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People ex rel Madigan v. Petco Petroleum Corp.

January 4, 2006

THE PEOPLE OF THE STATE OF ILLINOIS EX REL. LISA MADIGAN, ATTORNEY GENERAL OF THE STATE OF ILLINOIS, PLAINTIFF-APPELLEE AND CROSS-APPELLANT,
v.
PETCO PETROLEUM CORPORATION, AN INDIANA CORPORATION. DEFENDANT-APPELLANT ANDCROSS-APPELLEE, AND JAY DOUGLAS BERGMAN, DEFENDANT.
THE PEOPLE OF THE STATE OF ILLINOIS EX REL. LISA MADIGAN, ATTORNEY GENERAL OF THE STATE OF ILLINOIS, PLAINTIFF-APPELLANT,
v.
PETCO PETROLEUM CORPORATION, AN INDIANA CORPORATION, AND JAY DOUGLAS BERGMAN, DEFENDANTS-APPELLEES.



Appeal from Circuit Court of Sangamon County No. 00CH458. Honorable Leslie J. Graves, Judge Presiding.

The opinion of the court was delivered by: Justice Steigmann

In December 2000, the State filed an amended two-count complaint against defendants, Petco Petroleum Corporation and Jay Douglas Bergman, Petco's president, alleging multiple violations of the Illinois Oil and Gas Act (225 ILCS 725/1 through 28.1 (West 2000)) and seeking injunctive relief, as well as civil penalties. In February 2004, the trial court entered a judgment against Petco and Bergman and granted the State most of the relief it sought. However, in May 2004, after considering Petco's and Bergman's motions to reconsider, the court amended its order and (1) reversed its position on the question of Bergman's liability and (2) denied the State's request for a permanent injunction against Petco and Bergman. In June 2004, Petco filed a notice of appeal (case No. 4- 04-0558), and the State filed a motion to reconsider the court's May 2004 order. In September 2004, the trial court denied the State's motion to reconsider. Later that same month, the State filed a notice of appeal (case No. 4-04-0868) and a notice of cross-appeal (case No. 4- 04-0558).

Petco appeals, arguing that (1) this court lacks jurisdiction over the State's appeal and cross-appeal because the State's September 2004 notices of appeal and cross-appeal were not timely; and (2) the trial court erred by (a) determining that section 240.155 of Title 62 of the Illinois Administrative Code (62 Ill. Adm. Code §240.155 (Conway Greene CD-ROM April 2000)), under which the State brought its claims, was valid and (b) imposing on Petco a civil penalty totaling $168,000. The State appeals, arguing that (1) this court lacks jurisdiction over Petco's appeal because Petco's notice of appeal was premature; and (2) the trial court erred by (a) finding that Bergman was not personally liable as a responsible corporate officer, (b) declining to issue an injunction against Petco and Bergman, (c) failing to order Petco to post a $100,000 bond, and (d) failing to bar Petco and Bergman from acquiring additional drilling permits.

We conclude that (1) the State's notice of appeal was timely, (2) Petco's notice of appeal was premature, and (3) the trial court erred by declining to issue an injunction against Petco. Otherwise, we affirm the trial court's judgment. Accordingly, we dismiss Petco's appeal (case No. 4-04-0558) and the State's cross-appeal (case No. 4-04-0558), reverse the court's denial of the State's requested injunction against Petco (case No. 4-04-0868), remand for entry of the State's requested injunctive relief against Petco, and otherwise affirm the court's judgment.

