ILLINOIS POLLUTION CONTROL BOARD

August 20, 2009

PRIME LOCATION PROPERTIES, LLC,

Petitioner,

v.

ILLINOIS ENVIRONMENTAL

PROTECTION AGENCY,

Respondent.

)

)

)

)

)

)

)

)

)

)

PCB 09-67

(UST Appeal)

FRED C. PRILLAMAN AND PATRICK D. SHAW OF MOHAN, ALEWELT, PRILLAMAN

& ADAMI APPEARED ON BEHALF OF PETITIONER; and

THOMAS DAVIS, ASSISTANT ATTORNEY GENERAL, CHIEF, ENVIRONMENTAL

BUREAU, OFFICE OF THE ATTORNEY GENERAL OF THE STATE OF ILLINOIS,

APPEARED ON BEHALF OF RESPONDENT.

INTERIM OPINION AND ORDER OF THE BOARD (by T.E. Johnson):

Prime Location Properties, LLC (Prime) has appealed a January 27, 2009 determination

of the Illinois Environmental Protection Agency (Agency). In the determination, the Agency

rejected Prime’s amended plan and budget for the leaking underground storage tank (UST) site

located at 600 W. 10th Street in Metropolis, Massac County. For the reasons below, the Board

reverses the Agency’s determination and remands the matter to the Agency for further

consideration consistent with this opinion. The Board also denies Prime’s request to sanction the

Agency and denies the Agency’s motion to dismiss.

In this opinion, the Board first provides the procedural history of the case and addresses

Prime’s request that the Agency be sanctioned for filing the administrative record late. Next, the

Board discusses and rules on the Agency’s motion to dismiss the appeal on the ground that the

original petition for review was filed by a non-attorney. The Board then turns to the merits of

the appeal, setting forth the Board’s findings of fact. This is followed by a description of the

parties’ arguments concerning the Agency’s rejection of Prime’s plan and budget, after which the

Board renders its legal conclusions. Today’s decision comes as an interim opinion and order

because further information is required regarding Prime’s request for legal fees.

PROCEDURAL HISTORY

On March 9, 2009, the original petition for review was filed (Pet.). On March 19, 2009,

the Board issued an order accepting the matter as timely filed, but finding that it was unclear

whether the petition had been filed by an attorney. The Board directed Prime to file an amended

petition for review, along with the appearance of an attorney, by April 20, 2009. On April 20,

---

2

2009, Prime filed an amended petition for review accompanied by the appearance of an attorney.

On May 7, 2009, the Board accepted the amended petition for hearing.

On May 26, 2009, the Agency filed a motion to dismiss this appeal (Mot.). On June 4,

2009, Prime filed a response in opposition (Resp.) to the Agency’s motion. A hearing was held

on June 17, 2009, in Springfield before Board Hearing Officer Carol Webb. The Board received

the hearing transcript on June 18, 2009 (Tr.). No witnesses testified at hearing. Prime offered

eight exhibits at hearing, all of which were admitted (Exh.). The Agency offered no exhibits but

sought and received the hearing officer’s permission to file the Agency’s record by June 22,

2009. Tr. at 5.

A compact disk of the Agency’s record was filed on June 19, 2009. A hard copy was

filed on June 22, 2009. The Agency’s record consists of 39 documents. The record is not

consecutively paginated, but the Agency assigned a number to each document (1-39). The Board

therefore cites the Agency record by specific document number and then by page number within

the document (

e.g.

, “AR4 at 3”).

As permitted by hearing officer order, Prime filed a post-hearing brief (Br.) on June 29,

2009, and the Agency filed a response brief (Resp. Br.) on July 6, 2009. Prime’s brief includes a

request to sanction the Agency, to which the Agency responded in its response brief. On July 13,

2009, Prime filed a reply brief (Reply Br.) and on July 21, 2009, Prime filed a motion for leave

to file the reply brief. The Agency did not respond to Prime’s motion for leave to file, which is

granted. Also on July 21, 2009, Prime filed a waiver of the statutory decision deadline (415

ILCS 5/40(a)(2) (2008)), extending to August 20, 2009, the deadline for the Board to decide this

appeal.

PRIME’S REQUEST TO SANCTION THE AGENCY

In Prime’s initial post-hearing brief, as an alternative to reversing the Agency’s

determination on the merits, Prime requests that a default judgment be entered against the

Agency as a sanction for the Agency’s late filing of the record. Br. at 12. Prime notes that the

record on which the Agency based its determination was due by May 20, 2009, and that by that

date, the Agency had filed neither the record nor a motion for an extension of the record-filing

deadline.

Id

., citing 35 Ill. Adm. Code 105.116. Prime further notes that the Board may sanction

parties for unreasonably failing to comply with Board or hearing officer orders or the Board’s

procedural rules. Br. at 12, citing 35 Ill. Adm. Code 101.800(a), 105.118. Sanctions specifically

applicable to the issue of late-filed Agency records, continues Prime, are to bar the Agency from

filing any other document in the case or to immediately award petitioner the result it seeks. Br.

at 12, citing E&L Trucking Co. v. IEPA, PCB 02-53 (Apr. 18, 2002) and Freedom Oil v. IEPA,

PCB 03-54 (Feb. 2, 2006).

The Agency argues that Prime has not shown “any hardship due to the lateness of the

record.” Resp. Br. at 11. The Agency notes that the Board has already accepted the filing of the

record pursuant to an Agency motion made at hearing. According to the Agency, Prime “was

permitted to proffer several documents at the hearing” to which the Agency had “little to no

objection to allowing into the record.”

Id

. The Agency adds that Prime was “also allowed a full

---

3

hearing by which to present any evidence [it] chose and failed to present any witnesses.”

Id

.

The Agency concludes that because Prime has not demonstrated how it was prejudiced by the

late filing of the record, Prime’s sanction request should be denied.

Id

.

The Board notes that under its procedural rules, the Board may sanction parties for

unreasonably failing to comply with Board or hearing officer orders or the Board’s procedural

rules.

See

35 Ill. Adm. Code 101.800(a);

see also

35 Ill. Adm. Code 105.118. Potential

sanctions include entering a default judgment.

See

35 Ill. Adm. Code 101.800(b); E&L

Trucking, PCB 02-53, slip op. at 5 (among possible sanctions for the Agency’s late record-filing

in a UST appeal: “the petitioner may be immediately awarded the result it seeks, regardless of

the Agency’s position in the matter”).

By Board order of May 7, 2009 and 35 Ill. Adm. Code 105.410(a), the Agency’s record

of its determination was due to be filed no later than May 20, 2009. Neither the record nor a

motion for extension was filed by that date.

See

35 Ill. Adm. Code 105.116. Ultimately, the

administrative record was filed on June 19, 2009 (compact disk) and June 22, 2009 (hard copy).

Accordingly, the record had not been filed at the time of the hearing on June 17, 2009. Prime

received a copy of the record for the first time at the hearing, and that was a compact disk copy.

The Board has broad discretion in determining the imposition of sanctions.

See

IEPA v.

Celotex Corp., 168 Ill. App. 3d 592, 597, 522 N.E.2d 888, 891 (3rd Dist. 1988); Modine

Manufacturing Co. v. PCB, 192 Ill. App. 3d 511, 519, 548 N.E.2d 1145, 1150 (2nd Dist. 1989).

In exercising this discretion, the Board considers such factors as “the relative severity of the

refusal or failure to comply; the past history of the proceeding; the degree to which the

proceeding has been delayed or prejudiced; and the existence or absence of bad faith on the part

of the offending party or person.” 35 Ill. Adm. Code 101.800(c).

Here, Prime offered eight exhibits as evidence at hearing, almost all of which are in the

Agency’s record. Specifically, Prime’s Exhibits 1, 2, 3, 4, 6, and 7 are part of the Agency’s

record.

1

Exhibits 1, 2, and 6 are proposed plans and budgets, while Exhibits 3, 4, and 7 are

Agency determination letters. Prime plainly had a number of record documents at its disposal

before hearing. All exhibits offered by Prime were admitted into the record. Prime presented no

witnesses at hearing. Prime did not seek continuance of the hearing based on the Agency’s

failure to timely file the record. Since the time of hearing, Prime has had use of the Agency-filed

record to prepare Prime’s brief and reply brief.

The Board’s concerns about late-filed records are heightened when the record is not filed

sufficiently in advance of hearing to allow for reasonable hearing preparation. In this case,

however, the Board cannot find that the Agency’s tardiness warrants the drastic sanction

requested by Prime. Prime has not persuaded the Board that the Agency’s single late filing

amounts to bad faith, deliberate non-compliance with rules or orders, or a scheme designed to

stall this proceeding. Nor can the Board find that Prime established material prejudice.

See

1

Prime’s Exhibit 5 is an Office of the State Fire Marshal form entitled “Notification for

Underground Storage Tanks,” executed for the site in January 2007. Prime’s Exhibit 8 is

background information concerning the leaking UST site, printed from the Agency’s website.

---

4

Celotex Corp., 168 Ill. App. 3d at 597-98, 522 N.E.2d at 891-92; Modine Manufacturing, 192 Ill.

App. 3d at 517-18, 548 N.E.2d at 1149-50. Considering all of the circumstances, the Board

denies Prime’s motion for default judgment.

See

35 Ill. Adm. Code 101.800(c).

Agency’s Motion

The Agency argues that the Board’s procedural rules (35 Ill. Adm. Code 101.400(a)(2))

“clearly state that the petition for review must be filed by an attorney.” Mot. at 5. The Agency

moves to dismiss this appeal because the March 9, 2009 original petition was filed by a non-

attorney, Joe Keebler, “in violation of Board rules and it could not be cured by a filing of an

attorney after the due date of the appeal had run.”

Id

. at 6;

see also id

. at 4. According to the

Agency, because the 35-day timeframe to appeal ended on March 20, 2009, the April 20, 2009

amended petition is “past the date by which an appeal needed to be filed in this case by an

attorney for the appeal to be valid.”

Id

. at 4.

The Agency further asserts that “[a]ny judgment in a case initiated by a non-attorney is

void, even if subsequent appearances are made by an attorney.” Mot. at 5, citing Housing

Authority of Cook County v. Tonsul, 115 Ill. App. 3d 739, 741 (1st Dist. 1983). Describing the

Midwest Home decision, the Agency continues:

A corporate party cannot file a valid notice of appeal in its own behalf without the

advice and services of an attorney, and because the corporate party’s notice of

appeal was signed on behalf of the corporation by the secretary of the corporation,

and did not indicate that counsel represented the corporation in the preparation

and filing of the notice of appeal, the appeal would be dismissed. Mot. at 5, citing

Midwest Home Savings & Loan v. Ridgewood, 123 Ill. App. 3d 1001, 1004 (5th

Dist. 1984).

Finally, the Agency argues that Prime has failed to strictly comply with the appeal

procedures of Section 40 of the Environmental Protection Act (Act) (415 ILCS 5/40 (2008)), and

that when invoking “special statutory jurisdiction,” one “‘must strictly adhere to the prescribed

procedures’ in the statute.” Mot. at 5-6, internal quotation from ESG Watts, Inc. v. PCB, 191 Ill.

2d 26, 30 (2000).

Prime’s Response

Prime makes four arguments in opposition to the Agency’s motion to dismiss: (1) it

would be arbitrary for the Board to change its long-standing practice and interpretation of its

procedural rules; (2) the Board’s practice is consistent with the Act; (3) the Board’s practice is

consistent with the Administrative Procedure Act (5 ILCS 100/1-1

et seq

. (2008)); and (4)

judicial precedent supports the Board’s practice. Resp. at 3, 4, 5, 6.

---

5

Long-Standing Practice

First, Prime notes that since the Board adopted its new procedural rules, effective January

1, 2001, which require persons other than individuals to appear through an attorney, the Board

has “[r]epeatedly . . . responded to non-attorney filings by requiring the petitioner to file an

amended petition, accompanied by an appearance of an attorney.” Resp. at 3. In support of this

statement, Prime cites fifteen Board decisions from 2001 to 2007, by way of example.

