People ex rel. Madigan v. J.T. Einoder, Inc.

• Citation: 28 N.E.3d 758
• Decision Date: 19 March 2015
• Docket Number: No. 117193.,117193.
• Parties: The PEOPLE ex rel. Lisa MADIGAN, Appellee, v. J.T. EINODER, INC., et al., Appellants.
• Court: Supreme Court of Illinois

28 N.E.3d 758

The PEOPLE ex rel. Lisa MADIGAN, Appellee

v.J.T. EINODER, INC., et al., Appellants.

No. 117193.

Supreme Court of Illinois.

March 19, 2015.

Richard J. Prendergast, Seamus C. Prendergast, Lionel W. Weaver and Brian C. Prendergast, of Richard J. Prendergast, Ltd., of Chicago, for appellants.

Lisa Madigan, Attorney General, of Springfield (Carolyn E. Shapiro, Solicitor General, and Christopher M.R. Turner, Assistant Attorney General, of Chicago, of counsel), for the People.

OPINION

Justice BURKE delivered the judgment of the court, with opinion.

¶ 1 On July 19, 2000, the Attorney General for the State of Illinois¹ on his own motion and at the request of the Illinois Environmental Protection Agency (IEPA), filed a complaint in the circuit court of Cook County against J.T. Einoder, Inc. (JTE) and Tri–State Industries, Inc. (Tri–State), alleging that JTE and Tri–State were operating a solid waste disposal site without a permit, in violation of the Environmental Protection Act (Act). 415 ILCS 5/1 et seq. (West 2000). Subsequently, in an amended complaint filed on January 31, 2005, John Einoder, the sole owner and operator of Tri–State, and Janice Einoder, the principal owner and president of JTE, were added to the suit as party defendants in their individual capacities.

¶ 2 After several years of litigation, the circuit court ruled in the State's favor, holding that defendants had violated the Act by engaging in open dumping and by permitting the deposit of construction and demolition debris (CDD) waste above grade without a permit. Monetary penalties were imposed on each defendant. In addition, the court granted the State's request for mandatory injunctive relief, ordering defendants to remove any and all material deposited above grade at the site.

¶ 3 Defendants appealed and the appellate court affirmed the circuit court's judgment, with one justice concurring in part and dissenting in part. 2013 IL App (1st) 113498, 377 Ill.Dec. 816, 2 N.E.3d 1097.

¶ 4 We granted defendants' petition for leave to appeal. For reasons explained below, we affirm in part and reverse in part the judgment of the appellate court.

¶ 5 BACKGROUND

¶ 6 The essential facts of this case are not in dispute. In 1993, a 40–acre parcel of land located near the intersection of Rt. 30 and Rt. 83, in unincorporated Lynwood, Illinois (the Lynwood site), was purchased by John Einoder and placed in a land trust for the benefit of Tri–State. The property, which contained a large sand pit, was developed into a construction and demolition resource recovery facility and landfill using leased equipment and operators provided by JTE, a closely held corporation owned by Janice Einoder (90%) and John Einoder (10%).

¶ 7 Sometime in 1995 the site began accepting general construction and demolition debris (GCDD)² , and clean construction and demolition debris (CCDD).³ Soon thereafter, the IEPA received a complaint that open dumping was taking place at the site. As a result, Gino Bruni, an inspector for the IEPA, visited the site in December 1995. After inspecting the site, Bruni filed a report indicating that, at the time of inspection, approximately “500,000 cubic yards of wood, asphalt, brick, concrete and scrap metal” had been deposited at the site. A citation was issued to Tri–State for open dumping without a permit.

¶ 8 In 1996, JTE installed an Eagle 1400, which is a large waste processing machine, at the Lynwood site. Janice Einoder then contacted the Bureau of Land (BOL) at the IEPA to notify them that the site was now an operational recycling facility for GCDD and CCDD. JTE submitted a proposal to the IEPA, seeking to have the site designated as a recycling facility. In response to the proposal, Edwin Bakowski, manager of the permit section at the BOL, sent a letter to “J.T. Einoder, Attn: Janice T. Einoder.” In the letter Bakowski stated: “Certain recycling activities do not require a Bureau of Land permit, however, facilities not requiring a permit may only receive recyclable materials * * * which have an established market and are not mixed with solid waste prior to receipt.” The letter noted that the site could operate as a recycling facility without a permit only if JTE revised its proposal and agreed to accept solely CCDD, scrap metal, or harvested or untreated wood. Bakowski noted that, according to JTE's proposal, the site was accepting nonrecyclable GCDD materials in addition to recyclable CCDD materials. According to Bakowski, in this situation—where the recyclable and nonrecyclable materials are comingled prior to their arrival at the facility—all of the material is designated as “solid waste” and the facility would require a permit as a “waste transfer station.”

