BEFORE THE ILLINOIS
POLLUTION CONTROL BOARD
GRAND PIER CENTER LLC
AMERICAN INTERNATIONAL
SPECIALTY LINES INSURANCE CO.
as subrogee ofGRAND
PIER CENTER LLC
Complainants,
V.
RIVER EAST LLC
CHICAGO DOCK AND CANAL TRUST
CHICAGO DOCK AND CANAL COMPANY
KERR-McGEE CHEMICAL LLC
Respondents.
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RECEIVED
CLERKS OFFICE
OCT 212005
STATE OF ILLINOIS
Pollution Control Board
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PCB 2005-157
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(Enforcement)
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Donald J. Moran
Pedersen & Houpt
161 North Clark Street
Suite 3100
Chicago, IL 60601-3242
Bradley Halloran
Hearing Officer
Illinois Pollution
Control Board
James R. Thompson
Center
—
Suite 11-500
Chicago, IL 60601
NOTICE OF FILING
PLEASE TAKE NOTICE that on October21, 2005, we caused to be filed with the Illinois
Pollution Control Board in the James R. Thompson Center, Chicago, Illinois, TRONOX LLC’S
REPLY IN FURTHER SUPPORT OF ITS MOTION TO AMEND AFFIRMATIVE
DEFENSES TO COMPLAINANTS’ COMPLAINT, copies ofwhich are served upon you along
with this notice.
Michael P. Connelly
Garrett C. Carter
Connelly Roberts & McGivney LLC
One North Franklin Street
Suite 1200
Chicago, Illinois 60606
Tele: (312) 251.9600
Tronox LLC
TO:
Frederick S. Mueller
Daniel C. Murray
Garrett L. Boehm, Jr.
JOHNSON & BELL, LTD.
55 East Monroe Street
Suite 4100
Chicago, IL 60603-5803
t\2470\040\Notice ofFiling ~9
RECEIVED
BEFORE THE ILLINOIS
CLERK’S OFFICE
POLLUTION CONTROL BOARD
nr
LILT
212095
GRAND PIER CENTER
LLC,
)
STATE OF ILLINOIS
AMERICAN INTERNATIONAL
)
POItUtIOfl Control Board
SPECIALTY LINES INSURANCE CO.
)
as subrogee of Grand Pier Center LLC,
)
)
Complainants!
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Counter-Complaint Respondents,
)
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PCB 2005-157
V.
)
(Enforcement)
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RIVER EAST LLC,
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CHICAGO DOCK AND CANAL TRUST,
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CHICAGO DOCK AND CANAL COMPANY,
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Respondents,
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TRONOXLLC,
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Respondent/
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Counter-Complaint Complainant.
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TRONOX LLC’S REPLY IN FURTHER SUPPORT OF ITS MOTIONTO
AMEND AFFIRMATIVE DEFENSES TO COMPLAINANTS’ COMPLAINT
Respondent Tronox LLC (“Tronox”),’ in further support ofits Motion To Amend
Affirmative Defenses
to
Complainants’
Grand Pier
Center LLC
and
American International
Specialty Lines Insurance Co.,
as
subrogee of
Grand
Pier Center LLC, (collectively,
“Grand Pier”) Complaint, states
as
follows:2
Tronox LLC
was
formerly known as Kerr-McGee Chemical Company LLC. A
Notice ofName Change was filed with the Board on October II, 2005.
2
Tronox LLC filed a combined Motion To Withdraw Certain Affirmative Defenses
and for Leave to File Amendments to Affirmative Defenses. This Reply addresses the
Motion for Leave to File Amendments to Affirmative Defenses.
I.
Tronox’s Fifth Affirmative Defense is Well-Plead
For its fifth affirmative defense, Tronox claims that its liability “if any, should be
proportionately reduced because Complainants’ own fault contributed to their injuries.”
Answer and Affirmative Defenses ofKerr-McGee Chemical LLC, at 11 (filed June 13,
2005). Grand Pier argues that this defense is not well-plead because it allegedly does not
“give color” to Grand Pier’s allegations that Grand Pier was an “innocent purchaser” and
uninvolved in “the improper treatment, storage, disposal or discharge ofthorium
contamination at the RV3 Site.” Grand Pier’s Response to Motion for Leave to Amend
Affirmative Defenses, at 2 (filed Oct. 11,
2005)
(citing Grand Pier’s Complaint ¶30).
