BEFORE
THE
ILLINOIS
POLLUTION
CONTROL
BOARD
ECEVED
ELMHURST
MEMORIAL
HEALTHCARE
)
CLERK’S
OFFICE
and
)
AUG
252009
ELMHURST
MEMORIAL HOSPITAL,
)
STATE
OF
ILLINOIS
Pojlutton
Control
Board
Complainants,
)
vs.
)
No.
PCB 2009-066
)
(Citizen’s
Suit
)
Enforcement
Action)
CHEVRON
U.S.A.,
INC.
)
)
Respondent.
NOTICE OF
FILING
To:
Carey
S.
Rosemarin
Andrew
J.
Marks
Law Offices
of
Carey
S.
Rosemarin,
P.C.
500
Skokie
Boulevard, Suite
510
Northbrook,
Illinois
60062
PLEASE
TAKE
NOTICE that
on
August
25, 2009, we
filed
with
the clerk of the
Illinois Pollution
Control Board
an
original
and nine copies
of the
Sur-reply Of
Chevron
U.S.A.
Inc.
To
Complainants’
Reply
In Support
of Complainants’
Motion
To Strike
Affirmative
Defenses,
a copy
of which
is attached
hereto and
herewith
served upon you.
CHEVRON
U.S.A.
INC.
Dated:
August
25, 2009
By:
Joseph
A. Girardi
Robert
B. Christie
Henderson
&
Lyman
Attorneys
for Chevron
U.S.A.
Inc.
175
W. Jackson
Blvd.,
Suite
240
Chicago,
Illinois 60604
(312)
986-6960
PROOF
OF
SERVICE
BY MAIL
I,
Sarah
A. Whitford,
a non-attorney
on
oath,
state
that
I
served
a
copy
of
this
Sur-reply
Of Chevron
U.S.A.
Inc. To
Complainants’
Reply
In
Support
of
Complainants’
Motion
To Strike
Affirmative
Defenses
on
the
persons
to
whom
the
Notice
is directed
at
the
address
contained
in
the Notice
by
depositing
the
same
in
the
U.S.
mail
at
175
West
Jackson
Boulevard,
Chica
o,
Illinois
60604
before
5:00
p.m.
on
August
25, 2009.
Sarah A.
Whitford
Subscribed
and sworn
to
before
me
this
25th
day
of
August,
2009.
Pbli
UNDSEY
E
LLUO
MOTMY
PLSJC
.STAIE
OFLI.PIOS
MY
COMMISSION
E)ESO1t3
BEFORE
THE
ILLINOIS
POLLUTION
CONTROL
BOARD
ELMHURST
MEMORIAL
and
HEALTHCARE
)
CLERK’S
OFFICE
ELMHURST
MEMORIAL HOSPITAL,
)
AUG
52009
STATE
OF
ILLJNO
Complainants,
)
No.
PCB
2OO9-&ition
Control
)
(Citizen’s
Suit
vs.
)
Enforcement
Action)
)
CHEVRON
U.S.A.,
INC.
)
)
Respondent.
SUR-REPLY
OF
CHEVRON
U.S.A.
INC.
TO
COMPLAINANTS’
REPLY
IN
SUPPORT
OF
COMPLAINANTS’
MOTION
TO STRIKE
AFFIRMATIVE
DEFENSES
Respondent,
Chevron
U.S.A.
Inc.,
incorrectly
named
as
Chevron
U.S.A.,
Inc.
(“Respondent”), by
its
attorneys
Henderson
&
Lyman,
pursuant
to the
Board’s
Order
of
August
6,
2009,
and for
its
sur-reply
to Complainants’
reply
in
support
of
Complainants’
motion
to strike
affirmative
defenses,
states
as
follows:
For
its sw-reply,
Respondent
adopts
and
incorporates
herein
by
reference
the
“Response
of
Chevron
U.S.A.
to
Complainants’
Motion
to
File Reply
Instanter”,
that was
filed
with
the
Board
on
July 21,
2009,
and
a
copy of
which
is
attached
hereto.
Respectfully
submitted,
Chevron
U.S.A.
Inc.
Dated:
August
25,
2009
B .
ne
of its a
orneys
Joseph
A. Girardi
Robert
B. Christie
Henderson
&
Lyman
Attorneys
for Chevron
U.S.A.
Inc.
175 W. Jackson
Boutevard
Suite
240
Chicago,
Illinois 60604
(312)
986-6960
BEFORE
THE
ILLINOIS
POLLUTION
CONTROL
BOARD
ELMHURST
MEMORIAL
HEALTHCARE
)
and
ELMHURST
MEMORIAL
HOSPITAL,
)
JUL
2
12069
Complainants,
)
No.
PCB
20O9-7
ISd
)
(Citizen
s
Suit
vs.
)
Enforcement
Action)
)
CHEVRON
U.S.A.,
INC.
)
)
Respondent.
)
RESPONSE
OF
CHEVRON
U.S.A.
INC.
TO
COMPLAINANTS’
MOTION
TO FILE
REPLY
INSTANTER
Respondent,
Chevron
U.S.A.