¶ 9 The IEPA continued to make inspections of the site and on December 11, 1996, sent a Violation Notice Letter (VNL–1996–01190), to Tri–State and JTE, pursuant to section 31(a)(1) of the Act (415 ILCS 5/31(a)(1) (West 1996)). In the notice, the IEPA alleged that Tri–State and JTE were operating an open dump/solid waste disposal site without a permit in violation of environmental statutes, regulations, or permits. After receiving this notice, John and Janice Einoder, as well as attorneys representing Tri–State and JTE, engaged in numerous phone conversations, written correspondence, and personal meetings with several IEPA representatives in an effort to address the Violation Notice and determine what, if any, permits needed to be obtained and what action needed to be taken for the site to be in compliance with IEPA regulations. No consensus was reached.

¶ 10 According to the record, the Lynwood site received 9,763 loads of waste (nearly all CCDD) during the period of January 1998 to May 1998. All of this waste was deposited at the sand pit as fill so that, by May 1998, the waste had grown into a “hill” which was 40 feet above grade.

¶ 11 In April 1998, new Violation Notice Letters were sent to Tri–State and JTE. In response, John and Janice Einoder again met with IEPA representatives to discuss the alleged violations. Sub

sequently, the Einoders submitted a remediation proposal to the Agency. That proposal, however, was rejected. As a result, on August 20, 1998, the IEPA sent JTE a Notice of Intent to Pursue Legal Action, pursuant to section 31(b) of the Act (415 ILCS 5/31(b) (West 1996)), stating that the IEPA was “providing this notice because it may pursue legal action against J.T. Einoder for violations of environmental statutes, regulations or permits * * *.”

¶ 12 After this notice was sent, the agency agreed to postpone litigation until 10 test pits could be dug to determine the content of the material being used as fill. These test pits revealed that the material in the landfill was 99.99% nonhazardous CCDD. Nevertheless, because the pile of fill continued to grow above grade, the IEPA asked the Attorney General to file a complaint for an injunction and civil penalties against Tri–State and JTE for violations of the Act. See 415 ILCS 5/31(b) (West 2000).

¶ 13 On July 19, 2000, an initial, seven-count complaint was filed by the Attorney General against Tri–State and JTE. The complaint alleged the following violations: (1) open dumping, as defined in section 3.24 of the Act and in violation of section 21(a) of the Act (415 ILCS 5/21(a) (West 2000)); (2) operating a waste disposal facility without a permit, in violation of section 21(d) of the Act (415 ILCS 5/21(d) (West 2000)); (3) developing and operating a solid waste management site without a permit in violation of sections 807.201, 807.202(a), and 812.101(a) of the Board Waste Disposal Regulations (35 Ill. Adm.Code 807.201, 807.202(a), 812.101(a) (2000) ); (4) disposal of waste at an unpermitted facility in violation of section 21(e) of the Act (415 ILCS 5/21(e) (West 2000)); (5) causing or allowing litter in violation of section 21(p) (415 ILCS 5/21(p) (West 2000)); (6) failure to properly notify and document the GCDD accepted at the site and failure to limit the percentage of nonrecyclable GCDD, in violation of section 22.38(b) (415 ILCS 5/22.38(b) (West 2000)); and (7) failure to perform a hazardous waste determination, in violation of section 722.111 of the Board Waste Disposal Regulations (35 Ill. Adm.Code 722.111 (2000) ).

¶ 14 After the complaint was filed, the State sought a preliminary injunction and temporary restraining order to halt the continued disposal of CCDD at the site. Although the court granted the motion in April 2001, the Lynwood site continued to operate until 2003, when the site finally ceased all operations.

¶ 15 In January 2005, over the defendants' objection, the circuit court permitted the State to file a first amended complaint. In this complaint, John and Janice Einoder were added as party defendants in their individual capacity. Defendants moved for dismissal of the complaint as to the Einoders, arguing that, because the IEPA never sent a statutory “Notice of the Intent to Pursue Legal Action” letter to them in their individual capacity, they were improperly joined and the trial court had no subject matter jurisdiction as to them. In addition, defendants argued that Janice Einoder could not be held personally liable for violations of the Act because she had not been involved in the day-to-day operations of the site. The trial court denied the motion to dismiss the Einoders in their individual capacity, but granted relief on two of the counts. A bench trial was then held on a five-count second amended complaint.

¶ 16 After hearing all of the evidence, the circuit court rejected defendants' arguments and found that Tri–State and JTE, as well as John and Janice Einoder, were each liable for operating a waste disposal site and depositing CCDD above grade without a permit in violation of the Illinois Environmental Protection Act. The circuit court imposed penalties against each of the defendants, as follows: Tri–State, $750,000; JTE, $500,000; John Einoder, $500,000; and Janice Einoder, $50,000 ...