Id

. n.3.

According to Prime, it “does not appear that the Agency has ever before objected to non-attorney

filings, either before or after the 2001 procedural rule change.” Resp. at 3 (referring to repeal of

Board procedural rule that allowed a corporation to appear through any non-attorney officer,

employee, or representative). Prime adds that the Agency’s “form denial letter indicates that the

‘owner or operator’ may appeal this final decision without any reference to the need for

counsel.”

Id

. Prime concludes that for the Board to “adopt a new construction” of its procedural

rule now, that is inconsistent with the Board’s “long-standing practice, without apparent

objection from the IEPA,” would be “entirely arbitrary.”

Id

. at 4, citing IEPA v. PCB, 118 Ill.

App. 3d 772, 780 (1st Dist. 1983).

The Act

Second, Prime asserts that the applicable portions of the Act providing for this appeal

“merely state that an applicant may seek review of an Agency decision before the Board.” Resp.

at 4, citing 415 ILCS 5/40(a)(1), 57(c)(4) (2008)). According to Prime, “[n]owhere, does the Act

direct the Board to require an attorney.” Resp. at 4. In fact, the Act’s permitting process, Prime

notes, has been described as an “‘administrative continuum.’” Resp. at 5, quoting IEPA v. PCB,

138 Ill. App. 3d 550, 551 (3rd Dist. 1985). Prime asserts that a petition for review is “preceded

by a more informal process before the Agency,” one which “frequently does not involve lawyers

on either side.” Resp. at 5. The Agency’s denial letter is not signed by an attorney.

Id

. It is the

Agency’s denial letter, Prime continues, that frames the issues of law and fact before the Board,

not the “formal filing of complaint and answer as . . . in the courts.” Resp. at 5, citing IEPA v.

PCB, 86 Ill. 2d 390, 405 (1981). Prime describes the Board proceeding as “generally mixed

between the legal and the technical, the formal and the informal.” Resp. at 5. According to

Prime:

While the Board has struggled with the question of at what point, if any, the

practice of law begins in this mixed process, there is no basis to conclude that it

does so automatically with the filing of the petition for review.

Id

.

Prime maintains that while the Act does not require an attorney, the Board has “in its

discretion, citing prudential concerns discussed in In re Petition of Recycle Technologies decided

to take a conservative approach” to requiring attorney representation. Resp. at 5. The Board’s

“substantial discretion in establishing its practices and procedures,” however, cannot be

exercised to “work an injustice or defeat the purposes of the Act.”

Id

.;

see also id

. at 4.

---

6

The Administrative Procedure Act

Third, Prime states that administrative agencies are authorized by the Administrative

Procedure Act (APA) (5 ILCS 100/1-1

et seq

. (2008)) to establish procedures addressing the

“‘representation of parties.’” Resp. at 6, quoting 5 ILCS 100/10-10 (2008). Further, continues

Prime, the APA requires that “‘[a]n opportunity shall be afforded all parties to be represented by

legal counsel.’” Resp. at 6, quoting 5 ILCS 100/10-25(b) (2008). Prime argues that these APA

provisions, “[t]aken together,” authorize the Board to adopt rules concerning representation, but:

whether such rules are promulgated, an opportunity must always be given to the

party to obtain representation. The Board’s practice is consistent with these

provisions, while the Agency’s newfound position would deny Petitioner the

opportunity for legal representation. Resp. at 6.

Judicial Precedent

Fourth, and finally, Prime argues that “[t]he Illinois Supreme Court has rejected the

automatic voiding of cases initiated by nonattorneys.” Resp. at 6. Prime cites the Illinois

Supreme Court’s decision in Applebaum v. Rush Univ. Med. Ctr., 231 Ill. 2d 429, 435 (2008) for

the proposition that the so-called “nullity rule” should be invoked only when doing so is required

to protect the public and the court system’s integrity from the unauthorized practice of law and

where no alternative remedy is available. Resp. at 6. Prime refers to several appellate court

decisions holding that voidance of proceedings was unwarranted despite non-attorney filings or

representation. For example, Prime describes Moushon v. Moushon, 147 Ill. App. 3d 140, 147

(3d Dist. 1986) as follows: “where a complaint was filed by a lay agent of the corporation and

not by a licensed attorney, it was improper to void the lawsuit where an attorney was present

throughout the litigation.” Resp. at 6.

Prime argues that dismissing this appeal would not protect Prime “from the mistakes of

the ignorant and the schemes of the unscrupulous.” Resp. at 7, quoting Janiczek v. Dover

Management Co., 134 Ill. App. 3d 543,546 (lst Dist. 1985). Prime explains:

One does not protect the unwary from the traps of litigation by pushing them into

the deadliest. While there is no statutory requirement that a petition be signed by

an attorney, the thirty-five day time limit to file a petition for review is clear.

Moreover, the idea of protecting litigants is strained where it is the litigant’s own

member [Mr. Keebler] acting on its behalf. Limited liability companies act

through their members and the actions of the members are those of the company.

(805 ILCS 18[0]/13-5[](a)(1)) This is obviously not a situation in which a litigant

has been deceived into paying for legal services from a fraud. While not directly

applicable, the Supreme Court’s allowance of representation by corporate officers

in small claims court (S. Ct. R. 282(b)), belies the notion that companies seeking

to represent themselves are inherently troubling. Resp. at 7.

Prime further argues that the “harsh sanction of dismissal” (Resp. at 7) is not called for because

the Board can safeguard “the administration of its proceeding from those lacking the requisite

---

7

skills” (

id

., quoting Janiczek, 134 Ill. App. 3d at 546) through orders, “like the one entered in this

case, which not only direct a party to obtain an attorney, but stay any decision deadline” (Resp.

at 7).

Board’s Analysis of Agency’s Motion to Dismiss the Appeal

The Board finds that the filing of the original petition by Mr. Keebler met the Act’s

appeal procedures and therefore conferred jurisdiction on the Board. The amended petition,

though required by the Board’s procedural rule and precedent, was not required to cure any

jurisdictional defect in the appeal. Further, even if filing a petition for review constitutes the

practice of law, the Board finds that the “nullity rule,” which is described below, should not be

applied here.

The Board Has Jurisdiction Over this Appeal

Prime brings this appeal under Section 57.7(c)(4) of the Act (415 ILCS 5/57.7(c)(4)

(2008)), which is located in Title XVI of the Act. Title XVI concerns the “Leaking Underground

Storage Tank Program.” 415 ILCS 5/57 (2008). Section 57.7(c)(4) reads in pertinent part as

follows:

Any action by the Agency to disapprove or modify a plan or report or the

rejection of any plan or report by operation of law shall be subject to appeal to the

Board in accordance with the procedures of Section 40. If the owner or operator

elects to incorporate modifications required by the Agency rather than appeal . . . .

415 ILCS 5/57.7(c)(4) (2008).

Section 40 is located in the Act’s Title X, which concerns permits. Section 40 states in

relevant part:

If the Agency refuses to grant or grants with conditions a permit under Section 39

of this Act, the applicant may, within 35 days after the date on which the Agency

served its decision on the applicant, petition for a hearing before the Board to

contest the decision of the Agency. 415 ILCS 5/40(a)(1) (2008).

As is plain from these quoted passages, the appeal procedures of the Act do not require

that petitions for review filed with the Board be filed by attorneys. The “owner or operator” or

“applicant” need only file the petition within 35 days. It is uncontested that the original petition

here was so filed. The Board has consistently required strict adherence to these statutory

procedures, dismissing petitions filed after the jurisdictional 35-day appeal period of Section 40.

See

,

e.g.

, Illinois Ayers Oil Co. v. IEPA, PCB 05-48, slip op. at 5 (Mar. 17, 2005); DuPage

Enterprises, Inc. v. IEPA, PCB 93-143, slip op. at 1-2 (Aug. 5, 1993).

The Agency’s reliance upon ESG Watts, Inc. v. PCB, 191 Ill. 2d 26, 727 N.E.2d 1022

(2000) is not on point. In that case, the appellant’s petition for review of the Board’s decision

did not comply with a party-naming requirement set forth in the Administrative Review Law and

Supreme Court Rules (“The agency and all other parties of record shall be named respondents.”).

---

8

ESG Watts, 191 Ill. 2d at 30, 727 N.E.2d at 1025, quoting identical language from

Administrative Review Law at 735 ILCS 5/3-113(b)

(West 1996) and Supreme Court Rules at

155 Ill. 2d R. 335(a). Section 41(a) of the Act (415 ILCS 5/41(a) (2008)), which provides for

appellate court review of Board final decisions, incorporates by reference the petitioning

provisions of the Administrative Review Law and rules adopted pursuant thereto. ESG Watts,

191 Ill. 2d at 29-30, 727 N.E.2d at 1025. The Illinois Supreme Court upheld the appellate

court’s dismissal of the appeal for lack of jurisdiction. Because there was not strict adherence to

the appeal procedures of Section 41(a), the appellate court could not exercise its “special

statutory jurisdiction.” ESG Watts, 191 Ill. 2d at 28, 30-31, 727 N.E.2d at 1024-25. As the

Supreme Court explained:

[A]dministrative review actions, whether taken to the circuit court or directly to

the appellate court, involve the exercise of “special statutory jurisdiction.” When

a court is exercising special statutory jurisdiction the language of the act

conferring jurisdiction delimits the court’s power to hear the case. A party

seeking to invoke special statutory jurisdiction thus “must strictly adhere to the

prescribed procedures” in the statute. Section 102 of the Review Law reinforces

this point, by explicitly stating that a party is barred from obtaining judicial

review of an administrative decision “[u]nless review is sought of an

administrative decision within the time and in the manner herein [

i.e.

, in the

Review Law] provided.” ESG Watts, 191 Ill. 2d at 30, 727 N.E.2d at 1025

(citations omitted).

The defect in ESG Watts’ petition (failure to name a party of record to the Board

proceeding (ESG Watts, 191 Ill. 2d at 28-29, 727 N.E.2d at 1024)) was therefore jurisdictional.

Here, in contrast, there is no

jurisdictional

defect with Prime’s initial petition. As found above,

the filing of the original petition strictly complied with the prescribed appeal procedures of

Sections 40 and 57.7(c)(4) of the Act, which are the statutory provisions conferring jurisdiction

on the Board.

See

Robinson v. Human Rights Commission, 201 Ill. App. 3d 722, 728, 559

N.E.2d 229, 233 (1st Dist. 1990) (analogizing jurisdiction of administrative agencies to “special

statutory jurisdiction” of the courts).

The Board did not direct the filing of the amended petition through an attorney to cure

any jurisdictional defect. Rather, the filing was ordered to ensure compliance with the provisions

of the Board’s procedural rule (35 Ill. Adm. Code 101.400(a)(2)) and the Attorney Act (705

ILCS 205/1 (2008)) concerning non-attorney representation, compliance with which is not a

condition precedent to the Board acquiring jurisdiction to hear a UST appeal.

See

ESG Watts,

191 Ill. 2d at 31, 727 N.E.2d at 1026 (“the party seeking review must strictly comply with

the

statute conferring jurisdiction

on the court” (emphasis added)).

