Petition for Writ of Certiorari — Alton Packaging Corp. v. Pollution Control Board

88-2590

8 8 at 2 K y Supreme Court, U.S.

REIL ED

JUL 5 1888

In The

CLERK

F. SPANTOL, JR.

Supreme Court of the United

@ctober Term, 1987

ALTON PACKAGING CORPORATION,

Petitioner,

POLLUTION CONTROL BOARD

and

ENVIRONMENTAL PROTECTION AGENCY,

Respondents.

PETITION FOR A WRIT OF CERTIORARI

TO THE SUPREME COURT OF

THE STATE OF ILLINOIS

RICHARD J. KISSEL

JEFFREY C. Fort

(Counsel of Record)

DANIEL F.. O’CONNELL

GARDNER, CARTON & DouGLas

321 North Clark Street

Chicago, Illinois 60610-4795

(312) 644-3000

Attorneys for Petitioner

ALTON PACKAGING CORPORATION

July 6, 1988

Pandick Technologies, Inc., Chicago @ (312) 236-0200

QUESTION PRESENTED

This petition raises a question of whether the holder of

a State environmental permit is entitled to notice and an

opportunity to be heard, under the due process clause of the

Fourteenth Amendment to the United States Constitution,

before the State denies renewal of its permit.

QUEDTHON PUTT 6 66a ce ONSET Awe i

FARe Cie Ce & 6 65 0 Sh eae eae iii

TABLE OF AUTHORITIES ................... iii

OPINIONS AND DECISIONS BELOW ............ 1

Pt os re me ree ry ee are 2

STATUTES AND CONSTITUTIONAL PROVI-

es Oe VOTED 688d cw 0 ee eee een 2

STATEMENT OF THE CASE................... 4

REASONS FOR GRANTING THE WRIT .......... 8

COMNCAARIS 5 bene su el bee ee es 15

APPENDICES

A. Grant of Stay Pending Appeal by the

Supreme Court of the State of Illinois. .... a-1

B. Order of the Supreme Court of the State of

Tinela, AgeG F, Sies «6s cu ba aa es b-1

C. Opinion of The Appellate Court of Illinois,

Fifth District, September 25,1987 ........ c-1

D. Order of The Pollution Control Board, June

20, 1006 3. os iste eae eee d-1

TABLE OF CONTENTS

Decision of The Pollution Control Board,

Agel; 36, SHG oc sc ee ees e-1

li

TABLE OF AUTHORITIES

Cases: Page

Alton Packaging Corp. v. Environmental Protection

Agency, PCB 85-145 (April 24, 1986) ............ 6

Alton Packaging Corp. v. Pollution Control Board and

Environmental Protection Agency, 162 Ill. App. 3d

ee ee 7,14

American Trucking Asso. v. United States, 326 U.S.

CSU a LEN Ga 60 bk eee chester esse 14

Anniston Mfg. Co. v. Davis, 301 U.S. 337 (1937) .... 14

Armstrong v. Manzo, 380 U.S. 545 (1965) ..... 8, 9,13

Arnett v. Kennedy, 416 U.S. 134 (1974) ............ 8

Barry v. Barchi, 443 U.S. 55 (1979) .............. 8

Bell v. Burson, 402 U.S. 535 (1971) ........... 8,12

Board of Regents v. Roth, 408 U.S. 564 (1972) ...... 10

Brinkerhoff-Faris Trust & Saving Co. v. Hill, 281 U.S.

REE PO ee ee ee ee ee ae 9

Buchalter v. New York, 319 U.S. 427 (1943) ........ g

Covey v. Somers, 351 U.S. 141 (1956) ............ 12

Environmental Protection Agency v. Pollution Control

Board, 115 111.2d 65, 503 N.E.2d 343 (1986) ....... 7

Environmental Protection Agency v. Pollution Control

Board, 118 Ill. App. 3d 772, 455 N.E.2d 188

Ah iggy Sn aD So may oP oes ae rae 14

ili

Cases: Page

Environmental Protection Agency v. Pollution Control

Board and Waste Management, Inc. 138 Ill. App. 3d

550, 486 N.E.2d 293 (1986), aff’d 115 Ill.2d 65, 503

PE ee ire rei Vives 00 dca 7

Fuentes v. Shevin, 407 U.S. 67 (1972) .......... 8, 12

Galvan v. Press, 347 U.S. 522 (1954) ............. 4

Georgia Power Co. v. Decatur, 281 U.S. 505 (1930) ... 9

Goldberg v. Kelly, 397 U.S. 254 (1970) .......... 8,9

Goss v. Lopez, 419 U.S. 565 (1975) .............. 12

Hewitt v. Helms, 459 U.S. 460 (1982) ............ 11

Home Telephone and Telegraph Co. v. Los Angeles,

ee 9

In Re Estate of Levin, 135 ll. App.3d 386, 482 N.E.2d

I 8 Wil WS is Cr A kl i wads wee wake 13

Kwong Hai Chew v. Colding, 344 U.S. 590 (1953) .... 9

Lichter v. United States, 334 U.S. 742 (1948) ........ 9

Martell v. Mauzy, 511 F. Supp. 729 (1981) ...... 9,11

Mathers v. Pollution Control Board, 107 Ill. App.3d

Vay SED Ee See TED oo ct viascnccscceses 9

Mathews v. Eldridge, 424 U.S. 319 (1976) ....... 8, 10

Miller v. City of Mission, Kansas, 705 F.2d 368, 372

Ns Sen Sie te ew ate le aie ae ate x 14

Missouri ex rel Hurtwitx v. North, 271 U.S. 40

Sais 6M uh eee eae ee se ee te oe 13

iv

Cases: Page

North Alabama Express, Inc. v. United States, 585 F.

94 TEB Gite Clr. BBGT) occ ccc cc ewcccscccenn 13

Perry v. Sindermann, 408 U.S. 593 (1972) ......... - 10

Phillip Wagner, Inc. v. Leser, 239 U.S. 207 (1915) .... 9

Robinson v. Hanrahan, 409 U.S. 38 (1972) ........ 13

Roller v. Holly, 176 U.S. 398 (1900) ............. 13

Shaughnessy v. United States, 345 U.S. 206 (1953) .... 9

United States v. Storer Broadcasting Co., 351 U.S. 192

CURRED kpc ones ok 5a ses bP ee eae 18

CONSTITUTIONAL AND STATUTORY

PROVISIONS

UG Gee, Mee. ee, BE isch ccs ced asécesnes 2

Environmental Protection Act, Ill. Rev. Stat., ch. 111

E> Ff Pere ecr ee Ce eee 5, 8

Environmental Protection Act, Section 4(g), Ill. Rev.

Stat. da. 111 1B, FIGS) .. ccc cccccccssacecs 5

Environmental Protection Act, Section 31(d), fll. Rev.

Seat. da. 111 179, SIGS .. ccc ccccccces 6,13

Environmental Protection Act, Section 39, Ill. Rev.

Stat., ch. 111 1/2,§1089 ............ 3, 5, 7, 10, 11

Environmental Protection Act, Section 40, Ill. Rev.

ee Bite) & 5 rere re 4, 5, 6, 7

Environmental Protection Act, Section 41(a), Ill. Rev.

Stat... ch. 111 1/2, $1041(e) .. 2... cece cc cccens 5

Illinois Administrative Code Title 35, Section

DOR Se 6'0s.6 60464 OG 5 eee as ans

DORMS cecocccccccasssbcesbbaséaenecneds

Illinois Administrative Code Title 35, Section

DEES ccc cee de cates eeen sekes aedu beet

Iu The

Supreme Court of the Hnited States

@ctober Term, 1987

ALTON PACKAGING CORPORATION,

Petitioner,

v.

POLLUTION CONTROL BOARD

and

ENVIRONMENTAL PROTECTION AGENCY,

Respondents.

