ILLINOIS POLLUTION CONTROL BOARD

BACKGROUND
1. Midwest Motion for Stay Extension

February 15, 2007

MIDWEST GENERATION EME, LLC,

Petitioner,

ILLINOIS ENVIRONMENTAL

(Trade Secret Appeal)

ORDER OF THE BOARD (by A.S. Moore):

On December 11, 2006, petitioner, Midwest Generation EME, LLC (Midwest), filed a

motion to extend the stay previously granted by the Board in this trade secret appeal. Midwest

seeks an extension of the stay through April 4, 2007. Respondent, the Illinois Environmental

Protection Agency (IEPA), filed a response opposing the requested extension.

For the reasons below, the Board denies Midwest’s motion to extend the stay. The Board

also addresses and denies Midwest’s motion for partial reconsideration, a ruling on which had

been reserved during the stay. In this order, the Board provides background on the case before

discussing and ruling upon Midwest’s motions.

BACKGROUND

On June 3, 2004, Midwest appealed an April 23, 2004 trade secret determination of

IEPA under the Environmental Protection Act (Act) (415 ILCS 5 (2004)). The Board docketed

the trade secret appeal as PCB 04-216 and, in a June 17, 2004 order, accepted the case for

hearing. In the IEPA determination being appealed, IEPA denied Midwest’s claim for trade

secret protection of information that Commonwealth Edison Company (ComEd) submitted to

IEPA. Midwest states that a portion of the information submitted by ComEd is also owned by

Midwest. IEPA made the determination after receiving Sierra Club’s request, under Illinois’

Freedom of Information Act (FOIA) (415 ILCS 140 (2004)), for a copy of ComEd’s submittal.

Midwest maintains that the information ComEd submitted to IEPA is entitled to trade

secret status, exempt from public disclosure requirements under the Act.

See

415 ILCS 5/7, 7.1

(2004). The information relates to six coal-fired power stations, all of which are in Illinois. The

stations are formerly owned by ComEd and currently owned by Midwest.

ComEd originally

ComEd has appealed a separate IEPA trade secret determination concerning the same

information and other information submitted to IEPA by ComEd. That pending ComEd appeal

is docketed as PCB 04-215.

submitted the claimed information to the United States Environmental Protection Agency

(USEPA) in response to USEPA’s information request under Section 114 of the federal Clean

Air Act (42 U.S.C. § 7414). Sierra Club also submitted a federal FOIA request to USEPA for

the same claimed information. USEPA has been and is currently in the process of determining

whether to exempt the materials claimed to be confidential business information from release

under federal FOIA.

On June 13, 2004, IEPA filed the administrative record of its trade secret determination.

On August 3, 2004, Sierra Club filed a motion to intervene in this trade secret appeal. IEPA

supported Sierra Club’s motion, but Midwest opposed intervention.

On August 18, 2004, Midwest filed a motion for the Board to partially reconsider its

June 17, 2004 order, asking the Board to review IEPA’s trade secret denial

de novo

. On

September 21, 2004, IEPA filed a response, opposing Midwest’s motion for partial

reconsideration. On October 6, 2004, Midwest filed a motion for leave to file a reply to IEPA’s

response, attaching the reply. The Board grants Midwest’s unopposed motion for leave and

accepts the reply. By a November 4, 2004 order in the trade secret appeal Midwest Generation

EME, LLC v. IEPA, PCB 04-185, the Board denied another Midwest motion to partially

reconsider, which motion was also based on Midwest’s

de novo

hearing request.

In a July 7, 2005 order, after reviewing pleadings on the issue from the parties, the Board

declined to consolidate this appeal with the related trade secret appeal Commonwealth Edison

Company v. IEPA, PCB 04-215. In an August 18, 2005 order, the Board denied Sierra Club’s

motion to intervene, but ruled that Sierra Club could participate in this proceeding through

hearing statement, public comment, and

amicus curiae

briefing.

On August 25, 2005, the hearing officer issued an order setting a discovery schedule.

