Petition for Writ of Certiorari — B&W Investment Properties v. United States

Supreme Court brief1995

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941483 1 FEB 2 7 1995

No. SFice OF THE CLERK

IN THE

Supreme Court of the United States

OCTOBER TERM, 1994

B&W INVESTMENT PROPERTIES

and LOUIS WOLF,

Petitioners,

UNITED STATES OF AMERICA,

Respondent.

Petition for Writ of Certiorari to the United

States Court of Appeals for the Seventh Circuit

PETITION FOR WRIT OF CERTIORARI

RoBERT A. KORENKIEWICZ

Counsel of Record

123 West Madison Street

Suite 1500

Chicago, Illinois 60602

(312) 368-8283

February, 1995 Attorney for Petitioners

Midwest Law Printing Co., Chicago 60611, (312) 321-0220

3s Wak Nek od Se ae SR Gg BR Na BN Tat GA Seay RA Oh

FN ae SEA a i Pe Se. A RAR MR ANN Oe A Oe

QUESTIONS PRESENTED

Whether or not the Environmental Protection Agency,

in the case where asbestos is the pollutant, must give no-

tice, pursuant to Section 113(aX1) of the Clean Air Act

[42 U.S.C. sec. 7413(aX1); as in effect prior to November

15, 1990], to a violator as a precondition to filing an en-

forcement suit in the district court, when there is a state

implementation plan in effect encompassing the subject

pollutant, and

Whether or not the Seventh Circuit Court of Appeals

should have directly addressed itself to this question.

TABLE OF CONTENTS

PAGE

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c) Post-Trial Proceedings ..............

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TABLE OF AUTHORITIES

CASE LAW PAGE

Dow Chemical Co. vs. Environmental Protection

Agency, 635 F.Supp. 126 (M.D.La. 1986) ..... 1]

United States vs. Ford Motor Co., 736 F. Supp. 1539

COU, Mh BOE skh cectencesnucneeceswesns 10

United States vs. General Motors Corp., 876 F.2d

1060 (1st Cir., 1989), affirmed, 496 U.S. 530 ... 10

United States vs. Hugo Key and Son, Inc., 731 F.

Supp. 1135 (D. R.I. 1989) .............0--. 11

United States vs. Louisiana-Pacific Corp., 682 F.

Supp. 1122 (D. Colo. 1987) ............+6-- 10

United States vs. Tzavah Urban Renewal Corp.,

696 F. Supp. 10138 (D. N.J. 1988) .......... 11

STATUTORY LAW

ES eee ee 2,4, 14

Oe Ee Os FEED 6 oh aedee vosnndes 2, 3, 4, 12, 18, 14

i i i ab es ned keneesav bein 3, 4

40 C.F.R. secs. 61.145 and 61.146 ............. 9

42 C.F.R. Part 61 subpart Mi... cece eeee 4

re ara

SEI AN Pn A, i ek

IN THE

Supreme Court of the United States

OCTOBER TERM, 1994

B&W INVESTMENT PROPERTIES

and LOUIS WOLF,

Petitioners,

Vv.

UNITED STATES OF AMERICA,

Respondent.

Petition for Writ of Certiorari to the United

States Court of Appeals for the Seventh Circuit

PETITION FOR WRIT OF CERTIORARI

Petitioners, B&W Investment Properties and Louis Wolf,

respectfully pray that a writ of certiorari issue to review

the judgment and opinion of the United States Court of

Appeals for the Seventh Circuit entered in the above en-

titled proceeding on October 24, 1994 and modified on

December 2, 1994.

OPINION BELOW

The Opinion and Judgment Order of the United States

Court of Appeals for the Seventh Circuit, reported as

United States of America vs. B&W Investment Proper-

ties and Louis Wolf, No. 94-1892, appears in the Appen-

dix at p.1. The order modifying the opinion and denying

Defendants’ Petition For Rehearing With Suggestion For

Rehearing En Banc appears in the Appendix at p. 14.

JURISDICTION

The Seventh Circuit judgment in this case was entered

on October 24, 1994. The jurisdiction of the Court is in-

voked under 28 U.S.C. See. 1254(1).

STATUTORY PROVISIONS INVOLVED

Title 42 United States Code, sec. 7412(d), as in effect

prior to November 15, 1990,! provides:

(1) Each state may develop and submit to the Ad-

ministrator a procedure for implementing and en-

forcing emission standards for hazardous air pol-

lutants for stationary sources located in such State.

If the Administrator finds the State procedure

is adequate, he shall delegate to such State any.

authority he has under this chapter to implement

and enforce such standards.

(2) Nothing in this subsection shall prohibit the Ad-

ministrator from enforcing any applicable emis-

sion standard under this section.