Invoking the “Nullity Rule” is Not Warranted

The Supreme Court of Illinois in Applebaum v. Rush Univ. Med. Ctr., 231 Ill. 2d 429,

899 N.E.2d 262 (2008) described the “nullity rule” as follows: “where a person who is not

licensed to practice law in Illinois attempts to represent another party in legal proceedings, this

rule permits dismissal of the cause, thereby treating the particular actions taken by that person as

---

9

a nullity.” Applebaum, 231 Ill. 2d at 435, 899 N.E.2d at 266. In another recent opinion, the

Supreme Court explained that the nullity rule:

is grounded in the fact that there are risks to individual clients and to the integrity

of the legal system inherent in representation by an unlicensed person: The

purpose of the nullity “rule is *** to protect litigants against the mistakes of the

ignorant and the schemes of the unscrupulous and to protect the court itself in the

administration of its proceedings from those lacking requisite skills.” Ford Motor

Credit Co. v. Sperry, 214 Ill. 2d 371, 389-90, 827 N.E.2d 422, 433 (2005),

quoting Janiczek v. Dover Management Co., 134 Ill. App. 3d 543, 546, 481

N.E.2d 25, 27 (1st Dist. 1985).

The Supreme Court in Applebaum held that:

Although the nullity rule is well established in our courts, because the results of

its application are harsh it should be invoked only where it fulfills its purposes of

protecting both the public and the integrity of the court system from the actions of

the unlicensed, and where no other alternative remedy is possible. Applebaum,

231 Ill. 2d at 435, 899 N.E.2d at 266 (reversed appellate court for determining

that nullity rule was to be applied where attorney was on inactive status at the

time complaint filed; attorney returned to active status before hearing on dismissal

motion).

Applying these principles and in view of Mr. Keebler’s filing, the Board finds that

dismissal of this appeal is not required to protect Prime or the integrity of the Board’s process

from the actions of the unlicensed. As discussed above, Prime’s original petition was

jurisdictionally sufficient. Prime’s amended petition was filed by an attorney and Prime has ever

since been represented by legal counsel. Prime therefore had attorney representation before any

Agency filing and well before hearing. Prime has faced none of the risks that the nullity rule is

designed to avoid and the Board’s process is safeguarded.

The Agency’s motion incorrectly suggests that a filing by one who is not a licensed and

registered attorney

automatically

requires application of the nullity rule. The Agency fails to

recognize Applebaum

or any other like decision in which the court found the nullity rule

inapplicable to the facts presented.

See

,

e.g.

, Pratt-Holdampf v. Trinity Medical Center, 338 Ill.

App. 3d 1079, 1085, 789 N.E.2d 882, 887 (3rd Dist. 2003) (nullity rule “is not to be applied

automatically whenever a person not licensed to practice in Illinois signs a pleading”; complaint

filed by non-attorney was improperly dismissed under the nullity rule where “risks to individual

clients and to the integrity of the legal system inherent in representation by a person who has

never qualified to practice law” not present; plaintiff represented by counsel at every stage of

proceeding subsequent to initial filing). Nor does the Agency address whether the purposes of

the nullity rule would be served by its application here.

As the Board has held, the practice of law will likely occur at some point in an

adjudicatory proceeding, regardless of whether the filing of a petition so qualifies.

See

RTI, AS

97-9, slip op. at 5. When a petition has been filed by a non-attorney, the Board’s practice since

---

10

1997, employed here, has been to require an amended petition through counsel before going

forward with the proceeding. The filing of an amended petition accompanied by the appearance

of an attorney protects litigants and the Board’s administration of its proceedings. Because the

purposes of the nullity rule would not be fulfilled by dismissal, the Board declines to invoke the

nullity rule today.

See

Applebaum, 231 Ill. 2d at 435, 899 N.E.2d at 266.

This ruling comports with the Board’s precedent and procedural rules. The other

occasion on which the Agency challenged a proceeding based on a non-attorney filing was in

1997 in Petition of Recycle Technologies, Inc. for an Adjusted Standard from 35 Ill. Adm. Code

720.131(c), AS 97-9 (RTI). There, the Agency filed a motion to dismiss when an adjusted

standard petition was filed by the non-attorney owner of the petitioning company. On July 10,

1997, the Board denied the Agency’s motion, holding that while Illinois law precluded the non-

attorney from representing the company, dismissal was unwarranted.

See

RTI, AS 97-9, slip op.

at 1 (July 10, 1997). The Board found that the practice of law may include practice before an

administrative agency and noted that an adjusted standard proceeding is a “contested case” and

“adjudicatory proceeding” for which a public hearing would be held:

Any person representing RTI therefore must represent RTI at that hearing, and

must present arguments and precedents supporting a finding that the Board may

grant an adjusted standard . . . .

The Board finds that these tasks, like the representation of a party in

pretrial and trial proceedings in a court, require legal knowledge or skill. At some

point, then, Mr. Gunderson [the owner of petitioner] will necessarily be engaged

in the “practice of law” under the Attorney Act [(705 ILCS 205/1

et seq

. (2008))]

and CPLP Act [Corporation Practice of Law Prohibition Act (705 ILCS 220/1

et

seq

. (2008))] if he continues to represent RTI.

2

RTI, AS 97-9, slip op. at 3-4.

The Board found in RTI that neither the Attorney Act nor the CPLP Act requires that

cases initiated by non-attorneys be dismissed. The Board considered the court decisions

(including those then and presently relied upon by the Agency) holding that proceedings initiated

by a non-attorney on behalf of another are a nullity, even if all subsequent appearances are

through an attorney, and that if the action has proceeded to judgment, the judgment is void (

e.g.

,

Tonsul, 115 Ill. App. 3d 739, 450 N.E.2d 1248; Midwest Home, 123 Ill. App. 3d 1001, 463

N.E.2d 909). The Board observed, however, that other court decisions found dismissal

inappropriate where applying the nullity rule would be yield too drastic a result (

e.g.

, McEvers v.

Stout, 218 Ill. App. 3d 469, 472, 578 N.E.2d 321, 323 (4th Dist. 1991),

appeal denied

, 142 Ill. 2d

655, 584 N.E.2d 131 (1991) (relying on Janiczek, court refused to hold complaint a nullity, even

2

Section 1 of the Attorney Act provides in part: “No person shall be permitted to practice as an

attorney or counselor at law within this State without having previously obtained a license for

that purpose from the Supreme Court of this State.” 705 ILCS 205/1 (2008). Section 1 of the

CPLP Act specifically prohibits corporations from practicing law: “It shall be unlawful for a

corporation to practice law or appear as an attorney at law for any reason in any court in this

state or before any judicial body . . . .” 705 ILCS 220/1 (2008).

---

11

though it was filed by an attorney not licensed in Illinois; court allowed amended complaint to be

filed

pro se

or by Illinois attorney)).

In RTI, the Board quoted from Janiczek, where the plaintiff had brought a personal injury

action, through an attorney, only to learn before trial that the attorney had been disbarred before

the complaint was filed:

Given these unique circumstances, we believe that a rigid adherence to precedent

would not advance, but would in fact defeat, the purposes of the rule prohibiting

representation by non-attorneys. That rule is intended to protect litigants from the

mistakes of the ignorant and the schemes of the unscrupulous and to protect the

court itself in the administration of its proceedings from those lacking the

requisite skills. But we do not believe that either of these purposes is promoted

by the dismissal of plaintiff’s action. Not only would such a result clearly

penalize an innocent party possessing a substantial personal injury claim, but it

also would overlook the fact that the party did secure the services of a licensed

attorney to represent him at trial. RTI, AS 97-9, slip op. at 6, quoting Janiczek,

134 Ill. App. 3d at 546, 481 N.E.2d at 27.

In denying the Agency’s motion to dismiss in RTI, the Board held:

The Board finds that this case also presents special circumstances. The special

circumstances here arise from the Board’s own rules, which allow non-attorneys

to represent corporations in adjusted standard proceedings. [citation omitted] In

addition, the Agency has never before raised an objection to the Board’s rule.

Given the Board’s rule and the Agency’s previous silence on the rule, it was

reasonable for Mr. Gunderson to assume that he could represent RTI in this

proceeding. The Board also finds that it need not dismiss this case simply to

promote the purposes of the rule prohibiting representation by nonattorneys;

those purposes will be well served if RTI retains an attorney before this matter

proceeds any further. For these reasons, the Board denies the motion to dismiss.

RTI

, AS 97-9, slip op. at 6

This case likewise presents special circumstances. The Board has never dismissed a

timely-filed petition for review solely on the ground that it was filed by a non-attorney, without

providing the petitioner an opportunity to file an amended petition through an attorney. In fact,

at the July 10, 1997 Board meeting where the Board adopted its RTI decision, the Board issued

an analogous order in a UST appeal. In Riverview FS v. IEPA, PCB 97-226, the Board found

unwarranted the dismissal of a petition timely filed by petitioner’s environmental consultant, a

lay person, but held that before the UST appeal could proceed, an amended petition must be filed

through an attorney within 45 days.

See

Riverview FS, PCB 97-226, slip op. at 1, 3 (July 10,

1997). The Agency did not object to the Riverview FS ruling, even though the amended petition

was permitted to be filed after the 35-day appeal period.

See

Riverview FS, PCB 97-226, slip

op. at 1 (Sept. 4, 1997) (amended petition, filed by attorney, accepted for hearing)

Since the 1997 RTI and Riverview FS decisions, the Board has repeatedly accepted

---

12

petitions timely filed by non-attorneys and allowed for amended petitions through an attorney

after the 35-day appeal period. The Agency did not object to the Board’s approach in Riverview

FS and has not objected in any subsequent UST appeal, until now. The Board’s practice did not

change with the January 1, 2001 effective date of the Board’s procedural rule on attorney

representation, which reads as follows:

a)

Appearances. A person who is a party in a Board adjudicatory proceeding

may appear as follows:

1)

Individuals may appear on their own behalf or through an attorney-

at-law licensed and registered to practice law. (Section 1 of the

Attorney Act [705 ILCS 205/1])

2)

When appearing before the Board, any person other than

individuals must appear through an attorney-at-law licensed and

registered to practice law. (Section 1 of the Corporation Practice of

Law Prohibition Act [705 ILCS 220/1] and Section 1 of the

Attorney Act [705 ILCS 205/1]). 35 Ill. Adm. Code 101.400(a)(1),

(2).

When considering a petition timely filed by a non-attorney, the Board has consistently

interpreted Section 101.400(a)(2) as requiring that counsel file an appearance and amended

petition, not as requiring that the case be dismissed.

See

,

e.g.

, Premcor Refining Group, Inc. v.

IEPA, PCB 01-116, slip op. at 1 (Apr. 19, 2001); Estate of William Eggert v. IEPA, PCB 08-35,

slip op. at 1 (Dec. 6, 2007);

see also

35 Ill. Adm. Code 105.114(b) (amended petition

recommences decision period), 105.402 (“owner or operator” may file a petition for review).

The Board has implemented the procedural rule in this fashion when petitioners are limited

liability companies as well.

See

,

e.g.

, Mac’s Convenience Stores, LLC v. IEPA, PCB 05-101,

slip op. at 1-2 (Dec. 16, 2004). Before the instant appeal, the Agency has never objected to the

Board’s interpretation of this rule. Under these circumstances, it was reasonable for Mr. Keebler

to assume that Prime’s timely-filed appeal would not be dismissed. The Agency’s motion has

presented no reason for the Board to disregard its years of precedent.

See

Modine Manufacturing

Co. v. PCB, 40 Ill. App. 3d 498, 502, 351 N.E.2d 875, 879 (2nd Dist. 1976) (“An administrative

agency has the power to construe its own rules and regulations to avoid absurd or unfair

results.”); Chemetco, Inc. v. PCB, 140 Ill. App. 3d 283, 289, 488 N.E.2d 639, 643 (5th Dist.

1986) (“abrupt shifts” in agency practice “constitute ‘danger signals’”).

The Board finds that it need not dismiss this appeal to promote the purposes of the rule

prohibiting the unauthorized practice of law. As discussed above, those purposes have been well

served by Prime retaining counsel before this case could proceed any further. Moreover, finding

that Prime’s original petition is a nullity would be especially harsh—because the 35-day

jurisdictional appeal period has run, dismissal of this appeal would necessarily be with prejudice,

foreclosing review of the Agency’s determination.