I. BACKGROUND

In December 2000, the State filed an amended complaint for injunctive and other relief against Petco (count I) and Bergman (count II). The State alleged, in pertinent part, that in the preceding two years, Petco and Bergman were responsible for 168 documented spill events at the oil well sites for which Petco had permits issued by the Illinois Department of Natural Resources. For relief, the State requested that the court (1) enter findings that (a) Petco and Bergman had violated provisions of the Oil and Gas Act (225 ILCS 725/1 through 28.1 (West 2000)) and the oil and gas regulations contained in the Administrative Code (62 Ill. Adm. Code §§240.10 through 240.1960 (Conway Greene CD-ROM April 2000)) by repeatedly allowing the improper disposal, release, or discharge of produced fluids, thus resulting in an imminent danger of substantial environmental harm or environmental damage to property and contamination of surface water or groundwater causing environmental damage, (b) a pattern of documented events involving improper disposal, release, or discharge of produced fluids occurred during the preceding two years, and (c) Petco and Bergman failed to operate in a prudent manner, pursuant to industry standards; (2) permanently enjoin Petco and Bergman from further violations of the Oil and Gas Act (225 ILCS 725/1 through 28.1 (West 2000)); (3) order Petco to submit a written oil and gas facilities operation maintenance plan that would insure compliance with the Department's rules; (4) order Petco to submit and maintain a $100,000 bond; (5) impose a civil penalty against Petco and Bergman totaling $223,000; (6) enjoin Petco and Bergman from acquiring additional permits to drill new oil or gas production wells until the Department released the $100,000 bond; (7) award the Department its costs; and (8) grant such other relief as the court deemed appropriate.

In May 2002, the State filed a motion for summary judgment as to count I, and in June 2002, Petco filed a motion for summary judgment, asserting, in pertinent part, that section 240.155 of Title 62 of the Administrative Code, under which the State brought its amended complaint, was invalid. In July 2002, the trial court granted the State's summary-judgment motion, upon finding that no genuine issue of material fact existed as to the specific allegations against Petco. The court also denied Petco's motion for summary judgment.

During October and December 2002, the trial court conducted a bench trial on (1) count II of the State's amended complaint and (2) the relief to be granted as to Petco and Bergman. (We will discuss the evidence in the pertinent analysis sections.) At the conclusion of the evidence, the court instructed the parties to file posttrial briefs in lieu of closing arguments. In January 2003, the State filed its posttrial brief, and in March 2003, Petco and Bergman filed their posttrial briefs.

In February 2004, the trial court entered a written order, in which it (1) found that Bergman was personally liable as a responsible corporate officer for Petco's violations of the Oil and Gas Act, (2) entered judgment in favor of the State and against Petco and Bergman, (3) permanently enjoined Petco and Bergman from committing further violations of the Oil and Gas Act and the Administrative Code, (4) ordered Petco to submit within 30 days a written oil and gas facilities operation maintenance plan to ensure compliance with the Department's rules, (5) denied the State's request for a $100,000 bond, (6) ordered Petco and Bergman to pay civil penalties totaling $168,000 under section 26 of the Oil and Gas Act (225 ILCS 725/26 (West 2000)), and (7) denied the State's request that Petco and Bergman be permanently restrained from seeking additional permits to drill new oil or gas production wells.

In March 2004, Petco and Bergman each filed a motion to reconsider the trial court's judgment. In April 2004, the State filed separate responses to Petco's and Bergman's motions to reconsider. On May 26, 2004, the trial court entered a written amended order that modified its February 2004 order in the following respects: (1) it entered judgment against the State and in Bergman's favor on count II, (2) it denied the State's request for a permanent injunction against Petco and Bergman, and (3) it modified what Petco was required to include in the oil and gas facilities operation maintenance plan. In all other respects, the court affirmed its February 2004 order.

On June 22, 2004, the State filed separate motions to reconsider and strike the trial court's May 26, 2004, order as to Petco and Bergman. (The State's motion as to Petco is not in the record. However, Petco does not dispute that it was filed, and we are able to glean from Petco's July 2004 response what arguments were made in the State's motion. For simplicity, we will refer to the State's motions to reconsider as one motion unless the context requires otherwise.)

On June 25, 2004, Petco filed its notice of appeal (case No. 4-04- 0558). In July 2004, Petco and Bergman filed responses to the State's June 22, 2004, motion to reconsider, and on September 8, 2004, the trial court denied the State's motion. On September 22, 2004, the State filed (1) a notice of appeal of the court's September 8, 2004, order (case No. 4-04-0868), and (2) a notice of cross-appeal (case No. 4-04-0558). Petco did not file a new notice of appeal following the court's September 8, 2004, denial of the State's motion to reconsider.