PETITION FOR A WRIT OF CERTIORARI

TO THE SUPREME COURT OF

THE STATE OF ILLINOIS

Petitioner’ seeks a writ of certiorari to review an order

of the Supreme Court of the State of Illinois in which it

denied Alton’s Petition for Leave to Appeal from the IIli-

nois Appellate Court, Fifth District and an order of the

Dlinois Appellate Court.

OPINIONS AND DECISIONS BELOW

The Order Granting Stay Pending Appeal by the

Supreme Court of the State of Illinois is reprinted at page

‘Alton Packaging Corporation has been merged into Jefferson

cly traded corporation. Jefferson

Smurfit is affiliated with the Smurfit Group Limited and Con-

tainer Corporation of America.

1

a-1 of the Appendix. The order of the Supreme Court of

the State of Illinois denying petition for Leave to Appeal,

No. 66437, is reprinted at page b-i of the Appendix. The

opinion of the Illinois Appellate Court, Fifth District, No.

5-86-0477, affirming the decision of the Pollution Control

Board is reprinted beginning at page c-1 of the Appendix.

The opinion of the Pollution Control Board, PCB 85-145,

affirming the August 27, 1985 denial by the Environmen-

tal Protection Agency of application for renewal of an oper-

ating permit for its Alton Mill is reprinted beginning at

page e-1 of the Appendix. The order of the Ilinois Poll-

ution Control Board denying motion for reconsideration is

reprinted at page d-1 of the Appendix.

JURISDICTION

The order of the Supreme Court of the State of Illinois

dexying Alton’s motion for leave to appeal was rendered

Apr: 7, 1988. The jurisdiction of this court is invoked

under 28 U.S.C. §1257(3). This court has jurisdiction over

this matter because the petition seeks review of the final

judgment of the highest Illinois court in which relief can

be had, and because the validity of Section 40 of the Envi-

ronmental Protection Act is challenged on the basis that it

is repugnant to the Constitution of the United States.

STATUTES AND CONSTITUTIONAL

PROVISION INVOLVED

Fourteenth Amendment to the United States Constitution:

Section 1. All persons born or naturalized

in the United States, and subject to the jur‘sdic-

tion thereof, are citizens of the United States and

of the State wherein they reside. No State shall

make or enforce any law which shall abridge the

privileges or immunities of citizens of the United

States; nor shall any state deprive any person of

life, liberty, or property, without due process of

law; nor deny to any within its jurisdiction

to equal protection of laws.

2

Se

Ill. Rev. Stat., ch. 111 1/2, § 1039(a) (1987):

(a) When the Board has by regulation

required a permit for the construction, installa-

tion, or operation of any type of facility, equip-

ment, vehicle, vessel, or aircraft, the applicant

shall apply to the Agency for such permit and it

shall be the duty of the Agency to issue such a

permit upon proof by the applicant that the facil-

ity, equipment, vehicle, vessel, or aircraft will not

cause a violation of this Act or of regulations here-

under. The Agency shall adopt such procedures as

are necessary to carry out its duties under this

Section. In granting permits the Agency may

impose such conditions as may be necessary to

accomplish the purposes of this Act, and as are

not inconsistent with the regulations promulgated

by the Board hereunder. Except as otherwise pro-

vided in this Act, a bond or other security shall not

be required as a condition for the issuance of a per-

mit. If the Agency denies any permit under this

Section, the Agency shall transmit to the appli-

cant within the time limitations of this Section

specific, detailed statements as to the reasons the

permit application was denied. Such statements

shall include, but not be limited to the foliowing:

(i) the Sections of this Act which may be

violated if the permit were granted,

(ii) the provision of the regulations, pro-

mulgated under this Act, which may be violated if

the permit were granted;

(iii) the specific type of information, if any,

which the Agency deems the applicant did not pro-

vide the Agency; and

(iv) astatement of specific reasons why the

Act and the regulations might not be met if the

permit were granted.

If there is no final action by the Agency

within 90 days after the filing of the applica-

tion for permit, the applicant may deem the per-

mit issued; except that this time period shall be

extended to 180 days when (1) notice and oppor-

3

(CO OOOO ——vVvorrvcvcre

CO

,

tunity for public hearing are required by State or

federal law or regulation, or (2) the application

which was filed is for any permit to develop a

landfill subject to issuance pursuant to this sub-

section.

Ill. Rev. Stat., ch. 111 1/2, § 1040 (1987):

(a)(1) If the Agency refuses to grant or

grants with conditions a permit under Section 39

of this Act, the applicant may, within 35 days,

petition for a hearing before the Board to con-

test the decision of the Agency. The Board shall

give 21 day notice to any person in the county

where is located the facility in issue who has

requested notice of enforcement proceedings and

to each member of the General Assembly in whose

legislative district that installation or property is

located; and shall publish that 21 day notice in a

newspaper of general circulation in that county.

The Agency shall appear as respondent in such

hearing. At such hearing the rules prescribed in

Section 32 and 33(a) of this Act shall apply, and

the burden of proof shall be on the petitioner.

* * a

(d) In reviewing the denial or any condi-

tion of a permit issued by the Agency pursuant

to rules and regulations adopted under subsection

(d) or (e) of Section 9.1 of this Act, the decision of

the Board shall be based exclusively on the record

before the Agency including the record of the hear-

ing, if any, held pursuant to paragraph (f)(3) of

Section 39 unless the parties agree to supplement

the record.

STATEMENT OF THE CASE

This petition arises from the Environmental Protec-

tion Agency’s (the “Agency”) denial of an application for

renewal of the operating permit for the two main boil-

ers (the “Boilers”) used to operate the Alton Packaging

Corporation (“Alton”) Mill in Alton, Illinois. The permit

denial was subsequently affirmed by the Pollution Con-

trol Board (the “Board”) and the Illinois Appellate Court,

4

Fifth District. The petition arises from an order of the

Supreme Court of Illinois denying Alton’s petition for leave

to appeal.

The mill manufactures paperboard from recycled

paper. The mill employs over 350 people and produces in

excess of 600 tons of paperboard per day.

The Agency and the Board were established under the

Environmental Protection Act (the “Act”), Ill. Rev. Stat.,

ch. 111 1/2, $1001 et seg. (1987). Air emission sources

such as the Boilers are required to have a permit under

the regulations of the Board. Therefore, Section 39(a) of

the Act requires that Alton obtain an operating permit

from the Agency for the Boilers. Il. Rev. Stat., ch. 111

1/2, §§ 1004(g), 1039(a) (1987). Section 39(a) requires the

Agency to issue a statement of reasons in the event it

denies a permit. Section 40 provides for a Board review of

permit denials. The Board’s review must be based exclu-

sively upon the Agency record under Section 40 of the Act

as interpreted by the Illinois Courts. Il. Rev. Stat., ch. 111

1/2, § 1040 (1987). Section 41 provides for judicial review

of a Board Decision in the Illinois Appellate Court. IIl.

Rev. Stat., ch. 111 1/2, § 1041 (1987).

On January 25, 1983, Alton filed a routine application

with the Agency for renewal of the operating permit for the

Boilers. As the rules of the Board provide, this application

certified that the information supplied in previous success-

ful applications remained accurate. 35 Ill. Adm. Code,

§ 201.157.

The Agency did not rule on Alton’s application within

90 days as provided by Section 39(a) of the Act. Instead,

the parties agreed to postpone the decision on the permit.

Consequently, the Agency did not rule on the permit appli-

cation until August 27, 1985, at which time it denied the

permit. The denial was based on allegations that the Boil-

ers caused a violation of the sulfur dioxide air quality stan-

dard in Alton, linois in November, 1984.

