BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
PEOPLE OF THE STATE OF ILLINOIS"
)
)
Complainant,
)
)
v.
)
PCB No. 03-191
)
COMMUNITY LANDFILL COMPANY, INC., )
an Illinois Corporation, and CITY
OF MORRIS, )
an Illinois Municipal
Corporation"
)
)
Respondents.
)
NOTICE OF FILING
TO:
All counsel of Record (see attached Service List)
Please take notice that on October
13,2009, the undersigned electronically filed the
CITY OF MORRIS' MOTION TO STAY PENDING APPEAL
with the Illinois Pollution Control Board, 100 West Randolph Street, Chicago, Illinois 60601.
Dated:
2009
Charles F. Helsten
Hinshaw
&
Culbertson LLP
100 Park Avenue
P.O. Box 1389
Rockford, IL 61105-1389
815-490-4900
Respectfully submitted,
On behalf ofthe CITY OF MORRIS
/s/ Charles F. Helsten
One of Its Attorneys
70612353vl 806289 52944
BEFORE THE POLLUTION CONTROL BOARD
PEOPLE OF THE STATE OF ILLINOIS,
ex
reZ.
LISA MADIGAN, Attorney General of
the
State of Illinois,
Plaintiff,
v.
COMMUNITY LANDFILL CO., an Illinois
Corporation,
and the CITY OF MORRIS, an
Illinois Municipal Corporation"
Defendants.
)
)
)
)
)
)
)
)
~
)
~
PCB 03-191
(Enforcement - Land)
CITY OF MORRIS' MOTION TO STAY PENDING APPEAL
NOW COMES the City of Morris, by and through its attorneys, and
pursuant to Illinois Supreme Court Rule 335 and Section 101.906(c) of the
General Rules of the Illinois
Pollution Control Board ("PCB" or "the Board")
moves the Board for a stay pending appeal for the following reasons.
1.
Section 101.906(c) of the PCB General Rules provides that stays
pending appeal are governed
by Illinois Supreme Court Rule 335. Rule 335(g)
states that a stay pending appeal shall ordinarily be sought in the first instance
from the administrative agency.
2.
The Illinois Supreme Court has addressed factors that should be
considered in ruling
on a motion for stay pending appeal.
Stacke v. Bates, 138
Ill.2d 295, 304-05, 562 N.E.2d 192, 196 (1990). One consideration is "whether a
stay is necessary to secure the fruits of the appeal in the event that the movant is
successful."
Stacke,
138 Ill.2d at 305, 562 N.E.2d at 196. Other equitable factors
should be balanced,
and include whether the
status quo
should be preserved, the
70617086vl 806289 52944
respective rights of the litigants, and whether hardship on other parties would be
imposed. 5
tacke,
138 Ill.2d at 305-06, 309, 562 N.E.2d at 196, 198. Another
consideration is whether there is a
"substantial case on the merits" (not
likelihood of success
on the merits), but this ffshould not be the sole factor."
Stacke,
138 Ill.2d at 309, 562 N.E.2d at 198. Here, all factors favor a stay.
3.
Here, a stay is flnecessary to secure the fruits of the appeal in the
event that the movant is successful"
and to preserve the status quo.
4.
The PCB has ordered this small municipality to pay $399,308.98 as a
penalty, plus post financial assurance in the amount of $17,427,366, as a joint
and
several obligation of the co-defendant, Community Landfill Company, Inc.
(CLC).
If
the City is forced to immediately assume full responsibility for more
than
$17 million dollars in financial assurance, its ability to obtain short-term
financing would be eviscerated, as its bonding/borrowing authority would be
utterly depleted. This would cripple the City's capacity to respond to exigent
circumstances or municipal emergencies.
5.
Requiring the City to post financial assurance would deprive the
City of the fruits of its appeal. This is
an flaIl or nothing" proposition.
If
the City
is required to perform during the pendency of the appeal
and post financial
assurance, the City will have to
pay a significant bond premium, as it cannot post
a government guaranty for the full amount.
If
the City is ultimately found to not
be liable, from
whom is the City going to be able to recoup the expenses? Yet,
there can be no question that the City is going nowhere,
and it has ultimately the
2
70617086vl 806289 52944
Electronic Filing - Received, Clerk's Office, October 13, 2009
ability to generate funds by levying taxes - although this would take time. The
City lacks the current funds to comply with the order (Mo/Reconsider exs. A,
D).
