/

/

---

MEMORANDUM

DATE:

January 12, 1998

TO:

Darra, Kay, Stacy, Dee

FROM:

Doug Lenhart

RE:

Highlands Employee getting Farrowing Training

Don Bybee of the Highlands Sow Farm would like to go to Missouri for farrowing

training. He is available to begin at the earliest convenience for the Missouri

Operations. He will be able to stay in Missouri until April 1, 1998.

I would like for him to be set up the same as we did with others as far as providing

housing and a salary of $18,000. We have some Murphy of Missouri Applications for

Employment in our office. I will have Don fill one out and forward it to Dee as soon as

possible.

If anything else needs to be done by us, please contact Jackie.

r

ExhIbit 2

.

L

.1

M 00029

---

MURPHY

FA)A~LYFARMS

g

Farm Name:

Tota’ Number

Total Nunber

Total Number

Tota1 Ntimber

of

B,Ab4~

of ~*dI~

of

Farro*in~

of Farrowing

Emptoyw

Compe~es

Co*pete~des

Competencies

Compet.nc*s

!M!fl!

____

CrlIf

lid

-

Tra~d

C~t1If~ed

_______

________

________

• _______

________

~

~

1~(1~A

~

T~~Y~nStv~

~

_________

________

1J~

(jbtiis

_________

________

-

r

-

~

~thic~r’

____________

____________

~ P

____________

.&~\1~A)

~d~cJ(-

___________

~

__________

___________

—c~)~ç~-~

~-b~

-

Y2-9

__________

_________

__________

~Wrn tQ

Jnnif~r Ke11~

by

~:OOPM

on Thursday1 February

5.

---

M~ 13 ‘99 a8:2e~M

F~m

,IaouarY

l9~

_______

Ge~r~

H~~yw1

_____________________________________________

Sa~re~ay

~f

S~a:e

Ceparrniarit ~f

Eu~ines~Ser/ices

______________________

Uri,ited

Uability

Ccm~any

Oivision

Roam~S7,Hcwfelt ~uiJdirig

____________________________

Sprkig1Ie~d,IL 627E6

~aymel1~ muSf

~ari1a~e~y Cartifled

Iieck.

ca~hiet~cned~.l!IIrc~

a~torney’.i

~~!laok.iHittCi3C.~.ASthe~c

~r

money

;rder,

payable to

‘Secrenary ef SIa~a.~

—

1.

Limited

LJabiflty Company Name:

The Highlands, ~

(T71e LL.C

name mi.ie~

occi~inIrte wc~a

(lmzffie ia

ility

company

~r L.L.C.

and ~a~ino(

~iitàn

tt~e~ernisa

ra~iori,Carp.,

~nccrpora~ed.

Inc., If~.,

ac..

I~mi~~d

p ner~t~tp.

or LP.)

2.

Transacting

business

under sri assumed name

~ Yes

~

No.

I? YES.

a Farm LLC’

~.2O

i~required ~ 13e cenipteted and attacited ~e~ta~O

3.

The address, including county~of its principal place of business. (Post office box alone and do are

unacceptable.) .1122 !rtox Eiqhway 18, Williamsfield

LI~x Coux1t~L),

Zilinois

4.

Federal

Employer Identification Number (F.E.1.N.):

~ft~E:ywT:

~bt~i~d

~ —‘~/~_.7P~~

The Articles of

Organization

are

effective en:

(Check

one)

a)

~L the filing date, or b)

another date later than but riot

more

than ~Odays subsequent

•

to the filing date:_~

•

(month. day. year)

6.

The

registered

agent’s

name and registered

office

address

is:

Registered agent:

Pegistered Office:

_____________________________________________________________________

(P.O. Box alone and

ole

are unacceptable)

7.

Purpose or pur~csesfor which the LLC is organized: Include the business code ~(Form 1065)

•

(U

not ~uEt~cI9i1t~

0

C~’~~rthi~

~Cint,~

on~

or

more

~

~f

e,i~sI~a.)

The producti,on and marketing of 1ivestocl~ and agricultural

commodities and the transactieri of any or all

lawful

businesses

for which limited liability companies

r~taybe

organized under

the

Limited Liability Company Act.

Cc~’O~

•~

~)-~O

8.

The

lafes

date the

company

is to dissolve

12—01—2016

-

or

upon the

occurrence

of events of dissolution state

mcrt~t.uy,year)

in Section 35—1(3) of the Act.

~

ether

events of dissolution enumerated on an attachment.

-~c---.~

/

11l111O~S

Limited Liability Company Act

Th~e.7:~p2~eby

~ct!t~r).

~t

5ta&~

• Artfctes

ci

Organization

•

j L

ED

~C

.

04 ~96

4~ :jj~tjg~~a~.

C-IiORGE

H. R~AN

SECR.ETARX OF

~ilino

~ee

uoc.

rr~rir~l7~wi-ai’,rirn!I~

•

/

Must~ay~wr1tten

‘

Thia apace far uaa by

cre~r~~f~

Qate

/)..

- O 4’ - /~

~

As~gned~ie

5

~cpro’ed~~“

PAID

John

J.

Hatte~y

Nai,i~

-

t6~Jq

Jnf,’~aJ

L.a~t

name

•

~

Suite 402, ~i.ll Arcade

•,

NwTtber

—

Sfreee

Sw/a ~

Galesburg

61401

~flo~

2Z~7C4c~e

Exhibit 4

---

MA~

13 ‘99 ~8~.29AM

P.3

10,

a) Management is vested,

in

whale or fri part, in managers

0 Yes

List

tfleir

names and ~usfr7e.~saddresses

b) Management

is retained, in

whole or in

part, by

the members

List

meir u’~mesand ado’res~s

James

R. Baird

2218 Knox Road lOON

Yates City, IL 61572

Douglas

B. Baird

1124 Knox Highway 5.8

Williamsfield,

IL

(Nama ~/

~2Cc’~cl~#an

or

othef

~

$icngw,~

(Name

if

a corpora

don

or

amer en~iy)

3Jgt~ira

~

(/I~rne1/

~cC,~rjraacr,Oro~,a/

enn~)’)

•

~

—

EYes

ONo

Patricia

A. Baird

2218 Kr~ox Road lOON

Yates City, IL 61572

(Signatures

must

be fri irtk on art

onginal document.

Carbon copy, photocopy or ruCber stamp signatures may only be used

on contormad copies)

LL.C-4

LLC-5..5

9.

Other

provisions

fcr the regulation ot

The

internal affairs

of

the LL.C per Section 5-~(a) (8) included as at~chmertt

Yes

~Nc

65.489

11,

Name(s) & Addrass(e~)al

Organizer(s)

The undersigned

atfimis~

under penalties of

pefuzy,

having a

thorfty

to

sign

hereto,

that

this art~c1esof organization

is

to the

best

of

my knowledge arid belief, true, correct and complete.

Dated

December

3

—

-

96

Sigriat~~reand Name

1.

“4~

/

5Jgriaa~re

J1’ohn

~.

Hattery, Orgaii~.zer

(P/p1p~ntran8~,d~e)

Business Address

2.

3.

Suite 402, Hill Arcade

Niunter

Ga1esbu~g

Sft~et

,

—

Illinois

~‘1~~~wi

.

•

•

61401

-

Sure

~P

CO~9

2.

3.

S(re~r

C/~q7~w,i

$~te

•

-

~pC~dG

NtJm~f

sttg.Jt

clwrow,,

S~a

-

ZpCOda

---

1. Limited Liability Company niame:

The ~igh1ands~ L. L

~

2. File number assigned

by the Secretary of State:

00093521

3. Federal Employer Identification Number (F.E.l.N.):

4,

The registered agents name arid registered office address is:

Registered agent:

John

~egisteredOffice:

(P.O.

Box alone and

do

are

unacceptable),

__________________________________________________________________________

5. The penalties appl?cable to

where appropr~ale)

a)

S

- Failure to file the annual report and

pay the requisite fee prior to the

first

day af the anniversary

manth.

b)

S

_______

Failure to appoint andma:ritain a registered agent ri lllin~isas required.

C)

$

•

~aiIure

to report

the iedenal

employer

i~anth’icationnumber within 90 days of

the

initial filThg.

Total penalty amount (a through C) is $ -

6.

The

undersigned aflirrns, under penalties ~f perjury, having authority to sign heretc, that this penalty form

is

to the best

of my i~nowIedgeand belief, true, correct and complete.

Dated

-

April

/..?

- 19 97

~

-

B.

•

~aird,

(Typa

or

prrni

Me~ber/Mana~

Name arid Title)

NAY

13 ‘99 ~8:29AM

p0rrnLLC”50a15

January

19~4

G~ar9eH.

Ryan

Secretary of State

Department of Business Services

Limited

Liability

Company

Division

Room

3S7,

Hcwlatt Suiidlrig

Springfield, IL 62756

•

Illinois

Limited Liab~1ityCompany Act

PEN~LTY

- RETURN

TO GOOD STANOING

Submit in Duplicate

MuSt

~etypewntten

Payment must’ be made by

cert(ffeo’

che~k,cashier~s

check, Ill/n0/saftomey’s

check.

Illinois

C.P,A.’s check or money

order,

payable to ‘Secreea,y of State.

P.4

Thie

~~4CG

~

uee

~y

Secretary

~i

Slato

~‘~‘—

.It’

,~c~

~

APR 22 1997

Limited Lieb~lityCo~

Div.

Thiz

space foruga by Sec’ernry of

SIaia

Date

Assigned File ~

Filing Fee

•

$

Approved;

36—4127830

J.

Eattery

Fr~tName

• Middle Initial

Arcade

•

Last Name

Suite 402,

Hill

•

Ni~rnbar

Slreat

5uit~~

Galesburg

61401

Knox

C~ry

--

ZIP

Code

County

return

the

limtted lability company to good standing are as follows: (Check arid complete

(It

a~plicant

is a

company ør

ocrier

eriflty.

state name of

corTParly

aria ndlcata wlieltier it is

a

member

or manager

of die LLC.)

---

MAY 13 ‘99 O8:3~AM

P.5

L.LC.FileNumber: 00093521

Filing Deadline is ~riortot:

1

2/0 1 /

1 997

This r~p~rtmust

be RECEIVED in

the

office of

the Sacre~

of

State

prior to

the

anniversary

dateto avoid tale tilingperialtiea

eventual

administrative disscluUon at lie

orgeIli2atiOrt.

Fomi

LLC501 (D)

• j~riueryigg~

George H.

Ryan

Secretary of State — State of

llllno4~

~onIeeticLimited UabIIlty

Company

Annua’ Repert

Filing

Pee $300

Must be typewritten

1. LimIted Liability Company name: Registered

Agent,

Registered Office,

City, IL., ZIP

Code

THE HIGHLANDS,

L.L..C.

JOHN

J

HATTER~

HILL

ARCADE STE 402

GALES9URS XL,

611,01—0000

2. CHANCES ONLY:

REGISTERED AGENT

REGISTERED OFFICE

CITY, IL., ZIP CODE, COUNT?

3. Federal Enip(oyer Identification Number:

_____

36—4127830

4. Address of the office at which the records

required

by

SectIon

1.40 are to be kept

is:

r

1122

Knox Highway 18

Number

Street

Suite

Wil1iams~ie1d,

IL

61489

Knox

•

City, State

ZIP

coce

County

5.

Names and addresses of the managers or,

it

none, the members:

Maine

Nwnber & Street

City, Stalt

ZIP COO

Soled

~,t,

James

R. Baird

0j~

Patricia A.

Baird

,...i

Dcu~1asB. Baird

2218

Knox

Road lOON

Williamsfield,

IL 61489

2218 Knox Road lOON

1124 Knox Highway 18

Williamsfield,

IL 61489

Williamsfield, IL 61489

6. The undersigned

affirms,

under penalties of

perjury having authority to

sign thereto,

that this annual report is to the

best of

my knowledge and

belief,

true, correct and

complete.

Payment may be

made by business firm

check payable to Secretary of State. (It

check

is returned for arty reason this filing

will be nullified)

Return tot

Department of BusLnes~

SeMces

Limited

Liability

Company

Division

Roam 359,

HOWIOtt

building

Sprmgfl&d, IL 62756

lit

~p~licantl~a ~oi7,penyor

other enifly, state name 01 ~i11OW1Y

a14

indi~ieeI’ett~erFin a mambo,

or

rnenager ot iite u.C.)

Dated

-~

~

3/

,

19

~4L~

~7~1a,~i

-~

/

‘

(Signetuf~~~

~

/ James

R.

Baird, Member

/

Type

or

pnnt

NSm,

and life)

fl

L

.It~si~

MBR

MBR

LLC~~

---

MAY

13 ‘99 ~8:31AM

P.5

George

H.

Ryan

Secretary

of State

—

State

of

flulnols

Dume~tlcUmited Liability Company

Artnu&

Report

SEE 8~LOW

Submit Jn

Di~pticztte

Must be

typewritten

1. Limited Liability

Company name:

Reglster~d

Agent,

Registered Office, CIty, IL.,

ZIP

Code

LT~

THE 1~IGHL,ANDS, L.L.~.

JOHN J HATTEP..Y

HILL. ~CADZ STE 402

GALES8URG IL, 61401—0000

2. CHANGES

ONLY:

REGtSTERED AQENT

REGISTERED OFFICE

CITY,

IL., ZIP CODE,

COUNTY

3. Federal Employer ldentlficatiort Number:

4,

Address of the off e at which the records required by Section 1-40 are to be kept is;

36—4127830

FILING FEE

HAS LLC ELECTED TO ~E

GOVERNED 8? 1997

AMENDATORY ACT

FILING

flU

44

FILI1’~G F~E $3~U

PAE~

~CT~g1~g8

Hi

1122

Kt~ox~ighway 18

•

• NUITth~I’

Street

SuitS

Williamefiald, IL

61489

•

•

~floX

C~ly,

Slate

ZIPCCOe

Cou’,ty

5.

Names

and addresses

of the managers or,

i~

none, the members:

7~ijr~e

Mumfar & Str~at

City. Stnla

ZIP COO

SaiOCi

~,1OP1MS~

~‘JatnesR, Baird

2218 Knox Road IOO~

Williamsfield, IL

6L~89

MBR

-

PatrIcia

A.

Baird

2218

Knox Road 1OO~

•

Wililaisfield, IL 61489

MBR

-

~..

~ Dcu~1asB. BaIrd

1124 Knoi

Highway 18

Wi11ia~sfi~1d,IL

51489

MBR

6.. The undersigned affirms, under penalties of perjury, having authority to sign thereto, that this annual report is to the best of

my knowledge

and belief, true,

correct and complete.

Payment may be

made by business fIrm

check payable

to Secretary of State. (If

check is

returned forany reason this filing

will be nullified)

Return to:

Department

of

8usiriess Services

Limited

Liability

Company Division

Room 359, 1-lawleft Building

Sprin~fleld,

1L.

62756

Dated

~

—~c&

,

19

______

17

“~

~~eir~

• James R.

