E.O.R. Energy, LLC v. Pollution Control Board , 2015 IL App (4th) 130443 ( 2015 )

Illinois Official Reports
Appellate Court
E.O.R. Energy, LLC v. Pollution Control Board,
2015 IL App (4th) 130443
Appellate Court E.O.R. ENERGY, LLC, Petitioner, v. THE POLLUTION CONTROL
Caption BOARD, THE PEOPLE OF THE STATE OF ILLINOIS, and
AET ENVIRONMENTAL, INC., Respondents.–AET ENVIRON-
MENTAL, INC., Petitioner, v. THE POLLUTION CONTROL
BOARD, THE PEOPLE OF THE STATE OF ILLINOIS, and E.O.R.
ENERGY, LLC, Respondents.
District & No. Fourth District
Docket Nos. 4-13-0443, 4-13-0448 cons.
Filed March 27, 2015
Decision Under Petition for review of order of Pollution Control Board, No.
Review PCB-2007-095.
Judgment Affirmed.
Counsel on Felipe Gomez (argued), of Law Office of Felipe Gomez, of Chicago,
Appeal and James P. Baker, of Baker, Baker & Krajewski, LLC, of
Springfield, for petitioners.
Lisa Madigan, Attorney General, of Chicago (Michael A. Scodro and
Carolyn E. Shapiro, Solicitors General, and Carl J. Elitz (argued),
Assistant Attorney General, of counsel), for respondents.
Panel JUSTICE STEIGMANN delivered the judgment of the court, with
opinion.
Justices Holder White and Appleton concurred in the judgment and
opinion.
OPINION
¶1 These consolidated appeals involve questions of jurisdiction and procedure in
violation-enforcement proceedings before the Illinois Pollution Control Board (Board) under
the Environmental Protection Act (Environmental Act) (415 ILCS 5/1 to 58.17 (West 2004)).
In March 2007, the Illinois Environmental Protection Agency (EPA) charged two companies,
petitioners, E.O.R. Energy, LLC (EOR), and AET Environmental, Inc. (AET) (collectively,
the companies), with violations of the Environmental Act and its associated regulations.
Specifically, the EPA alleged in its complaint that EOR and AET transported hazardous-waste
acid into Illinois, where EOR stored the waste before disposing of it through injection into
EOR’s industrial wells in Sangamon and Christian counties. In June 2012, the EPA filed
motions for summary judgment. In response, the companies–for the first time in these
proceedings–argued that the acid material at issue was not a waste, but instead was used to treat
EOR’s wells to aid in petroleum extraction. Therefore, the companies claimed, their conduct
fell within the exclusive regulatory jurisdiction of the Illinois Department of Natural
Resources (DNR) under the Illinois Oil and Gas Act (Oil and Gas Act) (225 ILCS 725/1 to
28.1 (West 2004)). The Board rejected that argument and granted summary judgment for the
EPA, concluding that the DNR’s regulatory authority over the injection of fluids into
oil-and-gas-related wells does not encompass the injection of hazardous waste. Instead,
hazardous-waste regulation is within the exclusive province of the EPA. The Board imposed
sanctions of $60,000 against AET and $200,000 against EOR.
¶2 The companies appeal directly to this court pursuant to section 41(a) of the Environmental
Act (415 ILCS 5/41(a) (West 2004)), arguing that (1) the EPA failed to plead facts sufficient to
establish jurisdiction; (2) the EPA and Board had no jurisdiction; and (3) even if the EPA and
Board had jurisdiction, the record fails to support the Board’s grant of summary judgment.
¶3 To the extent the companies challenge the sufficiency of the EPA’s pleadings, we conclude
they forfeited that argument by answering the complaint and failing to raise a timely objection.
We further conclude that (1) the EPA and Board had jurisdiction and (2) the undisputed facts
established that the companies violated the Environmental Act, as alleged in the EPA’s
complaint. Accordingly, we affirm the Board’s grant of summary judgment.
¶4 I. BACKGROUND
¶5 Initially, we note that the companies vigorously contest many of the Board’s factual
findings. However, because the companies’ multiple procedural defaults affected the factual
record that was before the Board on summary judgment, we begin with the procedural history
of this case before turning to the undisputed facts.
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¶6 A. Procedural Background
¶7 1. The EPA’s March 2007 Complaint
¶8 In count I, the EPA alleged that AET and EOR violated section 21(e) of the Environmental
Act (415 ILCS 5/21(e) (West 2004)) by transporting hazardous wastes into Illinois for storage
and disposal at a site that did not meet the Environmental Act’s requirements.
¶9 In count II, the EPA alleged that EOR violated sections 21(e) and (f)(1) of the
Environmental Act (415 ILCS 5/21(e), (f)(1) (West 2004)) by storing, disposing, “and/or”
abandoning hazardous wastes at a site that did not meet the Environmental Act’s requirements,
thereby conducting a hazardous-waste storage operation without a Resource Conservation and
Recovery Act of 1976 (RCRA) permit.
¶ 10 In count III, the EPA alleged that EOR violated (1) sections 703.121(a) and (b) of Title 35
of the Illinois Administrative Code (Administrative Code) (35 Ill. Adm. Code 703.121(a), (b)
(2003)), (2) section 704.105(a)(2) of Title 35 of the Administrative Code (35 Ill. Adm. Code
704.105(a)(2) (2006)), and (3) section 21(f)(2) of the Environmental Act (415 ILCS 5/21(f)(2)
(West 2004)) by failing to apply for or acquire an RCRA permit before storing hazardous
waste at its site.