While there are over 20 types of municipal funds, the City is limited as to the use
of those funds (Mo/Reconsider
ex. A).
There are already contractual
commitments for some funds,
and for other funds (such as retirement and
pension funds) the monies cannot be used for another purpose
(id.J.
Monies
from most funds cannot be transferred from fund to fund
(id.).
The City's ability
to generate funds is limited
by state law. For example,
if
the City were to
increase real property taxes, the revenues would not be realized for about a year
(Mo
1
Reconsider ex.A, D).
If,
at the conclusion of the appeal, the appellate court
finds that the City is required to satisfy financial obligations relating to
closure-
in addition to its performance of leachate treatment - the City will have the
ability to generate funds via the imposition of taxes, in addition to considering
other potential avenues for raising revenue.
6.
If
the City pays the penalty now, there is no easy process for the
return of the funds
if
the City prevails on appeal, and the State, currently in dire
need of liquid funds, could spend the monies. While a court could order the
State to return the funds, this could require a legislative appropriation or other
complicated process. A stay should be entered in order to maintain the status
quo.
If
the penalty is paid, then under the Act, those monies go to a special fund,
the Environmental
Protection Trust Fund. 415 ILCS
51
42(a); 30 ILCS
105/125.1.
The disbursement of this fund is controlled by a commission of four persons,
3
70617086vl 806289 52944
including the Attorney General, the Director of Natural Resources, the PCB
Chairman, and the Director of the Environmental Protection Agency. 30ILCS
105/125.1. These four persons have the right to approve grants and administer
the funds on behalf of the State.
Id.
If
this fund is inactive for 18 months or if
discontinued
by legislative action, the monies are transferred to the General
Revenue Fund.
30 ILCS 105/5.102. The Illinois Legislature also may order the
transfer of monies from the Environmental Protection Trust Fund into the
General Revenue Fund. For example, starting July
1, 2006, the Legislature
ordered that
$2,228,031 be transferred to the General Revenue Fund. 30 ILCS
105/8.44. Put a different way, there is no simple way to recover money from the
State.
7.
Two of the other factors, what hardship would be imposed on the
State and the weighing of the respective rights of the litigants, also weigh in
favor of a stay. The City's population at the last census
(2000) was less than
12,000, and of those individuals, only 8,620 citizens were 20 years or older, or
potential taxpayers.
http://city.mornet.org/html/populationage.htm. The
order imposing this multi-million dollar financial assurance has the potential to
crush this tiny municipality. Although the Board noted concern about
millions
of State taxpayers, it overlooked the fact that its order seeks to hold a few
thousand municipal taxpayers responsible to pay the price for the landfill
company that operated the facility and now claims it is insolvent,
and for
4
70617086vl 806289 52944
Electronic Filing - Received, Clerk's Office, October 13, 2009
Frontier Insurance, a bonding company now in receivership. The impact on the
City's taxpayers would be devastating.
8.
Weighing the equities also favors a stay. There is no harm to the
State if a stay is entered. This municipality is not going to disappear and, as
noted above,
if
it does not prevail on appeal, then steps can be taken to post
financial assurance.
Indeed, the statute itself contemplates
that government
entities are
not similarly situated to private companies.
It
is unquestioned that
government entities may post a government guarantee under the regulatory
requirements (9/12/07 Tr. 36). 35 Ill.Adm.Code §81l.716. As of July 2009, the
City's independent auditor estimated
that the City would qualify to guarantee
between $8.5 to 8.75 million (Mo/Reconsider ex. D).l
9.
That the City is in a different position than a private individual or
company for purposes of stays
pending appeal is recognized by Illinois Supreme
Court Rule 305, which governs stays in the appellate court, and, in part,
provides:
(i) Appeals by Public Agencies.
If
an appeal is prosecuted by a
public, municipal, governmental or quasi-municipal corporation, ..
. the circuit court, or the reviewing court, or a judge thereof, may
stay the judgment pending appeal without requiring that any bond
or other form or security be given.
10.