Title 42 United States Code, sec. 7413(aX1) provides:

Whenever, on the basis of any information available

to him, the Administrator finds that any person is

in violation of any requirement of an applicable im-

plementation plan, the Administrator shall notify the

person in violation of the plan and the State in which

the plan applies of such finding. If such violation ex-

tends beyond the 30th day after the date of the ad-

ministrator’s notification, the Administrator may issue

an order requiring such person to comply with the

requirements of such plan or he may bring a civil

action in accordance with subsection (b) of this section.

1 All references herein to the Clean Air Act will be to the Act

as in effect prior to the effective date of the 1990 amendments,

November 15, 1990.

Title 42 United States Code, sec. 7413(bX2) provides:

The Administrator shall, in the case of any person

which is the owner or operator of a major stationary

source, and may, in the case of any other person,

commence a civil action for a permanent or tempo-

rary injunction, or to assess and recover a civil penal-

ty of not more than $25,000 per day of violation, or

both, whenever such person—

* * k* * *

(2) Violates any requirement of an applicable imple-

mentation plan (A) during any period of Federally as-

sumed enforcement, or (B) more than 30 days after

having been notified by the Administrator under sub-

section(aX1) of this section of a finding that such per-

son is violating such requirement;. . . .

Title 42 United Stated Code, sec. 7414(aX1) provides in

pertinent part:

For the purpose (i) of developing or assisting in

the development of any implementation plan un-

der section 7410 or section 7411(d) of this title,

any standard of performance under section 7411

of this title, or any emission standard under sec-

tion 7412 of this title, (ii) of determining whether

any person is in violation of any such standard

or any requirement of such a plan, or (iii) car-

rying out any provision of this chapter (except

a provision of subchapter II of this chapter with

respect to a manufacturer of new motor vehicles

or new motor vehicle engines)—

(1) The Administrator may require any person

who owns or operates any emission source or

who is subject to any requirement of this chapter

. . . with respect to a provision of subchapter

II of this chapter to (A) establish and maintain

such records, (B) make such reports, (C) install

use, and maintain such monitoring equipment or

methods, (D) sample such emissions (in accor-

dance with such methods, at such locations, at

such intervals, and in such manner as the Ad-

ministrator shall prescribe), and (E) provide such

other information as he may reasonably require;

Title 42 U.S.C. sec. 7414(b) provides:

(1) Each State may develop and submit to the Ad-

ministrator a procedure for carrying out this sec-

tion in such State. If the Administrator finds the

State procedure is adequate, he may delegate to

such State any authority he has to carry out this

section.

(2) Nothing in this subsection shall prohibit the

Administrator from carrying out this section in

a State.

STATEMENT OF THE CASE

A. Procedural Statement

On September 16, 1991, the Environmental Protection

Agency caused a Complaint to be filed against B&W In-

vestment Properties Inc. and Louis Wolf in the United

States District Court for the Northern District of Ulinois,

seeking injunctive relief and civil penalties under Sections

112(c), 113 and 114 of the Clean Air Act (is in effect prior

to November 15, 1990, 42 U.S.C. Sections 7412(c), 7413

and 7414), and the National Emissions Standards For Haz-

ardous Air Pollutants For Asbestos, 42 C.F.R. Part 61

subpart M, and 56 Federal Regulation 1669 (the Complaint

is set out in the Appendix at p. 16). In its two counts

for relief, the Complaint alleged work practice (Section

112) and Notice (Section 114) violations. Defendants filed

their Answer on October 11, 1991. Plaintiff filed its Mo-

tion for Summary Judgment on the issue of liability on

July 14, 1992. On October 27, 1992 Plaintiff filed its Mo-

tion for Summary Judgment as to the amount of the ap-

- =

plicable penalty. Defendants filed a Cross-Motion for Sum-

mary Judgment as to liability on August 14, 1992 and a

Motion for Summary Judgment as to the amount of the

applicable penalty on November 18, 1992. On September

30, 1992, the district court granted the Plaintiff's Motion

for Summary Judgment as to liability and denied Defen-

dants’ Motion For Summary Judgment as to liability. On

December 3, 1992 the district court denied both Plaintiff's

and Defendants’ respective Motions for Summary Judg-

ment as to the amount of the applicable penalty and re-

ferred that question to a magistrate for hearing and for

a report and recommendation to the district court.

A hearing before the magistrate was had on October

13, 1993 through October 15, 1993. The magistrate issued

her report and recommendation on the issue of the amount

of the applicable penalty on December 17, 1993. The mag-

istrate recommended the imposition of a $1,500,000.00 pen-

alty against Louis Wolf and a $1,675,000.00 penalty against

B&W Investment Properties, Inc., with joint and several

liability. The penalty assessed against Wolf amounted to

three-quarters of his net worth.

