avid S. O'Neill
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
PEOPLE OF THE STATE OF ILLINOIS,
Complainant,
v.
PCB 96-98
Enforcement
RECEIVED
CLERK'S OFFICE
DEC 0 5 2007
STATE
OF ILLINOIS
Pollution Control Board
SKOKIE VALLEY ASPHALT, CO., INC.,
EDWIN L. FREDERICK, JR., individually and as
owner and President of Skokie Valley Asphalt
Co., Inc., and RICHARD J. FREDERICK,
individually and as owner and Vice President of
Skokie Valley Asphalt Co., Inc.,
Respondents.
NOTICE OF FILING
PLEASE TAKE NOTICE that I have today filed with the Office of the Clerk of the
Pollution Control Board the Respondents' Motion for Reconsideration, a copy of which is
hereby served upon you.
December 5, 2007
David S. O'Neill, Attorney at Law
5487 N. Milwaukee Avenue
Chicago, IL 60630-1249
(773) 792-1333
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
PEOPLE OF THE STATE OF ILLINOIS,
Complainant,
v.
PCB 96-98
Enforcement
RECEIVED
CLERK'S OFFICE
DEC 0 5 2007
STATE OF
ILLINOIS
Pollution Control Board
SKOKIE VALLEY ASPHALT, CO., INC.,
EDWIN L. FREDERICK, JR., individually and as
owner and President of Skokie Valley Asphalt
Co., Inc., and RICHARD J. FREDERICK,
individually and as owner and Vice President of
Skokie Valley Asphalt Co., Inc.,
Respondents.
RESPONDENTS' MOTION FOR RECONSIDERATION
AND MOTION TO STAY
DATE OF FINAL
ORDER
The Respondents, SKOKIE VALLEY ASPHALT, CO., INC., EDWIN L. FREDERICK,
JR., individually and as owner and President of Skokie Valley Asphalt Co., Inc., and RICHARD
J. FREDERICK, individually and as owner and Vice President of Skokie Valley Asphalt Co.,
Inc.,, by and through its attorney, David S. O'Neill and in accordance with the Board's
procedural rules, 35 Ill. Adm. Code 101.520 herein file their Motion for Reconsideration of the
Board's Final Order of November 1, 2007 and hereby request a stay of the date of the final order
to stay Respondents' obligation to pay civil penalty and preserve the Respondents' right to
appeal until a time after a final opinion and order that considers the motion for reconsideration
has been entered and in support thereof states as follows:
FACTUAL BACKGROUND
Skokie Valley was an asphalt-paving contractor with its main office located at 768 South
Lake Street, Grayslake, Lake County (site). (Tr. at 277-78.) East of the site is the Avon-
Fremont Drainage Ditch that flows north through the town of Grayslake into a lake called Third
Lake. (Tr. at 145-46; Comp. Exs 25 and 32.) The lake, Grayslake, for which the town is named,
is located to the northeast of the site. (Comp. Ex. 32.) On April 4, 1986, the Agency issued a
site specific NPDES permit to Skokie Valley for the storm water runoff from the site. (Tr. at
137, Comp. Ex.1.) Skokie Valley was permitted to discharge storm water into Grayslake under
NPDES permit No. IL 0065005. (Tr. at 221;Comp.Ex. 1.) The permit, which became effective
on May 4, 1986, and expired on March 1, 1991, required Skokie Valley to submit monthly
DMRs. (Tr. at 27-29, Comp. Ex.1.) To comply with this requirement, Skokie Valley would
have an employee take a sample from a discharge pipe and deliver the sample to North Shore
Sanitary District for testing. (Tr. at 283.) The results were mailed to Skokie Valley and the
DMR was usually completed by Skokie Valley dispatcher Bob Christiansen and signed by
Richard Frederick as an officer of Skokie Valley Asphalt. (Tr. at 286, 313.)
Skokie Valley was an Illinois corporation until its sale to Curran Contracting and
dissolution in 1998. (Tr. at 299-300, 432.) The sale was a sale of assets and included all of the
records of Skokie Valley. (Tr. at 319-21.) Edwin Frederick was the president of Skokie Valley
from 1978 until its sale in 1998. (Tr. at 432-35.) Edwin Frederick's brother, Richard Frederick,
was the vice president of Skokie Valley from 1978 until its sale in 1998. (Tr. at. 276.) Edwin
and Richard Frederick each owned 50 percent of Skokie Valley, were the only shareholders of
Skokie Valley and were the only corporate officers of Skokie Valley. (Tr. at 435-37.)
Richard Frederick was responsible for the scheduling of all jobs, estimating, budgeting,
hiring, and controlling of all employees and subcontractors, equipment purchasing and repair
and review of equipment. (Tr. at 279-80.) Edwin Frederick was responsible for estimating,
insurance issues, management of payroll, job-site meetings, consultation with foremen and
engineers, and liaison with government officials and customers. (Tr. at 282.)
Prior to 1978, Liberty Asphalt operated the Skokie Valley site. (Tr. at 124.) Liberty
Asphalt was an asphalt manufacturing company owned and operated by Edwin and Richard
Frederick's parents. (Tr. at 279.) Edwin Frederick worked for Liberty Asphalt for over 20 years.
(Id.) Neither Richard Frederick or Edwin Frederick were owners or management participants in
Liberty Asphalt. (Id.)
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From 1978 to at least 1981 the site was operated as an asphalt plant. (Tr. at 279, 294-96.)
The Respondents sold the plant and had it removed in 1981 or 1982. (Id.) Since the removal of
the plant, the site was used as an office, and a maintenance and storage garage for equipment,
trucks, asphalt liquid stored in above-ground tanks, asphalt primer coatings stored in above-
ground storage tanks and other above-ground storage tanks. (Tr. at 278, 438, Comp. Ex. 32 and
34.) The site housed the estimating department, the office and all the people who did billing.
(Tr. at 277-78.)
The land between the site and the Avon-Fremont Drainage Ditch is a working farm field.
(Tr. at 359.) A farm drainage tile ran through the site toward the Avon-Fremont Drainage Ditch.
(Tr. at 340-41.) The outfall from the tile drains to the ditch due east of the site. (Comp. Ex.22.)
From December 1994 through April 1995, there was an oily discharge in the Avon Fremont
Drainage Ditch. (Tr. at 340-41, Comp. Ex.34.) Upon discovering the oily sheen on the water in
the tile, the respondents plugged it. (Tr. at. 340.) After the respondents plugged the drain tile on
their property, the oil discharge in the ditch subsided and stopped. (Tr. at 361-62; Comp. Ex.
34.)
In March 1995, the Agency sampled the effluent from the farm drainage tile that ran
through the site at the Avon-Fremont drainage ditch. (Tr. at 152.) The concentration of oil
gravimetric of the sample contained 664 milligrams of oil per liter. (Tr. at 155-56; Comp. Ex.
21.) The Agency does not have any records showing that Skokie Valley submitted any DMR's
in 1986 or 1987. (Tr. at 49-50; Comp. Exs. 1, 8A and 26.) According to the Agency's DMR
Submission Record, Skokie Valley submitted two DMRs in 1988, five DMRs in 1989, and
eleven in 1990. (Tr. at 51-52; Comp.Exs. 1, 8 and 26.) The Agency does not have a record of
Skokie Valley submitting a DMR for the month of July in 1992. (Tr. at 53; Comp.Ex. 8F.)
The DMR submitted for December 1990, contained the same data as the submitted for
November 1990. (Tr. at 37-38; Comp.Exs.2-3.) The DMR originally submitted by Skokie
Valley for February 1991 contained the same data as the report submitted for January 1991. (Tr.
at 40; Comp.Exs.4-5.) Skokie Valley subsequently submitted a corrected DMR for February of
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1991. (Tr. at 485. Resp.Ex.4.) Attached to the letter were non-duplicative DMRs for the two
months in question. (Id.)
The DMR that Skokie Valley submitted in August 1991 indicated a 30-day average
concentration for TSS of 55 mg/L and a daily maximum concentration for TSS of 55 mg/L. (Tr.
at 54; Comp.Ex.9.) The DMR that Skokie Valley submitted for September 1991 indicated that
their storm water discharge had a 30-day average concentration for TSS of 25 mg/L. (Tr. at 54-
55;Comp.Ex.10.) The DMR that Skokie Valley submitted for October 1991 indicated that their
storm water discharge had a 30-day average concentration for TSS of 41 mg/L and a daily
maximum concentration of 41 mg/L. (Tr. at 55;Comp.Ex.11.) The DMR that Skokie Valley
submitted for February 1992 showed that their storm water discharge had a 30-day average
concentration for TSS of 18 mg/L .(Tr. at 55-56;Comp.Ex.12.) The DMRs that Skokie Valley
submitted for November and December 1992 indicated that their storm water discharge had a
30-day average concentration for TSS of 22 mg/L and 24 mg/L respectively. (Tr. at 56;
Comp.Exs.13 and 14.) The DMR that Skokie Valley submitted for May 1993 indicated that
their storm water discharge had a 30-day average concentration for TSS of 24 mg/L. (Tr. at 56-
57;Comp.Ex.15.) The DMR that Skokie Valley submitted for June 1993 indicated that their
storm water discharge had a 30-day average concentration for TSS of 35 mg/L and a daily
maximum concentration of 35 mg/L. (Tr. at 57;Comp.Ex.16.) The DMR that Skokie Valley
submitted for April 1995 indicated that their storm water discharge had a 30-day average
concentration for TSS of 126 mg/L and a daily maximum concentration of 126 mg/L. (Tr. at 57-
58; Comp.Ex.17.)
The Complainant's witness, Mr Garetson, testified that the high levels of TDS were the
result of a number of factors beyond the control of the permit holder including rain fall and run
off from neighboring farm fields. (Trial at 78.) Mr. Huff testified that the IEPA had decided
before this case was filed that the TDS standards that were routinely inserted in NPDES permits
at the time that Skokie Valley's permit was issued were too stringent. They subsequently
changed the standard and did not enforce against the exceedences in existing permits (Id. at 414-
415.)