Baird, Member

—

(Type or Orint Name and 1~o)

(ifao~tJcanta

a ~mpeny

or o~df

eutaty, eu. iwne

0? ~II~Pau1y

and indicate wt,ether it a a n,e~n~eror menogeu’ of s~oLLC.I

L.L.C.FileNumber: 00093521

—

Fllirtg Deadline Is! orto:.JA! 01 / 1998

(~iiisreport must b~RECEIVED in

the

offIce of the Secretary I

of

Slate priorto the

anniversary

date tO

avoie

late

fling penalties

I

~~venttrni

administratIve dlsaeiUtisn

of

its organization.

~_j

Form

LLC5O~i(D)

Jartuaryl9M

tJ.C~22

---

~y- ~

GEM~AL

•

~AX~0,

•

217 ~247740

~HONE:

217/782-9031

~oice)

~

217/5244740 (Fax

#)

•

217/782-1

91

(Fax #)

TotaL aumber

p

s, instud~ngcover s

SUBJE

MS:

__

•

___IfaUpage~~

•ThistUOrney-privilege~and/or

conL~eiitia1in!or~naUonis

intend only for

the

use

of

the

entity

to which ft

is

addr~ed.It

you

ha,e

received th~s

error, please notify

the

gcnd~ret~fletelephone

flUfnber

ebo~e.~ edvosed that the

retention

J~

‘eJ~v ~ ~ 4~~,A7Ieeur*e~

~

i~

s~t*tty

praitiOL~o’.

500

ScUth

Sca’ond

S1t~C4

SpI4n~a14,IUIZIO.S

62’706 (217)

ias~ioco•

~

(5~1)

~

•

~AX~ çc~n1ae-.~7o4e

‘I~A

~Me~

~

Street, c~g~ago,

flhinais 60601 (~

15) 5~4.3OOO

•

‘rDD: (3 t2) 814.3374

•

FAXn (~Z) Sld.3506 ~

Qmc~

o~~

STATE OF

ILLINOIS

GjE

.1P6 1999

Jim

Ryan

FACSIMILE COVER SHEET

TO~

$1P~4~

~

~

c ~

1~AX#:

DATE:

~3~O

-

S

~

.

•.~

FROM:

..-Qfflce

of the Attorney General

Ezivironme~ta1

~h~L

B’~reau

L~~?

SOC

South

Secoi~d

StreeL

Springfield,

IllinoIs

62706

rrJ)

No_

Hard

cop~i

A

aa aoofl as possible.

---

STATE OF ILLINOIS

)

SS

COUNTY

OF

PEORIA

)

AFFIDAVIT

I, ERIC 0.

ACKERMAN,

after

being

duly sworn

and

upon

oath,

state as follows:

1.

I have firsthand knowledge of the matters stated herein, and could and would

testify competently thereto if called as a witness.

2.

I am employed by the Illinois Environmental Protection Agency (“Illinois EPA”) as

a field inspector and environmental protection engineer, stationed at the Peoria Regional Office

of the Illinois Environmental Protection Agency. I have been employed with the Illinois EPA in

this capacity for over twenty years. I am assigned to the Illinois EPA’s agriculture pollution

program and concentrate the vast majority of my time inspecting and evaluating agricultural

facilities.

3.

I am one of the inspectors that has been assigned to and involved in site

investigations and inspections pertinent to allegations of air and water pollution violations at The

Highlands facility, which is the facility that is the subject of the case of

People v. The Highlands,

LLC and Murphy Farms, Inc.,

PCB No.

00-104.

4.

As the environmental protection engineer assigned to the Illinois EPA’s

agriculture program, I am a custodian of the Illinois EPA’s field office file regarding

documentation accumulated pertinent to and regarding The Highlands facility. This file is kept

in the ordinary course of business and it contains copies of all inspection reports generated

regarding the facility, as well as copies of all other documentation of correspondence,

communications, conversations and information generated and obtained by the office regarding

the subject facility.

S

5.

I have received communications and correspondence about Murphy Farms, Inc.

interest and efforts to establish a sow facility in Illinois, since 1996. In 1996, I received

---

communication from Doug Lenhart, representing himself as Murphy Farm, Inc.’s designated

agent for Illinois, regarding the siting and establishment of asow facility in the vicinity of Peoria,

in an area contained within the Illinois EPA’s Peoria Region.

6.

To my knowledge and belief, based on communications I received from Doug

Lenhart, concerned citizens and David lnskeep, Murphy Farms, Inc., prior to establishing a

relationship and contract with Doug Baird, entered into discussions with David lnskeep to locate

a 3,600 head sow facility at or near the then proposed location of what later became Inwood

Dairy near Elmwood, Illinois. At a point in time, it became apparent that Murphy Farms, Inc.

was no longer considering contracting with David Inskeep, but in factwas working with Doug

Baird in the establishment of a sow facility approximately three miles south of Williamsfield in

Knox County that later did in fact become established as an operating sow facility known as

The Highlands. It is this facility, the facility approximately three miles south of Williamsfield, that

is the subject of the case of

People v. The Highlands, LLC and Murphy Farms, Inc.,

PCB No.

00-104.

7.

Attached to this affidavit, are exhibits that are true and correct copies of

documents contained in the Peoria Regional Office’s file for The Highlands facility.

8.

Exhibit 1, is a true and correct copy of a telephone conversation record that I

wrote regarding a phone conversation I had with Doug Lenhart on July 5, 1996, at 10:15 a.m.

regardingMurphy Farms, Inc.’s intent to establish a 3,600

sow operation in

the vicinity of

Peoria. The purpose of Mr. Lenhart’s call was to discuss the requirements of the Subtitle E,

Agriculture Pollution Related Regulations. In the course ofthe conversation, Mr. Lenhart

indicated he personally had talked to the Illinois Department of Agriculture regarding the

requirements of that department, which included siting requirements pursuant to the Illinois

Livestock Management Facilities Act.

9.

Exhibit 2, is a true and correct copy of a document retained in the Illinois EPA’s

---

field office’s file on The Highlands facility. It is a handwritten record of a phone conversation

with Doug Lenhart. In that conversation, Mr. Lenhart requested Illinois Environmental

Protection Agency input regarding site selection for The Highlands facility.

10.

Exhibit 3 is a true and correct copy of a letter sent to A.G. Taylor of the Illinois

Environmental Protection Agency by Doug Lenhart, Illinois Development Manager for Murphy

Family Farms. This document is contained within the Illinois EPA Peoria Region field office’s

files, and is kept in this file pursuant to customary business practices in which the office

accumulates copies all documentation relevant to a facility in

its

field file. In this letter, Mr.

Lenhart states that Murphy Family Farms operates pork production facilities in several

Midwestern states, including Illinois. The letter is an invitation to an environmental summit in

which information is to be provided regarding Murphy Family Farms programs utilized at its

operations for environmental protection. Upon information and belief, Murphy Family Farms’

only involvement in hog production in Illinois has been with contract operations. That is, one

entity owned the property and Murphy Farms, Inc. or Murphy Family Farms, which to my

knowledge is essentially the same entity, owned the hogs. Thus, Mr. Lenhart’s representation

in this letter would be with regard to contract operations.

S

11.

Exhibit 4, is a true and correct copy of a document provided by Doug Baird to me

and other employees of the Illinois EPA outlining the design and construction of The Highlands

facility and also outlining the contractual responsibility of The Highlands and Murphy Farms in

the operation of The Highlands facility.

12.

Based on information and belief, Murphy Farms, Inc. participated in the selection

and establishment of waste management systems at The Highlands. Murphy Farms, Inc.

facilitated Doug Baird’s introduction to and exploration of the use of the BION system, and

Doug Lenhart and other Murphy Farms, Inc. personnel were involved in the discussions

pertinent to the establishment and operation of the BION system at the Highlands facility.

---

Further, upon information and belief, Murphy Farms, Inc. personnel have been involved in the

analysis and design of modifications made to the waste management system at The Highlands

since BION Technologies ended its contract at The Highlands.

13.

Under the penalties as provided by law pursuant to Section 1-109 of the Code of

Civil Procedure, the undersigned certifies that the statements set forth in this instrument are

true and correct, except as to matters stated to be on information and belief and as to such

matters the undersigned certifies as aforesaid that he verily believes the same to be true.

Further affiant sayeth not.

S

S

~

~

ERIC 0. ACKERMAN

Subscribed and sworn to before me

this &

r

day of / ~

,

2004.

NOTARYPUBLIC’

OFFICE SEAL

S

JANETTE K. GODIN

NOTARY PUBLIC STATE OF ILLINOIS

MY COMM’.~”~

~FS

07-25-2006

---

STATE OF ILLINOIS

ENVIRONMENTAL

PROTECTION AGENCY

DIVISION OF WATER ~LLtTTION CONTROL

PEORIA REGIO~L OFFICE

PEORIA

COUNTY

TELEPHONE CONVERSATION RECORD

RE:

Mur~hv Farms

-

Sow Operation

CONVERSATION WITH: Doug Lenhart (417)667-3397

-(

)

ICalled Party

(X) Party Called Me

DATE:

July 5, 1996

TIME: 10:15 ~.M.

Doug Lenhart contacted the Peoria office to discuss the

Subtitle E requirements. Mr. Lenhart is with Murphy Farms in

Nevada, MO. He will be moving to Illinois to become Director of

Illinois Operations with Murphy Farms.. They intend to construct

a 3,600 sow operation in western Peoria County.. The facility is

locally owned, but under

contractS?~

supplies all pigs,

feed,

medication, etc. The facility proposes to utilize an anaerobic

lagoon with center pivot irrigation unit. The facility

will

£arrow daily with pigs taken off site at 17 days of age. Four

separate off-site nurseries are proposed to take the pigs from 10

lbs. to 45 lbs. These nurseries

will

be within a 30-mile radius

of the site and probably in Knox County. EDS Engineering will be

on site in mid-July. Earthwork to begin in mid-August and first

sows on

site approximately January

1.,

1997. I advised

Mr. Lenhart of the need for a stor~ater construction permit if

greater than 5 acres were disturbed. We also discussed NPDES

requirements and proper lagoon construction.

Mr. Lenhart advised that he had

previously contacted IDOA

regarding the requirements of that department.

~

Signed

a~~)

EOA/lb

S

cc:-DWPC/FOS & RU

______

-Bruce Yurdin/Dan Heacock

-A.G. Taylor

Exhibit 1

---

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rLu~J-i

Ff~X

NO

3096935467

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Exhibit 2

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---

V—UV--~i~

ij’~)f~ltDi4

Senterr,b~r

4. 1.997

,.rr

NiA

~1_

~_rC.r~..d

NV

~U~O~ii~4O(

ALA

4.~

MURPHY

F~A

MI ~ Y

F A P

Dear Represen~ve:

AG. Taylor

Lllii,.ois

Exivironmen~lProtection Azency

Fax:

217-7~S-1~lZ

You and thj~e~exub~a o(your agency are invited

to an ~Evfratlment2l

Sn~it”

s

onscired by Murphy Family

Farms. The p~po~eof the meethg is to

shae

information about the p~gramswe use to protect ourccunn~y’s

naturat resources. Murphy Family

F~xm~

operates pork production facilities itt se’/eral

Midwesr~

states,

~inhl~i3~

S

The meeting will be held on Tuesday, Septetnber

16,

at the Crowne

Plaza

in Spt~igfield,XL. We hope you can

join

thts prestigimxs v~aup

The En~’iroutnenra1Stnr~itwes draigned to infárm you about how pro-active Uvestoek proth era and specifically

Murphy Family Farms go to greatlengths to operate r~p~sib1y.Our

rent pragrem5 which are h~pisce

throii~houtthe company and our a -goIng research t~reduce odor. use manure as ferti1~-,and m~iegesc,il

m±ieruswill be covered by featured avea.kees.

The speakers for the mecth~gare technically oriented prof~siona!s,not public rektiorxs pitch men. A rouniltable

discussion is also part of the meeting because

we

value the opportunity to l~nmore about the isroes eottcerning

the people of flflnoi~.

Since lunch will be provided, we will be calling to cnn~rxxiyour a~endanca.If you have any qu tiotte or re~vire

additional information egarding the Envhumneatal Sunaniit, plesse feel free

to

contact rxme

ax

309.344-49~O.

W~

hope you can join us ou September 16 for an interesting and infortuativo scasioxi..

Sincere lv,

tD~ Lerth~

Illinois Development Manager

Murphy Family Farms

Enclosin~e:

256

South

Sonag~taha

I~ad,

Galesburg, IX.., 61401, (309) 344-4W70,

FAX (309) 344.-4973

r u~

1:37

Exhibit 3

---

NOV—05—99 FRI 12:37

IEP~PORII~

F~XNO. 3096935467

P. 02

THE HIGHLANDS LLC

3600 SOW FARM

OWNED AND OPERATED BY

DOUGLAS B.

AND

JAMES

R BAIRD

CONTP~ACTEDWITH

MURPHY FAMILY FARMS

LAGOON

ca~

~?

~I

~

~11

~

One time

capacity

Specifications

Sows Gestation

Saws not bred

Boars

Saws

Lactating

Replacement

nursery

Replacement finisher

Total

Animal

Units

2900 head

300 bead

20 head

450 h~d

300

head

S00

head

1810

head

I-..

1

~~S:~:.SSS-.

:SSJ

~

1

LAGOON

c~j~

+1

Exhibit 4

---

NOV—05-99 FRI 12:38

IEP~?EORJ8

F~XNO.

3096935467

P.03

S

Building

Specifications

Gestation

78

X

578

feet

Breeding

76X341.

feet

Farrowing

61 X

597

feet

(8 rooms

-

72 crates each)

Nursery

26 X 66

feet

S

Finisher

53 X

171

feet

S

Office and

Shower room

40 X 40

feet

Garage

12 X

40

feet

These buildings are wood framed, metal

covered

with tunnel ventilation

and curtain

sides.

Labor Force

Annual projected payroll

5380,000

15 Employee Positions:

Sow Farm Manager

Trainer

Breeding Supervisor

Fan-owing

Supervisor

2 Assistant Supervisors

9

Laborers

Entry

level position starts

at

56.50

per hour.

Employee Benefit Programs

Health Insurance

Life

Insurance

Paid

Vacation

7 paid Holidays /

Funeral leave

Profit Share Plan

401K plan

---

NOV-05-99 FRI l~2:38

F~XNO. 3096935467

Manure

~2.nagement

Buildiiig pits;

1

a

in. deep Pull plug system

Maximum e~1uentlevel 10

inches

Total gallons ofeffluent produced ~er year

Two Stage Lagoon

2,506,775

gal

Capacity

Primary (Cell No. 1)291 X 431 feet 2,9 ac. --11,107,276 gal

(Anaerobic biological breakdown)

Secondary (Cell No. 2) 396 X 396

feet

3.6

ac.

- -

13,613,974 gal

(Water

used

for pit recharge and

Irrigation)

Lagoofl cells are lined

with one

foot.

packed clay liner to

95

compaction, top of berm

covered with

synthetic liner.

S

Illinois law required

core borc

sample 50 feet below the

bottom

of lagoon revealed

solid clay

soil, no

aquifer material and seasonal water table one foot below the bottom oflagoon.