Plaintiff filed its objections to the magistrate’s recom-

mendation on January 10, 1994 and Defendants filed their

objections on January 18, 1994. Both parties filed their

respective responses to the objections and the defendants

filed a reply to the plaintiff's response. On February 17,

1994 the district court entered its Memorandum Opinion

and Judgment adopting the magistrate’s recommended fines.

Subsequently, Defendants filed a Motion for Reconsidera-

tion of the Judgment on March 14, 1994, and their Sup-

plemental Motion for Reconsideration on March 18, 1994.

Plaintiff filed its Response to the defendants’ motion on

March 25, 1994. The Motion for Reconsideration was denied.

B. Factual Statement

Albert Berland (hereinafter referred to as ‘‘Berland’’)

entered into a contract for the purchase of the proper-

ty in issue from a third-party at the purchase price of

$575,000.00. Berland became financially unable to complete

the purchase so he approached Louis Wolf (hereinafter

referred to as “Wolf’) with regard to the latter’s purchas-

ing the property. On October 12, 1989 Wolf entered into

a contract with Berland to purchase the property from

him for $575,000.00. A real estate closing took place on

December 7, 1989 whereupon Wolf gave the money to

Berland who in turn gave the money to the third-party

for the purchase of the property. The parties exchanged

deeds and Wolf became the title owner. After closing,

Berland negotiated an option to purchase the property -

back from Wolf, along with a first right of refusal if with-

in two years Wolf had a bonafide offer to purchase the

property. Thereafter, Berland prepared sales information

with the Cicero Economic Development Authorities and

attempted to sell the property for $1,950,000.00. The prop-

erty consisted of several old, unoccupied factory buildings.

Eventually, Berland negotiated with another third-party

to lease the property. The third-party was led to believe

that Berland owned the property and he remitted all rent

payments to him. Said payments were never received by,

or on behalf of, either Wolf or B&W Investment Proper-

ties, Inc. (hereinafter referred to as B&W). Berland and

the third-party also entered into a real estate sales agree-

ment, under the terms of which the third-party would pur-

chase the property from Berland for $1,400,000.00, contin-

gent upon the latter’s first removing the asbestos from

the property. In early August, 1990 Berland contracted

with S&F Construction, paid them for the removal of the

asbestos and the work thereupon commenced. In so doing,

i ele OE) tie ee ce eS ee

BE ED co BS STR aS

ER I a TS a

ill

Berland took it upon himself to go beyond the express

limitations on his authority and enter into contracts with-

out the knowledge or consent of the sole owner of the

property, Wolf. The asbestos in question consisted of in-

tact boiler and pipe wrapping contained within the build-

ings and, as such, its then present status was in compli-

ance with all regulatory requirements.

In the summer of 1990, Wolf suffered a heart attack

and was hospitalized. The acts complained of by Plaintiff

occurred while Wolf was in the Hospital. It was during

this period of time that B&W learned of the third-party

tenant who was paying monies to Berland and Berland

admitted receiving the rents and keeping the money. The

third-party testified that although he was current in his

rent, he received a 5-day notice from B&W on August

31, 1990, demanding past due rent.

Wolf’s sole purpose in buying the property was to turn

it over to Berland for a profit. Wolf never authorized Ber-

land or anyone else to remove asbestos from the Cicero

facility. Berland was authorized to show the property to

prospective buyers and to keep it secure. Although Wolf

was aware that Berland was showing the property for

sale, he never authorized Berland to do any work on the

property other than to keep the property secure. Further,

Wolf would receive no benefit from Berland’s actions un-

less a sale was consummated at the option price.

After Berland contracted with S&F Construction for the

removal of the asbestos, it, in turn, subcontracted the as-

bestos removal to one Juan Vasquez. Neither S&F Con-

struction nor Juan Vasquez had any direct contact with

Wolf. Likewise, Wolf had no involvement with regard to

the property during his hospitalization and recovery and

was unaware of the asbestos removal project.

On August 27 and 31, 1990, EPA representatives inspected

the asbestos removal project, determined that Vasquez

had not submitted a plan for a permit, observed large

quantities of unwetted friable asbestos lying about, and

immediately ordered a halt to the work. As early as Au-

gust 27, 1990, Berland admitted to a representative of the

EPA that Wolf, not he, owned the property. Wolf never

represented to Plaintiff or anyone else that Berland was

the owner but Plaintiff incorrectly believed that it was

dealing with the owner in August of 1990, when actually

it was dealing with Berland, who had only certain limited

authority with regard to the property. On August 30, 1990

the EPA issued an order requiring all work to cease until

a plan was approved for the completion of the asbestos

removal. (The order is set out in the Appendix at p. 26.)_

This order, the sole written communication from the EPA,

was addressed to B&W Investment Properties and per-

sonally served upon Berland’s wife at the Berland home.