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In numerous discussions with the IEPA, the Respondents were informed that they would
not be required to reapply for an NPDES permit. They were informed that their permit
requirement could be covered by an industry permit. For reasons not known to the Respondents
the IEPA changed the requirement. (Id. at 416-417) Because the NPDES permit expired in
March of 1991, the Agency sent a compliance inquiry letter to Skokie Valley in April 1991. (Tr.
at 42-46; Comp.Ex.6.) The Respondents discussed the idea of coverage under a blanket permit
instead of an individual NPDES permit with an Agency representative, (Tr. at 322-325.) but
decided to submit an application for an NPDES permit. The Agency received Skokie Valley's
NPDES permit renewal application on June 5, 1991. (Tr. at 42; Comp.Ex. 6.) To date, the
IEPA has not issued the NPDES permit for the site. It appears that an NPDES permit was not
required.
Agency inspector Kallis inspected the site on May 21, 1991, even though he did not have
a warrant to enter the site. (Tr. at 139-40; Comp.Ex.19.) Donald Klopke worked in the
Agency's Office of Emergency Response on April 19, 1995, when he inspected the site, the
Avon-Fremont drainage ditch and the surrounding area. (Tr. at 218-22.) On that day, Mr.
Klopke inspected the site with fellow Agency employees Ken Savage and Betty Lavis — the on-
scene coordinator from the U.S. EPA. (Tr. at 227-28.; Comp.Ex.25.) Mr. Klopke saw the oil
sheen on the surface of the ditch. (Tr. at 222.) Ms. Lavis prepared a pollution report on May 3,
1995 describing her visit to the site on April 18, 1995, that mistakenly stated the source of the
petroleum release into the Avon-Fremont drainage ditch was Skokie Valley. (Tr. at 227-28;
Comp.Ex.25.) In her report, Ms. Lavis wrote that she had planned to conduct additional
sampling, but that she was informed by Edwin and Richard Frederick that they had found a leak
and would address the problem with the assistance of their consulting engineer, Mr James Huff
(Tr. at 228-31; Comp.Ex.25.) The Respondents signed a notice of federal interest in an oil
pollution incident and agreed to submit a clean-up project plan to the U.S. EPA for review.
(Comp.Ex.25.) The U.S. EPA requested that Skokie Valley search for additional sources of the
release on their site and suspected that there might be a pool of oil product accumulated under
their site. (Id.)
-5-
Three USTs that were installed in 1978 by the former owner of the site – Liberty Asphalt
– were removed from the site after the April 1995 incident at the total expense of Skokie Valley
Asphalt, Edwin Frederick and Richard Frederick, individually and as officers of Skokie Valley
Asphalt. (Comp. Ex. 34, pg. 8.). This amount was in excess of $150,000 at the time of the
hearing and has since risen to over $200,000.
Agency inspector Chris Kallis also investigated the site in 1995. On March 1, 1995, Mr.
Kallis took samples from the point where the farm drainage tile discharged into the ditch,
observing at the time, an oil sheen coming from the farm drainage tile and downstream in the
ditch. (Tr. at 151-55.) Mr. Kallis did not notice any sign of contaminant upstream from the
drainage tile. (Tr. at 154.)
On April 22, 1995, the Respondents contacted and retained environmental engineer
James Huff after finding a visible sheen of oil on an opened drain tile on Respondents' property
and after no other party including the Illinois EPA and the USEPA and other landowners
abutting the site took ant action to address the problem (Tr. at 347-48). On Huff s advice, the
Respondents plugged the drain tile on respondents' property at the total expense of the
Respondents. (Tr. at 340-41.) Solely at their own expense, the Respondents were able to resolve
the problem of releases to the Avon Ditch. No releases have occurred since Respondents
plugged the drain tile. (Tr. at 348.) Huff visited the site a few days later and saw that the drain
tile had been plugged and the soil brought to grade. (Tr. at 352.) The Respondents addressed
the oil sheen problem by having absorbent booms placed in the Avon-Fremont drainage ditch by
the USEPA. (Tr. at 348.) Mr. Huff noticed an oil sheen near where the booms were in place and
observed that the oil sheen did not exist a mile downstream from were the drain tile empties into
the ditch. (Tr. at 348-49.)
On April 25, 1995, Respondents excavated a trench at the site to again locate the drain
tile and Huff noticed oil in the center of the trench. On April 28, 1995, the Respondents
discovered that an underground heating oil tank contained in water and reported a leaking
underground storage tank incident to the Illinois Emergency Management Agency (IEMA). (Tr.
-6-
at 363-68.) On April 28, 1995, the Respondents followed Mr. Huff s recommendation and
purchased higher quality booms and placed them in the drainage ditch. (Tr. at 351-352.)
After removing the underground storage tank, Huff determined that the release from that
tank was minor and now thinks the oil sheen on the drainage ditch from 1994 to 1995 was
caused by one or more items on the south side of the site. (Tr. at 386-87.) Huff ultimately
concluded that the release to the drainage ditch was attributed to the abandoned gasoline and
diesel lines from an above ground storage tank to the former pump island, that had been installed
by a previous site owner. (Comp. Ex. 34.)
After the sale of the site, and continuing at least until the time of the hearing, Edwin and
Richard Frederick continue to fund the effort to eliminate any potential source of a release from
the site as individuals and not on behalf of the dissolved Skokie Valley Asphalt Co., Inc. (Tr. at
387-88.) To date, the Fredericks have paid Huff at least $150,000 for environmental work
performed at the site. (Tr. at 467-68.)
PROCEDURAL HISTORY
On November 3, 1995, the Complainant filed a complaint against Skokie Valley Asphalt
Co., Inc. The complaint alleged violations dating back to 1986. Prior to the filing of the
Complaint the Respondent worked in good faith to resolve the issues on which the complaint
was based and was of the opinion that the matter had been resolved with the Attorney General's
office. The Complainant filed a first amended complaint on December 29, 1997 that added an
additional count against Skokie Valley Asphalt, but did not add any additional Respondents.
In June of 1999, the first discovery period for this matter was established. The
Complainant's First Set of Interrogatories and First Request for Production were sent to Skokie
Valley Asphalt on June 10, 1999. The Respondent filed complete responses to Complainant's
discovery request on January 21, 2000. The Respondent made no discovery request to
Complainant
during
the first discovery period.
-7-
The Board allowed the Complainant's a second discovery period on April 7, 2000. Under
a hearing officer order, all discovery was to be completed by October 20, 2000. During this
discovery period, the parties agreed to a settlement of the matter. The settlement included the
execution of a consent decree which was to be prepared by the Complainant and the payment of
a penalty of approximately $20,000.00. Neither party requested any further discovery during
this second discovery period.
Mr. Halloran left the Attorney General's office before executing the consent decree with
the Respondent. Ms. Kelly Cartwright filed an appearance in this matter on May 12, 2000. The
Respondent and its attorney discussed the settlement with Ms. Cartwright and she recognized the
existence of the agreement and the need for the Complainant to prepare the consent decree but
she failed to do so.
On April 16, 2001, the Complainant filed a motion for summary judgment. The
Respondent filed a response to the motion for summary judgment on April 30, 2001 and the
motion was denied by the Board on May, 2001. The Board also denied the Complainant's
motion for reconsideration of its order denying summary judgment on June 6, 2001.
In September of 2001, the hearing officer set a third discovery schedule for this matter at
the request of the Complainant. All written discovery was to be completed by November 16,
2001 and all depositions were to be completed by December 17, 2001. The Respondent fully
complied with the Complainant's request for discovery. The Respondents made no request for
discovery upon the Complainant. On May 2, 2002, the matter was set for hearing. The hearing
was scheduled for June 27, 2002. However, prior to the hearing, the parties agreed to settle the
matter on the terms previously agreed to by the parties. Again, the Complainant was supposed
to prepare the consent decree but failed to do so.
On June 14, 2002, Mr. Cohen filed an appearance on behalf of the Complainant. On the
motion of the Complainant, the Board canceled the hearing that was scheduled for June 27,
2002. The Respondents agreed to the canceling of the hearing based on representations made by
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Mr. Cohen that he would honor the settlement agreement made with Ms. Cartwright and Mr.
Halloren. However, instead of preparing the required consent decree, Mr. Cohen filed a second
amended complaint in which Mr. Cohen added Mr. Richard Frederick and Mr. Edwin Frederick
as Respondents. The second amended complaint was filed with the Board on July 26, 2002,
without previous notice to the Respondent's attorney and without leave of the Board to file an
amended complaint as required by Board procedural rules.
On July 26, 2002, a full fifty-six months after the first amended complaint was filed and
eighty-one months after the original complaint was filed and fourteen years after the alleged
violations first occurred, the Complainant filed a second amended complaint. In the complaint,
the Complainant added the Fredericks as Respondents. The second amended complaint alleged
that the Fredericks violated Sections 12(a) and (f) of the Environmental Protection Act (Act)
(415 ILCS 5/12(a), (0(2002)), as well as Sections 302.203, 304.105, 304.106, 305.102(6),
309.102(a), and 309.104(a) of the Board's regulations. The complaint alleged that the Fredericks
falsified discharge monitoring reports, submitted a late application for a National Pollutant
Discharge Elimination System (NPDES) permit, failed to comply with sampling and reporting
requirements in their NPDES permits, discharged oil into a drainage ditch, and violated NPDES
permit effluent limits.
On July 30, 2002, Mr. Joel Sternstein filed an appearance on behalf the Complainant in
clear violation of the Board's procedural rules which prohibits a former Board employee from
representing a client in a matter before the Board if that attorney had previous worked on that
case while a Board employee. While both the Board, the Complainant and Mr. Sternstein knew
that Mr. Sternstein was previously a Board employee who had done a substantial amount of
work in this case at the Board, they allowed Mr. Sternstein to file his appearance, work on the
matter and failed to divulge the conflict and breach of the rules to the Respondent or the
Respondents' attorney.
On September 25, 2002, the Respondents filed a Motion to Strike Complainant's Second
Amended Complaint because the Complainant's failed to ask leave of the Board to file its
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Second Amended Complaint as required by the Board's Procedural Rules. The Complainant's
filed a response to the Respondents Motion. The Response was prepared by Mr. Sternstein who
was not supposed to be practicing before the Board on this matter. Even though Mr Stemstein's
response failed to address the main issue put forth in the Respondent's motion, the Board ruled
in favor of their former employee. In its Order of October 17, 2002, the Board found that the
Complainant did, in fact, again violate Board procedural rules by failing to ask leave of the
Board to file an amended complaint. However, the Board said they would not enforce their
procedural rules against Mr. Sternstein and the Complainants choosing to allow the filing of the
Second Amended Complaint in the interest of "judicial economy" and at the expense of the
Respondent's right to due process. As a result of this ruling in favor of Mr. Sternstein, the
Respondents lost their right to contest the Complainant's Second Amended Complaint. To date,
Complainant's Second Amended Complaint has not been properly served on any of the
Respondents.
