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E & E Hauling, Inc. v. Pollution Control Bd

OPINION FILED JUNE 15, 1983.

E & E HAULING, INC., ET AL., PETITIONERS AND CROSS-RESPONDENTS,

v.

THE POLLUTION CONTROL BOARD, RESPONDENT — (THE VILLAGE OF HANOVER PARK, RESPONDENT AND CROSS-PETITIONER).



Petition for review of order of Pollution Control Board.

PRESIDING JUSTICE SEIDENFELD DELIVERED THE OPINION OF THE COURT:

JUSTICE SEIDENFELD delivered the opinion of the court:

E&E Hauling, Inc., is the operator of a landfill on property owned by the Forest Preserve District of Du Page County commonly known as the "Mallard Lake" site. It, joined with the County Board of Du Page County (County Board) and the Du Page Forest Preserve District, seeks judicial review of a decision of the Illinois Pollution Control Board (PCB) which had reversed a decision of the County Board granting approval of a proposed modification and expansion of the landfill subject to certain conditions. The village of Hanover Park has cross-appealed from that part of the decision of the PCB which remanded the cause for further hearings rather than reversing outright.

The Du Page County Forest Preserve District (District) acquired the 927-acre site in 1956 for recreational purposes. In 1972 the County Board and the District passed a joint resolution empowering the District to operate and contract for the operation of a sanitary landfill on the site, with a goal of improving the site's recreational and scenic value. In 1974 the District contracted with E&E Hauling, Inc. (E&E), a private waste disposal company, to operate the landfill. The Illinois Environmental Protection Agency issued development and operation permits for 1974 and 1975.

The contract was originally for a 10-year period commencing June 1, 1974, with additional two-year extensions at the company's option. In no case was the period of the agreement plus any extensions to exceed 19 years (i.e., past 1993), and the agreement would terminate upon completion of the development of the site (if before 19 years).

Under the agreement the District would receive from E&E an amount equal to 10% of the amount charged by E&E for all waste material received or deposited on the premises during the first 10 years of the contract, with an additional 1% added to the preceding period's royalty for each two-year renewal period. The District would also receive 25% of the amount received by E&E from the sale of material recovered from the waste stream. The District also received the right to dump materials collected from its preserves at the Mallard Lake landfill at no cost. Evidence introduced on administrative review before the PCB showed that the District has, since the landfill started operating, received over $2 million in royalties and has been collecting royalties at a rate of about $30,000 per month.

The original design of the landfill envisioned a north hill about 200 feet high, with a 90-acre base, and a south hill about 200 feet high with a 65-acre base, along with below-grade excavation and fill. The fill began operating in 1975 and by September 1981 the south hill was filled near the lateral limits of its original design. According to James Andrews, an environmental engineer and consultant to E&E, the projected total life of the landfill at the time of the original permit application was 42 years, but the projection was shortened after operations began because the quantities of refuse going into the fill greatly exceeded original estimates.

In 1979 the District and E&E were opponents in several lawsuits involving operation of the landfill relating to the acceptance of sludge at the site. In April 1981 the suits were settled and dismissed by the parties' agreement. The agreement provided, inter alia, that E&E and the District would jointly petition the Illinois Environmental Protection Agency for approval of plans to modify the design of the landfill to an expanded one-hill concept. The District, by ordinance, approved the settlement and proposed modification. The PCB found that the agreement adequately protected the environmental interests of the State of Illinois.

On September 10, 1981, E&E and the District applied to the Illinois Environmental Protection Agency for permission to expand and modify the landfill according to the agreed-on "one-hill concept." On October 27, 1981, the County Board passed an ordinance approving the proposed modification and expansion. The Illinois Environmental Protection Agency scheduled a public hearing on the application for November 18, 1981.

In the meantime the General Assembly passed Senate Bill 172 (also known as Public Act 82-682), effective November 12, 1981, amending the Environmental Protection Act (Ill. Rev. Stat., 1982 Supp., ch. 111 1/2, par. 1039.2), to transfer the responsibility for hearing and approving site location suitability permits for regional pollution control facilities from the E.P.A. to the relevant locality, in this case, the County Board. The statute requires the County Board to conduct a public hearing on the site location application and conditions approval of the application on proof that the proposed site meets certain statutory criteria. The statute also enables interested parties to obtain review of the County Board decision before the PCB. Ill. Rev. Stat., 1982 Supp., ch. 111 1/2, par. 1039.2; Ill. Rev. Stat. 1981, ch. 111 1/2, par. 1040.1.