Other than as stated, no further EPA inspections were

carried out and no further removal work was performed

at the job site until a contractor hired by the Defendants

began an EPA-approved cleanup on January 21, 1991. The

cleanup was completed by March 15, 1991 and the inspec-

tions thereafter demonstrated that the property was re-

mediated of asbestos in accordance with the statute. Six

months later, in September, 1991, the EPA caused its suit

for injunction and penalties to be filed.

C. Post-Trial Proceedings

Upon denial of the Motion for Reconsideration, Defen-

dants filed a timely Notice of Appeal on April 15, 1994.

After considering the briefs and the oral arguments of

counsel, the Seventh Circuit Court of Appeals affirmed

the judgment of the district court by opinion and order

Pes eee a we

PARE ROE ee

‘idle

of October 24, 1994. On December 2, 1994, the Court de-

nied, with one modification to its Opinion, Defendants’

Petition For Rehearing With Suggestion For Rehearing

En Banc.

REASON FOR GRANTING THE WRIT

It is undisputed that:

A) Wolf had no knowledge of the asbestos removal

by Berland (Opinion, p. 4);

B) Neither defendant was ever served with a notice

of violation, Berland having received, apparent-

ly through his wife, the sole written communica-

tion from the EPA (Opinion, p. 5); and

C) The Administrator of the EPA had delegated both

the asbestos reporting and asbestos work prac-

tices provisions of sections 112 and 114 of the

Clean Air Act to the State of Illinois (Complaint,

paras. 22, 27).

Paragraph 22 of the Complaint states, inter alia:

“The asbestos NESHAP at 40 C.F.R. sections 61.145

and 61.146 requires each owner or operator of a reno-

vation operation to provide EPA with timely, advance

written notice of the intention to renovate a facility.

EPA has delegated implementation of the asbestos

NESHAP to the State of Illinois. In Illinois, there-

fore, each owner or operator of a renovation opera-

tion must provide the State of Illinois with timely,

advance written notice of the intention to renovate

a facility... .”

Paragraph 27 of the Complaint states:

“In accordance with section 112(dX1) of the Act, 42

U.S.C. section 7412(dX1), EPA delegated authority to

the State of Illinois to implement and enforce the as-

bestos NESHAP. In accordance with section 112(dX2)

of the Act, 42 U.S.C. section 7412(dX2), EPA retained

the authority to bring an action for any violation of

the Act.”

42 U.S.C. sec. 113 provides the blueprint for enforce-

ment procedures by the EPA. Subsection (aX1) sets out

the procedure to be followed whenever the Administrator

believes that any person is in violation of a state imple-

mentation plan. First he must serve a notice of the viola-

tion upon that person and, if the violation continues 30

days after the date of the notice he may then issue a com-

pliance order or institute a civil action for injunction and

civil penalties in accordance with subsection (b). In the

case of a violation of a state implication plan, subsection

(bX2) is applicable and reiterates the procedure set out

in subsection (aX1), to wit; a civil action may only be com--

menced against an owner or operator if there is a compli-

ance failure 30 days after the date of notice to that person.

Thus, under the facts of this case, the Administrator

had delegated to the State of Illinois his authority to im-

plement and enforce both asbestos removal [42 U.S.C. sec.

112(dX1)] and asbestos reporting requirements [42 U.S.C.

sec. 114(bX1)].

In support of their threshold argument, that 42 U.S.C.

sec. 113(bX2) incorporates as a precondition to suit the

personal service of notice of violation upon the person

against whom relief is sought and that this precondition

is mandatory where the Administrator has delegated his

enforcement authority to a state, the defendants relied

upon United States vs. General Motors Corp., 876 F.2d

1060, 1063 (1st Cir., 1989), affirmed, 496 U.S. 530; United

States vs. Ford Motor Co., 736 F. Supp. 1539, 1547 (W.D.

Mo. 1990); and United States vs. Louisiana-Pacific Corp.,

682 F.Supp. 1122, 1128 (D. Colo. 1987).

In its opinion, the Seventh Circuit Court of Appeals

agreed with Defendants’ proposition that 42 U.S.C. sec.

113(bX2) incorporates a precondition of notice to the par-

ty against whom enforcement will be sought and that that

precondition is mandatory. (Opinion, p. 6.) Incredibly, how-

ever, the Court stated that subsection (bX2) does not and

could not apply to this case,

“because section 113(bX2), which concerns violations

of state implementation plans for ambient air quality

standards, by its terms does not apply to regulation

of hazardous air pollutants. . . . Instead, asbestos,

like the other hazardous air pollutants designated in

section 112, is a federally regulated substance outside

the purview of state implementation plans.” Opinion,

p. 6. (EMPHASIS ADDED.P

The Court, initially either through error or misapprehen-

sion, treated the issue not only as if the Administrator

had not in fact delegated his asbestos reporting and en-

forcement authority to the state of Illinois, but as if the

Clean Air Act itself specifically prohibited such a delega-

tion of authority. The law contains no such prohibition.