¶ 11 In count IV, the EPA alleged that EOR violated multiple provisions of Title 35 of the
Administrative Code, thereby violating section 21(f)(2) of the Environmental Act (415 ILCS
5/21(f)(2) (2004)), by failing to follow proper procedures, take all necessary precautions, and
keep and maintain all appropriate records regarding the management of the hazardous-waste
acid.
¶ 12 Last, in count V, the EPA alleged that EOR violated section 704.121 of Title 35 of the
Administrative Code (35 Ill. Adm. Code 704.121 (2006)), thereby violating section 12(g) of
the Environmental Act (415 ILCS 5/12(g) (West 2004)), by injecting hazardous-waste acid
into EOR’s wells without having an “Underground Injection Control” (UIC) permit and failing
to comply with the listed requirements of section 704.203 of Title 35 of the Administrative
Code (35 Ill. Adm. Code 704.203 (2006)).
¶ 13 In April 2007, the Board accepted the EPA’s complaint for hearing. In June 2007, the
companies–through corporate officers who were not attorneys–filed separate answers to the
EPA’s complaint. In October 2007, after a Board hearing officer required the companies to
hire an attorney, both companies refiled answers to the complaint through their mutual
attorney, David O’Neill. Neither company challenged (1) the EPA’s or the Board’s jurisdiction
or (2) the sufficiency of the EPA’s complaint.
¶ 14 In January 2008, O’Neill withdrew from the case.
¶ 15 2. The EPA’s Requests To Admit Facts
¶ 16 In March 2008, the EPA served AET with a request to admit facts that set forth 138
separate factual allegations. In April 2008, Lori DeVito, AET’s owner, who was not an
attorney, filed an appearance and a response to the EPA’s request to admit facts.
¶ 17 In January 2009, the EPA served EOR with a request to admit facts that set forth 165
separate factual allegations. In February 2009, attorney Diane F. O’Neill entered her
appearance on behalf of AET and EOR. (The record does not reveal what relation, if any, exists
between David O’Neill and Diane O’Neill.) Later that month, EOR filed an unsigned and
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unsworn response to the EPA’s request to admit facts. The response stated, in part, “[EOR],
arguing on its own behalf, herein responds to the [EPA’s] Request to Admit Facts.” (Although
the final page of the response listed Diane F. O’Neill’s name and contact information, the
signature line above her name was blank and the document was not notarized.) In March 2010,
Diane O’Neill withdrew from the case.
¶ 18 In August 2010, the EPA filed motions to deem facts admitted against both companies. In
its motions, the EPA cited the Board’s procedural rules, which provided that (1) corporations
must appear before the Board only through licensed attorneys (35 Ill. Adm. Code
101.400(a)(2), amended at 31 Ill. Reg. 11610 (eff. Nov. 21, 2007)) and (2) a party’s failure to
respond to a request to admit facts by timely serving upon the requesting party “a sworn
statement denying specifically the matters of which admission is requested” results in the
matters of fact being admitted (35 Ill. Adm. Code 101.618(f), amended at 31 Ill. Reg. 11610
(eff. Nov. 21, 2007)). The EPA argued that because neither AET nor EOR provided a sworn
statement from a licensed attorney in response to the requests to admit, the facts should be
deemed admitted. Neither company responded in any form to the EPA’s motions to deem facts
admitted. In September 2010, the Board granted the EPA’s motions to deem facts admitted.
¶ 19 3. The EPA’s Motions for Summary Judgment
¶ 20 In June 2012, the EPA filed separate motions for summary judgment against AET and
EOR. In addition to the facts that the Board deemed admitted in its September 2010 ruling, the
EPA’s motions for summary judgment relied upon numerous other documentary exhibits.
¶ 21 Among the EPA’s exhibits was an affidavit completed by Richard Johnson, an EPA
regional manager who conducted the EPA investigation into the companies’ alleged violations
of the Environmental Act. Johnson stated that his investigation included multiple site
inspections and interviews with witnesses. Johnson attached to his affidavit (1) a 10-page
report from his November 2004 inspection of the waste-disposal site; (2) a 58-page “Criminal
Technical Report” from the National Enforcement Investigations Center (NEIC) of the United
States Environmental Protection Agency (USEPA), which was completed as part of a federal
investigation into the companies’ conduct; and (3) a 42-page report from Johnson’s April 2005
inspection of the waste-disposal site, which included 34 pages of photographs, maps,
diagrams, charts, and permitting records.
¶ 22 Neither AET nor EOR moved to strike Johnson’s affidavit, the attached reports, or any of
the EPA’s other supporting exhibits.
¶ 23 B. The Undisputed Facts
¶ 24 Having reviewed the procedural history leading up to summary judgment, we now set forth
the undisputed facts of record. Before doing so, however, we note that the EPA’s requests to
admit contain several seemingly inconsistent factual allegations. For example, the EPA’s
request to admit facts served upon EOR contains the following factual assertions:
“60. EOR paid Luxury Wheels for the acid material.
61. EOR paid AET for the acid material.
62. EOR paid nothing for the acid material.
63. EOR paid to ship the acid material from Colorado to Illinois.
64. Luxury Wheels paid to ship the acid material from Colorado to Illinois.”
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¶ 25 When the Board granted the EPA’s motion to deem facts admitted, its doing so resulted in
a blanket admission of all the facts contained in both of the EPA’s requests to admit.