However, Tronox’s affirmative defense is not a denial of, but rather is compatible with,
those allegations, which have no bearing on whether Grand Pier took actions that
contributed to the exposure of thorium at the RV3 Site and thus contributed to Grand Pier’s
own damages.
In asserting its fifth affirmative defense, Tronox alleges, among other things, that
(1) Grand Pier’s property was protected by a “pavement covering” that “acted as a shield
to prevent human exposure to the ‘gamma radiation’ associated with thorium residues,” (2)
in “January 2000, Grand Pier began to remove the pavement
...
to prepare for
construction of a commercial building,” and (3) “only by removal of the pavement and
excavation of the site for construction of a commercial development, was the public and the
environment exposed to the risk ofthorium.” Tronox LLC’s Combined Motion to
Withdraw Certain Affirmative Defenses and for Leave to File Amendments to Affirmative
2
Defenses, at 3 (filed Sept. 22. 2O05).~These averments do not deny Tronox’s allegations;
rather they assert a new matter-- Tronox’s environmentally hazardous activities
--
which
defeats Tronox’s claim. Thus, Tronox’s fifth affirmative defense “gives color to Grand
Pier’s claim and then asserts a new matter by which Grand Pier’s apparent right is
defeated.” See Ferris Elevator Co.. Inc. v. Neffco. Inc., 285 Ill.App.3d 350,
354, 674
N.E.2d
449,452
(3d Dist. 1996).
II.
Tronox’s Sixth Affirmative Defense is Well-Plead
Grand Pier accuses Tronox of pleading its sixth affirmative defense
--
that
Grand Pier’s “claims are barred, in whole or in part, because of the preceding, intervening
and/or superseding acts of third parties or because of events over which Tronox had no
control”4
--
in bad faith. See Grand Pier’s Response to Tronox’s Motion to Amend
Affirmative Defenses, at 3. Grand Pier’s position is at odds with itself. Grand Pier first
asserts that it cannot discern what third party actions are at issue in Tronox’s sixth
affirmative defense because Tronox allegedly “fails to specifically plead what acts ofwhat
third party” give rise to the defense. Id. In the next sentence, however, Grand Pier is
sufficiently confident that Tronox had “control” over the third-party acts to accuse Tronox
ofbad faith for alleging otherwise
*
Indeed, USEPA has indicated that “when Grand Pier stripped the concrete off” and
began construction activities, “that’s what created the imminent and substantial
engagement (sic) that the agency responded to.” Transcript ofOral Argument before the
LAB, at 44 (Petition No. CERCLA 106(b) 04-01) (June 16,2005), attached hereto as
Exhibit A.
Answer and Affirmative Defenses of Kerr-McGee Chemical LLC, at 11 (filed June
13, 2005).
3
Moreover, Tronox’s sixth affirmative defense is well-plead. For example,
Tronox specifically alleged, among other things, that “nleither Grand Pier nor any
consultant to Grand Pier conducted a file search at the EPA to learn the particulars of the
then-ongoing cleanup activities” on adjacent property, and that, “allthough Grand Pier
and/or its consultants and contractors, conducted subsurface borings at the 200 East Illinois
Street site, none was addressed to the possibility of thorium residues.”
Tronox’s
Amendment to Certain Affirmative Defenses, at 2 (filed Sept. 22, 2005).
Whether Tronox had “control” over these and other actions which
contributed to the environmentally hazardous conditions on Grand Pier’s property, is a
matter for hearing before the Board in due course, not for accusations ofbad faith premised
on hunches about what the record will show. Indeed, Tronox did not know that Grand
Pier’s property had underground thorium deposits until after Grand Pier strippefithe
asphalt from its property. Grand Pier speculated on a multi-million dollar development
adjacent to an ongoing multi-million dollar cleanup of radioactive material that wasteing
undertaken by public order of USEPA. Grand Pier is a sophisticated party and its
principal. Raymond Chin, is a trained engineer. Grand Pier hired consultants and
contractors. It conducted soil borings on its property. Tronox could not have anticipated
that Grand Pier, its consultants, and contractors would fail to investigate the possibility of
thorium contamination on Grand Pier’s property. Indeed, even USEPA has called Grand
Pier’s failure to include sampling for thorium as part ofits environmental assessments
“surprising.” USEPA’s Comments Upon EAB’s Preliminary Decision, at 3 (Oct.
