NOTICE OF FILING
C. Allegations of Non-Compliance
E. Compliance Activities to Date

Rc:~V~D

CLERK’S OF~CE

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

DEC

2004

PEOPLE OF THE STATE OF ILLINOIS,

by LISA MADIGAN, Attorney General

)

 STATE

OF~LL~NO!S

of the State of Illinois,

)

 PoDut~on

Control Board

Complainant,

PCB No.

 04-136

v.

)

 (Enforcement

 Air)

CROMWELL-PHOENIX,

 INC.,

an Illinois Corporation,

Respondent.

NOTICE OF FILING

TO:

 Eric

 E. Boyd

Seyfarth Shaw

55 East Monroe Street,

 Suite 4200

Chicago,

 IL 60603-5803

PLEASE TAKE NOTICE that

 I have today, December 6,

 2004,

 filed

with the Office of the Clerk of the Illinois Pollution Control

Board the Stipulation and Proposal

 for Settlement

 and Motion for

Relief from Hearing Requirement,

 true and correct copies of which

are attached hereto and herewith served upon you.

PEOPLE OF THE STATE OF

 ILLINOIS,

by LISA MADIGAN, Attorney General

of~the State of Illinois

BY:_____

MICHJ~ELC.

 PARTEE

Assistant Attorney General

Environmental Bureau/North

 188 West Randolph Street,

 Suite 2001

Chicago,

 Illinois 60601

Tel.:

 (312)814-2069

BEFORE

THE

ILLINOIS

POLLUTION

CONTROL

BOARD

F?~ECr~VED

CLERK’S OFFICE

PEOPLE

 OF THE STATE OF ILLINOIS,

)

by LISA

MADIGAN,

 Attorney General

)

of the State of Illinois,

STATEOF~LUNOIS

PoUuUOfl Contro’ Boarc~

 Complainant,

PCB

No.

 04-136

v.

)

 (Enforcement

 Air)

CROMWELL-PHOENIX,

 INC.,

an Illinois Corporation,

Respondent.

STIPULATION AND PROPOSAL FOR SETTLEMENT

Complainant,

 PEOPLE OF THE STATE OF ILLINOIS,

 by LISA MZ~DIGAN,

Attorney General

of

the

State of

Illinois,

the

Illinois

Environmental Protection Agency (“Illinois EPA”), and Respondent,

CROMWELL-PHOENIX,

 INC., have agreed to the making of this

Stipulation and Proposal for Settlement

 (“Stipulation”) and to

submit it to the Illinois Pollution Control Board

 (“Board”)

for

approval.

 The parties agree that the statement of facts contained

herein is made and agreed upon for purposes of settlement

 only.

The

parties further stipulate that neither the fact that a party has

entered into this Stipulation,

 nor any of the facts stipulated

herein,

 shall be introduced into evidence in any other proceeding

except as otherwise provided herein.

 If the Board approves and

enters this Stipulation,

 the parties agree to be bound by the

Stipulation and Board Order and not to contest their validity in any

subsequent proceeding to implement or enforce their terms.

I.

JURISDICTION

The Board has jurisdiction of the subject matter herein and of

the parties consenting hereto pursuant to the Illinois Environmental

Protection Act

 (“Act”),

 415 ILCS 5/1,

et

 seq.

 (2002)..

II.

AUTHORIZATION

The undersigned representatives for each party certify that

they are fully authorized by the party whom they represent to enter

into the terms and conditions

 of this Stipulation and to legally

bind them to it.

 This Stipulation may be signed in counterparts,

all of which shall be considered one settlement.

III.

STATEMENT OF FACTS

A.

 Parties

1.

 On January 30,

 2004,

 a Complaint was filed on behalf of

the People of the State of Illinois by Lisa Madigan, Attorney

General of the State of Illinois, on her own motion and at the

request of the Illinois EPA, pursuant to Section 31 of the Act,

415

ILCS 5/31

 (2002),

 against the Respondent.

2.

 The Illinois EPA is an administrative agency of the State

of Illinois,

 created pursuant to Section 4 of the Act,

 415 ILCS 5/4

(2002)

2

3.

