Court of Appeals of Illinois, First District, Third Division
THE PEOPLE ex rel. LISA MADIGAN, Attorney General of the State of Illinois, Plaintiff-Appellee and Cross-Appellant,
J.T. EINODER, INC., an Illinois Corporation, TRI-STATE INDUSTRIES, INC., an Illinois Corporation, JOHN EINODER, an Individual, and JANICE EINODER, an Individual, Defendants-Appellants and Cross-Appellees.
In an action arising from defendants’ operation of an unpermitted landfill, the trial court’s subject matter jurisdiction was not affected by the Environmental Protection Agency’s failure to notify defendants that they would be sued in their individual capacities, defendants’ contention that a permit was not required for their operations was properly rejected, the evidence established that defendant wife participated in the alleged violations along with her husband, and the entry of a mandatory injunction requiring the removal of the above-grade waste and the penalties and fines were upheld, but the appellate court rejected the State’s contention that defendants should have been ordered to take corrective action in the event groundwater contamination was discovered.
Appeal from the Circuit Court of Cook County, No. 00-CH-10635; the Hon. Richard J. Billik, Jr., Judge, presiding.
Richard Prendergast and Seamus Prendergast, both of Richard J. Prendergast, Ltd., of Chicago, for appellants.
Lisa Madigan, Attorney General, of Chicago (Brett E. Legner, Assistant Attorney General, of counsel), for appellee.
PRESIDING JUSTICE HYMAN delivered the judgment of the court, with opinion. Justice Neville concurred in the judgment and opinion. Justice Mason concurred in part and dissented in part, with opinion.
HYMAN PRESIDING JUSTICE
¶ 1 Plaintiff-appellee and cross-appellant, the State of Illinois, filed a seven-count complaint against defendants-appellants and cross-appellees J.T. Einoder, Inc. (JTE), Tri-State Industries, Inc. (Tri-State), John Einoder (John), and Janice Einoder (Janice) (together, the Einoders), arising out of defendants' operation of an unpermitted landfill near Lynwood, Illinois. Following a bench trial, the court found in favor of the State on the first five counts, all of which generally alleged defendants had engaged in waste disposal or dumping operations above grade without a permit. The circuit court directed a verdict in favor of defendants on counts VI and VII, which alleged that defendants failed to properly notify and document the general construction and demolition debris accepted at the landfill and failed to perform a hazardous waste determination. The court ordered mandatory injunctive relief in the form of removal of the waste above grade and groundwater testing, and assessed fines of $500, 000 each against John and JTE; $750, 000 against Tri-State; and $50, 000 against Janice, which was later reduced to $27, 300 on reconsideration.
¶ 2 On appeal, defendants contend: (1) the Illinois Environmental Protection Agency's failure to give notice of its intent to pursue legal action against the Einoders in their individual capacities as required by sections 31(a)(1) and (b) of the Environmental Protection Act (Act) (415 ILCS 5/31(a)(1), (b) (West 2010)), deprived the court of subject matter jurisdiction; (2) no permit was required for the above-grade disposal of clean construction and demolition debris during the time the Lynwood site was operational; (3) the evidence was insufficient to find Janice personally liable for violations of the Act; (4) the court erred in entering a mandatory injunction ordering removal of the waste above grade; and (5) the penalties and fines assessed were unduly harsh.
¶ 3 The State cross-appeals on the ground that the circuit court erred when, in addition to periodic groundwater testing, it failed to order defendants to take corrective action in the event that contamination of groundwater is found. For the reasons that follow, we affirm the circuit court's order and reject the State's contention on cross-appeal.
¶ 4 BACKGROUND
¶ 5 The source of this controversy is a 90-foot hill located on a 40-acre site south of Lincoln Highway and east of Torrence Avenue in unincorporated Cook County near Lynwood, Illinois. From afar, the hill appears to be covered with vegetation and soil, but erosion gullies reveal that buried beneath this layer of greenery is construction and demolition debris (CDD).
¶ 6 CDD is a general term encompassing both clean construction and demolition debris (CCDD) as well as general construction demolition debris (GCDD). During the time the site was operational, CCDD referred to uncontaminated broken concrete without protruding metal bars, bricks, rock, stone, reclaimed asphalt pavement, or dirt or sand (later amended to soil) generated from construction or demolition activities (415 ILCS 5/3.78a (West 1998)), while GCDD included nonhazardous, uncontaminated materials resulting from construction, remodeling, repair and demolition activities, limited to such items as bricks, concrete, wood, and plaster (415 ILCS 5/3.78 (West 1998)).
