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So. Ill. Asphalt Co. v. Pollution Control Bd.

OPINION FILED MARCH 24, 1975.

SOUTHERN ILLINOIS ASPHALT COMPANY, INC., APPELLEE,

v.

THE POLLUTION CONTROL BOARD ET AL. — (ENVIRONMENTAL PROTECTION AGENCY ET AL., APPELLANTS.) — AIRTEX PRODUCTS, INC., APPELLEE,

v.

THE POLLUTION CONTROL BOARD ET AL. — (ENVIRONMENTAL PROTECTION AGENCY ET AL., APPELLANTS.)



Appeals from the Appellate court for the Fifth District; heard in that court on petitions for review of orders of the Pollution Control Board.

MR. JUSTICE RYAN DELIVERED THE OPINION OF THE COURT:

In each of these consolidated cases the Appellate Court for the Fifth District, with one justice dissenting, held that the imposition of a discretionary monetary penalty by the Pollution Control Board under the authority of section 42 of the Environmental Protection Act (Ill. Rev. Stat. 1971, ch. 111 1/2, par. 1042) is invalid. (Southern Illinois Asphalt Co. v. Environmental Protection Agency (1973), 15 Ill. App.3d 66; Airtex Products, Inc. v. Pollution Control Board (1973), 15 Ill. App.3d 238.) We granted leave to appeal, and the cases were consolidated for decision and opinion in this court. We had previously granted leave to appeal in City of Waukegan v. Environmental Protection Agency (1973), 11 Ill. App.3d 189, which had likewise held invalid the imposition of a fine by the Pollution Control Board. Thus, this common constitutional issue was under consideration in this court. In City of Waukegan v. Pollution Control Board we held that the imposition of a monetary penalty by the Pollution Control Board is constitutionally permissible (57 Ill.2d 170). This holding is dispositive of the same issues in Southern Illinois Asphalt Co. and in Airtex Products, Inc.

Other issues have been raised in this court by the appellees, which they may properly do pursuant to Rule 318(a) (50 Ill.2d R. 318(a)). This fact prevents the disposition of these cases on the constitutional issue decided in City of Waukegan. However, one issue common to both cases is dispositive. Both appellees contend that the fines imposed by the Pollution Control Board were arbitrary and not authorized in light of mitigating circumstances. Because we find that the Board erred in imposing the fines, we need not decide or discuss the other issues raised by the appellees.

The Environmental Protection Act (Ill. Rev. Stat. 1971, ch. 111 1/2, par. 1001 et seq.) provides for both civil (section 42) and criminal (section 44) penalties. (Ill. Rev. Stat. 1971, ch. 111 1/2, pars. 1042, 1044.) The criminal penalty is obviously intended to be punitive. The fact that the Act contains two separate provisions imposing sanctions indicates the intention of the legislature to prescribe civil sanctions for a different purpose. (Cf. Helvering v. Mitchell (1938), 303 U.S. 391, 401-405, 82 L.Ed. 917, 923-925, 58 S.Ct. 630.) In City of Monmouth v. Pollution Control Board (1974), 57 Ill.2d 482, 490, we stated: "The legislative declaration of the purpose of the Act (par. 1002) indicates that the principal reason for authorizing the imposition of civil penalties (par. 1042) was to provide a method to aid the enforcement of the Act and that the punitive considerations were secondary." We there held that the Board erred in imposing a fine upon the City of Monmouth.

Traditionally, courts have carefully avoided encroaching upon the power which the legislature has vested in an administrative body. That does not mean, however, that all administrative determinations are sacred and beyond the reach of the courts. Where an administrative order is against the manifest weight of the evidence or where the agency has acted arbitrarily or capriciously and has thereby abused the discretion vested in it, the courts should not hesitate to intervene. Dorfman v. Gerber (1963), 29 Ill.2d 191; Bruce v. Department of Registration and Education (1963), 26 Ill.2d 612.

In upholding the authority of the Board to impose civil penalties we recognized in City of Waukegan that the Act contained sufficient built-in safeguards. We found that the guidelines set forth in section 33(c) of the Act afforded protection against arbitrariness on the part of the Board. Section 33(c) requires that in making its orders and determinations the Board shall take into consideration "all the facts and circumstances bearing upon the reasonableness of the emissions, discharges or deposits involved including, but not limited to: * * *." The Act then provides four specific areas which the Board must consider. The Board is not limited, however, to the consideration of these four specified areas, but, as noted above, it is required to consider all facts and circumstances bearing upon the reasonableness of the conduct. We have recently held that the provisions of section 33(c) establish the criteria for determining an unreasonable interference with the enjoyment of life or property as that phrase is used in section 3(b) of the Act. (Incinerator, Inc. v. Pollution Control Board (1974), 59 Ill.2d 290.) However, the standards of section 33(c) are also relevant standards which the Board must consider in mitigation or aggravation in determining the particular action to be taken or penalty to be imposed under section 33(b) of the Act.

