ILLlNOIS POLLUTION CONTROL BOARD

PEOPLE OF THE STATE OF ILLlNOIS,

)

reI.

LISA MADIGAN, Attorney General ofthe

)

State

of lllinois,

)

Plaintiff,

)

COMMUNITY LANDFILL CO., an lllinois

)

Corporation, and the CITY OF MORRIS, an

)

nlinois Municipal Corporation,

)

Defendants.

NOTICE OF FILING

TO: SEE ATTACHED SERVICE LIST

PCB 03-191

(Enforcement - Land)

PLEASE

TAKE NOTICE that on November 2, 2007, we electronically filed with the

Clerk

of the lllinois Pollution Control Board, City's Response to the State's Appeal of the

Hearing Officer'sRuling, a copy

of which is attached hereto and hereby served upon you.

Dated:

November

2, 2007

Charles F. Heisten

Richard

S. Porter

Hinshaw

& Culbertson LLP

100 Park Avenue

P.O. Box 1389

Rockford, IL 61105-1389

815-490-4900

Scott M. Belt

& Associates, P.C.

105 East Main Street #206

Morris, IL 60450

(815) 941-4675

Respectfully

submitted,

On behalf ofthe CITY OF MORRIS

70S3S4711vl 806289

Electronic Filing - Received, Clerk's Office, November 2, 2007

AFFIDAVIT OF SERVICE

The undersigned, pursuant to the provisions of Section 1-109 ofthe lllinois Code of Civil

Procedure, hereby under penalty of perjury under the laws of the United States of America,

certifies that

on November 2,2007, she caused to be served a copy ofthe foregoing upon:

Mr. Christopher Grant

Mark LaRose

Assistant Attorney General

Clarissa Grayson

Envirornnental Bureau

LaRose

Bosco, Ltd.

W. Washington St., Suite 1800

200 N. LaSalle, Suite 2810

Chicago, TIL 60602

Chicago,

60601

Mr. John

T. Therriault, Assistant Clerk

Bradley Halloran

Illinois Pollution Control Board

Hearing Officer

100 W. Randolph, Suite 11-500

lllinois Pollution Control Board

Chicago, IL 60601

100 W. Randolph, Suite 11-500

(via electronic filing)

Chicago, TIL 60601

Mr. Scott Belt

Jennifer

Tomas

Scott

Belt

Associates, P.C.

Assistant Attorney General

105 East Main Street

Environmental Bureau

Suite 206

69 W. Washington Street, Suite 1800

Morris,

IL 60450

Chicago,

a 60602

A copy

of the same was enclosed in an envelope in the United States mail at Rockford, Illinois,

proper postage prepaid. before the hour of5:00 p.m., addressed as above.

HINSHAW

& CULBERTSON

100 Park Avenue

P.O. Box 1389

Rockford, IL 61105-1389

(815) 490-4900

1041S200vl 806289

PCB No. 03-191

(Enforcement~Land)

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

PEOPLE OF THE STATE OF ILLINOIS,

)

reI.

LISA MADIGAN, Attorney General ofthe

)

State

ofIllinois,

)

Plaintiff,

)

COMMUNITY LANDFILL CO., an Illinois

)

Corporation, and the CITY OF MORRIS, an

)

Illinois Municipal Corporation,

)

Defendants.

)

CITY'SRESPONSE TO THE STATE'SAPPEAL OF THE

HEARING OFFICER'SRULING

NOW COMES the Defendant, CITY OF MORRIS, an illinois Municipal Corporation, by

and through its attorneys, and in opposition

the State'sAppeal of the Hearing Officer'sRuling

states as follows:

BACKGROUND

The underlying proceeding at issue is an enforcement action involving allegations that the

City

of Morris ("the City") and its co-defendant, Community Landfill Company, Inc. ("CLC")

violated Section 5/21 (d)(2) ofthe Dlinois Environmental Protection Act, and Sections 811.700(f)

and 811.712

of the Board's Financial Assurance Regulations, for which hearings were held on

September 10,

II, and 12,2007. The hearings were held for the purpose of determining what

penalty,

if any, should be assessed against the City and CLC.

