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Clean Harbors Services Inc v. Illinois International Port District

United States District Court, N.D. Illinois, Eastern Division

February 15, 2018

CLEAN HARBORS SERVICES, INC, Plaintiff,
v.
THE ILLINOIS INTERNATIONAL, PORT DISTRICT, Defendant.

          MEMORANDUM OPINION AND ORDER

          Thomas M. Durkin, United States District Judge.

         Plaintiff Clean Harbors Services, Inc. (“Clean Harbors”) brought this action against Defendant The Illinois International Port District (“Port District”) asserting claims under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), 42 U.S.C. §§ 9607, 9613, the Resource Conservation and Recovery Act (“RCRA”), 42 U.S.C. § 6972, and state law. Presently before the Court is the Port District's Motion to Dismiss Counts II, III, and VIII of Clean Harbors' Third Amended Complaint. For the reasons explained below, the Port District's motion is granted in part and denied in part.

         BACKGROUND[1]

         This case involves contaminated property located at 11700 and 11800 South Stony Island in Chicago, Illinois (the “property”). R. 108 ¶ 1. The Port District has owned the property since 1955. In the 1960s and 1970s, the Port District began to construct piers on the property with fill materials consisting of industrial waste, construction debris, natural material, and a mixture of soil, steel industry wastes, and pea-sized gravel. Id. ¶¶ 27, 30, 31. Also in the 1970s, the Port District leased the property to a now-dissolved company, Hyon Waste Management Services, Inc. Id. ¶ 36. Hyon Waste operated a series of surface impoundments at the property for the treatment, storage, and disposal of hazardous wastes and disposed of tens of millions of gallons of waste. Clean Harbors alleges that the Port District, as the owner of the property, knew or reasonably should have known of Hyon Waste's contamination but did nothing to abate the contamination or hold Hyon Waste accountable for the contamination. Id. ¶ 51.

         Beginning in the 1980s, the Port District leased the property to two different companies, ChemClear, Inc. and CMW Chemical Services, Inc., both of which Clean Harbors later acquired. (Throughout this Order, the Court refers to Clean Harbors and these companies collectively as “Clean Harbors.”) Clean Harbors operated a waste processing facility at the property that processed hazardous wastes for disposal or recycling at offsite locations. Clean Harbors and the Port District are co-permittees on permits issued by the Illinois Environmental Protection Agency (“IEPA”). One such permit is a RCRA Part B permit, which was originally issued on November 4, 2005 and expired on December 9, 2015 (the “Permit”). The IEPA renewed the Permit effective September 6, 2017. R. 108 ¶ 197.

         The IEPA eventually directed the Port District and Clean Harbors to conduct a RCRA facility investigation of the property. The parties performed the investigation and discovered contamination primarily related to Hyon Waste's operations in the 1970s. R. 108 ¶¶ 89-99. Clean Harbors incurred substantial costs to conduct the investigation. Id. ¶ 150. The Port District and Clean Harbors subsequently worked with the IEPA to develop a corrective action plan to address the contamination (known as the “Cap and Drain Plan”). IEPA gave its final approval for the plan in 2011. Id. ¶ 123. The IEPA's plan required that an existing cover at the property remain in place as an engineered barrier, required the construction of a french drain, and required future groundwater monitoring at the property. The Plan is projected to cost $5.75 million in construction costs and an additional $ 2.15 million in monitoring costs. Id. ¶ 151.

         In 2012, Clean Harbors provided notice of its intent to terminate its leases on the property and identified issues related to the Cap and Drain Plan that needed to be resolved as part of its winding down of operations at the property. R. 108 ¶¶ 130- 131. Two weeks after Clean Harbors gave notice of its intent to terminate the leases, the Port District wrote to the IEPA stating it had not approved the Cap and Drain Plan. Id. ¶ 135. Later in 2012, the Port District demanded that Clean Harbors remove the engineered barrier discussed in the Plan, demanded it construct a truck yard on the property, and refused to grant it access to the property to remove certain improvements. Id. ¶ 140-42. The Port District also refused to complete forms required to wind down Clean Harbors' operations properly with the IEPA. Id. ¶ 146. Finally, Clean Harbors alleges the Port District overcharged it quarterly rent payments from 2010 through 2012 totaling $315, 000. Id. ¶ 78.

         On February 19, 2013, Clean Harbors provided written notice to the Port District, the IEPA, and the U.S. Environmental Protection Agency (“EPA”) of its intent to file a RCRA citizen suit against the Port District pursuant to 42 U.S.C. § 6972. The notice letter accused the Port District of violating the parties' IEPA permit by refusing to implement the Cap and Drain Plan, refusing to take financial responsibility for its share of the clean-up under the Plan, refusing to execute documents to allow for the closure of RCRA units (through Clean Harbors) at the property, and by demanding that the engineered barrier be removed in violation of the Cap and Drain Plan. R. 108-5 at 20-21. The notice letter also accused the Port District of violating the RCRA's endangerment provision (42 U.S.C. § 6972(a)(1)(B)) as the owner of the contaminated property. Id. at 21-22.

