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BEFORE THE POLLUTION CONTROL BOARD

OF THE STATE OF ILLINOIS

PEOPLE OF THE STATE OF ILLINOIS

)

ex rel.

LISA MADIGAN, Attorney General

)

of the State of Illinois

VIA ELECTRONIC FILING

)

UNION PACIFIC RAILROAD COMPANY,

)

a Delaware corporation,

Illinois Pollution Control Board

James R. Thompson Center

100 West Randolph Street, Suite 11-500

Chicago, IL 60601

Zemeheret Bereket-Ab

Assistant Attorney General

Environmental Bureau North

69 West Washington Street, Suite 1800

Chicago, IL 60602

Bradley P. Halloran

Hearing Officer

James R. Thompson Center

100 West Randolph Street, Suite 11-500

Chicago, IL 60601

W. Lee Hammond

Union Pacific Railroad Company

1400 Douglas Street, Stop 1080

Omaha, NE 68179

Please take notice that today, November 6, 2009, I have filed with the Office of the Clerk

of the Illinois Pollution Control Board by electronic filing Union Pacific Railroad Company’s

Reply in Support of Motion for Reconsideration, along with Notice of Filing and Certificate of

Service, a copy of which is attached hereto and served upon you.

Respectfully submitted,

ONNENSCHEIN NATH & ROSENTHAL LLP

By: /s/ Thomas A. Andreoli

Attorneys for Respondent

Union Pacific Railroad Company

Thomas A. Andreoli

SONNENSCHEIN NATH & ROSENTHAL LLP

233 South Wacker Drive

Chicago, Illinois 60606

312.876.8000

tandreoli@sonnenschein.com

Electronic Filing - Received, Clerk's Office, November 6, 2009

CERTIFICATE OF SERVICE

I, Thomas A. Andreoli, an attorney, hereby certify that I caused a copy of Union Pacific

Railroad Company’s Reply in Support of Motion for Reconsideration, along with Notice of

Filing and Certificate of Service, to be served upon the service list on November 6, 2009, by

regular mail.

/s/ Thomas A. Andreoli

Thomas A. Andreoli

Electronic Filing - Received, Clerk's Office, November 6, 2009

BEFORE THE POLLUTION CONTROL BOARD

OF THE STATE OF ILLINOIS

PEOPLE OF THE STATE OF ILLINOIS

)

ex rel.

LISA MADIGAN, Attorney General

)

of the State of Illinois

VIA ELECTRONIC FILING

)

UNION PACIFIC RAILROAD COMPANY,

)

a Delaware corporation,

)

Respondent.

)

REPLY IN SUPPORT OF MOTION FOR RECONSIDERATION

Union Pacific Railroad Company (“Union Pacific”) has moved the Illinois Pollution

Control Board (the “Board”) to reconsider its August 20, 2009 Order (“Order”) denying Union

Pacific’s Motion to Sever the State’s claims and to require the State to re-file separate actions for

each of the two unrelated alleged releases addressed in the Complaint. Union Pacific asked the

Board to reconsider the Order on three grounds:

First

, the Board based its ruling upon the

materially incorrect finding that the two alleged releases involved “the same NPDES permit and

the same facility.” Order at 7. Union Pacific submitted new evidence with its Motion for

Reconsideration demonstrating that this finding was incorrect.

Second

, the Order relied upon

and misapprehended hearsay evidence offered by the State in opposition to the Motion to Sever.

Third

, the Order’s conclusion that no material prejudice would result from the State’s improper

consolidation of claims was in error.

On October 23, 2009, the State filed its Response to the Motion for Reconsideration.

Union Pacific has sought leave to file this Reply in order to prevent material prejudice caused by

the State’s Response. 35 Ill. Admin. Code § 101.500(e). Specifically, this Reply is necessary

Electronic Filing - Received, Clerk's Office, November 6, 2009

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because the Response (1) contains inaccurate statements relating to the new evidence now before

the Board, (2) misstates the Complaint’s allegations and the facts as they are known related to

the alleged November 2005 release at the Proviso Yard and the alleged February 2006 release at

the Global II intermodal facility, and (3) again fails to provide a proper foundation for the

hearsay document offered in opposition to the Motion to Sever. The State’s Response also

contains highly prejudicial language and argument that is simply inappropriate in connection

with the Motion for Reconsideration or in any other context before the Board.

Reply

Inaccurate Statements Relating To The New Evidence Before The Board

The State asserts in its Response that “[r]espondent has not presented any new evidence

that could serve as a basis for reconsideration.” Resp. to Mot. for Reconsideration at 3. This

assertion misstates the new evidence now before the Board.

In ruling upon a motion for reconsideration, the Board will consider new evidence to

determine whether a prior decision was in error.

