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United States v. Lippold

July 11, 2006

UNITED STATES OF AMERICA, PLAINTIFF,
v.
GERALD LIPPOLD, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Jeanne E. Scott, U.S. District Judge

OPINION

This matter comes before the Court on Defendant Gerald Lippold's Amended Motion to Require Notice of 404(b) Evidence (d/e 25) and his First Motion In Limine (d/e 35). The Government filed a Response to Defendant Lippold's Motion to Require Notice of 404(b) Evidence (d/e 28), indicating that it did not intend to introduce any 404(b) evidence at trial, and thus it had no objection to Defendant Lippold's Motion. The Government, however, indicated that it intended to introduce the following evidence pursuant to the "intricately related" doctrine: fly ash waste from City, Water Light & Power (CWLP) "was buried at the Curry excavation site on North Dirksen Parkway both before and during the time period of the indictment and as a result of actions taken by [D]efendant Lippold not all of such ash was removed as required by the Illinois Environmental Protection Agency." Government's Response to Defendant Lippold's Motion to Require Notice of 404(b) Evidence, at 1-2. Defendant Lippold has filed his First Motion In Limine objecting to the introduction of such evidence. Defendant Lippold's Motion to Require Notice of 404(b) Evidence is ALLOWED; however, for the reasons set forth below, Defendant Lippold's First Motion In Limine is DENIED.

BACKGROUND Defendant Gerald Lippold and his co-Defendants in this case are charged with the criminal offense of violating the Clean Water Act (CWA). The Indictment (d/e 1) alleges that the Defendants knowingly discharged a pollutant into waters of the United States from a point source, without a national pollutant discharge elimination system (NPDES) permit, in violation of 33 U.S.C. §§ 1311(a) and 1319(c)(2)(A) and in violation of 18 U.S.C. § 2.*fn1 The Government alleges the following in the Indictment: Defendant Lippold was part owner of Lippold & Arnette, Inc. (Lippold & Arnett), a bulk hauling company that operated a bulk hauling facility (Curry facility) at 3600 North Dirksen Parkway, in Springfield, Sangamon County, Illinois. The Indictment alleges that an unnamed intermittent tributary of the Sangamon River (the Sangamon tributary) flowed through the Curry facility. Water in the Sangamon tributary flowed to the Sangamon River in Springfield, Sangamon County, Illinois.

Sometime in 1999, Defendant Curry Ready Mix & Builders' Supply, Inc. (Curry Ready Mix), a bulk hauling and ready-mix concrete business incorporated in the State of Delaware and authorized to do business in the State of Illinois, purchased the Curry facility from Lippold and his partner.*fn2 After this purchase, Lippold & Arnett became a subsidiary of Curry Ready Mix. Defendant Curry Ice & Coal of Springfield, Inc. (Curry Ice & Coal), an Illinois Corporation, was also a subsidiary of Defendant Curry Ready Mix. According to the Indictment, "[f]rom [o]n or about 1999 to the present, the [D]efendant Curry Ready Mix directed, controlled and supervised the operations of [D]efendant Curry Ice & Coal and [D]efendant Lippold & Arnett, Inc. at the Curry facility." Indictment, ¶ 3.

The Indictment alleges that, as part of the purchase agreement, Defendant Lippold agreed to provide consulting services to Defendant Curry Ready Mix. The Indictment alleges that, from on or about 1999 to at least in or about the summer of 2003, Defendant Lippold accordingly sought to increase the Curry facility's business and in doing so exercised substantial authority over operations in the Curry facility.

According to the Indictment, in or about March and April 2001, Defendants Curry Ready Mix, Curry Ice & Coal, and Lippold & Arnette accepted approximately 35,000 tons of industrial waste, containing fly ash waste and bottom ash waste from coal combustion, from CWLP. The industrial waste was placed in the Curry facility, and Defendants Curry Ready Mix, Curry Ice & Coal and Lippold & Arnette used such waste to fill a large excavation at the Curry facility.

