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City of Waukegan v. Arshed

February 23, 2009


The opinion of the court was delivered by: Judge Robert W. Gettleman


Plaintiff City of Waukegan has brought a two count amended complaint against Javed and Shahnaz Arshed, d/b/a J&S Enterprises ("J&S"), and Shell Oil Co., Equilon Enterprises a/k/a Shell Oil Products US and Shell Oil Products Co., LLC (jointly as "Shell"). Count I seeks injunctive relief and cost recovery under the Resource Conservation and Recovery Act ("RCRA") 42 U.S.C. § 6972(a)(1)(B), and Count II alleges a common law public nuisance. This court has already denied Shell's motion to dismiss for failure to state a claim. Shell now takes a second bite of the apple by joining the Arsheds' motion to dismiss for lack of jurisdiction and/or failure to state a claim. For the reasons that follow, that motion is also denied.


In 1988 Shell purchased an inactive gasoline service station at 2159 N. Lewis Avenue in Waukegan. It has never operated the site as a service station. At the time Shell purchased it, the site included four petroleum underground storage tanks ("USTs"). By the end of December 1989 Shell had removed the USTs. On December 29, 1989, after completing the removal, Shell recorded a release of petroleum product from the USTs to the Illinois Emergency Management Agency ("IEMA") and the Illinois Environmental Protection Agency ("IEPA"). Petroleum products, which constitute a solid waste under RCRA, 42 U.S.C. § 6903(27), were released from the USTs on the property sometime before December 12, 1989. The notice of release was issued by IEPA to Shell in accordance with the technical standards and correction action requirement for owners and operators of underground storage tanks. In response, Shell submitted a correction action plan and conducted a series of environmental investigations, which revealed that benzene, a known carcinogen, and other elements of gasoline contamination were present in significant quantities. The complaint alleges that the petroleum products have migrated or have the potential to migrate from the property and may present an imminent and substantial endangerment to human health or the environment. Shell's own investigations identified the "potential receptive" of the contamination as an "adjacent apartment building to the east."

Shell sold the property to J&S in 1997. On September 9, 1999, J&S reported a release of petroleum products at the property to IEMA and IEPA.


Defendants have moved to dismiss Count I arguing that the court lacks subject matter jurisdiction. This argument is obviously wrong because RCRA, 42 U.S.C. § 6972(a)(2), provides that actions be brought in "the district court in which the alleged violation occurred or the alleged endangerment may occur." Indeed, although not entirely a settled matter, most courts have held that RCRA actions are exclusively federal. See White & Brewer Trucking, Inc. v. Donley, 952 F. Supp. 1306, 1312 (CD Ill. 1997).

What defendants really argue is that this court should "refer" the case to the IEPA, or abstain from exercising jurisdiction under the doctrine of primary jurisdiction. This is a difficult argument because "when a federal court is properly appealed to in a case over which is has by law jurisdiction, it is its duty to take such jurisdiction . . .. The right of a party plaintiff to choose a Federal court where there is a choice cannot be properly denied." Willcox v. Consol. Gas Co., 212 U.S. 19, 40 (1909). Thus, it is only in exceptional cases that a court may exercise its discretion to withhold otherwise authorized equitable relief. New Orleans Pub. Serv., Inc. v. Council of New Orleans, 491 U.S. 350, 359 (1989).

The doctrine of primary jurisdiction is really a combination of two doctrines. See Arsberry v. State of Illinois, 244 F.3d 558, 562 (7th Cir. 2001). In its original form, more aptly described as "exclusive agency jurisdiction," it applies only when, in a suit involving a regulated firm but not brought under the regulatory statute, an issue arises that is within the exclusive original jurisdiction of the regulatory agency to resolve even though that agency's resolution will usually be subject to judicial review. Id. (citing United States v. Western Pacific R.R., 352 U.S. 59, 64 (1956)). In such cases, the court must stay the suit and refer the issue to the agency. The case would then return to the court if the agency resolution did not dispose of the entire matter.

This form of primary jurisdiction obviously does not apply to the instant case. First, RCRA jurisdiction is exclusively within the federal district courts. The fact that defendants may also be proceeding to remediate any problems voluntarily within the auspices of the IEPA cannot divest this court of jurisdiction.

The doctrine of primary jurisdiction has also been defined as one that allows a court to refer an issue to an agency that knows more about it, even if the agency has not been given exclusive jurisdiction to resolve the issue. Arsberry, 244 F.3d at 564. Under this version of the doctrine, courts can and have referred matters that are beyond the "conventional experiences" of the judiciary or that fall within the realm of agency discretion to an administrative agency with more specialized experience, expertise and insight. Id. at 563. As Arsberry suggests, such cases, in which a court refers an issue to the agency because of the agency's superior expertise rather than because of the agency's jurisdiction, are "not felicitously described as cases of primary jurisdiction." Arsberry, 244 F.3d at 563. These cases are more akin to those in which the court abstains from exercising jurisdiction pursuant to Burford v. Sun Oil Co., 319 U.S. 315, 332-34 (1943). "In such cases, either the court and the agency have concurrent jurisdiction to decide an issue, or only the court has the power to decide it, but seeks merely the agency's advice." Arsberry, 244 F.3d at 564.

This leads to defendant's second argument, that the court should abstain from exercising jurisdiction pursuant to Burford. According to defendants, the issue of remediation of the property is currently before the IEPA, which is best suited to handle the mathematical and scientific data necessary to resolve the issue. Defendants argue that in 2002 J&S voluntarily enrolled in the Title XVI "Leaking Underground Storage Tank" program ("LUST"), implemented by the IEPA. Therefore, according to defendants, any orders by this court would interfere with the investigation being conducted by IEPA.

Under Burford, a federal court should abstain from deciding unsettled questions of state law that relate to a complex state regulatory scheme. Burford abstention involves situations where there exist "difficult questions of state law bearing on policy problems of substantial public import whose importance transcends the results in the case then at bar," or where the federal case "would be disruptive of state efforts to establish a coherent policy with respect to a matter of substantial public concern." New Orleans Pub. Serv., 491 U.S. at 361 (quoting Colorado River Water ...

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