TOP

or 8SPJ.1 EL

=

308.3

FLOOR

EL ~

95.5

#‘

~

EL.

=

105.8

Nutrient Application

Total nutrients produced by

this unit would be just ovr

9,000,000

gallons: Planned low pressure

centerpivot

irrigation with drop

nozzles for large droplet size

-

220

acres needed

to comply with

Livestock Mananement Facilities

Act.

As

new

methods

are developed and

cost effective they

will

be introduced.

I’

IEP~ PE0RIi~

P. 04

CELL

,-~-

~

CORE TRENCH~

NOTE: CLAY LINER & CLAY CORE TRENCH

COMPACICO TO 95

STANOARD PROCTOR

DENS1T~

One acre inch of

water equals

27,500 gal., 220 acres X 1 inch

=

9,1~5,0O0gallons

---

NOV—05—99

FRI 12:39

JEPA PEORIA

FAX NO. 3096935467

P05

Annual Consumption

S

Water

-

-2

wells

687

-

690 ~et deep

Total usage of

25.000

gal / day

Kilowatt

hot.ffs

electricity

80,000!month

S

960,000

kwiilyear

Propane

gas

42,600 gal

Emergency power

supply

175 kw genset

Corn

144,431 bu.

S

Soybean meal

756 tons

=

37,778 bu.

Real..estate

Taxes

S

Cdunty

S

$ 1,980.00

Coimty Pension

5

418.00

Elba

$

3,696.00

Elba

Township

Pension5

$

110.00

UnIt

School

Dlst

210

$

12,584.00

Unit2IO

Pension

$

528.00

Jr. College Dist

518

.$

1,320.00

Williamsfield Fire

Dept.

$

748.00

MTA

5

154.00

Williamsfield Public

Library

$

374.00

Total

$21,912.00

---

NOV—08-99 MON 08:41

TEPA PEORIA

FAX NO.

3096935467

P02

The Highlands

is

a contract Sow Farm owned

by Jim

and Doug Baird

contacting with Murphy Family Farms.

The

Highlands will artificially

breed sows using fresh semen brought in daily. Boars will be used for

checking heat. The Highlands will farrow 170 sows per week with the

baby pig being

weaned

at 17 to 21 days weighing approximately 10#. The

baby pigs are then sent to

other

locations in the state of

fflinois to be raised

to

market

weight.

The

cone-actual arrangement between Murphy Family Fains and The

Highlands can

be briefly

described as the following.

S

Jim and Doug Baird

Provides

Land & Buildings

E~ployees

S

Employee Benefits

Responsible

for Manure

Management

Option

to

contract

corn

Non Pig Consumables,

ie. peas, paper, soap, etc.

S

Dead

Animal Disposal

Dead animals and afterbirth will be stored hi a refrigerated’frailer

-

Located

at Baird Seed

Farm,

picked up

regularly

by

National By-Products.

Murphy Family

Farms

Provides

Feed

Breeding Stock

Training

of

~mp1oyees

Transportation

ofPigs

Medication & Veterinary service

Anything that

goes in

or on the

snimal,

le. Syringe,

needles, Marking

sticks,

etc.

The Highlands

manure management plan meets or exceeds

the

flhinois

S

Livestock

Management

Facilities Act. The

Highlands wifl be applying

manure nu~entsat rates

not to

exceed

plant

utilization.

---

NOV—08-99 NON 08:42

IEPA PEORIA

FAX

NO. 3096935467

P. 03

The

Highlands

A

partial listing of annual nor~pig consumables

Shampoo

Liquid shower soap

Hand cl~aner(orange)

Ear plugs

Spray deodorant

tinderwear:

mens briefs

mens boxers

women’s brie±~

women’s sport

bras

T

-

shIrts

Coveralls

Socks

Bandanas

Sweet shirts

Boots

Boot insoles

Bleach

Laundry soap

Latex gloves

Dish soap

46

bottles

9gal

9gal

541

pairs

47

cans

38

17

4

4

54

60

lOOpaiis

20

14

40

40

.22

gal

1,000 pounds

1,900

pairs

7

bottles

Toilet

paper

Band-aid

Push Brooms

Clothes

pins

Heat lamps

S

Incandescent

60 wt.

Legal pads

S

Mernobooks3X5

Assorted ink pens

Pencils

Paper clips

-

large

-small

Computer paper

Particle mask

Coffee filters

Coffee

Electrical tape

Duct tape

OB lube

Paint

sticks

5lOrolls

2 cases

7

1,235

300 bulbs

122 bulbs

69

37

258

50

450

2 boxes

2 boxes

250

350

30 pounds

85

rolls

7 rolls

95

gal

I ,132

---

STATE

OF ILLINOIS

)

SS

COUNTY OF SANGAMON

)

AFFIDAVIT

I, BRUCE YURDIN, after being duly sworn and upon oath, state as follows:

1.

I have firsthand knowledge of the matters stated herein, and could and would

testify competently thereto if called as a witness.

2.

I am employed by

the

Illinois Environmental Protection Agency (“Illinois EPA”) as

the manager of the Watershed Management Section. In this position, I have managerial

responsibilities for the administration of the National Pollution Elimination Discharge System

(“NPDES”) program as it applies to agricultural facilities.

3.

In this capacity, I am at times requested to assist

with

questions pertinent to

watershed pollutional issues. I also receive and respond to inquiries from the regulated

community regarding the NPDES permit program

as.

it pertains to agriculture facilities.

4.

Exhibit

1,

attached to this affidavit, is a true

and correct copy of an email

I wrote in

which

I documented a question that arose in

the course of the Illinois

EPA’s discussions and

communications with Doug

Lenhart of Murphy

Family Farms regarding the waste management

system to be utilized at The Highlands sow facility.

ASS IS

obvious from the subject line of the

email that is attached hereto as Exhibit 1 the sow facility that is the topic of discussion is the

Baird facility, which is also known as The Highlands and is the subject of the case of

People v.

The Highlands, LLC and Murphy Farms, Inc.,

PCB No. 00-104.

5.

Exhibit 2, attached to this affidavit, is a true and correct copy of an email I wrote in

which I documented questions and issues that arose in the course of the Illinois EPA’s

discussions and communications with Doug Lenhart of Murphy Family Farms regarding the

S

waste management system in use at The Highlands sow facility. It documents information

S

1

---

provided by Doug regarding his interactions with BION personnel regarding the system in place

at The Highlands and information he wished to communicate to me regarding modifications

made and issues that had arose relative to the BION system at The Highlands

facility.

6.

Group Exhibit 3 is a letter I sent to select state agriculture and environmental

agencies seeking information pertinent to BION Technologies, Inc. waste management systems.

The exact nature of the request is set out on the second page of my letter of June 25, 1998.

Also, as set forth in the letter on the second page, upon information and belief, all of the BION

systems involved in my inquiry, that were either under construction or in place and operating at

the time, were installed at facilities affiliated

with Murphy Family Farms. It was my understanding

at the time, in part based on this inquiry, that the BION systems in use across the continental

United States were commonly implemented for and at facilities affiliated with or owned by

Murphy FamiIy~Farms.

S

S

7.

Exhibit 4, attached to this affidavit, is a true and correct copy of an e-mail I

received in my capacity as unit supervisor, written by Dan Heacock, an Illinois EPA engineer that

I supervise within my unit. In the e-mail, Dan Heacock documented a conversation he had with

Doug Lenhart of Murphy Family Farms in July of 1996, in which Mr. Lenhart was seeking

information on stormwater permit requirements. In the course of the conversation, as

documented in the email, Mr. Lenhart indicated Murphy Family Farms was calling regarding a

S

potential swIne operation to be located in Peoria County and he indicated the typical Murphy

Family Farm operation to be a 3600-sow operation.

8.

Under the penalties as provided by law pursuant to Section 1-109 of the Code of

Civil Procedure, the undersigned certifies that the statements set forth in this instrument are true

and correct, except as to matters stated to be on information and belief and as to such matters

the undersigned certifies as aforesaid that he verily believes the same to be true.

2

---

Further affiant sayeth not.

Subscribed and sworn to before me

this~~~~’day of

~1~P2

~

2004.

~

NOTARY PUBLIC

~

:~

OFFICIAL SEAL

8

CYNTHIA L. WOLFE

8

NOTARY

pusuc,

STATE OF IWNOIS

:~

MY COMMISSION

~

EXPIRES 3-20-2007

:~

BRUCE YURDIN

3

---

NOV-29-2004

NON 12:41 PN ENVIRONIIENTAL

FAX

NO. 2175247740

P, 02/17

S

__

~Mox

~

From:

Bruce

Yurdin

To:

AG and FOS Ag

Engineers, Rich i~arrington

S

DatQ:

12/11/97 12:2~pm

subject:

Baird Farm Ready

t~Sprout Pigs -For~arded

AG-

S

r

don’t get the impression that this is

the same waste system ~en±iart ta.lked

to us about

several weeks ago. I don’t reme~iberanything

at

that time about

an aeration

system--solids

separation and a

covered lagoon,

but not aeration.

Did I miss something?

bjy

S

C~/’,y.

-/-1

—

EXHIBIT 1

---

NOV-29-2004 NON

12:42

PN

ENVIRONNENTAL

FAX NO. 2175247740

P.

03/17

From:

Bruce Yurdin

S

~

S

~

To:

AG Taylor, Eric Ackerman

~/2s/sa

1:55cm

Subject:

~

I spoke to Doug this morning.

He is having trouble getting IDOA’s attention

so a firm date has not been set on the meeting in Henry County.

(In case I

failed to

mention

this yesterday, Eric, the public

meeting was to be in

Atkinson, tentatively.)

Due to ccn~ljcts and the holiday, Doug is leaning

toward the week of

7/13.

He will advise later.

S

S

Doug went on

to

discuss conversations he had yesterday with BIOL’T.

He says he

told them that there is a real

prob.lem at the Highlands and it has to be

fixed.

According- to Doug, Duane Stutzman of BIO~ countered, that:

1. BION is disappointed that the owner

has moved so slowly on in9talling- the

baffle and the last aerator, both in the 3rd cell.

2. EION seems to put high priority in the value of the cuality of the

recycled/flush water that is pum~ed into the pits from

the 3rd cell. Their

statement, through Doug, was that this high 02-low solids water has alot to do

with the operations in cell

#1. BIObT believes this cell is

now overloaded,

apparently due to the poor performance of the

3rd cell

(this is an issue--the

overloadidg of

cel l~1-

-

that

AG and I brought up when we talked to Doug cm

BION will

be at the Highlands on ~/27 and Doug invited us to attend.

1

declined.

Doug also suggested that he may arrange for BION, probably Steve

Pagano--the

BION rep. assigned to this project, to come in for

a meeting with

us

in Spfld.

S

One

Last item: Doug is concerned about

how FOS-Peoria will

react. I

attempted to explain that FOS is in

a

tight spot, they receive the ccmtlaints,

donc have many options, etc, etc. He seems to view FOS as more reactive,

maybe more eager to press an issue (my words, not his)

.

Be advised.

One more last item: The letter to the states asking about

BION goes out

today, pretty much

as

you saw it. I’m thinking that

a separate letter to BIONS

may be useful, however

Doug

said yesterday that he would ask

BION for mere

details en performance criteria.

I may wait until we get to meet with BION,

if that happens (Doug said Spfld, but a meeting at the SitC may be

better--I’ll

ad.vise

you both when that gets

set up)

.

S

bj y

CC:

Dan Heacock, Tim Kiuge

~

—

c:

~

~

~

—

~

EXHIBIT 2

---

NOV—29—2004 MON 12:42 PM ENVIRONNENTAL

FAX

NO.

2175247740

P. 04/17

June25,

1998

ILLINOIS ENVIRONMENTAL PROTECTION AGENCY

2021

North Grand

Avenue East.

P.O.

Box 19276,

Springfield.

Illinois 62794-9276

Mnr~A. Cads, Director

Mr. Robert Schoenecke

Oldahoima Department of Agriculture

2800

North

Lincoln Boulevard

Oklahoma

City, OK 73105

Mr.

Dennis Ramsey

North

Carolina Department of Water Quality

P.O. Box 29535

Raleigh. NC 27626-0535

Mr. Ubbo Agena

Iowa Department of Natural Resources

Nonpoinc Source Pollution

Water Quality Section

Wallace State Office Building

900 East Grand

Des Moines, IA 50319

Mr. David Hoim

Colorado Department of Health

arid Environment

Water Quality Control Division

WGCD-DO-32

4300 Cherry Creek Drive South

Denver, CO 80222

S

S

S

Gentlemen:

Mr. Donald Carison

Kansas Department of Health and Environment

Building 283

Topeka, KS 66620

Mr. Randy

Cla.rkson

S

Missouri Department of Natural Resources

P.O. Box 176

Jefferson City, MO 65102

Mr.

Kiran Bhayani

Utah Division

of Water Quality

P.O. Box 144870

S

Salt Lake City, UT 84114

Mr. N. 0. Kaul

S

New

York Department

of Environmental Conservation

Division of Water

50 Wolf Road

S

Albany, NY 12233

The Illinois EPA is currently reviewing the operations of a new swine farm in

the

north~centralpart of this state. This

facility is now operating at 3650 sows, farrow to wean (approximately 14 days old). The owner of the swine operation

plans to expand this facility to approximately 7300 sows. Our interest in this facility in particular is in regard to the

generation of odors. The livestock waste at this facility is treated under a system designed by BION Environmental

Thcbnologies. Inc. (BION).

Ba.sed on information tiled by BION with the Securities and Exchange Commission in their May 1998 quarterly report,

BION cites several examples where their designs are

now under consideration or are

in use. These locationslt’acilities

are:

I.

Mulupie in.staUations

at Circle Four Farm, Phase II. Milford, Utah. for riot less than 10.000 sows,

32.000

nursery

pigs and 40,000 finishing hogs.

2. Three (3) installations in

Kansas tone in Lane

County and two in Hodgeman County), each for not less than 11.000

sews,

JSS:

~

S

‘~55.Sa

~

,.u~

GROUP EXHIBIT 3

---

NOV—29—2004

MON

12:43

PI’l ENVIRONMENTAL

FAX

NO.

2175247740 .

P. 05/17

3. One (1) installation in Barton County, Missouri for not less

than

75,000 sows.

4. Two to four (2-4) installations in the area of Laverne, Oklahoma for not less than 40,000 finishing hogs.

5. One (1) installation at the Squire sow farm in Bladen County,

North

Carolina for not less than 3600 sows. A

separate demonstration unit is also cited, although the location and size

are

not specified,

6. One (I’) demonsri~adoninstallation in Iowa fOr not less than 3300 finishing hogs.

All of the above

are

facilities affiliated with Murnhy Family Farms. In addition the SEC report also cites an

aereement with Bowman Family farms of Wray,Colorado for 36 treatment units in two unspecified states, arid a unit

near Hermitage, New

York (believed

to be a dairy facility).