On September 11, 2007, the Hearing Officer sustained an objection

by the City to

evidence concerning a settlement offer which was allegedly made

by Frontier Insurance

Company in connection with a surety bond claim which the State

has

brought against Frontier.

70541195v\ 806289

After the hearing, when the State filed its Closing Argument and Post-Hearing Brief on

October 19, 2007, the State also filed an objection to the above-referenced evidentiary ruling by

the Hearing Officer. The State'sobjection was titled "Appeal ofHearing Officer'sRuling."

The State's objection to the hearing officer's ruling was Wltimely, inasmuch as

it was

filed well after the Board's fourteen

day rule for filing such objections.

See

35 TIl.Adm.Code

101.502(b).

In addition, the evidentiary ruling to which the State objects was proper, inasmuch

as it excluded evidence concerning settlement negotiations, which also constituted hearsay, and

which was irrelevant to the hearing which was limited solely to the issue

of the proper remedy.

As a result, the Board should strike and/or deny the State's objection to the Hearing Officer's

ruling.

ARGUMENT

The State's"Appeal" of the Hearing Officer'sRuling

Untimely

The ruling by the Hearing Officer now being challenged by the State occurred on

September 11, 2007.

involved the Hearing Officer's decision to sustain an objection to the

introduction

of evidence concerning alleged settlement negotiations between the State and

Frontier Insurance Company

in Rehabilitation. (Tr.

9/11107

p. 179).

The

Board'sProcedural Rules provide that:

objection to a hearing officer ruling made at hearing...

will be deemed waived

notfiled within

days

after the Board receives the hearing transcript.

35 Ill.Adm.Code 101.502(b) (emphasis added)

The transcript

of the hearing was filed with the Board on September 24, 2007. Twenty-

five (25) days later,

on October 19, 2007, the State filed its objection to the Hearing Officer's

ruling. Inasmuch as the State's objection was

not timely filed, the State's objection is deemed

70541195vl806289

waived. The State's"Appeal" should therefore be stricken, or

the alternative, should be denied

by the Board.

The Hearing Officer Correctly Ruled that the Proffered Testimony was Inadmissible

Because

it Concerns Settlement Negotiations

Even if the State's objection was not untimely, the Hearing Officer's ruling was correct.

The evidence which the Hearing Officer held inadmissible was testimony about settlement

negotiations undertaken between IEPA and Frontier, within the context

of the IEPA's claim on

fmancial assurance bonds that were issued by Frontier.

The excluded evidence was testimony provided by Mr. Brian White, an IEPA official

who stated that Frontier allegedly made an offer

of settlement to IEPA to pay $400,000 in the

State's claim under the financial assurance bonds. (State's

brief at pp. 1-2) 1. In Illinois, the

general rule is that offers

of settlement are not admissible into evidence.

Prewitt v. Hall,

113

Ill.App.2d 198,201,252 N.E.2d 43,44 (1

Dist. 1969);

Habitat Co. v. McClure.

301 Ill.App.3d

425, 445, 703 N.E.2d 578, 592 (1

Dist. 1998). Moreover, settlement offers are strictly

inadmissible if they are introduced to prove liability.

Stathis v. Geldermann, Inc.,

295 IlLApp.3d

844,861,692 N.E.2d 798,810 (lst Dist. 1998).

Here, the State argues that the excluded evidence was necessary to establish that the

amount

of financial assurance provided by the City and CLC was inadequate, and therefore

violated llIinois law. (State's"Appeal" at 3-4). Clearly, then, the State sought to introduce the

evidence to show that the Defendants allegedly failed to meet obligations imposed by the Act,

and are accordingly liable for violating the statute. The hearing officer, therefore, correctly

excluded the evidence of settlement negotiations.

1 Unfortunately, the State's brief does not include page numbers. Cites to the State'sbrief are therefore determined

by counting from the

first page of the State's "Appeal" brief, excluding the Notice of Filing and Certificate of

Service pages.

