N. Ill. Gas Co. v. City of Evanston

• Decision Date: 10 February 2016
• Docket Number: 14-cv-9227
• Citation: 162 F.Supp.3d 654
• Parties: Northern Illinois Gas Company, d/b/a/ Nicor Gas Company, Plaintiff, v. City of Evanston, Illinois, Defendant. City of Evanston, an Illinois Municipal Corporation, Counter-Plaintiff and Third-Party Plaintiff, v. Northern Illinois Gas Company d/b/a Nicor, and Commonwealth Edison Company, Counter-Defendant and Third-Party Defendant.
• Court: U.S. District Court — Northern District of Illinois

162 F.Supp.3d 654

Northern Illinois Gas Company, d/b/a/ Nicor Gas Company, Plaintiff,

v.City of Evanston, Illinois, Defendant.

City of Evanston, an Illinois Municipal Corporation, Counter-Plaintiff and Third-Party Plaintiff,

v.Northern Illinois Gas Company d/b/a Nicor, and Commonwealth Edison Company, Counter-Defendant and Third-Party Defendant.

14-cv-9227

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

Signed February 10, 2016

J. Gregory Deis, Jaimy Levine Hamburg, Matthew C. Sostrin, Mark R. Ter Molen, Mayer Brown LLP, Chicago, IL, for Plaintiff.

Michael S. Blazer, Jeffery D. Jeep, Jeep & Blazer, L.L.C., Chicago, IL, for Defendant.

Gabrielle Sigel, Andrew William Vail, Jenner & Block LLP, Chicago, IL, for Counter-Defendant and Third-Party Defendant.

MEMORANDUM OPINION AND ORDER

JOHN Z. LEE

, United States District Judge

The City of Evanston notified Northern Illinois Gas Company (“Nicor”) and Commonwealth Edison (“ComEd”) in October 2014 of its intent to sue the companies under the Resource Conservation and Recovery Act (“RCRA”), 42 U.S.C. § 6901 et seq. ,

for improper disposal of “solid waste.” In response, Nicor preemptively filed suit, requesting a declaratory judgment that the company has no liability to the City under RCRA. Not to be outdone, Evanston then filed “a counterclaim and third-party complaint” against Nicor and ComEd, respectively—which the Court will call the “counterclaim” for simplicity's sake—asserting claims under RCRA and state law.

Evanston's RCRA claim centers around two different types of “wastes.” First, Evanston alleges Nicor and ComEd are responsible for waste oil that was created years ago as part of a gas production process utilized at the long-defunct Skokie Manufactured Gas Plant (Skokie MGP). Evanston refers to this gas process as the “Lowe Process.”

According to the City, the waste oil created by the Lowe Process “is likely to have leaked into the environment from the above ground storage tanks and other infrastructure at the Skokie MGP,” as well as from gas pipelines, into the soil and groundwater. Counterclaim ¶¶ 10, 35, 41. The waste oil in the soil, at least according to the City, is leading to the creation of methane gas as the oil biodegrades. Id. ¶¶ 40, 112. Evanston also alleges the existence of a “black crust coating” at various parts of the water line along Dodge Avenue, the chemical composition of which is identical to the Lowe Process waste oil. Id. at 42-44.

Second, Evanston asserts that Nicor and ComEd are responsible for the leakage of natural gas from active gas pipelines and associated infrastructure into the soil, groundwater, and bedrock in the area of interest. Id. ¶ 114. According to the City, this has caused “the presence of methane at high pressure and concentrations” in the area. Id. ¶ 114.

Nicor and ComEd have filed a motion to dismiss the RCRA counterclaim under Fed. R. Civ. P. 12(b)(6)

and offer two principal arguments. First, the companies contend that methane gas is not a “solid waste” as that term is defined in RCRA. Second, the companies argue that the Evanston's “intent to sue” letter did not satisfy the requirements of RCRA.

For the reasons set forth below, the Court grants the motion and dismisses Evanston's RCRA claim against Nicor and ComEd without prejudice. As a result, the Court also declines to exercise supplemental jurisdiction over Evanston's state claims, and Nicor's complaint seeking declaratory relief is dismissed as moot.

I. FACTUAL AND PROCEDURAL BACKGROUND

Methane gas was first detected in and around James Park in Evanston, Illinois, in 2012. Id. ¶ 63. If this methane were to reach concentrations at or exceeding the gas's “lower explosive limit” (“LEL”), it could combust when exposed to an ignition source. Id. ¶ 7. In light of this danger and on the joint advice of Evanston's Fire Chief and a retained engineer, David Hendron, Evanston began monitoring methane levels at various locations in the James Park area, including around Dawes Elementary School and Levy Senior Center. Id. ¶ 69–70. Methane has not yet been detected at or near the LEL, id. ¶¶ 70–71, but the Illinois EPA and other organizations agree with Evanston that continued monitoring is necessary, id. ¶¶ 92–94.