The County Board held the required public hearing on the application jointly with the Illinois Environmental Protection Agency on February 11, 1982. Jack Knuepfer, Chairman of the Du Page County Board, appointed himself hearing officer, apparently without objection. Most of the County Board members did not attend all of the hearing, but all later received transcripts of the hearing. Under procedural rules employed at the hearing, all persons in attendance were allowed to testify, present evidence, and cross-examine hostile witnesses.

During the hearing Chairman Knuepfer stated that no further testimony or evidence would be taken after the conclusion of the hearing unless he adjourned the hearing to a date specific for the purpose of taking further evidence. He did not do this, and later testified before the PCB that no further public hearings on the application were scheduled. On April 14, 1981, he published a working draft of proposed findings and stipulations recommending approval of the application subject to certain conditions. He submitted the draft findings and stipulations to the County Board finance committee.

The finance committee considered the application at a series of meetings between April 19 and April 27, 1982. According to evidence developed on review before the PCB, Edward Heil, president of E&E, and attorneys for E&E and the District attended these meetings and discussed aspects of the proposed application.

On April 27, 1982, the County Board voted 16-7 to approve the site location for the proposed modified Mallard Lake landfill.

On June 1, 1982, the village of Hanover Park (Village) filed a petition for review of the County Board decision with the PCB. See Ill. Rev. Stat. 1981, ch. 111 1/2, par. 1040.1.

The PCB appointed a hearing officer and ordered the County Board clerk to prepare and certify the record for review. Over objections by petitioners (respondents at the PCB level), the PCB on July 21, 1982, entered an order allowing the Village to conduct limited discovery on the issue whether the proceedings at the County Board level satisfied statutory requirements of fundamental fairness.

The PCB reversed the County Board's site approval decision and remanded for a further public hearing before a panel of elected county officials rather than the County Board. The PCB rested its decision on findings that

(1) The County Board approval resolution did not sufficiently demonstrate that the applicants had, in the County Board's judgment, met their burden to show that the proposed expansion satisfied the six statutory criteria of section 39.2 of the Environmental Protection Act (Ill. Rev. Stat., 1982 Supp., ch. 111 1/2, par. 1039.2).

(2) The proceedings below, though fairly conducted, were fundamentally unfair because the County Board, whose members were by law also commissioners of the co-applicant District (Ill. Rev. Stat. 1981, ch. 96 1/2, par. 6305), had already passed favorable judgment on the application before the hearing had begun.

The PCB also found that the record certified by the County Board was incomplete in certain respects. Insofar as the original record was incomplete we have concluded that this defect was cured by proceedings at the PCB level, and discuss the issue no further.

The petition and cross-petition to this court followed.

The issues raised by the petition and cross-petition are numerous, but can be grouped into three major areas of inquiry: (1) whether the proceedings at the County Board level was inherently unfair, (2) whether the County Board proceedings were unfairly conducted, (3) whether the County Board erred in finding that the proposed expansion met the requirements of section 39.2 of the Environmental Protection Act.

I

INHERENT UNFAIRNESS

• 1 The Village argues that the proceedings at the County Board level were inherently violative of statutory common law and constitutional guarantees of administrative fairness for two reasons: (1) The County Board suffered from a disqualifying conflict of interest, as by statute all members were also commissioners of the District, a co-applicant which stood to gain financially from approval of the proposed expansion; (2) County Board members suffered from a disqualifying bias and prejudice because they had, both as board members and as District commissioners passed favorably on the merits of the application several times before the public hearing had even begun.

Petitioners argue that the Village has waived all of its "fundamental fairness" arguments by not raising them at the County Board level. It appears that the record of the County Board hearing contains only a brief comment by a citizen to the effect that any County Board members that have taken bribes, campaign funds or other gratuities from a landfill contractor should disqualify themselves from voting on the application, and a comment by another citizen that the District stood to gain financially by approval of the application. While we agree that these comments are insufficient to raise the issues of conflicting duties and bias and prejudice raised before the PCB, we are impelled, owing to the seriousness of the Village's charges, to consider the merits of the issue. The waiver rule is not inflexible and may encompass challenges to the composition of administrative bodies made for the first time on administrative review wherein injustice might otherwise result. Kendler v. Rutledge (1979), 78 Ill. App.3d 312, 318; Olson v. Department of Registration & Education (1978), 63 Ill. App.3d 166, 168.