5

Prior to the Agency’s August 27, 1985 denial of the

permit, Alton received no notice from the Agency that it

intended to act on the permit. On December 20, 1984,

the Agency completed an air quality bulletin in which the

Agency contended that Alton contributed to the alleged

November, 1984 violation. The bulletin was neither pub-

lished nor sent to nor received by Alton. An Agency study

completed in May, 1985 stated that the Boilers had been

the “likely cause” of the alleged November, 1984 violation.

On July 22, 1985, the Agency sent Alton a notice of

noncompliance regarding the alleged violations, along with

the May, 1985 study, and demanded that Alton respond

within fifteen (15) days. This notice is the first step of an

enforcement action under Section 31(d) of the Act. Ill. Rev.

Stat., ch. 111 1/2, § 1031(d) (1987). The notice did not in

any manner refer to the Agency’s intention to deny the

permit.

The Board’s Rules specifically require the Agency to

notify a permit applicant if the Agency believes an appli-

cation lacks sufficient information. 35 [1]. Adm. Code

201.158. Prior to the permit denial, however, the Agency

did not notify Alton that the Application contained insuffi-

cient information. When Alton filed its application, it

had no reason to believe that additional information was

required. In fact, Alton had no notice of the charges that

the Agency was making until it received the Agency’s

August letter denying the permit. Consequently, Alton

was provided with no opportunity to present evidence to

rebut the Agency’s charges prior to the August 27, 1985

permit denial.

Alton then filed an appeal with the Pollution Con-

trol Board pursuant to Il. Rev. Stat., ch. 111 1/2, § 1040

(1987). Alton Packaging Corp. v. Environmental Protec-

tion Agency, PCB 85-145 (April 24, 1986). In such an

appeal the applicant has the burden of proving to the Board

that its operations will not result in a violation of the Act

6

or the Board's rules. [1]. Rev. Stat., ch. 111 1/2, § 1040

(1987); Environmental Protection Agency v. Pollution Con-

trol Board, 138 Tll. App. 3d 550, 46 N.E.2d 293 (1985). Sec-

tion 40, as interpreted by the Illinois courts, requires that

the hearing in a permit appeal be based exclusively on the

record before the agency. Under this interpretation of Sec-

tion 40, Alton was given the limited opportunity to cross-

examine Agency witnesses to test the information relied

upon by the Agency, Environmental Protection Agency v.

Pollution Control Board (1986), 115 Ill. 2d 65, 503 N.E.2d

343, but was specifically denied the opportunity to present

evidence that was not part of the Agency record. Con-

sequently, Alton had no opportunity to present evidence

before the Board to refute the Agency’s charges. Since the

applicant bears the burden of proving its right to an oper-

ating permit, Ill. Rev. Stat. 1983, ch. 111 1/2, § 1039(a)

(1987), Alton was presented with the burden of proof for

an issue on which it was denied the opportunity to present

evidence. Based on the limited record, the Board affirmed

the denial.

Subsequently, Alton appealed the Board’s Decision to

the Appellate Court of Illinois, Fifth District. Alton Pac-

kaging Corp. v. Pollution Control Board and Environmen-

tal Protection Agency, 162 Ill. App. 3d 731, 561 N.E.2d 275

(1987). In its briefs and at oral argument, Alton argued

that the Board had erred in its interpretation of Section

40 and that under recent decisions a permit appeal to the

Board should not be restricted to the Agency record. The

Appellate Court rejected these arguments and held that

Section 40 restricted permit appeals solely to the record

before the Agency, even in a case such as Alton’s where

the applicant, prior to denial, had been given no notice of,

and no opportunity to rebut or respond to, the basis for the

Agency’s action. The Appellate Court affirmed the Deci-

sion of the Board, finding that Alton had failed to meet its

burden of proof before the Board.

7

After a petition for rehearing was denied by the Appel-

late Court, Alton, on January 11, 1988 petitioned the

Supreme Court of the State of Illinois for Leave to Appeal.

The petition was denied on April 7, 1988, No. 66437,

prompting this petition for a writ of certiorari.

REASONS FOR GRANTING THE WRIT

A. Introduction

The Illinois Environmental Protection Act, Il. Rev.

Stat., Ch. 111 1/2, § 1001 et seq., in its provisions for the

issuance of environmental operating permits, violates the

permit applicant’s right to due process of law as guaran-

teed by the Fourteenth Amendment to the United States

Constitution. The Act denies due process because it allows

the State to take away or to refuse to renew permits with-

out sufficient notice and without an opportunity for a fair

hearing at a meaningful time and in a meaningful man-

ner. Barry v. Barchi, 443 U.S. 55 (1979); Mathews v.

Eldridge, 424 U.S. 319 (1976); Arnett v. Kennedy, 416 U.S.

134 (1974); Fuentes v. Shevin, 407 U.S. 67 (1972); Bell v.

Burson, 402 U.S. 535 (1971); Goldberg v. Kelly, 397 U.S.

254 (1970); Armstrong v. Manzo, 380 U.S. 545 (1965).

Permit holders such as Alton have a valuable prop-

erty interest in the continuation of their operating per-

mits, to which they have a claim of entitlement. Alton

was deprived of this property interest without notice and

without opportunity for a hearing. Thus, this Court should

grant this writ in order to prevent State agencies from arbi-

trarily depriving permit holders of their valuable property

interests in permits without due process of law.

On August 27, 1985, by a letter from the Agency,

Alton was denied an operating permit for the operation of

boilers essential to the viability of the Alton mill. Alton

was not notified of the forthcoming permit denial, or of the

reasons for the denial at any time prior to the denial let-

ter. The Agency denied Alton its operating permit without

providing notice or the opportunity for a hearing.

8

Moreover, the Agency’s failure to provide Alton with

due process of law prior to refusing to renew its operating

permit was not remedied by the post-deprivation opportu-

nity for a “hearing” before the Pollution Control Board.

That proceeding, in which Alton had the burden of prov-

ing its right to the permit, was limited to the record before

the Agency. Thus Alton was deprived of the opportunity

to present evidence to challenge the Agency’s findings and

carry that burden. Consequently, Alton was never given

an opportunity to present its side of the story through the

introduction of evidence to dispute the Agency’s charges.

B. Basic Requirements of Due Process

The due process Clause of the Fourteenth Amendment

prohibits a State from depriving a person of property with-

out reasonable notice and the opportunity for a fair and

impartial hearing at a reasonable time and in a reasonable

manner. Goldberg v. Kelly, 397 U.S. 254, 268 (1970); Arm-

strong v. Manzo, 380 U.S. 545, 552 (1965). These require-

ments apply to all agencies, departments, or officials of the

state, whether legislative, judicial, or executive, Buchal-

ter v. New York, 319 U.S. 427 (1943); Brinkerhoff-F aris

Trust & Saving Co. v. Hill, 281 U.S. 673 (1930); Georgia

Power Co. v. Decatur, 281 U.S. 505 (1930); Phillip Wagn.

er, Inc. v. Leser, 239 U.S. 207 (1915); Home Telephone &

Telegraph Co. v. Los Angeles, 227 U.S. 278 (1913), and to

administrative as well as to judicial proceedings. Galvan v.

Press, 347 U.S. 522 (1954); Shaughnessy v. United States,

345 U.S. 206 (1953); Kwang Hai Chew v. Coiding, 344 U.S.

590 (1953); Lichter v. U.S., 334 U.S. 742 (1948). Thus, the

requirements of due process apply to proceedings of the

Environmental Protection Agency and Pollution Control

Board. The Illinois Appellate Court and the United States

District Court for the Northern District of Illinois have so

held. Mathers v. Pollution Control Board, 107 [ll. App. 3d

729, 438 N.E.2d 213 (1982); Martell v. Mauzy, 511 F.Supp.

729, 739 (N.D.Il. 1981).

C. Protected Interest in Operating Permit

Procedural due process requirements apply whenever

governmental decisions infringe property or liberty inter-

ests protected by the Fourteenth Amendment. Mathews v.