Hendron also conducted an investigation to determine the source of the methane. Id. ¶ 69. Although earlier investigations pointed to the closed landfill, upon which James Park was constructed, id. ¶¶ 63–67, Hendron drew a different conclusion and identified two other “likely sources” of the methane gas: (1) “[l]eakage of petroleum materials (Lowe Process oil waste) from the operational facilities at, and from the maintenance and operation of the pipeline infrastructure systems associated with the former Skokie MGP”; and (2) “[l]eakage of natural gas from existing and abandoned natural gas pipelines in the vicinity of James Park.” Id. ¶ 73.

The Skokie MGP, Evanston explains, operated from 1910 until sometime in the early 1950s. Id. ¶¶ 29–30. The plant manufactured gas using the “Lowe (Williamson)” process. Id. ¶ 31. The Lowe Process utilized oil stored in above-ground tanks that eventually became waste oil. Id. ¶¶ 32–33. The waste oil likely entered the environment by leaking from the storage tanks and by traveling through the pipelines that transported gas from the Skokie MGP. Id. ¶¶ 35-37. At least two of those old distribution lines are located in the vicinity of James Park. Id. ¶ 36. Because of its low viscosity, the waste oil would have taken only a matter of years to travel down to bedrock. Id. ¶ 34. Once the oil reached bedrock, it would have started to biodegrade into methane gas. Id. ¶ 40.

In addition, Evanston also alleges that an active natural gas pipeline running along Dodge Avenue near James Park “contains, or contained, Lowe Process waste oil.” Id. ¶ 41. Evanston surmises this from a chemical analysis of a “black crust” that coats a municipal water pipeline located five feet below the Dodge Avenue gas pipeline. Id. ¶ 44. The analysis of the crust revealed that it “matches identically with the compounds known to be present in Lowe Process waste oil.” Id. According to Evanston, this crust threatens to penetrate the water line, which would contaminate Evanston's drinking water. Id. ¶ 111. Further supporting the conclusion that the crust on the water line comes from the gas line is that the soil between the two lines “is stained black, similar in appearance to the color of the black crust.” Id. ¶ 44.

Unrelated to the Lowe Process waste oil, Evanston also alleges that natural gas is leaking from active gas pipelines and associated infrastructure in the vicinity of James Park into soil, groundwater and bedrock. Id. ¶ 114. This is causing “the presence of methane in high pressure and concentrations in and around James Park.” Id. ¶ 115.

Evanston asserts that it repeatedly has sought the cooperation of Nicor and ComEd to investigate the source of the methane. Id. ¶¶ 74–107. In Evanston's eyes, the companies were generally evasive and dismissive. Id. As a result, Evanston was forced to resort to administrative orders and Freedom of Information Act requests to learn about the location of pipelines and other relevant infrastructure. Id.

In the face of Nicor and ComEd's unwillingness to cooperate, the City formally notified the companies of its intent to sue them under RCRA. Compl. ¶¶ 8, 117, 121. Evanston's notice, which is attached to its counterclaim and further detailed below, identified two separate RCRA “endangerments”: methane leaking from natural gas pipelines, and “coal tar” in the form of a “black crust” coating the Dodge Avenue municipal water pipeline. The notice stated that “[t]here is a perfect match between the compounds detected in the black crust and compounds know to be present in coal tar.” Id. , Ex. B ¶ 38. Evanston's notice made no mention of Lowe Process waste oil, nor did it draw a connection between the “coal tar” and the methane problem.

II. ANALYSIS

In deciding a motion to dismiss under Rule 12(b)(6)

for failure to state a claim, the Court accepts all well-pleaded facts in the complaint (or counterclaim) as true and gives the plaintiff the benefit of all reasonable inferences. Tamayo v. Blagojevich , 526 F.3d 1074, 1081 (7th Cir.2008). “RCRA is a comprehensive environmental statute that governs the treatment, storage, and disposal of solid and hazardous waste,” Meghrig v. KFC W., Inc. , 516 U.S. 479, 483, 116 S.Ct. 1251, 134 L.Ed.2d 121 (1996), and to state a claim under the citizen-suit provisions of RCRA, a plaintiff must allege either a “violation,” see 42 U.S.C. § 6972(a)(1)(A), or an “endangerment,” see

id. § 6972(a)(1)(B). The plaintiff must also have notified the defendant of an alleged violation 60 days before filing suit and of an alleged endangerment 90 days before filing suit. 42 U.S.C. § 6972(b)(1)(A), (b)(2)(A). Failure to provide notice requires dismissal of the complaint. Hallstrom v. Tillamook Cnty. , 493 U.S. 20, 31, 110 S.Ct. 304, 107 L.Ed.2d 237 (1989).

Evanston brings its RCRA claim under the endangerment provision, see Compl. ¶ 108; Resp. Br. at 3 n.2, ECF 36, which allows suits “against any person, … including any past or present generator, past or present transporter, or past or present owner or operator of a treatment, storage, or disposal facility, 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.” 42 U.S.C. § 6972(a)(1)(B)

.

As explained above, Evanston identifies in its counterclaim two distinct substances that it contends are RCRA solid wastes that present an imminent threat to public health or the environment. The first is Lowe Process waste oil from the Skokie MGP. Some of that waste oil coats a water pipe, and some of it has biodegraded into methane. The second is methane gas leaking from natural gas pipelines. For...