The hearing officer noted in orders of October 7, November 10, and December 21, 2005, that

discovery was proceeding as scheduled. On February 8, 2006, the hearing officer granted an

agreed motion to amend the discovery schedule. On February 16, 2006, Midwest filed a motion

to compel IEPA’s answers to interrogatories and document requests. On March 2, 2006, IEPA

filed a response opposing the motion to compel. On March 7, 2006, the hearing officer issued a

revised discovery schedule. On March 16, 2006, Midwest filed a motion for leave to file a reply

to IEPA’s response concerning the motion to compel, attaching the reply. On March 28, 2006,

IEPA filed a response opposing Midwest’s motion for leave. In March 2006, depositions were

conducted.

In an April 6, 2006 order, the Board ruled on Midwest’s first motion to stay this appeal

based on the pending USEPA determination of confidentiality. Midwest sought to stay this

proceeding before the Board until the USEPA process concluded. IEPA opposed the motion.

The Board issued a short-term stay, staying this proceeding for 120 days or until August 4, 2006.

With the issuance of the stay, the Board reserved ruling on Midwest’s motion to partially

reconsider and related motion for leave, and the hearing officer suspended discovery and

reserved ruling on Midwest’s motion to compel and related motion for leave.

On August 3, 2006, Midwest filed an agreed motion to extend the original stay through

December 4, 2006. The Board granted the agreed motion in an order of August 17, 2006. The

case has not been to hearing and has not concluded discovery. On December 12, 2006, the

hearing officer accepted the parties’ proposed discovery schedule as follows: final

interrogatories and final document requests must be served by February 28, 2007; and answers to

final interrogatories and final document requests must be served by March 30, 2007.

As noted, Midwest filed a motion to further extend the stay on December 11, 2006, which

the Board rules on today. The motion includes a status report and a waiver of the Board’s

statutory decision deadline. On December 19, 2006, IEPA filed a response opposing Midwest’s

motion.

Midwest has waived to September 26, 2007, the Board’s deadline for deciding this

appeal. The Board meeting before that deadline is currently scheduled for September 20, 2007.

The hearing officer last held a status call with the parties on January 23, 2007.

The Board today, in separate orders, is likewise denying stay extensions in two other

trade secret appeals involving claimed information that is also the subject of a confidentiality

request pending before USEPA: Midwest Generation EME, LLC v. IEPA, PCB 04-185;

Commonwealth Edison Company v. IEPA, PCB 04-215.

DISCUSSION

Stay Extension Request

Midwest Motion for Stay Extension

Midwest’s motion for another extension of the stay (this time through April 4, 2007)

reiterates that the Board and USEPA are simultaneously engaged in proceedings involving the

same “party in interest” (Midwest), the same FOIA requestor (Sierra Club), and a “substantially

similar determination of confidentiality with respect to the [claimed information].” Mot. at 2.

The facts and claims at issue in the State and federal proceedings are “closely related,” Midwest

maintains.

. According to the motion, these circumstances led Midwest to originally move the

Board to stay this trade secret appeal, PCB 04-216, “pending the resolution of USEPA’s

determination.”

In the current motion, Midwest again emphasizes that the Board’s April 6, 2006 order

granting the initial short-term stay found the stay appropriate because:

[T]he pending federal process is “substantially similar” to the Board’s, and thus a

“stay of the latter may avoid multiplicity and the potential for unnecessarily

expending the resources of the Board and those before it.” In its Order, the Board

noted that “[t]he information claimed by Midwest [] at the federal and State levels

to be protected from disclosure is identical.” The Board further noted that “[t]he

The Board cites Midwest’s motion to extend the stay as “Mot. at _”, and IEPA’s response as

“Resp. at _.”

potentially applicable legal standards for each proceeding are also similar if not

the same.” Thus, USEPA’s determination would amount to “persuasive

authority”; alternatively, “public release by USEPA of the documents at issue

may render this appeal before the Board moot.” Mot. at 2-3 (quoting

Midwest

Generation EME, LLC v. IEPA, PCB 04-216 (Apr. 6, 2006), citations omitted).

