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03/08/95 PEOPLE STATE ILLINOIS EX REL. ROLAND W.

March 8, 1995

PEOPLE OF THE STATE OF ILLINOIS EX REL. ROLAND W. BURRIS, ATTORNEY GENERAL OF THE STATE OF ILLINOIS, AND EX REL. DAVE NEAL, STATE'S ATTORNEY OF GRUNDY COUNTY, ILLINOIS, PLAINTIFF-APPELLANT
v.
C.J.R. PROCESSING, INC., AN ILLINOIS CORPORATION, REGENEX INC., A DELAWARE CORPORATION, FEDERAL INDUSTRIAL PARK, INC., AN ILLINOIS CORPORATION, NORMAL H. WEXLER, INDIVIDUALLY AND AS PRESIDING OF FEDERAL INDUSTRIAL PARK, INC., JAMES R. JOHNSON, TY-WALK LIQUID SALES, INC., A DELAWARE CORPORATION, ROBERT D. WALKER, INDIVIDUALLY AND AS PRESIDENT OF TY-WALK LIQUID SALES, INC., AG LEASING, INC., AN ILLINOIS CORPORATION, AND ROBERT D. WALKER, INDIVIDUALLY AND AS PRESIDENT OF AG LEASING, INC., DEFENDANTS, AND CURTIS APPEL, INDIVIDUALLY AND AS PRESIDENT OF C.J.R. PROCESSING, INC., DEFENDANT-APPELLEE.



Appeal from the Circuit Court of the 13th Judicial Circuit, Grundy County, Illinois. No. 93 CH 26. Honorable Robert H. Adcock, Judge Presiding.

Honorable Peg Breslin, Justice, Honorable Tom M. Lytton, Justice, Honorable Michael P. Mccuskey, Justice. Breslin and Lytton, JJ., concur.

The opinion of the court was delivered by: Mccuskey

The Honorable Justice McCUSKEY delivered the opinion of the court:

The State appeals from the dismissal of one of the defendants, Curtis Appel, from an enforcement action brought against various defendants pursuant to the Environmental Protection Act (Act) (415 ILCS 5/0.01 et seq. (West 1992)). In dismissing Appel, the circuit court of Grundy County concluded that the definition of "person" under the Act did not include corporate officers. As a consequence, the court determined that the State's complaint did not state a cause of action against Appel. On appeal, the State contends that both of the trial court's decisions are incorrect. We agree. Therefore, we reverse and remand.

FACTS AND PROCEDURAL BACKGROUND

Defendants C.J.R. Processing, Inc. (CJR) and Regenex, Inc. (Regenex) are corporations conducting business in Illinois. CJR is a wholly-owned subsidiary of Regenex. Appel is the president of CJR. He is responsible for CJR and controls its activities. Appel is also the executive vice president and chief operating officer for Regenex.

According to the complaint, CJR, Regenex, and Appel (the defendants) own and operate a facility located in Morris (the Morris facility). From April 11, 1991, until March 31, 1993, the defendants transported large quantities of solid and liquid waste materials to the Morris facility, where the waste is stored. Representatives of the Illinois Environmental Protection Agency inspected the Morris facility on two occasions and found large amounts of the solid waste scattered throughout the building.

On September 3, 1993, the State filed a 14-count complaint against the defendants. After discovering further information, the State filed a second amended complaint on November 29, 1993. The complaint categorized all of the waste stored in the Morris facility as "special waste." In this 24-count complaint, counts I through XI allege the defendants caused or allowed various violations of the Act and its regulations. Count XVII alleges the defendants caused or allowed the creation and maintenance of a common law public nuisance. Count XVIII alleges the defendants caused or allowed the creation and maintenance of a public nuisance in violation of section 221 of the Criminal Jurisprudence Act (740 ILCS 55/221 (West 1992)). Count XXIII alleges the defendants violated section 43(a) of the Act by causing or allowing substantial danger to the environment or public health. (See 415 ILCS 5/43(a) (West 1992).) The complaint requested preliminary and permanent injunctive relief, the imposition of civil penalties, and orders requiring the defendants to correct the violations. The remaining counts purport to state causes of action against other defendants and have no bearing on this appeal.

On January 11, 1994, Appel filed a motion asking the trial court to dismiss him as a defendant. In his motion, Appel contended he acted solely in his capacity as a corporate officer of Regenex and CJR. Appel pointed out that section 3.26 of the Act (415 ILCS 5/3.26 (West 1992)) did not expressly include corporate officers in its definition of "person." Therefore, Appel claimed that he could not be liable for the acts or omissions of the corporations.

At a hearing on March 11, 1994, the trial court granted Appel's motion. The court concluded that Appel could not be held individually liable because the Act's definition of "person" does not include corporate officers or directors. The court also found that the complaint's allegations were insufficient to state a cause of action. The State's timely notice of appeal followed.

ARGUMENT(S) AND ANALYSIS

The instant case presents questions of first impression in Illinois. We identify these issues as follows: (1) whether a corporate officer is a "person" under section 3.26 of the Act; and (2) whether a corporate officer may be held individually liable for a corporation's violations of the Act when he or she is personally involved or actively participates in those violations. We answer both of these questions in the affirmative.

Based on our resolution of these questions, we find the complaint is legally and factually sufficient to state a cause of action against Appel for violations of the Act and ...


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