5,
2005), attached hereto as Exhibit B.
III.
Tronox’s Seventh Affirmative Defense is Well-Plead
Tronox’s seventh affirmative defense
--
that “by their actions,
4
Complainants knowingly and voluntarily assumed the risk of incurring any alleged damage
they may have suffered and are therefore precluded from recovery”5
--
is compatible with
Grand Pier’s allegations about its purchase of the RV3 Site and its involvement in disposing
of thorium at that site.
S~
Grand Pier’s Response to Tronox’s Motion to Amend
Affirmative Defenses, at 3-4. Tronox’s seventh affirmative defense alleges that Grand Pier
ought to have taken a more sober approach to the possibility of thorium contamination on
Grand Pier’s property. Rather than pressing ahead with the destruction ofthe protective
asphalt shield, Grand Pier ought to have first investigated whether the site contained
underground thorium deposits. By choosing to move forward in the face of knowable risk,
IV.Grand
PierTronox’svoluntarilyEighthassumedAffinnativethe riskDefenseof incurringis
Well-Pleadits
alleged damage.6
Tronox’s eight affirmative defense
--
“that Counts I, II, and III of the
Complaint are preempted by Section 113(0(2) of the Comprehensive Environmental
Response, Compensation, and Liability Act”7
--
is well-plead because, among other things,
Tronox alleged that it entered into at least one settlement with USEPA with respect to
Grand Pier’s property.
~,
~
Counter Complaint ¶16(filed June 13, 2005) (“Pursuant
to a consent decree under § 107 of CERCLA Tronox has reimbursed EPA approximately
Answer and Affirmative Defenses of Kerr-McGee Chemical LLC, at 11.
6
Grand Pier also argues that Tronox’s seventh affirmative defense, even if well-
plead, is not an appropriate defense. Grand Pier does not cite any authority on that point
and its bare opinion on the subject should not be sufficient to strike a well-plead defense.
Tronox’s Amendment to Certain Affirmative Defenses, at
4-5
(filed Sept. 22, 2005
as attachment Exhibit B to Tronox’s Combined Motion To Withdraw Certain Affirmative
Defenses and for Leave to File Amendments to Affirmative Defenses).
5
$130,000 for its costs of oversight and response with respect to the 200 East Illinois Street
site.”).
V.
8Tronox’s
Ninth Affirmative Defense is Well-Plead
Grand Pier has misread, and therefore misunderstood, Tronox’s ninth
affirmative defense, which states as follows: “With respect to Counts I, II, and III of the
Complaint, Tronox is entitled to contribution protection under CERCLA section
113(0(2)
Amendment to Certain Affirmative Defenses, at
5
(emphasis added).
Grand Pier misreads this defense to state that Tronox “is entitled to contribution under
CERCLA section 113(0(2).” Grand Pier’s Response to Motion for Leave to Amend
Affirmative Defenses, at 4 (emphasis added); see also
14.
at
4-5
(“a contribution affirmative
defense is unavailable”) (emphasis added). None of Grand Pier’s remarks are directed to
Tronox’s ninth affirmative defense defense, as that defense properly is read.
CONCLUSION
For the reasons above and those set forth in the Motion for Leave to
Amend Affirmative Defenses, Tronox respectfully requests that the Board grant
Tronox’s motion to amend its affirmative defenses.
Respectfully submitted,
TRONOX LLC
By:___
of its Att2fteys
8
Tronox incorporated and adopted in its affirmative defenses the specific factual
averments contained in its Counter-Complaint.
$~
Amendment to Certain Affirmative
Defenses, at 1.