II. ANALYSIS

A. Appellate Jurisdiction

1. Supreme Court Rules 274 and 303(a)

While this appeal was pending, the Supreme Court of Illinois promulgated Supreme Court Rule 274, which provides, in pertinent part, as follows:

"A party may make only one postjudgment motion directed at a judgment order that is otherwise final. If a final judgment order is modified pursuant to a postjudgment motion, or if a different final judgment or order is subsequently entered, any party affected by the order may make one postjudgment motion directed at the superseding judgment or order. Until disposed, each timely postjudgment motion shall toll the finality and appealability of the judgment or order at which it is directed." Official Reports Advance Sheet No. 22 (October 26, 2005) R. 274, eff. January 1, 2006.

The committee comments to Rule 274 provide, in pertinent part, as follows:

"New Rule 274 clarifies the status of successive (superseding) final judgments, and of postjudgment motions directed at each final judgment, allowing one such motion per party per final judgment. Rule 274 further clarifies that a timely postjudgment motion directed at any final judgment, including a later superseding judgment, tolls the appeal time." Official Reports Advance Sheet No. 22 (October 26, 2005) R. 274, eff. January 1, 2006, Committee Comments. Also while this appeal was pending, the supreme court amended

Supreme Court Rule 303(a), which governs appeals from final judgments in civil cases, in pertinent part, as follows:

"(1) *** [T]he notice of appeal must be filed with the clerk of the circuit court within 30 days after the entry of the final judgment appealed from, or, if a timely post-trial posttrial motion directed against the judgment is filed, whether in a jury or a non-jury case, within 30 days after the entry of the order disposing of the last pending post judgment postjudgment motion directed against that judgment or order, irrespective of whether the circuit court had entered a series of final orders that were modified pursuant to postjudgment motions. ***

(2) When a timely post-judgment postjudgment motion has been filed by any party, whether in a jury case or a non-jury case, a notice of appeal filed before the entry of the order disposing of the last pending post-judgment postjudgment motion shall have no effect and shall be withdrawn by the party who filed it ***. *** No request for reconsideration of a ruling on a post-judgment postjudgment motion will toll the running of the time within which a notice of appeal must be filed under this rule." Official Reports Advance Sheet No. 22 (October 26, 2005) Rs. 303(a)(1) through (a)(2), eff. January 1, 2006.

We recognize that these rule changes do not take effect until January 1, 2006. In People v. Atkins, 217 Ill. 2d 66, 71-73, ___ N.E.2d ___, ___ (2005), the supreme court addressed the retroactivity of legislative amendments. The court held that when the legislature has not indicated whether an amendment should be applied retroactively, in accordance with section 4 of the Statute on Statutes (5 ILCS 70/4 (West 2004)), procedural changes to statutes may be applied retroactively, while substantive changes may not. Atkins, 217 Ill. 2d at 71, ___ N.E.2d at ___. Although Atkins addressed legislative amendments, its holding applies equally to supreme court rules. See generally People v. Roberts, 214 Ill. 2d 106, 116, 824 N.E.2d 250, 256 (2005) ("The rules of statutory construction also apply to interpretation of *** supreme court rules").

The supreme court did not indicate that new Rule 274 or amended Rule 303 should be applied retroactively. Thus, in accordance with section 4 of the Statute on Statutes (5 ILCS 70/4 (West 2004)), we must determine whether the changes are substantive or procedural. In Rivard v. Chicago Fire Fighters Union, Local No. 2, 122 Ill. 2d 303, 310-11, 522 N.E.2d 1195, 1199 (1988), the supreme court explained the difference between a substantive amendment and a procedural one:

"In general, procedural law is '"[t]hat which prescribes the method of enforcing rights or obtaining redress for their invasion; machinery for carrying on a suit."' [Citation.] Substantive law, in contrast, establishes the rights whose invasion may be redressed through a particular procedure. More specifically, procedure embraces 'pleading, evidence[,] and practice. Practice means those legal rules which direct the course of proceedings to bring parties into court and the course of the court after they are brought in.' [Citation.]."