On October 17, 2002, the Board accepted the People's second amended complaint.
People v. Skokie Valley Asphalt, CO., PCB 96-98 slip op. at 3 (Oct. 17, 2002). On December
20, 2002, the Respondents filed Respondents' Answer and Affirmative Defense to the
Complainant's Second Amended Complaint. In this filing the Respondents offered an
affirmative defense based on lathes.
On January 3, 2003, the Complainant, through Mr. Sternstein, filed a trivial Motion to
Deem Facts Admitted and for Summary Judgments. The Respondents filed a response to Mr.
Stemstein's Motion on January 17, 2003. On March 20, 2003, the Board issued an order that
denied the Complainant's motion for summary judgment, accepted the Respondents' answer into
the record, and directed the hearing officer to proceed to hearing. People v. Skokie Valley
Asphalt, Co., PCB 96-98 (June 5, 2003).
A hearing was held on October 30 and 31, 2002 at the Village Hall in Libertyville. Six
witnesses testified. The People filed 42 Exhibits, and the Respondents filed eight exhibits. All
offered exhibits were accepted into evidence. On November 3, 2003, Board Hearing Officer,
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Carol Sudman, issued a hearing repot that set a briefing schedule and found the witnesses
credible.
On January 15, 2004, the Complainant filed its Closing Argument and Post Trial Brief in
the above captioned matter along with a Motion to File Instanter which was required because the
closing argument was filed after the deadline for filing set by the hearing officer's order. Again,
the Board allowed the Complainant to defy a Board order and allowed the brief to be filed late.
The Board did not allow the Respondents extra time to respond to the Complainant's late filed
Closing argument. On March 12, 2004, the Respondents filed their closing brief on time and in
accordance with the Board's imposed deadline.
In the Closing Argument and Post Trial Brief, the Complainant failed to ask for
attorneys' fees with the specificity required under Illinois law and instead made an ambiguous
plea for "Complainant's costs and fees". (Complainant's Closing Argument of January 15, 2004
at 48). On April 15`h
, 2004, the Complainant filed its Closing Rebuttal Argument and Reply
Brief which included a petition for attorneys' fees and costs. (Complainant's Rebuttal Argument
and Reply Brief at 38.) On May 17, 2004, the Respondents filed a Motion to Strike and
Objections to Complainant's Closing Argument and Reply Brief, in which, in part, the
Respondents objected to the Complainant introducing materials beyond the scope of rebuttal in
the filing including the petition for attorney's fees and costs. (Resp. Mot. at 1-2.) In its Order of
September 2, 2004 the Board failed to address the issue of whether or not the Complainant could
seek attorneys' fees if it had not raised the issue at hearing or in closing arguments. Again, the
Board allowed the Complainant to act in clear defiance of the Board's procedural rules
In its order of September 2, 2004, the Board granted the Respondents' motion to strike in
regards to attorneys' fees and costs. (Order of September 2, 2004.) The issue of attorneys' fees
was not raised by the Complainant at hearing or in its closing argument and because the Board
granted the Respondents' motion to strike "that portion of the People's reply that addresses
attorney fees and cost exceed the scope of the arguments made in the Respondents' brief .." (Id at
6.) Therefore, the issue of attorneys' fees and costs was never brought to the Board for consideration.
However, the Board somehow granted the Complainant's non-existent request for
attorneys' fees and costs (Id. at 23.) and in doing so the Board stated that it would "withhold a
decision regarding attorney fees and cost until the matter is fully addressed by the parties." (Id. at
2.) (emphasis added). On December 16, 2004 the Board contradicted its Order of September 2,
2004 by issuing an order in which it stated that it would not hold any hearings on the issues of
fees and costs. (Order of December 16, 2004 at 3.) In doing so, the Board, without basis or
justification, denied the Respondents the right to fully address the issue of attorneys' fees and
cost that the Board had granted to the Respondents in the Order of September 2, 2004.
April 7, 2005, the Board issued an Order in which the Board granted the Respondents'
motion for extension of time to allow for discovery. The Order states that "the Board will grant
the Respondents additional time in order to conduct discovery..." (Order of April 7, 2005 at 3).
This Order again contradicted the Board's granting of the Respondents' right to fully address the
attorneys' fees and costs issues in the September 2, 2004 Order by stating that "the Board grants
the Respondents' motion for extension of time to allow for
limited
discovery". (Id. At 1.)
(Emphasis added.) In the Conclusion of the Order, the Board "grants Respondents' motion for
extension of time and authorizes Respondents to conduct discovery on the attorney fees issue".
(Id at 4.).
The Board Order of April 7, 2005 also denied the Respondents' the right to discovery on
the issue of Mr. Sternstein's improper participation in this matter, even though the Plaintiff s
clearly open the door to such discovery by requesting fees and costs for Mr. Sternstein's
participation in their petition for attorneys' fees and cost of September 17, 2004. (Resp. Motion
at 2-3.)
Following the limited discovery and the filing of a series of motions, the hearing officer
conducted a hearing on fees and costs on December12, 2006. The hearing officer filed her
hearing report on December 14, 2006 and the parties filed their post-hearing briefs on January
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19, 2007. The Board issued its opinion and order of the issue of attorneys' fees and costs on
November 1, 2007.
In the order, the Board awarded the Complainant 30, 225 in attorney fees and $2,291 in
costs, for a total of $32,516.20. (Order of Nov.1, 2007 at 30.) The Board also ordered a lift of
the stay of the Respondents' obligation to pay the civil penalty of $153,000 and stated that the
opinion constitutes the Board's final order subject to motion for reconsideration under Board
procedural rule 101.520.
DECISION ON VIOLATIONS AND
CIVIL PENALTY
In its September 2, 2004 decision, the Board first held that Edwin and Richard Frederick
are personally liable for the activities of Skokie Valley Asphalt Co., Inc. (Skokie Valley)
because of their participation or personal involvement in the company:
The Fredericks, together, were responsible for the day-to-day operation of Skokie
Valley. Both were present for environmental investigations and inspections. They also
both corresponded and met with environmental government officials. While perhaps not
driving the train, the Fredericks both sat beside the driver and gave instructions, and had
the ability to control the activities that gave rise to the instant complaint. Accordingly,
the Fredericks can be held personally liable under the doctrine set forth in [People v.
C.J.R. Processing Inc., 269 Ill. App. 3d 1013, 647 N.E.2d 1035 (3rd Dist. 1995)] for any
violations committed by Skokie Valley. See People v. Skokie Valley Asphalt Co. Inc.
PCB 96-98, slip op. at 11 (Sept. 2, 2004).
The Board then addressed each of the five counts of the People's complaint in turn. In
count I of the complaint, the People alleged that respondents violated the Act and Board
regulations by falsifying Skokie Valley's December 1990 and January 1991 discharge
monitoring reports (DMRs). The People alleged that respondents falsified the DMRs by altering
the dates of previously submitted reports and submitting the duplicates to the Illinois
Environmental Protection Agency (Agency). The Board found that respondents made a false
statement, representation, or certification to the Agency in at least these two instances, and held
that respondents violated Section 12(1) of the Act (415 ILCS 5/12(1) (2006)) and 35 Ill. Adm.
Code 305. 102(b). See Skokie Valley Asphalt, PCB 96-98, slip op. at 12-13.
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The People alleged in count II of their complaint that respondents violated the Act and
Board regulations by not applying for reissuance of Skokie Valley's NPDES permit 80 days
prior to the expiration date contained in the existing permit. The Board found that Skokie Valley
did have an NPDES permit, and that any permittee wishing to continue to discharge was required
by regulation to file for renewal prior to 180 days before NPDES permit expiration. The Board
further found that Skokie Valley did not timely apply for renewal, and therefore held that
respondents violated Section 12(f) of the Act and 35 111. Adm. Code 309.102(a) and 309.104(a).
See Skokie Valley Asphalt, PCB 96-98, slip op. at 13-14.
In count III of the complaint, the People alleged that respondents violated the Act and
Board regulations by failing to submit DMRs to the Agency as required by Skokie Valley's
NPDES permit and by not maintaining an accessible effluent sampling point for Skokie Valley's
discharge from its lagoon. The Board found that respondents violated Section 12(f) of the Act, as
well as 35 III. Adm. Code 305.102(b) and 309.102(a) and special condition number of the
NPDES permit, by failing to properly submit DMRs on a regular basis. The Board also found,
however, that the People failed to meet their burden of proof that respondents violated special
condition number 1 of the NPDES permit, and the accompanying statutory and regulatory
provisions, by failing to maintain an accessible sampling point. See Skokie Valley Asphalt, PCB
96-98, slip op. at 15.
Count IV of the complaint alleged that respondents violated the Act and Board
regulations by causing or allowing the discharge of contaminants into a drainage ditch located
east of the site. The Board found that from December 1994 through April 1995, there was an oily
discharge in the ditch constituting the "discharge of a contaminant to the environment so as to
cause water pollution, I. e. , a discharge to State waters that will or is likely to create a nuisance
or render such waters harmful or detrimental or injurious." Skokie Valley Asphalt, PCB 96-98,
slip op. at 1 7. Further, the Board found that the People met their burden of proving that the oily
sheen in the drainage ditch was caused, threatened, or allowed by respondents. Id. Accordingly,
the Board held that respondents violated Section 1 2(a) of the Act (4 1 5 ILCS 5/1 2(a) (2006))
and 35 Adm.
Code 302.203, 304. 105, and 304. 106. Additionally, the Board found that
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respondents violated 35 Ill. Adm. Code 304.124© of the Board's effluent standards as laboratory
analysis revealed that a water sample far exceeded 1 5 milligrams per liter (mg/L) of oil. Id.
The People alleged in count V of the complaint that respondents violated the Act and
Board regulations by causing or allowing the discharge of effluent from the Skokie Valley
facility to exceed concentration limits for total suspended solids (TSS) as set forth in Skokie
Valley's NPDES permit. The permit contains effluent limits for TSS of(1) 15 mg/L for a 30-day
average and (2) 30 mg/L for a daily maximum. After reviewing the DMRs submitted by
respondents, the Board found nine exceedences of the 30-day average concentration limit and
four exceedences of the daily maximum concentration limit. The Board further found that
respondents violated the limits in the NPDES permit for two consecutive months twice and for
three consecutive months in 1991 . The Board held that respondents violated Section 12(f) of the
Act and 35 Ill. Adm. Code 305. 102(b) and 309. 102(a). Skokie Valley Asphalt, PCB 96-98, slip
op. at 18.