Inc.,
incorrectly
named
as Chevron
U.S.A.,
Inc.
(Respondent”),
by
its
attorneys
Henderson
&
Lyman,
pursuant
to
Section
101.500(d)
of
the procedural
rules
of
the
Illinois
Pollution
Control
Board
(“Board”),
responds
to
the
motion
of
Complainants,
Elmhurst
Memorial
Healthcare
and
Elmhurst
Memorial
Hospital
(“Complainants”),
to file
a
reply
in
support
of their
motion
to
strike
Respondent’s
affirmative
defenses,
as
follows:
Argument
With
respect
to
filing
a
reply
in
support
of
a
motion,
the
procedural
rules
of
the
Board,
at
Section
101
.500(e),
provide
that
the
‘moving
party
[Complainants
here]
will
not
have
the
right
to
reply,
except
as
permitted
by
the
Board
or
the
hearing
officer
to
prevent
material
prejudice.”
Complainants
try
to
come
within
the
ambit
of
this
“material
prejudice”
requirement
by
accusing
Respondent
of
improperly
having
the
Board
believe,
in
Respondent’s
response,
that
Complainants’
claim
was
discharged
in
1
the
Texaco
Inc.
bankruptcy.
Complainants
allege
this
somehow
prejudiced them,
and
that
they
now
need
to
clarify
the
matter.
To
the
contrary,
however,
the
claim
has
been
discharged
by
the
Texaco Inc.
bankruptcy
and
Respondent’s
response is
not
the
first
time
that
Respondent has
made
this
allegation.
Respondent’s
affirmative
defense
alleges
the
claim
was
discharged
by
the
bankruptcy.
Complainants
filed
a
motion
to
strike
the
defense
and
Respondent
filed
a
response.
For
Complainants
to
now
argue
that
the response
is the
first
time
that
Respondent
alleged
the
claim
was
discharged
is
preposterous.
As
will
be
demonstrated
below,
the only
thing
that
is
improper
here
is
Complainants’
accusations,
and
the
Board
should
deny
Complainants’
motion.
Notwithstanding
Complainants’
claim
of
material
prejudice,
the
actual
reason
that
Complainants
request
leave
to
file
a
reply
is that
in
their
motion
to strike
this
defense
they
chose
not
to
cite,
mention
or
argue
against
the
holding of
the
Texaco
Inc.
bankruptcy
court
in
Texaco
Inc.
v.
Fred
Saunders,
et
aL
(In
re Texaco Inc.),
182
B.R.
937
(1995), which
Respondents
relied
upon
in
their
response.
As
demonstrated
in
Respondent’s
response,
Saunders
is
on
point
with
the
underlying facts
of this
case
(as
they
are alleged
in Complainants’
complaint),
and
Saunders
was
decided
in
the
Texaco
Inc.
bankruptcy
proceeding,
making
it
the
law
of the
case
regarding
Texaco Inc.
bankruptcy
discharge
issues.
The
Complaint
alleges
that
the
releases
took place
while
Texaco
Inc.
owned
or
operated
the
USTs,
which
is
before
1978,
and
some
nine
years
before
the
Texaco
Inc.
bankruptcy;
thus,
the
releases
alleged
are
clearly
“pre-petition
releases”.
Because
of
this,
any
debt
or
claim
created
by
those
releases
(no
matter
who
may
bring
that
claim)
2
I.
was
discharged
by
the
Texaco
Inc.
bankruptcy.
As the
Saunders court
stated in
discharging
the
Saunders
plaintiffs’
claims, “All of the
physical events
required to
establish
causation
and
damage
for
such claims
occurred prior
to
the
confirmation,”
Texaco
v.
Saunders,
182
B.R.
at 951.
And that is
the
case here.
Not
being
able
to
argue
against the holding
in
Saunders,
Complainants now
try
to
distinguish
themselves
from
the Saunders
plaintiffs
by
arguing
that since
Complainants
did not own
the
property
at issue
at
the time of the Texaco
Inc.
bankruptcy,
they did not
have
the same
pre-bankruptcy
relationship
with
Texaco Inc.
that
the
Saunders
plaintiffs had.
Complainants,
consequently, argue
that,
being
a
later
purchaser,
they
could not
have had
their claim
discharged
in the
bankruptcy
because
they could not
have known they
had a claim.
This
reasoning
is
fundamentally
flawed.
It
is undisputed, per
Saunders,
that
the owner
of the Complainants’
property at the
time
of
the Texaco Inc. bankruptcy
could
not now bring
this claim. And
a simple sale of
that
property to a
third party
does not,
somehow,
reincarnate
this
claim
and wash away
the
bankruptcy
discharge.
As
successors-in-interest
to
the
owner
at
the time of the
Texaco
Inc. bankruptcy,
Complainants
inherit
and are
bound
by
that owner’s
pre-bankruptcy
relationship
with Texaco
Inc.
See,
e.g.:
Humphrey
Property Group,
LLC
v.
The Village
of Frankfort,
2009 Ill.
App.
Lexis 431
(June 18, 2009), holding
that
a
later purchaser
of
land is a
successor-in-interest
and is bound
and estopped
by
the acts
of its
predecessor
in-interest.