• 2 Also preliminarily, we disagree with petitioners' argument that the PCB improperly allowed the Village to discover and introduce evidence of the County Board's alleged conflict and bias.

The Environmental Protection Act by its terms requires that a hearing on a petition for review be "based exclusively on the record before the county board * * *" (Ill. Rev. Stat. 1981, ch. 111 1/2, par. 1040.1(a)), but the spirit and purposes of an enactment will prevail over the literal language if necessary to avoid an unjust or absurd result. (First National Bank v. Coleman (1979), 68 Ill. App.3d 256, 258.) To adopt petitioners' argument could visit unjust results on parties actually victimized by unfair or improper procedures not of record. To shield off-record considerations from judicial review would frustrate the purpose of review since the statute directs the PCB to consider the fundamental fairness of the procedures at the County Board level. We also note that much of the "evidence" obtained by the Village on review before the PCB consists of judicially noticeable matter such as statutes, ordinances, County Board and District resolutions, and Attorney General's opinions. See Tyrrell v. Municipal Employees Annuity & Benefit Fund (1975), 32 Ill. App.3d 91, 98; King v. Exchange National Bank (1978), 64 Ill. App.3d 335, 344.

A

THE ASSERTED BASES OF DISQUALIFICATION

(1) CONFLICT OF INTEREST

The Village argues that the conflict of interest arising from County Board members' dual role as adjudicators and commissioners of the co-applicant District violated (a) common law limitations on holding incompatible offices, (b) the Illinois Corrupt Practices Act (Ill. Rev. Stat. 1981, ch. 102, par. 3(a)), (c) constitutional guarantees of due process, and (d) the requirement of "fundamental fairness" section 40.1 in the Environmental Protection Act. We consider each of these possible bases of disqualification in turn.

• 3 a. Common law incompatibility. The Village argues that the Board's action in deciding on the application violated the common law doctrine that an individual may not hold more than one public office "where the duties of either office are such that the holder of the office cannot in every instance, properly and fully, faithfully perform all the duties of the other office." People ex rel. Myers v. Haas (1908), 145 Ill. App. 283, 286.

The incompatibility doctrine concerns limits on simultaneous office holding, not the validity of particular decisions made by individuals holding more than one office. In accordance with statute, members of the county board simultaneously became commissioners of the Forest Preserve District. (Ill. Rev. Stat. 1981, ch. 96 1/2, par. 6305.) Even if the common law rule of incompatibility prevented the decision-making process here, this rule would have been overridden by the legislative authorization of dual office holding. Ahto v. Weaver (1963), 39 N.J. 418, 423-24, 189 A.2d 27, 30; 1975 Ill. Att'y Gen. Op. S-877.

b. Corrupt Practices Act. The Illinois Corrupt Practices Act, which provides generally that a holder of public office interested directly or indirectly in any contract of work may not vote on the matter or receive anything of value as a means of influencing his vote (Ill. Rev. Stat. 1981, ch. 102, par. 3(a)), also does not apply. Although the District and the County Board both stood to gain financially from the modification of the landfill, the Corrupt Practices Act is inapplicable since there is no claim that any member of the County Board or District would gain personally from his act or vote. The Corrupt Practices Act is aimed at the "actual bad faith abuse of power for an officer's own personal benefit (and) * * * the creation of relationships which carry in them the potential of such abuse * * *." (Emphasis added.) Brown v. Kirk (1976), 64 Ill.2d 144, 151; see also Chicago ex rel. Cohen v. Keane (1976), 64 Ill.2d 559, 565.

• 4 c. Due process. The Village next argues that the conduct of the County Board members in passing on an application from the District of which they were automatically members violates due process guarantees against adjudication by one whose personal or institutional interests in the outcome afford a temptation to be less than fully impartial. It maintains that because the District will gain financially from approval of the application the hearing by the County Board members who are also District commissioners inherently violated due process guarantees of neutrality.

The Village, however, slights the threshold question of whether the protections afforded by the due process clauses of Federal and Illinois constitutions (U.S. Const., amend. XIV; Ill. Const. 1970, art. I, sec. 2) apply to these proceedings at all. We must conclude that they do not, as such, apply. As a municipal creature of the legislature, the Village itself has no due process rights. (Village of Riverwoods v. Department of Transportation (1979), 77 Ill.2d 130, 136.) As the Village brought its petition for review on behalf of its individual citizens, it is necessary also to consider whether the grant of the permit, either in itself or because of its alleged effects, deprived any of these individuals of a protected liberty or property interest. If it did not, due process would not apply. Meyer v. Niles Township (N.D. Ill. 1979), 477 F. Supp. 357, 362.