Indeed, the three cases* cited by the Court in its Opin-

ion, at pp. 6-7, in support of the proposition that no prior

notice is required before the EPA may institute a civil

2 Later in the Opinion, at p. 7, the Court discussed the benefits

of the policy and the salutory nature of the 30-day notice require-

ment in the case of state implementation plans and stated,

“In the case of hazardous air pollutant regulation, where there

are no state implementation plans to enforce, there is less

reason to defer action or to await the state’s response.” [EM-

PHASIS ADDED.]

3 Dow Chemical Co. vs. Environmental Protection Agency, 635

F.Supp. 126 (M.D.La. 1986); United States vs. Hugo Key and Son,

Inc., 731 F.Supp. 1135 (D. R.1. 1989); and United States vs. Tzavah

Urban Renewal Corp., 696 F. Supp. 1013 (D. N.J. 1988).

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———

= =

action all involved direct actions either by or against the

EPA without reference to so much as the existence of

state implementation plans let alone any holdings that in

the case of asbestos, approved state implementation plans

may be disregarded and treated as non-existent. The law

containing no such prohibition and the facts being to the

contrary, this treatment of the issue constituted a total

disregard of both the law and the facts.

In their Petition For Rehearing, the defendants speci-

fically identified and pointed out the applicable state and

federal statues and regulations whereby the state of Illi-

nois adopted in whole the federal Clean Air Act, including

enforcement provisions, and the Administrator approved

that adoption and delegated, as stated in paras. 22 and

27 of the Complaint, his authority in connection with as-

bestos reporting and enforcement requirements. (A copy

of the relevant Argument portion of the said Petition is

set out in the Appendix at p. 35.) Upon being so apprised,

the Court modified the slip opinion by striking ‘‘outside

the purview of state implementation plans,” and substi-

tuting “for which apparently no state implementation plan

was involved.” (See Order of December 2, 1994 at Appen-

dix, p. 14.) Defendants contend that this response was un-

responsive and inadequate. There was in fact a state im-

plementation plan in effect for asbestos and thus the issue

4 It must be admitted that the bold statement in Defendants’

opening brief before the Court of Appeals that, “the Plaintiff al-

leged Jurisdiction under Section 7413(bX2) of the . . . Clean Air

Act. . was not supported by any reference to the Complaint,

ifically paras. 22 and 27 thereof, and further the claimed allega-

tion of jurisdiction was incorrect in that the Complaint, at para.

2, simply made a generalized jurisdictional reference to 42 U.S.C.

section 7413(b). However, nowhere within the Complaint did the

EPA claim that it was specifically ype pursuant to 42 U.S.C.

sections 113(bX3) or ‘a a it later argue

=— =

that should have been decided by the Court was could

the EPA disregard the mandatory notice requirement of

42 U.S.C. sec. 7413(bX2) and proceed, in a case involving

asbestos, directly under 42 U.S.C. section 7413(bX3) if it

so chose, and as it indeed did in this case. Unfortunately

for the defendants, this issue, one of first impression,® was

never directly addressed and decided by the Court. Fur-

ther, by avoiding resolution of the general issue of notice,

no conflict among the circuits was created, but claiming

that asbestos is outside the purview of state impiementa-

tion plans is simply incorrect. Lastly, by stating within

the four corners of the Opinion that under the instant facts

no state implementation plan, and thus no prior notice,

is involved, the Opinion is a “correct” one as a matter

of law if not of fact. But by disregarding the uncontested

facts in such a way as to affirm a judgment against an

individual, Wolf, that constitutes three-quarters of his net

worth, the Seventh Circuit Court of Appeals has, in the

words of this Court’s Rule 10.1(a), so far departed from

the accepted and usual course of judicial proceedings as

to call for an exercise of this Court’s power of supervision

by either granting the writ of certiorari prayed for or,

after considering any response from the government, di-

rectly remanding the case to the Court of Appeals by per

curiam order with instructions to decide the threshold

notice issue as argued above.

CONCLUSION

For the foregoing reasons, Defendants pray that this

Court exercise its supervisory authority and grant their

Petition For Writ of Certiorari or, in the alternative, re-

5 The three notice cases relied upon by Defendants did not in-

volve asbestos emissions.

=" a

mand the matter to the Seventh Circuit Court of Appeals

with instructions to decide the issue of whether or not

pre-suit notice was required under the instant facts. The

1990 amendments have not removed, and thus mooted, the

requirement of pre-suit notice in violation cases involving

state implementation plans (see 42 U.S.C. sec. 7413(aX1),

(bX1), and 42 U.S.C. sec. 7412(1) of the current Act).