Cf

. RTI, AS 97-9, slip op. at 6 (Board

declined to apply the nullity rule even though another adjusted standard proceeding could have

been initiated if the Board had granted the Agency’s motion to dismiss)

---

13

The Board’s Ruling on the Motion to Dismiss

For the reasons set forth above, the Board finds that it has jurisdiction over this appeal

and that invocation of the nullity rule is unwarranted in this case. Accordingly, the Board denies

the Agency’s motion to dismiss.

Legal Background

Under Title XVI of the Act, the Agency determines whether to approve proposed cleanup

plans and budgets for leaking UST sites, as well as requests for cleanup cost reimbursement from

the State’s UST Fund.

See

415 ILCS 5/57.7, 57.8 (2008). As discussed above, a UST owner or

operator may appeal Agency determinations to the Board under Section 40 of the Act (415 ILCS

5/40 (2008)), which governs Board review of Agency permit decisions.

See

415 ILCS

5/40(a)(1), 57.7(c)(4), 57.8(i) (2008); 35 Ill. Adm. Code 105.Subpart D. The Office of the State

Fire Marshal (OSFM) determines whether USTs may be registered, which is a prerequisite for

UST Fund eligibility.

See

415 ILCS 5/57.9 (2008). The OSFM also determines whether a UST

owner or operator is eligible for reimbursement and, if so, which deductible applies. OSFM

eligibility and deductibility determinations may be appealed to the Board.

See

415 ILCS

5/57.9(c)(2) (2008);

see also

35 Ill. Adm. Code 105.Subpart E. In addition, the OSFM oversees

the removal and abandonment in-place of USTs.

See

41 Ill. Adm. Code 170.

The Site and USTs

The site is located at 600 W. 10th Street in Metropolis, Massac County, at the southwest

corner of the intersection of 10th Street (U.S. Highway 45) and Johnson Street. AR1 at 1; AR 4

at 1; AR 36, Fig. 2. Metropolis Tire & Oil Co., Inc. (Metropolis Tire & Oil) sold the site to

Prime in March 2006. Pet., Exh. 4; AR28 at 1 (letter).

The site is rectangular in shape. The eastern boundary of the site faces Johnson Street

while the northern boundary faces 10th Street. AR36, Fig. 2. The site had a single-story

building that covered the southern half of the property. AR4, App. D; AR36, Fig. 2. The

building extended from the eastern to the western boundaries of the property, along the length of

the property’s southern boundary. The building was set back from the northern property

boundary and faced 10th Street. Three bays were located in roughly the western third of the

building. A pump island canopy was located between the building and 10th Street,

i.e.

, in front

of or north of the building. The canopy extended approximately from the property’s eastern

boundary to the center of the site. AR 36, Fig. 2.

The site had seven USTs. AR4 at 4. The tanks were used to contain the following

---

14

substances and had the capacities indicated:

UST 1

gasoline

4,000 gallon

UST 2

gasoline

3,000 gallon

UST 3

used oil

1,000 gallon

UST 4

kerosene

550 gallon

UST 5

gasoline

1,000 gallon

UST 6

gasoline

1,000 gallon

UST 7

gasoline

1,000 gallon

AR36, Fig. 2; Exh. 5.

3

The USTs, which were registered with the OSFM, were installed in 1954. USTs 1 through 3

were last used in 1987 while USTs 4 through 7 were last used in 1995. Exh. 5; AR5, App. D;

see also

AR4, App. C.

USTs 1 and 2 were located in the area of the bays while USTs 3 through 7 were located

in the area of the pump island canopy. Specifically, UST 1 was located just in front of the two

western-most bays, to the north of the building. UST 2 was located under the western-most bay

and extended just beyond the building to the north. USTs 3 through 7 were located under or

partially under the canopy. USTs 3 and 4 were located roughly in the center of the site, at the

western end of the canopy, while USTs 5 through 7 were located toward the eastern end of the

canopy. AR36, Fig. 2.

2001

Release Reporting, 20-Day Certification, OSFM Tank Removal Permit.

On August

1, 2001, a petroleum release from the site’s seven USTs was reported to the Illinois Emergency

Management Agency (IEMA). AR1 at 1; AR 4 at 1, 4; AR8 at A-2; AR36 at 1 (letter). IEMA

assigned Incident No. 2001-1314 to the reported release. AR1at 1; AR 4 at 1; AR8 at A-2. At

the time, the site was owned by Metropolis Tire & Oil. AR1 at 1; AR 4 at 1; Pet., Exh. 4.

Metropolis Tire & Oil “decided to have the tanks removed to prevent any further

release.” AR4 at 2. On August 13, 2001, “[t]he tanks were inspected to ensure that as much of

the regulated substance as possible had been removed.” AR3 at 3. On August 15, 2001,

Metropolis Tire & Oil submitted a 20-day certification to the Agency. AR4 at 1. On August 21,

2001, Metropolis Tire & Oil applied for, and on August 22, 2001, the OSFM issued, a permit for

removal of the seven USTs. AR4 at 3, App. C.

3

For purposes of identifying the seven USTs, different environmental consultants have

numbered the USTs differently. The Board uses the tank numbering system employed by the

environmental consultant in the final submittal that led to the Agency determination being

appealed.

See

AR36, Fig. 2;

see also

Exh. 5. Likewise, the gallon capacity and contents

indicated for the USTs varied occasionally among record documents, although the 11,500 gallon

total for all tanks was consistent and the contents were limited to gasoline, used oil, and

kerosene. The table above reflects the environmental consultant’s information in the final

submittal that led to the Agency determination on appeal.

See

AR36, Fig. 2;

see also

Exh. 5.

---

15

45-Day Reporting.

On September 6, 2001, IEPA issued a determination in response to

an “Early Action Extension” request submitted by Metropolis Tire & Oil. AR2 at 1. In the

determination, the Agency extended “the initial 45-day period for which early action costs shall

be considered reimbursable” to December 15, 2001. AR2 at 1. The Agency letter noted that the

45-day report must be submitted on time but added that “[a]n amended 45 Day Report or other

report documenting the activities conducted during the early action extension period must also be

submitted to the Illinois EPA.” AR2 at 1.

On September 13, 2001, Metropolis Tire & Oil submitted a 45-day report to the Agency.

AR3. The 45-day report noted that the request for extension of the early action period was made

“to allow additional time for scheduling tank removals with the [OSFM], the removal of the

USTs, and the removal and transport of contaminated backfill material to a licensed landfill.”

AR3 at 1. The OSFM’s permit for removal of the seven USTs was attached to the 45-day report.

AR3, App. C. The 45-day report concluded:

Based on observations by owner representative Ms. Stevey Joyce, it was

determined that a release had occurred on the property. To avoid further

migration of contamination, removal of the USTs was deemed prudent. The

removal of the USTs will be conducted under the supervision of the OSFM and

has tentatively been scheduled with the OSFM for October 23, 2001. *** A

better understanding of the extent of any release will be gained after tank removal

and early action operations have been completed. An addendum to this Report

will be submitted to the IEPA, within the approved time frame, to document these

additional early action activities. AR3 at 9.

On December 3, 2001, Metropolis Tire & Oil submitted a 45-day report addendum to the

Agency. AR4. The 45-day report addendum stated that on October 24, 2001, Metropolis Tire &

Oil’s environmental consultant, CW

3

M Company, Inc. (CW

3

M), visited the site to uncover the

tanks in preparation for their removal the next day. AR4 at 3. However, upon:

the unveiling of the tanks it was determined that removal of them would

jeopardize the integrity of the building, because one tank was close to the

foundation while another was almost completely under the foundation. The

foundation was in poor condition further jeopardizing safety of removal activities.

Additionally, the other tanks were inaccessible due to the location of a low

canopy. Tanks were also positioned next to footings for the canopy and pump

island structure. The tanks could not be removed at this time to ensure the

integrity of the property building and the connected building. AR4 at 3.

The 45-day report addendum lists the seven USTs and describes the “[t]ype of [r]elease”

from each as “[u]nknown.” AR4 at 4. At the time of the October 24, 2001 site visit, CW

3

M

confirmed the location of four of the USTs (USTs 1 and 2 in the area of the bays on the west side

of the site; USTs 3 and 7 near the pump island canopy area), but could not confirm the exact

location of USTs 4-6. AR4 at 4, App. B (site and utility map). CW

3

M suspected that two of

those three USTs were near the pump island canopy area. AR4 at 4, App. B (site and utility

---

16

map). The 45-day report addendum concluded that a “better understanding of the extent of any

release will be gained after the site classification process has been completed.” AR4 at 8.

2002

OSFM Eligibility/Deductibility Determination.

On February 4, 2002, the OSFM

issued a letter determining that Metropolis Tire & Oil is eligible for UST Fund reimbursement of

costs over $15,000 incurred “in response to the occurrence referenced above [Incident No. 2001-

1314] and associated with” the seven USTs. AR5, App. D.

Site Classification.

On February 18, 2002, Metropolis Tire & Oil submitted a site

classification work plan and budget to the Agency. AR5. On March 21, 2002, the Agency

modified the site classification work plan and rejected the associated budget. AR7. On April 19,

2002, Metropolis Tire & Oil submitted an amended site classification work plan and budget to

the Agency. AR8. On May 21, 2002, the Agency modified the amended site classification work

plan and associated budget. AR10.

On June 21, 2002, Metropolis Tire & Oil submitted a site classification completion report

to the Agency, proposing to designate the site as “high priority.” AR11 at 16. CW

3

M installed

four monitoring wells and advanced two soil borings to sample for benzene, toluene,

ethybenzene, and total xylenes (BTEX), polynuclear aromatic hydrocarbons (PNAs), and for soil

only, Toxicity Characteristic Leaching Procedure (TCLP) lead. AR11 at 9, 13. One soil boring

and monitoring well location (MW-1) was on the eastern edge of the site, just north of the pump

island canopy. AR11, App. B (site boring location map; monitoring well location map). In

installing MW-1, a slight odor was noted from 6 to 12 feet below land surface. AR11 at 9. The

sample at 9 feet below land surface from MW-1 was submitted for laboratory testing because it

had the highest photo-ionization detector (PID) reading (42 parts per million). AR11 at 13.

The June 2002 report documented exceedences of the Tiered Approach to Corrective

Action Objectives (TACO)

4

Tier I residential soil remediation objective for TCLP lead (0.0075

milligrams per liter (mg/L), soil component of the groundwater ingestion exposure route, Class I

groundwater) in MW-1 at nine feet and the TACO Class I groundwater objective for lead

(0.0075 mg/L, Class I groundwater remediation objective) in three of the four monitoring wells,

including MW-1. AR11 at 11, 14, 16; AR18 at 6. The groundwater sample from MW-1 had a

detectable concentration of toluene and the soil sample from MW-1 had a detectable

concentration of naphthalene, but both concentrations were below the most stringent respective

Tier I TACO remediation objectives. AR11 at 11, 14. On July 29, 2002, the Agency approved

the site classification with modifications. AR14 at 1.

First Corrective Action Plan and Budget.

On August 13, 2002, Metropolis Tire & Oil

submitted a “Phase I” corrective action plan (CAP) and budget to the Agency, stating:

The Phase I CAP is proposing to remove the site obstacles prior to the site

investigation process followed by complete delineation of the contaminant plume.

4

35 Ill. Adm. Code 742.

---

17

These activities are necessary to comply with the investigation efforts required by

the Agency.

***

The plan proposes to remove the USTs and the contaminated backfill surrounding

the tanks. In order to remove the USTs, the removal of the building, canopy and

possibly underground retaining walls will be required. AR15 at 6, 7.

On October 22, 2002, the Agency modified the CAP and rejected the associated budget. AR17

at 1. Regarding the CAP modifications, the Agency required additional soil borings and

monitoring wells to define the full extent of soil and groundwater contamination and stated that:

The plan includes the removal of the USTs, contaminated backfill, the building,

canopy, and underground retaining walls, which are not required for corrective

action at this time.