Obviously, if two or more of those admitted facts cannot logically coexist as true, those
particular facts cannot be considered undisputed. However, to the extent that we can logically
reconcile a combination of admitted facts, we will construe such facts as undisputed. For
example, it is logically possible that both EOR and Luxury Wheels paid for the acid material to
be shipped from Colorado to Illinois. It is not possible, however, that EOR paid AET or
Luxury Wheels for the acid material and also paid nothing for the acid material. Given these
admissions, we will consider it an undisputed fact that EOR paid to ship the acid material from
Colorado to Illinois and a disputed fact whether EOR paid Luxury Wheels or AET for the acid
material. The companies argue on appeal that the seemingly inconsistent facts must be
construed against the EPA as the party moving for summary judgment. However, as is true of
the example just given, we conclude that none of the seemingly inconsistent or contradictory
facts in the EPA’s requests to admit are material to the ultimate determination of liability in
this case. Accordingly, we will not attempt to further reconcile–or even discuss–irreconcilable
facts that are not material to the issues before us in these appeals.
¶ 26 1. The Companies and the Illinois Wells
¶ 27 AET specializes in the logistics of transportation, storage, and disposal of hazardous waste
generated by third-party companies. EOR is an energy company involved in petroleum
production. The companies share an office building in Denver. Arthur Clark, a corporate
officer of EOR, also works for AET. Clark is married to DeVito, who, as already mentioned,
owns AET.
¶ 28 EOR holds the lease to two oil fields in Illinois on which it operates oil, brine-injection, and
natural-gas wells. The first field, known as Rink-Traux, is on the northern edge of Lake
Sangchris in Christian County. The second field, known as Galloway, is at the junction of
Galloway Road and Cotton Hill Road, just northeast of the village of Pawnee in Sangamon
County.
¶ 29 2. The Luxury Wheels Incident
¶ 30 In July 2002, a hazardous-materials team from the fire department of Grand Junction,
Colorado, responded to an incident at Luxury Wheels, a company that produced custom
chrome automobile wheels. A 1,500-gallon tank of industrial acid–which consisted of
phosphoric, nitric, glycolic, and fluoroboric acids mixed with a product known as Alum
Etch-G–was overheating, fuming, and producing a large orange-brown cloud. The fire
department successfully cooled and stabilized the acid by adding large amounts of ice to the
tank. After eliminating the emergency, the fire department left it up to Luxury Wheels to
arrange clean up.
¶ 31 3. AET Takes Custody of the Acid Material
¶ 32 The day after the fire department responded to the incident, Luxury Wheels hired AET to
remove and dispose of the acid material. AET obtained 8 new 275-gallon plastic storage
containers, known as totes, which it used to transport the acid material away from Luxury
Wheels.
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¶ 33 AET shipped the acid-filled totes to Arvada Treatment Center (Arvada) in Arvada,
Colorado, for disposal. As part of the shipment process, AET created a “waste profile” that
listed the acid material as “Aluminum Etch (Fluoroboric Acid, Glycolic Acid) that was
generated by the etching of aluminum prior to nickel plating.” AET also created a “hazardous
waste manifest,” which described the acid material as corrosive and reactive hazardous waste.
Arvada rejected the totes because the acid material was reacting and “off-gassing,” emitting a
red or orange gas.
¶ 34 After Arvada rejected the acid material, AET prepared another waste profile to be used in
delivering the material to Safety Kleen, a disposal company in Deer Trail, Colorado. That
waste profile listed the acid material as “spent aluminum etchant” and “waste byproduct from
process.” Safety Kleen also rejected the totes of acid.
¶ 35 After Arvada and Safety Kleen refused to dispose of the acid material, AET placed the
totes in a semitrailer at its transfer facility. Because the acid material was producing gas, the
lids of the totes were left slightly open and the semitrailer was left open during the daytime. A
fan was placed in the semitrailer to vent the gas. While at the transfer facility, one or more of
the totes attained a temperature sufficient to melt the container. Clark–who oversaw the
storage of the acid material at AET’s facility–directed an AET employee to further dilute the
acid with water and other materials. After dilution, the acid material filled 12 totes.
¶ 36 AET contacted Vickery Environmental, Inc. (Vickery), to discuss disposal of the acid
material. In anticipation of sending the material to Vickery, AET prepared a third waste
profile, which described the material as a “clear liquid that is a hazardous waste (40 C.F.R.
261).” Although AET never sent the acid material to Vickery for disposal, a representative of
Vickery suggested disposing of the material through deep-well injection. Clark and James
Hamilton (also an EOR corporate officer) decided to ship the acid material from AET’s
Colorado facility to EOR’s wells in Illinois.
¶ 37 4. Shipment of the Totes to Illinois
¶ 38 On August 30, 2002, AET and EOR shipped the totes of acid from AET’s warehouse in
Denver to a facility located near EOR’s oil fields and the village of Pawnee in Sangamon
County. That facility was owned by a company known as Kincaid P&P (Kincaid). Kincaid
employed two workers, Rick Wake and Charles Geary, whom EOR paid to maintain EOR’s
wells. A bill of lading accompanying the shipment of acid material listed Luxury Wheels as the
shipper, SLT Express as the carrier, and Kincaid as the consignee.