See

35 Ill. Admin. Code § 101.902. In denying

Union Pacific’s Motion to Sever, the Board found that the two releases alleged in the Complaint

involved “the

same

NPDES permit at the

same

facility.” Order at 7 (emphasis provided). This

finding, which provided a central basis for the Board’s conclusion, was in error. The competent

evidence before the Board—including the new evidence submitted with Union Pacific’s Motion

for Reconsideration—indisputably shows that the alleged November 2005 release and the

alleged February 2006 release took place on different properties which were governed by

separate NPDES permits until at least February 14, 2006 and, based upon the evidence, as late as

March 1, 2006.

Specifically, Union Pacific attached to its Motion for Reconsideration authenticated

copies of the following:

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•

NPDES Permit No. IL0002127 (issued Aug. 14, 1996; effective Sept. 1, 1996)

(Mot. for Reconsideration, Ex. A);

•

General NPDES Stormwater Permit No. ILR003013 (issued May 30, 2003;

effective June 1, 2003) (Mot. for Reconsideration, Ex. B);

•

NPDES Permit No. IL0002127 (issued Jan. 24, 2006; effective Mar. 1, 2006)

(Mot. for Reconsideration, Ex. C);

•

the IEPA’s termination notice for General NPDES Stormwater Permit

No. ILR003013 (dated Feb. 14, 2006) (Mot. for Reconsideration, Ex. D); and

•

the IEPA’s notice declining to terminate NPDES Permit No. IL0002127 (dated

Mar. 10, 2006) (Mot. for Reconsideration, Ex. E).

This evidence, which the State does not (and could not) dispute, shows that prior to

February 14, 2006, Union Pacific had a General NPDES Stormwater Permit (No. ILR003013)

for the Global II intermodal facility, which was and is a separate property from the Proviso Yard.

During this same time period, Union Pacific had a different NPDES Permit (No. IL0002127) for

the Proviso Yard, which was and is a separate property from Global II.

In January 2006, Union Pacific requested that the Illinois Environmental Protection

Agency (the “IEPA”) cancel the existing permits for the two properties and issue a new general

NPDES permit covering both of them. Mot. for Reconsideration at 2-3. Union Pacific made this

request in conjunction with a program of ongoing improvements (under the IEPA’s voluntary

Site Remediation Program) to address stormwater originating at the Proviso Yard, certain parts

of Global II, and other offsite sources west of the two properties.

The IEPA denied Union Pacific’s request. Instead, on January 24, 2006, the IEPA

reissued NPDES Permit No. IL0002127, effective March 1, 2006. Mot. for Reconsideration,

Union Pacific verified that these exhibits are true and correct copies of documents received by Union

Pacific from the IEPA on or about the referenced dates. Mot. for Reconsideration at 3. These documents

are competent evidence for purposes of Union Pacific’s Motion to Sever and Motion for Reconsideration

under Section 10-40(a) of the Administrative Procedure Act, 5 ILCS 100/10-40, as public records, and as

admissions by the State.

- 4 -

Ex. C. On February 14, 2006, the IEPA canceled General NPDES Stormwater Permit No.

ILR003013 applicable to Global II.

., Ex. D. Then, on March 10, 2006, the IEPA notified

Union Pacific that it had declined to terminate NPDES Permit No. IL0002127.

., Ex. E. In

lieu of the railroad’s request, the IEPA stated that NPDES Permit No. IL0002127 would remain

in effect for the Proviso Yard, while Global II’s general stormwater permit would be terminated.

., Ex. E. In that March 10, 2006 notice, the IEPA specifically identified Global II and the

Proviso Yard as separate “

facilities

.”

. (emphasis provided).

The competent evidence, including the new evidence submitted with the Motion for

Reconsideration, shows that the alleged November 2005 release and the alleged February 2006

release did not involve “the same NPDES permit” or “the same facility.”

. Order at 7. Global

II and the Proviso Yard are different properties; they were permitted under separate NPDES

permits until at least February 14, 2006 and as late as March 1, 2006, when reissued NPDES

Permit No. IL0002127 took effect. As demonstrated in Union Pacific’s Motion for

Reconsideration, the Order’s finding on this point was in error. The State’s assertion that Union

Pacific has not presented new evidence is wrong and, in effect, would deny the Board the

opportunity to rule on the Motion for Severance based upon a correct set of facts.

