KNAPP OIL COMPANY,
DON'S 66,
Petitioner,
V .
ILLINOIS ENVIRONMENTAL
PROTECTION AGENCY,
TO:
Melanie A. Jarvis
Assistant Counsel
Division of Legal Counsel
1021 North Grand Avenue East
P .O
. Box 19276
Springfield, IL 62794-9276
Carolyn S
. Hesse
Barnes & Thornburg LLP
One North Wacker Drive
Suite 4400
Chicago, Illinois 60606
(312) 357-1313
369783vl
BEFORE THE POLLUTION CONTROL BOARD
R
CLERK'S
E C C= 9
OFFICE
N/ E D
Respondent .
OF THE STATE OF ILLINOIS
PCB 06-52
(UST Appeal)
NOTICE OF FILING
Carol Webb
Hearing Officer
Illinois Pollution Control Board
1021 North Grand Avenue East
P.O . Box 19274
Springfield, IL 62794-9274
DEC 1 *12006
Pollution
STATE OF
Control
ILLINOISBoard
PLEASE TAKE NOTICE
that on December 12, 2006 filed with the Clerk of the Illinois
Pollution Control Board of the State of Illinois an original, executed copy of Petitioner's Cross-
Motion for Summary Judgment
.
Dated : December 12, 2006
Respectfully submitted,
By:
Knapp Oil Company, Don's 66
[This filing submitted on recycled paper as defined in 35 111
. Adm . Code 101 .2021
Melanie A
. Jarvis
Assistant Counsel
Division of Legal Counsel
1021 North Grand Avenue East
P.O. Box 19276
Springfield, IL 62794-9276
CERTIFICATE OF SERVICE
I, on oath state that I have served the attached Petitioner's Cross-Motion for Summary
Judgment by placing a copy in an envelope addressed to :
Carol Webb
Hearing Officer
Illinois Pollution Control Board
1021 North Grand Avenue East
P .O. Box 19274
Springfield, IL 62794-9274
from One North Wacker Drive, Suite 4400, Chicago, Illinois, before the hour of 5 :00 p.m., on
this 12'h Day of December, 2006 .
Carolyn S . He
[This filing submitted on recycled paper as defined in 35111 . Adm . Code 101 .2021
2
BEFORE THE POLLUTION CONTROL BOARD
OF THE STATE OF ILLINOIS
KNAPP OIL COMPANY,
)
DON'S 66,
)
Petitioner,
)
v.
) PCB 06-52
(UST Appeal)
ILLINOIS ENVIRONMENTAL
)
PROTECTION AGENCY,
)
Respondent .
)
RECEIVEDCLERK'S
OFFICE
DEC 1 2 2006
Pollution
STATE OF
Control
ILLINOISBoard
PETITIONER'S CROSS-MOTION FOR SUMMARY JUDGMENT
Petitioner, Knapp Oil Company ("Knapp"), by its counsel Barnes & Thornburg, LLP, and
pursuant to 35 Ill . Adm. Code 101
.500, 101 .508, and 101 .516, moves for Summary Judgment in
favor of Knapp and against the Illinois Environmental Protection Agency ("IEPA" or the
"Agency") on Knapp's Petition for Review of IEPA's Decision
. In support of its Motion, Knapp
states as follows :
INTRODUCTION
The sole issue presented in this Motion for Summary Judgment is whether IEPA can
determine whether a underground storage tank ("UST") is eligible for reimbursement . Contrary
to IEPA's arguments, only the Office of the State Fire Marshall ("OSFM") can make such
determinations
. Once the OSFM determines that an UST is eligible for reimbursement, IEPA is
bound by that determination
. As the facts and law provide below, Knapp is entitled to summary
judgment, in that IEPA improperly rejected Knapp's high priority corrective action plan and
budget based on the false premise that IEPA can nullify OSFM's eligibility determinations
.
IThis
filing submitted on recycled paper as defined in 35 III .
Adm . Code 101 .2021
BACKGROUND FACTS
I .