 At all times relevant to the Complaint,

 Respondent was

and is an Illinois corporation that is authorized to transact

buSiness in the State of Illinois.

B.

 Site

 Description

1.

 From at least 1993 until, about September 2000,

 Respondent

operated a facility located at 7401 South Pulaski Road,

 Chicago,

Cook County,

 Illinois

 (“former facility”)

2.

 At its former facility,

 Respondent produced corrosion

inhibiting packaging materials by using paper coating machines to

coat paper with corrosion inhibiting compounds.

 These corrosion

inhibiti~igcompounds contained more than 0.28 kilograms per liter or

2.3 pounds per gallon volatile organic material

 (“VOM”)

3.

 In about 2000, Respondent moved its operations to another

facility located at 12701 South Ridgeway Avenue, Alsip, Cook County,

Illinois

 (“current facility”)

 Respondent applies corrosion

inhibiting compounds containing more than 0.28 kilograms per liter

or 2.3 pounds per gallon VOM at its current facility.

4.

 Complainant contends that Respondent operated air

pollution sources without an operating permit at its former

facility,

 constructed and operated air pollution sources at it~

current facility without ‘construction or operating permits, and did

not comply with or seek an exemption from the emission limitation

applicable

 to its paper coating machines.

5.

 On September 18,

 2003k

 the Board granted Respondent an

Adjusted Standard from the VOM paper coating requirements under 35

Ill. Adm.

 Code 218.204(c).

3

C.

 Allegations of Non-Compliance

Complainant contends that the Respondent violated the following

provisions of the Act and Board regulations:

Count

I:

 Causing, threatening or allowing air pollution in

violation of Section 9(a)

 of the Act

 (415

 ILCS 5/9(a)

(2002)) and Section 201.141 of the Board’s Air Pollution

Regulations

 (35 Ill. Adm. Code 201.141);

Count II:

 Constructing air pollution source without construction

permit in violation of Section

 9(b)

 of the Act (41~ILCS

5/9(b)

 (2002))

 and Section 201.142 of the Board’s Air

 Pollution Regulations

 (35 Ill. Adm.

 Code 201.142);

Count III: Operating an air pollution source without an operating

permit in violation of Section 9(b)

 of the Act and

Section201.143 of the Board’s Air Pollution Regulations

(35 Ill.

 Adm.

 Code 201.143);

Count IV:

 Exceeding the emission limitation for a coating line in

violation of Section 9(a)

 of the Act and Section

218.204(c)

 of the Board’s Air Pollution Regulations

(35

Ill. Adm.

 Code 218.204(c));

CountV:

 Failing to demonstrate compliance with the emission limit

for a coating line in violation of Section 9(a)

 of the

Act and Section 218.204 of the Board’s Air Pollution

Regulations

 (35 Ill. Adm.

 Code 218.204);

D.

 Non-Admission of Violations

The Respondent has agreed to this Stipulation for the purpose

of settling and compromising disputed claims without having to incur

the expense of contested litigation. By entering into this

Stipulation,

 the Respondent does not admit the violations alleged in

the Complaint or the Alleged Violations contained in this

Stipulation,

 and this Stipulation shall not be interpreted or

construed as including or expressing any such admission.

E.

 Compliance Activities

 to Date

Respondent applied for and was granted both an Adjusted

Standard from the VOM paper coating requirements under 35 Ill. Adm.

4

Code 218.204(c)

 and the necessary operating permit,

 thereby

remedying the alleged noncompliance.

IV.

APPLICABILITY

1.

 This Stipulation shall apply to and be binding upon the

Complainant and the Respondent, and any officer,

 director,

 agent,

employee or servant of the Respondent,

 as well as successors or

assigns of the Respondent.

 The Respondent shall not raise as a

defense to any enforcement action taken pursuant to this Stipulation

the failure of any of its officers or agents to take such action as

shall be required to comply with the provisions of this Stipulation.

2.

 No change in ownership,

 corporate status or operator of

the facility shall in any way alter the responsibilities of the

Respondent under this Stipulation and Proposal for Settlement.

