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

• Citation: 377 Ill.Dec. 816,2 N.E.3d 1097,2013 IL App (1st) 113498
• Decision Date: 11 December 2013
• Docket Number: Docket No. 1–11–3498.
• Parties: The PEOPLE ex rel. Lisa MADIGAN, Attorney General of the State of Illinois, Plaintiff–Appellee and Cross–Appellant, v. 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.
• Court: United States Appellate Court of Illinois

2013 IL App (1st) 113498

2 N.E.3d 1097

377 Ill.Dec. 816

The PEOPLE ex rel. Lisa MADIGAN, Attorney General of the State of Illinois, Plaintiff–Appellee and Cross–Appellant,

v.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.

Docket No. 1–11–3498.

Appellate Court of Illinois, First District, Third Division.

Dec. 11, 2013.

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.

OPINION

Presiding Justice HYMAN delivered the judgment of the court, with opinion.

¶ 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...