The possible harmful effects of the proposed expansion on citizens' property do not give individual citizens any due process right to a hearing at all on petitioners' application, and thus give them no constitutional right to a fair hearing. (Landfill, Inc. v. Pollution Control Board (1978), 74 Ill.2d 541, 559; Village of South Elgin v. Waste Management of Illinois, Inc. (1978), 62 Ill. App.3d 815, 821; White Fence Farm, Inc. v. Land & Lakes Co. (1981), 99 Ill. App.3d 234, 243-44; see also People v. Pollution Control Board (1983), 113 Ill. App.3d 282, 297-98.) Nor do the notice and hearing provisions of the new Environmental Protection Act bring any of these citizens within the protections of due process. It is true that the new section conditions the grant of a permit on specific criteria and affords persons certain rights to participate in a hearing. It provides for notice to "owners of all property within 250 feet in each direction of the lot line of the subject property," provides that any person may file a written comment with the County Board concerning the appropriateness of the proposed site, and provides for at least one public hearing, on due notice, which shall develop a record sufficient to form the basis of appeal of the decision of the County Board. (Ill. Rev. Stat., 1982 Supp., ch. 111 1/2, pars. 1039.2(b), (c), (d).) However, the protection of proeprty under due process is "a safeguard of the security of interests that a person has already acquired in specific benefits." (Board of Regents v. Roth (1972), 408 U.S. 564, 576, 33 L.Ed.2d 548, 560, 92 S.Ct. 2701, 2708.) Although the statute gives all persons a right to a hearing before the grant of a permit application, this does not create a property right where, it has been held, none existed. At least from the point of view of these third parties, decisions on the siting of proposed landfills are essentially matters of public policy, not specific benefits that State law has conferred on individuals. See Landfill, Inc. v. Pollution Control Board (1978), 74 Ill.2d 541, 559; Wallis v. Blue (N.D. Ga. 1967), 263 F. Supp. 965.

We thus conclude that neither the Village nor any of its citizens have any constitutionally protected interest in the continued nonexistence of a landfill (or expansion) on another's property, and thus that the grant of the permit in itself does not trigger the application of due process guarantees of fairness. The County Board's decision cannot, therefore, be invalidated on this ground.

• 5 d. Statutory fundamental fairness. Although we have concluded that the Village and its citizens are not entitled to a fair hearing by constitutional guarantees of due process, we hold that the Environmental Protection Act gives them the right to insist that procedures at the County Board level comport with due process standards of fundamental fairness. Section 40.1(b) of the Act provides that, in reviewing the grant of a landfill permit the PCB "shall hear the petition in accordance with the terms of subsection (a) of this Section * * *." (Ill. Rev. Stat. 1981, ch. 111 1/2, par. 1040.1(b).) Subsection (a) directs that "[i]n making its orders and determinations," the PCB "shall include in its consideration * * * the fundamental fairness of the procedures used by the county board * * *." (Emphasis added.) (Ill. Rev. Stat. 1981, ch. 111 1/2, par. 1040.1(a).) "Fundamental fairness" has been directly equated with "due process." (Lassiter v. Department of Social Services (1981), 452 U.S. 18, 24, 68 L.Ed.2d 640, 648, 101 S.Ct. 2153, 2158; In re D.M.D. (1972), 54 Wis.2d 313, 318, 195 N.W.2d 594, 597.) We therefore hold that the conflict of interest involved here supported the PCB's finding of disqualifying bias if it violated standards of adjudicative due process. *fn1