S

We are interested in obtaining any information submitted to your office by BION or the

facility

owners/operators

regarding

the basis of design for the facilities in your state. In addition

to

the BION

plans and specifications for the

facilities, please also provide information on the stams or existence of state odor control standards, guidelines or

monitoring to which these systems must adhere, and the existence at’

compliance or enforcement actions taken by your

state

against

these facilities for problems associated with the livestock waste treatment system desigri or odor

generation problems.

Than.k

you for yo~ircooperation.

We

understand that in certain instances the information we have requested may be

desi~iacedas proprietary or confidential by BION. If this is the case, please advise as to how the information may

be obtained in accordance with your rules for this type of proterted data, If you are interested in our compiled

findings, please advise. I can he reached

at

the above phone number, address or by Email ac epal

l77~epa.stace.il.us.

Sincerely,

~~~J(Yurdin

M~anager,Watershed Unit

Permit Section

Di~4sionafWater Pollution Control

cc: EPA, DWPC. FO.S, Peoria

---

P. 06/17

NOV-29-2004 MON 12:43

PM ENVIRONMENTAL

FAX NO.

2175247740

DEPARTMENT OF E~IRO~1ENTALQUALITY

DtVTSION OF WATER

QUALITY

Michael 0.

L~avitz

C~v~i’nor

Dianne P~.

t4itheii. Ph.D.

£x~.zt8j\..,C)ir~ctor

Don

A. ç~tler.

P.E.

2~3North

1460 West

P.O.

Box

1441370

Salt Lake City. (kah ~4I 1 4.48’70

(501)

535-6

146

(SOt) 535.6016 Fa~

(501)

536-44)4

T.D.D.

ww.dcq.~Lite.ut.u~

Web

July22,

1998

Mr.

Bruce J

Yurdin

Illinois Division of Water PoUution Control

P.O. Box 19276

Springfield,

IL 62794-9276

Dear Mr. Yurdin:

SUBJ’E CT;

BION Technologies Inc.

JUL 2 7

‘1998

ILLINOIS EN

VIRONMENT~~~

pROTECTION

AGENCY

BOw/WPC/~MlTSECTION

BION Technologies Inc. currently has a single system proposed for permitting in

Utah

for a complex

known as Circle Four Farms. It is to

serve

40,000 finishing hogs. ‘It consists of the

usual reactors

associated with BION systems. The general design basis for BION

systems is

confidential.

However,

BION’s

generalcriteria can obtained from thern’under certain conditions.

Neither the proposed permit nor this statecurrently have standards for odorcontrolor the monitoring

ofsuch. An enforcement action was taken against the farm unrelated to BION systems. The most

common problem

occurring at these

farms is accidental disconnection of the wastewater conveyance

piping.

This usually occurs due

to the impact of vehicles with cleanout structures which are

connected to pipelines.

S

If you have any further questions, please contact Mz~.David Rupp of our office.

esign Evaluation Section

DAR:dr

Sincerely,

‘iayani, ~.E., D.E.E., ivlanager

F.’~Ior~o.1&c.NILLnqu~’y

FILE;Ajiu~l

~

Mn~j.~

---

NOV-29-2004 MON 12:44 PM ENVIRONMENTAL

FAX

NO.

2175247740

P. 07/17

Roy Rorner, Governor

S

STAT.E

‘‘. ‘~ ,

OF

“..‘

~OL~T~ADO

Patti Shwayckr, E*ecucive Director

S

Dedicated

to

pro

cacting

a,id improving the health and environmenc

ot’the

people of Colorado

.

.:

4300

Cherry Creek Dr.

S.

Laboratory

and Radiation Ser4ce~Division

‘~

Denvcr, Colorado 8024~.1

5630

SlOG Lowry

Blvd.

Phone (303) 6~2-20O0

Denver CO SO220.~928

,

- .

..

5

5

Located in Glendatc, Colorado

(303) 692.3090

..—--

S

S , ‘

•~,

~

Deparunent

ht~//cdph~wco

~a

- Q

4/

—

.

~1

~ of~ibhc~~th

July

13, 1998

.

S

Mr. Bruce J. Yurdin

.

Manager, Watershed Unit

Permit Section

Division of Water Pollution Control

Illinois Environmental Protection Agency

-

1021 North Grand Avenue East

S

P.O. Box 19276

5

Springfield, Illinois 62794—9276

5

Re: col~rado’s Experience with BION Environmental Technologies,

Inc.

Dear Mr. lurdin:

In reply to your request for information

on Colorado’s experience

with BION

designs,

we have not received a submittal from BIO~’T as

of this time. Your reference to the Bowman Family Farms proposal

is still a proposal.

We have only been provided limited

information on the BION process much like your SEC information.

However based on the limited information available, our

impression of the process is that it is temperature dependent and

as such it would be subject

to reduced efficiency during cold,.

periods~

currently Colorado has no odor control standards for agricultural

facilities because state law specifically exempts these

facilities. However, there is art initiative underway to create

such standards for corporate hog farm facilities. This

initiative’s focus for odors is anaerobic treatment processes and

the need to capture and treat off gases.

should you have any further questions of our program, please

contact me at (303) 692—3561. Also, I would be interested in the

outcome of your BION inquiry.

Sincerely,

Derald Lang, P.E.

---

P. 08/17

NOV—29—2004 MON 12:44 PM ENVIRONMENTAL

FAX

NO. 2176247740

---

NOV—29—2004 MON 12:45 PM ENVIRONMENTAL

FAX NO. 2175247740

P. 09/17

ILLINOISENVIRONMENTAL PRoTEcTIoN AGENCY

1021

North

Crnnd Aveiiue East. P.O. Box

19276,

5prin~rfieli1.illinois

62794-926

iry

A. Cad~,Director

S

RECEIVE

JUL01 19S8

June25,

1998

Mr.

Robert Schoenecke

Oklahoma

Department

of Agriculture

2800 North Lincoln Boulevard

Oklahoma City, OK 73105

Mr. Dennis Ramsey

North Carolina Department of Water Quality

P.O. Box 29535

Raleigh, NC 27626-0535

Mr. TJ’bbo Agena

Iowa Department of

Natural

Resources

Nonpoint Source Pollution

Water Quality Section

Wallace State Office Building

900 East Grand

Des

Moines,

IA 50319

Mr. David Hoim

5

Colorado

Department of Health and

Environment

Water Quality Control Division

WGCD-DO-B2

4300 Cherry

Creek

Drive South

Denver, CO 80222

Gentlemen:

WQOD~D1reCtOrSOff.

Mr. Donald Carison

Kansas Department of Health and Environment

Building

283

Topeka, KS 66620

Mr. P.andy Clarkson

Missouri Department of Natural Resources

P.O. Box 176

Jefferson City, MO 65102

Mr. Kiran Bhayani

titali. Division of Water Quality

P.O. Box

144870.

Salt Lake City, UT 84114

Mr. N..G. (aW

New York Depa.rrmeru of Environmental Conservation

Division of Water

5 5

50 Wolf Road

Albany, NY 12233

The Illinois EPA is currently reviewing the operations of a new swine farm in the north-central part of this state. This

facility is now operating at 3650 sows. farrow to wean (approximately 14 days old). The owner of the swine operation

pLans to expand this facility to approximately 7300 saws. Our interest in this facility in particular is in regard to the

generation of odors. The livestock waste at this facility is treated under a system designed by BION Environmental

Technologies, Inc. (BION).

Based on information filed by BION with the Securities and Exchange Corrtrnission in their May 1998 quarterly report,

BION cites several examples where

their

designs are now under consideration or are in use. These locations/facilities

are:

1. Multiple installations at Circle Four Farm, Phase II, Milford, titah, for not less than 10.000 sows, 32,000 nursery

pigs and 40,000 finishing hogs.

2. Three (3) installations in Kansas (one in Lane County and two in Hodgeman County), each for not less than 11,000

L

sows.

---

NOV-29-2004 MON 12:45 PM ENVIRONMENTAL

FAX NO. 2175247740

P. 10/17

3. One (1). installation in Barton County, Missouri for not less than 75,000 saws,

4. Two to four (2-4) installations in the area of Laverne, Oklahoma for not less than 40,000 finishing hogs.

5. One (1) installation at the Squire sow farm in Bladen County, North Carolina for not less than 3600 sows. A

separate demonstration unit is

also cited, although

the

location

and size are not specified.

6. One (1) demonstration installation in Iowa for not less than 3300 finishing hogs.

All of the above are facilities affiliated with Murphy Family Farms. In addition the SEC report also cites an

agreement with Bowman Family farms of Wray, Colorado for 36 treatment units

itt

two unspecified states, and a unit

near Hermitage, New York (believed to be a dairy facility).

We are interested lit obtaining any information submitted to your office by BION or the facility ownersloperatcrs

regarding the basis of design

for the facilities

in your state. In additiod to the BION plans and specifications for the

facilities, please also provide information on the

status

or existence of state odor control standards, guidelines

or

monitoring to which

these systems must

adhere, and the existence of compliance or enforcementactions taken by your

state against these facilities for problems associated

with the livestock

waste treatment system design

or odor

generation problems.

Thank you for your cooperation. We understand that in certain instances the information we have requested may be

desi~’iatedas proprietary or confidential by BJON. If this is the case, please advise as to how the information may

be obtained in accordance with your rules for this type of protected data. If you arc

interested in our compiled

findings, please advise. I caiI

be

reached at the above phone number, address or

by

Email at epall77@epa.state.il.us.

Sincerely,

~din

a.nager, Watershed Unit

Permit Section

Division of Water Pollution Control

cc: IEPA, DWPC, FOS, Peoria

---

NOV—29—2004 MON 12:46 PM ENVIRONMENTAL

FAX NO. 2175247740

P. 11/17

rA~c~

O~.~f!S~oURr’

Mel C:cn~,~n,(~vern.)r

.

.~c~ph~n~I. ~‘.I.~h(~od,Dir:oer

D~EP~TMENTOF NATURAL RESOURCES

__________

‘5,

~

S

_______

____________

• ~

S

DIVISION OF

ENVIRONMENTAL

QUALITY

4

S./4~”•SS.S~

~S1

.

I

-.,_L~

‘~‘~

...Z•

P0 Box 176 JcEet~onCity MO 65102 Ol’G

S

JUL29i3S8

ILLINOIS ENVIRONMENTAL

July 24, 1998

PROTECTION

AGENCY

B0W/WPC/PEI~M1TSECTION

Bruce J.Yurdm

Manager, Watershed Unit.

Division of Water Pollution Corurol

Illinois Environmental Protection Agency

1021 North Grand Avenue

East

P.O. Box 19276

5

Sprin~eld,LL

62794-9276

-

RE: Inquiry about Murphy Farms

Use of BION

Technology

S

Dear Mr. Yurdin:

S

Please find enclosed

information that was submitted

to

Missouri Deparmienr

of

Natural Resources, Water

Pollution Control

Program

by BION. Our interpretation of the data is that

the system is basically a surface

aerated lagoon

using Aeradon Indusnies aerator (page enclosed).

We

have

not seen a

formal

application for the

system. The Murphy Famis have several permitting

issues

that must be resolved before approval of arty treatment system.

S

The state of Missouri does

not

currently have odor regulations.

There

is a workgroup that has been formed

to

investigate agriculture odor regulations.

You may contact

the A.ir Pollution Conrrol Program at (573)

751-4817 for

additional information on odor issues.

You

may contact me at (573) 751-6568 if

you

have additional

questions.

Sincerely,

WATER

POLLUTION CONTROL

PRO

GRAM

Troy Chockley, P.E.

Agricultural Unit Chief

TC:lsm

Enclosures

---

NQV—2~-2OO4

NON 12:46 PN ENV1RONflENT~L

FAX NO, 2175247740

P. 12/17

BION

TECHNOLOGIES

SYSTEM

PREPARED BY:

BION TECHNOLOGIES, INC.

•619-.C SOUTH

THIRD STREET

SMITHFIELD, NC

27577

(919) 934-3066

---

NUV-29—2004 NON 12:47

P~

ENVIRONHENTAL

FAX ~

~

J75247740

P.5 13/17

S

COMPANY BACKGROUND

S

Bioti

Technologies, Inc.,

is

acornpany uniquely

qualified

tO

deal

profit bt~iiththe growing

public concern

and awareness

of ow-

environment.

This concern has become a

major cost factor

of

business in

the 1990’s due to intense regulatory pressure on the business community to adopt

more efficient

pollution control

sys~erits.

While

conventional solutions are expensive

and

frequently ineffective, Bions patented and proprietary systems solve a b~oadrange of

disposal

S

problems

efficiently

and

at greatly

reduced costs. In marty

cases, they also improve

the

profitability

of

the

user.

Bion systems rely

on natura.l, biological

processes and do

not

require

the expensive structures of alternative waste treatment technologies.

They also

create

self-

contained natural habitats

and

significantly reduce odor.

Bion

has offices in North Carolina,

Colorado, New York and Florida. Bion Technologies,

Inc. represents a unique

opportunity

as a company committed to providing ecological benefits

to its clients

and

long-term economic returns to

its

shareholders.

,

B1ON NMS

SYSTEM

The Elan NMS~syst~mis a patented

process developed by Bion

Technologies, Inc. CBion)

that treats

both

the solid and liquid fraction of the

manure wastestrearn through a

complex series

of natural microbial processes. The system

typically consists of

Solids Ecoreactors.

Bioreactors,

Temporary

Water Storage Areas

and Polishing Ecoreactors.

The

Solids Ecoreactors are

designed to capture

and dewater waste

solids whIch the.n undergo a biological conversion into

an organic soil-Like material.

The

Bioreactors are designed to be high intensity microbial action

zones that contain aerobic, anaerobic,

and facult,acive bacterial populations. They are designed

to biologically assimilate nutrients as well as reduce Biological Oxygen Demand (BOD)

suspended solids

arid odor.

Water

Storage

Areas are

designed to

meet all local regulatory

requirements and to provide final treatment prior to application onto a. new or established

spray-field

crop. The Polishing Ecoreactor

is a

wetland type

component of

the

system designed

to further remove nutrient by mean.~of a vegetative-microbial complex, capable of producing

final water quality that is suitable for reuse on the farm. The end-product water from the

system

can be treated to any desired standard level.

Solids are periodically harvested from the Solids Ecoreactor, processed, and subsequently

removed from the fat-rn site. The processed material, BionSoilTM, will be sold by Bion as a

commercial product. Utilization studies conducted on processed

BionSoil

have indicated great

potential as a plant growth

media

or soil amendment product, as well as other potential uses

which are currently being investigated.

BioriSoil has a ready market in home gardens.

landscaping. potting soils, organic farms, soil remediation, golf courses, nurseries, sod farms,

groves, field crops, and many other applications. Biori is committed to successfully marketing

BionScil as a renewable resource for the horticulture and agriculture industries.

---

NOV—29—2004 NON 12:47 PN ENVIRONNENT~L

FAX NO. 2175247740

P. 14/

TYPICAL HOG SOW, NURSERY, OR FINISHING BION SYSTEM

Bian has developed a Bion Nutrient

Management System~application specifically designed

for typical hog sow, nursery, andlor finishing farm facilities. A typical Bion waste

management

process flow diagram is

presented in

Figure HE-i. The process

flow

diagram illustrates

the

prirnazy features associated with

the

Elan

treatment system and

its potential coordination with

a

typical

existing

waste management system. The Bion NMS treatment

system is

designed

to

funtion with minimal operational

and maintenance

involvement of farm personnel. Where

ever

possible, the waste stream flows through the process

by

gravity. The entire system

is located

as close to the hog

houses

as possible to facilitate efficient waste collection and treatment, and

S

is

designed

to contain wastewater as well as divert clean stormwater from entering the system.

The treatment

process

begins when the

hog

house wastes are

flushed