¶ 7 The hill was formerly a sandpit that was purchased in 1993 and held in a land trust for the benefit of Tri-State, which is wholly owned and operated by its president, John. JTE, a closely held corporation, often leased equipment and operators to Tri-State for use at the site. During the relevant time period, Janice owned 90% of JTE and also served as its president, while John owned 10% and served as secretary.
¶ 8 The Lynwood site first came to the attention of the Illinois Environmental Protection Agency (Agency) in 1995, when the Agency received anonymous reports of open dumping. Gino Bruni, an environmental professional specialist for the Agency, testified that he first visited the site in December 1995 in response to these reports. At that time, he issued a citation for dumping without a permit. Similar citations followed his visits in 1996 and 1997.
¶ 9 In March 1996, JTE proposed to begin a recycling operation at the site. This recycling operation would entail receiving CDD at the site, separating and processing it, and returning the material to the economic mainstream. In response to JTE's proposal, Edwin Bakowski, the manager of the permit section for the Bureau of Land at the Agency, sent a letter to JTE to the attention of Janice in which he explained the circumstances under which a recycling facility could operate without a permit. He was concerned because JTE's proposal indicated it would accept nonrecyclable materials and he informed JTE that it could operate the facility without a permit only if it revised its proposal to accept solely CCDD. At the time, CCDD was defined as uncontaminated concrete, brick, stone, and reclaimed asphalt.
¶ 10 Several months later in June 1996, a hearing was held before the Cook County zoning board (Board) regarding JTE's application to operate a recycling facility for construction and demolition debris at the site. At the hearing, Janice testified to her experience in operating recycling facilities–three years–and also provided details as to the proposed hours of the facility's operation, the number of employees, and the entities expected to deposit materials for recycling. The Board recommended that the application be granted, but there is conflicting evidence in the record as to the extent and duration of the facility's operation.
¶ 11 In the meantime, Bruni continued to return to the site for follow-up visits because the Agency remained concerned about the type of material the site was accepting. On March 25, 1998, Bruni had the opportunity to observe the site's operations from 7 a.m. to 12:30 p.m. That morning, 205 truckloads of construction and demolition debris were brought onto the site. Defendants generally charged between $25 to $40 per truckload of debris and between $75 to $150 for "hard to handle" loads. That morning, all but one load consisted of CCDD. The remaining load consisted of GCDD, which includes wood, drywall and scrap metal. A recycling machine known as the Eagle 1400 was located at the bottom of the sandpit, about 40 feet below ground. That machine was processing some GCDD. On that occasion, Bruni observed that the debris above grade covered an area 100 yards by 50 yards and was 5 yards deep.
¶ 12 Paul Purseglove, employed by the Agency as a field operations manager in the Bureau of Land, accompanied Bruni on his March 25 site visit. Purseglove spoke to John, who demonstrated the use of the Eagle 1400. While Purseglove was happy with John's plans for a recycling facility, he expressed concern with regard to the fill operation that was taking place. Purseglove observed that about 5 acres of the 40-acre pit had been filled with CCDD, and the pile was beginning to grow above grade. John reassured Purseglove that the material above grade would be compacted.
¶ 13 According to Purseglove, "grade" refers to the elevation of the ground in a specific area, expressed in terms of feet above mean sea level (MSL). At the site, grade was 631 MSL. Purseglove initially explained that while an amendment to the Act in 1997 exempted below-grade disposal of CCDD from permit requirements, in 1998 a permit was still required for CCDD disposed above grade. Somewhat contradictorily, Purseglove testified at trial that the permit for CCDD came into effect in 2005 or 2006. Later, he clarified:
"[A]s of 2005, 2006 you are required to have a permit to put it [CCDD] below grade.
Earlier on when this matter came to issue there was no permit required to put clean construction and demolition debris below-grade. But there has always been a requirement to have a permit when you start going above-grade. And that's one of the problems with this site, that Mr. Einoder went above-grade and did not have a permit to do that."
CDD, in contrast, requires a permit for disposal both above and below grade.