According to Midwest, the Board’s August 17, 2006 order found that the reasons for granting the

initial stay likewise warranted extending the stay until December 4, 2006.

. at 4.

Midwest states in its current motion that USEPA informed Midwest that USEPA hired a

consultant, Industrial Economics, “to analyze the confidential nature” of the documents in

question. Mot. at 4. According to the motion, USEPA found that Industrial Economics has

“extensive expertise in the utility industry” and USEPA is waiting for the consultant to make

recommendations before USEPA renders its confidentiality determination. Further, the motion

continues, USEPA told Midwest that USEPA expects to receive the consultant’s

recommendations “sometime after Christmas [2006].”

. Midwest concludes that “[g]iven this

development, the reasons underlying the Board’s prior stay of this proceeding remain equally

true at this time.”

IEPA Response

IEPA opposes Midwest’s request for a stay extension. IEPA quotes from the Board’s

April 6, 2006, in which the Board originally granted a stay:

“The Board is mindful of the strong policy interest, evidenced in the [] Act,

favoring public disclosure of environmental compliance information, particularly

emission data.” The Board nonetheless granted a short-term [four] month stay, on

the reasoning that “[t]he risk of prejudice to IEPA from a stay of PCB 04-216

would be greatly diminished . . . by limiting the duration of the stay to a date-

certain in the near future, rather than simply granting a stay “until resolution of

the federal [confidential business information] process” as Midwest requests.

Resp. at 1-2 (quoting

Midwest Generation, PCB 04-216 (Apr. 6, 2006), citations

omitted).

IEPA states that after the Board granted the initial stay, IEPA “acceded to an agreed

motion for a short-term extension of the stay” based on new information from USEPA that

USEPA “was likely to issue a final decision within a few months.” Resp. at 2. IEPA stresses,

however, that when the Board granted the agreed motion, the Board reemphasized that the Act

favors public disclosure of emission data and accordingly stated: “The Board therefore cautions

the parties that, absent especially compelling circumstances, the Board may be disinclined to

further extend the stay.”

. (quoting Midwest Generation, PCB 04-216 (Aug. 17, 2006).

IEPA argues that “[n]o such ‘especially compelling circumstances’ have emerged to

warrant further continuation of the stay.” Resp. at 2. IEPA asserts that despite USEPA’s stated

expectations at the time of the agreed motion, USEPA has not issued a determination on the

FOIA request “nor stated any date certain by which it will do so.”

. IEPA maintains that

USEPA’s act of hiring a consultant “more than two and a half years after receiving the initial

FOIA request,” along with “vague statements” about when the consultant’s recommendations

would arrive, after which “USEPA’s decision will follow [at] some indefinite time,” do not

amount to “especially compelling circumstances” to justify extending the stay.

IEPA maintains that “in the interest of comity and efficiency,” IEPA, through the agreed

motion, was “willing once to give USEPA the opportunity to promptly resolve this matter and

potentially alleviate the need for parallel proceedings.” Resp. at 2-3. IEPA argues now,

however, “with no end to USEPA’s decisionmaking process in sight,” extending the stay would

contravene the Act’s strong policy interest in publicly disclosing environmental compliance

information.

. at 3.

Board Analysis

The Board’s procedural rules address motions for stays, providing: “Motions to stay a

proceeding must be directed to the Board and must be accompanied by sufficient information

detailing why a stay is needed . . . .” 35 Ill. Adm. Code 101.514(a). The decision to grant or

deny a motion for stay is “vested in the sound discretion of the Board.”

See

People v. State Oil

Co., PCB 97-103 (May 15, 2003),

aff’d sub nom

State Oil Co. v. PCB, 822 N.E.2d 876 (2d Dist.

2004).

The Board acknowledges that some of the reasons for originally staying this trade secret

appeal remain, such as avoiding the multiplicity of litigation and potentially conflicting

determinations. Nor does IEPA disavow its earlier concession that USEPA’s confidentiality

determination would constitute persuasive authority for the Board here. Under the present

circumstances, however, the reasons for extending the stay yet again are outweighed by the

interest in making environmental compliance information publicly available under the Act.