After finding the violations, the Board considered the factors set forth in Section 33© of
the Act (415 ILCS 5/33© (2006)) to determine whether a civil penalty should be imposed on the
Respondents. The Section 33© factors bear on the reasonableness of the circumstances
surrounding the violations, including the technical practicability and economic reasonableness of
reducing or eliminating the discharges or deposits at issue. After considering these factors, the
Board found that a civil penalty was warranted. Skokie Valley Asphalt, PCB 96-98, slip op. at
18-20. The Board then considered the factors of Section 42(h) of the Act (415 ILCS
5/42(h)
(2006)) to determine the appropriate amount of the civil penalty. Section 42(h) sets forth factors
that may mitigate or aggravate the civil penalty amount, including the duration and gravity of the
violations. Based on the Section 42(h) factors, the Board imposed a $153,000 civil penalty on
respondents. Id. at 20-23.
The Board issued its opinion and order of the issue of attorneys' fees and costs on
November 1, 2007. In the order, the Board awarded the Complainant $30,225 in attorney fees
and $2,291 in costs, for a total of $32,516.20. (Order of Nov.1, 2007 at 30.)
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ISSUES FOR RECONSIDERATION
1.
The Board failed to properly apply the facts of the case to the Respondents'
affirmative defense of laches.
"Laches is an equitable doctrine which precludes the assertion of a claim by a litigant
whose unreasonable delay in raising that claim has prejudiced the opposing party." Riverview
FS, Inc. V. Illinois Environmental Protection Agency, PCB 97-226 at 1 (May 3, 2001 citing
Tully v. Illinois, 143 III. 2d 425, 432, 574 N.E. 2d 659, 662 (1991). "There are two principal
elements of laches: lack of due diligence by a party asserting a claim and prejudice to the
opposing party." People v. Royster-Clark. Inc., PCB 02-8 at 6 (January 24, 2002) citing Van
Milligan v. Board of Fire and Police Commission, 158 ILL.2d at 89, 630 N.E.2d at 833.
In its Opinion and Oder of September 2, 2004, the Board denied the Respondents'
affirmative defense based on laches. The Complainant was aware of the roles of Respondents
Edwin L. Frederick and Richard J. Frederick in the alleged violations prior to the filing of the
original complaint in 1995 and all discovery pertinent to the parties involved in this matter was
completed by the year 2000. No new information or additional allegations involving
Respondents Edwin L. Frederick and Richard J. Frederick has been introduced by the
Complainant to justify the untimely addition of these parties. The untimely addition of these
parties is solely the result of a lack of diligence by the Complainant.
The Board held that both parties were responsible for "the lengthy nature of time
interval". Order of Sept. 2, 2004 at 8. It must be noted that the Respondent had no duty to
shorten the time interval. It is the duty of the party asserting a claim to diligently pursue their
claim. Van Milligan v. Board of Fire and Police Commissioners, 158 Ill. 2d 85, 630
N.E.2d830,833 (1994). Additionally, there is no case law that suggest that lack of diligence by a
respondent somehow justifies or offsets the lack of diligence of a complainant. A finding that
both parties were responsible for "the lengthy nature of time interval"is, in fact, a finding that the
Complainant was responsible for "the lengthy nature of time interval", with the culpability of the
Respondent
being irrelevant. Order of Sept. 2 at 8. Therefore, the Board has determined that the
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first element necessary to show laches – lack of diligence by a party asserting a claim – does exist.
The Board also found that "nothing in the record indicates that the People were not
diligent in pursuing their claim. Id. at 8. This finding is not supported by the record. An initial
discovery period was established by the Hearing Officer and was concluded by January 21,
2000. By order of the Board Hearing Officer the Complainant was allowed a second discovery
period in which all discovery was ordered to be completed by October 20, 2000 (Hearing Officer
Order of April 7, 2000.) The Respondent complied with this discovery schedule but the
Complainant was not diligent in their efforts to complete discovery and requested no additional
discovery materials. On September 6, 2001, the Complainant requested a third discovery
schedule. Over the objections of the Respondents, the Board Hearing Officer granted the
Complainant additional discovery time and ordered that all discovery be closed by February 1,
2002 (Hearing Officer Order of April 7, 2000). Again the Respondent complied with the
discovery schedule. However, the Complainant did not request any discovery information
during this third discovery period. No additional information concerning the liability of the
Respondent or other parties was requested or proffered during this additional discovery period.
The Respondents contend that this total lack of activity of any kind during these discovery
periods is unquestionably a showing of lack of diligence.
With respect to the element of prejudice, the Board states that it "cannot find that being
added to the Complaint in 2000 prejudiced the Fredericks". In fact, Richard J. Frederick and
Edwin L. Frederick were not named as additional Respondents until July of 2002. (Second
Amended Complaint of July 26, 2002 at 1.) This two year difference in the date considered by
the Board and the actual date by which the prejudice took place is significant. During that
period, the Fredericks relied on representations by the Complainant that prior to May 12, 2000 a
settlement had been reached with the Complainant to settle the matter and that the Complainant
was preparing a consent decree. Also by October 20 of 2000, the second and third discovery
periods had been closed and the Fredericks had every reason to rely on the actions and lack of
action of the Complainant in not requesting any discovery information and not naming additional
Respondents after discovery was completed to conclude that their records with respect to the
various counts in the complaint would not be an issue. Therefore, they had no reason to suspect
there was a need to ask Curran to preserve their records.
-17-
As a direct result of the Complainant's lack of due diligence, the Respondents Richard
Frederick and Edwin Frederick have been prejudiced in their ability to produce records, recall
witnesses and remember events relevant to their defense in this matter. In 1998, during the
period of the Complainant's lack of due diligence, the assets of the Respondent Skokie Valley
Asphalt were sold to a third party (Trial at 435,475). These assets included all of the records of
Skokie Valley Asphalt including records on NPDES permits, responsibilities of employees
including Edwin Frederick and Richard Frederick, records on DMR submittals, records on past
operations at the plant, records on environmental Skokie Valley Asphalt , the new owners
decided they had no need for the records of Skokie Valley Asphalt and disposed of the records.
Edwin and Richard Frederick had no control over the new owners decision to dispose of
these records and also had no reason to suspect that these records would be of value to them.
This litigation had started two years earlier and the Fredericks were not named Respondents.
There was no knew information divulged through discovery that would lead a reasonable person
to suspect that they would be named as Respondents. Therefore, they made no attempt to retain
any of Skokie Valley Asphalt's records. For similar reasons, the did not retain any of their
personal records relevant to Skokie Valley Asphalt beyond the periods these records would have
been required for other purposes.
In the September 2, 2004 Opinion and Order, the Board says that "[t]here is no
indication that any evidence beyond what is need to defend Skokie Valley Asphalt was needed to
defend the Fredericks." Order of Sept. 2 at 9. A conclusion that the Fredericks requirements for
defense were fully aligned with Respondent Skokie Valley Asphalt can not be supported by the
record or logical analysis. Skokie Valley Asphalt was a dissolved corporation with liability
limited to its corporate assets. It had supplied full responses in two discovery periods, had
reached a settlement agreement with the Complainant, had not raised any affirmative defenses
and had retained counsel to represent it in litigation. Skokie Valley Asphalt had every reason to
either rely on the Complainant ethically to complete the settlement agreement or to proceed to
hearing and a decision with civil penalties it would be wiling to pay.. Under either scenario,
Skokie Valley Asphalt had every justification to decide that it had no need to retain additional
documents or ask
Curran
to not destroy the documents.
-18-
The Fredericks interest were far from aligned with those of Skokie Valley Asphalt. By
the time the Fredericks were named as co-Respondents in the Second Amended Complaint, the
Respondents realized that the Complainants were not going to act ethically to execute the
consent agreement as the Complainants had said they would do for years and that the
Complainants had used as a basis for getting Skokie Valley asphalt and their attorney to agree to
the postponement of the hearing that had been schedule but for which the Complainant was not
prepared. The Fredericks also had greater concerns with protecting their limited retirement
assets against a civil penalty and an interest in protecting their personal reputations in a matter
where they were the only party that took corrective action and spent a considerable amount of
money and now were being accused of causing the problem for which they had previously been
told they would not be held responsible.
The statement in the Board's Opinion and Order of September 2, 2004 that the
Respondents had they rights to the records owned by Curran is irrelevant. Once Curran made
the decision to destroy the records, they could not be recovered. The Fredericks could not be
expected to make the better decision with respect to requesting Curran to retain the records
because they relied on the actions and inactions of the Complainant in determining what records
it may need. This sis exactly the prejudice required for the second element of a laches defense.
The Respondents take great exception to the Board's finding that the Respondents
statements regarding record retention are "specious" (Opinion of Sept. 2, 2004 at 9.) and other
personal attacks on Edwin Frederick and Richard Frederick by the Board throughout the opinion
(Id. at 11, inter alia.) and the entire proceeding. These conclusions are especially disturbing in
light of the fact that it is the Board's credibility that should be in question in light of the
Sternstein issue. In the Hearing Officer Report, the Hearing Officer stated that she found the
Respondents credible. No other Board representative was present at the hearing. Additionally,
on cross examination, the Complainant did not refute the position of the Respondents with
respect to record retention. Therefore the Board's position that the Respondents' position is
"specious" is baseless and should not be part of the decision concerning the affirmative defense.
If the decision on the affirmative defense of laches is based on the record as opposed to the
decision maker's
speculation, the
decision would be reversed upon reconsideration.
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Laches is based on the notion that courts will not readily come to the aid of a party who
has "slept on his rights to the detriment of the opposing party." Riverview FS, Inc. v. Illinois
Environmental Protection Agency, PCB 97-226 at 5 (May 3, 2001) citing Tully, 143 Ill. 2d 425,
432, 574 N.E. 2d 659, 662 (1991). The record shows that the Complainant's lack of due
diligence has in fact resulted in a detriment to the Respondents Edwin L. Frederick and Richard
J. Frederick. While the Board does not fully address the requirement of "compelling
circumstances" needed to apply laches against a government entity in its Opinion and Order of
September 2, 2004, it does state that "the Board can find no compelling circumstances to apply
laches to the People in this matter". Id. At 9.