Eldridge, 424 U.S. 319 (1976). Alton has such a property

interest in a government benefit. For the purposes of due

process, a property interest in a government benefit must

depend on more than a unilateral expectation, abstract

need, or mere desire. Rather, a person must have a

legitimate claim of entitlement to a specific benefit before

the Fourteenth Amendment’s protections apply. Board of

Regents v. Roth, 408 U.S. 564 (1972).

Persons holding a government permit pursuant to

specific State regulations have a claim of entitlement to

continuation of those permits. In the present case, Alton

has a legitimate claim of entitlement to the operating per-

mit for the Boilers. This entitlement was created and is

defined by the existing rules of the Pollution Control Board

and Section 39(a) of the Act. Ill. Rev. Stat., ch. 111 1/2,

§ 1039 (1987). See, 35 Ill. Adm. Code § 201.160. These

provisions set out specific objective criteria which, if met,

entitle an applicant to a permit.

The guarantees of due process attach in cases of

renewals of government benefits such as permits. This

case is analogous to that in Perry v. Sindermann, 408 U.S.

593 (1972), where the defendant had, without a hearing,

refused to renew the plaintiff’s expired one-year college

teaching contract, thereby refusing to grant the plaintiff a

new benefit identical to the expired one. This Court held

that despite the lack of a formal tenure policy, the plain-

tiff was entitled to prove the existence of a protected prop-

erty interest in his employment stemming from official pol-

icy statements and guidelines which implied some form of

tenure. The plaintiff was held to have a right to a hearing

“where he could be informed of the grounds for his non-

retention and challenge their sufficiency.” 408 U.S. at 603.

10

Here, as in Perry v. Sindermann, the operating per-

mit applicant sought a “new” benefit to supercede the “ex-

piring” benefit of the old operating permit. This does not,

however, foreclose Alton’s claim of entitlement to the oper-

ating permit. For here, as the Court said in Perry:

“property” interests subject to due process pro-

tection are not limited by a few rigid, technical

forms. Rather, “property” denotes a broad range

of interests that are secured by “existing rules or

understanding.” ... A person’s interest in a benefit

is a “property” interest for due process purposes

if there are such rules or mutually explicit under-

standings that support his claim of entitlement to

the benefit and that he may invoke at a hearing.

408 U.S. at 601.

Illinois law specifically establishes a permittee’s enti-

tlement to a renewed permit. Under Illinois law, a permit-

tee is entitled to renewal of its permit if certain objective

criteria are met; that is, if operation of the source will not

cause a violation of the Act or the Board’s regulations, the

Agency has a statutorily compelled “duty” to issue a per-

mit. Ill. Rev. Stat. ch. 111 1/2, § 1039 (1987) (“[I]t shall

be the duty of the Agency to issue such permit upon proof

that [the source] will not cause a violation of the Act or

of regulations hereunder.”) This Court has held that when

an agency has a duty to issue a permit based on specified

criteria, a protected interest arises under the Constitution.

Hewitt v. Helms, 459 U.S. 460, 470-72 (1982).

The United States District Court for the Northern Dis-

trict of Illinois has specifically held that a person holding

a permit under the Illinois Act has a protected property

interest in that permit. Martell v. Mauzy, 511 F. Supp. 729,

739 (N.D.II1. 1981). In Martell, the Agency denied plaintiff

an operating permit for a waste disposal facility under Sec-

tion 39(a) of the Act based solely on unadjudicated allega-

tions. The district court found that the plaintiff had been

denied an operating permit without being afforded due pro-

11

cess of law and held that he was entitled to an operating

permit until he could be afforded a full hearing. Jd. at 744.

In much the same way, Alton was denied an operating

permit based upon unadjudicated allegations of wrongdo-

ing, 1.e., that it caused an air quality violation.

Further, the operating permit for the Boilers is cru-

cial to the continued viability of the Alton Mill. By

its dependence on the operating permit, Alton is, as the

Martell court noted, effectively a licensee who depends on

its license for its livelihood. Jd. at 739. Thus, Alton is

also analogous to a licensee whose license is “essential

in the pursuit of a livelihood.” Bell v. Burson, 402 U.S.

539 (1871). In Bell, the Court held that a driver’s license

“may not be taken away without the procedural due pro-

cess required by the Fourteenth Amendment.” Jd. Thus,

because Alton has a legitimate claim of entitlement to an

operating permit and the permit is essential to its paper-

board business, it has a protected property interest which

the State of Illinois may not take away without due process

of law.

D. Inadequate Notice Before Agency

Procedural due process requires that parties whose

rights are to be affected by governmental action are enti-

tled to be heard; and in order to enjoy that right they must

first be notified. Consequently, notice is an essential ele-

ment of due process. Goss v. Lopez, 419 U.S. 565 (1975);

Fuentes v. Shevin, 407 U.S. 67 (1972). The notice must be

reasonably calculated to apprise the interested party of the

pendency of the action and afford the party an opportunity

t» present its objections. Covey v. Somers, 351 U.S. 141

(1956).

The Agency failed to provide Alton with notice of its

impending action prior to the denial of its permit. The

Agency did not notify Alton in the summer of 1985 that it

intended to act on Alton’s 1983 permit application.

12

The August 27, 1985 letter from the Agency informing

Alton of denial of the permit was Alton’s first notice of the

Agency’s action and of the reasons for denial. The Agency’s

Air Quality Bulletin of December 20, 1984 was insufficient

as notice since it was never published or sent to or received

by Alton. Thus, the bulletin was clearly not reasonably

calculated to apprise Alton of the pendency of the action

against it. See, Robinson v. Hanrahan, 409 U.S. 38 (1972);

Armstrong v. Manzo, 380 U.S. 545 (1965).

An Agency letter of July 22, 1985 serving Alton with

notice of non-compliance was also insufficient to notify

Alton of the action pending on its permit application. The

letter stated only that non-compliance with the Board’s

regulations might result in enforcement action. This is

the first procedural step in bringing an enforcement action.

See, Ill. Rev. Stat., ch. 111-1/2, § 1031(d) (1987). It did not

indicate in any way that it was connected with Alton’s per-

mit application. Due process requires that notice of the

pendency of the action affecting a property interest be pro-

vided. In the administrative context, due process requires

that interested parties be given reasonable opportunity to

know claims of adverse parties, the: consequences which

might arise from those claims, and an opportunity to meet

them. North Alabama Express, Inc. v. United States, 585

F. 2d 783 (5th Cir. 1978); In Re Estate of Levin, 135 Ml.

App. 3d 386, 482 N.E.2d 409 (1985). Clearly, the letter

did not inform Alton of the possible consequences at stake,

that is, the denial of its permit.

Furthermore, the July 22, 1985 letter was not suffi-

cient notice because it was not timely. Procedural due

process requires that the notice must be given a sufficient

length of time prior to government action to afford oppor-

tunity to be present. Roller v. Holly, 176 U.S. 398 (1900);

Missouri ex rel. Hurtwitx v. North, 271 U.S. 40 (1926).

The amount of time required to satisfy due process is deter-

minable only from the facts and circumstances of each case.

Id.

13

a

Alton was given only fifteen (15) days to respond to

the Agency’s letter. Due process requires that one be given

notice of charges against him a reasonable time before the

government takes action on those charges. Miller v. City

of Mission, Kansas, 705 F. 2d 368, 372 (10th Cir. 1983).

Given the complexity of the air dispersion modeling stud-

ies, which Alton would have needed to conduct to respond

properly to the Agency's allegations, fifteen days consti-

tutes grossly insufficient notice. The Agency record shows

that it took the Agency more than six (6) months to prepare

its rudimentary May, 1985 study. Thus, the July 22, 1985

letter was insufficient in its timing as well as its content.

