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April 30, 1985


The opinion of the court was delivered by: Getzendanner, District Judge:

  This action is before the court in part on appeal from the
March 20, 1985 order of Magistrate Joan Lefkow issued in the
case of In the Matter of Outboard Marine Corporation, No. 85 Mont. 030.
 28 U.S.C. § 636(b)(3); General Rules of the United States
District Court, Northern District of Illinois 2.44. The
complaint also seeks a preliminary injunction. As no
fact-finding hearing has yet been convened, the court must
assume as true all well-pleaded allegations in the complaint.
For the reasons stated below, the motions for preliminary
injunction and for reversal of the Magistrate's order are

Factual Allegations

This action concerns the efforts of the Environmental Protection Agency ("EPA") and its Administrator, Lee M. Thomas, to remedy the problem of polychlorinated biphenyl ("PCB") contamination of Waukegan Harbor and surrounding areas of Waukegan, Illinois. The Outboard Marine Corporation ("OMC") owns an industrial complex on property near Waukegan Harbor. (Complaint ¶ 12.) The EPA has charged that OMC is responsible for the presence of PCBs in a drainage ditch and a parking lot on OMC's property (the "North Property"), (Id. at ¶ 16.) The EPA has further charged that OMC is responsible for PCB contamination of property not owned by OMC, specifically the Upper Harbor and Slip No. 3 of Waukegan Harbor. (Id.) Waukegan Harbor is a navigable body of water servicing several industries and recreational docking facilities. (Id. at ¶ 15.)

Over the past several years, the EPA has sought ways to address the problem of PCB contamination in Waukegan Harbor and on OMC property. It first sought relief under various federal statutes, including the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. § 9601-9657 ("CERCLA"), in a suit pending before this court, United States v. Outboard Marine Corporation, et al., 78 C 1004. On February 6, 1985, this court granted EPA's motion voluntarily to dismiss that action. The dismissal, however, was without prejudice to the EPA's rights to conduct its own remedial response to the contamination under CERCLA § 104, 42 U.S.C. § 9604, and to sue those responsible for the contamination under CERCLA § 107, 42 U.S.C. § 9607.

  The activities EPA seeks to perform under its
  warrant will cause substantial disruptions to
  OMC's operations by impeding OMC's access to its
  parking lot, plants and all of the Harbor-front
  property. The presence of EPA workers dressed in
  protective garb will have an adverse
  psychological impact on OMC's employees.

(Id. at ¶ 48.)

OMC also complains of Phase 2 of the EPA's planned action, which constitutes the actual remedy for the contamination. According to OMC, the EPA's remedial plan would seriously intrude on OMC's property. Specifically, the EPA plans to implement a dredging and removal action at a cost of $21 million and a duration of 31/2 years. (Id. at ¶¶ 26-31.) This action would involve, among other things, the removal of sediments from the North Property and Slip No. 3 and the treatment of those sediments in lagoons that will be constructed on OMC property. The site chosen for the lagoons is known as the "Harbor-front Property," a thirty-acre property owned by OMC which is not contaminated with PCBs. (Id. at ¶¶ 27-28.) Additionally, the EPA proposes to store the treated PCBs permanently on OMC's parking lot (part of the North Property) in a six-acre "containment cell" to be built by the EPA. (Id. at ¶ 29.)

Exhibit G of the complaint, a "Conceptual Site Layout" prepared by the EPA, shows the proposed locations of the structures, such as the lagoons and the containment cell, to be built on OMC's North and Harbor-front Properties. OMC alleges that the removal operations will release PCBs into the air and water of and around Waukegan Harbor; require nearly 100 daily truck-trips on OMC's property; eliminate the water intake necessary to OMC's operations; damage OMC's utility lines and data processing facilities; cause psychological harm to OMC's more than 2,000 employees; render useless 30 acres of OMC's property during the operations; and contaminate OMC's Harbor-front Property.

According to the complaint, on February 13, 1985, EPA agents obtained an administrative warrant in an ex parte application to Magistrate Lefkow. The warrant, attached as Exhibit B to the complaint, authorized the EPA to enter the Waukegan, Illinois property of the Outboard Marine Company ("OMC") in order to conduct the Phase 1 activities described above. The warrant does not allow the EPA access to OMC property for purposes of carrying out Phase 2. At the April 24, 1984 status hearing before this court on this matter, the EPA stated that it could not use a warrant to gain entry for Phase 2. EPA's attorney stated that some sort of equitable action in federal district court would be used to gain this type of access.

In the warrant proceedings, Magistrate Lefkow considered the affidavits of EPA employees Rodney Lynn and Danial M. Caplice as evidence that a release or threatened release of a hazardous substance had occurred on the OMC premises in Waukegan. The Magistrate further found that representatives of OMC had refused EPA agents access to the OMC premises for purposes of conducting Phase 1 activities. (The EPA concedes that the access is not designed to investigate whether a violation of law did or is about to take place, or to determine whether OMC is in compliance with the law.) After making such findings, the Magistrate found authority for the contemplated entry in CERCLA § 104, and granted the warrant for the limited purpose of conducting Phase 1 activities.

In Count I of its complaint, OMC contends that conduct of Phase 1 or Phase 2 activities on its property without authority granted by condemnation proceedings constitutes an uncompensated taking of its property and a deprivation of property without due process of law, both in violation of the fifth amendment to the federal constitution. In Count II, OMC claims that issuance of the warrant violated the federal fourth amendment, as it was issued without a finding of probable cause and in an ex parte hearing. As such, the warrant constituted an unreasonable search and seizure. These alleged constitutional violations have and continue irreparably to harm it. Moreover, OMC alleges other damages, such as loss of business, will result from the warrant and harm it irreparably. As relief, OMC requests the court to issue an order:

1. Quashing the warrant issued February 13, 1985;

  2. Enjoining the EPA and Thomas from executing
  said warrant;
  3. Reversing the Magistrate's March 20, 1985
  ruling that denied Outboard Marine Corporation's
  motion to quash the warrant; and
  4. Granting OMC such other and further relief as
  the Court deems proper.

(Complaint fol. ΒΆΒΆ ...

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