¶ 39 5. Storage of the Totes at the Kincaid Facility
¶ 40 Upon arriving in Illinois, the totes were unloaded and placed in a structure owned by
Kincaid. The structure, which was not entirely protected from the outside weather, lacked (1)
electricity, (2) heating, (3) a containment structure to collect the acid material in the event of a
spill, (4) a fence, and (5) posted warnings that the structure contained hazardous waste. For a
period of time between August 2002 and November 2004, bags of hydrated lime were stored
on pallets next to the totes of acid material. The paper bags eventually deteriorated and lime
spilled onto the ground inside the structure. Hydrated lime is a strong base that would react
violently if it made contact with acid. EOR did not instruct Wake or Geary to separate the totes
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of acid from the lime, nor did EOR inform Wake or Geary that the totes contained hazardous
waste.
¶ 41 6. Injection of the Acid Material Down EOR’s Wells
¶ 42 At some point prior to early 2004, EOR instructed Wake and Geary to inject the acid
material into EOR’s wells on the Rink-Traux and Galloway fields. Clark told Wake and Geary
that (1) the totes contained a “light grade acid” and (2) they should “keep it out of their eyes
and wash it off if they get it on them.”
¶ 43 Wake and Geary injected the acid material down the wells by fabricating a hose fitting
capable of connecting the totes with the fittings at the top of the wells. After loading a tote into
the bed of a pickup truck, Wake and Geary would drive from the storage structure to a well.
They would then connect the tote to the well and pump the acid material down the well. Over a
three-to-four-month period, Wake and Geary discharged approximately 8½ totes of acid
material down EOR’s wells.
¶ 44 EOR was aware that Wake and Geary were injecting the acid material into the Rink-Traux
and Galloway wells. In January 2004, Hamilton telephoned Geary at his home and instructed
him to (1) discharge all the remaining acid material down EOR’s wells as soon as possible and
(2) rinse out the remaining totes.
¶ 45 7. The Federal Investigation
¶ 46 In early February 2004, the USEPA and the NEIC (the USEPA’s forensic-investigations
division) served a search warrant and conducted sampling activities at the Kincaid site. (We
note that the record does not reveal how federal or state authorities learned of the companies’
activities relating to the acid material.) At the time the search warrant was executed, the 12
totes were still inside the structure. Three of the totes were full of the acid material and one tote
was partially full. The remaining eight totes contained residue from the acid material. Liquid
samples from the full and partially full totes revealed that the acid material contained greater
than 5 mg/L of leachable chromium.
¶ 47 8. Johnson’s Investigation
¶ 48 In November 2004, Johnson inspected the Kincaid site. Prior to his inspection, Johnson
reviewed EPA records and determined that the Kincaid site was not a hazardous-waste-storage
or disposal facility and had never been issued an RCRA permit to serve as a
hazardous-waste-management facility. At the Kincaid site, Johnson interviewed Wake, who
stated that Hamilton directed Wake and Geary to discharge the acid into the wells. Following
his November 2004 inspection, Johnson received a copy of the NEIC report detailing the
results of the testing performed at the Kincaid site.
¶ 49 In April 2005, Johnson reinspected the Kincaid site and discovered that all 12 totes were
gone. Johnson again met with Wake, who showed Johnson a “uniform hazardous waste
manifest” showing the shipment of 1,000 gallons of “corrosive and toxic hazardous waste”
from the Kincaid site to SET Environmental, Inc., in Houston, Texas, five days earlier. A
“Land Disposal Restriction” notice accompanying the manifest indicated that the waste
exhibited the hazardous-waste characteristics for corrosivity and “Toxicity Characteristic
Leaching Procedure (TCLP) chrome.”
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¶ 50 C. The Board’s Grant of Summary Judgment
¶ 51 1. EOR
¶ 52 EOR never responded to the EPA’s motion for summary judgment. On September 6, 2012,
the Board granted summary judgment against EOR and imposed a civil penalty of $200,000,
finding that EOR violated the Environmental Act and its associated regulations, as alleged in
the EPA’s complaint.
¶ 53 On September 12, 2012, attorney Felipe Gomez entered his appearance on behalf of EOR.
(We note that Gomez entered his appearance on behalf of AET in August 2012, before the EPA
filed its motions for summary judgment.)
¶ 54 In October 2012, EOR filed a motion to reconsider which, for the first time in these
proceedings, challenged (1) the sufficiency of the EPA’s complaint and (2) the Board’s
jurisdiction to impose liability and penalties for counts I and V of the EPA’s complaint.
Specifically, EOR argued that the wells at issue were “Class II oil-and-gas-related injection
wells” governed by the Oil and Gas Act, which fell within the exclusive regulatory jurisdiction
of the DNR. According to EOR, it utilized the acid material at issue to “treat” the wells, as is a
common practice in the oil and gas industry. (We note that the EPA’s request to admit facts
also stated that EOR injected the acid material to “treat” the wells. This fact was deemed
admitted.)
¶ 55 In January 2013, the Board denied EOR’s motion to reconsider. In a 20-page order, the
Board considered and rejected EOR’s jurisdictional arguments. The Board concluded that
although DNR has regulatory authority over Class II injection wells, the Oil and Gas Act did
not grant DNR authority over hazardous waste, even if such waste is injected into Class II
wells. Instead, DNR’s authority to regulate “waste” injected into Class II wells is limited under
the Oil and Gas Act to the type of field waste produced during oil and gas extraction. See 225
ILCS 725/1 (West 2004) (defining “waste” for purposes of the Oil and Gas Act). The Board
noted that the EPA, however, has exclusive regulatory authority over hazardous waste.