Because new Rule 274 and amended Rule 303, which address multiple final orders and postjudgment motions, involve the "machinery for carrying on a suit," they are clearly procedural. Accordingly, we conclude that these rules apply retroactively to this case.

We further note that compliance with the deadlines for appeals set forth in Rule 303(a) is mandatory and jurisdictional. Berg v. White, 357 Ill. App. 3d 496, 499, 828 N.E.2d 889, 892 (2005).

2. Petco and Bergman's Motion To Dismiss the State's Appeal

Petco and Bergman have moved to dismiss the State's appeal in case No. 4-04-0868, arguing that (1) the State's June 22, 2004, motion to reconsider the trial court's May 26, 2004, order was a successive postjudgment motion that did not toll the time for filing a notice of appeal; and, therefore, (2) the State's notice of appeal was not timely filed within 30 days of the entry of the court's May 26, 2004, order. We disagree with Petco and Bergman and conclude that we have jurisdiction to hear the State's appeal.

In this case, the trial court issued a final judgment on February 24, 2004. Both Petco and Bergman filed timely postjudgment motions, and the State filed responses. On May 26, 2004, the trial court entered an amended order, in which it modified its February 2004 judgment in certain respects. Under the plain language of new Rule 274 and amended Rule 303(a)(1), the court's May 26, 2004, order was a modified final judgment, at which the State could direct another postjudgment motion. See Roberts, 214 Ill. 2d at 116, 824 N.E.2d at 256 (courts must interpret supreme court rules the same way they interpret statutes--that is, they must give the language of the rule its plain meaning). The State's June 22, 2004, motion was a "request for reconsideration" of the court's May 26, 2004, amended order. Thus, under Rules 274 and 303, the State's motion to reconsider tolled the running of the time for filing a notice of appeal. Accordingly, the State's notice of appeal had to be filed within 30 days of the court's September 8, 2004, order disposing of the State's motion to reconsider, and the State's September 22, 2004, notice of appeal in case No. 4-04-0868 was so filed. Accordingly, we have jurisdiction over the State's appeal in case No. 4-04-0868.

3. The State's Claim That This Court Lacks Jurisdiction Over Petco's Appeal

The State argues that this court lacks jurisdiction over Petco's appeal in case No. 4-04-0558. Specifically, the State contends that because its June 22, 2004, motion to reconsider the trial court's May 26, 2004, amended order tolled the time for filing a notice of appeal, Petco's June 25, 2004, notice of appeal was premature and of "no effect." We agree.

As earlier stated, amended Rule 303(a)(2) provides that when a party has filed a timely postjudgment motion, a notice of appeal filed before the entry of the order disposing of the last pending postjudgment motion shall have no effect. Official Reports Advance Sheet No. 22 (October 26, 2005) R. 303(a)(2), eff. January 1, 2006.

In Chand v. Schlimme, 138 Ill. 2d 469, 474, 563 N.E.2d 441, 443 (1990), the plaintiff simultaneously filed a posttrial motion and a notice of appeal. The Supreme Court of Illinois held that pursuant to Rule 303, a timely filed posttrial motion is not deemed "abandoned" by the filing of a notice of appeal. Rather, the notice of appeal is of no effect. Chand, 138 Ill. 2d at 478, 563 N.E.2d at 445. The trial court retains jurisdiction and must rule on the posttrial motion, and if the plaintiff wishes to appeal that ruling, he must file a new notice of appeal within 30 days of the trial court's ruling on the posttrial motion. Chand, 138 Ill. 2d at 477, 563 N.E.2d at 445. Whether a plaintiff's timely filed posttrial motion is filed before, simultaneous to, or after the filing of the notice of appeal is of no moment. As the supreme court stated, "even a notice of appeal that is filed before the filing of a post[]trial motion but which post[]trial motion is in fact later timely filed, has no effect." Chand, 138 Ill. 2d at 478, 563 N.E.2d at ...


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