E. Inadequacy of Board Hearing

Subsequent to the Agency's denial of the operating

permit Alton appealed to the Board pursuant to Section

40 of the Act. The “hearing” before the Board failed to

remedy the lack of procedural due process accorded Alton

by the Agency. Although the Board provided Alton with

notice and the opportunity for a “hearing,” this hearing

was totally inadequate. Permit appeal hearings before the

Board are limited to the record before the Agency under

Section 40 of the Act, as interpreted below by the Illinois

Appellate Court. Alton Packaging Corp. v. Pollution Con-

trol Board and Environmental Protection Agency, No. 5-

86-0477, Ill. App., Fifth District, slip op. (September 25,

1987) at p. c-8 of the Appendix. See also, Environmen-

tal Protection Agency v. Pollution Control Board, 118 Tl.

App. 3d 772, 455 N.E.2d 188 (1983). Consequently, Alton

was prohibited from presenting relevant evidence at the

hearing before the Board to refute the Agency's charges.

An essential element to the due process right to a hearing

is the right to present evidence. United States v. Storer

Broadcasting Co., 351 U.S. 192 (1956); American Trucking

Asso. v. United States, 326 U.S. 77 (1945); Anniston Mfg.

Co. v. Davis, 301 U.S. 337 (1937). Since the hearing before

14

the Board did not allow Alton to present evidence, it did

not meet the minimum requirements of due process.

CONCLUSION

Permit holders under Illinois law are not given notice

and the opportunity to be heard at a reasonable time and

a reasonable manner before being denied a permit. In

the proceedings below, Alton was deprived of its permit

without notice and the opportunity to be heard. The Illi-

nois courts have refused to reinstate Alton’s permit. This

refusal is contrary to the holdings of this Court as discussed

above. Therefore, this Court should granted a writ, reverse

the holdings of the lower courts, and order the Agency to

reinstate Alton’s permit until Alton is given notice and an

opportunity to be heard.

Furthermore, this Court should grant a writ to resolve

| the important question of constitutional law raised in this

. proceeding, that is, whether States must give a permittee

notice and an opportunity to be heard before refusing to

renew valuable environmental permits.

Respectfully submitted,

Alton Packaging Corporation

By

One of their attorneys

RIcHARD J. KISSEL

Jerrrey C. Fort

Dante. F. O'CONNELL

GaRDNER, CaRTON & DouGLas

321 North Clark Street

Suite 3200

Chicago, Illinois 60610-4795

(312) 644-3000

15

eee

A

No. 66437

a — —---

In The

Supreme Court of Illinois

Alton Packaging Corpora- )

tion,

7, Appeal from

Petitioner sentinels

v. > Fifth District

Pollution Control Board, et AC5-86-0477

al., PCF 85145

Respondents e

ORDER

This matter has come for consideration upon the

motion of petitioner to stay the mandate of this Court pend-

ing appeal or application for certiorari in the United States

Supreme Court.

IT IS ORDERED that the mandate of this Court in

the above cause is stayed pending the filing of a notice of

appeal or an application for certiorari or the expiration of

the period within which said application or notice may be

filed. If certiorari is applied for or notice of appeal filed,

the mandate of this Court shall, upon proof of such filing

being made by affidavit filed with the clerk of this Court,

be further stayed pending resolution by the United States

Supreme Court of such application or appeal. If no such

affidavit is filed, the mandate shall without further order,

issue upon the expiration of the time within which appeal

or certiorari may be sought.

FILED

May 9 - 1988

SUPREME COURT CLERK

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In The

Supreme Court of Illinois

April 7, 1988

Mr. Richard J. Kissel

Martin, Craig, Chester & Sonnenschein

55 West Monroe-S1200-Chicago, IL 60603

In re: Alton Packaging Corporation, petitioner

v. Pollution Control Board, et al., respondents.

No. 66437

Dear Sir:

The Supreme Court today DENIED the petition for

leave to appeal filed in the above cause.

Very truly yours,

Clerk of the Supreme Court

JH: jae

cc: All attorneys

of record

b-1

No. 5-86-0477

In The

Appellate Court of Illinois

Hitth District

ALTON PACKAGING COR- .

PORATION, |

Petitioner-Appellant, |

. | Appeal from

| >.

THE POLLUTION CON. 0+ al

TROL BOARD and ILLI-

NOIS ENVIRONMENTAL

PROTECTION AGENCY,

Respondents-Appellees.

Justice Lewis! delivered the opinion of the court:

Alton Packaging Corporrtion (Alton) appeals from an

order of the Pollution Control Board (Board), in which

the Board affirmed the Environmental Protection Agency’s

(Agency) denial of Alton’s application for renewal of an

operating permit at its mill in Alton, Illinois. The Agency

had denied Alton’s application for renewal of the permit

because it had found that certain boilers at Alton’s mill

had been the major contributors to a violation of the Agen-

cy’s sulfur dioxide standard for the area during 1984 and

had concluded that these boilers might cause violations in

the future. On appeal from the Board’s order affirming the

Agency’s denial, Alton contends that the Board’s findings

that there was a violation of the Agency’s sulfur dioxide

1 Justice Lewis replaced Justice Jones who retired after the

cause was taken under advisement.

c-1

standard in Alton in November 1984 and that continued

operation of the Alton mill might cause that standard to

be exceeded in the future were contrary to the manifest

weight of the evidence. We affirm.

Alton is a fully integrated company engaged in the

manufacture and sale of paper board and paper board pack-

aging products. In its manufacture of paper board prod-

ucts, Alton operates a mill located at Alton, Illinois, which

requires the use of steam produced by boilers. Two of these

boilers, Nos. 6 and 7, are pulverized, wet bottom boilers, in

which coal is pulverized to a fine powder and blown into the

boilers. Exhaust air from these boilers is eventually vented

into the atmosphere through two large stacks, which con-

tain no devices to control sulfur dioxide emissions. It is

these boilers that are the subject of this permit appeal.

On January 25, 1983, Alton filed an application with

the Agency for renewal of its operating permit for the boil-

ers in question. In a related proceeding, Alton, on April

23, 1983, filed a petition for variance and site specific relief

from the Board’s Rule 204(f) (now codified as 35 Ill. Adm.

Code §214.141), which had been revised to establish an

emission limitation for sulfur dioxide of 1.8 pounds per mil-

lion BTU (lbs/mmbtu). The Board subsequently dismissed

the variance and site specific proceeding for lack of prose-

cution, but, upon appeal to this court (see Alton Packaging

Corp. v. Pollution Control Board (1986)), 146 [ll. App. 3d

1090, 497 N.E.2d 864), the cause was reinstated and appli-

cation of the revised emission limitation to the Alton mill

was stayed pending the outcome of the variance and site

specific proceeding.

In November 1984, following Alton’s application for

renewal of its operating permit, the Agency recorded two

excursions or exceedances of the 24 hour primary ambient

air quality standard for sulfur dioxide at its monitor in

Alton, Dlinois. Pursuant the Board regulation (codified at

35 Ill. Adm. Code § 243.122), more than one excursion from

c-2

this standard of 0.14 parts per million (ppm) in a one year

period constituted a violation. The two excursions occurred

on November 6 and 7, 1984, with a 24 hour average read-

ing of 0.148 ppm, and on November 25 and 26, 1984, with a

reading of 0.159 ppm. In December 1984 the Agency issued

an air quality bulletin identifying Alton as a primary con-

tributor to these excursions, and, in May 1985, the Agency

completed a modeling study which confirmed that Alton’s

boilers had been the “likely cause” of the November 1984

violation of the air quality standard for sulfur dioxide in

the Alton area.