***

The Illinois EPA is requiring further investigation to determine which, if any, of

the USTs had a release. *** After further investigation has been performed and

the full extent defined, some or all of the above activities may be approved.

AR17, Att. A at 1, 2.

2003

Second Corrective Action Plan and Budget.

On July 30, 2003, Metropolis Tire & Oil

submitted its Phase I CAP “II” and budget to the Agency. AR18. The submittal described the

analytical results of samples taken from four soil borings advanced in May 2003. The

investigation was designed to sample “as near as possible to the USTs and pump island

locations.” AR18 at 6. To that end, a skid-mounted drill rig along with an air compressor and

multiple jackhammers were used. Two borings were taken near the site’s bays and two borings

were taken near the site’s pump island canopy. AR18 at 6. A slight odor and discoloration was

noted in each of the four borings. AR18 at 6-7. Each of the four borings was completed at six

feet below land surface. AR18 at 6-7. Samples were collected at a depth of six feet in each

boring so as to sample near the depth of the USTs and another sample was collected at a depth of

three feet in the boring under the canopy so as to sample near the depth of UST piping. AR18 at

7.

All samples were tested for BTEX, PNAs, and TCLP lead. All four borings indicated

exceedences of the TACO residential Tier I soil remediation objective for TCLP lead (0.0075

mg/L, soil component of the groundwater ingestion exposure route, Class I groundwater). The

sample from one of the bay borings (“Bay2” at six feet) revealed concentrations greater than the

TACO residential Tier I soil remediation objectives for benzene and naphthalene (respectively,

0.03 milligrams per kilogram (mg/kg) and 12 mg/kg, soil component of the groundwater

ingestion exposure route, Class I groundwater). AR18 at 6-8. Samples from the boring beneath

the pump island canopy (PI-1 at three feet and six feet) revealed detectable levels of BTEX but at

concentrations below TACO residential Tier I soil remediation objectives for those parameters.

AR18 at 7.

---

18

The Phase I CAP II proposed to remove the site obstacles before continuing with the site

investigation to “completely delineate [] the contaminant plume.” AR18 at 8. Metropolis Tire &

Oil sought to “remove the USTs and the contaminated backfill surrounding the tanks,” noting

that “[i]n order to remove the USTs, the removal of the building, canopy and possibly

underground retaining walls will be required.” AR18 at 9. Metropolis Tire & Oil proposed that

afterward it would prepare a Phase II CAP “for the remediation of any soil and groundwater

contamination at the site that is found during the site investigation process.” AR18 at 10.

On October 3, 2003, the Agency rejected the CAP and associated budget. AR21. The

Agency determined that the full extent of soil and groundwater contamination had not been

defined and that the “full extent of contamination must be defined before a [High Priority] CAP

can be approved.” AR21, Att. A. Further, the Agency stated that the full extent of

contamination must be defined before the Agency would consider approving “the removal of the

USTs, contaminated backfill, the building, canopy, and underground retaining walls, which are

not required for corrective action at this time.” AR21, Att. A.

The Agency required that the extent of contamination be defined in specified areas

around the bays and pump island canopy. The Agency required that the soil and groundwater

samples collected be tested for BTEX and PNAs. AR21, Att. A. The Agency also stated,

however, that:

after further review of the small concentrations of lead contamination at the site,

the Illinois EPA believes the lead is background. Therefore, the migration to

groundwater and groundwater pathways for lead have been addressed. AR21,

Att. A.

In rejecting the budget, the Agency noted that according to the 45-day report, the tanks

were inspected to ensure that as much regulated substance as possible had been removed, from

which the Agency concluded that “not much, if any, liquid should remain in the USTs.” AR21,

Att. B at 2;

see also

AR18 at A-2, I-1 (3) (the capacity of all 7 USTs was 11,550 gallons;

Metropolis Tire & Oil had sought liquid disposal costs for one-half that capacity,

i.e.

, 5,775

gallons).

2005-2006

Third Corrective Action Plan and Budget.

On August 22, 2005, Metropolis Tire & Oil

submitted another CAP and budget. AR22. The submittal documents that three monitoring

wells were installed in April 2005, two near the bays and one off-site to the west of the bay area.

AR22 at 8. The soil sample from one of the borings near the bays exceeded the TACO Tier I

residential remediation objective for benzene (0.03 mg/kg, soil component of the groundwater

ingestion exposure route, Class I groundwater). AR22 at 9. No groundwater exceedences of

BTEX or PNA parameters were detected based on Class I groundwater remediation objectives.

AR22 at 10. Two soil borings advanced in July 2005 around the well that had the elevated soil

benzene level revealed no exceedences of Tier I residential soil remediation objectives for BTEX

or PNA parameters. AR22 at 11. The 2005 activities did not involve advancing borings or

monitoring wells near the pump island canopy area. AR22.

---

19

After concluding that “groundwater contamination does not appear to be located” at the

site, environmental consultant CW

3

M proposed to “remove the USTs and the contaminated soils

surrounding the tanks,” adding that their removal would require removing the building and

canopy. AR22 at 11-12. CW

3

M stated:

Previously, the IEPA has requested that it be determined which tanks had

releases, and at this point it is impossible to tell which tanks have caused the

contamination. The OSFM representative on-site during the tank pull will make

the determination as to which tanks have leaked . . . . AR22 at 12.

The CAP mapped a soil contaminant plume around the bays and USTs 1 and 2 on the

west side of the site, extending east to roughly the center of the site. The CAP proposed

excavating an irregularly-shaped area that included the mentioned soil contaminant plume. The

proposed excavation area encompassed approximately the western third of the site. The

northeastern-most point of the proposed excavation reached the general location of UST 3 at the

western edge of the pump island canopy. AR22, App. B, #0012, 0013; AR36, Fig. 4. CW

3

M

proposed to remove contaminated soil in conjunction with removing the USTs:

Approximately 370 cubic yards of soil some of which is beneath the building will

be removed during the excavation based upon the defined soil plume. *** An

additional 480 cubic yards of soil will be removed, if the OSFM representative on

site determines that the USTs which are outside of the soil plume have had a

release. In this situation up to 4 feet of contaminated backfill surrounding those

USTs will also be removed. It is impossible to tell at this point if the backfill

materials around the tanks is contaminated, since their exact location is unknown.

If the OSFM representative determines that the USTs have not released, no soil

from these areas will be disposed of. AR22 at 12.

Regarding the liquid disposal costs in the budget rejected by the Agency, CW

3

M

responded that while the USTs had been inspected to ensure that as much substance as possible

had been removed:

these are tanks that have leaked contamination into the environment and if

regulated substance can get out, water can get in through the same pathways, and

may need to be disposed of at the time of removal. AR22 at 2 (letter).

On November 23, 2005, the Agency modified the CAP and rejected the budget. AR24.

The Agency determined that any activities not associated with the proposed excavation of the

area around the bays were in excess of the minimum requirements of the Act and therefore the

costs of such activities could not be reimbursed from the UST Fund. AR24, Att. A. In

modifying the CAP, the Agency further stated:

Please note only UST [1 and 2, located in the bay area] have shown evidence of a

possible release; and therefore, are associated with Incident #20011314.

Furthermore, any additional USTs that are found on-site and contamination that

---

20

may be associated with these USTs must be reported as a new release and

addressed accordingly. AR24, Att. A.

The Agency did not modify the elements of the CAP proposing removal of UST 1 and 2 and

excavation of the soil plume around that area of the bays. AR24 at 11, Att. A. However, in

requiring submission of “the correct groundwater classification demonstration,” the letter

cautioned that “[i]f the groundwater beneath the site is Class II groundwater, the site should only

be remediated to Class II remediation objectives on-site.” AR24, Att. A.

In rejecting the budget, the Agency also determined:

The proposed costs associated with USTs [3 and 7, located in the pump island

canopy area], and the three USTs that have not been located to date are not

associated with the release and Incident #20011314; and therefore, are activities

in excess of those necessary to meet the minimum requirements of Title XVI of

the Act. All costs associated with the above must be removed from the budget.

AR24, Att. B (emphasis in original).

Fourth Corrective Action Plan and Budget.

Metropolis Tire & Oil responded on

December 20, 2005 by submitting a modified CAP and budget to the Agency. AR25. In the

cover letter, CW

3

M stated:

While we disagree with the Agency’s contention that only USTs [1 and 2] have

shown evidence of a possible release, in order to move the site forward, the

budget has been modified so that nothing beyond the proposed excavation and

removal of USTs [1 and 2] is included in the budget. Furthermore, if other USTs

are found to have released while on-site, they will be appropriately addressed.

AR25 at 1 (letter).

The December 20, 2005 submittal also included a groundwater classification demonstration,

concluding that the site’s groundwater “would most likely be properly classified as Class II

groundwater.” AR25 at 1 (letter). For purposes of the plan and budget, the groundwater was

“assumed as Class II groundwater.” AR25 at 2 (letter). CW

3

M proposed that during corrective

action activities, it would conduct a confirmation sample for sieve analysis to verify the Class II

status, adding that if Class I is the appropriate groundwater classification, an amendment will be

submitted to address any resulting CAP changes. AR25 at 2 (letter).

On February 24, 2006, the Agency approved the CAP (including removal of USTs 1 and

2) and rejected the budget for lack of supporting documentation. AR27.

2006

Prime Becomes Owner.

On April 3, 2006, a letter was submitted to the Agency on

behalf of Prime, stating that Prime became the owner of the site on March 28, 2006. AR28

(letter). Attached to the letter is the Agency’s “Election to Proceed as ‘Owner’” form, executed

by Prime, which stated, among other things, that:

---

21

I understand that by making this election I become subject to all responsibilities

and liabilities of an “owner” under Title XVI of the Environmental Protection Act

and the Illinois Pollution Control Board’s rules at 35 Ill. Adm. Code 734. AR28

(form).

5

The Agency accepted Prime’s election on April 10, 2006. AR29 at 1.

Prime’s Amended Corrective Action Plan Budget.

On July 18, 2006, Prime submitted

an amended CAP budget to the Agency (AR30), which included $6,475.78 for removal of USTs

1 and 2 (AR30 at 13). The Agency modified the budget on September 15, 2006 (AR32),

approving the proposed $6,475.78 for removal of USTs 1 and 2 (AR32, Att. A at 1).

OSFM Eligibility/Deductibility Determination.

Attached to Prime’s amended CAP

budget was an April 17, 2006 OSFM letter, determining that Prime is eligible for UST Fund

reimbursement of costs over $15,000 incurred “in response to the occurrence referenced above

[Incident No. 2001-1314] and associated with” the seven USTs. AR30.

Release Reporting.

Prime reported a UST release for the site to IEMA on December 13,

2006. AR33 at 1. IEMA assigned Incident No. 2006-1558 to the release. AR33 at 1. IEMA

noted that the release had been “[d]iscovered” in August 2001. AR33 at 1.

2008

Prime’s “Corrective Action Investigation Plan and Budget.”

On November 10, 2008,

Prime’s environmental consultant, Environmental Management, Inc. (EMI), submitted a

“Corrective Action Investigation Plan and Budget” to the Agency. AR36. The submittal

described some of the site history since the initial release reporting in August 2001 and explained

that various activities were performed at the site in December 2006, including the removal of all

seven USTs:

An environmental incident was initially reported to IEMA on August 1, 2001 and

subsequently, Incident No. 20011314 was issued for this facility. It was reported

that all tanks at the site had a release. Through correspondence with the IEPA

Project Manager, it was stated that only the tanks on the west side of the property

were responsible for the release reported. As a result, corrective action costs were

only approved to remove the two tanks located on the west side of the property

[USTs 1 and 2]. During corrective action excavation and tank removal activities,

all seven tanks at the site were removed. The OSFM official on-site during tank

removal activities confirmed that all seven (7) tanks on-site had releases. As a

result, Incident No. 20061558 was issued on December 13, 2006 and was noted as

5

Owners or operators of USTs for which a release was reported to IEMA before June 24, 2002,

may elect to proceed under Title XVI of the Act and Part 734 of the Board’s regulations.