Further, EOR’s failure to respond to the EPA’s request to admit facts or motion for summary
judgment resulted in an admission that the acid material was a “hazardous waste” within the
meaning of the Environmental Act. Accordingly, the Board affirmed its prior order, finding no
jurisdictional defect.
¶ 56 2. AET
¶ 57 In November 2012, AET–through Gomez–filed a response to the EPA’s motion for
summary judgment. Similar to EOR’s motion to reconsider, AET’s response challenged the
EPA’s and the Board’s jurisdiction and the sufficiency of the EPA’s complaint. In January
2013, the Board rejected AET’s arguments and found that the uncontested facts established
AET’s liability under count I of the complaint. The Board granted summary judgment for the
EPA and imposed a penalty of $60,000 against AET.
¶ 58 In April 2013, the Board denied (1) AET’s motion to reconsider and (2) EOR’s second
motion to reconsider.
¶ 59 These appeals followed. We consolidated the appeals on the parties’ joint motion.
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¶ 60 II. ANALYSIS
¶ 61 The companies argue that (1) the EPA failed to plead facts sufficient to establish
jurisdiction; (2) the EPA and Board had no jurisdiction; and (3) even if the EPA and the Board
had jurisdiction, the record fails to support the Board’s grant of summary judgment. We
address these arguments in turn.
¶ 62 A. Sufficiency of the EPA’s Complaint
¶ 63 The companies contend that the EPA failed to plead “ultimate facts” sufficient to establish
the jurisdiction. We conclude that this challenge to the EPA’s complaint is forfeited.
¶ 64 The Board’s rules state that “[a]ll motions to strike, dismiss, or challenge the sufficiency of
any pleading filed with the Board must be filed within 30 days after the service of the
challenged document, unless the Board determines that material prejudice would result.” 35
Ill. Adm. Code 101.506, amended at 29 Ill. Reg. 19666 (eff. Nov. 21, 2005). In this case, the
companies did not object to the sufficiency of the EPA’s complaint until 5½ years after it was
filed. Instead, the companies answered the complaint in October 2007 and responded to each
allegation. Accordingly, we conclude that the companies forfeited their objections to the
sufficiency of the EPA’s complaint.
¶ 65 In so concluding, we note that–unless otherwise specified–procedural rules governing
administrative proceedings should generally be interpreted and applied the same as similar
rules governing judicial proceedings. It is a well-established rule of civil practice in this state
that a respondent forfeits any objection to the sufficiency of the complaint by filing an answer.
See, e.g., Fox v. Heimann, 375 Ill. App. 3d 35, 41, 872 N.E.2d 126, 133 (2007) (“[W]here a
defendant files an answer to a complaint, any defect in the pleading is [forfeited].”).
Accordingly, we see no reason why the companies’ failure to abide by section 101.506 of Title
35 of the Administrative Code should result in anything less than forfeiture of their objection to
the sufficiency of the EPA’s complaint.
¶ 66 B. The EPA’s and the Board’s Jurisdiction
¶ 67 The companies argue that the EPA and the Board lacked jurisdiction because (1) the acid
material shipped into Illinois, stored at the Kincaid structure, and injected into EOR’s wells
was not “waste” but, instead, “product”; and (2) only the DNR has jurisdiction to regulate
injections into Class II wells. The Board rejected these contentions, as do we.
¶ 68 1. Standard of Review
¶ 69 As creatures of statute, administrative agencies–such as the EPA and the Board–have only
the powers that their enabling statute confers. Illinois Bell Telephone Co. v. Illinois Commerce
Comm’n, 362 Ill. App. 3d 652, 655-56, 840 N.E.2d 704, 708 (2005). “A decision rendered by
an administrative agency which lacks jurisdiction over the parties or the subject matter, or
which lacks the inherent power to make or enter the decision involved, is void and may be
attacked at any time or in any court, either directly or collaterally.” Board of Education of the
City of Chicago v. Board of Trustees of the Public Schools Teachers’ Pension & Retirement
Fund, 395 Ill. App. 3d 735, 739, 917 N.E.2d 527, 531 (2009).
¶ 70 “The determination of the scope of the agency’s power and authority is a judicial function
and is not a question to be finally determined by the agency itself.” County of Knox ex rel.
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Masterson v. Highlands, L.L.C., 188 Ill. 2d 546, 554, 723 N.E.2d 256, 262 (1999). The scope
of an administrative agency’s jurisdiction under its enabling statute is a question of law, which
we review de novo. Marconi v. Chicago Heights Police Pension Board, 225 Ill. 2d 497, 532,
870 N.E.2d 273, 293 (2006).
¶ 71 2. Relevant Provisions of the Environmental Act
¶ 72 The General Assembly has vested the EPA with authority to investigate violations of the
Environmental Act and take summary enforcement action. 415 ILCS 5/4 (West 2004). The
Board has authority to adopt regulations and conduct proceedings under the Environmental
Act. 415 ILCS 5/5(b)-(d) (West 2004). The Board found that AET violated section 21(e) of the
Environmental Act and EOR violated sections 21(e), (f)(1), and (f)(2) and section 12(g) of the
Environmental Act.