70541195v! 806289

The Proffered Evidence was Properly Excluded Because it was Hearsay

Even if the State's "Appeal" had not been untimely filed, and even if evidence of

settlement negotiations was not inadmissible, the Hearing Officer correctly sustained the City's

objection because the proffered testimony was hearsay.

is axiomatic that an out-of-court

statement offered as proof of the matter asserted in court is hearsay and, therefore, inadmissible

unless a recognized exception applies.

See, e.g., Hallowell v. University ofChicago Hasp., 334

1ll.App.3d 206, 211, 777 N.E.2d 435 (1

Dist. 2002).

his testimony, Mr. White asserted that he had

"received information

that Frontier has

offered to settle [the IEPA's bond claim against Frontier] for $400,000." (State's brief at p. 2;

Tr.

9/11107

at p. 184). The Hearing Officer initially sustained the City's objection that the

testimony constituted hearsay. When the State then revised its question, asking Mr. White, "Do

you know how much that [settlement] offer was for," the City reiterated its hearsay objection.

The State responded that the question sought to elicit the witness's personal knowledge of the

settlement offer. At that point the Hearing Officer agreed and overruled the hearsay objection.

Without waiving its hearsay objection, the City argued that the evidence of settlement

negotiations between the State and Frontier was also irrelevant and inadmissible

a hearing to

determine what penalty, if any, should be assessed against the City. The Hearing Officer

sustained the City'sobjection based on lack ofrelevance. (State'sbrief at p. 2).

The Proffered Evidence was Properly Excluded Because it was Irrelevant

Even

the State's Appeal had not been untimely, and if the proffered evidence

concerning settlement negotiations was not inadmissible, and if the proffered evidence did not

constitute hearsay, the Hearing Officer correctly excluded the evidence because it was irrelevant

to the question at issue in the hearing: what penalty, if any, should be imposed against the City.

70541 I95vl 806289

the attorney for the State, Mr. Chris Grant, explained

his opening statement, "TItis

hearing is set to provide evidence to the Board on the penalty factors from Section 33C and 42H

of the Illinois Environmental Protection Act." (Tr. 9/11/07 at 18).

Despite the fact that the sole purpose of the hearing was to detennine the appropriate

remedy,

if any, for the alleged violations, the State asserts that the excluded evidence was

proffered for the

purposes of showing that the amount of funds available for closure and post-

closure care

of the Landfill was inadequate. (State's brief at p. 3-4). On one hand the State

acknowledges that the hearing was conducted "on the sole issue

of remedy" and did not involve

the question ofliability. (State's Closing Argument and Post-Hearing Brief at p.

1).

At the same

time, however, the State argues

its objection to the Hearing Officer's ruling that the excluded

evidence is necessary to prevent the Board from being "misinformed" as to whether the value of

the financial assurance bonds was sufficient to comply with the statutory requirements. These

assertions are utterly inconsistent.

There is no question but that the hearing was conducted solely to determine what,

if any,

remedy is appropriate. Because the evidence excluded

by the Hearing Officer is clearly

irrelevant to this question, the evidence would not assist the Board and was therefore properly

excluded.

CONCLUSION

The State filed an untimely objection the Hearing Officer)s ruling) and its objection is

therefore deemed waived under the Board'srules. Even if the State's objection had been timely

filed, however, the State's request that the Board overturn the Hearing Officer's evidentiary

ruling should

be denied inasmuch as the proffered evidence concerned inadmissible settlement

negotiations, constituted hearsay, and was irrelevant to the question of what remedy, if any, is

appropriate.

70541195v1806289

WHEREFORE, for the reasons set forth above, the Defendant, CITY OF MORRIS, a

Municipal Corporation, respectfully requests that this Board deny the State's "Appeal

of the

Hearing Officer Ruling," and grant such other and further relief as the Board deems appropriate.

CITY OF MORRIS, Defendant

By: HINSHAW

CULBERTSON L

Charles F. Helsten

Richard

S. Porter

Hinshaw & Culbertson LLP

100 Park Avenue

P.O. Box 1389

Rockford,

IL 61105-1389

815-490-4900

Scott M. Belt

Associates, P.C.

105 East Main Street #206

Morris, IL 60450

(815) 941-4675

70541195vI806289

Electronic Filing - Received, Clerk's Office, November 2, 2007