In

the event of any conveyance

 of title, easement or other interest in

the current facility,

 the Respondent shall continue to be bound by

and remain liable for performance of all obligations under this

Stipulation.

V.

COMPLIANCE WITH OTHER LAWS AND REGULATIONS

This Stipulation in no way affects the responsibilities of the

Respondent to comply with any other federal, State or local

 laws or

regulations including,

 but not limited to, the Act and the Board

regulations,

 35 Ill. Adm.

 Code,

 Subtitles A through H.

5

VI.

IMPACT RESULTING FROM THE ALLEGED NON-COMPLIANCE

Section

 33(c)

 of the Act,

 415 ILCS

 5/33(c)

 (2002),

 provides as

follows:

In making its orders and determinations, the Board shall

take into consideration all the facts and circumstances

bearing upon the reasonableness of the emissions,

discharges, or deposits involved including, but not

limited to:

1.

 the character and degree of injury to, or

interference with the protection of the health,

 general’

welfare and physical property of the people;

2.

 the social and economic value of the pollution

source;

3.

 the suitability or unsuitability of the pollution

source to the area in which

 it is located,

 including the

question of priority of location in the area involved;

4.

 the technical practicability and economic

reasonableness of reducing or eliminating the emissions,

discharges or deposits resulting from such pollution

source; and

5.

 any subsequent compliance.

In response to these factors, the parties state the following:

1.

 The VOM emissions from the RespOndent1s facilities have

not caused negative health or environmental effects.

2.

 There is social and economic benefit to Respondent’s

current

 facility.

3.

 Operation of the current facility is suitable for the

area in which it is located.

4.

 Reducing or eliminating the emissions from Respondent’s

paper coating line was neither technically practicable nor

economically reasonable.

 Accordingly, Respondent was granted an

6

Adjusted Standard from the VOM paper coating requirements

 under. 35

Ill. Adm.

 Code 218.204(c).

5.

 Respondent is in compliance with the Act and the Board

Regulations.

VII.

CONSIDERATION OF SECTION 42(h)

 FACTORS

Section 42(h)

 of the Act, 415 ILCS 5/42(h)

 (2002), provides as

follows:

In determining the appropriate civil penalty to be

imposed under

 this Section, the Board is authorized

to consider any matters of record in mitigation or

aggravation of penalty, including but not limited to the

following factors:

1..

 the duration and gravity of the violation;

2.

 the presence or absence of due diligence on the part

of the respondent in attempting to comply with

requirements

 of this Act and regulations thereunder or to

secure relief therefrom as provided by this Act;

3.

 any economic benefits accrued by the respondent

because of delay in compliance with requirements,

in

which case the economic benefits shall be determined by

the lowest cost alternative for achieving compliance;

4.

 the amount of monetary penalty which will serve to

deter further violations by the respondent and to

otherwise aid in enhancing voluntary compliance with this

Act by the respondent and other persons similarly subject

to the Act;

5.

 the number, proximity in time,

 and gravity of

previously adjudicated violations

 of this Act by the

respondent;

6.

 whether the respondent voluntarily self-disclosed,

in accordance with subsection

 i of this Section,

 the non-

compliance

 to the Agency; and

7.

 whether the respondent has agreed to undertake a

“supplemental environmental project,” which means an

7

environmentally beneficial project that

 a respondent

agrees to undertake in settlement of an enforcement

action brought under this Act, but which the respondent

is not otherwise legally required to perform.

In response to these factors,

 the parties state as follows:

1.

 Complainant contends that the alleged violations began at

various times between 1993 and 2000,

 but were all resolved on

September

18,

 2003,

 when Respondent was granted an Adjusted Standard

from the VOM paper coating requirements under 35 Ill.

 Adm. Code

218.204(c).

2.

 Respondent was diligent in achieving compliance with the

Act and Board regulations once

 it became aware of the alleged

noncompliance.

3.

 Because of a delay in compliance with requirements, the

Complainant contends that approximately one third of the $60,000.~O0

civil penalty against the Respondent goes to negate the economic

benefit accrued as a result of the delay in compliance.