¶ 73 Section 21 of the Environmental Act provides, in pertinent part, that no person shall:
“(e) Dispose, treat, store or abandon any waste, or transport any waste into this
State for disposal, treatment, storage or abandonment, except at a site or facility which
meets the requirements of this Act and of regulations and standards thereunder.
(f) Conduct any hazardous waste-storage, hazardous waste-treatment or hazardous
waste-disposal operation:
(1) without a RCRA permit for the site issued by the Agency under subsection
(d) of Section 39 of this Act, or in violation of any condition imposed by such
permit, including periodic reports and full access to adequate records and the
inspection of facilities, as may be necessary to assure compliance with this Act and
with regulations and standards adopted thereunder; or
(2) in violation of any regulations or standards adopted by the Board under this
Act[.]” 415 ILCS 5/21(e), (f)(1)-(2) (West 2004).
The Environmental Act defines “waste” as “any garbage, sludge from a waste treatment plant,
water supply treatment plant, or air pollution control facility or other discarded material,
including solid, liquid, semi-solid, or contained gaseous material resulting from industrial,
commercial, mining and agricultural operations, and from community activities.” 415 ILCS
5/3.535 (West 2004). “Hazardous waste” is defined as follows:
“[A] waste, or combination of wastes, which because of its quantity, concentration, or
physical, chemical, or infectious characteristics may cause or significantly contribute
to an increase in mortality or an increase in serious, irreversible, or incapacitating
reversible, illness; or pose a substantial present or potential hazard to human health or
the environment when improperly treated, stored, transported, or disposed of, or
otherwise managed, and which has been identified, by characteristics or listing, as
hazardous pursuant to Section 3001 of the [RCRA], P.L. 94-580, or pursuant to Board
regulations.” 415 ILCS 5/3.220 (West 2004).
¶ 74 Section 12(g) of the Environmental Act provides, in pertinent part, that no person shall:
“Cause, threaten or allow the underground injection of contaminants without a UIC
permit issued by the [EPA] under Section 39(d) of this Act, or in violation of any term
or condition imposed by such permit, or in violation of any regulations or standards
adopted by the Board or of any order adopted by the Board with respect to the UIC
program.” 415 ILCS 5/12(g) (West 2004).
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A “contaminant” is broadly defined as “any solid, liquid, or gaseous matter, any odor, or any
form of energy, from whatever source.” 415 ILCS 5/3.165 (West 2004).
¶ 75 3. The Acid Material at Issue
¶ 76 The companies contend that the acid material at issue was not a “waste” or “hazardous
waste” because it was neither “used” nor “discarded” before EOR injected it into the wells.
However, we agree with the Board’s conclusion that the undisputed evidence proved
otherwise.
¶ 77 Luxury Wheels paid AET to remove the acid material from its facility after the material
underwent an uncontrolled and accidental chemical reaction that required an emergency
response from the hazardous-materials team of the Grand Junction fire department. AET
prepared a “waste material profile” and a “hazardous waste manifest” for the material. On the
waste-material profile submitted to Arvada, the box for “unused product or chemical” is left
unchecked. The hazardous-waste manifest listed the material as corrosive and reactive
hazardous waste. The waste material profile submitted to Safety Kleen described the material
as “spent aluminum etchant” generated by “etching of aluminum wheels.”
¶ 78 The companies argue, however, that the generator’s (Luxury Wheels) intent does not
control the determination of whether the material was “used” or “discarded.” Instead, the
companies assert that because EOR was able to make use of the acid material by injecting it
into wells for a purpose related to petroleum extraction, the material was neither “used” nor
“discarded.” The undisputed evidence rebuts this claim. After several unsuccessful attempts to
dispose of the material at waste-disposal sites in Colorado, AET and EOR decided to ship the
material to Illinois so that it could be injected down EOR’s wells. Even if EOR injected the
acid material into its wells to aid in petroleum extraction, this particular acid material was a
hazardous waste under section 3.220 of the Environmental Act. Although we do not doubt that
petroleum companies sometimes inject acid into their wells for purposes related to petroleum
extraction, the record contains no evidence to suggest that the injection of hazardous-waste
acid is a typical activity that falls within the regulatory parameters of the Oil and Gas Act.
¶ 79 Further rebutting the companies’ claim is the fact that most of the acid material (7 full totes
consisting of 1,925 gallons) was discharged into a “salt water disposal well” on the Rink-Traux
field, according to Johnson’s unrebutted affidavit. Only 340 gallons were discharged into oil or
gas wells. Even more telling is the fact that five days prior to Johnson’s second inspection of
the Kincaid site, EOR paid to have 1,000 gallons of “corrosive and toxic hazardous waste”
shipped from the Kincaid site to a waste-disposal site in Houston, Texas. If the acid material
was actually used in a lawful manner for the treatment of EOR’s petroleum wells, the
companies have not even attempted to explain why most of the material was either injected
into a salt-water disposal well or sent to Texas for disposal. The undisputed evidence leaves no
genuine issue of material fact as to whether the acid material was both a “waste” and a
“hazardous waste” as defined by the Environmental Act.
¶ 80 Because the acid material was both a “waste” and a “hazardous waste” within the meaning
of the Environmental Act, the EPA and the Board properly exercised jurisdiction over the
companies’ activity vis-à-vis the acid material.
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¶ 81 4. The Wells at Issue
¶ 82 The companies further contend that the EPA and the Board had no jurisdiction because the
acid material was injected into Class II wells, which fall within the exclusive regulatory
jurisdiction of the DNR under the Oil and Gas Act. We disagree.