See

415 ILCS 5/7 (2004). Midwest’s claimed information remains protected from public disclosure

while this trade secret appeal is pending. Only by resuming this proceeding can the Board

adjudicate whether IEPA properly determined that Midwest’s claimed information is not entitled

to trade secret protection.

The Board notes that it was well over a year ago, on September 27, 2005, that Midwest

filed its first motion for stay based on the USEPA proceeding. The Board, by limiting the initial

stay to four months, sought to avoid prejudice to IEPA, noting the Act’s “strong policy interest

. . . favoring public disclosure of environmental compliance information, particularly emission

data.” Midwest Generation, PCB 04-216, slip op. at 8 (Apr. 6, 2006).

In subsequently granting the agreed motion for a short-term extension of the original stay,

the Board gave considerable weight to representations that a USEPA confidentiality

determination was expected by early December 2006. Still, the Board cautioned the parties that

“absent especially compelling circumstances, the Board may be disinclined to further extend the

stay.” Midwest Generation, PCB 04-216, slip op. at 3 (Aug. 17, 2006). The Board is so

disinclined.

The Board finds that USEPA’s retention of a consulting firm does not constitute

“especially compelling circumstances” to justify extending the stay a second time and further

delaying the public disclosure of environmental information that may not warrant trade secret

protection. Unlike the agreed motion, Midwest’s current motion is devoid of any estimate on

when USEPA expects to issue its final confidentiality determination. Moreover, the Board can

report that during the January 23, 2007 status call with the Board hearing officer, Midwest

conveyed no information about whether any recommendations from the consultant, expected

“sometime after Christmas [2006]” (Mot. at 4), have actually arrived with USEPA. Accordingly,

the Board denies Midwest’s motion for extension of the stay.

Motion to Partially Reconsider

Having denied Midwest’s request to extend the stay, the Board turns to Midwest’s motion

for partial reconsideration of the Board’s June 17, 2004 order. A motion to reconsider may be

brought “to bring to the [Board’s] attention newly discovered evidence which was not available

at the time of the hearing, changes in the law or errors in the [Board’s] previous application of

existing law.” Citizens Against Regional Landfill v. County Board of Whiteside County, PCB

92-156, slip op. at 2 (Mar. 11, 1993), citing Korogluyan v. Chicago Title & Trust Co., 213 Ill.

App. 3d 622, 627, 572 N.E.2d 1154, 1158 (1st Dist. 1991);

see also

35 Ill. Adm. Code 101.902.

A motion to reconsider may specify “facts in the record which were overlooked.” Wei

Enterprises v. IEPA, PCB 04-23, slip op. at 5 (Feb. 19, 2004).

As noted, the Board reserved ruling on Midwest’s motion to partially reconsider during

the stay. The Board’s June 17, 2004 order, which Midwest wants reconsidered in part, accepted

this appeal for hearing. In Midwest’ motion, which is opposed by IEPA, Midwest asks the

Board to conduct a

de novo

hearing in this appeal of IEPA’s trade secret denial. Under

analogous circumstances, Midwest included substantially identical arguments and sought the

same relief in a motion to partially reconsider filed in another pending trade secret appeal,

Midwest Generation EME, LLC v. IEPA, PCB 04-185. That motion was likewise opposed by

IEPA.

In PCB 04-185, on November 4, 2004, the Board devoted over twenty pages to

considering the parties’ positions, analyzing the issues, and ultimately denying Midwest’s

motion to partially reconsider.

See

Midwest Generation, PCB 04-185, slip op. at 12-34

(Nov. 4, 2004). In the interest of administrative economy, the Board will not repeat here all of

the arguments and analyses already detailed by the Board in its November 4, 2004 order in PCB

04-185. Rather, the Board adopts its reasoning and findings from that order, essential aspects of

which are summarized as follows:

The Board’s trade secret rules (35 Ill. Adm. Code 130) provide the trade secret claimant

with a meaningful opportunity to present evidence to IEPA in the form of a Statement of

Justification before IEPA can make the information publicly available. Additionally,

nothing in Part 130 precludes the claimant from submitting to IEPA an amended

Statement in an attempt to respond to the deficiencies identified in an IEPA denial letter.