4.

 The Complainant contends that the civil penalty to be

paid by the Respondent will serve to deter any future violations

of

the Act, Board and Illinois EPA regulations,

 and permit

requirements, and will enhance voluntary compliance with State and

federal environmental laws.

 The Complainant further contends that

approximately two thirds of the $60,000.00 civil penalty against the

Respondent

 is deterrence-based.

5.

 To Complainant’s knowledge,

 Respondent has no previously

adjudicated violations

 of the Act.

6.

 Self-disclosure is not at issue in this matter.

8

7.

 The settlement

 of this matter does not include a

supplemental environmental project.

VIII.

TERMS

 SETTLEMENT

Penalty

Payment

1.

 The Respondent shall pay a civil penalty in the sum of

Sixty Thousand DQllars

 ($60,000.00) within 30 days from the date the

Board adopts and accepts this Stipulation.

 The penalty described in

this Stipulation shall be paid by certified check, money order or

wire transfer payable to the Illinois EPA,

 designated to the

Illinois Environmental Protection Trust Fund and submitted to:

Illinois Environmental Protection Agency

Fiscal Services Section

1021 North Grand Avenue East

P.O. Box 19276

Springfield,

 Illinois 62794-9276

The name and number of the case and Respondent’s Federal Employer

Identification Number,

 36-3582927, shall appear on the certified

check, money order or wire transfer.

 A copy of the certified check

or money order and the transmittal letter or a copy of the receipt

for the wire transfer shall be sent to:

Michael

C.

 Partee

Assistant Attorney. General

Environmental Bureau/North

188 West Randolph Street,

 Suite 2001

Chicago,

 Illinois 60601

Maureen Wozniak

Assistant Counsel

Illinois Environmental Protection Agency

1021 North Grand Avenue East

P.O.

 Box 19276

Springfield,

 Illinois 62794-9276

9

2.

 Pursuant to Section 42(g)

 of the Act,

 415 ILCS 5/42(g)

(2002),

 interest shall accrue on any payment not paid within the

time period prescribed above at the maximum rate allowable under

Section 1003(a)

 of the Illinois Income Tax Act,

 35 ILCS 5/1003

(2002)

 Interest on any unpaid payment shall begin to accrue from

the date the payment is due and continue to accrue until the date

payment is received.

 When partial payment(s)

 is made,

 such partial

payment shall be first applied to any interest on unpaid payment

then due and owing.

 All interest on payment owed shall be paid by

certified check or money order, payable to the Illinois EPA,

designated to the Illinois Environmental Protection Trust Fund and

delivered to the address and in the manner described above.

3.

 For purposes of payment and collection,

 Respondent may be

reached at the following address:

Roy Galman

Vice President of Operations

Cromwell-Phoenix,

 Inc.

12701

 S. Ridgeway Ave.

Alsip,

IL

60803

4.

 In the event of default of this Section VIII.A,

the

Complainant shall be entitled to all available relief including,

but

not limited to, reasonable costs of collection and reasonable

attorney’s

 fees.

Future

Use

Notwithstanding any other language in this Stipulation to the

contrary, the Respondent agrees that this Stipulation may be used

against the Respondent in any subsequent enforcement action as proof

of

 a past adjudication of violation of the Act and the Board

10

regulations promulgated thereunder for all violations alleged in the

Complaint in this matter, for purposes of Sections 39(a) and/or

42(h)

 of the Act,

 415 ILCS 5/39(a) and/or 5/42(h)

 (2002).

 Further,

Respondent agrees to waive any rights to contest,

 in any subsequent

enforcement action, any allegations that these alleged violations

were adjudicated.

C.

 Right of Entry

In addition to any other authority,

 the Illinois EPA,

its

employees and representatives, and the Attorney General, her agents

and representatives,

 shall have the right of entry into and upon the

Respondent’s facility which is the subject of this Stipulation,

at

all reasonable times and with reasonable advance notice,

 for the

purpose of carrying out inspections.