On August 27, 1985, the Agency denied Alton’s

request for renewal of its operating permit, setting forth

two reasons. The first reason, that the boilers in question

had an average emission rate of 4.9 lbs/mmtu, in excess

of the newly revised emission limit of 1.8 lbs/mmbtu, was

subsequently rendered inapplicable when the variance pro-

ceeding was reinstated and the applicability of the new

limit was stayed as to Alton. The second reason for denial

was stated as follows:

“2. The s ambient SO2 monitor in Alton

recorded a violation of the primary 24 hour SO2

standard during 1984. Based upon a recent study

performed by the Agency, Boilers 6 and 7 appear

to have been the major contributor to this viola-

tion. Boilers 6 and 7 thus may cause violations of

35 Ill. Adm. Code 201.141 and 243.122(a)(2).”

Alton then filed an appeal with the Board from the

Agency's denial pursuant to section 40 of the Environ-

mental Protection Act (Act) (Ill. Rev. Stat. 1985, ch. 111

1/2, par. 1040). In a hearing before the Board, Alton

called two Agency employees as adverse witnesses. John

Shrock, an environmental protection specialist with the

Agency testified that he had prepared the Agency’s May

1985 Study with regard to the alleged excursions of Novem-

ber 1984. He stated that it was not the purpose of this

report to predict future excursions but only to determine

c-3

the major contributors to the reported excursions. Upon

examination by the Agency, Shrock testified that similar

excursions may be possible in the future if Alton were

allowed to operate at the limits they were operating at dur-

ing the previous excursions, since the weather conditions

present on those dates were not unusual.

Alton further called David Kolaz, manager of the

Agency’s Ambient Air Quality Monitoring section. Kolaz

testified concerning the range of accuracy of the Agency’s

monitors, explaining the procedures and requirements for

recalibrating its monitors. Upon examination by the Agen-

cy, Kolaz described the precision and accuracy checks that

are performed on the Agency’s monitors and stated that

under United States Environmental Protection Agency

(USEPA) guidelines, the recorded values were not to be

adjusted based upon accuracy and precision checks, but

were to be reported as measured on the Agency’s monitors.

As a final witness the Agency called Patrick Dennis, a

senior analysis engineer for the Agency, who had reviewed

Alton’s permit application and recommended that it be

denied. Dennis explained the reasons given by the Agency

for the permit denial and stated that either reason alone

would have been sufficient to recommend denial. He fur-

ther stated that Alton had provided no information to the

Agency to show that operation of its boilers would not

cause future exceedances of the air quality standard for

sulfur dioxide.

Upon cross-examination by Alton, Dennis testified

that he had been aware of a modeling study prepared by

Murray and Trettel and submitted by Alton as part of the

variance proceeding but stated that this study had not been

considered in the context of the permit proceeding because

it had not been prepared according to USEPA guidelines

and because it had been part of the variance proceeding

that was dismissed by the Board. Dennis stated that he

had placed no reliance on the Murray and Trettel study,

c-4

which was not included in the Agency record in the permit

appeal, but had based his recommendation to deny Alton’s

permit request on the modeling study performed by the

Agency to determine the source of the two excursions in

November 1984, as well as information provided by Alton

as to coal usage.

Following the hearing, the Board, on April 24, 1986,

affirmed the Agency’s denial of the operating permit for

Alton’s mill. In stating the basis for its decision the Board

found, contrary to Alton’s contentions regarding the accu-

racy of the Agency’s recorded excursion on November 6 and

7, 1984, that there had been an excursion on that date and

that Alton had failed to show that the Agency’s monitor by

which the November 1984 excursions were recorded was

faulty. The Board further found that

| “based on the information received form the excur-

sion study [of May 1985], the Agency could reason-

ably conclude that Alton’s boilers may cause a vio-

lation of 35 Ill. Adm. Code 201.141 and 243.122(a)

(2).”

The Board noted that while Alton had questioned the

predictive capacity of the Agency’s excursion study, it had

| “offer{ed] no data to suggest that the Agency’s conclusions

| were unreasonable.”

: The Board continued:

“In this permit appeal, the burden is not on the

Agency to prove that a violation will occur in the

future. Rather, the burden is on Alton to prove

that a violation will not occur in the future. Alton

has not provided the Board with any information

which would enable the Board to conclude that a

violation of the primary SO2 24-hour standard will

not occur in the future. Based on the record before

the Agency, the Board finds that the information

provided by Alton to the Agency fails to demon-

strate that issuing a permit for Alton’s mill will

not cause a violation of the Act and Board regula-

tions. Therefore, the Board affirms the Agency's

ee ee

c-5

denial of a permit for Alton’s mill.”

On direct appeal to this court (see Ill. Rev. Stat. 1985,

ch. 111 1/2, par. 1041), Alton contends that the Board’s

decision affirming the Agency’s permit denial was con-

trary to the manifest weight of the evidence and should be

reversed. In particular, Alton maintains that there was an

insufficient basis for the Board to conclude that continued

operation of Alton’s mill may cause future violations of air

quality standards in view of testimony at the hearing that

the Agency’s May 1985 modeling study was no intended to

be predictive of future violations and testimony that the

alleged excursion of November 6 and 7, 1984, fell within

the margin of error of the Agency’s monitor. Alton asserts,

therefore, that the evidence failed to support the second

reason given in the permit denial and that the Agency’s

denial should be reversed.

Section 39(a) of the Act (Ill. Rev. Stat. 1983, ch. 111

1/2, par. 1039(a)), under which Alton’s permit application

was made, states in pertinent part:

When the Board has by regulation required a per-

mit for the * * * operation of nay type of facility

*** the applicant shall apply to the Agency for

such permit and it shall be the duty of the Agency

to issue such a permit upon proof by the applicant

that the facility *** will not cause a violation of

this Act or of regulations hereunder.”

(Emphasis added.)

Under section 39, Alton, as permit applicant, had the

burden of showing that issuance of a permit for operation

of its mill would not cause a violation of the Board’s air

quality standard for sulfur dioxide. Upon appeal to the

Board from the Agency’s denial of such permit, the burden

of proof was again upon Alton. Ill. Rev. Stat. 1985, ch. 111

1/2, par. 1040 (a) (1); see Environmental Protection Agency

v. Pollution Control Board (1983), 118 11l. App. 3d 772, 455

N.E.2d 188 (hereafter Alburn).

c-6

OE Cnt ce DP ete

Kult Cee Se aha &

eae cA ENORE, TE Se i Sal ii wit lala alee ata sath te

AE OR at SF ae LPO Bh AS

In the hearing to determine whether Alton had met his

burden, the Board considered testimony elicited by Alton

from the Agency’s employees regarding the accuracy of the

recorded excursions in the Alton area during November

1984. Alton, in its examination of these employees, sought

to discredit the Agency’s measuring and recording meth-

ods. The Board, however, rejected Alton’s assertions that

the recorded measurement of November 6 and 7 did not

constitute an excursion and found that there had in fact,

been an excursion. The Board thus determined that Alton

had failed to carry its burden of refuting the factual basis

for the Agency’s conclusion that there may be a violation

of Board regulations in the future. the Board further noted

that while Alton had questioned the predictive capacity of

the May 1985 modeling study, this study was an adequate

basis fo. the Agency’s conclusion that Alton was a major

contributor to the excursions in question.

Upon appeal, now, from the Board’s decision to this

court, Alton has the heavy burden of showing that the

Board’s decision affirming the Agency’s denial was con-

trary to the manifest weight of the evidence. (Ill. Rev.

Stat. 1985, ch. 111 1/2, par. 1401 (b).) While the Board

was required to determine, based upon the evidence in the

hearing before it, whether the permit should issue, this

court, in reviewing the Board’s decision, must evaluate the

evidence in the record and determine whether the Board’s

findings were contrary to the manifest weight of the evi-

dence. (Environmental Protection Agency v. Pollution Con-

trol Board (1986), 115 Ill. 2d 65, 503 N.E.2d 343 (here-

after Waste Management, Inc.) That a different conclusion

might be reasonable is insufficient; the opposite conclusion

must be evident. (See Willowbrook Motel v. Pollution Con-

trol Board (1985), 135 [1l. App. 3d 343, 481 N.E.2d 1032.)