The equities also favor the City because it has complied with parts
of the Board's
order even though the order was automatically stayed under PCB
1 The Audit will be complete and presented for approval on October 19, 2009.
5
70617086vl 806289 52944
§101.520(c). As the City said it would in its Motion to Reconsider, Shaw
Environmental has provided updated cost estimates to the
IEP A (which initially
rejected them because
CLC had yet to sign and verify them)
(see
attached ex. I,
EPA letter). The equities also favor the City because well before the Board
entered any order, the City initiated routine testing
and monitoring of site
conditions (Mo/Reconsider
ex. C).
11.
Additionally, a stay is also warranted by the fact that the purpose
of financial assurance is
"for closure and post-closure care of the site." 35
Ill.Adm.Code §811.700(c). Here, closure is not imminent. Indeed, this Board
expressly declined to order the closure of
Parcel B (9/18/09 Order p. 3). The
purpose of financial assurance is to provide a financial vehicle in the event that
there is a future need for finances when the landfill is closed,
and during post-
closure care. This requirement is not to provide finances for a present need.
Because the purpose of financial assurance
is to provide a vehicle for funding
based on a contingent future need, there is no
harm in staying the requirement to
post financial assurance, pending outcome of the appeal.
12.
The final factor is whether there is a substantial case on the merits.
Stacke,
138 Il1.2d at 309, 562 N.E.2d at 198. This is not the same as likelihood of
success on the merits, and is only one consideration, not the
"sole factor."
Id.
This Board is familiar with the City's position through its post-hearing briefs and
briefs submitted in support of its Motion to Reconsider, adopted and
incorporated herein
by reference. While this Board did not agree with the City's
6
70617086vl 806289 52944
position, it cannot be said that there is not a substantial case on the merits. For
example, this Board found that there was no evidence of the amount that the City
benefited
by not posting financial assurance, so it assessed as a penalty the
amount the City received as
"dumping royalties or tipping fees from the Landfill
operations in the years
2001-2005" (6/18/09 Order at 41). Yet, §42(b)(3) of the
Act provides that an appropriate penalty is to be determined based
on "any
economic benefits accrued by the respondent
because of delay in compliance
with requirements,
in which case the economic benefits shall be determined by
the lower cost alternative for achieving compliance." 415 ILCS 5/42(h)(3)2
(emphasis added). The statute thus contemplates that the
amount of the penalty
should be determined
by assessing the benefit that was gained by non-
compliance, not just any alleged benefit related to the landfill. The State simply
failed to meet its
burden to show the amount the City allegedly benefitted, and
there is a "substantial case on the merits" on the penalty issue for this issue
alone, as well as others.
13.
Another example demonstrating a substantial case on the merits is
the Board's order requiring the posting of financial assurance. As outlined in the
2 This Board recently properly applied the economic benefit test after finding
that Edward Pruim
and Robert Pruim were the true operators of the CLC
landfill.
People v. CLC and Pruim, et al.,
Cons. Nos. 97-193, 04-207, Aug. 20, 2009
Order, pp. 55-56. There, however, the State apparently submitted evidence
regarding the Pruims' savings
by not filing financial assurance.
ld.,
State's
Closing Argument and Post-Hearing brief p.49. Here, no such evidence was
presented.
7
70617086vl 806289 52944
Electronic Filing - Received, Clerk's Office, October 13, 2009
post-hearing briefs, and, more recently, the Memorandum in Support of the
Motion for Reconsideration (incorporated by reference herein), this Board's
finding that the City, which only owns the property, is the
"operator" is against
the manifest weight of the evidence, and some of its findings have no
support in
the record.
14.
In addition, the State has made inconsistent claims with regard to
who is the operator of the landfill. In this case, it claimed that the City is an
"operator" of the Landfill. However, in another case, it claimed that CLC and
the sole shareholders
and owners of CLC, Edward and Robert Pruim, were in
fact the operators of CLC, that the
Pruims had the sole authority whether to
continue or
"shut down operations," that "only the Pruims had the authority to
arrange for financial assurance," that
"Edward and Robert Pruim were the only
persons who could have arranged for the appropriate amount of financial
assurance
at the Landfill/' and that the Pruims decided "whether and when to
comply with the pertinent landfill regulations."
People v.
eLe
and Pruim, et aL,
Cons. Nos. 97-193, 04-207, Feb. 6, 2009 State's Closing Argument and Post-
Hearing Brief, pp. 9, 19, 20-26, 29-30, 32, 40. The State's position in
People v.
eLe
and Pruim
was that the City was merely the owner, not the operator.