See

415 ILCS 5/57.13 (2008); 35 Ill. Adm. Code 734.105.

---

22

being a re-reporting of the 20011314 incident. *** Confirmation samples

collected during the corrective action excavation activities are also included.

Confirmation sampling was also conducted during tank removal activities on the

east side of the property. Based on these confirmation samples, it is evident that

the other tanks on-site were in fact responsible for contributing to the release

initially reported. AR36 at 1-2 (letter);

see also

Exh. 5.

EMI’s submittal documented laboratory analyses identifying detectable levels of BTEX

in post-excavation samples taken in December 2006 along the eastern edge of the excavation of

the soil plume around USTs 1 and 2 (area of bays) and throughout the former pump island area

where USTs 3 through 7 had been located. AR36, App. A, Fig. 2, Fig. 4, App. B, Tab. 1. These

analyses included exceedences of the TACO Tier I benzene soil remediation objectives for

residential properties (0.03 mg/kg, soil component of the groundwater ingestion exposure route,

Class I groundwater). AR36, App. B, Tab. 1. Specifically, benzene exceedences of this

objective were detected in soil samples collected from the excavation walls (W) and floors (F) at

the following locations:

1.

Along the eastern edge of the excavation on the west side of the site, extending

east toward the center of the site (from north to south, sample locations F-10, W-

2, W-3, W-10); and

2.

Throughout the former pump island area on the east side of the site, extending

west to the center of the site (from east to west, sample locations W-4, F-2, W-5,

W-7, W-6, F-3, F-4).

6

AR36, App. A, Fig. 1, Fig. 4, App. B, Tab. 1.

The “[t]ype of release” indicated for each of the seven USTs was “[o]verfill.” AR36,

App. E at 5.

To identify the vertical and horizontal extent of contamination on the east side of the site,

EMI proposed to advance five soil borings and analyze samples for BTEX and PNAs:

EMI is enclosing a Corrective Action Investigation Plan and Budget to delineate

the contamination on the east side of the property in the vicinity of the other five

tanks. Earlier site investigation activities conducted did not properly define the

soil contamination at this facility. *** [A]n amended corrective action budget is

enclosed with costs necessary to delineate the remaining contamination present at

this facility. Also included in the budget is costs incurred for removing the

additional five (5) tanks at the facility, as well as the confirmation samples that

were collected during said tank removal activities. AR36 at 1-2 (letter), App. A,

Fig. 6.

6

The Board makes no finding as to the applicable remediation objectives for the site. The

TACO Tier I benzene soil remediation objectives for residential properties, soil component of

the groundwater ingestion exposure route, Class II groundwater is 0.17 mg/kg, which was

exceeded at W-3, F-2, W-7, W-6, F-3, and F-4.

---

23

Agency Determination Under Review.

On January 27, 2009, the Agency rejected the

November 2008 plan and associated budget submitted by Prime. AR38. The Agency rejected

the plan for the following reasons:

A) During the investigation activities associated with Incident #20011314 soil and

groundwater contamination were not identified in the vicinity of USTs #3 through

#7. However, three years later during the removal of these USTs, soil

contamination was identified in these areas. Therefore, Incident #20061558 is a

new release and is not considered a re-reporting of Incident #20011314.

B) Pursuant to 35 Ill. Adm. Code 734.210(c) and 734.210(e), the 20- and 45-Day

reporting requirements must be fulfilled.

C) In addition, pursuant to 35 Ill. Adm. Code 734.310(a), prior to conducting site

investigation activities pursuant to Section 734.315, 734.320 or 734.325 of this

Part, the owner or operator must submit to the Agency for review a site

investigation plan. AR38 at 1.

The Agency rejected the budget because the Agency “has not approved the plan with which the

budget is associated.” AR38 at 2. Further, in rejecting the budget, the denial letter noted that

“most of the costs in the proposed budget will have to be submitted as Early Action costs.”

AR38 at 2.

The Agency’s January 27, 2009 letter concluded by requiring that Prime submit a “Stage

1 Site Investigation Plan” for Incident No. 2006-1558 and a “Corrective Action Completion

report” for Incident No. 2001-1314. AR38 at 2.

The Agency’s “technical review notes” underlying the January 27, 2009 determination

included the following recommendation:

Incident #20061558 is NOT a re-reporting of Incident #20011314. There was not

any evidence of contamination in this area until the USTs were removed 3 years

later. There will have a new deductible. AR37 at 2 (emphasis in original).

Prime’s Brief

According to Prime, the Agency denied the subject plan and budget “solely based upon

its unsupported finding that the work entails a new release reported in 2006, and not a re-

reporting of a 2001 release that has been and continues to be the subject of remediation efforts at

the site.” Br. at 1. Prime argues that there is no evidence in the record to support the Agency’s

finding of “an additional release from tanks that had clearly been abandoned prior to 2001 and

drained in 2001.”

Id

. at 9.

The “only thing that happened at the site since 2001,” Prime continues, is that the

Agency’s Leaking UST Section has been acting in its “customary role of protecting the LUST

fund” by precluding the type of site work activities that “any other division of the Agency”

---

24

would require. Br. at 9. According to Prime, the Agency directed the site investigation in the

“hopes” that the Fund would not have to pay for demolition costs, despite the presence of USTs

“next to crumbling building foundations and under canopies.”

Id

. Prime maintains that without

removing site obstacles, soil borings could not be advanced near the tanks, and thus the extent of

contamination could not be determined using the approach mandated by the Agency. Prime

asserts that the Agency imposed “a classic Catch-22” on the project:

1. Removal of site obstacles is necessary to investigate the extent of

contamination;

2. Site obstacles cannot be removed without first investigating the extent of

contamination.

Id

. at 10.

Despite what Prime describes as “the Agency’s efforts to try and rule out a release from

the tanks that might trigger expensive demolition costs,” the environmental consultant ultimately

determined that it was “impossible” to identify the tanks that had experienced a release without

removing the tanks. Br. at 10. All of the tanks were removed in 2006 in the presence of an

OSFM representative and, “unsurprisingly, holes were found” in the USTs.

Id

. The 2006

incident was a re-reporting of the 2001 incident, according to Prime.

Id

. Noting that re-

reporting releases is not uncommon, Prime argues that the 2006 incident number was just

“further confirmation that all of the tanks had experienced a release by 2001.”

Id

. Prime

maintains that such “multiple reportings” promote:

the Act’s purpose of making sure the site is fully cleaned-up and no evidence is

ignored; it is certainly not intended to promote multiple, bureaucratic parceling of

the cleanup process into multitudes of parallel clean-up tracts.

Id

.

According to Prime, even assuming there were “multiple occurrences at the site, this is

legally irrelevant” because the Board has held that “deductibles are assessed per site, not per

occurrence.” Br. at 11, citing Mac Investments v. OSFM, PCB 01-129 (Dec. 19, 2002) and

Swif-T-Food Mart v. IEPA, PCB 03-185 (May 20, 2004). The Agency can deny a plan only if

the Agency “articulates how the Act or its regulations would be violated” and here, Prime

argues, the Agency’s denial letter merely cites “general provisions concerning the LUST

program,” none of which “contradict the Board’s prior decisions.” Br. at 11.

Finally, Prime asserts that the Agency’s determination is neither consistent with the

purposes of the Act nor good policy:

The LUST program should be interpreted in a manner which furthers the purposes

of the Act, which are foremost the “protection of Illinois’ land and water

resources.” (415 ILCS 5/57) The Agency’s decision is bad for the environment

because it will infuse more delays as the owner/operator is required begin the

process anew. The Agency’s decision is bad for the LUST Fund, as it will give

rise to redundant costs, which may not even be offset by charging an additional

deductible it seeks to assess the owner. Better for the environment would be to

---

25

continue investigation of the extent of contamination as part of a second phase of

investigative corrective action. Br. at 12.

Agency’s Response Brief

The Agency asserts that the issue for the Board to decide on appeal is:

WHETHER Incident # 20061558 is a new incident under the Act and regulations

thereunder requiring a new deductible; 20- and 45-day report; and a site

investigation plan? Resp. Br. at 7.

The “20-day and 45-day reports” and “a Site Classification Plan and a Corrective Action

Plan and Budget,” according to the Agency, “clearly show that the release was centered around

tanks #1 and 2 and that tanks #3 through #7 were not included in the release.” Resp. Br. at 7.

The Agency continues:

Indeed, the reports submitted to the Illinois EPA show that not only were there

clean borings around the plume associated with tanks #1 and #2, but that three out

of the remaining five tanks could not be located.

Id

. at 7.

The Agency emphasizes that the 45-day report addendum acknowledged that the

locations of all the tanks had not been identified. Resp. Br. at 7. The locations of the three

“unknown” tanks, according to the Agency, were discovered during the Agency-approved

excavation activities for Incident No. 2001-1314.

Id

. at 8. The Agency asserts that USTs 3-7

“were not in the defined contamination plume,” but instead “were tanks the Petitioner just

wanted to remove.”

Id

. Further, the Agency continues, site investigation activities (borings

MW-1, SB-1 and PI-1) performed during April 2002 and May 2003:

did not show any contamination near the tanks that were outside of the defined

contamination plume. This indicates a release did not occur in this area prior to

the dates of this sampling.

Id

.

The Agency argues that a map submitted at the time “clearly shows the area of excavation and

the clean borings surrounding that area.” Resp. Br. at 8. The Agency’s November 23, 2005

determination stated that activities not associated with the proposed excavation as shown on the

map were not reimbursable. That final determination, the Agency stresses, was not appealed.

Id

.

The Agency argues that the Board has held that “a condition imposed in a permit, not

appealed to the Board under Section 40(a)(1), may not be appealed in a subsequent permit.”

Resp. Br. at 8, citing Panhandle Eastern Pipe Line Co. v. IEPA, PCB 98-102, slip op. at 30 (Jan

21, 1999). Further, the Agency continues, it is well-established that the Agency is “not

authorized under Illinois law to change its final decision.” Resp. Br. at 8-9, citing Reichhold

Chemicals, Inc. v. PCB, 204 Ill. App. 3d 674, 561 N.E.2d 1343 (3rd Dist. 1990). Therefore, the

Agency states, the Agency “is bound to its November 23, 2005 final decision.” Resp. Br. at 9,

citing Mick’s Garage v. IEPA, PCB 03-126 (Dec. 18, 2003). Prime purchased the property and

is now, according to the Agency, “stuck with decisions that the prior owner and consultant

---

26

made.” Resp. Br. at 10. The Agency maintains that Prime is “trying at this late date to change

those decisions by creating a controversy in order to get the November 23, 2005 decision before

the Board in the hopes of getting that decision overturned.”

Id

.

Prime also seems to contend, according to the Agency, that the OSFM should determine

the applicable deductible, but the Agency maintains that:

The law is well settled that the OSFM’s decisions do not determine the applicable

deductible. Section 22.18b(d)(3)(G) of the Act provides that the deductible

application must be submitted to the Illinois EPA and that the Illinois EPA makes

the deductible determination. Resp. Br. at 9.

The Agency further argues that Prime “casts aspersions in its brief by stating that the

Illinois EPA is trying to protect a fund over the clean-up obligations of the site.” Resp. Br. at 9.

That, according to the Agency, “is a ridiculous statement” because the Agency “is a creature of

statute and the LUST fund and its remediations are very highly regulated by State law and Board

regulations.”

Id

.

The Agency also asserts that the facts of this case and those of Swif-T-Food Mart are

distinguishable:

In Swif-T Food Mart, the second incident number was issued prior to any site

classification or other work performed on the site. This case has had site

investigation performed at the site and maps were submitted to the Illinois EPA

that clearly shows that there were clean borings around the area of contamination

and that the plume had been defined for Incident #20011314. Resp. Br. at 10.