¶ 14 Following the March inspections, the Agency sent a violation notice to Tri-State to the attention of John and Janice on April 17, 1998. The notice generally alleged the dumping and disposal of waste without a permit as required by section 21 of the Act. 415 ILCS 5/21 (West 2010). Defendants responded with a remediation proposal, which the Agency rejected in July 1998.
¶ 15 On August 20, 1998, the Agency sent a notice of intent to pursue legal action to JTE addressed to the attention of John and Janice, based on charges that open dumping of waste was occurring and waste disposal operations were being conducted without a permit in violation of the Act. The Agency had learned from one of Bruni's inspections that between January 1998 and May 11, 1998, 9, 763 loads of waste had been deposited at the site.
¶ 16 Defendants successfully persuaded the Agency to dig 10 test pits at the site to determine the content of the material being used as fill before bringing suit. The digging occurred in November 1998 and the inspection followed one month later. The vast majority of the material unearthed was CCDD, with less than 0.1% of GCDD.
¶ 17 After sporadic inspections in 1999 and 2000 revealed a growing pile of CCDD above grade, the Illinois Attorney General eventually brought suit against Tri-State and JTE in July 2000.The complaint alleged that suit was brought by the Attorney General both on her own motion and at the request of the Agency. The complaint contained allegations of open dumping; conducting waste disposal operations without a permit; development and operation of a solid waste management site without a permit; disposal of waste at an unpermitted site; causing or allowing litter; failing to properly notify and document the GCDD accepted at the site and failing to limit percentage of nonrecyclable CDD; and failing to perform a hazardous waste determination.
¶ 18 Following the filing of the complaint, the State moved for a temporary restraining order and a preliminary injunction to halt the continued disposal of CCDD above grade. In April 2001, the court granted the motion in part and enjoined defendants from allowing open dumping of waste and conducting waste disposal operations that were not otherwise allowed as part of the recycling operation allegedly occurring at the site. Nevertheless, defendants continued to accept materials for disposal based on their belief that the term "grade" as used in the Act was vague and therefore, their conduct was not prohibited. In 2002, John revealed to Bruni that the site was receiving about 20 to 40 loads of CDD per day. It was not until sometime in 2003 that the site ceased operations, at which point Purseglove estimated that the site contained 48, 000 truckloads of waste.
¶ 19 In 2005, the State amended its complaint to include the Einoders as defendants in their individual capacities, notwithstanding the fact that the Agency had never sent either John or Janice a notice of intent to take legal action. At trial, Ronald Schlossberg, an environmental investigator for the Illinois State Police who investigated criminal violations of the Act, testified that in his investigation of the Lynwood site, he learned that Janice was not involved in its "actual operation."
¶ 20 Janice likewise denied having any personal involvement at the site, testifying that she visited the Lynwood facility only 12 to 15 times in 10 years. During those visits, she would accompany John and she would usually wait in the car while he conducted business, though on some occasions she distributed paychecks or Christmas gifts to employees. Janice stated that John managed the daily operations through his company, Tri-State. With regard to JTE's involvement, Janice explained that it was limited to leasing equipment for use at the site to Tri-State, the owner of the property.
¶ 21 On cross-examination, Janice admitted that she executed 273 contracts on behalf of JTE for the recycling and disposal of material at the site between 1996 and 2002, but testified that she signed these forms at the suggestion of her insurance company to protect JTE from liability if its equipment operators were injured. Janice also acknowledged that numerous letters and documents sent to the Agency listed JTE as the owner or operator of the site.
¶ 22 The circuit court ultimately found for the State on all counts related to disposal of waste and operation of a waste disposal site without a permit, but directed a verdict in favor of defendants on the issues of whether defendants failed to properly notify the Agency and document the GCDD accepted at the landfill and failed to perform a hazardous waste determination.
¶ 23 After the court ruled on liability, the parties proceeded to the remedies phase of the bifurcated trial. The State sought an injunction ordering defendants to remove the waste pile and undertake groundwater testing, and, in the event contamination of the groundwater was found, to take corrective action. In addition, the State asked for $5 million in fines against all defendants.
¶ 24 Defendants, through the testimony of their consulting engineer, John Lardner, maintained that capping the site would be a more environmentally sound remedy. Capping refers to the process of covering a landfill with clay, topsoil, and vegetation. Lardner explained that removal of the waste pile would require excavation and could take three to four years to complete. Additionally, the numerous truckloads of material that would need to be transported to other landfills would release pollution into the atmosphere. In ...