 In conducting such

inspections,

 the Illinois EPA,

 its employees and representatives,

and the Attorney General, her employees and representatives, may

take photographs,

 samples, and collect information,

 as they deem

necessary consistent with Constitutional limitations.

D.

 Cease and Desist

The Respondent shall cease and de~istfrom violations of the

Act and Board regulations that were the subject matter of the

Complaint

 as’ outlined in Section III.C of this Stipulation.

E.

 Release from Liability

In consideration of the Respondent’s payment of the $60,000.00

penalty, any interest accrued thereon, and upon the Board’s

acceptance and approval of the terms of ‘this Stipulation, the

Complainant releases, waives and discharges the Respondent from any

11

further liability or penalties for violations

 of the Act and Board

regulations that were the subject matter of the Complaint herein.

The release set forth above does not extend to any matters other

than those expressly specified in Complainant’s Complaint filed on

January 30,

 2004.

 The Complainant reserves, and this Stipulation is

without prejudice to,

 all rights of the State of Illinois against

the Respondent with respect to all other matters,

 including but not

limited to,

 the following:

a.

 criminal liability;

b.

 liability for future violation of State,

 federal, local,

and common laws and/or regulations;

c.

 liability for natural resources damage arising out of the

alleged violations; and

d.

 liability for claims based on the Respondent’s failure to

satisfy the requirements of this Stipulation.

Nothing in this Stipulation is intended as a waiver,

 discharge,

release, or covenant not to sue for any claim or cause of action,

administrative or judicial, civil or criminal, past or future,

in

law or in equity, which the State of Illinois or the Illinois EPA

may have against any person,

 as defined by Section 3.315 of the Act,

415 ILCS 5/3.315

 (2002),

 or entity other than the Respondent or any

officer, director, or agent of the Respondent.

Enforcement

Board

Order

1.

 Upon the entry of the Board’s Order approving and

accepting this Stipulation,

 that Order is a binding and enforceable

order of the Board and may be enforced as such through any and all

12

available means.

2.

 Respondent agrees that service of process on Respondent

in any subsequent proceeding to enforce the Board Order approving

and accepting this Stipulation may be made by certified mail.

3.

 The parties agree that,

 if the Board does not approve and

accept this Stipulation, neither party is bound by the terms herein.

4.

 ,It is the intent of the Complainant and Respondent that

the provisions of this Stipulation and any Board Order accepting and

approving same shall be severable, and ‘should any provision be

declared by a court of competent jurisdiction to be inconsistent

with State or federal

 law, and therefore unenforceable,

the

remaining clauses shall remain in full force and effect.

5.

 Each party shall remain responsible for its own costs and

fees incurred in relation to the Complaint and resolution of this

matter.

The

 remainder of this page should be blank

13

WHEREFORE, Complainant and Respondent request that the Board

adopt and accept the foregoing Stipulation as written.

PEOPLE

THE

STATE

ILLINOIS,

‘by LISA MADIGAN, Attorney General

of the State of Illinois

MATTHEW

DUNN,

 Chief

Environmental Enforcement!

Asbestos Litigation Division

BY:

ROSEMARIJ

Environmen?a1

Buf~áu/Nö~th

Assistant

Attorney

General

ILLINOIS

ENVIRONMENTAL

PROTECTION

AGENCY

BY:

JOSEP

 SVOBODA

Chie

egal

Counsel

CROMWELL-PHOENIX,

 INC.

BY:

Nar~~7f5/~4

Title:

DATE:

DATE:

///2.~’/o

14

BEFORE THE ILLINOIS POLLUTION CONTROL BJ~i~K~J~

PEOPLE OF THE STATE OF ILLINOIS,

DEC

062004

by LISA

MADIGAN,

 Attorney General

of the State of Illinois,

‘

)

STATEOFILLINOIS

Pollution Contro~Board

Complainant,

PCB No.

 04-136

v.

)

 (Enforcement

 Air)

CROMWELL-PHOENIX,

 INC.,

an Illinois Corporation,

Respondent.