to an initial bioreactor

(Bioreactor #1). Bioreactor #1 is an aerated earthen basin, which may be lined

with

a

geomembrane synthetic liner, if required. The initial bioreactor has a short retention period and

is designed to stimulate mIcrobial growth. The microbes, in

Bioreactor

#1, begin

to

quickly

assimilate

the1

nuitrients available from

the waste products. The

microbes

will utilize low

molecular weight compounds first. The low molecular weight compounds are typically the

unfavorable odor causing compounds often associated with hog farming. The effluent from

Bioreactor #1 gravity flows or is pumped into one of two Solids Ecoreactor cells.

The Solids Ecoreactor is comprised of two deep earthen cells, each of which has been sized

to contain waste manure generated from the hogs for a period of four to twelve months.

The

cells operate in

parallel

such that as one cell

is

filling the other filled cell is left to cure and dry

prior to harvesting. The Solids Ecoreactor cells are designed to capture and dewater waste

solids. The nutrients in

the waste

solids

undergo

a biological conversion utilizing the natural

microorganisms which are stimulated in

Bioreactor #1.

The resulting solids are

organic material

which can be used as a plant growth media or soil conditioner.

As with the bioreactors, the Solids Ecoreactorcells may be synthetically lined, if necessary.

L

The SoLids Ecoreactor is sloped to a flow control sump at the effluent end of the cell. The flow

control sump at the outlet of the cell is designed to maintain a

flow

of water over flow control

boards while retaining

the solids

in the Ecoreactor. Flow control boards are

periodically added

until the Solids Ecoreactor

is filled to.

its maximum

capacity.

The solids are harvested front

one of

the Solids Ecoreactor cells at least once every four to

twelve months. eased on previous operating experience, Bion estimates approximately

0.75

cubic

yard

per one finishing hog house occupancy

space,

per year. The solids may be pumped

from

the Solids

Ecoreactor and processed, to be subsequently transported off the facility. The

solids may also be utilized on the

farm,

depending on the specific requirements of each

individual

client.

The effluent from the Solids Ecoreactor

cell gravity flows or is pumped into a second stage

bioreactor (Bioreactor #2). Bioreactor ~2 is also

an aerated earthen basin and

may also

be

---

NUV—~9—2004NON 12:48

Pfl

ENVIRONIjENTAL

FAX NO 2

175247740

P. 15/17

synthetically

lined,

ifnecessa.ry.

The second stage bioreactor has been

designed to further the

treatment process by stimulating

additional microbial growth. Bioreactor #2 has a

longer

retention period than Bioreactor #1

and, as such allows the microbes

to

further assimilate the

nutrients in the waste stream. Water in

Bioreactor

#2

is

recycled back to the hog

houses

for

flushing

or

recharging

the subslat pit. Depending upon

required

agronomic land application

rates,

excess water from Bioreactor #2

can be further treated in a third stage bioreactor

(Bioreactor #3) or

can be directed to a final

Water Storage

Area.

S

Bioreactor #3 is an aerated earthen basin

and

may also be synthetically lined if

necessary.

The bioreactor

further treats

the

waste stream through a long retention period and ectensive

additional microbial

nutrient utilization. Excess water from Bioreactor

#3 gravity flows or is

pumped

to a

final

Water Storage Area

which is used

to

provide an

adequate temporary storage

volume and

polish the

waste stream prior to final irrigation on the sprayfields.

If minimizing fresh

water

usage andior minimizing

sprayfield irrigation is desirable, Bion

will design a Polishing Ecoreactor to complete the treatment process. The Polishing Ecoreactor

is a constructed wetland type of treatment component, which is extremely effective for the low

nutrient containing water typically

created in a Bion. NMS. The Polishing Ecoreactor is a

flooded,

vegetated area in which nutrients will

be removed from the waste

stream by means

of

a vegetative—~tiicrobialcomplex. The

Polishing

Ecoreactot consists of a series of cells

separated

by

small internal berms

with flow control structures to regniate water levels. A

portion of the

Polishing Ecoreactor may be

used to produce nutrient rich plants andlor organic soil. The

Polishing Ecoreactor has the appe.arance

of a

native wetland, which provides

wetland habitat for

wildlife,

and in general, presents an attractive environmental image.

S

---

Bion Technologies, Inc.

~

N~lJ.l~ic~luRo.d5~Li~

&

(mb~iOUY

flu..... ~

~

I..., ..aI

-

FLog

F’arut

l.~uJIflL~ui

Solids E

acitU l)usig~

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NMS~M

System

P)uce,ss

Fluw

Diagr~ini

Date:

)Jl)i97

~rjJ~,ID: C:/I1IONS

V~(l

IL—

l.D.SF

I

I

---

-

i------

uHF

---

NQV-29-2004 NON 12:49 P11 ENVIRONNE~fl’AL

FAX NO. 2175247740

P. 17/17

aeration industries, inc.

I-Iaze1t~neGates

•

Chaska, Minnesota 553 iS

1—800—328—8287

(612) 448—6789

A1RE-02 AERATOR

OPERATI ON,

TROUBLESHOOTING

AND

INSTALLATION

MANUAL

2,3~.5&

7.5HP

AIRE-02

---

•1 ~

~

::~

EXHIBIT 4

——

NOV—29—2004

NON

1203PM ENVIROUMEftFAL

FAX t~O 21752477~

P 02/02

•

From:

Dan Heacock

-

S

-

-

.

-

To

EPAI177, A~t’~olE~O~O1~

REGDO1 PEOPoL EPA1

Date:

7/8/96 12:14cm

-

.

-S

.

-.

--

-

-,

-‘S

-,

.

Subject:

Murphy Family Farms

-

~‘eor:a Co.

-.

-

.

i -received a cal. from Doug Lenhar: of ~urphy Family Farms re~garding a

-

-

-.

S

potential swine contract operation

in

eoria Co. south of Elmwood. Doug

Lenhart. indicated the following: The ty~ical

Mu~phy Family farm operation

consists cf a 3600 Sow operation and/c: a seperate nursery operation with

buildings each housing 2300 pigs from

L7 days old to 40

lbs. each. The pigs.

are to be shipped cut of state after they reach ~0 lbs. They ~iill be applying

for a stormwater

~PDES

permit for the scw operation which will disturb

S

approximately 10

acres.

The facil~cy (b~ildings~ lagoons,

etc.) will be o~ed.

by an individual operator, who raises Murchys

hogs.

Doug Len.harz indicated

chat he could ~end in an application.

for

the

1~vestockN?DES

termic, although

he stated the facility would

be designed with a

1~lagoonhI and laud application

without a discharge to

waters

of

the

state.

I stated

chat,

if he sent plans and

an application for our review, and the review confirmed the “no discharge

plan

for the facility the Agency would :rcbably issue a no permit ~e~Lired

-

letter.

Mr. Lenhart had previously discussed with Eric ~ckerr~’an

the

~ropoaed

facility. Mr. Lenharc will be calling r.e to provide the

name

and

address of

-the operator to send

the. scarmwater aç~iicationsto.

-

DLH

---

Page 2 of26

w~•,*

299 F.Supp.2d 693

299 F.Supp.2d 693, 2003 WL

22595989

(W.D.Ky.),

58

ERC 1076

(Cite

as: 299

F.Supp.2d

693,

2003 WL 22595989

(W.D.Ky.))

Page 1

C

United States District Court,

W.D.

Kentucky,

Owensboro Division.

SIERRA CLUB, iNC., Mary B.

Edwards,

Norma

Caine, and

Leesa Webster, Plaintiffs,

v.

TYSON FOODS, iNC., Tyson Children

Partnership, Adams

Chicken Farms,

Stirman

Adams, Buchanan Livestock, Buchanan Farms,’ and

Roland Buchanan, Defendants.

-

CIVIL ACTION NO. 4:O2CV-73-M.

Nov. 7,

2003.

Background:

Owners of

land located near chicken

production

farms,

together with environmental

group,

brought action against

farm owners

-

and

operators, alleging failure to report releases of

ammonia from chicken droppings in violation of the

Comprehensive

Environmental

Response,

Compensation and Liability

Act (CERCLA) and the

Emergency Planning and Community Right to

Know Act

(EPCRA).

Cross-motions for summary

judgment were filed.

Holdings: The

District Court, McKinley,

J., held

that:

-

(1) owners and environmental group had standing

to

bring action;

(2)

farms were not exempt from reporting

requirements of CERCLA and EPCRA;

(3) the whole farm site, rather than each poultry

house, was a “facility”;

(4) under CERCLA, wholly owned subsidiary of

food production company was a “person in charge”

of

two chicken production facilities under contract

with growers; and

(5)

partnership that leased chicken production

facility to chicken production farm was not “person

in qharge.”

Motions granted in part and denied in part.

-

West Headnotes

1

Federal Civil Procedure ?~103.2

170Akl03.2

Most Cited Cases

Standing is a core component of the case or

controversy requirement of Article

III

of the United

States Constitution.

U.S.C.A. Const.

Art. 3, § 2, cl.

2 Federal Civil Procedure ?~103.2

l7OAkl 03.2

Most Cited Cases

The standing doctrine under Article III

of the

United

States Constitution is designed to confme

the courts to adjudicating actual cases and

controversies

by ensuring

that

the plaintiff has

alleged such a personal stake in the outcome of the

controversy

as to warrant his invocation of federal

court jurisdiction and to justify exercise of the

court’s remedial powers on his behalf.

U.S.C.A.

Const.

Art. 3, § 2, cI. 1.

3 Federal Civil Procedure ?103.2

l70Ak103.2 Most Cited Cases

The injury in fact test to establish standing

under

Article III of the United States’ Constitution requires

more than an injury to a

cognizable interest;

jt

requires that the party seeking review

be himself

among the injured. U.S.C.A. Const.

Art. 3, § 2, cl. 1

4

Associations

?~‘20(1)

4lk20(l) Most Cited Cases

- An organization has standing under Article III of

the United States Constitution to

bring

suit

on

behalf of its members when: (1) its members would

otherwise have standing to sue in their

own right;

(2) the interests it seeks to protect are

germane

to

the organization’s purpose; and

(3) neither the- claim

asserted nor the relief requested requires the

participation of individual members in the lawsuit.

U.S.C.A.

Const. Art. 3, § 2, cl. 1.

5 Federal Civil Procedure ?~‘103.2

l70Akl03.2 Most Cited Cases

The party invoking federal jurisdiction bears the

burden of establishing that it has standing to pursue

the action. U.S.C.A.

Const. Art. 3,

§ 2, cl. 1.

6 Environmental Law ?‘656

l49Ek656 Most Cited Cases

Allegations by owners of land located near chicken

production farms that

ammonia emitted

by chicken

Copr. ©

2004 West. No Claim to Orig. U.S. Govt. Works.

Exhibit A

.5

http://print.westlaw. comldelivery.html?dest=atp&dataid=B005580000004016000396482... 11/29/2004

---

299 F.Supp.2d 693

‘ -

299 F.Supp.2d 693, 2003 WL 22595989 (W.D.Ky.),

58

ERC 1076

(Cite

as: 299

F.Supp.2d 693, 2003 WL 22595989 (W.D.Ky.))

Page 3 of26

Page 2

droppings

curtailed

their activities and forced them

to cancel outdoor events, and that failure of farm

operators to report ammonia releases denied them

access to critical information and

impaired

ability of

government

agencies to respond to releases, were

sufficient to state injury in fact, as required to

establish standing to sue farm operators under the

Comprehensive

Environmental

Response,

Compensation and Liability Act (CERCLA) and the

Emergency Planning and Community Right to

Know Act

(EPCRA).

U.S.C.A.

Const.

Art. 3, § 2,

cl. 1; Comprehensive Environmental Response,

Compensation and Liability Act

of

1980,

§ 101, 42

U.S.C.A.

§

9601; Emergency Planning and

Community

Right-To-Know Act of 1986,

§ 301, 42

U.S.C.A. §

11001.

7

Federal Civil Procedure ?Z~103.2

l70Akl03.2 Most Cited Cases

Injury required by Article III may exist solely by

virtue of statutes creating legal rights, the invasion

of which creates

standing.

U.S.C.A. Const.

Art. 3, §

2, cl. 1.

8 Environmen~a1Law?~656

149Ek65’6 Most Cited Cases

Owners of land located near chicken production

farms, alleging that farm operators failed to report-

dangerous levels of ammonia emitted from chicken

droppings, did not, in order to establish standing to

sue operators under the Comprehensive

Environmental

Response,

Compensation

and

Liability

Act (CERCLA) and the Emergency

Planning

and Community Right to Know Act

(EPCRA),

have to prove that

a

reportable

quantity

of ammonia to trigger the

reporting requirements

was

released; owners presented evidence

that

-

poultry

houses emitted ammonia and that studies

existed estimating amount of

ammonia

a poultry

house emits over a specific -time

-

period.

-

Comprehensive

Environmental

Response,

Compensation and Liability Act of 1980,

§ 101, 42

U.S.C.A. § 9601; Emergency Planning and

Community Right-To-Know Act of 1986,

§ 301, 42

U.S.C.A. § 11001.

9

Environmental Law ?~656

l49Ek656 Most Cited Cases

Alleged failure by

operators of chicken production

farms to give notice of ammonia released from

chicken droppings caused alleged injury to nearby

landowners,

as

required for landowners to establish

standing under Article III of the United States

Constitution

to sue operators

under Comprehensive

Environmental Response, Compensation and

Liability Act (CERCLA) and the Emergency

Planning and Community

Right to Know Act

(EPCRA); absent notice of releases, government

agencies could, not mitigate them

and

protect

landowners from potential exposure. U.S.C.A.

Const. Art. 3,

§ 2, cl. 1; Comprehensive

Environmental Response, Compensation and

Liability Act,

of

1980, § 101, 42 U.S.C.A. § 9601;

Emergency

Planning

and

Community

Right-To-Know Act of 1986, § 301, 42

U.S.C.A. §

11001.

10 Federal Civil Procedure ?~103.3

l7OAkl 03.3

Most Cited Cases

The redressability requirement for establishing

- standing under Article III

of the United States

Constitution ensures that a plaintiff personally

would benefit in a tangible way from the court’s

intervention.

U.S.C.A. Const.

Art. 3, § 2, cl. 1.

11 Injunction ?~‘114(2)

2l2k1 14(2) Most Cited Cases

A plaintiff seeking injunctive

relief- demonstrates

redressability, as required to establish standing

under Article III of the United States Constitution,

by alleging a continuing violation or the imminence

of a future violation of the statute at issue.

U.S.C.A. Const. Art. 3, § 2, cI. 1.

12 Environmental Law ?~‘656

l49Ek656 Most Cited Cases

A decision favorable to owners of land near

chicken, production farm that emitted ammonia from

chicken droppings, in their action seeking injunctive

relief against farm operators under Comprehensive

Environmental Response, Compensation and

Liability - Act (CERCLA) and the Emergency

-

-

Planning and

Community Right to Know Act

(EPCRA), would, jedress owner’s injuries, as

required to establish standing; favorable decision

would require farm operators to provide notice that

a specific episodic release of ammonia had occurred

or that specific continuous releases would occur in

the

future,

allowing

landowners

to

take

precautionary steps to protect themselves from

releases and allowing governmental agencies to

respond. Comprehensive Environmental Response,

Compensation and Liability Act of.1980, § 101, 42

U.S.C.A. § 9601; Emergency Planning and

Community Right-To-Know Act of 1986, § 301, 42

U.S.C.A. § 11001.

13 Environmental Law ?~415

l49Ek4l5 Most Cited Cases

Copr.

© 2004 West. No Claim to

Orig. U.S. Govt. Works.

http ://print.westlaw.comldelivery.html?dest=atp&dataid=B005580000004016000396482... 11/29/2004

---

Page 4 of26

299 F.Supp.2d 693

299 F.Supp.2d 693, 2003 WL 22595989 (W.D.Ky.), 58 ERC 1076