Id.
pp. 9, 28,
40. The State's inconsistent assertions as to who controlled and operated the
Landfill raise substantial questions about the merits of this case.
15.
Moreover, the Board found, in its Final Order in
People v.
eLe
and
Pruim, et al.,
PCB 97-193 (August 20, 2009) that "[t]he evidence in the record
8
70617086vl 806289 52944
demonstrates that the Pruims were solely responsible for permits" for the
Landfill
(id.
at 42)(emphasis added). The Board's Order includes its observation
that the
State was adamant that I/[t]he Pruims personally caused the financial
assurance violations
and as sole owners the decision not to expend resources
ultimately benefitted the
Pruims"
(id.
at 44). The Board's Order further found
that
1/
only the Pruims could decide to stop accepting waste at the landfill"
(id.
at
48)(emphasis added) and that "[h]aving found that the Pruims were solely
responsible for permitting
and that the Pruims were liable for failure to secure
financial assurance, the Board finds that the
Pruims are also liable for the failure
to revise cost estimates
biennially"
(id.
at 49).
16.
Given the facts of the State's case against the City, given the Board's
prior findings that it was the
Pruims who operated the Landfill and the Pruims
who were "liable for the failure to secure financial assurance," and further, given
the fact that the City can provide a government guaranty in the approximate
amount of $8.5-8.75 million, this Board should enter a stay pending appeal.
If
this Board believes that an appeal bond is needed, in light of its ultimate holding
in the matters noted immediately above, it should require CLC
and the Pruims to
post the
bond and comply with the orders, not the municipality.
17.
For all the reasons discussed herein, a stay is necessary in this case.
The United
States Supreme Court recently explained why stays pending appeal
are necessary:
9
70617086vl 806289 52944
It
takes time to decide a case on appeal. Sometimes a little;
sometimes a lot.
"No court can make time stand still" while it
considers an appeal,
Scripps-Howard Radio, Inc.
v.
FCC,
316 U.S. 4, 9
(1942), and
if
a court takes the time it needs, the court's decision
may in some cases come too late for the party seeking review. That
is
why it "has always been held,,,.that as part of its traditional
equipment for the administration of justice, a federal court can stay
the enforcement of a judgment pending the outcome of
an appeal."
Id.,
at 9-10 (footnote omitted). A stay does not make time stand still,
but does hold a ruling in abeyance to allow an appellate court the
time necessary to review it.
Nken v. Holder,
129 S.Ct. 1749, 1754, 173 L.Ed.2d 550 (2009) (holding a court's
inherent authority to stay pending appeal and the traditional factors apply, not
the demanding standards of 8 U.S.c. §1252(f)(2)).
CONCLUSION
For the reasons discussed above, the City of Morris requests that the
Board stay its order pending appeal
and grant such other relief as the Board
deems proper.
Charles
F. Helsten
Nancy
G. Lischer
Hinshaw
&
Culbertson LLP
100 Park A venue
P.O. Box 1389
Rockford, 1L 61105-1389
(815) 490-4947
I
s
I
Charles F. Helsten
Attorney for the City of Morris
10
70617086vl 806289 52944
Electronic Filing - Received, Clerk's Office, October 13, 2009
Exhibit
1
Exhibit List
Description
EPA letter dated September 15,2009
11
70617086vl 806289 52944
ILLINOIS ENVIRONMENTAL PROTECTION AGENCY
1021 North Grand Avenue East,
P.O.
Box 19276, Springfield, Illinois 62794-9276. (217) 782.2829
James
R.
Thompson Center, 100 West Randolph, Suite 11.300, Chicago, IL 60601 • (312) 814-6026
PAT QUINN, GOVERNOR
DOUGLAS
P.
ScOTT, DIRECTOR
217/524-3300
September 15, 2009
OWNER
City of Morris
Attn: Mayor Richard Kopczick
320 Wauponsee Street
Morris, Illinois 60450
Re:
0630600001-- Grundy County
Community Landfill-
Parcel A
Log
No. 2009-424
Pemrit
Landfill 810-817 File
PennitDOI
Dear Mayor Kopczick and Mr. Pruim:
C ertifi.ed Mail
7002 3150 0000 1111 1018
7002 3150 0000 1111 1025
OPERATOR
Community Landfill Company
Attn: Mr. Robert 1. Pruim
1501 S. Ashley Road
Morris, lllinois 60450
Pursuant to 35 lAC 813.1 03(b), the Illinois Environmental Protection Agency has reviewed, for
purposes of completeness only, the application referenced above, dated August 17, 2009 and
received August
18,2009. 'This review has revealed that the application does not contain the
information described below and therefore
is incomplete. This detennination of incompleteness
is based on the omission
of the following item(s):
1.