Knapp is the owner of underground storage tanks ("USTs") at a former gasoline
service station known as "Don's 66," located at 700 East Main Street, Olney, Richland County,
Illinois (the "Station")
. There are three USTs at the Station, two of which stored gasoline and
one that stored diesel
.'
2 .
On July 19, 1990, Knapp notified IEMA that it found gasoline in the monitoring
well next to Knapp's Super No Lead tank located at the Station
. SAR 4 .z Knapp originally
believed that only one gasoline tank leaked .
Both gasoline tanks and the diesel tank were refined and upgraded on
September 7, 1990
. AR 13 .
4.
On June 28, 1995, Knapp submitted a Site Classification Work Plan and Budget
to the IEPA . SAR 5
. Because it believed at that time that only gasoline had been released from
one tank, Knapp proposed testing only for benzene, toluene, ethylbenzene and xylene (BTEX),
indicators of the presence of gasoline . SAR 12, 18 .
5 .
On June 26, 1995, Knapp submitted an Underground Storage Tank Fund
Eligibility and Deductibility Application to OSFM . SAR 66
. This Application indicated that
there were three USTs at the Station, but that only one of the USTs storing gasoline had a
release . SAR 67 .
6.
On July 25, 1995, OSFM notified Knapp that the 6,000-gallon gasoline tank was
eligible for the payment of costs from the Underground Storage Tank Fund
. SAR 63 . The
I
Hereinafter, the 1,000-gallon diesel fuel tank will be referenced as the "Diesel UST" or "Diesel Tank
."
2
"SAR _" means (EPA's Supplemental Administrative Record, "AR _" means the original Administrative
Record, and "P
"
means the Supplemental Administrative Record submitted by Knapp that is at issue in Knapp's
Motion for Leave to Supplement Administrative Record .
(This filing submitted on recycled paper as defined in 35 Ill
. Adm
. Code 101 .2021
2
July 25, 1995 OSFM eligibility determination referred to tank number 3, the Diesel Tank, and
the other gasoline tank, tank number 1, and stated as follows
:
Your application indicates that there has not been a release from
these tanks .
You may be eligible to seek payment of corrective
action costs associated with these tanks if it is determined that
there has been release from one or more of these tanks
. Once it
is determined that there has been release from one or more of these
tanks, you may submit a separate application for an eligibility
determination to seek corrective action costs associated with
this/these tanks .
SAR 65 (emphasis added)
.
7 .
On July 27, 2001, Knapp submitted a Site Assessment Report and Corrective
Action Plan (the "2001 CAP")
. SAR 148-294
. In the 2001 CAP, Knapp stated that it discovered
that there may have been a release from the Diesel Tank as well as the other gasoline tank
. This
report states :
While prior reporting indicated that tank numbers I and 3 did not
contribute to the release, contamination found during the site
assessment beneath the pump island and at the east property line
indicates that all three tanks may have contributed to the release
.
SAR 155 .
8.
By letter dated November 16, 2001, the Agency rejected the 2001 CAP and
required Knapp to perform additional investigation (AR 11, SAR 296-305), including the
investigation of whether the Diesel Tank leaked
. SAR 299.
9.
On February 14, 2002, CW3M
on behalf of Knapp responded to various issues
]EPA raised on November 16, 2001, and submitted a revised CAP and budget to get paid for
costs already incurred to investigate BTEX
.3 P 1-37
. The February 14, 2002 submission also
explained that it was only during the subsequent site assessment that Knapp discovered that the
3 Knapp still has not been reimbursed for these costs
.
(This filing submitted on recycled paper as defined in 35 111
. Adm . Code 101 .2021
3
Diesel Tank and the other gasoline tank may have contributed to contamination
at the Station .
P 1-37.
10 . On March 7, 2002, Knapp submitted an Amended Eligibility and Deductibility
application which corrected the "date" registered for all three tanks at the property
and listed in
paragraph 8 that there have been releases from all three tanks on the property . P 348 . This was
done in accordance with the instructions from the OSFM to submit an "application for an
eligibility determination to seek corrective action costs associated with this/these
tanks" if it was
determined that there were releases from them
. SAR 65.