MOTION

FOR

RELIEF

FROM

HEARING

 REQUIREMENT

NOW COMES the Complainant,

 PEOPLE OF THE STATE bF ILLINOIS, by

LISA

MADIGAN,

 Attorney General of the State of Illinois,

 and hereby

moves for relief from the hearing requirement in this case pursuant

to Section 31(c) (2)

 of the Illinois Environmental Protection Act

(“Act”), 415 ILCS

 5/31(c) (2)

 (2002),

 and Section 103.300 of the

Illinois Pollution Control Board

 (“Board”)

 Procedural Rules,

 35 Ill.

Adm. Code 103.300.

 In support of this Motion,

 the Complainant

states as follows:

1.

 Section 31(c) (2)

 of the Act allows the parties in certa,in

enforcement cases to request relief from the mandatory hearing

requirement where the parties submit to the Board a Stipulation and

Proposal for Settlement.

 Section 31(c) (2) provides as follows:

Notice;

 complaint;

 hearing.

(c) (2) Notwithstanding the provisions of subdivision

(1)

of this subsection

 (c), whenever a complaint has been

filed on behalf of the Agency or by the People of the

State of Illinois, the parties may file with the Board a

stipulation and proposal for settlement accompanied by a

request for relief from the requirement of

 a hearing

pursuant to subdivision

(1)

 Unless the Board,

 in its

discretion,

 concludes that a hearing will be held,

the

Board shall

 cause notice of the stipulation,

 proposal and

request for relief to be published and sent in the same

manner as is required for hearing pursuant to subdivision

(1)

 of this subsection. The notice shall include

a

statement that any person may file a written demand for

hearing within 21 days after receiving the. notice.

 If any

person files a timely written demand for hearing, the

Board shall deny

 t’he request for relief from a hearing

and shall hold a hearing in accordance with the

provisions of subdivision

 (1).

2.

 Board Procedural Rule 103.300 provides,

 in relevant part,

as follows

 (emphasis in original)

Request for Relief from Hearing Requirement in State

Enforcement Proceeding.

(a)

 Whenever a complaint has been filed on behalf of

the

Agency or by the People of the

 State

 of Illinois,

the

parties may file with the Board a proposed stipulation

and settlement accompanied by a request for relief from

the requirement of a hearing

 pursuant to Section 31(c) (2)

of the Act

3.

 On January 30,

 2004,

 the Complaint was filed on behalf of

the People of the State of Illinois with the Board.

4.~

 Simultaneous with the filing of this Motion, a

Stipulation and Proposal for Settlement was filed with the Board,

and no hearing is currently scheduled in this

 case.

WHEREFORE,

 the Complainant,

 PEOPLE OF THE STATE OF ILLINOIS, by

LISA

MADIGAN,

 Attorney General of the State of Illinois,

respectfully moves

 for relief from the requirement of

 a hearing

pursuant to Section 31(c) (2)

 of the Act and Board Procedural Rule

103.300.

2

Respectfully submitted,

PEOPLE OF THE STATE OF ILLINOIS,

by LISA

MADIGAN,

 Attorney General

of the State of Illinois

BY:

MICHAEL

C.

 ARTEE

Assistant Attorney General

Environmental Bureau/North

 188 West Randolph Street, Suite 2001

Chicago,

 Illinois 60601

Tel.:

 (312)814-2069

3

CERTIFICATE

 OF SERVICE

It

 is hereby certified that true and correct copies of

Stipulation

and

Proposal

for

Settlement,

Motion

for

Relief

from

Hearing

 Requirement and Notice of

Filing

 were mailed,

 first class

postage prepaid,

 to the person listed on the Notice of Filing on

December

6,

 2004.

BY:

1~4J(ft~41.

MICHAEL

 C. PARTEE

It is hereby certified that the originals plus nine

(9)

 copies

of the foregoing were hand-delivered to the following person on

December

6,

 2004:

Pollution Control Board, Attn:

 Clerk

James R. Thompson Center

100 West Randolph Street, Suite 11-500

Chicago,

 Illinois 60601

BY:

____________________

MICHAEL

C.

 PARTEE