Obviously the General Assembly did not intend that the Pollution Control Board should impose a monetary fine in every case of a violation of the Act or regulations. Section 33(a) provides that the Board, following a hearing, shall enter such order "as it shall deem appropriate under the circumstances." Section 33(b) provides that the order may include a direction to cease and desist "and/or the imposition by the Board of civil penalties in accord with Section 42." (Ill. Rev. Stat. 1973, ch. 111 1/2, par. 1033(b).) Section 42 authorizes the imposition of a civil penalty of not to exceed $10,000 for the violation and an additional civil penalty of not to exceed $1,000 for each day during which the violation continues. Implicit in the grant of the discretionary authority to impose monetary civil penalties in varying amounts is the requirement that the severity of the penalty should bear some relationship to the seriousness of the infraction or conduct. (See W. Gellhorn, Administrative Prescription and Imposition of Penalties, 1970 Wn. U.L.Q. 265, 271.) In determining if a civil penalty is warranted and, if so, the amount of the penalty, the Board must be governed by the considerations required by section 33(c).

Arguably, the imposition of a civil penalty for each violation may deter further violations by the one penalized or by others, thus aiding in the administration of the Act. However, the Pollution Control Board itself has recognized that the arbitrary imposition of penalties can in fact hinder the fulfillment of the purpose of the Act. In Employees of Holmes Bros. v. Merlan, Inc. (1971), 2 Ill. P.C.B. Op. 405, 409, the Board stated:

"In the opinion of the Board, Merlan has exercised good faith in trying to control its problems, and to penalize a company such as this would discourage all those who act in good faith to bring an end to their pollution problems."

As we held in City of Monmouth, it is plain that the General Assembly intended to vest the Board with broad discretionary powers in the imposition of civil penalties. It is equally plain that its orders and determinations are subject to judicial review, and in order to be sustained must find support in the record. In each of these consolidated cases we can only conclude that the record does not support the imposition of the civil penalty. The record contains substantial evidence in both cases which indicates that the imposition of the penalty would not aid the enforcement of the Act. In both cases the violations had ceased long before the Environmental Protection Agency instituted action before the Pollution Control Board based upon such violations. In both cases there are substantial mitigating circumstances which cast shadows of arbitrariness upon the penalties.

The case of Southern Illinois Asphalt Co. involves air pollution under Title II of the Act (Ill. Rev. Stat. 1971, ch. 111 1/2, pars. 1008 through 1010). The Environmental Protection Agency filed a complaint with the Pollution Control Board charging that the company had installed an asphalt plant in McLeansboro, Illinois, without having secured a permit from the Environmental Protection Agency in violation of section 9(b) of the Act (Ill. Rev. Stat. 1971, ch. 111 1/2, par. 1009(b)) and Rule 3-2.110 of the rules and regulations of the Pollution Control Board governing the control of air pollution. The Board found against Southern, ordered it to cease and desist the operation of its McLeansboro plant and fined it $5,000 for failure to secure a permit. It should be noted that Southern was not charged with polluting the air. In fact all of the evidence was to the effect that this plant was an extremely clean plant and that the emissions were well below the acceptable emission standards established by the Board. The plant began operation early in September, 1970, and ceased operation about December 1, 1970, and has not operated since. The complaint against Southern was not filed until February 26, 1971, after the plant had ceased operation.

The failure to obtain the permit was pure inadvertence. There was no need to assess a penalty in aid of the enforcement of the Act because Southern had ceased operating prior to the filing of the complaint. The fine could not be imposed as a penalty for any consequences of polluting the air since Southern had not been charged with air pollution. The fine was an arbitrary penalty and further unjustified in view of the mitigating circumstances shown by the evidence.

A short time before constructing the plant at McLeansboro and installing the pollution-control equipment Southern had also constructed an asphalt plant in Mt. Vernon, Illinois, and had installed the same pollution-control equipment in that plant. Southern procured the pollution-control equipment for both plants from the same supplier. In the case of the Mt. Vernon plant the supplier had filled out the application forms for the permit and had filed them with the Agency prior to the commencement of operation. However, the actual permit to install the equipment was not received by Southern until several weeks after operation had commenced. All the evidence indicates that Southern believed the same procedure was being followed at McLeansboro. Since the permit at Mt. Vernon had not been received until after operations had commenced, Southern logically assumed the permit at McLeansboro would be forthcoming. When Southern became aware that the permit to construct and install this equipment had not been applied for, it had the supplier fill out and file the application forms for the McLeansboro plant. This was done in December, 1970. The agency denied the application for the permit in February, 1971, and a few days later filed its complaint against Southern with the Pollution Control Board. However, as earlier noted, the plant had ceased operating in December. During the brief period that the plant had been in operation various environmental officers employed by the State of Illinois had visited the plant, commented on the clean operation and generally left the officers of Southern with the impression that there had been full compliance with the Act and the regulations.

The Pollution Control Board has recognized the inappropriateness of imposing a civil penalty in a situation such as this. In Environmental Protection Agency v. Beloit Foundry Co. ...


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