Respectfully submitted,

RoBERT A. KORENKIEWICZ

Counsel of Record

123 West Madison Street

Suite 1500

Chicago, Illinois 60602 .

(312) 368-8283

February, 1995 Attorney for Petitioners

APPENDIX

een tr tt OO TA OO

App. 1

IN THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

No. 94-1892

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

Vv.

B & W INVESTMENT PROPERTIES and LOUIS WOLF,

Defendants-Appellants.

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 91 C 5886—Charles P. Kocoras, Judge.

ARGUED SEPTEMBER 7, 1994—DecipeD OcToBER 24, 1994

Before CUMMINGS, BAUER and Cupany, Circuit Judges.

CUMMINGS, Circuit Judge. This suit involves a civil ac-

tion by the United States Environmental Protection Agen-

cy (the “EPA”) against two defendants for violations of

sections 112 and 114 of the Clean Air Act (the “*Act’’),

42 U.S.C. §§ 7412(c) and 7414, and the National Emis-

sions Standards for Hazardous Air Pollutants for Asbestos

(the asbestos “NESHAP”), 40 C.F.R. Part 61 subpart M.!

* The Clean Air Act and the applicable regulations were amended

in November 1990. Since the events at issue occurred prior to the

amendment date, the district court applied pre-amendment law,

with the exception that the court relied on the expanded post-

amendment list of mitigating factors in determining the penalty.

Mem. Op. at 6, n.1 (Sept. 30, 1992); Mem. Op. at 8 (Feb. 17, 1994),

App. 2

The United States District Court for the Northern Dis-

trict of Illinois granted summary judgment for the EPA

and imposed fines of $1,500,000 and $1,675,000, respec-

tively, on defendants Louis Wolf and B & W Investment

Properties, Inc.

Defendants argue on appeal that because the Environ-

mental Protection Agency failed to provide notice before

initiating the action, the trial court erred in imposing a

statutory penalty; that the court improperly found B & W

Investment Properties, Inc. liable; and that the fine was

excessive and unsupported in its amount. For the reasons

set forth below, the judgment of the district court is af-

firmed.

STATUTORY BACKGROUND

The Clean Air Act sets forth regulations for the con--

trol of air quality, several of which are at issue here. Sec-

tion 112 of the Act authorizes the EPA to establish na-

tional emission standards for any air pollutant deemed

“hazardous,” for which no ambient air quality standard

is applicable.? Section 112(c) prohibits the construction or

modification of existing sources that will emit hazardous

air pollutants, and further prohibits emissions of such air

pollutants which violate emission standards. Section 114

authorizes the EPA to establish reporting requirements

to assist the agency in developing emission standards and

monitoring compliance. The asbestos NESHAP, inter alia,

requires written notification to the EPA before renova-

tion that could result in emissions and establishes speci-

fic standards for the treatment of asbestos—primarily, for

purposes of this case, that it be adequately wetted until

collected for disposal, so that asbestos particles cannot

become airborne.* 40 C.F.R. 61.147. These regulations ap-

2 Asbestos was among the earliest air pollutants designated haz-

ardous under the Act. 36 Fed. Reg. 5931.

» Dry or friable asbestos poses a particular danger during con-

struction or renovation activities because it can easily become air-

(Footnote continued on following page)

App. 3

ply to all owners or operators, defined as “any person

who owns, leases, operates, controls or supervises” a prop-

erty in violation. 40 C.F.R. 61.45. The Act and asbestos

NESHAP impose strict liability on violators.

The EPA is authorized to pursue violations of sections

112 and 114 and the asbestos NESHAP under section 113

of the Act, 42 U.S.C. § 7413. This section sets forth fed-

eral enforcement procedures for the issuance of compliance

orders and civil actions, and provides for civil penalties

not to exceed $25,000 per day of violaticn.

FACTS

Defendant Louis Wolf purchased the parcel in question,

consisting of 5.5 acres and four vacant buildings in Cicero,

Illinois, on December 7, 1989. Mr. Wolf made the $575,000

deal at the behest of fellow real estate developer Albert

Berland. In a somewhat Byzantine transaction, Mr. Ber-

land retained a two-year option to purchase the land from

Mr. Wolf at a higher rate, and a right of first refusal if

Mr. Wolf received other offers. In the meantime, Mr. Wolf

authorized Mr. Berland to show the property to poten-

tial buyers.