This court, thus, must not reweigh the evidence nor sub-

stitute its judgment for that of the Board. Waste Manage-

ment, Inc.

c-7

We have so examined the record before the Board

and have concluded that there was sufficient evidence to

support the Board’s findings. Notwithstanding Alton’s

attempts to establish the unreliability of the Agency’s

recorded measurements, there was evidence that the Agen-

cy’s monitor was operating satisfactorily and that the mea-

surements were properly reported without adjustment as

required by USEPA guidelines. In light of the evidence of

Alton’s role in the violation of November 1984 and Alton’s

failure to show that no such violation would occur in the

future, the Board was justified in upholding the Agency’s

permit denial. We, accordingly, affirm the decision of the

Board.

We note in passing Alton’s alternative argument that

the Board’s decision should be reversed and remanded for

further hearing to afford Alton the opportunity to intro-

duce new evidence that was not part of the record before

the Agency. Alton maintains that the decision of Envi-

ronmental Protection Agency v. Pollution Control Board

(1985), 138 Ill. App. 3d 550, 486 N.E.2d 293, which has

since been affirmed in Waste Management, Inc. referred to

above, changed the law with respect to the requirements

of the hearing before the Board in a permit appeal so that

the parties are no longer limited to the record before the

Agency but are entitled to a hearing de novo before the

Board with the admission of new evidence. It is Alton’s

position that it should have a new hearing in which to sub-

mit evidence of its own modeling study prepared by Murray

and Trettel even though this study had not been presented

to the Agency in the permit proceeding.

We find no merit in Alton’s position, because, rather

than changing the law regarding the admission of evi-

dence in Board hearings, it appears that the Waste Man-

agement, Inc. decisions merely restated the law regarding

the standard of proof applicable in such hearings. while

both the appellate and the supreme court opinions dis-

c-8

cussed the opportunity afforded the permit applicant, dur-

ing the Board hearing, to challenge the reasons given by

the Agency for denying such permit by means of cross-

examination and the receipt of tes: imony "to test the valid-

ity of the information [relied upon by the Agency] (115 Il.

2d 65, 70, 503 N.E.2d 343, 345), the courts’ language should

not be construed to allow the supplementing of the record

with new matter not considered in the Agency’s denial

of the permit application. (Cf. Alburn: Board’s review of

Agency’s permit denial limited to consideration of material

relied upon by Agency.) We believe Alton was afforded an

adequate opportunity here to challenge the reasons given

by the Agency for its permit denial and we, accordingly,

find no basis upon which to remand the case for further

hearing.

For the reasons stated in this opinion, we affirm the

decision of the Board.

AFFIRMED.

Karns, P.J.,

and KASSERMAN, J., concur.

‘A wed

Be tata tealts

nies SN a

ILLINOIS POLLUTION

CONTROL BOARD

June 20, 1986

ALTON PACKAGING COR- ~

PORATION, |

Petitioner,

v. ,

ILLINOIS ENVIRONMEN- |

TAL PROTECTION AGE- |

NCY, |

Respondent. J

ORDER OF THE BOARD (by J. D. Dumelle):

This matter comes before the Board upon a May 29,

1986 motion for reconsideration filed on behalf of the Alton

Packaging Corporation and a June 9, 1986 response filed

on behalf of the Dlinois Environmental Protection Agency.

In its motion Alton admits that its “arguments are all set

forth in previous briefs filed with the Board in this matter.”

That being the case, and since Alton has not persuaded the

Board that it “has clearly erred in assessing what Alton

was required to demonstrate to the Agency,” the motion is

hereby denied.

IT IS SO ORDERED.

I, Dorothy M. Gunn, Clerk of the Illinois Pollution

Control Board, hereby certify that the above Order was

adopted on the _day of , 1986 by a

vote of

Dorotuy M. Gunn, Clerk

Illinois Pollution Control Board

APPENDIX E

ILLINOIS POLLUTION

CONTROL BOARD

April 24, 1986

ALTON PACKAGING COR- >

PORATION,

Petitioner, |

v. . PCB 85-145

ILLINOIS ENVIRONMEN-

TAL PROTECTION AGE.-

NCY,

Respondent. y,

MR. RICHARD KISSEL, MARTIN, CRAIG, CHESTER &

SONNENSCHEIN, APPEARED ON BEHALF OF PETI-

TIONER.

MR. WILLIAM INGERSOLL APPEARED ON BEHALF

OF RESPONDENT.

OPINION AND ORDER OF THE BOARD (by J.D.

Dumelle):

This matter comes before the Board upon a permit

appeal filed on October 1, 1985 on behalf of Alton Packa-

ging Corporation (Alton). Alton requests that the Board

reverse the August 27, 1985 decision by the Illinois Envi-

ronmental Protection Agency (Agency) denying Alton’s

application for renewal of an operating permit for its Alton

mill.

Alton is a fully integrated company in the pulp and

paper industry engaged in the manufacture and sale of

paperboard and paperboard packaging products which is

headquartered in Alton, Illinois. Alton operates a mill in

Alton, Illinois which employs about 350 people and pro-

duces approximately 600 tons of paperboard per day which

is then converted into paperboard manufacturing products

for corrugated shipping containers. In the production of

e-1

paperboard products, Alton utilizes boilers to produce the

stream required for heating and process use. Two of these

boilers, Boilers 6 & 7, are the subject of this permit appeal.

(Pet. Brief pp. 1-2).

Boilers 6 & 7 are pulverized, wet bottom boilers. Coal

is pulverized to a fine powder and blown into the boilers.

Ash is both emitted through the vented air as well as col-

lected in the wet ash pit. The exhaust air from the boil-

ers passes through mechanical collectors (multi-clones) and

then through electrostatic precipitators and then vented

to the atmosphere through two separate 192-foot stacks.

There is no control device to deal with SOg emissions.

When needed, low sulfur coal is burned to comply with

applicable emission limits for SOg. (Pet. Brief p. 2).

On January 21, 1983, Alton filed a renewal permit

application with the Agency for its Alton mill. Alton

waived the 90-day decision period until the Board issued

a final order in PCB 83-55 (site-specific rule) and PCB 83-

49 (variance). The Board dismissed these proceedings on

August 1, 1985. The Agency denied Alton’s permit appli-

cation on August 27, 1985 for the following reasons:

1. Based upon information submitted to the Agency,

Boilers 6 and 7 presently emit sulfur dioxide at the

average rate of 4.9 lbs per million Btu, an amount in

excess of Btu of 35 Ill. Adm. Code 214.141.

2. The Agency’s ambient SO2 monitor in Alton recorded

a violation of the primary 24 hour SO standard dur-

ing 1984. Based upon a recent study performed by

the Agency, Boilers 6 and 7 appear to have been the

major contributor to this violation. Boilers 6 and

7 thus may cause violations of 35 [ll. Adm. Code

201.141 and 243.122(a) (2).

The first ground for the Agency’s denial is not

presently at issue. Alton filed a petition for variance (PCB

83-49) within 20 days after the effective date of the rule

e-2

which established the 1.8 lbs/mmBtu SOg emission limita-

tion, thereby staying applicability of this emission limita-

tion pursuant to Section 38 (b) of the Environmental Pro-

tection Act. The Board subsequently dismissed the vari-

ance petition and the Agency contended that the stay was

no longer in effect. However, Alton appealed the Board’s

decision to the appellate court which granted Alton’s

motion to stay the applicability of the 1.8lbs/mmBtu SO

2 emission limitation to Alton’s mill. Therefore, the Agen-

cy’s first ground for denial is not presently applicable and

will not be considered.