11 . On March 26, 2002, OSFM issued an eligibility and deductibility determination
that the Diesel Tank, as well as both of the gasoline tanks at the
Station, were eligible for
reimbursement from the UST Fund . AR 303-304 . The releases from the gasoline and diesel
tanks likely occurred around the same time because all three tanks were upgraded and
relined at
the same time . OSFM stated that its determination was "the final decision as
it relates to your
eligibility and deductibility ." AR 304 . A copy of the OSFM determination was included in
Appendix G of the Site Assessment Report and Corrective Action Plan dated August 2005 .4 AR
304-305
. The OSFM determination was also included in documents submitted to IEPA earlier .
12 .
The budget for the site investigation work was rejected by the Agency on May
15,
2002 . P 38-40 .
13 . Another Site Assessment Report and Corrective Action
Plan to address both
gasoline and diesel contamination was submitted on behalf of Knapp to
IEPA on October 4,
2004. (the "2004 CAP") . P 41-347 .
The 2004 CAP included data from samples collected on
4 Note that the Agency's denial of the August
2005
Corrective Action Plan and its associated Budget are the subject
of
this Appeal .
(This filing
submitted on recycled paper as defined in 35 111 .
Adm. Code 101 .2021
4
February 20, 2002 and August 27, 2002
that were analyzed for polynuclear aromatic
hydrocarbons (PAH) which are diesel fuel indicators, and polynuclear aromatic hydrocarbons
were found
. P 57 . 59-61
. These actions are consistent with IEPA's instructions in November of
2001 to investigate the Diesel Tank further
. SAR 299.
14.
On January 19, 2005, IEPA rejected the 2004 CAP because it included the
removal of the Diesel Tank and remediation of the diesel contamination (AR 316) and requested
an affidavit from Knapp identifying specific off-site property that required access and for which
access had been denied. AR
317
. IEPA also requested that Knapp perform additional off site
investigation
. AR 26-27 .
15 .
On August 2, 2005, Knapp submitted a High Priority Corrective Act Plan and
associated budget (the "2005 CAP and Budget") to IEPA and responded to IEPA's requests for
information in the Agency's January 19, 2005
letter. AR 1-304.
16.
The 2005 CAP and Budget included costs related to removing the Diesel Tank in
addition to both gasoline tanks and to remediate the release from all the
tanks. AR
1-304. The
letter regarding the 2005 CAP and Budget stated that the OSFM made a determination that the
Diesel Tank and both gasoline tanks were eligible for reimbursement and the 2005 CAP and
Budget included a copy of the OSFM letter stating that all three tanks are
eligible. AR 1, 303-
304
. The 2005 CAP and Budget also explained why the Diesel Tank was not initially included
in the September 13, 2000 Site Classification Completion Report
:
The information that the Diesel Tank had to be upgraded when the
gasoline tanks were upgraded, and the product noted in the
observation well had been assumed to be gasoline, but may have
been diesel was not known by CW3M
until after the Site
Classification Completion Report was submitted
. The presence of
diesel does not change the High Priority designation, merely
refines the release from them .
(This filing submitted on recycled paper as defined in 35 III
. Adm
. Code 101 .2021
5
The information that resulted in the Diesel Tank being added
appeared in the CAP submitted in February of 2002, and was based
on interviews and a review of the OSFM records for the site .
AR 1 .
17 . The 2005 CAP also contains data from numerous samples collected on August 27,
2002 in which indicator parameters for diesel exceeded their respective remedial objectives
("ROs") . For example, groundwater samples from MW-D exceeded ROs for
benzo(a)anthracene, benzo(a)pyrene, benzo(b)flouranthene and benzo(k)flouranthene (AR 23) ;
benzo-(a)pyrene exceeded ROs in soil samples collected from SB5a-3, SBIa-5, SB11-3 (AR 24)
and from SB4a-3 (AR 25)
.