6
Michael P. Connelly
Garrett C Carter
Connelly Roberts & McGivney LLC
One North Franklin Street
Suite 1200
Chicago, Illinois 60606
(312) 251-9600
Peter J. Nickles
J.T. Smith II
Thomas E. Hogan
COVINGTON & BURLING
1201 Pennsylvania Ave., N.W.
Washington, D.C. 20004-2401
(202) 662-6000
Attorneys for Respondent Tronox LLC
7
£
ORIGINAL
BEFORE THE ENVIRONMENTAL APPEALS BOARD
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
IN THE MATTER OF:
WASHINGTON, D.C.
x
GRAND PIER CENTER, LLC
Petition No.
CERCLA 106(b) 04-01
x
Thursday, June 16, 2005
Environmental Protection Agency
Courtroom 1152
1201 Constitution Avenue, N.W.
Washington, D.C.
The oral argument in the above-entitled
matter convened, pursuant to notice, at 10:00 a.m.
BEFORE
ANNA L. WOLGAST, EDWARD E. REICH
and KATHIE A. STEIN
Environmental Appeals Judges
MILLER REPORTING
co., INC.
735
-
8TH STREET, S.E.
WASHINGTON, D.C.
20003
(202) 546-6666
svs
SG
1
SVS
2
APPEARANCES:
On behalf of the Petitioner:
DANIEL C. MURRAY, ESQ.
On behalf of the U.S. EPA, Region 5:
MARY FULGHUM, ESQ.
CATHLEEN MARTWICK, ESQ.
ALSO PRESENT:
FREDERICK S. MUELLER
Present with Counsel for Petitioner
EURIKA DURR, Clerk
Environmental Protection Agency
QQalflra
ORAL ARGUMENT
PAGE
Daniel C. Murray, On behalf of the
Grand Pier Center, LLP
4
Mary Fulghum, On behalf of the
Environmental Protection Agency
28
Rebuttal Argument by Daniel Murray
On behalf of the Grand Pier
Center, LLP
49
MILLER REPORTING CO., INC.
735
-
8TH STREET, S.E.
WASHINGTON, D.C.
20003
(202) 546-6666
5V5
43
1 that we need to operate within the determinations
2 that you made in issuing the order, since the order
3 is the premise for the petition?
4
MS. FULGHUM: I certainly believe that the
5 order does include the facility but I think that if
6 you disagree with me, the purpose of 106(b)
7 petitions are to determine the liability and
S because of the exigent circumstances at the time
9 and the very best information that we had at that
10 time
was
that they were the owner of the site and
11 we were trying to differentiate their status from
12 the status of River East and Kerr-McGee, who were
13 also respondents to this amended order.
14
JUDGE WOLGAST: Does that mean that we
15 could also take up issues of divisibility even
16 though that wasn’t raised by the Petitioner in this
17
case?
18
MS. FULGHUM: I noted in regarding
19 Marblehead although apparently divisibility wasn’t
20 raised by the town of Marblehead. It wasn’t
21 annunciated in the brief or oral argument. I
22 believe, if I correctly remember that footnote that
MILLER REPORTING
co.,
INC.
735
-
8TH STREET, 5.5.
WASHINGTON, D.C.
20003
(202) 546—6666
svs
44
1 the board did consider divisibility. In this
2 instance, there’s been no showing of how this harm
3 can be divided.
4
I would urge that when Grand Pier stripped
5 the concrete off it’s side, engaged in the
6 potholing, the removal of obstructions, to allow
7 the caisson drills to operate adjacent to the right
S of ways. There were nine caissons placed along
9 columbus right of way itself. Their work abutting
10 the Columbus Drive right of way which exposed
11 materials and worked in the Columbus Drive right of
12 way before we even got to the site.
13
That’s what created the imminent and
14 substantial engagement that the agency responded
15 to. And that imminent and substantial endangerment
16 continued after they did their gray beam
17 construction in the sidewalk right of way. It
18 might be helpful at this point to show you an
19 exhibit.
20
This is our attachment--six, figure one.
21 This exhibit was provided to the U.S. EPA by Grand
22 Pier. It’s a construction drawing to show the
MILLER REPORTING CO., INC
735
-
8Th STREET, S.E.
WASHINGTON, D.C. 20003
(202) 546-6666
(‘C~\j
n
I..
L
LS.