If that were
not the
case a bankruptcy discharge
would
be
meaningless.
A
late
claimant could simply
sell real
estate or
a
business
entity to a
third party who
could
then
bring claims that
the late claimant
failed
to
bring and would be
barred
from
now
bringing.
For this reason,
the determination
of whether
or not
a
claim
has been
3
discharged
focuses
on
the
underlying
circumstances
that
occurred
to
give
rise
to
the
claim,
irrespective
of
whether
the
owner
at
the
time
of
a
bankruptcy
brings
the
claim
or
a
subsequent
owner
brings
the
claim.
Because
Complainants
cannot
factually
or
legally
argue
against
this
conclusion
they
resort
to
calling
Texaco’s
argument “highly
misleading
and, indeed,
false”.
Complainants’
Motion,
at
p.
4.
Recognizing
this flaw
in
their
reasoning,
Complainants
try
to
bring themselves
within
the
purview
of
some
of
the
language,
but
not
the
holding,
in
In
re
Chateaugay
Corp.,
944
F.2d
997
(2nd
Cir.
1991).
The
holding
in
Chateauga
militates
against
Complainants
as
the
U.S.
Court
of
Appeals
affirmed
the
decision
of
the
U.
S.
District
Court
which
discharged
claims
for
future
cost
recovery
brought
by
the
United
States
Environmental
Protection
Agency
for
pre-petition
releases
by
LTV
Corp.
And
pre
petition
releases
are
exactly
what
Complainants
seek
recovery
for
here.
In
discussing
when
a
claim
is
dischargeable
the
Chateaugay
court
indicated
that
a
pre-bankruptcy
relationship
would
be
necessary
to
discharge
certain
claims.
By
way
of
example
the
Chateaugay
court
stated
that
it
would
be
absurd
to
find
that the
claim
of
a
person
who
is
injured
in
a
post-bankruptcy
accident,
as
a
result
of
a
pre-bankruptcy
design
flaw,
was
discharged.
The
reasoning
is
clear.
All
of
the
circumstances
that
were
necessary
to
give
rise
to
the
injured
person’s
claim
had
not
occurred
before
the
bankruptcy
took
place.
Such
a
person
could
not
have
known
that he
would
be
injured
in
the
future,
and, therefore,
could
not
have
had
a
pre-petition
bankruptcy
claim.
This
Chateaugay
example
does not
mean
that
any
claim
brought
by
a
claimant,
who
did
have
a
pre-bankruptcy
relationship
with
the
bankrupt
party, cannot
be
discharged.
Nor
is
this
example
in
conflict
with
the
holding
in
Saunders (where
the
court specifically
4
I
found
that
all of
the circumstances
that
had to occur
for the claim
to
brought had,
in
fact,
occurred
and
could
have
been known
of before
the claims bar
date).
A claim for
cost
recovery
could
have
been
brought
by
the prior
owner of
Complainants’
property
in the Texaco
Inc. bankruptcy,
but
was not. Changing
the
name of the claimant
from the
prior owner
to Complainants
does
not change
a
thing.
Complainants’
predecessors-in-interest
at
the
time of the Texaco
Inc. bankruptcy
had
any necessary pre-bankruptcy
relationship with
Texaco Inc.,
and Complainants,
as their
successors-in-interest,
are bound
by that relationship.
Humphrey
Property Group,
LLC, supra.
By
no stretch of one’s
imagination
can
the Chateaugay
language cited
by
Complainants
be
argued
to
mean
that
a
subsequent
owner such
as
Complainants
would
have the right
to
bring this claim.
As pointed
out in other
of Respondent’s
affirmative
defenses, Complainants
should
have
performed
the
usual
and customary
environmental
due diligence
before acquiring
the
property.
Had they done
so they
would
have
not found
themselves
in the position
in which
they now are. Given
all of
these
facts, Complainants’
labeling
Respondent’s
argument
on discharge of
the claim
as
being “false”
is outrageous
and should be sanctioned
by
the Board.
In summary, notwithstanding
all of
Complainants’
deleterious accusations,
the
plain and simple
conclusion is that
their
claim was
discharged
by
the
Texaco Inc.
bankruptcy
and they have not
been materially
prejudiced
by
Respondent’s response
brief.
Complainants
should have dealt
with
the
Saunders
decision in their
initial
motion, and
they should not now
be allowed
to
try
to do
so.
For
all of the foregoing
reasons Respondent
submits
that
Complainants’
motion
to
file
a
reply
in support
of their
motion
to strike
the
affirmative
defenses should be
5
denied.
In
the
alternative,
should
the
Board
grant
Complainants’
motion
to
file
a
reply,
Respondent
requests
that
the
Board
grant
it
14
days
to file
a
sur-reply.
Respectfully submitted,
Chevron
U.S.A.
Inc.
Dated:
July 21,
2009
tneys
Joseph
A. Girardi
Robert
B.
Christie
Henderson
&
Lyman
Attorneys
for
Chevron
U.S.A.
Inc.
175
W.
Jackson
Boulevard
Suite
240
Chicago,
Illinois
60604
(312)
986-6960
6