18. On September 21, 2005, IEPA issued a letter to Knapp rejecting the entire 2005
CAP and Budget . AR 323-330 . IEPA rejected the 2005 CAP and Budget as related to the Diesel
Tank based on the following statement :
Incident no
. 901831 was reported as a result of free product
observed in an observation well located in the gasoline tank basin .
The substance reported released was gasoline only
. The release
was classified as High Priority based on the elevated concentration
of gasoline indicator contaminants (BTEX)
. Site Classification
was approved by the Agency on January 3, 2001, based on
information supplied in the Site Classification Completion report
received by the Agency on September 14, 2000 . This report states
that there was no release from the Diesel Tank, and diesel indicator
contaminants were not analyzed for during site classification
.
Therefore, any activity associated with the delineation and
remediation of diesel fuel indicator contaminants exceed the
minimum requirements to comply with Title XVI of the Act . In
addition, these costs are not reimbursable pursuant to 35 IAC
Section 732 .606(o).
AR 325
. When drafting his letter, the Agency ignored the information provided by Knapp in
2004 and 2005 .
(This filing submitted on recycled paper as defined in 35 III . Adm . Code 101 .2021
6
19 .
The Agency did not raise issues in its September 21, 2005 letter related to
whether one or both gasoline tanks leaked.
20. On October 17, 2005, Knapp filed a Petition for Review of Illinois Environmental
Protection Agency Decision based on IEPA's rejection of the 2005 CAP and Budget on
September 21, 2005 .
ARGUMENT
I.
Standard for Summary Judgment
.
Section 101
.516(b) of the Board's General Rules provides :
If the record, including pleadings, depositions and admissions on
file, together with any affidavits, shows that there is no genuine
issue of material fact, and that the moving party is entitled to
judgment as a matter of law, the Board will enter summary
judgment .
35 Ill . Adm. Code 101 .516(b) .
A review of the record shows that summary judgment is
appropriate on Knapp's Petition for Review in favor of Knapp
.
II.
Knapp is entitled to approval of the 2005 CAP and Budget
.
In its Motion for Summary Judgment, IEPA correctly stated that "The question in this
case is not one of fact, but rather of law
." IEPA's Motion for Summary Judgment, p. 9
. The
question of law for Knapp's Motion for Summary Judgment is whether Knapp satisfied all of the
statutory and regulatory requirements for approval of the 2005 CAP and Budget, such that it is
entitled to reimbursement from the UST Fund for work performed on the Diesel Tank
.
35 111 . Adm. Code 732
.405(b) provides the requirements for IEPA's approval of a
high priority corrective plan and budget
:
In addition to the plans required in subsections (a), (e), and (f) of
this Section and prior to conducting any groundwater monitoring
or corrective action activities, any owner or operator intending to
[This filing submitted on recycled paper as defined in 35 111
. Adm . Code 101 .2021
7
seek payment from the Fund
shall
submit to the Agency a
groundwater monitoring or corrective action budget plan with the
corresponding groundwater monitoring or corrective action plan .
Such budget plans shall include, but not be limited to, a copy of
the eligibility and deductibility determination of the OSFM and
an estimate of all costs associated with the development,
implementation and completion of the applicable activities,
excluding handling charges .
(emphasis added) . Knapp provided the information required under section 732 .405(b).
Specifically, section 732 .405(b) does not state that Knapp needs to report a release of the Diesel
Tank to IEMA for IEPA to approve a high priority corrective action plan and budget . It only
states that a copy of the OSFM eligibility and deductibility determination must be included . In
this case, on March 26, 2002, OSFM made a final decision that the three tanks at the Station,
including the Diesel Tank, were eligible for the payment of costs in excess of $10,000 . AR-303-
304. Accordingly, Knapp satisfied the requirements for approval of a high priority corrective
action plan and budget for the 2005 CAP and Budget
.