• 6 It is difficult to conclude that a procedure under which the hearing body consists of the same people who also comprise the body applying for the permit can be fundamentally fair. It is not true as petitioners have argued that fundamental fairness is violated only where the adjudicator's pecuniary interest in a case is a personal one. Rather "the principle of disqualification applies even if the pecuniary interest is only an indirect outgrowth of public official's desire to protect official funds." (Meyer v. Niles Township (N.D. Ill. 1979), 477 F. Supp. 357, 362. See also Ward v. Village of Monroeville (1972), 409 U.S. 57, 34 L.Ed.2d 267, 93 S.Ct. 80.) In Ward, defendant's due process (fundamental fairness) rights were violated by his trial, for a traffic offense, before the village mayor as, although the mayor did not benefit personally from convictions, a substantial portion of the village revenues were derived from fines and costs imposed by the mayor's court. Similarly in Meyer, the court held a panel of township supervisors disqualified from conducting the hearing and from deciding on plaintiff's eligibility for public aid because township funds were the source of the payments in issue. In United Church of the Medical Center v. Medical Center Com. (7th Cir. 1982), 689 F.2d 693, 699-700, the court held that the Commission was disqualified from presiding over proceedings involving title to the appellant's property because if the Commission found a certain way, title to the property, along with any proceeds from a subsequent sale would revert to the Commission. We think that the above principles apply here. The Board and District are distinct entities statutorily, but they consist of the same people and the institutional pecuniary pressures on those people are analytically similar to those in the above cited cases. The royalty revenue involved is undeniably substantial. Under these circumstances principles of fundamental fairness lead to the conclusion that the County Board suffered from a disqualifying conflict of interests.

(2)

BIAS AND PREJUDICE

The PCB held that the County Board members were disqualified from hearing the permit application because they had prejudged the merits of the application before the hearing had begun. Arguing in support of this finding, the Village points out that before receiving any evidence according to the procedures of section 39.2, Board members had already (1) in their role as District commissioners, passed an ordinance approving the proposed expansion and applied to the Illinois Environmental Protection Agency, and later the County Board, for permission to go ahead with the expansion, and (2) in their role as the County Board, adopted an ordinance approving the proposed expansion. This ordinance of October 27, 1981, noted and evidently accepted the District's claims that the proposed modification of the Mallard Lake landfill would "improve [the site's] final use as a scenic and recreational facility" and "improve the environmental qualify of the site" by restricting the fill to "areas out of the flood plain, and areas of favorable geological conditions * * *." Petitioners argue that the Board's actions in conducting a full public hearing and bringing the matter to a vote in which seven Board members dissented from the permit grant demonstrate that the Board members approached the application decision with open minds despite any indications of prejudgment.

The parties disagree over the proper legal test for whether Board members suffered from a disqualifying bias and prejudice. Petitioners, relying on the standard used in administrative rule making proceedings, maintain that the PCB could find disqualifying bias only upon a clear and convincing showing that Board members had unalterably closed minds on matters critical to the disposition of the application. (See Association of National Advertisers, Inc. v. F.T.C. (D.C. Cir. 1979), 627 F.2d 1151, 1154, cert. denied (1980), 447 U.S. 921, 65 L.Ed.2d 1113, 100 S.Ct. 3011.) The Village, characterizing the Board's decision under section 39.2 as adjudication, argues that the PCB could disqualify any Board member, or the Board as a whole if a disinterested observer might conclude that he, or it, had in some measure adjudged the facts as well as the law of the case in advance of hearing it. See Cinderella Career & Finishing Schools, Inc. v. F.T.C. (D.C. Cir. 1970), 425 F.2d 583, 591.

• 7 To decide whether the County Board proceedings were inherently unfair because of bias and prejudice, we must first decide how to characterize these proceedings. We conclude that in hearing and deciding on petitioners' application the Board was engaging in adjudication and that the Cinderella standard thus applies to the question of whether it suffered from a disqualifying bias and prejudice.

While the line between adjudication and rule making "may not always be a bright one," the basic distinction is one "between proceedings for the purpose of promulgating policy-type rules or standards, on the one hand, and proceedings designed to adjudicate disputed facts in particular cases on the other." (United States v. Florida East Coast Ry. Co. (1973), 410 U.S. 224, 245, 35 L.Ed.2d 223, 239, 93 S.Ct. 810, 821.) Under section 39.2 the Board's decision on the grant or denial of a permit turns on its resolution of disputed fact issues, whether the particular landfill, or expansion, for which the permit is sought meets the specific factual criteria set out in section 39.2 of the Act. The facts that the Board relies on are developed primarily by the immediate parties rather than acquired through the Board's own expertise.

Our supreme court has held that the decision whether to grant a variance from an environmental regulation is quasi-adjudicatory, although the imposition of conditions on the variance is rule making. (Monsanto Co. v. Pollution Control Board (1977), 67 Ill.2d 276, 289-90. See also Environmental Protection Agency v. Pollution Control Board (1981), 86 Ill.2d 390, 400; Willowbrook Development Corp. v. Pollution Control Board (1981), 92 Ill. App.3d 1074, 1081-82.) As the factual criteria involved in the County Board's decision under ...


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