The application was not signed by the operator. Pursuant to 35 lAC Section 812.104, all
pemrit applications shall be signed by a duly authorized agent
of the operator and
property owner.
Within 35 days after the date of mailing of this lllinois EPA final decision, the applic;mt may
petition for a hearing before the lllinois Pollution Control Board
to contest the decision of the
Illinois
EPA, however, the 3 5-day period for petitioning for a hearing may be extended for a
period
of time not to exceed 90 days by written notice provided to the Board from the applicant
and the Illinois
EPA within the 35-day initial appeal period.
If you submit additional information addressing the deficiencies identified within 35 days of the
date
of this letter, the lllinois EPA shall review it for completeness in conjunction with the
information contained in the application deemed incomplete.
If
additional information is
submitted, this new application will be considered
to have been filed on the day that the
additional information
was received by the Illinois EPA. Please be aware that any additional
information should:
Rockford. 4302
N.
Main St., Rockford, IL 61103 • (815) 987.7760
Elgin. 595 S. State, Elgin,ll &0123. (647) 608-3131
Bureau
of
Land -
Peoria. 7620
N.
University St., Peoria, Il 61614 • (309) 693.5462
Collinsville • .2009
Mall
Stree~
Collinsville, Il62234. (618) 346-5120
Des Plainn. 9511 W. Harrison St., Des Plaines, Il60016. (
Peoria. 5415 N. University SL. Peoria, IL 61614 • (309)
Champaign. 2125 S. First St., Champaign, IL 61820. (21
Marion. 2309 W. Main St., Suite 116, Marion, Il 62959 • (6
i
Printed on Recycled Paper
j
EXHIBIT
e
Page 2
1.
be in a format which allows incorporation of the new information into the appropriate
sections
of the current application;
2.
include a cross-reference indicating where in the new information each deficiency,
identified above, has been addressed;
3.
have the date of the revision on each page and on each drawing;
4.
include an original and at least three copies; and
5.
be submitted to the address below.
Illinois Environmental Protection Agency
Bureau
of Land -- #33
Permit Section
1021 North Grand Avenue East
Post Office Box 19276
Springfield, Illinois 62794-9276
If you do not submit additional information within 35 days, you will need to submit a new permit
application in its entirety.
If you have any questions regarding this letter, please contact Christine Roque
at
217/524-3299.
7#
Stephen F. Nightingale, P.E.
~anager,PenrritSection
Bureau of Land
L'jL
SFN:~h\091132S.dOC
cc:
Jesse P. Vax-sho, P.E. Shaw Environmental, Inc.
AFFIDAVIT OF SERVICE
The undersigned, pursuant to the provisions of Section 1-109 of the Illinois Code of Civil
Procedure, hereby under penalty
of peIjury under the laws of the United States of America,
certifies that on
October 13,2009, she caused to be served a copy of the foregoing upon:
Mr. Christopher Grant
Assistant Attorney General
Environmental Bureau
69 W. Washington
St., Suite 1800
Chicago, IL 60602
Mr. John T. Therriault, Assistant Clerk
Illinois Pollution Control Board
100 W. Randolph, Suite 11-500
Chicago, IL
60601
(via electronic filing)
Mr. Scott Belt
Scott M. Belt
&
Associates, P.C.
105 East Main Street
Suite 206
Morris, IL
60450
Via E-Mail and regular U.S. mail.
HINSHAW
&
CULBERTSON
100 Park
Avenue
P.O. Box 1389
Rockford, IL 61105-1389
(815)
490-4900
Mark LaRose
LaRose
&
Bosco, Ltd.
200 N. LaSalle, Suite 2810
Chicago, IL
60601
Bradley Halloran
Hearing
Officer
Illinois Pollution Control Board
100 W. Randolph, Suite 11-500
Chicago,IL 60601
Clarissa Y. Cutler
Attorney at Law
155 N. Michigan Ave.,
Suite 375
Chicago,IL 60601
70415200v) 806289