In Hickey v. Illinois Central Railroad Co., 35 Ill. 2d 427, 220 N.E.2d 415 (1966), the
Illinois Supreme Court established the standard for applying laches to the state. In that case, the
court stated:
It is, of course, elementary that ordinary limitations statutes and principles of
laches and estoppel do not apply to public bodies under usual circumstances, and
the reluctance of courts to hold government bodies estopped to assert their claims
is particularly apparent when the governmental unit is the State. There are sound
basis for such policy. *** [A]pplication of laches or estoppel doctrines may
impair the functioning of the state in the discharge of its government function,
and [] valuable public interests may be jeopardized or lost by its negligence,
mistakes or inattention of public officials.
But it seems equally true that the reluctance to apply equitable principles against
the State does not amount to absolute immunity of the State from laches and
estoppel under all circumstances. The immunity is a qualified one and the
qualifications are variously stated. It is sometimes said laches and estoppel will
not be applied against the state in its governmental, public or sovereign capacity,
and it cannot be estopped from its exercise of its police powers or in its power of
taxation or the collection of revenue.
It has, however, been stated with frequency that the State may be estopped when acting
in a proprietary, as distinguished from its sovereign or governmental, capacity and even, under
more compelling circumstances, when acting in its governmental capacity.
-20-
Therefore, laches can be applied to the state under "compelling circumstances", even
when the state is acting in a governmental capacity. People v. State Oil Company, William
Anest et. al. PCB 97-103 (May 18, 2000) citing Hickey v. Illinois Central Railroad Co., 35 III. 2d
427, 220 N.E.2d 415 (1966).
In the present case, it is not apparent that the State's ability to discharge its government
function is impaired or that any valuable public interest is jeopardized or lost if the doctrines of
laches and equitable estoppel are imposed to disallow the naming of additional Respondents.
The dismissal of Richard Frederick and Edwin Frederick will not act as impairment of the
State's right to discharge its government function and protect public interests because the State
will still be able to protect the public interest and perform its government function by enforcing
against the remaining party – Skokie Valley Asphalt Co., Inc. Dismissing the Fredericks under
the doctrine of laches will allow the Fredericks the protection against undue prejudice and the
Complainants efforts to use administrative proceedings to increase the cost and effort to the
Respondents of defending themselves in this matter, without jeopardizing the State's ability to
pursue its case against the Respondent it selected as the culpable party at the time it was in
possession of all discovery material, had full knowledge of all of the parties involved, knew the
roles each party played in the matter and was fully informed of all other facts of the case.
The Board needs to reconsider the release of Richard J. Frederick and Edwin L.
Frederick from liability in this matter to protect the Respondents against the prejudice that has
resulted from the unreasonable delay of the Complainants in naming additional Respondents.
Under the standard established in the Hickey decision, "compelling circumstances" must exist
for the Board to invoke laches and equitable estoppel against the state when the state is acting in
its governmental capacity. People v. State Oil Company, William Anest et. al. PCB 97-103
(May 18, 2000) citing Hickey. The "compelling circumstances" in this matter, include the fact
that the Respondents' were unable to fully defend themselves against charges of alleged
incidents that occurred up to seventeen (17) years ago, five (5) years after the Respondents
terminated their employment with the entity involved in the matter and three (3) years after
discovery related to the liability of the parties was completed. The "compelling circumstances"
include the fact that a party in the position of the Respondents should have every right to rely on
the representations and actions of the State to conclude that it will not be required to defend
-21-
themselves against allegations raised well after their retirement and after it had justifiably
determined that it had completed its responses to discovery requests.
For the Board to find that "compelling circumstances" are not established by the fact
pattern in this matter, the Board would need to find that the term "compelling circumstances"
has no meaning and that laches can never be applied against the State. Such a ruling would be
contrary to the decisions of the Illinois Supreme Court on the issue. The Illinois Supreme Court
has also stated that "mere non-action of governmental officers is not sufficient to work an
estoppel ... there must be some positive acts by the officials which may have induced the actions
of the adverse parties" Id. See also Van Milligan v. Board of Fire and Police Commissioners,
158 Ill 2d 85, 630 N.E. 2d 830 (1994); People v. ESG Watts (February 5, 1998), PCB 96-107 at
7; People v. Bigelow Group Inc. (January 8, 1998), PCB 97-217, at 2.
In the case before the Board, the filing of the First Amended Complaint on December
29, 1997 without naming the Respondents as additional parties, the failure of the State to name
the Respondents as parties after requesting and receiving all information concerning all of the
parties involved after the discovery period that ended on October 20, 2000 and the fact that the
Complainants requested second and third discovery periods without making a request of the
Respondent for additional information regarding the parties, all were positive acts by the
officials which induced the Respondents to take actions which have prejudiced the Respondents
ability to properly defend themselves in this matter.
Wherefore, the Respondent respectfully requests that the Board dismiss the Respondent
Edwin L. Frederick Jr.,.individually and as owner and President of Skokie Valley Asphalt Co.,
Inc., and the Respondent Richard J. Frederick, individually and as owner and Vice President of
Skokie Valley Asphalt Co., Inc. under the doctrines of laches and equitable estoppel.
2.?
The issue of the prejudice resulting from Mr. Sternstein's involvement in this mater
needs to be fully explored in order to determine the impact on the procedures.
On July
30, 2002, Mr. Joel Sternstein filed an appearance on behalf the Complainant in
clear violation of the Board's procedural rules which prohibits a former Board employee from
-22-
representing a client in a matter before the Board if that attorney had previous worked on that
case while a Board employee. While both the Board, the Complainant and Mr. Sternstein knew
that Mr. Sternstein was previously a Board employee who had done a substantial amount of
work in this case at the Board, they allowed Mr. Sternstein to file his appearance and work on
the matter while failing to divulge the conflict and breach of the rules to the Respondent or the
Respondent's attorney.
However, in an action completely in violation of its own procedural rules and in
violation of any semblance of justice and due process, the Board sent Mr. Sternstein a copy of
the decision apparently prior to the decision being made available to the general public or the
Respondents. The copy of the decision made available to Mr. Sternstein included retractions
from an earlier draft of the Order. A copy of this document is included in this Motion for
Reconsideration as Appendix "A". The document or the fact that the Order was provided to Mr.
Sternstein was never divulged to the Respondents by the Board or the Complainant. The
Respondents first became aware of this document when it received the Complainant's partial
response to its request for documents with respect to legal fees. The copy of the document
discovered by the Respondents from the Complainant's files has a hand written note on it which
says "Mitch– enjoy – we are probably not supposed to see the crossed-out stuffl – Joel".
On July 30, 2002, Mr. Joel Sternstein filed an appearance on behalf the Complainant in clear
violation of the Board's procedural rules which prohibits a former Board employee from
representing a client in a matter before the Board if that attorney had previous worked on that
case while a Board employee. While both the Board, the Complainant and Mr. Stemstein knew
that Mr. Sternstein was previously a Board employee who had done a substantial amount of
work in this case at the Board, they allowed Mr. Sternstein to file his appearance, work on the
matter and failed to divulge the conflict and breach of the rules to the Respondent or the
Respondents' attorney.
On January 3, 2003, the Complainant, through Mr. Sternstein, filed a trivial Motion to
Deem Facts Admitted and for Summary Judgments. The Respondents filed a response to Mr.
Sternstein's Motion on January 17, 2003. On March 20, 2003, the Board issued an order that
denied the Complainant's motion for summary judgment, accepted the Respondents' answer into
-23-
the record, and directed the hearing officer to proceed to hearing. People v. Skokie Valley
Asphalt, Co., PCB 96-98 (June 5, 2003).
However, in an action completely in violation of its own procedural rules and in
violation of any semblance of justice and due process, the Board sent Mr. Stemstein a copy of
the decision apparently prior to the decision being made available to the general public or the
Respondents. The copy of the decision made available to Mr. Sternstein included retractions
from an earlier draft of the Order. A copy of this document is included in this Motion for
Reconsideration as Appendix "A". The document or the fact that the Order was provided to Mr.
Stemstein was never divulged to the Respondents by the Board or the Complainant. The
Respondents first became aware of this document when it received the Complainant's partial
response to its request for documents with respect to the issue of legal fees. The copy of the
document discovered by the Respondents from the Complainant's files has a hand written note
on it which says
"MITCH - ENJOY - WE ARE PROBABLY NOT SUPPOSE TO SEE THE
CROSSED -OUT STUFF! — JOEL".
On September 25, 2002, the Respondents filed a Motion to Strike Complainant's Second
Amended Complaint because the Complainant's failed to ask leave of the Board to file its
Second Amended Complaint as required by the Board's Procedural Rules. The Complainant's
filed a response to the Respondents Motion. The Response was prepared by Mr. Stemstein who
was not supposed to be practicing before the Board on this matter. Even though Mr Stemstein's
response failed to address the main issue put forth in the Respondent's motion, the Board ruled
in favor of their former employee. In its Order of October 17, 2002, the Board found that the
Complainant did, in fact, again violate Board procedural rules by failing to ask leave of the
Board to file an amended complaint. However, the Board said they would not enforce their
procedural rules against Mr. Stemstein and the Complainants. As a result of this ruling in favor
of Mr. Sternstein, the Respondents lost their right to contest the Complainant's Second Amended
Complaint and the false circumstances under which the Complainant was able to postpone the
June 27, 2002 hearing. To date, Complainant's Second Amended Complaint has not been
properly served on any of the Respondents.
-24-
The Board's overwhelming concern with "judicial economy" at the expense of the
Respondent's right to due process is inconsistent with the Board's other decisions in this case
that showed a total disregard judicial economy or the expense of litigation suffered by the
Respondents. The Board allowed the Complainant five discover periods, allowed the
Complainants to file numerous documents after the deadline without sanctioning the
Complainant and allowed the Complainant to file a barrage of trivial motions without ever
sanctioning the Complainant. The Board's decision in favor of Mr. Sternstein in its Order of
October 17, 2002, is to say the least — "specious".
On October 17, 2002, the Board accepted the People's second amended complaint.