In May 1990, having failed to sell the property, Mr. Ber-

land leased an undeveloped portion of the parcel to David

Moss of C & M Parking to use as a storage lot. Mr. Ber-

land signed the agreement with Mr. Moss as an agent

for a corporate entity called B & W Investment Proper-

ties, Inc. (“B & W’’). At the same time, unbeknown to

Mr. Wolf, Mr. Berland entered into negotiations with Mr.

Moss regarding the eventual sale of the entire parcel for

$1,400,000, contingent on the removal of existing asbestos

from the vacant buildings.

3 continued

borne. The asbestos NESHAP defines friable asbestos as “material

containing more than 1 percent asbestos by weight that hand pres-

s¥ can crumble, pulverize, or reduce to powder when dry.” 40

.F.R. 61.141.

App. 4

To facilitate the pending sale to Mr. Moss, Mr. Berland

hired a contractor to remove the asbestos. Work began

on August 10, 1990—unfortunately, without the requisite

prior notice to the EPA. Further, the contractor apparent-

ly failed to adhere to the safety regulations set forth in

the asbestos NESHAP, performing the removal in such

a way that friable asbestos could enter the air. This dan-

ger was particularly serious because the parcel abutted

a Chicago Transit Authority commuter rail stop.

In the meantime, unaware of the asbestos removal work

at the site, Mr. Wolf had entered the hospital for treat-

ment of a heart condition in late July or early August

1990. During this time B & W acted as his management

company.

On August 27 and 31, following an anonymous tip re-

garding the renovation activity at the parcel, the EPA_

ordered a halt to the asbestos removal and sent investi-

gators to the site. These investigators discovered large

quantities of unwetted friable asbestos. The investigators

also noted that the parcel was not safely secured, that

individual buildings had open or broken windows and in

one case a hole in the roof, and that no warning signs

had been posted to alert individuals to the danger of as-

bestos exposure.

On August 30, 1990, the EPA issued an order—addressed

to B & W Investment Properties but apparently received

only by Mr. Berland—regarding asbestos cleanup at the

parcel. The order required cessation of the cleanup until

the EPA approved a plan for disposal of the previously

disturbed asbestos, and required compliance with the Clean

Air Act and asbestos NESHAP regarding any further ac-

tivities. Some time later (the parties differ as to the exact

date), Mr. Wolf learned of this order. After further delay,

a contractor hired by Mr. Wolf as agent for B & W began

EPA-approved cleanup on January 21, 1991; work was

complete on March 13-15, 1991.

On September 16, 1991, the EPA filed suit for enforce-

ment and penalties pursuant to 42 U.S.C. § 7413(b), alleg-

App. 5

ing that the defendants had commenced asbestos removal

without proper notification to the EPA, and that they had

violated the Act and the asbestos NESHAP by failing to

wet friable asbestos material adequately. On September

30, 1992, the district court granted summary judgment

for the government. On February 17, 1994, following a

hearing before the magistrate judge regarding penalties,

the district court entered a judgment against Mr. Wolf

and B & W. The decision assessed a joint and several

fine of $1,675,000 against both defendants for the wetting

violations. This sum represented the statutory maximum

of $25,000 per day for 67 days, from November 15, 1990

until the approved cleanup began on January 21, 1991.

The court reduced Mr. Wolf’s liability for the joint and

several fine of $1,675,000 to $1,500,000, based on his abil-

ity to pay, and imposed no fines on either Mr. Wolf or

B & W for the notice violation.

DISCUSSION

Defendants initially contend that the Act requires the

EPA to give notice to a violator as a precondition to fil-

ing suit. Since neither Mr. Wolf nor B & W was ever

properly served with notice (Mr. Berland received the sole

written communication from the EPA, and the record is

devoid of evidence that he passed it along), defendants

submit that the district court erred in granting summary

judgment for plaintiff on the liability issue. We review

de novo the statutory interpretation behind the district

court’s decision. Erickson v. Trinity Theatre, Inc., 13 F.3d

1061, 1067 (7th Cir. 1994).

In support of their notice argument, defendants rely on

section 113(bX2) of the Act, which states that the EPA

may commence suit when any person “violates any re-

quirement of an applicable implementation plan . . . more

App. 6

than 30 days after having been notified by the Adminis-

trator under subsection (aX1) of this section of a finding

that such person is violating such requirement.” 42 U.S.C.

§ 113(bX2). Numerous courts, defendants correctly note,

have interpreted this language to incorporate a precondi-

tion of notice. See United States v. General Motors Corp.,

876 F.2d 1060, 1063 (1st Cir. 1989), affirmed, 496 U.S. 530;

United States v. Ford Motor Co., 736 F. Supp. 1539, 1547

(W.D. Mo. 1990); United States v. Louisiana-Pacific Corp.,

682 F. Supp. 1122, 1128 (D. Colo. 1987) (all reading the

notice of violation provision as mandatory).