(Cite as: 299 F.Supp.2d 693, 2003 WL 22595989 (W.D.Ky.))

131

Environmental Law ?‘441

149Ek441 Most Cited Cases

Chicken production farms which released ammonia

from chicken droppings were not exempt from

reporting

requirements

of

Comprehensive

Environmental Response, Compensation and

Liability Act (CERCLA) and Emergency Planning

and Community Right to Know Act (EPCRA),

despite fact that there was no generally accepted

methodology or model for estimating the amount of

ammonia chicken production facilities emit.

Comprehensive

Environmental

Response,

Compensation and Liability Act of 1980,

§ 101, 42

U.S.C.A.

§

9601; Emergency Planning and

Community Right-To-Know Act of 1986,

§ 301, 42

U.S.C.A.

§

11001.

-

141

Environmental Law ?460

149Ek460 Most Cited Cases

-

Fact that Environmental Protection Agency (EPA)

had not enforced reporting requirements of

Comprehensive

Environmental

Response,

Compensation and Liability Act (CERCLA) or

Emergency Plai~ining and

Community Right to -

Know Act (EPCRA) against animal production

facilities did not prohibit citizen enforcement suit

against chicken production farm operators for

violation of such requirements. Comprehensive

Environmental Response, Compensation and

Liability Act of 1980,

§

101, 42 U.S.C.A.

§

9601;

Emergency

Planning

and

Community

Right-To-Know Act of 1986,

§

301, 42 U.S.C.A.

§

11001.

15 Environmental Law ?~‘415

l49Ek4l5 Most Cited Cases

151

Environmental Law ?~441

l49Ek441 Most Cited Cases

Fact that government had knowledge of ammonia

emissions from

chicken production farm did not

automatically exempt farm operators from reporting

requirements under Comprehensive Environmental

Response, Compensation and Liability Act

(CERCLA) and Emergency Planning and

Community Right to Know Act (EPCRA); notice of

specific releases was required. Comprehensive

Environmental Response, Compensation and

Liability Act of 1980,

§

103(a), 42 U.S.C.A.

§

9603(a); Emergency Planning and ‘Community

Right-To-Know Act of 1986,

§ 304(3)(a), 42

U.S.C.A.

§ 11004(3)(a).

161

Environmental Law ?~415

l49Ek4l5 Most Cited Cases

16 Environmental Law ?‘441

149Ek44l Most Cited Cases

Actual or constructive knowledge of a release of a

reportable quantity of a hazardous substance, rather

than mere knowledge that some release occurred,

creates a duty to report under the Comprehensive

Environmental Response, Compensation and

Liability Act (CERCLA) and Emergency Planning

and

Community Right to Know Act (EPCRA).

Comprehensive

Environmental

Response,

Compensation and Liability Act of 1980,

§

103(a),

42 U.S.C.A.

§

9603(a); Emergency Planning and

Community

Right-To-Know Act of 1986,

§

301, 42

U.S.C.A.

§

11001.

17 Environmental Law ?~415

149Ek415 Most Cited Cases

171 Environmental

Law ?‘441

149Ek44l Most Cited Cases

Where chicken production farms which released

ammonia

from

chicken droppings consisted of

several poultry houses on a contiguous site, the

whole farm site, rather than each poultry house, was

the regulated “facility” for

purposes

of reporting

requirements under Comprehensive Environmental

Response, Compensation and Liability Act

(CERCLA) and Emergency Planning and

Community Right

to

-

Know

Act (EPCRA); all

poultry houses at a site were operated together for a

singular

purpose. Comprehensive Environmental

Response, Compensation and Liability Act of 1980,

§

101(9),’ 42 U.S.C.A. §

9601(9); Emergency

Planning and Community Right-To-Know Act of

1986,

§

301,42 U.S.C.A.

§ 11001.

18 Environmental Law ?~415

l49Ek4l5 Most Cited Cases

18 Environmental Law ?~441

l49Ek441 Most Cited Cases

-

-

In instances where a hazardous substance or

contamination is

confined to an individual building

or structure, the “facility,” for purposes of reporting

requirements under Comprehensive Environmental

Response,

Compensation

and

Liability

Act

(CERCLA) and Emergency Planning and

Community Right to Know Act (EPCRA), is

properly limited to this unit; however, when

-

multiple sources of hazardous substances are

grouped together, the “facility” encompasses the

entire area

and extends

to the bounds of the

contamination.

Comprehensive

Environmental

Response, Compensation and Liability Act of 1980,

Copr. © 2004 West. No Claim to Orig. U.S. Govt. Works.

Page 3

http://print.westlaw.comldelivery.html?dest=atp&dataidB005

580000004016000396482... 11/29/2004

---

299 F.Supp.2d 693

299 F.Supp.2d 693, 2003 WL 22595989 (W.D.Ky.), 58 ERC 1076

(Cite

as: 299

F.Supp.2d 693, 2003 WL 22595989 (W.D.Ky.))

Page

5

of26

Page 4

§

101, 42 U.S.C.A.

§ 9601; Emergency Planning

and Community Right-To-Know

Act of 1986, §

301, 42 U.S.C.A.

§

11001.

19 Environmental Law ?~415

149Ek4l5 Most Cited Cases

191 Environmental Law ?~441

149Ek44l Most Cited Cases

Release

of ammonia from chicken production

farms was not a continuous release subject to

reduced

reporting

requirements

under

Comprehensive

Environmental

Response,

Compensation and Liability Act (CERCLA) and

exempt from

Emergency Planning and Community

Right to Know Act (EPCRA) requirements; person

in charge of farm operations had not notified any

agency of any releases, or established that releases

were continuous rather than episodic.

Comprehensive

Environmental

Response,

Compensation

and Liability Act of 1980, § 103, 42

U.S.C.A.

§

9603;, 40 C.F.R.

§

302.8(e); Emergency

Planning and Community Right-To-Know Act of

1986,

§

301,42 T.~r.S.C.A.

§

11001.

20 Environmental Law ?‘415

149Ek4l5 Most Cited Cases

Chicken production farms which released ammonia

from chicken droppings were not exempt from

reporting requirements of Emergency Planning and

Community Right to Kiiow Act (EPCRA) as

“routine agricultural operations”; exemption applied

only to substances stored or used by the agricultural

user, and alleged reporting violation was based on

venting of gaseous ammonia into the atmosphere,

not storage of chicken manure or application of

chicken manure to farm fields. Emergency

Planning and

Community Right-To-Know Act of

1986,

§

311, 42U.S.C.A.

§ 11021.

-

21 Environmental Law ?~415

149Ek4l5 Most Cited Cases

21 Environmental Law ?~441

l49Ek44l Most Cited Cases

Chicken production farms

which released ammonia

-from chicken droppings were not exempt from

reporting requirements of Comprehensive

Environmental Response, Compensation and

Liability Act (CERCLA) and Emergency Planning

and Community Right to Know Act (EPCRA) as the

normal application of fertilizer; challenged release’

was venting

of gaseous ammonia into the

atmosphere from the chicken houses, not from

storage of chicken manure or the application of

chicken manure to farm fields. Comprehensive

Environmental Response, Compensation and

Liability Act of 1980,

§

101, 42 U.S.C.A.

§

9601;

Emergency Planning and Community

Right-To-Know Act of 1986,

§ 301, 42~U.S.C.A.§

11001.

22 Environmental

Law ?~441

149Ek44l Most Cited Cases

The

owner or operator of a facility is not always a

“person in charge” for purposes of reporting

requirements under Comprehensive Environmental

Response, Compensation and Liability Act

(CERCLA); proper inquiry is whether

owner/operator occupies positions of responsibility

and power, and whether they are

in a position to

make timely discovery of a release, direct the

activities that result in the pollution, and have the

capacity to prevent and abate the environmental

damage.

Comprehensive- Environmental Response,

Compensation and Liability Act of 1980,

§ 103, 42

U.S.C.A.

§

9603.

23 Environmental

Law ?~441

l49Ek44l Most Cited Cases

Wholly owned subsidiary of food production

company was a “person in charge” of a

chicken

production facility which released ammonia from

chicken droppings, for purposes of reporting

requirements under Comprehensive Environmental

Response, Compensation and Liability Act

(CERCLA),

where subsidiary

leased facility,

subsidiary

employees

performed

all

duties

necessary to raise chickens

there, and subsidiary

clearly occupied a position of responsibility and

power and was

in ‘a-- -position to make timely

discovery of ammonia releases. Comprehensive

Environmental

Response,

Compensation

and

Liability Act of 1980,

§

103, 42 U.S.C.A.

§

9603.

24 Environmental Law ?~441

l49Ek441 Most Cited Cases

Wholly

owned subsidiary of food production

company was a “person in charge” of

two chicken

production facilities for which

it had contracts with

chicken growers, for purposes of reporting alleged

ammonia

releases

-

from

facilities

under

Comprehensive

Environmental

Response,

and

Liability Act (CERCLA), though subsidiary merely

provided

chicks,

feed,

veterinary

services,

medication, and technical advice to growers;

Copr. ©

2004

West. No Claim to Orig. U.S. Govt. Works.

http ://print.westlaw.com1delivery.html?dest=~tp&dataid=B005580000004016000396482... 11/29/2004

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Page 6 of26

299 F.Supp.2d 693

299 F.Supp.2d 693, 2003 WL 22595989 (W.D.Ky.), 58 ERC 1076

(Cite as: 299 F.Supp.2d 693, 2003 WL 22595989 (W.D.Ky.))

Page 5

subsidiary had its,

own

technical advisors who

monitored facilities on weekly basis, subsidiary was

involved

in facility design and equipment

specifications, directed growers how to build and

orient chicken houses, how to heat,

cool, and

ventilate buildings, and how to illuminate houses to

ensure optimum chicken growth. Comprehensive

Environmental

Response,

Compensation

and

Liability Act of 1980, §

103,

42

U.S.C.A.

§

9603.

25 Environmental Law ?~415

-

149Ek4l5 Most Cited Cases

Wholly owned subsidiary of food production

company was an “operator” of chicken production

farms which released ammonia from chicken

droppings, for purposes of reporting requirements

under Emergency Planning and Community Right

to Know Act (EPCRA); subsidiary managed and

directed many

of the operations related to the

venting of ammonia. Emergency Planning and

Community Right-To-Know Act of 1986, § 304(a),

42 U.S.C.A. §

11004(a).

261

Environmental Law ?~415

l49Ek4l5 Most Cited Cases

For purposes of reporting requirements under

Emergency Planning and Community Right to

Know

Act

(EPCRA), an “operator” is someone who

directs the workings of, manages, or conducts the

affairs of a facility. Emergency Planning and

Community Right-To-Know Act of 1986, § 304(a),

42U.S.C.A. § 11004(a).

27 Environmental

Law ?~441

149Ek441 Most Cited Cases

Partnership that

-

leased chicken production facility

to chicken production farm was not “person in

charge”

of facility, as required for partnership to be

liable for alleged failure to report ammonia releases

from

farm in

violation

of Comprehensive

Environmental

Response,

Compensation

and

Liability Act (CERCLA); partnership was not

involved in daily production operations and was not

in a position to detect, prevent and abate a release

of

hazardous

substances.

Comprehensive

Environmental

Response,

Compensation

and

Liability Act of 1980,

§

103, 42 U.S.C.A.

§ 9603.

28 Environmental Law ?~415

-

149Ek415 Most Cited Cases

Partnership that leased chicken production facility

to chicken production farm was not an “owner” or

“operator” of facility, as required for

partnership to

be liable for alleged failure to report

ammonia

releases from farm in violation of Emergency

Planning and Community Right to Know Act

(EPCRA); there was

no evidence that partnership

managed, directed, or conducted activities of

facility related to pollution. Emergency Planning

and

Commumty Right-To-Know

Act of 1986,

§

304(a), 42 U.S.C.A.

§ 11004(a).

*698

Aaron Isherwood, Barclay Rogers, Patrick

Gallagher, San Francisco, CA, John Harbison,

Ronald Shems, Shems

Dunkiel &

Kassel,

Burlington, VT, Phillip J. Shepherd, Frankfort, KY,

for Plaintiffs.

*699

James Wendell Taylor, Lexington, KY,

Judith A. Villines,

Frankfort, KY, Laura D. Keller,

Louisville, KY, Stites & Harbison, Flem Gordon,

Gordon & Gordon, P.S.C., Madisonville, KY, for

Defendants.

IVEMORANDTJM

OPINION

AND ORDER

McKINLEY, District

Judge.

‘~‘1

This matter is before the Court on Plaintiffs’

Motion for Partial Summary Judgment as to the

First and Second Causes of Action DN 44; on a

motion by Defendants for summary

judgment on the

CERCLA and EPCRA issues DN 49; on a motion

by Defendants, Tyson Food on its behalf and on

behalf of Tyson Chicken for partial summary

judgment on the issue of “person in charge” DN

50;

on a motion by Defendant, Tyson Children

Partnership, for partial summary judgment on the’

issue of “person in charge” DN 48; on a

motion

by Plaintiff to stay consideration of Tyson Food’s

motion for partial summary judgment on the issue

of “person in charge” DN 61. Plaintiffs allege that

Defendants have

failed to report ammonia

emissions from

certain chicken production

operations in Kentucky in violation of the

Comprehensive

Environmental

Response

Compensation and Liability Act (“CERCLA”), 42

U.S.C.

§~960

1-9675,

and the Emergency Planning

and Community Right-to-Know Act (“EPCRA”), 42

U.S.C.

§

11001-11050, and also allege that the

operations constitute nuisances under state law.

Plaintiffs seek damages and penalties, as well as

declaratory and injunctive relief, By agreement of

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the parties, the parties are

attempting

to simplify the

litigation by

submitting

dispositive motions on

certain threshold issues at the initial phase of the

litigation.

See

Joint Status Report and Rule 26(f)

Report of Counsel, September 10, 2002 DN -

18.

A limited amount of discovery has been conducted.

Fully briefed, these matters are ripe for decision.

STANDARD

OF

REVIEW

In order to grant a motion for

summary judgment

or for partial summary judgment, the Court must

fmd that the pleadings, together with the

depositions, interrogatories and affidavits, establish

that there ‘is no genuine issue of material fact and

- that the moving

party is entitled to judgment as a

matter of law. Fed.R.Civ.P.

56.

The moving party

bears the initial burden of specifying the basis for

its motion and of identifying that portion of the

record which demonstrates the absence -of a genuine

issue of material fact.

Celotex Corp. v. Catrett,

477

U.S. 317, 3,22, 106 S.Ct. 2548, 91 L.Ed.2d 265

(1986). - Once

the

moving party satisfies this

burden,

-the non-moving

party thereafter must

produce specific facts demonstrating a genuine

issue of fact for trial.

Anderson v. Liberty Lobby,

Inc.,

477 U.S.

242, 247-48, 106 S.Ct. 2505, 91

L.Ed.2d 202 (1986).

Although the Court must review the evidence in the

light most favorable to the non-moving party, the

non-moving party

-

is required to do more than

simply show that there is some “metaphysical doubt

as to the material facts.”

Matsushita Elec. Indus.

Co. v. Zenith Radio Co.,

475 U.S. 574,

586,

106

S.Ct. 1348, 89 L.Ed.2d 538 (1986). The Rule

requires the non-moving party to present

“specific

facts

showing there is a

genuine

issue for trial.”

Fed.R.Civ.P.

56(e)

(emphasis added). Moreover,

“the mere existence of a scintilla of evidence in

support

of the plaintiffs position will be

insufficient; there must be evidence on which the

jury could reasonably find for the plaintiff.”

Anderson,

477 U.S.

at 252, 106 S.Ct.

2505.

FACTS

**2 There are four chicken production operations

at issue in this case: (1) the’ “Tyson *700