¶ 83 The General Assembly has created a comprehensive statutory structure for the regulation
of underground injection of materials into wells in Illinois. This program–commonly known as
the Illinois UIC program–was promulgated with federal approval pursuant to the federal UIC
program, which allows states the option of implementing their own UIC programs that comply
with federal standards. 42 U.S.C. § 6904 (2006). The federal UIC program was promulgated
under the Safe Drinking Water Act (SDWA) (42 U.S.C. § 300f et seq. (2006)) and, to the
extent the program deals with hazardous waste, the RCRA (42 U.S.C. § 6901 et seq. (2006)).
¶ 84 Section 4(l) of the Environmental Act (415 ILCS 5/4(l) (West 2004)) designates the EPA
as implementing agency for all purposes of the SDWA, except for section 300h-4 of the
SDWA, which provides the authority for federally approved state programs relating to “(1) the
underground injection of brine or other fluids which are brought to the surface in connection
with oil or natural gas production or natural gas storage operations, or (2) any underground
injection for the secondary or tertiary recovery of oil or natural gas.” 42 U.S.C. § 300h-4
(2006). As reflected by this jurisdictional carve-out in section 4(l) of the Environmental Act,
Illinois’s package of UIC-related statutes and regulations submitted to the federal government
for approval provided that Class II wells–known as “oil-and-gas-related-injection
wells”–would be regulated by the DNR under the Oil and Gas Act. See 40 C.F.R. § 147.701
(2004) (approving and adopting Illinois’ proposed UIC program for Class II wells). The EPA,
on the other hand, is vested with authority over hazardous-waste injection wells (Class I and
Class IV wells). See 35 Ill. Adm. Code 730.105 (2012) (classifying the six types of injection
wells based upon the types of materials injected).
¶ 85 Class II wells are defined as wells
“that inject[] any of the following types of fluids:
(1) Fluids that are brought to the surface in connection with conventional oil or
natural gas production and which may be commingled with wastewaters from gas
plants that are an integral part of production operations, unless those waters are
classified as a hazardous waste at the time of injection;
(2) Fluids that are used for enhanced recovery of oil or natural gas; and
(3) Fluids that are used for storage of hydrocarbons that are liquid at standard
temperature and pressure.” 35 Ill. Adm. Code 730.105(b) (2012).
¶ 86 The companies assert that the wells at issue in this case fell within the DNR’s exclusive
regulatory jurisdiction because the DNR issued Class II UIC permits for the wells in the late
1990s. However, the answer to the jurisdictional question presented does not depend upon how
the wells were classified at some point in time in the past. Instead, the EPA’s and the Board’s
authority to regulate the activity in this case originated from the type of injections that actually
took place, which the Board concluded were not authorized Class II injections.
¶ 87 The Oil and Gas Act provides the DNR authority only over Class II injections into Class II
injection wells. Section 8b of the Oil and Gas Act provides that “[n]o person shall drill, convert
or deepen a well for the purpose of disposing of oil field brine or for using any enhanced
recovery method in any underground formation or strata without first securing a permit
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therefor.” 225 ILCS 725/8b (West 2004). Section 6(2) of the Oil and Gas Act, which sets forth
the DNR’s power to hold a hearing on a UIC permit application, refers to a “person desiring or
proposing to drill, deepen or convert any well *** for the disposal of salt water, brine, or other
oil or gas field wastes.” 225 ILCS 725/6(2) (West 2004). Section 1 of the Oil and Gas Act
provides that “ ‘[w]aste’ means ‘physical waste’ as that term is generally understood in the oil
and gas industry.” 225 ILCS 725/1 (West 2004). We cite these provisions of the Oil and Gas
Act to illustrate that the DNR’s regulatory power under the UIC program is clearly limited to
the injection of fluids associated with oil and gas extraction (known as Class II fluids (62 Ill.
Adm. Code 240.10, amended at 35 Ill. Reg. 13281 (eff. July 26, 2011))). The DNR’s own
regulations explicitly state that only Class II fluids may be injected into Class II wells under the
UIC program. 62 Ill. Adm. Code 240.750(i), amended at 35 Ill. Reg. 13281 (eff. July 26,
2011).
¶ 88 The type of hazardous-waste acid at issue in this case, which was produced specially for
etching aluminum automobile wheels and contained traceable amounts of leachable
chromium, was not a Class II fluid that the DNR was authorized to regulate under the UIC
program or the Oil and Gas Act. Instead, because the acid material in this case clearly fell
within the Environmental Act’s definition of “hazardous waste,” the EPA and the Board had
jurisdiction over the injection. It does not matter for jurisdictional purposes that the hazardous
waste was injected into Class II wells.
¶ 89 We note that the companies’ jurisdictional argument relies heavily upon section 45(a) of
the Environmental Act (415 ILCS 5/45(a) (West 2004)), which provides, in pertinent part, as
follows:
“Nothing in this Act shall be construed to limit or supersede the provisions of the
Illinois Oil and Gas Act and the powers therein granted to prevent the intrusion of water
into oil, gas or coal strata and to prevent the pollution of fresh water supplies by oil, gas
or salt water or oil field wastes ***. However, if the [DNR] fails to act upon any
complaint within a period of 10 working days following the receipt of a complaint by
the [DNR], the [EPA] may proceed under the provisions of this Act.”
¶ 90 The companies assert that the record fails to establish the EPA waited 10 working days
following the DNR’s receipt of a complaint before proceeding under the Environmental Act.