Further, during any appeal of an IEPA denial, the claimed information must be kept

confidential by the State agencies.

Unless a trade secret appeal before the Board is dismissed on a dispositive motion, the

appeal will include a hearing. The Board hearing is generally limited to the record before

IEPA at the time of denial. The hearing does, however, afford the trade secret claimant

the opportunity to challenge IEPA’s reasons for denial. In addition, the claimant may

introduce new evidence if it can demonstrate either that the evidence was unavailable to

the party and IEPA at the time that IEPA made its determination or that the claimant was

not given the required opportunity to present a Statement of Justification to IEPA.

This process provides adequate safeguards against any erroneous loss of trade secret

status. Moreover, requiring a

de novo

hearing in all trade secret appeals would impose

additional administrative burdens on the State, promote forum-shopping, and hinder the

timely release of environmental information to the public.

See

Midwest Generation, PCB

04-185, slip op. at 22, 24, 33 (Nov. 4, 2004).

There are a few instances in Midwest’s

de novo

pleadings for PCB 04-216 where

Midwest raises legal arguments about “emission data” that it did not make in its earlier PCB 04-

185 filings.

See

Midwest Reply at 4-5. Midwest is not, and has never been, precluded by the

Board from raising such arguments on the merits of this appeal. The Board finds, however, that

none of the arguments made by Midwest warrant reconsideration of the Board’s June 17, 2004

order. Accordingly, on the grounds articulated here and in the Board’s November 4, 2004

decision in PCB 04-185, the Board denies Midwest’s motion to partially reconsider filed in this

proceeding, PCB 04-216.

Additionally, the Board will not order, on its own motion, a limited remand to IEPA to

specify trade secret denial reasons in a supplemental determination, as the Board ordered on

November 4, 2004, in PCB 04-185.

See

Midwest Generation, PCB 04-185, slip op. at 30-31, 33-

34 (Nov. 4, 2004). Without commenting on IEPA’s trade secret denial letter in PCB 04-216, the

Board simply notes that the procedural postures of this proceeding and PCB 04-185, at the times

of the respective rulings on the motions to partially reconsider, are quite different. On

November 4, 2004, no discovery had been conducted in PCB 04-185. In contrast, and as

described in the background section of this order, PCB 04-216 is presently in a relatively

advanced stage of discovery. Should Midwest, however, wish the Board to entertain a motion

for such a limited remand, the Board grants Midwest 21 days leave from its receipt of this order

to so move the Board. IEPA may respond to any Midwest motion as provided in the Board’s

procedural rules.

See

35 Ill. Adm. Code 101.500(d).

CONCLUSION

For the reasons above, the Board denies Midwest’s motion to extend the stay of this trade

secret appeal. By its terms, the stay ran through December 4, 2006. With this denial of

Midwest’s motion for another stay extension, the Board in this order also addresses and denies

Midwest’s motion for partial reconsideration. In addition, as more fully described above, the

Board grants Midwest leave to file a motion for a limited remand.

Consistent with today’s order, the Board directs the hearing officer to proceed

expeditiously to hearing. Additionally, the Board directs Midwest to promptly file with the

Board a copy of the USEPA final confidentiality determination concerning Midwest’s claimed

information if that determination is issued while this appeal is pending. As necessary, Midwest

may make the filing consistent with the procedures of 35 Ill. Adm. Code 130 for protecting

information from disclosure.

IT IS SO ORDERED.

I, Dorothy M. Gunn, Clerk of the Illinois Pollution Control Board, certify that the Board

adopted the above order on February 15, 2007, by a vote of 4-0.

Dorothy M. Gunn, Clerk

Illinois Pollution Control Board