In support of its rejection of the 2005 CAP and Budget, IEPA is attempting to claim that
it can make eligibility determinations . To the contrary, as provided in Section 57 .9(c) of the
Illinois Environmental Protection Act (the "Act"), 415 ILCS 5/57 .9(c), "Eligibility and
deductibility determinations shall be made by the Office of the State Fire Marshal ."
In
accordance with its jurisdiction, OSFM made the determination that the Diesel Tank was an
eligible tank . AR-303-304 . IEPA is not entitled to second guess OSFM's eligibility decision, as
OSFM issues its eligibility determination by issuing "one letter enunciating the final eligibility
and deductibility determination, and such determination or failure to act within the time
prescribed shall be a final decision appealable to the Illinois Pollution Control Board
." 415 ILCS
5/57.9(c)(2)
. Accordingly, OSFM's decision that Knapp was eligible to access the UST Fund
(This filing submitted on recycled paper as defined in 35 I11
. Adm . Code 101 .2021
8
was made final by OSFM's decision, and that determination cannot be second-guessed or
challenged by IEPA .
IEPA attempts to explain that although "the Petitioner did have the Office of State Fire
Marshal issue a new eligibility determination listing the Diesel Tank as an eligible tank,
however, that does not replace the need for IEMA to be notified ." IEPA's Motion for Summary
Judgment, p . 10. This argument is misleading
. Neither section 732 .404 nor 732 .405 requires
that Knapp notify IEMA of a release from the Diesel Tank . Instead, only section 732
.202
requires a report of a release to IEMA
. 35 III . Adm. Code 732
.202(a)(1). Sections 732 .404 and
732
.405, however, do not predicate approval of a CAP and budget upon compliance with
732.202,
nor do they require Knapp to contact IEMA for any reason
. IEPA is attempting to
impose an additional requirement in 732
.404 and 732 .405 that is not supported in the regulatory
language .
As a result, whether Knapp notified IEMA of a release from the Diesel Tank is
irrelevant for determining whether a CAP and budget that includes the Diesel Tank should be
approved
. Knapp satisfied the elements under 732
.405 by obtaining an eligibility determination
for the Diesel Tank, and is thus entitled to approval of the 2005 CAP and Budget
.
IEPA also argues that Knapp is not entitled to approval of the 2005 CAP and Budget
because Incident Number 908131, dated July 2, 1990, was reported as a release from a gasoline
tank only
. Knapp, however, fully informed IEPA that there had been a release from the Diesel
Tank as soon as it became aware of the release in its Site Assessment Report and Corrective
Action Plan, dated July 27, 2001
. SAR-150
. That Report and Plan stated that "While prior
reporting indicted that tank numbers I and 3 did not contribute to the release, contamination
found during the site assessment beneath the pump island and at the East property line indicates
that all three tanks may have contributed to the release
." SAR-155
. Moreover, Knapp explained
(This filing submitted on recycled paper as defined in
35 111 . Adm
. Code 101 .2021
9
when it submitted the 2005 CAP and Budget why the release of the Diesel Tank was not
discovered and disclosed in the September 13, 2000 Site Classification Completion Report
.
AR-1
. Further, data indicating the presence of diesel is contained in the 2005 CAP and Budget
on pages 13, 14, and 15 of that
report. AR 23-25 .
Again, because there is no question of
material fact that Knapp has satisfied its regulatory requirements, Knapp is entitled to approval
of the 2005 CAP and Budget for future reimbursement, and summary judgment should be
granted in its favor .
CONCLUSION
Knapp Oil Company requests that the Board grant this Motion, enter summary judgment
in favor of Knapp and against IEPA, and grant all relief it deems fair and just
.
Carolyn S
. Hesse
David T . Ballard
Barnes &
Thornburg LLP
One North Wacker Drive
Suite 4400
Chicago, Illinois 60606
(312) 357-1313
CHDS01 DTB 360564v1
By :
Respectfully submitted,
Knapp Oil Company, Don's 66
One of Its Atto e s
This filing submitted on recycled paper as defined in 35111
. Adm . Code 101 .2021
10