Concerning the second ground for denial, the Agen-

cy’s ambient SO2 monitor in Alton recorded two excursions

from the primary SOg 24-hour standard in November 1984.

(The primary 24-hour ambient air quality standard for SOg

is 0.14 ppm). The first occurred during a 24-hour period

on November 6 and 7. During this period, the maximum

24-hour average was 0.148 ppm. The second occurred dur-

ing a 24-hour period on November 25 and 26. During this

period, the maximum 24-hour average was 0.159 ppm. A

violation of the primary SOg 24-hour standard occurs when

two excursions from the standard occur within a one-year

period. The Agency conducted an excursion study to deter-

mine the major contributor(s) to the violation. The excur-

sion study determined that Alton’s Boilers 6 and 7 appear

to have been the major contributor to the violation. Thus,

the Agency concluded that Boilers 6 and 7 may cause vio-

lations of 35 Ill. Adm. Code 201.141 and 243.122 in the

future and denied Alton’s permit request.

Alton’s position is that whether or not it was a contrib-

utor to the violation of the primary SOg 24-hour standard

is not a proper basis up on which the Agency can deny a

permit; rather, the Agency must have in the record that

this will occur in the future and the record does not con-

tain that. (R. p. 9). Alton supports its position by ques-

tioning the accuracy of the recorded excursion on Novem-

e-3

ber 6 and 7. Alton contends that the November 6 and 7

excursion was not an excursion because the range of accu-

racy of the monitored readings could range, based on a 95%

confidence interval, anywhere from 9% too low to 5% too

high. Furthermore, Alton contends that the November 6

and 7 excursion may have been lower since the precision

check of the monitor before the recorded excursion indi-

cated that the recorded sample was 5.5% higher than what

the real value was. Lastly, Alton contends that the Agen-

cy’s excursion study was not predictive of the future and,

consequently, the Agency could not determine whether the

operation of Alton’s boilers would in the future cause a

violation of the primary SOQ 24-hour standard. (Pet. Brief

pp. 7-10).

The Agency responds to these arguments by asserting

that the November 6 and 7 excursion was in fact an excur-

sion. The Agency asserts that the employee who testified

on the range of accuracy was merely expression his sta-

istical confidence level and that under USEPA guidelines

the reported data is not to be corrected. The Agency also

contends that the precision check indicating that the mon-

itor was recording slightly higher readings does not affect

the accuracy of the reported data. This just means that

the baseline reference had drifted above zero and the drift

had corrected itself before the November 6 and 7 excur-

sion. (R. p 50). Lastly, the Agency employee, based on his

expertise, concluded that future excursions were possible

if Alton were allowed to continue operations as they were

since the meteorological conditions during the excursions

were not unusual and other SOg sources which would nor-

mally be expected to impact the monitor were not operat-

ing or operating at well below allowable limits. (Ag. Brief

pp. 7-10).

The issue to be addressed by the Board in this permit

appeal is whether the information provided by Alton to

the Agency sufficiently proves that issuing a permit for

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Alton’s mill will not cause a violation of the Act and Board

regulations. This issue is to be decided by the Board based

on the record before the Agency when it made its decision.

Section 40 of the Act places the burden of proof in a permit

appeal on the petitioner to show that the Agency’s decision

was wrong. For the following reasons, the Board finds that

Alton has not met this burden and affirms the Agency’s

denial of an operating permit for Alton’s mill.

Alton’s position in this permit appeal centers on the

impropriety of the Agency’s data which were used to deter-

mine that the November 6 and 7 excursion was in fact an

excursion; and that Alton’s boilers may in the future cause

a violation of 35 Il. Adm. Code 201.141 and 243.122(a) (2).

The Board is not persuaded by any of Alton’s arguments.

Specifically, the Board finds that the November 6 and 7

excursion was in fact an excursion. Mr. David Kolaz, Man-

ager of the Agency’s Ambient Air Quality Monitoring Sec-

tion, testified that USEPA guidelines specifically state that

the measured data is not to be corrected for any measure-

ments of precision or accuracy, either directly corrected or

corrected in performing evaluations to determine attain-

ment of a standard. (R. p. 33). Though a monitor that

is consistently taking faulty readings should be removed

from the State’s monitoring system, Alton has not provided

any information to the Board that would demonstrate that

the Barton School monitor which recorded the November,

1984 excursions was consistently taking faulty readings.

Alton also argues that the November 6 and 7 reading

of 0.148 ppm. was 5% too high; the actual reading being

0.141 ppm. Alton contends that such a tenuous and de

minimus number would not seem to be a proper basis on

which to deny a permit, though Alton never acknowledges

the contrary position that the November 6 and 7 read-

ing was 9% too low. Alton’s contention is seriously mis-

placed. Under the current federal and state air pollution

control scheme, an area is either designated as attainment

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or non-attainment for criteria pollutants based on the best

available information. This information includes the data

obtained form the State’s ambient air quality monitors.

Once an area is designated as non-attainment, regardless

of the degree of the non-attainment, major consequences

flow. These consequences include the requirement that

all existing major sources in the area install state-of-the-

art pollution control technology, an increased demand for

state and federal resources to correct the problem and an

increased risk of having sanctions imposed on the area

which may include construction bans on new sources and

the loss of millions of dollars in federal funding. These are

hardly de minimus consequences. Lastly, the determina-

tion of attainment or non-attainment is ultimately made

by the USEPA using its guidelines. In view of these con-

sequences, the Board cannot lightly dismiss the testimony

that USEPA guidelines place the recorded values as a vio-

lation of the primary SOg 24-hour standard.

The Board also concludes that based on the informa-

tion received from the excursion study, the Agency could

reasonably conclude that Alton’s boilers may cause a vio-

lation of 35 Tl. Adm. Code 201.141 and 243.122(a) (2).

While Alton questions the predictive capacity of the Agen-

cy’s excursion study, it offers no data to suggest that the

Agency’s conclusions were unreasonable.

Alton’s position in this permit appeal is misdirected.

In this permit appeal, the burden is not on the Agency to

prove that a violation will occur in the future. Rather,

the burden is on Alton to prove that a violation will not

occur in the future. Alton has not provided the Board with

any information which would enable the Board to conclude

that a violation of the primary SOg 24-hour standard will

not occur in the future. Based on the record before the

Agency, the Board finds that the information provided by

Alton to the Agency fails to demonstrate that issuing a

permit for Alton’s mill will not cause a violation of the Act

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and Board regulations. Therefore, the Board affirms the

Agency’s denial of a permit for Alton’s mill.

This Opinion constitutes the Board’s findings of fact

and conclusions of law in this matter.

ORDER

The Board hereby affirms the Agency’s denial of an

operating permit for Alton’s mill located at Alton Packa-

ging Corporation’s facility in Alton, [linois.

IT IS SO ORDERED.

I, Dorothy M. Gunn, Clerk of the Illinois Pollution

Control Board, hereby certify that the above Order was

adopted on the 24th day of April, 1986 by a vote of 7 — 0.

/s/ Dorothy M. Gunn

DorotHy M. Gunn, Clerk

Illinois Pollution Control Board

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CERTIFICATE OF SERVICE

I hereby certify that, on the 6th of July, 1988, within

90 days of the April 7, 1988 Order of the Supreme Court of

the State of Illinois, as required by 28 U.S.C. § 2101(c),

copies of the attached Petition for a Writ of Certiorari

were filed with the Clerk of the United States Supreme

Court by being placed in envelopes properly addressed to

the Clerk and to all the persons entitled to notice including

the Illinois Attorney General, at the following address:

TO: James L. Morgan, Esquire

Assistant Attorney General of

the State of Illinois

Office of the Attorney General

500 South Second Street

Springfield, Illinois 62706

with proper first-class postage prepaid and deposited in a

United States mail depository in Chicago.

DANIEL F. O’CONNELL

An Attorney for Petitioner