People v. Skokie Valley Asphalt, CO., PCB 96-98 slip op. at 3 (Oct. 17, 2002). On December
20, 2002, the Respondents filed Respondents' Answer and Affirmative Defense to the
Complainant's Second Amended Complaint. In this filing the Respondents offered an
affirmative defense based on laches. On April 18, 2003, the Complainant filed a Motion to
Dismiss or Strike Respondent's Affirmative Defenses. The Respondents only offered one
affirmative defense based on laches and equitable estoppel. In its response to the Complainant's
Second Amended Complaint, the Respondent clearly entitled the section including its
Affirmative Defense as "Affirmative Defense" and not "Affirmative Defenses". The
Respondents simply delineated the elements of the affirmative defense in the Response as is
proper practice.
However, the Board has allowed the Complainant to confuse this issue with claims that
the Respondents had filed multiple defenses. The Board has failed to sanction the Complainants
for filing numerous trivial actions based on the fabricated multiple defenses position and instead
has caused the Respondent to spend a great deal of time and money addressing a non-issue
fabricated by the Complainant and adopted by the Board.
In its Order of June 5, 2003, the Board struck the element of the Respondents'
affirmative defense of laches before allowing the Respondents to present any evidence or
argument to prove the elements of the affirmative defense at hearing.. The Board denied the
Respondents' motion to reconsider the June 5, 2003 order in a July 24, 2003 Board order.
See
People v. Skokie Valley Asphalt, Co.. PCB 96-98 (July 24, 2003). In its Order of July 24, 2003,
-25-
the Board attempted to clarify a decision that never should have been entered by saying that the
issue of laches could still be considered. However, the Board's predisposition to not consider
the position of the Respondents was already divulged and is apparent in the superfluous review
presented of the laches argument in the Opinion and Order of September
4, 2004.
The Board has acted diligently to prevent the Respondents from including any
information concerning Mr. Sternstein in its discovery efforts. The Board Order of April
7, 2005
denied the Respondents' the right to discovery on the issue of Mr. Sternstein's improper
participation in this matter, even though the Plaintiff's clearly opened the door to such discovery
by requesting fees and costs for Mr. Sternstein's participation in their petition for attorneys' fees
and cost of September 17,
2004.
Resp. Motion at
2-3.
In light of the new evidence presented in
Appendix "A", the Board must reconsider it actions with respect to Mr. Sternstein's violations
and reverse its decisions against the Respondents.
3.
The Board has failed to properly apply the factors set forth in Section 33( c ) of the
Act to each count of the complaint to determine the civil penalty that should be
imposed for each count.
Under section
33©
of the Act, the Board is required to take into consideration all the
facts and circumstances bearing upon the reasonableness of the emissions, discharges or deposits
involved including, but not limited to:
I. The
character and degree of injury to, or interference with the protection of the
health, general welfare and physical property of the people;
ii.
The social and economic value of the pollution source;
iii.
The suitability or unsuitability of the pollution source to the area in which it is
located, including the question of the priority of location in the area involved;
iv.
The technical practicability and economic reasonableness of reducing or
eliminating the emissions, discharges or deposits resulting from such pollution
source; and
v.
Any subsequent compliance.
In the matter before the Board, only two of the counts involved "emissions, discharges or
deposits. The first of those counts involves exceedences of NPDES permit limitations for total
suspended solvents (TSS). The Board discusses the fact that the Respondent failed to submit
some DMR reports and says that complying with the requirements of an NPDES permit is part of
-26-
doing business in Illinois (Board Opinion and Order of September 2, 2004 at 19.) even though
these issues are not relevant to the factors of Section 33©. The record shows that Skokie Valley
Asphalt – the only Respondent that held a permit and had responsibility for permit compliance –
complied with all of its permit discharge limitations except the limitation for TSS. While finding
that the Respondents exceeded their TSS discharge levels, the Opinion does not say the
recording of elevated TSS concentrations had any character and degree of injury to, or
interference with the protection of the health, general welfare and physical property of the people
and such a finding could not be supported by the record. While the Board did not state so in
their Opinion this factor of must be decided for the Respondents.
The technical practicality and economic reasonableness of reducing or eliminating the
emissions, discharges or deposits resulting from such a pollution source are critical factors in
understanding the complete unreasonableness of this Count. Testimony by both Mr. Huff and
Mr. Kallis confirmed that the violations sited existed as a result of runoff of soil from
neighboring farm fields during intense rain events (Trial at 200, 516-517.). The Respondents
had installed a retention pond to allow the solids to settle before discharge and this activity did
reduce the level of TSS in the discharge (Trial at 516-517). However, it is technically
impossible and consequently economically unreasonable for the Respondents to control rain
events. The unreasonableness of this count is illustrated by the testimony of Mr. Kallis who
stated that the state seldom enforced violations that involved exceedences of TDS and TSS
releases in circumstances similar to those reported by Skokie Valley Asphalt (Trial at 201.), and
the testimony of Mr. Huff who pointed out that the IEPA had made a mistake in placing this
requirement in a storm water NPDES permit like the one issued to Skokie Valley Asphalt and
that the IEPA had corrected their mistake when they issued a draft renewal permit in 1996 (Trial
at 518).
The Board holds that practicable and economically reasonable to comply with the
requirements of the NPDES permit. Opinion and Order of Sept. 2, 2004 at 20. Compliance is
not the issue under 33 C. The issue is the technical practicability and economic reasonableness
of reducing or eliminating the emissions, discharges or deposits resulting from a pollution
source. The
record shows that
it was not technical practicability and economic reasonableness to
-27-
reduce or eliminate TSS discharges from this source. This factor must be reconsidered in favor
of the Respondents.
The remaining factor for reconsideration is the subsequent compliance with the permit
condition. While it was done for independent reason, the Respondents did ultimately comply
with the limits on TSS discharges in the only way technically possible – they ceased operations.
Until the Complainant filed this Complaint, the Respondents were never told the exceedences of
the NPDES limits was of concern to the Agency. In fact, they were of the opinion that they
would be treated like everyone else doing business in the state of Illinois and that the TSS
discharges would be accepted as unavoidable and mistakenly included in the permit. Trial at
201.
It is hard to understand how the Board could conclude that the Complainant was diligent
in pursuing this legal matter before the Board but then find the Respondent's efforts to be
sluggish. It is even more difficult to comprehend how the Board could question if the
compliance has been completed when the plant activities have ceased and Skokie Valley no
longer has discharges of any kind. However, the most basic question should be how the Board
could possibly expect the Respondents to move faster to eliminate TSS discharges that had been
shown to be outside of Skokie Valley Asphalt's control.
The second count that involves a discharge of contaminants into the Avon Drainage
Ditch. In the Opinion, the Board simply declares that "[t]he water pollution in the Avon-
Fremont drainage ditch threatened the public health". Opinion and Order of Sept 2, 2004 at 19.
Again, this declaration is not supported by the record. With respect to the character and degree
of injury to, or interference with, the protection of the health, general welfare and physical
property of the people, there is no evidence that any such factors exist.
The Complainant's witness, Mr. Donald Klopke, who has responded to hundreds of
emergency situations of behalf of the IEPA (Trial at 215, 216) and in charged with protecting the
environment for the people of the state of Illinois, testified that the damage caused by the release
to the
Avon-Fremont Drainage Ditch was of a temporary nature. He noted the sheen on the
water in the ditch that was gone shortly after the incident and the possibility of odor problems
-28-
while the released materials were exposed as the only possible effects. Neither rises to the level
of a threat to the public health that would allow the Board to make such a finding in its Opinion
and Order of September 2, 2004. Neither Mr. Klopke nor any other witness at hearing testified
as to any permanent health concerns or concerns for property damage as a result of this release
(Trial at 272, 273).
In fact, the IEPA Emergency Response Unit, which included Mr. Klopke, considered
this release to be of such minor impact that they did not even bother to identify the number of
drain tiles that fed into the farm tile, what farm tiles fed into the Avon-Fremont Drainage Ditch
(Trial at 241), take samples of the materials in the drainage ditch and attempt to match the
released materials to at the Skokie Valley Asphalt site (Trial at 234), investigate the tanks at the
Skokie Valley Asphalt site to determine if they were the source of the contamination or even
determine how many tanks were at the site (Trial at 235), fully investigate other potential
sources (Trial at 247) or even attempt to identify other sources of the contamination and
definitively show what source was responsible for the release to the Avon-Fremont Drainage
Ditch (Trial at 238).
An additional indication of the lack of concern that the IEPA had for this release is the
fact that neither the Emergency Response Unit or any other response group from the IEPA
revisited the site after their initial visit on April 19, 1995, even though they had not identified the
source of the release and the release to the Avon-Fremont Drainage Ditch continued (Trial at
255). If the release represented any notable degree of potential injury to, or interference with,
the protection of the health, general welfare and physical property of the people, the IEPA surely
would have follow through with their duty to rectify the situation.
In it Opinion, the Board states that the only addressed the water pollution when under
scrutiny by the Agency (Opinion and Order of Sept.2, 2004 at 19.) This statement is totally
fabricated. The Agency had so little concern with the impact of this release that they never
followed up with Skokie Valley Asphalt in any way (Trial at 239). The fact that the IEPA
determined that this release was so minor that it did not require any follow up is the clearest
indication of the
minor
impact this incident had regarding interference with the protection of the
health, general welfare and physical property of the people.
-29-
Mr. James Huff also testified that actions taken at the request and at the expense of
Edwin Frederick and Richard Frederick such as placing oil absorbing booms on the waters to
collect the sheen materials were effective in collecting and limiting the spread of the discharge
material (Trial at 351,352). The Fredericks continue to take the actions necessary to ensure that
discharges to the Avon-Fremont Drainage Ditch are avoided (Trial at 347).
The evidence presented at hearing also clearly indicate that it was not technically
practical and economically reasonable for the Respondents to avoid the discharge into the
drainage ditch. Regardless of whether there existed a practical technical solution or an
economically reasonable solution, none of the Respondents were in a position to take the
necessary action to reduce or eliminate the discharge until the source of the discharge was
identified .
Only after Richard Frederick and Edwin Frederick accidentally discovered the drain tile
that went through the Skokie Valley Asphalt property and after Mr. James Huff theorized that
the drain tile was a probable source of the discharge into the Avon-Fremont Drainage Ditch was
it possible to even consider factors of technical practicality and economic reasonableness in
reducing or eliminating the discharge. Once the probable source was identified, the
consideration of the technical practicality and economic reasonableness not only support an
argument that these are mitigating factors but also show that the Respondents acted in good faith
to eliminate the discharges.