Operation,” consisting of 24 poultry houses, is

located at or near 4200 Ilsey Road in Earlington,

Hopkins

County,

Kentucky,

and is owned by Tyson

Children Partnership and leased by Tyson Chicken,

Inc.; (2) the “Adams Operation,” consisting of 16

poultry

houses, is located near

2300 Kentucky

593

in Cathoun, McLean County, Kentucky, and is

owned by Adams; (3) “Buchanan # 1 Operation,”

consisting of 24 poultry houses,

is located at or near

1886 Gravel Pit Road and/or 53 Honeysuckle Lane,

and/or 63 Davis Road

in Sebree, Webster County,

Kentucky, and is owned by Buchanan; and (4) the

“Buchanan # 2 Operation,” consisting of 16 poultry

houses, is located at or near 1061 Collins Road

and/or 1097 Collins Road in Sebree, Webster

County, Kentucky, and is ‘owned by Buchanan.

See

Declaration of

John

Blair, Exhibits A-D

DN

45.

The broiler houses are generally 40 to 43 feet wide

and 400 to 500 feet long and generally 50 to 60 feet

apart. The houses are roofed and insulated, and

constructed to prevent entry of other animals. The

chicken production farms share common access

roads and interconnecting roads. Tyson Chicken

FN1

typically delivers between

160,000 and

180,000 chickens to a farm at a time, roughly

enough to fill 8 chicken houses. Tyson Chicken

delivers feed

to all

of Defendants’ operations almost

daily. Tyson Chicken formulates, makes, and owns

the feed and maintains feed delivery records. Tyson

Chicken

retains ownership of the chickens and feed

while at the

chicken production operations.

Through its contracts with the growers, Adams and

Buchanan, Tyson Chicken mandates that they

cooperate with it in adopting and/or- installing

recommended

management

practices

and

equipment. Tyson Chicken provides their growers

with a “Broiler Growing Guide” to ensure that they

raise the chickens according to Tyson

Chicken

standards. Under the contract, Tyson Chicken

reserves the right to unfettered access to the

growers’

property. ‘ Tyson - Chicken

technical

advisors visit the Adams and Buchanan operations

on approximately a weekly basis. The chickens are

fed, watered, and cared for by the growers--e.g.

Adams and Buchanan FN2-- for approximately

forty-nine to fifty-one days. At that time, Tyson

Chicken picks up the chickens from the facilities.

FN1. As discussed more fully below,

because of the early stage of this litigation,

the Court is

unable

-

at this time to

determine the role Tyson Foods plays in

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both

the operation of its subsidiary Tyson

Chicken and in the operation/management

of the poultry houses in question.

-

FN2. The grower for the Tyson Operation

is

Tyson Chicken. Tyson Chicken leases

the operation from Tyson Children

Partnership.

Ammonia is a colorless, irritant gas produced by

decomposing animal waste. For purposes of

chicken production

operations, the growers grow

chickens in houses on a floor of litter, generally a

layer of rice hulls. When the birds defecate, their

waste collects in the litter. Ventilation in the

poultry houses is necessary to protect the health of

the chickens and is accomplished by a combination

of exhaust fans and vents. The grower controls

ventilation by adjusting which fans are operating

and which vents are open. Many of the ventilation

tasks, along with feed, water,

and heating or cooling

tasks, are automated. After a flock is caught and

removed for prdcessing, the grower generally will

remove a small layer of 1 or 2 inches of the litter

that

is usually found below the watering lines and

that is found

in clumps due to higher moisture

content; this

process of removal is called

“decaking.” Proper decaking is necessary to

provide a *701

suitable environment for the

placement of

baby chicks for the next production

cycle. The growers decake the litter after every

flock,

but they do a total cleanout--that is, removal

of the litter, about every

two years.

STATUTORY BACKGROUND

**3 Plaintiffs complaint alleges the chicken

production operations discharge dangerous

quantities of ammonia into the environment.

Plaintiffs allege that Defendants have failed to

report these releases to the appropriate authorities in

violation of the Comprehensive Environmental

Response, Compensation, and Liability Act

(“CERCLA”), 42 U.S.C.

§~

9601-9675 and the

Emergency Planning and Community Right to

Know Act

(“EPCRA”), 42 U.S.C. §~11001-11050.

CERCLA and EPCRA provide, in combination, for

federal, state, and local governments to receive

immediate notification of releases of hazardous

substances into the environment so that these

govemment agencies can

initiate appropriate

responses. Specifically, Section 103 of CERCLA

provides that any person in charge of a facility from

which a hazardous substance has been released in a

reportable quantity (RQ) must immediately notify

the National Response Center (“NRC”). 42 U.S.C. §

9603(a). Releases that exceed

100 pounds per day

must be reported under section 103. 42 U.S.C.

§

9603; 40 C.F.R.

§

302.4. Section 103(f)(2) of

CERCLA

further provides for relaxed reporting

requirements for substances that

are classified as a

continuous release. 42 U.S.C. § 9603(f).

EPCRA requires owners or operators of facilities to

provide immediate notice of the release of an

extremely hazardous substance or CERCLA

hazardous substance to the designated state

emergency response commission (“SERC”) and the

emergency coordinator for the appropriate local

emergency planning commission (“LEPC”). 42

-U.S.C. § 11004(a); 40 C.F.R. §

355.40(b)(l).

The

statute also requires a written follow-up emergency

notice to the SERC and the LEPC “as soon as

practicable after a release.” 42 U.S.C. § 11004(c).

CERCLA authorizes

any person to “commence a

civil action on his own behalf

...

against any person

who is alleged to be in violation of any standard,

regulation, condition,

requirement, or order which

has become effective pursuant to this chapter....” 42

U.S.C.

§

9659(a)(1). Similarly, enforcement of

EPCRA can occur through the

- citizen-suit

provision, 42 U.S.C.

§ 11046(a)(1), which

authorizes civil penalties and injunctive relief

against “an owner or operator of a facility for

failure,” among other things,

to “submit a

followup emergency notice” as required under

Section

304(c)

of EPCRA.

42

U.S.C.

§

1 1046(a)(l)(A)(i).

-

DISCUSSION

Plaintiffs have moved for partial summary

judgment as to the First and

Second Causes of

Action set forth in the First Amended Complaint

arguing that (1) a “facility” under the definitions

contained in both CERCLA and EPCRA includes

multiple chicken houses that are located on single

or adjacent sites within a concentrated area; and (2)

that Tyson Foods, including its wholly -owned

subsidiary, Tyson Chicken, Inc., is an operator and

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thus liable under ,CERCLA for the unreported

ammonia

releases occurring at the chicken

production facilities. DN 44. Defendants have

moved for summary judgment on the CERCLA and

EPCRA claims as well arguing that (1) the Plaintiffs

lack standing to assert their federal statutory claims

because they cannot demonstrate that non-reporting

of ammonia emissions *702 under CERCLA and

EPCRA has caused them any injury in fact; (2) that

the Defendants are not in violation of CERCLA and

EPCRA because they have no knowledge that a

reportable quantity of ammonia has been released

from any facility at issue herein; (3) that no

reporting of releases under EPCRA and CERCLA is

required because if any releases from chicken

production operations are reportable, they are

continuous; (4) that the Defendants are not

required

to report ammonia releases

from chicken production

operations because it is used

in routine agricultural

operations;

(5)

that

each poultry house or litter shed

is a separate facility under CERCLA and EPCRA;

(6) that notification of the EPA and other agencies

is not necessary ‘because those agencies have actual

knowledge of the

releases in question;

(7) that

Defendants have been denied fair notice of any

requirement to report ammonia emissions

-

from

poultry

waste; (8) that the Defendants are not

required to report ammonia releases from the

chicken production operations because the release

falls within the Fertilizer Exception under

CERCLA; (9) that Tyson

Foods and Tyson

Chicken are not persons in charge of the Adams and

Buchanan Facilities; and

(10) that Tyson Children

Partnership is not a person in charge of the Tyson

Facility DN 48, DN 49, DN 50.

I. STANDING

**4

l23

Before the Court

can examine the

other issues raised by the parties, the Court must

address whether the Plaintiffs have standing to

assert claims under CERCLA and EPCRA. A party

may not bring a suit

in federal court without

standing. Standing is a “core component” of the

“case or controversy” requirement of Article III of

the United States Constitution.

Broadened Horizons

Riverkeepers v. United States Army

-

Corps oJ

Engineers,

8 F.Supp.2d 730, 733 (E.D.Tenn.1998).

The standing doctrine is designed to confine the

courts to adjudicating actual cases and controversies

by ensuring that the “plaintiff

has ‘alleged such a

personal stake in the outcome of the controversy’ as

to warrant his invocation of federal court

jurisdiction and to justify exercise of the court’s

remedial powers on his

behalf.”

Warth v. Seldin,

422 U.S. 490, 498-499, 95 S.Ct. 2197, 45 L.Ed.2d

343 (l975)(quoting

Baker v. Carr,

369 U.S. 186,

204, 82 S.Ct. 691, 7 L.Ed.2d 663 (1962)). To

establish

Article

III standing to sue in federal

court,

an individual plaintiff must establish three elements:

First,

the plaintiff must have suffered an “injury

in fact--an invasion of a legally protected

interest

which is (a) concrete and particularized

and (b) “actual or immirent, not ‘conjectural’

or ‘hypothetical,’

“....

Second, there must be a

causal connection between the injury and the

conduct complained of--and the

injury has to be

“fairly

...

traceable

to the challenged action of

the defendant, and not

...

the

result of

the

independent action of some third party not

before

the court.’.... Third, it must be “likely,” as

opposed

to merely “speculative,” that the injury

will be “redressed by a favorable decision.”

Broadened Horizons Riverkeepers,

8 F.Supp.2d at

733 (quoting

Lujan v. Defenders of Wildlife,

504

U.S.

555,

560, 112 S.Ct. 2130, 119 L.Ed.2d 351

(1992) (citations omitted));

see also Bennett v.

Spear,

520 U.S. 154, 167, 117 S.Ct. 1154, 137

L.Ed.2d 281 (1997);

Cox v. City of Dallas, -Texas,

256 F.3d 281, 304 (5th Cir.200l);

Friends of the

Earth v. Laidlaw Environmental Services, Inc.,

528

U.S. 167, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000).

“The ‘injury in fact’ test requires more than an

injury to a cognizable interest. It requires that the

party seeking review be himself among the injured.”

*7O3Lujan,

504 U.S. at 563, 112 S.Ct. 2130. In

short, the

three

constitutional requirements are

injury, causation, and redressability.

45

An organization has standing to bring suit on

behalf of its members when: “(a) its members,

would otherwise have standing to sue in their own

right; (b) the interests it seeks to protect are

germane to the organization’s purpose; and (c)

neither the claim asserted nor the relief requested

requires the participation of individual members in

the lawsuit.”

Hunt v. Washington State Apple

Advertising Com’n,

432 U.S. 333, 343, 97 S.Ct.

2434, 53 L.Ed.2d 383 (1977). The party invoking

federal jurisdiction bears the burden of establishing

that it has standing to pursue the action.

FW/PBS,

Inc. v. City ofDallas,

493 U.S. 215, 231, 110 S.Ct.

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596, 107 L.Ed.2d 603 (1990).

Defendants allege that Plaintiffs are unable to

establish an

injury

in fact. Defendants maintain that

the only injury

that could result from the alleged

reporting violation of CERCLA and EPCRA would

be that the EPA would not have sufficient

information to evaluate the need for action.

Defendants contend that the EPA has knowledge

concerning

ammonia releases from

chicken houses

since it is now attempting to ascertain whether the

current state of scientific knowledge is sufficient for

establishing a reliable emission factor that could be

used to determine whether reporting is required at

all. Additionally, Defendants argue that Plaintiffs

do not contend that they have any current evidence

of the amount of any release on any particular day

in a reportable amount at the farms in question-they

merely contend that if they are allowed’ to test at the

farms they

believe they can show the farms will

have reportable emissions. Defendants assert that

Plaintiffs’ claims are therefore purely hypothetical

and

conjectural.

Further, Defendants contend that

Plaintiffs cannot establish that they have an injury

that will not be redressed without a decision

favorable to the Plaintiffs. Except for the argument

that the individual

Plaintiffs do not have standing,

the Defendants have not challenged whether the

organization

has

met

the

other

standing

requirements.

-

A. Injury in Fact

-

**5 6 Plaintiffs have

plainly demonstrated injury

in fact. The individual Plaintiffs have alleged a

violation of their

right to use the area around the

-

chicken production operations without being

-

exposed,,, either

-

knowingly or unknowingly, to

harmful pollutants allegedly

released without proper

notice. Plaintiffs allege that the ammonia emitted

by Defendants’ operations greatly diminish their

ability to use and enjoy their property. Odors

associated with the Defendants’ operations force the

Plaintiffs to curtail their activities on their farms and

often force them to cancel outdoor events because

of the odors and potentially dangerous chemicals

-

allegedly released from Defendants’ facilities.

Plaintiffs have both

detailed their use of the affected

area, as well as the ways

in which their use is

threatened by the alleged releases of ammonia.

FN3

The faCts alleged in these declarations are

sufficient to meet the

injury in fact

requirement

under

Lujan. Lujan,

504 U.S. at 560, 112 S.Ct.

2130;

Heart of America Northwest v. Westinghouse

Hanford,

820

F.Supp.

1265,

1266-70

(E.D.Wash.1993).

FN3. Defendants argue that Plaintiffs have

failed to allege injury in fact because the

alleged injury results from releases, not

from the failure to give notice. The Court

will consider this

argument in the

discussion of causality.

-

7 Further, Plaintiffs also allege an injury to their

right

to be informed in a

timely

manner of any

releases from the *704 operations so that they may

take whatever precautionary steps are necessary.

Plaintiffs argue that Defendants’ failure to report the

ammonia releases has harmed the Plaintiffs because

it has denied them access to critical information and

has impaired the ability of government agencies to

properly respond to releases. Plaintiffs have alleged

precisely the type,

of injury--failure to receive

information--that Congress intended to prevent by

enacting the reporting requirements of both

CERCLA and

EPCRA. Notably, the Supreme

Court in discussing the purpose

of

EPCRA has

stated as follows: “EPCRA establishes

a

framework