Misstatement Of The Complaint’s Allegations And Facts As They Are Known

The State’s Response contains the following misstatement of the facts before the Board

related to the alleged November 2005 release at the Proviso Yard and the alleged February 2006

release at Global II:

In one of the incidents, the runoff ended up in 301 W. Lake Street,

Northlake, Illinois, property that Respondent owns, operates and

controls 24/7 for its business. In the other incident, the runoff

ended up in 5050 W. Lake Street, Northlake, Illinois, a property

that Respondent owns, operates and controls 24/7 for the same

business. Thus, Respondent is arguing that two incidents, which

resulted from the failure of the same oil/water separator owned,

Electronic Filing - Received, Clerk's Office, November 6, 2009

- 5 -

operated and controlled by Respondent, which led to runoff that

discharged to two places owned, operated, and controlled by

Respondent, which occurred less than three months apart, are so

different so as to require the Board to sever the claims.

Resp. to Mot. for Reconsideration at 3.

This misstatement is inaccurate and misleading in several respects. At a basic level, the

State has flip-flopped the chronology and misidentified the location of the two alleged releases

addressed in the Complaint. The first alleged release occurred in November 2005, purportedly at

the Proviso Yard, which is located at 5050 W. Lake St., in Melrose Park, Ill.,

not

Northlake.

Compl. at ¶¶ 6-8;

see

Mem. of Law in Support of Mot. to Sever at ¶¶ 1-6. The second and

unrelated alleged release occurred in February 2006 at the Global II intermodal facility located at

301 W. Lake St. in Northlake, Ill. While the locations are misidentified, the State’s concession

in its Response that the alleged releases involved two separate properties should be considered

for purposes of the Motion to Sever and the instant Motion for Reconsideration.

At a more substantive level, the State has contradicted the Complaints’ allegations and

the facts as they are known. The State has never actually alleged that the “two incidents …

resulted

from the failure of the same oil/water separator” or that the failure of the oil/water

separator “led to runoff that

discharged to two places

.”

Compare

Resp. to Mot. for

Reconsideration at 3 and Complaint at ¶¶ 6-13. The weir structure was not the

cause

of the

alleged pollution. That puts it backward at best. The weir structure drains a broad area including

the Proviso Yard, parts of Global II, the Tri-State Tollway, and surrounding municipalities. The

weir structure did not cause the alleged releases; it is simply where some residue (a “sheen”) of

fuel oil purportedly caused or allowed to be released into the environment at two separate times,

on two separate properties, and based upon entirely unrelated facts and circumstances ultimately

Electronic Filing - Received, Clerk's Office, November 6, 2009

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discharged.

The mere existence of a common downstream outfall—shared by many other

business, government facilities and communities—does not provide a basis for consolidating

claims which have no other connection whatsoever.

Failure To Provide A Proper Foundation For Hearsay Evidence

In its Motion for Reconsideration, Union Pacific showed that the State’s unverified and

misleading assertions that Global II and the Proviso Yard are “the same facility” resulted in

error. Mot. for Reconsideration at 4-5. In particular, Union Pacific objected to the State’s use

of, and the Board’s mistaken reliance upon, a June 6, 2006 letter from Union Pacific to the IEPA

for the proposition that Global II and the Proviso Yard are “located on the same parcel of land,

just in different locations on the parcel.” Resp. in Opp’n to Mot. to Sever at 2 (citing Ex. A). As

the Order recognized, the State provided no other “evidence” in opposition to the verified facts

presented in support of Union Pacific’s Motion to Sever.

See

Order at 6. Those facts established

unambiguously that Global II and the Proviso Yard are not the same facility.

The State now seeks to provide a foundation for use of the June 6, 2006 letter as a

business record. The June 6, 2006 letter, however, simply is not a business record of the IEPA.

See

Mot. for Reconsideration at 4-5. The affidavit attached to the State’s Response to the

Motion for Reconsideration (as Ex. A) does not provide a proper business record foundation.

The document is not even complete on its face and should not be used for the purpose offered by

Moreover, the alleged February 2006 release at Global II did not involve stormwater “runoff” at all.

See

Compl. at ¶¶ 9-13; Mot. to Sever at ¶ 7, n. 1. It involved an actual accidental fuel oil spill by a non-

railroad contractor at the intermodal facility, which required and received an emergency response.

. As

discussed in the Motion to Sever, the Complaint does not contain any allegations of any actual fuel oil

release at the Proviso Yard in November 2005. There was none. Mot. to Sever at ¶ 5. Rather, the

Complaint merely alleges that the IEPA was “notified … that there had been a recent fuel oil release” at

the Proviso Yard. Compl. at ¶ 6. The Complaint does not identify any cause or source for the alleged

pollution.

- 7 -

the State in its current form or otherwise.

Union Pacific also objects to the State’s attempt in its

Response to the Motion for Reconsideration to use the June 6, 2006 letter (which post-dated the

alleged February 2006 release and the cancellation of General NPDES Stormwater Permit No.