E.P.,~,.
BEFORE THE ENVIRONMENTAL APPEALS BOARD
UNiTED STATES ENVIRONMENTAL PROTECTION AGENCY
-
Al: p
‘~
WASHINGTON, D.C.
‘i
~
i;j~.,~
)
)
IN THE MATTER OF:
)
Grand Pier Center, LLC
)
CERCLA 106(b) Petition No. 04-01
)
________________________________________________________________________________
)
RESPONDENT’S COMMENTS UPON
ENVIRONMENTAL APPEALS BOARD PRELIMINARY DECISION
In accordance with the United States Environmental Appeals Board (the “Board”) Order
dated August 18, 2005, Respondent, U.S. EPA,
Region
5
respectfully offers the following
comments upon the Preliminary Decision.
I. Grand Pier Asserted
it
was not a CERCLA 107(a) “Operator.”
The opening paragraph of the Board’s Preliminary Decision explains that “Grand Pier’s
petition focuses on the scope of liability ofa present owner under CERCLA Section 107(a).”
U.S. EPA, Region 5 agrees that is a conect statement. In its Petition, however, at pages 6-7,
C. Grounds for Reimbursement, paragraph 20 a. and b., Grand Pier explicitly asserted that
it
was
“never” the operator of the off-site sidewalk area. Also, in the Preliminary Decision, at pages 20-
21, in I. Background, C. Procedural History, the Board states that Grand Pier argues “...because it
is
not an owner ofthe ‘off-site sidewalk area’ it was not liable
This procedural discussion
should also reflect that Grand Pier’s Petition expressly asserted it was not an operator ofthe off-
site sidewalk area. Had U.S. EPA, Region 5 declined to respond to Grand Pier’s assertion that it
was not an operator, the Board or any reviewing court, may not have looked favorably upon the
~HIBff
intended only to reflect, as Attachment 9, page ii stated, that “for most of this the 20th
century the study site was part of a very long east-west city block without cross streets. The
Columbus Drive and McClurg Court extensions were only extended across the site during the
last decade.” Note that the “study site” referenced in Attachment 9 is the 316 E. Illinois, River
East site immediately east of the Columbus Drive extension. The Lindsay Light Company did
not own the 316 E. Illinois Street property or the Grand Pier property. During the Lindsay Light
Company’s operation, however, that “very long east-west city block” encompassed both the
present-day Grand Pier property and the adjacent 316 B. Illinois property. The fact that the
properties were contiguous during the Lindsay Light Company’s operations was of particular
interest to U.S. EPA, Region
5
because of the likelihood that materials would have been
transferred between the two operating Lindsay Light Company facilities across the present-day
Grand Pier property. It also made more surprising the fact that Grand Pier’s environmental
assessments did not include sampling for thorium.
The Board’s Preliminary Decision at page 10, I. Background, B. Factual Background, 1.
Description of the Site, discusses the history of the ownership of the property at issue, i.e. the
approximately 10’ wide by 46’ long by 8’ deep off-site sidewalk area for which Grand Pier
sought reimbursement. Although the property at issue was not owned by the Lindsay Light
Company, it is part of the facility (as defined by CERCLA) where Lindsay Light Company
thorium wastes came to be located, The only property that the Lindsay Light Company owned
was the Lindsay Light Building at 161 B. Grand. It should be clarified that the property at issue
in this case is located in Chicago’s Streeterville neighborhood where the Lindsay Light Company
operated from 1904 until thel93O’s and that the property at issue was once part of a long east-
3
CERTIFICATE OF SERVICE
I,
Lynne Pudlo, a non-attorney, being first sworn on oath, depose and state
that I
served the attached TRONOX
LLC’S REPLY IN FURTHER SUPPORT OF ITS
MOTION
TO AMEND AFFIRMATIVE DEFENSES TO COMPLAINANTS’
COMPLAINT on the attorneys ofrecord by mailing true and correct copies in a properly
addressed, sealed envelope with appropriate postage affixed and depositing same in the
U.S. mail located at One North Franklin Street, Chicago, Illinois, before 5:00 p.m. on
October 21, 2005.
Subscribed and sworn to
before me October
21, 2005.
blic