Lastly, the Agency notes that a proposed budget cannot be approved unless the

corresponding plan is approved. Therefore, because Prime’s plan was rejected, the Agency

correctly rejected Prime’s budget. Resp. Br. at 11.

Prime’s Reply Brief

Prime argues that the Agency’s statement of the burden of proof “tellingly omits the all

important detail, which is what exactly the petitioner must prove.” Reply Br. at 2. That burden

is to show that the proposed plan, as submitted by the applicant, will not result in the violation of

the Act or regulations.

Id

., citing Browning-Ferris Industries of Illinois v. PCB, 179 Ill. App. 3d

598, 607 (2nd Dist. 1989) and John Sexton Contractors Co. v. PCB, 201 Ill. App. 3d 415, 425

(1st Dist. 1990). The Agency’s brief, according to Prime, is “twelve pages that fail to identify

the provisions of the Act or regulations that would be violated, plus twenty-one single-spaced

pages of the ‘Relevant Law.’” Reply Br. at 3. “One can only assume,” continues Prime, “that

the Agency either wants the Board to find a legal violation, or hopes that the Board misconstrues

the nature of the burden of proof in these proceedings.”

Id

.

Prime also takes issue with the Agency’s statement that there were “clean borings”

surrounding the excavation area. Reply Br. at 3-4. Prime asserts that the environmental

---

27

consultant was “never able to sample inside of the area of the tanks and repeatedly sought

permission to remove the site obstacles that would permit such borings.”

Id

. at 4.

Next, Prime states that even assuming “a new incident occurred in 2006 during the

ongoing cleanup of the 2001 incident,” that is immaterial:

The LUST program is premised on cleaning up an underground storage tank

“site.” (415 ILCS 5/57.8(a)(4)) The number of occurrences on a site doesn’t

matter, and it certainly doesn’t require a new deductible. Reply Br. at 4, citing

Mac Investments and Swif-T-Food Mart.

Still, Prime asks “[w]here did the alleged 2006 product come from when the tanks were

emptied and out of service long before 2006?” Reply Br. at 5. This “simple question” remains

“unanswered and unaddressed by the Agency,” according to Prime.

Id

. Prime states that the

tanks were out of service before the 2001 incident was reported and, as confirmed by the

Agency’s October 3, 2003 letter, the environmental consultant drained the tanks. Because

abandoned tanks containing petroleum are a threat to human health and the environment, Prime

continues, “[h]ad the LUST reviewer believed the tanks still contained product, he would [have]

almost certainly ordered them drained.”

Id

. n.1.

Prime argues that the Agency:

sought to delay the investigation into all seven tanks by refusing to authorize

removal of site obstructions that would permit soil borings next to the tanks, as

well as removal of the tanks themselves, which the licensed professional engineer

indicated made it “impossible” to rule out releases from all of the tanks.

It may or may not have been reasonable for the Agency to direct the

investigation toward the tanks closest to the property line and farthest from the

building, but its willful blindness to conclude that once the tanks were examined,

the releases from them had to have originated from recent events. Reply Br. at 5.

Those site activities that were allowed by the Agency, leading up to the tank removals, “were

insufficient to rule out releases from the seven tanks for which the OSFM issued an eligibility

determination for the 2001 release.”

Id

.

Another “oddity” of the Agency’s response brief, according to Prime, is that “the Agency

does not appear to know that it no longer has responsibility for deductibility determinations.”

Reply Br. 6. Section 22.18(d)(3)(G) of the Act was of course amended in 1993, Prime continues,

giving responsibility for eligibility and deductibility determinations to the OSFM, “as noted by

the very case the Agency cites,” Mick’s Garage, PCB 03-126, slip op. at 4 n.2 (finding that the

1991 incident was governed by pre-1993 law). Reply Br. at 6.

“The 1993 change” to the Act, according to Prime, has “broader implications as well.”

Reply Br. at 6. Under the 1993 changes:

---

28

the OSFM now has a much greater role in the present UST program than in the

previous ones. In particular, the OSFM must provide on-site assistance to the

owner/operator for leak confirmation, evaluation and eligibility information. The

OSFM is also the state entity responsible for making eligibility and deductibility

determinations (access to the fund issues).

Id

., quoting Kathe’s Auto Service

Center v. IEPA, PCB 96-102 (Aug. 1, 1996).

Here, Prime continues, the OSFM issued an eligibility and deductibility determination,

finding that all seven USTs were eligible for Fund reimbursement, subject to a $15,000

deductible. Reply Br. at 7. Further, an OSFM representative was on-site during tank removal

activities and confirmed that all seven tanks on-site had releases.

Id

. In turn, Prime maintains,

Incident No. 20061558 was issued on December 13, 2006, and was noted as being a re-reporting

of Incident No. 20011314. Prime asserts that the Agency is “overstepping its role by disputing

deductibility determinations and on-site activities entrusted by law to the OSFM.”

Id

.

Prime argues that “the tank owner/operator had no duty to appeal prior Agency letters.”

Reply Br. at 7. According to Prime, the Agency’s argument that this appeal is an “impermissible

effort to seek reconsideration of a prior Agency decision,” if accepted by the Board, “would

essentially gut the LUST program.”

Id

. Prime explains:

The complication with remediating underground storage tanks are that all of the

activities take place under the ground. Consequently, investigation and

remediation may uncover new data that give rise to more investigation and

remediation. The Agency’s letters in the record reflect this. For example, the

October 22, 2002, denial letter refused to allow removal of the USTs,

contaminated backfill, the building, canopy, and underground retaining walls, but

stated that “[a]fter further investigation has been performed and the full extent

defined, some or all of the above activities may be approved.” (R.18) To say that

new information obtained from on-site activities cannot be presented to the

Agency to seek approval of a new plan would be to force the premature closing of

any underground storage tank site with conditions worse than may have been

expected.

Id

.

Concerning the Agency’s November 23, 2005 determination, on which the Agency

“seems to place particular importance,” Prime states as follows:

As an initial matter, that decision letter, required modifications, and consequently,

a new plan and budget were submitted on February 23, 2006. (R. 25) That

document[] stated: “While we disagree with the Agency’s contention that only

USTs [1 and 2] have shown evidence of a possible release, in order to move the

site forward, the budget has been modified so that nothing beyond the proposed

excavation and removal of USTS [1 and 2] is included in this budget.

Furthermore, if other USTs are found to have released while on-site, they will be

appropriately addressed.” (R.25) On February 24, 2006, the Agency issued a

decision letter, stating that “the plan is approved.” (R.27) Subsequent on-site

---

29

activities confirmed releases from the remaining USTs, and thus further corrective

action is appropriate. Reply Br. at 8.

Prime concludes by asserting that the Agency’s “notion” that UST releases at a property

“are remediated via discrete cleanups of separate ‘incidents,’ subject to separate deductibles,

clearly violates the Act.” Reply Br. at 8, citing 415 ILCS 5/ 57.8(a)(4) (2008) (“Only one

deductible shall apply per underground storage tank site.”).

Standard of Review and Burden of Proof

The Board must decide whether Prime’s submittal to the Agency demonstrated

compliance with the Act and the Board’s regulations.

See

,

e.g.

, Illinois Ayers Oil Co. v. IEPA,

PCB 03-214, slip op. at 8 (April 1, 2004); Kathe’s Auto, PCB 96-102, slip op. at 13. The

Board’s review is generally limited to the record before the Agency at the time of its

determination.

See

,

e.g.

, Freedom Oil, PCB 03-54, slip op. at 11;

see also

Illinois Ayers, PCB

03-214, slip op. at 15 (“the Board does not review the Agency’s decision using a deferential

manifest-weight of the evidence standard,” but “[r]ather the Board reviews the entirety of the

record to determine that the [submittal] as presented to the Agency demonstrates compliance

with the Act”).

Further, on appeal before the Board, the Agency’s denial letter frames the issue (

see

,

e.g.

,

Karlock v. IEPA, PCB 05-127, slip op. at 7 (July 21, 2005)) and the UST owner or operator has

the burden of proof (

see

,

e.g.

, Ted Harrison Oil v. IEPA, PCB 99-127, slip op. at 5-6 (July 24,

2003);

see also

35 Ill. Adm. Code 105.112). The standard of proof in UST appeals is the

“preponderance of the evidence” standard. Freedom Oil

, PCB 03-54, slip op. at 59;

see also

McHenry County Landfill, Inc. v. County Bd. of McHenry County

, PCB 85-56, 85-61, 85-62,

85-63, 85-64, 85-65, 85-66 (consol.), slip op. at 3 (Sept. 20, 1985) (“A proposition is proved by a

preponderance of the evidence when it is more probably true than not.”).

“New Release”

The Act requires that the Agency’s denial letter provide “an explanation of the provisions

of the regulations . . . which may be violated if the plan were approved” and “a statement of

specific reasons why . . . the regulations might not be met if the plan were approved.” 415 ILCS

5/57.7(c)(4)(B), (D) (2008). The Agency rejected Prime’s plan because the Agency determined

that there was a “new release” from USTs 3 through 7, requiring Prime to now submit a 20-day

certification, a 45-day report, and a site investigation plan. The 20-day and 45-day reporting

provisions cited in the denial letter read as follows:

---

30

c)

Within 20 days after initial notification to IEMA of a release plus 14

days,

7

the owner or operator must submit a report to the Agency

summarizing the initial abatement steps taken under subsection (b) of this

Section

8

***

and any resulting information or data.

e)

Within 45 days after initial notification to IEMA of a release plus 14 days,

the owner or operator must submit to the Agency the information collected

in compliance with subsection (d) of this Section

9

in a manner that

demonstrates its applicability and technical adequacy. 35 Ill. Adm. Code

734.210(c), (e).

The Agency denial letter cited Section 734.310(a) for requiring a site investigation plan:

a)

Prior to conducting site investigation activities pursuant to Section

734.315, 734.320, or 734.325 of this Part, the owner or operator must

submit to the Agency for review a site investigation plan. The plan must

be designed to satisfy the minimum requirements set forth in the

applicable Section and to collect the information required to be reported in

the site investigation plan for the next stage of the site investigation, or in

the site investigation completion report, whichever is applicable. 35 Ill.

Adm. Code 734.310.

The Act defines a “release” as follows:

“Release” means any spilling, leaking, emitting, discharging, escaping, leaching

or disposing of petroleum from an underground storage tank into groundwater,

surface water or subsurface soils. 415 ILCS 5/57.2 (2008);

see also

35 Ill. Adm.

Coe 734.115 (quoting Act).

The site’s seven USTs were installed in 1954. The USTs were last used in 1987 (USTs

4-7) or 1995 (USTs 1-3), many years before Prime acquired the site. In August 2001, IEMA was

notified of a release from the seven USTs, at which point IEMA assigned Incident No. 2001-

7

OSFM regulations provide that “[u]nless corrective action is initiated, owners or operators shall

investigate and confirm all suspected releases of regulated substances requiring reporting within

14 days, using the following procedures: . . . .” 41 Ill. Adm. Code 170.580(b).

8

Initial abatement steps include “[r]emov[ing] as much of the petroleum from the UST system as

is necessary to prevent further release into the environment” and “[i]nvestigat[ing] to determine

the possible presence of free product.” 35 Ill. Adm. Code 734.210(b).

9

The collected information is to include “[d]ata on the nature and estimated quantity of release”

and “[d]ata from available sources or site investigations concerning the following factors:

surrounding populations, water quality, use and approximate locations of wells potentially

affected by the release, subsurface soil conditions, locations of subsurface sewers, climatological

conditions and land use.” 35 Ill. Adm. Code 734.210(d).