Both Richard Frederick and Edwin Frederick took all actions necessary and available to
reduce and eliminate the discharge as soon as they identified the suspected source. Although
neither of these Respondents had a clear responsibility for the discharge because neither was
personally involved in or actively participated in the cause of the discharge or had the ability to
control the acts or omissions that gave rise to the violation, they authorized action to address the
situation. At no point did any of the Respondents attempt to hinder the effort to eliminate the
discharge because the remediation action would be technically impractical or economically
unreasonable.
-30-
With respect to the factor of subsequent compliance, the extent of the technical effort is
shown by the fact that Respondents Edwin L. Frederick and Richard J. Frederick continued to
employ and pay Mr. James Huff and his firm to identify and remediate possible pollution
sources until compliance was achieved (Trial at 463 ). In the Opinion, the Board states that the
"[respondents did, ultimately, address the water pollution in the Avon-Fremont drainage ditch,
but only when under scrutiny by the U.S. EPA and the Agency". Opinion and Order of Sept.2,
2004 at 19. Therefore the Board actually found that the Respondents did subsequently come into
compliance. There is no indication that the scrutiny of the US EPA was the driving factor in the
compliance effort. Either way, the scrutiny by the US EPA and the Agency is immaterial to the
factor to be considered and the fact that compliance was achieved. However, the Board's final
decision somehow weighed this factor against the Respondent. Upon reconsideration this factor
must be reversed and weighed in favor of the Respondents.
The Board needs to reconsider its determination on the issue civil penalties based on
information in the record and not on factors such as perceived sluggishness, fathom scrutiny by
government agencies and non-compliance with factors that are not delineated in Section 33 © of
the Act. The evidence and testimony presented at hearing and available on the record indicate
that none of the factors to be considered in Section 33© should be weighed against the
Respondents for either of the two counts involving discharges. As such, no civil penalty should
be imposed . Upon reconsideration, the Board should find that no civil penalty should be
imposed.
4.?
The Board failed to properly apply the factors set forth in Section 42(h) of the Act
to each count of the complaint and to each Respondent to determine the proper
amount of the civil penalty that should be imposed for each count.
The Board is required to issue an independent, item-by-item analysis of the violations in
determining the appropriate civil penalty. The Board has failed to do so in this matter. Instead,
the Board developed its civil penalty by using the Complainant's request for penalties as the
basis from which the civil penalties would be determined. Opinion and Order of September 2,
2004 at 22,23.
Granting this
type of deference to the position of the Complainant, without any
consideration to the position of the Respondents, is inherently unjust.
-31-
Not only does the Board use the Complainant's recommended penalties as the basis for
its determination of the civil penalty, it does so without any analysis of the Complainant's
recommendation. Their recommended penalty is arbitrary and baseless. In offering its
recommended penalty, the Complainant argues that all of the Respondents were guilty of all
counts and that the factors delineated in Section 42(h) of the Act do not represent mitigation for
any of the Respondents. It does not correspond to the decision of the Board and can not
effectively be used as a basis for the determination of penalties without great prejudice to the
Respondents.
The Board needs to use an independent reference point in determining the civil penalty.
An assumption of zero penalty or the maximum statutory penalty would be more effective than
the approach adopted by the Board. However, in the Opinion and Order, the Board states that
the maximum penalty is $4,600,000. Id. At 22. The Board fails to support that assumption and it
is the position of the Respondents that this statement is false and needs to be corrected. The
Board also indicates that there are ongoing violations in this matter. Id. This statement is also
false and not supported by the record. To the extent the Board's decision on civil penalties is
based on the false assumption that the violations are ongoing, the penalty amount needs to be
adjusted.
The Board's determination of the civil penalty does not differentiate between the
Respondents in determining their liability and in applying the factors that should be considered
regarding matters of mitigation or aggravation of penalty. The Board treats the penalties as joint
and severable. The assumption of joint and several liability is not based on the Act. Instead, the
act calls for the Board to determine the culpability of each party independently and apply the
factors in section 42(h) of the Act to each Respondent and to each count independently. In this
matter, the liability of the Fredericks and the remediation efforts of the Fredericks are much
different than those of Respondent Skokie Valley Asphalt in each count.
Section 42 of the Act, 415 ILCS 5/42 (from Ch. 111 1/2, par. 1042) addresses civil
penalties for any person that violates any provision of the Act or any regulation adopted by the
Board, or any
permit or term
or condition thereof or that violates any determination or order of
-32-
the Board pursuant to the Act. Paragraph (h) of Section 42 authorizes the Board to consider any
matters of record in mitigation or aggravation of penalty. The section states:
(h) In
determining the appropriate civil penalty to be imposed under subdivisions (a),
(b)(1), (b)(2), (b)(3) or (b)(5) of 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 benefit 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 or previously adjudicated
violations of this Act by the Respondent;
(6)
whether the respondents 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 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.
An independent application of these factors to each of the Counts and to the Respondents
Richard and Edwin Frederick on each Count indicates that civil penalty to the Fredericks should
be greatly reduced and well below the penalty imposed on Respondent Skokie Valley Asphalt.
COUNT I
In Count I, the Complainant accused the Respondents of making false statements in the
DMRs it submitted to the IEPA under Skokie Valley Asphalt's NPDES permit. Since the
required testing and report preparation were performed, the Respondents did not avoid any
expense by submitting the wrong data. In fact, they incurred substantial additional cost in
making the required correction and addressing the problem through their lawyers with the
Attorney General's Office. There can be no argument that the Respondents received an
economic benefit from this mistake.
-33-
Consideration of the other factors delineated in Section 42 also support a finding that no
civil penalty is justified under Count I. The duration of the alleged offense was only for one
reporting period. The gravity is minor considering it was only a reporting matter that did not
involve any harm to the public health or the environment. The Respondents acted diligently as
soon as they were informed that a mistake had been made and they subsequently submitted the
proper data. No economic benefit accrued as a result of the delay in compliance. None of the
Respondents presently possess a NPDES permit so there is no need to impose a monetary
penalty to deter further violations. There were no previous adjudicated violation of the Act by
any of the Respondents. The Respondents were not in a position to self-disclose the violation
because they were not aware of the alleged violation until the IEPA made them aware of the
mistake.
The Fredericks culpability is even less than that of Skokie Valley Asphalts because
neither of the Fredericks were the permit holder and as such had no duty to comply with the
permit. The Fredericks also have little possibility of a repeat offense because they are both
retired and there is no reason to expect that they will have an NPDES permit in the future and
cause a repeat offense
COUNT II
In Count II, the Complainant maintained the Respondents failed to make timely
application for renewal of their NPDES permit. Skokie Valley Asphalt did not apply for the
renewal because they were told by IEPA officials and other experts familiar with NPDES
permits that they would not be required to have an individual permit for the site. Skokie Valley
Asphalt did subsequently apply for the permit even though their remains an issue as to whether
or not a permit is required.
Since the required application was subsequently completed and submitted, the
Respondents did not avoid any expense by submitting the wrong data. In fact, they incurred
substantial additional cost in trying to clarify this matter and in attempting to get the IEPA to
issue
the permit. To date, IEPA has not issued a permit renewal. There can be no argument that
the Respondents received an economic benefit from this mistake.
-34-
Consideration of the other factors delineated in Section 42 also support a finding that no
civil penalty is justified under Count II. The duration of the alleged offense was only a delay of
a few months from the date the application was supposed to be filed and the date it was actually
filed. This period is much shorter than the number of years it is taking the IEPA to issue the
actual NPDES permit. The gravity is minor considering it was only a reporting matter that did
not involve any harm to the public health or the environment. Skokie Valley Asphalt continued
to control discharges from the site as it had during the period the NPDES permit was in place.
The Respondents acted diligently as soon as they realized that there was a question as to whether
or not a permit was required and they subsequently submitted the proper application. No
economic benefit accrued as a result of the delay in applying. None of the Respondents
presently possess a NPDES permit so there is no need to impose a monetary penalty to deter
further violations. There were no previous adjudicated violation of the Act by any of the
Respondents. The Respondents did in fact self -disclose this violation through its inquiries to the
state concerning the need to file an application.
Again, because neither of the Fredericks were not the permit holder and as such had no
duty to comply with the permit, the Fredericks culpability is even less than that of Skokie Valley
Asphalt. No action by either Edwin or Richard Frederick would justify a civil penalty for either
of them under this Count.
COUNT III
Despite the finding by the Board, Skokie Valley Asphalt was able to show that they had
taken all the required samples, had the samples analyzed and prepared the required DMR
reports. This information was submitted to the IEPA and the Attorney General's Office as soon
as Skokie Valley Asphalt realized there was an issue involving their compliance with the
reporting requirements. Based on the IEPA's previous record of mishandling DMRs and the lax
procedures used in handling DMRs, there is a presumption that the DMRs were submitted by
Skokie Valley Asphalt and lost by IEPA.
Since the required
testing and report preparation were performed, Skokie Valley Asphalt
did not avoid any expense by submitting the wrong data. In fact, they incurred substantial
-35-
additional cost in addressing the problem through their lawyers with the Attorney General's
Office. There can be no argument that the Respondents received an economic benefit from this
mistake.
Consideration of the other factors delineated in Section 42 also support a finding that no
civil penalty is justified under Count I. Even if it were somehow determined that Skokie Valley
Asphalt failed to file some of the reports, the duration of the alleged offense only for a few
reporting periods through the life of the permit. The gravity is minor considering it was only a
reporting matter that did not involve any harm to the public health or the environment. It also
should be noted that if, in fact, the Agency did not receive the DMR reports in a timely manner,
it never notified the Respondents of this shortcoming. This lack of action must be interpreted as
an indication that the Agency actually received the reports or thought the requirement to submit
the report was not important. The Respondents acted diligently as soon as they were informed
that DMRs were missing and they supplied copies of the report to the IEPA and the Attorney
General's Office. No economic benefit accrued as a result of the loss of these reports. None of
the Respondents presently possess a NPDES permit so there is no need to impose a monetary
penalty to deter further violations. There were no previous adjudicated violation of the Act by
any of the Respondents. The Respondents were not in a position to self-disclose the violation
because they were not aware of the alleged violation until the IEPA made them aware of the
mistake.
Again, it is Skokie Valley Asphalt, as the permit holder, that should bear the majority of
penalty for this Count. Not only did the Fredericks not have a duty to comply with the permit
but they also were subject to additional expenses in having to deal with this issue with the
Agency and the Attorney General's office in clarifying the issue..