of state, regional and local agencies designed to

inform the public about the presence of hazardous

and toxic chemicals, and to provide for emergency

response in the

event

of health-threatening

releases.”

Steel Co. v. Citizens for a Better

Environment,

523 U.S. 83, 86, 118 S.Ct. 1003, 140

L.Ed.2d 210 (1998). It is well established that the

“injury required by Article III may exist solely by

virtue

of ‘statutes creating legal rights, the invasion

of which creates standing.’

“

Warth,

422 U.S. at

500,

95

S.Ct. 2197 (citations omitted);

see also

Lujan,

504 U.S. at 578, 112 S.Ct. 2130;

Federal

Election Com’n v. Akins,

524 U.S. 11, 20, 118 S.Ct.

1777, 141 L.Ed.2d 10 (1998)(Supreme Court noted

that it “has previously held that a plaintiff suffers an

‘injury in fact’ when the plaintiff fails to obtain

information which must be publicly disclosed,

pursuant to a statute.”

Id.

at 21, 118 S.Ct. 1777).

FN4

FN4. The Court recognizes that the

Supreme Court in

Steel Co.

noted that they

had “not had occasion to decide whether

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being dep~ived of information that is

supposed to be disclosed under EPCRA-or

at least being deprived of it when one has a

particular plan for its use-is a concrete

injury

in fact that satisfied Article III.”

Steel Co., .523

U.S. at 105, 118 S.Ct. 1003.

The Supreme Court declined to reach that

question because it found that the

- complaint

in that case failed the third test

of standing, redressibility. From a review

of the case law, and as discussed above,

the Court believes that under the facts of

the present case, the Supreme Court

would

find an injury in fact that satisfies Article

III.

8

The Defendants further argue that Plaintiffs

have failed to allege an

injury in fact because they

can not prove that the Defendants have released a

reportable quantity of ammonia triggering the

reporting requirement under either CERCLA or

EPCRA. Requiring the Plaintiffs at this

stage of the

litigation to show the exact amount of the release of

ammonia from the chicken production operations as

a condition for standing “confuses the jurisdictional

inquiry (does the court have

power under Article III

to hear the case?) with the merits inquiry (did the

defendants violate the law?).”

Ecological Rights

Foundation v. Pac(flc Lumber Co.,

230 F.3d 1141,

1151(9th Cir.2000).

See also Friends of the Earth,

Inc. v. Laidlaw Environmental Services, Inc.,

528

U.S. 167, 182, 120 S.Ct. 693, 145 L.Ed.2d 610

(2000). Plaintiffs have presented evidence that

poultry houses emit ammonia and that studies exist

that estimate the amount of ammonia a poultry

house emits- over a specific period of time. Whether

this will be sufficient to establish violations of the

reporting requirements of CERCLA and EPCRA

remains to be seen. However, considering that little

discovery has been conducted at this stage of the

litigation, the Plaintiffs need not prove that the

Defendants have, in fact, violated the reporting

requirements in order to obtain

standing; this is

instead a question of whether Plaintiffs can

prove

their case.

Id.

**6 For these reasons, the Court concludes that the

Plaintiffs have alleged facts, supported by

declarations, which demonstrate a concrete, actual

injury and thus satisfy the first standing

requirement--injury in fact.

*705 B. Causality

9

Similarly, the Court

finds that Plaintiffs have

demonstrated a causal connection between the

injury and the conduct complained of. The Court

rejects the Defendants argument that the injury in

question results from the release of the

ammonia

and not the Defendants failure to give notice of the

release.

The purpose of CERCLA notice requirement is to

provide the EPA

and other regulatory agencies with

the information they need to assess hazards and

mitigate potential

injury

from releases.

Similarly,

EPCRA establishes a framework of agencies

designed to inform

the public about the presence of

hazardous and toxic chemicals, and to provide

emergency

response

in

the

event

- of

health-threatening releases. Without the required

notices of, alleged releases, regulatory agencies are

without knowledge of the releases; and are

consequently impeded from adequately mitigating

the releases. As a- result, Plaintiffs who use the

affected environment are therefore injured by

potential exposure to the hazardous releases.

See

Heart of America Northwest,

820 F.Supp. at 1271.

The procedures which Plaintiffs seek to enforce are

designed to protect Plaintiffs’ interest in avoiding

exposure to hazardous substances in the

environment.

Id.

at 1273. Therefore, the Court

fmds that Plaintiffs’ alleged injury is fairly traceable

to the challenged actions of Defendants and thus

satisfies the second standing

requirement.

C.- Redressability

10 11 The redress ability requirement ensures

that a plaintiff “personally

would benefit in a

tangible way from the court’s intervention.”

Warth,

422 U.S. at 508, 95 S.Ct.

‘2197;

Friends of the

Earth, Inc. v. Gaston Copper Recycling Corp.,

204

F.3d 149, 162 (4th Cir.2000). A plaintiff seeking

injunctive relief, as in

the present case,

demonstrates

redressability by

“alleging

a

continuing violation or the imminence of a future

violation” of the statute at issue.

Steel Co.,

523 U.S

at 108, 118 S.Ct. 1003. Plaintiffs seek injunctive

and other relief for Defendants alleged continuing

and threatened future violations of the reporting

requirements.

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Page 11

12 In the present case, a decision favorable to the

Plaintiffs would redress their injuries because it

would

require the Defendants to provide notice that

a specific

episodic release of a hazardous substance

has occurred or that specific continuous releases

will occur in the future which would allow the

Plaintiffs to take whatever precautionary steps

necessary to protect themselves from the ammonia

releases.

Furthermore, although the EPA, along with other

govemmental agencies, may already know that the

poultry houses emit high levels of ammonia and, as

Defendants argue, may be studying ways

to

effectively measure such release, such defense is

inappropriate to challenge standing where what the

Plaintiffs seek is enforcement of statutes Congress

designed in part for Plaintiffs’ benefit.

See Heart of

America Northwest,

820 F.Supp. at 1273 (citing

Women’s Equity Action League v. Cavazos,

879

F.2d 880, 886 (D.C.Cir.1989)). The notice

requirements under CERCLA and EPCRA are

designed to enable the appropriate governmental

agencies’ to respond to hazardous releases and under

EPCRA,

specifically, to notify

the public of such

releases. It is therefore reasonable for the Court to

also fmd that if Defendants complied with the

notice

requirements,

then

the

appropriate

govemmental agencies might respond to the release.

**7 For these reasons,

Plaintiffs’ alleged injury

redressed by a decision

favorable to Plaintiffs.

Based on the above discussion, the Court finds that

the individual Plaintiffs, as well as Sierra Club,

have standing to

assert

claims under CERCLA and

EPCRA.

II.

EXEMPTION

FOR

ANIMAL

PRODUCTION OPERATIONS

13 Defendants argue that there is no generally

accepted methodology

or model for estimating the

amount of ammonia chicken production facilities

emit. According to Defendants, the EPA is currently

addressing the issue of whether there is reliable

science to determine whether reporting is required

for these type

of facilities, and as a result, they are

not required to report ammonia releases. The

problem with this argument is that Defendants cite

no authority which exempts animal production

facilities from the reporting requirements of

EPCRA

and CERCLA. If Congress had intended

such a result, it could have excluded animal

production facilities, such as poultry and swine,

from the reporting requirements. Congress clearly

knew how to exempt certain items from the

reporting requirements of CERCLA and

EPCRA as

demonstrated by the fertilizer exclusion’ under

CERCLA Section lOl(22)(D) which

exempts “the

normal application of fertilizer” from the definition

of release. 42 U.S.C.

§

960 1(22)(D).

14

Furthermore, the fact that the EPA has not

chosen to enforce these provisions against animal

production facilities does -not prohibit a citizen

enforcement suit for

violation of the reporting

requirements. The Supreme Court has recognized

that the purpose of citizen suits is not to supplant

governmental enforcement by subjecting a

defendant to duplicative enforcement, but to step in

when local agencies fail to exercise their

enforcement responsibility.

Gwaltney of Smithfield,

Ltd. v. Chesapeake Bay Foundation,

484 U.S. 49,

60, 108 S.Ct. 376, 98 L.Ed.2d 306 (1987). If the

EPA were enforcing these provisions,

this suit

would not be necessary.

15

Similarly,

- the fact that the government has

knowledge of ammonia emissions from chicken

houses does not necessarily exempt Defendants

from the reporting requirements. The Government

would not require notice of specific releases of

hazardous substances if it was not already aware

that such substances at or above the reportable

quantity were

harmful.

FN5

‘FNS.

The Defendants do not dispute that

both CERCLA and

EPCRA require

-

persons in charge or owners and operators

of facilities

to report releases of ammonia

in excess of 100 pounds per day to the

appropriate federal, state and

local

authorities. 42 U.S.C. §

9603(a); 40

C.F.R.

§

302.6; 42 U.S.C.

§ 1l004(a)(3).

What is in dispute in this case is whether

these notice requirements apply to releases

of ammonia from chicken production

Operations.

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the Court finds that

is likely to be *706

on the

merits that is

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-

-

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the release of more than one 1

pound of

asbestos....’

“Id.).

However,

the cases cited by the Defendants reflect

that courts interpreting the knowledge requirement

have indicated that knowledge can be either actual

knowledge or’ constructive knowledge.

See In the

Matter of Thoro Products Co.,

1992 EPA AU

LEXIS 523, 1992 WL 143993 (May 19, 1992).

The

Administrative Law Judge in

Thoro Products

held that to establish a violation of the reporting

provisions, a plaintiff must present facts which

show the following:

first, that the owner or operator or person in

charge of the

...

facility had actual knowledge of

a

release of an RQ or more of a hazardous

substance or that he or she possessed knowledge

of

such circumstances ,as would ordinarily lead

upon investigation, in the exercise of reasonable

diligence which a prudent person ought to

exercise, to a knowledge of a release of an RQ or

more of a hazardous substance

...,

and, second,

that the owner or operator

failed to report the’

release

immediately after such knowledge was

acquired or may be constructed....

Id.

Therefore, actual or- constructive knowledge of

a release of a reportable quantity creates a duty to

report.

-

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2004 West. No Claim to Orig. U.S. Govt. Works.

Additionally, the Defendants maintain that if the

Court determines

that reporting of poultry emissions

is required, it would be a violation of due process to

penalize them

because the laws and regulations do

not provide fair warning that they must file

emergency reports for routine agricultural

emissions. The

Defendants ask that the Plaintiffs’

claim for penalties be dismissed. As stated

above, it

appears to the Court that

statute clearly does not

exclude the release of ammonia

from chicken or

livestock production operations, and as a result,

Defendants are required to report releases that meet

or exceed the reportable quantity. For purposes of

the motion for summary judgment, the Court denies

*707 Defendants’

-

motion to dismiss the civil

penalties with leave to reargue this issue at a

later

date after the liability of Defendants has been

determined.

III.

KNOWLEDGE

**8 16

Plaintiffs have alleged that the Defendants

have violated ‘the reporting requirements of

CERCLA

and EPCRA. Plaintiffs maintain that they

need only demonstrate that Defendants knew of a

release of ammonia, not that the Defendants knew

that it was of a reportable quantity. Defendants

disagree.

-

CERCLA Section 103(a) provides:

Any person in charge of

...

an onshore facility

shall, as soon as

he has knowledge of any

release (other than a federally permitted

release) of a hazardous substance from such

facility in quantities equal to or greater than

- -

those -determined pursuant to section 9602 of

this title,

immediately notify the National

-

‘

-,

Response Center

42 U.S.C. § 9603(a). The language in the statute

is

plain.

To prove a violation of the reporting

requirements, Plaintiffs must show not merely that

Defendants knew of a release, but that Defendants

knew that a reportable quantity of ammonia was

released. The EPA, administrative law judges, and

other

courts

have indicated that knowledge that a

release is of

a reportable quantity is necessary to

impose a requirement to file a report.

See United

States v. Buckley,

934 F.2d 84, 89 (6th Cir.l99l)

(“The district court properly charged jurors that to

prove Buckley guilty of failure to notify, the

government needed -,to prove that Buckley

‘knew

of

Defendants also argue that Plaintiffs have failed to

set

forth

proof that emissions from the

poultry

houses exceed the reportable quantities, and as a

result, Plaintiffs’ claims fail. Plaintiffs have

presented evidence that poultry houses emit

ammonia and that studies exist that estimate the

amount of ammonia a poultry house emits over a

specific period of time. For example, Plaintiffs’

have alleged that a 24-house chicken production

facility, like the Tyson Facility, releases at the

lowest estimate approximately 235 pounds of

ammonia into the environment every day. As

noted

above, whether this will be sufficient to establish

violations of the reporting requirements of

CERCLA and EPCRA remains to be seen.

However, considering that little discovery has been

conducted at this stage of the

litigation, the

Plaintiffs *708

need not prove that the Defendants

have, in fact, violated the reporting requirements in

order to survive this initial motion. There are

currently genuine issues of material fact regarding

the amount of ammonia released by each facility

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Page 13

and whether “the owner

or

operator” or “person in

charge” had knowledge or was aware of such

release.

-

IV. FACILITY

**9

One of the main issues before the

Court is

whether

under

the

emergency

reporting

requirements of both CERCLA and EPCRA the

term “facility” includes every poultry house or litter

shed at the farm site. Plaintiffs argue that each farm

site, consisting of several poultry houses on a

contiguous site, releases more than 100 pounds of

ammonia

daily. Plaintiffs maintain that the whole

farm site is the proper regulated entity for

purposes

of

the

CERCLA

and

EPCRA

reporting

requirements. The Court agrees.

A. CERCLA

CERCLA Section 101(9) defmes “facility” as

follows:

(A)

any

building,

structure,

-

installation,