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02/03/87 the People of the State of v. Electric Corporation

February 3, 1987





503 N.E.2d 1179, 152 Ill. App. 3d 175, 105 Ill. Dec. 173 1987.IL.112

Appeal from the Circuit Court of Fayette County; the Hon. William R. Todd, Judge, presiding.


JUSTICE WELCH delivered the opinion of the court. KARNS, P.J., and HARRISON, J., concur.


Plaintiffs commenced this action in the circuit court of Fayette County for, inter alia, a preliminary injunction allowing the Illinois Environmental Protection Agency access to defendant Van Tran's real estate "for the purpose of accomplishing a remedial investigation and feasibility study and removal or remedial action regarding the past release of hazardous substances." After a hearing, the circuit court denied the preliminary injunction. Plaintiffs appeal. There is no cross-appeal.

Steve Parke, defendant's vice-president of purchasing and compliance, testified at the January 1986 hearing as follows: Defendant is a manufacturer and repairer of small power transformers. Defendant's original plant, the one in question, is located on three acres near Vandalia on Town Branch Creek. At its apex the Vandalia plant employed 65 to 70 people on two shifts. Later defendant added plants in Georgia and Texas and moved its main office to Texas. About 30 people now work at the Vandalia plant. Net income after taxes for 1984, the last recorded year preceding this matter, was about $40,000 for the Vandalia plant and $108,000 for all three plants. Defendant's gross sales were less than $6 million for the year.

Defendant uses oil as a coolant in the transformers it manufactures. Some transformers are ultimately used in locations, such as inside buildings, where a petroleum-based oil is not sufficiently resistant to fire. Years ago defendant used askarel, a synthetic oil, in such applications and used less expensive petroleum-based oil where flame resistance was less important. During the mid-1970's Monsanto, the manufacturer of askarel, began circulating warnings regarding the risks of polychlorinated biphenyls (PCBs) in askarel. Defendant stopped using askarel about 1976 due to the health hazards of PCBs. That action was precipitated in part by a United States Environmental Protection Agency inspection of the Vandalia plant in 1975. During a strike in 1975, the oil in two storage tanks totaling 14,000 gallons was released at the Vandalia facility. According to Parke, PCBs were never stored in those tanks. Material containing PCBs was stored at the Vandalia facility until 1982. Parke acknowledged there were some "hot spots" of PCBs on defendant's property. IEPA officials attempted to inspect the Vandalia facility in May 1985,

but were denied access. When IEPA finally inspected the Vandalia plant in June 1985, its representatives discovered an unlined, bermed pit about 8 feet in diameter. Defendant's employees used the pit for disposal of paint-fouled, spent solvents generated by defendant's spray-painting operations. Defendant's practice was to allow the solvents to evaporate in the pit until the paint waste became semisolid, at which time it was removed from the pit and placed in a container with other trash for removal to a landfill. IEPA officials took samples of the material in the pit and from soil outside the pit. Parke testified that at the June 1985 inspection, defendant's officials denied handling hazardous wastes because they didn't know they had any. Parke admitted there was no USEPA identification number for this waste, no waste analysis reports, and no notification of disposal of these wastes to IEPA. Defendant's main office, unaware of the solvent pit until the June

1985 inspection, ordered the Vandalia plant to cease using the pit immediately and clean it up. Defendant's employees removed the topsoil to a depth of approximately two to three feet. The contaminated soil was stored in five 55-gallon drums kept at the Vandalia plant, and the excavation was backfilled with soil. IEPA issued an enforcement letter to defendant as a result of the June

1985 inspection. Received at defendant's Texas office, the letter informed defendant of "apparent violations and non-compliance with the Illinois Environmental Protection Act" (the Act) (Ill. Rev. Stat. 1985, ch. 111 1/2, par. 1001 et seq.) and that the matter was referred to IEPA's legal staff for formal enforcement. The letter also stated: "This

Van Tran officials attended the preenforcement conference in July 1985. There, IEPA issued its RI/FS draft to defendant. Parke testified "we had no earthly idea this would come about. We just couldn't believe it, the scope of this project that was involved here because of a pit." In September defendant hired a consulting engineer, Ernest Brix of Baker/TSA, an environmental engineering firm, who testified he had 11 years of experience in environmental and industrial work, including site assessments and closure options. IEPA inspected defendant's facility a second time on October 3, 1985.

On October 26 IEPA issued its notice to defendant of potential liability for release or threat of release of a hazardous substance pursuant to section 4(q) of the Act (Ill. Rev. Stat. 1985, ch. 111 1/2, par. 1004(q)). The section 4(q) notice consisted of a 16-page "notice" and an 18-page copy of the RI/FS. The "notice" portion was in pertinent part as follows: IEPA had determined defendant might be liable to plaintiffs for any costs incurred as a result of any "response action" undertaken as a result of any failure to act in accordance with the "Identified Response Action" set forth in the notice; such costs might include, but might not be limited to, expenditures for investigation, planning, cleanup and enforcement; defendant was encouraged to undertake voluntary cleanup in accordance with the "Identified Response Action"; if defendant undertook voluntary cleanup, IEPA might determine that additional work was necessary; defendant would be required to perform any such additional work; if defendant declined such work, IEPA reserved the right to do the work itself and seek reimbursement for its costs; all work by defendant was subject to IEPA approval; IEPA reserved the right to enter upon the property at all reasonable times for inspection and review; notwithstanding defendant's compliance with the notice, IEPA reserved the right to take any enforcement action and to seek injunctive relief, monetary penalties, and punitive damages for any violation of law or the notice; IEPA reserved the right to undertake removal or remedial action at any time and to seek reimbursement from defendant; defendant would pay all response and oversight costs upon accounting submitted by IEPA; and upon defendant's failure to comply with the notice, plaintiffs would seek punitive damages equal to at least three times actual costs incurred. The notice also set forth IEPA's findings regarding hazardous substances found in samples taken on or near defendant's property and set forth a schedule of deadline dates for defendant's compliance with the requirements of the notice.

The "RI/FS" set forth 16 basic "tasks." The first eight tasks constituted the remedial investigation and addressed such topics as "Description of Current Situation" and "Community Relations Support." The task "Description of Current Situation" was divided into eight subtasks. Subtask C, "Site Background," was as follows: "Prepare a summary of the site location, pertinent area boundary features, and general site physiography, hydrology, and geology. Define the total area of the site and the general nature of the problem, including pertinent history relative to the use of the site for hazardous waste disposal." Subtask F required preparation of a site map including topographic features accurate to within 0.5 feet horizontal and 0.1 feet vertical. Subtask G required preparation of a surrounding property map. Task 2D, entitled "Community ...

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