However, the 10-day provision is a red herring because nothing in section 45(a) of the
Environmental Act precluded the EPA or the Board from exercising jurisdiction in this case. In
fact, section 45(a) of the Environmental Act supports the Board’s determination that it had
jurisdiction. As already stated, the DNR has no authority to permit the underground injection
of hazardous waste. In carving out a specific area of exclusive jurisdiction for the DNR in
section 45(a) of the Environmental Act, the General Assembly saw fit only to grant the DNR
exclusive power to “prevent the pollution of fresh water supplies by oil, gas or salt water or oil
field wastes.” 415 ILCS 5/45(a) (West 2004). Because the acid material in this case did not
constitute oil, gas, salt water, or oil field wastes, the EPA’s and the Board’s exercise of
jurisdiction could have done nothing to “limit or supersede the provisions” of the Oil and Gas
Act or the powers therein granted to the DNR.
¶ 91 The unpermitted injection of hazardous-waste acid into EOR’s wells (1) did not constitute
a Class II injection authorized by the Oil and Gas Act or its associated regulations and; (2)
therefore, fell within the EPA’s and the Board’s jurisdiction to enforce the provisions of the
Environmental Act regulating hazardous waste.
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¶ 92 C. The Board’s Grant of Summary Judgment
¶ 93 Finally, the companies argue that the facts of record were insufficient to support the
Board’s grant of summary judgment for the EPA. Before we explain why we disagree with this
contention, however, we note that EOR forfeited this claim by altogether failing to respond to
the EPA’s motion for summary judgment. Accordingly, we affirm the Board’s grant of
summary judgment against EOR as to all counts of the EPA’s complaint.
¶ 94 AET contends that because the Board found EOR liable under count I as the shipper of the
acid material, the “law-of-the-case doctrine” bars AET from also being found liable for the
same offense. AET points out that neither the EPA’s motion for summary judgment against
EOR, nor the Board’s order granting that motion, named AET as the “co-transporter” of the
acid material. Therefore, AET argues, the Board was barred from finding AET liable under
section 21(e) of the Environmental Act. This argument is entirely without merit. The
law-of-the-case doctrine “bars relitigation of an issue already decided in the same case.”
People v. Tenner, 206 Ill. 2d 381, 395, 794 N.E.2d 238, 247 (2002). The doctrine does not,
however, prohibit a finding that two parties are jointly liable for violating a statute. AET fails
to explain how the Board’s finding that EOR was liable under section 21(e) of the
Environmental Act necessarily precluded the Board from finding AET liable as well.
¶ 95 We agree with the Board’s finding that the undisputed facts established AET’s liability
under section 21(e) of the Environmental Act, which provides, in pertinent part, that no person
shall “transport any waste into this State for disposal, treatment, storage or abandonment,
except at a site or facility which meets the requirements of this Act and of regulations and
standards thereunder.” 415 ILCS 5/21(e) (West 2004). Johnson’s affidavit stated, in pertinent
part, as follows:
“[AET] was hired by [Luxury Wheels] to dispose of the hazardous waste acid.
After several attempts to dispose of the acid at various hazardous waste disposal
facilities, AET transferred the hazardous waste acid to [EOR]. AET and EOR shipped
the hazardous waste acid to the Kincaid P&P site.
*** Prior to my site inspection, I performed a review of Illinois EPA records and
discovered that the Kincaid P&P site is not a hazardous waste storage or disposal
facility and has never been issued a RCRA permit granting it permission to serve as a
hazardous waste management facility.”
¶ 96 Standing alone, the factual assertions in Johnson’s affidavit were sufficient to establish
AET’s liability under section 21(e) of the Environmental Act. AET argues on appeal that many
statements in Johnson’s affidavit were (1) based largely upon hearsay, (2) unsupported by
independent evidence, and (3) factually inaccurate. However, AET forfeited these objections
to Johnson’s affidavit by failing to file a motion to strike the affidavit based upon these alleged
deficiencies. “In Illinois, the general rule is the sufficiency of affidavits cannot be tested for the
first time on appeal where no objection was made by a motion to strike, or otherwise, in the
trial court.” Arnett v. Snyder, 331 Ill. App. 3d 518, 523, 769 N.E.2d 943, 947 (2001) (citing
Kolakowski v. Voris, 83 Ill. 2d 388, 398, 415 N.E.2d 397, 402 (1980)).
¶ 97 AET also failed to present any affidavits of its own to rebut Johnson’s affidavit (or any of
the EPA’s other evidence, for that matter). “When a party moving for summary judgment files
supporting affidavits containing well-pleaded facts, and the party opposing the motion files no
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counteraffidavits, the material facts set forth in the movant’s affidavits stand as admitted.
[Citation.] The opposing party may not stand on his or her pleadings in order to create a
genuine issue of material fact. [Citation.]” Parkway Bank & Trust Co. v. Korzen, 2013 IL App
(1st) 130380, ¶ 49, 2 N.E.3d 1052. AET’s failure to file counteraffidavits resulted in the factual
assertions in Johnson’s affidavit standing as admitted. Because those unrebutted factual
assertions established AET’s liability under section 21(e) of the Environmental Act, we affirm
the Board’s grant of summary judgment against AET.
¶ 98 III. CONCLUSION
¶ 99 For the reasons stated, we affirm the Board’s judgment.
¶ 100 Affirmed.
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