ILR003013) as impermissible evidence of subsequent remedial measures.

See

Resp. to Mot. for

Reconsideration at 8.

The State further asserts that “[e]ven if the letter should not have been relied on, the

Board could appropriately rule that the violations occurred at a single site.” Resp. to Mot. for

Reconsideration at 4. This self-serving assertion is not well-founded. Union Pacific provided

competent evidence that the Proviso Yard and the Global II intermodal facility are not the same

facility.

Absent some competent contrary evidence, which the State has not provided and

cannot provide, Union Pacific is entitled to rely upon the evidentiary protections of the Board’s

adjudicatory processes. 83 Ill. Admin. Code § 504.

Inappropriate And Prejudicial Language And Argument

The remainder of the State’s Response is merely argument and merits no reply, but for

one statement. In its Response, the State asserts that Union Pacific’s request to sever the State’s

claims is “

a malicious assault on the intellectual integrity of the Board

.” Resp. to Mot. for

Reconsideration at 6 (emphasis provided). This form of

ad hominem

attack is highly prejudicial

Even if the June 6, 2009 letter were deemed admissible on other grounds, the letter does not state nor

does it stand for the proposition, as mischaracterized by the State, that the Proviso Yard and the Global II

intermodal facility are “located on the same parcel of land, just in different locations on the parcel.”

See

Resp. in Opp’n to Mot. to Sever at 2.

The evidence shows,

inter alia

, that Global II and the Proviso Yard at all relevant times were “two

separate properties” (Mem. of Law in Support of Mot. to Sever at ¶¶ 1-3); with separate IEPA generator

ID numbers (Mot. for Reconsideration at 4); were separately fenced and located in and accessed through

different street addresses in different municipalities (Reply in Support of Mot. To Sever at 4); served

different purposes (

.); were staffed with different personnel (

.); reported separately to the IEPA on

stormwater management matters (

Id.

); and were separately permitted for stormwater discharges at all

times prior to February 14, 2006 and as late as March 1, 2006 (

see

discussion

supra

Electronic Filing - Received, Clerk's Office, November 6, 2009

- 8 -

and simply inappropriate in response to Union Pacific’s Motion for Reconsideration or in any

context before the Board. The State’s assertion is also, again, simply incorrect.

Union Pacific has sought severance in good faith, because the State for its own purposes

has improperly consolidated claims in this action (1) which the State pursued at all times under

separate violation notices and classifications prior to the Complaint; (2) which arose from two

unrelated alleged releases, on two separate properties, at two different times; and (3) which

indisputably have no common cause. The alleged November 2005 release at the Proviso Yard

and the alleged February 2006 release at Global II are not analogous, in the State’s words, to

“months of fecal coli form effluent violations caused by inadequate chlorination” by a publicly

owned treatment works. This flawed analogy is contrary to the Complaint’s allegations, the facts

as they are known, and common sense.

See

State Resp. in Opp’n to Mot. to Sever at 3.

Moreover, consolidation unavoidably will prejudice Union Pacific’s ability to defend

these unrelated claims. It will allow the State to obtain an impermissible negative inference

against Union Pacific as to either the alleged November 2005 release or the alleged February

2006 release, despite the Board’s best efforts to address these unrelated claims separately. (The

State has assured as much by combining the two unrelated alleged releases addressed by the

Complaint within the same counts of the pleading.) Consolidation also will prejudice a fair

hearing because the State by its admission is seeking liability and damages based upon a “pattern

of violations” which was not alleged and does not exist. Resp. in Opp’n to Mot. to Sever at 3.

As the Order recognized, the alleged releases also would involve different witnesses and

potential evidence. Order at 6. Severance is both appropriate and essential to the convenient,

expeditious and completer determination of the issues.

Electronic Filing - Received, Clerk's Office, November 6, 2009

- 9 -

In sum, the State should be required to put on its proof, and Union Pacific should have

the opportunity to defend the alleged November 2005 release at the Proviso Yard and the

unrelated alleged February 2006 release at Global II each on its own merits. There is nothing

malicious in this request. It is only a plea for fairness.

Conclusion

WHEREFORE, for these reasons, Union Pacific Railroad Company respectfully requests

that the Illinois Pollution Control Board grant its Motion for Reconsideration.

Dated: November 6, 2009

Respectfully submitted,

SONNENSCHEIN NATH & ROSENTHAL LLP

By: /s/ Thomas A. Andreoli

Attorneys for Respondent

Union Pacific Railroad Company

Thomas A. Andreoli

Sonnenschein Nath & Rosenthal LLP

233 South Wacker Drive

Chicago, Illinois 60606

312.876.8000

tandreoli@sonnenschein.com