CO
U
NT IV
In Count IV, the Complainant maintain the Respondents allowed or caused the discharge
of an oily substance to the Avon-Fremont Drainage Ditch. None of the Respondents caused or
allowed the discharge and
none
of the Respondents were in a position to prevent the discharge.
However, after potential sources of the discharge were identified, the Respondents Richard
-36-
Frederick and Edwin Frederick took extra ordinary efforts to address the problem. Because of
the large expenditures to address the discharge and the elimination of the potential sources, the
Fredericks did not avoid any expense by allegedly "allowing or causing" the discharge. In fact,
the Fredericks incurred substantial additional cost on a voluntary basis, much of which they were
not required to spend, in trying to ensure that the releases would stop. There can be no argument
that the Fredericks received an economic benefit from this activity.
Consideration of the other factors delineated in Section 42 to the Fredericks also support
a finding that no civil penalty is justified under Count IV against the Fredericks. The duration of
the alleged offense was only for a short period and it has not reoccurred since the Fredericks
took the lead in addressing the problem. This period is much shorter than the number of years
the problem would have persisted if the IEPA's actions to address the problem had been the only
action taken. The gravity is minor considering that all of the witnesses at trial stated that the
main problem was a slight petroleum odor concern and a temporary sheen on a drainage ditch.
The incident did not involve any lasting harm to the public health or the environment. Skokie
Valley Asphalt continued to control discharges from the site as it had during the period the
NPDES permit was in place. But it was the Fredericks who acted diligently as soon as they
identified the potential source of the release and worked with the IEPA and the USEPA even
before they thought that the release could possibly be coming from Skokie Valley Asphalt's
property. No economic benefit accrued as a result of the release to any of the Respondents.
The site previously owned by Skokie Valley Asphalt has been sold to a third party,
Skokie Valley Asphalt Co., Inc. has been dissolved and none of the Respondents presently are
involved in the ownership or operation of the site, so there is no need to impose a monetary
penalty to deter further violations. There were no previous adjudicated violation of the Act by
any of the Respondents. The Fredericks did, in fact, self-disclose the potential source of the
release immediately upon discovering the source. The Fredericks activities with respect to
addressing the discharge to the Avon-Fremont Drainage Ditch and Grays Lake represent a de
facto supplemental environmental project because Edwin Frederick and Richard Frederick took
actions beyond the actions required to address the discharge from the Skokie Valley Asphalt site.
The expenditures for this additional activity should be credited to Richard and Edwin Frederick
against any possible penalty.
-37-
COUNT V
In Count V, the Complainant accused the Respondents of exceeding the discharge limits
established in Skokie Valley Asphalt's NPDES permit. The record shows that these permit
requirements could not be complied with during periods following intense storm events. Since
the required testing and report preparation were performed, Skokie Valley Asphalt did not avoid
any expense. Regardless of the effort and expenditures made by the Respondents, they would
not have been able to avoid the exceedences. Therefore, they did not avoid any expense by not
addressing the problem. In fact, they incurred substantial additional cost in addressing the
problem through their lawyers with the Attorney General's Office. There can be no argument
that the Respondents received an economic benefit from this event.
Consideration of the other factors delineated in Section 42 also support a finding that no
civil penalty is justified under Count V. The duration of the alleged offense was only for a few,
isolated reporting periods following intense storm events. The gravity is minor considering it
was only a reporting of slightly elevated suspended solids levels that do not result in any harm to
the public health or the environment. The Respondents acted diligently as soon as they were
aware of the problem by addressing the problem with their consulting environmental engineer,
but even acting diligently to investigate the problem, there was nothing the Respondents could
do to alleviate the potential for slight exceedences from the poorly established standard. No
economic benefit accrued as a result of a delay in compliance. None of the Respondents
presently possess a NPDES permit so there is no need to impose a monetary penalty to deter
further violations. There were no previous adjudicated violation of the Act by any of the
Respondents. The Respondent Skokie valley Asphalt self-disclosed the violations through its
DMR reports. The other Respondents were not involved in the activities involved in this Count
V and therefore had no duty to self report.
As previously argued, the Fredericks culpability is even less than that of Skokie Valley
Asphalts because neither of the Fredericks were the permit holder and as such had no duty to
comply with the permit. As a result the civil penalty applied to the Fredericks should be less
than that applied to the respondent Skokie Valley Asphalt.
-38-
The application of the 42(h) factors to each Count individually highlights the lack of
damage done under each of the Counts and also clarifies that the liability of the Fredericks was
minor in each situation. In light of this information, the civil penalties imposed in this matter
should be reduced accordingly.
While the Board discusses reducing the civil penalty that they adopted from the
Complainant to offset the expense incurred by Edwin Frederick and Richard Frederick, the
reduction does not appear to have been properly applied if it was applied at all. First, the Board
only recognizes an expenditure of $150,000 by the Respondents in environmental work on the
site. Id. In fact, the record shows that $150,000 was the amount that was paid to Mr. Huff and
his firm alone. (Tr at 467-468). The actual expenditures to address the release to the drainage
ditch is in excess of $200,000 and these expenses are still being incurred.
Second, the Board fails to recognize that these expenditures were made by the
Respondents Edwin and Richard Frederick individually and not by, or on behalf of, the
Respondent Skokie Valley Asphalt. By the time the effort and expenditures for addressing the
release from to the Avon-Freeman Drainage Ditch were needed, Skokie Valley was dissolved
and no longer existed. It was the Fredericks that made the agreements with the US EPA to
address the source of the release and eliminate the threat. Tr at 227-228 and Comp Ex 25. This
effort was taken on a voluntary before the source of the contaminant had been identified.
Because the Fredericks were the Respondents performed the remediation and spent the necessary
money, it is the Fredericks that should be granted any offset from the civil penalties resulting
from the remediation effort. It is extremely difficult to follow the logic in determining the final
civil penalty used by the Board. Assuming the Board gave the Respondents dollar-for dollar
credit for the remediation effort that the Board mistakenly stated was $150,000 and the final
penalty assessed was $153,000, it could be concluded that the penalty before offsets was
$303,000. Absent a clear decision form the Board, this value of $303,000 will be used as a basis
for further evaluation even though this penalty amount appears to be extremely harsh in light of
the foregoing section 33 and section 42 analysis.
-39-
David S: O'Neill
There is no basis for making the civil penalty joint and several. Each of the respondents
had different responsibilities and culpabilities. Again, because the Board did not properly
analyze the independent liabilities, we are limited in assigning the responsibilities. While it is
obvious from the record that the culpabilities of the Fredericks was less than that of Skokie
Valley Asphalt, we will adopt a conservative assumptions that each of the Respondents were
equally liable and therefore should each be assessed a civil penalty of $101,000. At this point
the offsets should be applied but only to the Respondents Edwin Frederick and Richard
Frederick. Assigning half of the $150,000 offset to each of the Fredericks would reduce their
civil penalties to $26,00 each while retaining Skokie Valley civil penalty at $101,000. This
assignment of the civil penalty is consistent with the proper application of section 42(h).
Wherefore, the Respondents respectfully request the Board reconsider its decision and
penalties in this matter before the Board and stay the date of the final decision until this Motion
for reconsideration has been fully considered.
Respectfully submitted,
David S. O'Neill, Attorney at Law
5487 N. Milwaukee Avenue
Chicago, Illinois 60630-1249
(773) 792-1333
-40-
PEOPLE OF THE STATE OF ILLINOIS,
Complainant,
v.
SKOKIE VALLEY ASPHALT, CO., INC.,
EDWIN L. FREDERICK, JR., individually
and as owner and president of SKOKIE
VALLEY ASPHALT CO., INC., and
RICHARD J. FREDERICK, individually and
as owner and vice president of SKOKIE
VALLEY ASPHALT CO., INC.,
Respondents.
ORDER OF THE BOARD (by T.E. Johnson):
"EXHIBIT A"
ILLINOIS POLLUTION CONTROL BOARD
March 20, 2003
PCB 96-98
(Enforcement - Water)
In thisthis water enforcement action, the Office of the Attorney General, on behalf of the
People of the State of Illinois (People), filed a motion to deem facts admitted and for summary
judgment as to respondents Edwin L. Frederick, Jr. and Richard J. Frederick (collectively the
Fredericks). The immediate dispute centers solely on the timely filing of pleadings. The Board
denies the People's motion and directs this case to proceed to hearing.
PROCEDURAL HISTORY
On July 26, 2002, the People filed a second amended complaint. That complaint added
Edwin Frederick and Richard Frederick as respondents. Furthermore, the second amended
complaint alleged that the Fredericks violated Sections 12(a) and (f) of the Environmental
Protection Act (Act) (415 ILCS 5/12(a),
(f) (2000)),
as well as Sections 302.203, 304.105,
304.106, 305.102(b), 309.102(a), and 309.104(a) of the Board's regulations. Moreover, the
complaint alleged that the Fredericks falsified discharge monitoring reports, submitted a late
application far a 1`1..t..al nisch"rgc
vystera (NPnve)
permit Seri to
comply with sampling and reporting requirements in their NPDES permits, discharged oil into a
drainage ditch, and violated NPDES permit effluent limits.
The Fredericks filed an untimely motion to strike the People's second amended complaint
on September 25, 2002. On October 1, 2002, the People filed their response to the Fredericks'
motion together with a motion for leave to file a second amended complaint. On October 17,
2002, the Board denied the motion to strike as moot and accepted the People's second amended
complaint.
People v. Skokie Valley Asphalt, Co.,
PCB 96-98, slip op. at 3 (Oct 17, 2002). The
final sentence of that order read, "The respondents may file an answer as provided in Section
CERTIFICATE OF SERVICE
I, the undersigned, certify that I have served the attached Respondents' Motion for
Reconsideration by hand delivery on December 5, 2007, upon the following party:
Paula Becker Wheeler, Esq.
Environmental Bureau
Assistant Attorney General
Illinois Attorney General's Office
188 W. Randolph, 20th Floor
Chicago, IL 60601
NOTARY SEAL
SUBSCRIBED AND SWORN TO ME this
3
day of
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rewbc,
, 20
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Notary Public ":-)
"OFFICIAL SEAL"
AGNIESZKA SCIOG
NOTARY PUBLIC, STATE OF ILLINOIS
MY COMMISSION EXPIRES 10-18-2010