         In December 2013, the Court stayed the case to allow the IEPA to approve Phase II of the Cap and Drain Plan. R. 65. In January 2017, the Court resumed proceedings. R. 98. Clean Harbors subsequently filed its Third Amended Complaint (“TAC”) on October 10, 2017. R. 108. At issue in this dispute are Counts II, III, and VIII. In Count II of the TAC, Clean Harbors asserts a cause of action under the endangerment citizen suit provision of the RCRA, 42 U.S.C. § 6972(a)(1)(B). In Count III, Clean Harbors brings a citizen suit claim to abate RCRA permit violations under 42 U.S.C. § 6972(a)(1)(A). Both counts allege Clean Harbors provided pre-suit notice to the Port District on February 19, 2013. R. 108 ¶¶ 186, 215. In Count VIII, Clean Harbors alleges the Port District was unjustly enriched after it refused to return rent overpayments Clean Harbors made. Id. ¶¶ 237-244.

         On October 31, 2017, the Port District filed a motion to dismiss Counts II, III, and VIII of the TAC under Fed.R.Civ.P. 12(b)(1) and 12(b)(6). As to the RCRA claims, the Port District argues Clean Harbors (1) failed to allege any facts showing it has an “injury in fact” to demonstrate standing under Article III of the Constitution; (2) failed to provide adequate pre-suit notice; and (3) failed to sufficiently allege RCRA violations under each provision. The Port District argues that Count VIII should be dismissed because Clean Harbors improperly bases its unjust enrichment claim on an express written contract.

         LEGAL STANDARD

         A Rule 12(b)(6) motion challenges the sufficiency of the complaint. See Hallinan v. Fraternal Order of Police of Chicago Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009). Under Rule 8(a)(2), a complaint must include “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). Under the federal notice pleading standards, a plaintiff's “factual allegations must be enough to raise a right to relief above the speculative level.” Bell Atlantic v. Twombly, 550 U.S. 544, 555 (2007). Put differently, a “complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662 (2009) (quoting Twombly, 550 U.S. at 570). “In evaluating the sufficiency of the complaint, [courts] view it in the light most favorable to the plaintiff, taking as true all well-pleaded factual allegations and making all possible inferences from the allegations in the plaintiff's favor.” AnchorBank, FSB v. Hofer, 649 F.3d 610, 614 (7th Cir. 2011).

         Rule 12(b)(1) authorizes the Court to dismiss any claim for which the Court lacks subject matter jurisdiction according to Article III, Section 2 of the U.S. Constitution. When a defendant challenges jurisdiction, the plaintiff bears the burden of establishing a court's jurisdiction. Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992). As with 12(b)(6) motions, in deciding a Rule 12(b)(1) motion the Court must “accept as true all well-pleaded factual allegations and draw all reasonable inferences in favor of the plaintiff.” St. John's United Church of Christ v. City of Chi., 502 F.3d 616, 625 (7th Cir. 2007) (quotation marks omitted).

         DISCUSSION

         I. RCRA (Counts II and III)

         The RCRA was enacted to aid in a national policy to reduce or eliminate hazardous waste “as expeditiously as possible.” 42 U.S.C. § 6902(b). Waste that cannot be eliminated “should be treated, stored, or disposed of so as to minimize the present and future threat to human health and the environment.” Id. To help enforce this goal, Congress enacted a citizen-suit provision that allows “any person” to commence a civil action against alleged violators of the RCRA. 42 U.S.C. § 6972.

         RCRA authorizes two general types of citizen suits. First, a plaintiff may commence a civil action against “any person . . . who is alleged to be in violation of any permit, standard, regulation, condition, requirement, prohibition, or order which has become effective pursuant to this chapter.” 42 U.S.C. § 6972(a)(1)(A). To proceed under subsection (a)(1)(A), a plaintiff is generally required to provide 60 days advance notice to the EPA Administrator, the State in which the violation occurred, and the alleged violator. Id. § 6972(b)(1)(A) (“No action may be commenced under subsection (a)(1)(A) . . . prior to 60 days after the plaintiff has given notice of the violation to (i) the [EPA] Administrator; (ii) the State in which the alleged violation occurs; [and] (iii) to any alleged violator of such permit, standard, regulation, condition, requirement, prohibition, or order.”). Second, a plaintiff may commence a civil action against “any person . . . who has contributed or who is contributing to the past or present handling, storage, treatment, transportation, or disposal of any solid or hazardous waste which may present an imminent and substantial endangerment to health or the environment.” Id. § 6972(a)(1)(B). To proceed under subsection (a)(1)(B), a plaintiff is generally required to provide 90 days advance notice. Id. § 6972(b)(2)(A) (“No action may be commenced under subsection (a)(1)(B) . . . prior to ninety days after the plaintiff has ...


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