---

31

1314. After this initial notification of the release, Prime applied for and received from the

OSFM, in August 2001, a permit to remove the seven tanks. Prime submitted to IEPA a 20-day

certification in August 2001; a 45-day report in September 2001; and a 45-day report addendum

in December 2001. In rejecting a budget request for the costs of disposing liquids from the seven

USTs, the Agency in October 2003 noted that “not much, if any, liquid should remain in the

USTs” because shortly after the August 2001 release notification, the USTs were inspected to

ensure that as much of the tank contents as possible had been removed. AR21, Att. B at 2.

The OSFM official who was on-site during the tank removal activities in December 2006

verified that all seven USTs had leaked. IEMA was again notified and a second incident number

was assigned, Incident No. 2006-1558. After the tanks were removed, the “[t]ype of release” for

each of the seven USTs was specified as “[o]verfill.” AR36, App. E at 5. IEMA documentation

of the release reporting in December 2006 (Incident No. 2006-1558) noted that the release had

been discovered in August 2001 (Incident No. 2001-1314).

The USTs had been used to contain gasoline, kerosene, and used oil. Indicator

contaminants for gasoline, kerosene, and used oil include benzene, ethylbenzene, toluene, and

total xylenes (BTEX).

See

35 Ill. Adm. Code 734.405(b), (c), (g). Detectable levels of BTEX

parameters were present in post-excavation soil samples collected across the site in December

2006, from the area of the bays on the west side through the area of the pump island canopy on

the east side. These levels included exceedences of the most stringent TACO Tier I residential

soil remediation objective for benzene (0.03 mg/kg, soil component of the groundwater ingestion

exposure route, Class I groundwater).

10

These benzene exceedences were detected consistently

from along the eastern limit of the remedial excavation around USTs 1-2 through the area of

USTs 3-7. Additionally, the TACO Tier I benzene soil remediation objective for residential

properties, based on the soil component of the groundwater ingestion exposure route, Class II

groundwater, which is 0.17 mg/kg, was exceeded near the eastern-most extent of the bay area

excavation and throughout the pump island canopy area.

The Board finds that the Agency’s argument about soil borings being “clean” is

unpersuasive in the context of this appeal. While samples from some borings were non-detect

for BTEX parameters (

e.g.

, SB-1), others revealed detectable levels of BTEX parameters (

e.g.

,

PI-1). The definition of a “release” is not limited to exceedences of remediation objectives.

See

35 Ill. Adm. Code 734.115. Moreover, the soil boring investigation on the east side of the

property was restricted by site structures. That limited investigation did not rule out a release

from USTs 3 through 7 and the Agency never determined otherwise. The preponderance of the

evidence shows that a release from all seven USTs was reported in 2001 and that all seven USTs

have contributed to the release at the site. The record does not support the Agency’s position

that the release from USTs 3 through 7 occurred only after the 2001 reporting. The 2006 IEMA

Incident No. 2006-1558 was a re-reporting of the 2001 IEMA Incident No. 2001-1314.

Based on a thorough review of the record, the Board finds that Prime’s November 2008

plan established that the contamination from USTs 3 through 7 is not a “new release” triggering

new document submission requirements. The Agency therefore erred in determining that

10

The Board makes no finding as to the applicable remediation objectives for the site.

---

32

Incident No. 2006-1558 constituted a “new release” rather than a re-reporting of Incident No.

2001-1314. The 20-day and 45-day reporting for this release was submitted in 2001 and is not

required again now. Further, Prime’s submittal not only documented site activities from

December 2006, it proposed investigatory soil borings. The Agency, however, having

determined there was a “new release,” did not consider the substance of Prime’s plan or budget.

The Board finds that the Agency erred in failing to do so.

The Board’s ruling is consistent with precedent. For example, in Swif-T-Food Mart, the

service station at issue had eight USTs. During a boring test in 1995, a release was discovered,

IEMA was notified, and Incident No. 95-1716 was assigned. Swif-T-Food represented at the

time that three of the USTs had experienced a release.

See

Swif-T-Food Mart, PCB 03-185, slip

op. at 2 (May 20, 2004). In 1996, all eight tanks were removed, a release was reported to IEMA,

and Incident No. 96-0723 was assigned. At that time, Swif-T-Food represented that all eight

USTs had experienced a release.

Id

. The Agency’s project manager testified that the

contamination from the two incident numbers was commingled.

See

Swif-T-Food Mart, PCB

03-185, slip op. at 5, Tr. at 41-42, 70-71. The Board found that the 1996 incident was “a re-

reporting of the 1995 incident.” Swif-T-Food Mart, PCB 03-185, slip op. at 11.

Early Action Costs and Corrective Action Completion Report

The Agency’s denial letter here also mentioned that “most of the costs in the proposed

budget will have to be submitted as Early Action costs.” AR3 at 2. This statement presumably

refers to a future application by Prime for payment of those costs in this budget other than the

costs for the proposed borings, such as the costs of removing USTs 3 through 7 in December

2006.

11

As there has been no “new release,” the Board finds that such costs, incurred many

years after this release was initially reported, are not properly characterized as “early action”

costs.

See

Kathe’s Auto

, PCB 96-102, slip op. at 28-29 (

e.g.

, “the activities of tank removal and

fill material removal are not necessarily early action activities”); Regulation of Petroleum

Leaking Underground Storage Tanks; Amendments to 35 Ill. Adm. Code 732, R01-26, slip op. at

7 (Feb. 21, 2002).

It is true that Prime’s November 2008 plan and budget do address work performed in

December 2006 that went beyond the Agency-approved plan and budget. It is also true that “in

the ordinary course, submission of a budget or plan is generally required prior to corrective

action being taken.” FedEx Ground Package System, Inc. v. PCB and IEPA

, 382 Ill. App. 3d

1013, 1016, 889 N.E.2d 697, 700 (1st Dist. 2008). However, Section 57.7(e)(1) of the Act

allows UST owners and operators to undertake site investigation or corrective action without the

Agency’s pre-approval, and to submit the plan and budget after performing the work:

Notwithstanding the provisions of this Section, an owner or operator may proceed

to conduct site investigation or corrective action prior to the submittal or approval

11

Generally, no work plan or budget is required for “early action” activities.

See

35 Ill. Adm.

Code 734.200.

---

33

of an otherwise required plan.

12

If the owner or operator elects to so proceed, an

applicable plan shall be filed with the Agency at any time.

13

Such plan shall

detail the steps taken to determine the type of site investigation or corrective

action which was necessary at the site along with the site investigation or

corrective action taken or to be taken, in addition to costs associated with

activities to date and anticipated costs. 415 ILCS 5/57.7(e)(1) (2008);

see also

35

Ill. Adm. Code 734.310(e), 734.335(d) and accompanying Board notes (owners or

operators proceeding in this manner “are advised that they may not be entitled to

full payment from the Fund.”).

Accordingly, Prime’s November 2008 plan and budget, in addressing work already

performed but not pre-approved, is permitted by Section 57.7(e)(1) of the Act.

See

FedEx

Ground, 382 Ill. App. 3d at 1016-17, 889 N.E.2d at 700 (Part 734 regulation codifying Section

57.7(e)(1) applies either where there is no plan or budget or where the owners or operators “go

beyond the scope of an approved plan or budget”). The Agency must review Prime’s submittal

as provided in Section 57.7(e)(2): “Upon receipt of a plan submitted after activities have

commenced at a site, the Agency shall proceed to review in the same manner as required under

this Title.” 415 ILCS 5/57.7(e)(2) (2008).

In addition, the Agency’s denial letter directs that Prime submit a corrective action

completion report for Incident No. 2001-1314. The Board finds the Agency’s directive

inappropriate because it is premised on the erroneous conclusion that there were two separate

releases at the site.

Reversal and Remand

Prime has met its burden of proof. The Board reverses the Agency’s January 27, 2009

determination and remands the matter to the Agency to consider the merits of Prime’s plan and

budget. In so doing, the Agency will be not be improperly “reconsidering” its November 23,

2005 determination. The Reichhold

court made clear that when the Agency denies an

application, not only are “[r]equests to modify or reconsider [] not permissible” under the Act,

but “the applicant’s only options are to start over with a new application or file a petition for

review.” Reichhold, 204 Ill. App. 3d at 679-80, 561 N.E.2d at 1346. Here, on remand, the

Agency will be assessing additional information about subsurface site conditions submitted by

Prime in the November 2008 submittal, a “new application.” The Agency did as much when it

determined, “after further review of the small concentrations of lead contamination at the site,”

that lead is background and the pathways for lead had been addressed after all. AR21, Att. A.;

see also

AR17, Att. A. Contrary to the Agency’s argument, Prime is not “creating a controversy

in order to get the November 23, 2005 decision before the Board.” Resp. Br. at 10. Prime has

12

For purposes of Title XVI of the Act, “plan” includes “budget.” 415 ILCS 5/57.7(c)(5)

(2008).

13

The plan and budget must be submitted to the Agency prior to receiving payment for any

related costs or the issuance of a No Further Remediation Letter.

See

35 Ill. Adm. Code

734.310(e), 734.335(d).

---

34

the statutory right to appeal the Agency’s January 27, 2009 determination and that is the only

determination reviewed today by the Board.

Deductible

Finally, the Board notes that both parties argue repeatedly about whether one or two

deductibles should apply here. As stated, the issue on appeal is defined by the Agency’s denial

letter. The word “deductible” does not appear in the denial letter and, of course, this is not an

appeal of an OSFM deductible determination. Nor is this an instance where the Agency applied

a deductible to a request for reimbursement. Prime submitted a plan and budget, not a

reimbursement request. Accordingly, the Board finds that the parties’ arguments about

deductibles are misplaced and warrant no further discussion.

LEGAL FEES

Section 57.8(l) of the Act provides that corrective action excludes “legal defense costs,”

which include “legal costs for seeking payment . . . unless the owner operator prevails before the

Board in which case the Board may authorize payment of legal fees.” 415 ILCS 5/57.8(l)

(2008). The Board has required the reimbursement of legal fees from the UST Fund where the

petitioner has prevailed in appealing the Agency’s rejection of a plan and budget.

See

Illinois

Ayers Oil Co. v. IEPA, PCB 03-214 (Aug. 5, 2004). Prime seeks legal fees for prosecuting this

appeal, but reserved the issue for post-judgment filings. Br. at 13. The record therefore does not

presently include the amount of legal fees incurred by Prime.

The Board today reserves ruling on the issue of legal fees. Prime is directed to file a

statement of its legal fees that may be eligible for reimbursement and its arguments why the

Board should exercise its discretion to direct the Agency to reimburse those fees from the UST

Fund. Prime must file its statement by September 21, 2009, which is the first business day

following the 30th day after the date of this order. The Agency may file a response within 14

days after being served with Prime’s statement.

CONCLUSION

The Board denies Prime’s request to sanction the Agency for the late filing of the

administrative record. The Agency’s motion to dismiss this appeal because it was originally

filed by a non-attorney is denied. The Agency’s January 27, 2009 determination rejecting

Prime’s plan and budget is reversed and the matter is remanded to the Agency to consider the

merits of Prime’s plan and budget. Prime’s legal fees are to be addressed as discussed above.

This interim opinion constitutes the Board’s findings of fact and conclusions of law.

ORDER

1.

The Board denies Prime’s request to sanction the Agency.

2.

The Board denies the Agency’s motion to dismiss.

---

35

3.

The Board reverses the Agency’s January 27, 2009 determination and remands

the matter to the Agency to undertake actions consistent with this opinion.

4.

Prime is directed to file by September 21, 2009, a statement of its legal fees in

accordance with this opinion. The Agency may file a response within 14 days

after being served with Prime’s statement.

IT IS SO ORDERED.

I, John Therriault, Assistant Clerk of the Illinois Pollution Control Board, certify that the

Board adopted the above interim opinion order on August 20, 2009, by a vote of 5-0.

___________________________________

John Therriault, Assistant Clerk

Illinois Pollution Control Board