The Indictment alleges that, some time in early 2001, rain water began accumulating in the excavation site where the fly ash waste had been buried, causing boron to leach out of the industrial waste into the rain water that had accumulated in the excavation. The Indictment further alleges that "[t]his caused the accumulated water to be contaminated with a level of boron that was approximately 13 times greater than the concentration that IEPA would allow for purposes of water quality. . . . By 2003, several million gallons of boron ash wastewater had accumulated in the large excavation at the Curry facility." Indictment, ¶ 11.

The Indictment alleges that, beginning in or about June 2001, Defendants Curry Ready Mix, Curry Ice & Coal, and Lippold & Arnett received notices from the Illinois Environmental Protection Agency (IEPA) indicating that the Defendants had violated Illinois law by improperly managing the industrial waste at the Curry facility. The Indictment alleges that, after negotiations and discussions with the IEPA, sometime in or about 2001, Defendants Curry Ready Mix, Curry Ice & Coal, and Lippold & Arnett subsequently agreed to properly remove and dispose of the industrial waste buried in the excavation site, and the removal lasted at least until the winter of 2005.

According to the Indictment, beginning in or about February 2002, Defendant Lippold was the main person in charge of supervising the removal of the industrial waste and disposing of the boron ash wastewater at the Curry facility. Indictment, ¶ 12.

The Indictment further alleges that, in or before the spring of 2002, Defendants Curry Ready Mix, Curry Ice & Coal, and Lippold & Arnett were notified by the IEPA that a valid NPDES permit was required to discharge the boron ash wastewater into the Sangamon tributary. In order to obtain an NPDES permit to discharge the boron ash wastewater, Defendant Curry Ice & Coal filed an application for the permit approximately in March 2002. According to the Indictment, by at least March of 2002, Lippold knew that, without an NPDES permit issued by the IEPA, boron ash wastewater could not be discharged into the Sangamon tributary.

The Indictment alleges that shortly after Defendant Curry Ice & Coal's submission of the NPDES application, specifically in or about May or June 2002, the IEPA notified Defendants Curry Ready Mix, Curry Ice & Coal, and Lippold & Arnett that the NPDES application would be denied. Upon this notification, Defendant Curry Ice & Coal withdrew its application for the NPDES permit in or about June 2002. Also in or about June 2002, Defendant Curry Ice & Coal, through counsel, sent a letter to the IEPA requesting a "provisional variance," a special permission to discharge the boron ash wastewater to the Sangamon tributary even though such discharge would exceed the IEPA water quality standards. At the end of July 2002, Defendant Curry Ice & Coal subsequently withdrew that request and re-submitted an amended request for a provisional variance sometime in early August 2002.

The Indictment alleges that the IEPA denied the amended request for a provisional variance in or about the end of August 2002. According to the Indictment, in or about February 2003, Defendant Lippold and other employees of Defendants Curry Ready Mix and Curry Ice & Coal met with the IEPA officials, at which time the officials informed the Defendants that "analytical monitoring was necessary to determine if the industrial waste in the excavation at the Curry facility had also contaminated the area groundwater and drinking wells." Indictment, ¶ 19.

According to the Indictment, the Curry facility had two dirt and gravel parking lots. The lower-level parking lot, which was located specifically East of the excavation site, sloped toward the Sangamon tributary and the excavation site. The upper-level parking lot, which was located on the opposite side of the Sangamon tributary at the Curry facility, similarly sloped toward the Sangamon tributary. The Defendants used these parking lots to park the trucks used in operating their business.

The Indictment alleges that, in or about March or April 2003, the IEPA permitted the Defendants to spread the boron ash wastewater on the Curry facility's lower and upper-level parking lots in order to control dust. The IEPA, however, cautioned and warned the Defendants that there was to be no run-off from the parking lots into the Sangamon tributary. The Indictment states that in or before April of 2003, at the direction of Defendant Lippold, a drainage ditch that would collect water run-off from the lower parking lot's surface was dug between the excavation and the lower-level parking lot. The Indictment alleges that around the same time period, Defendant Lippold directed the installation of a discharge pipe at the bottom of the drainage ditch. The Indictment states that "[t]he discharge pipe was ...


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