However, as plaintiff has pointed out, the EPA did not

rely on the enforcement provision of section 113(bX2). In

fact the EPA could not, because section 113(bX2), which

concerns violations of state implementation plans for am-

bient air quality standards, by its terms does not apply

to regulation of hazardous air pollutants. There are no

ambient air quality standards for hazardous air pollutants

such as asbestos. 42 U.S.C. § 7412 (“ ‘hazardous air pol-

lutant’ means an air pollutant to which no ambient air

quality standard is applicable’’). Instead, asbestos, like the

other hazardous air pollutants designated in section 112,

is a federally regulated substance outside the purview of

state implementation plans. Jd. Section 112(eX1) of the Act

authorizes the EPA Administrator to promulgate work

practice standards for pollutants for which there are no

feasible emission standards; the asbestos NESHAP con-

stitutes just such a response. Id.

Section 113(bX3), which vests authority in the EPA to

pursue violations of section 112(c), simply states that the

EPA may issue compliance orders or commence civil ac-

tions “whenever” the agency finds a violation. 42 U.S.C.

§ 7413(bX3). On its face, the Act imposes no duty on the

EPA to provide notice of violations of section 112 before

commencing an action for injunction or civil penalties. See

Dow Chemical Co. v. U.S. Environmental Protection Agen-

cy, 635 F. Supp. 126, 1380 (M.D. La. 1986) (stating that

“no preliminary notice is required for the enforcement of

regulations dealing with hazardous air pollutants under

App. 7

42 U.S.C. § 7412’’); see also United States v. Hugo Key

and Son, Inc., 731 F. Supp. 1135 (D. R.1. 1989) (setting

forth the elements of a NESHAP violation simply as viola-

tion of applicable work-practice standards); United States

v. Tzavah Urban Renewal Corp., 696 F. Supp. 1013, 1021

(D. N.J. 1988) (holding that in order to establish liability

under the asbestos NESHAP, the government must prove

“only . . . (1) that defendants are owners or operators

of a stationary source; (2) that asbestos-containing mate-

rial was present in the facility being renovated, and (3)

that specific requirements of the regulations have been

violated.” (citation omitted)).

The distinction between hazardous air pollutants and

other air pollutants is reflected throughout the Act’s treat-

ment of federal enforcement procedures. Section 113(a),

like section 113(b), distinguishes violations of state imple-

mentation plans from section 112 violations, and similarly

incorporates an explicit notice requirement into the former

but not into the latter. Compare 42 U.S.C. § 7413(aX1)

with 42 U.S.C. § 7413(aX3).

Section 113(a) makes clear that the notice of violation

requirement for state implementation plans serves a dif-

ferent function than simply alerting the violator. Section

113(aX1) requires 30-day notification of both the violator

and the state, allowing the state to act to enforce its own

implementation plan before the EPA steps in. See Baugh-

man v. Bradford Coal Co., Inc., 592 F.2d 215 (8rd Cir.

1979), certiorari denied, 441 U.S. 961 (state implementa-

tion plans are enforceable by either the state or the EPA).

This is consistent with the overall goals of the Clean Air

Act and its 1970 Amendments, which increased the federal

government’s role in air quality control while preserving

the locus of primary responsibility within state and local

governments. See General Motors, 876 F.2d 1060. In the

ease of hazardous air pollutant regulation, where there

are no state implementation plans to enforce, there is less

reason to defer action or to await the state’s response.

App. 8

Regardless of their lack of formal written notice, it is

clear that defendants had actual notice of the violations

well before the penalty period began. The EPA notified

Mr. Berland, a close friend of Mr. Wolf’s, on August 30,

1990, some two and a half months before any penalties

ensued. Defendant admitted in his responses to interroga-

tories that he became aware of the problems at the parcel

by late September or early October. The district court

found that defendants knew of the asbestos violations by

October 15 but nevertheless delayed the date at which

penalties began accruing until November 15, 1990, giving

the defendants a 30-day grace period to begin rectifying

the situation. To the extent that defendants now make

an equitable claim against the enforcement of the Act’s

penalty provisions, their awareness of the asbestos prob-_

lem as of October renders that claim hollow.

Il.

B & W also disputes its characterization as an “owner

or operator” strictly liable for violations of the Act. B & W

raised this issue for the first time in a motion for recon-

sideration filed 27 days after the district court entered

summary judgment against the corporation. This Court

can review the denial of that motion only for clear abuse

of discretion. Industrial Associates, Inc. v. Goff Corp., 787

F.2d 268, 269, 270 (7th Cir. 1986).

The asbestos NESHAP extends liability beyond nominal

owners of a property to all those who lease, operate, con-

trol, or supervise it. 40 C.F.R. 61.02. While the proceed-

ings below demonstrate a great deal of confusion as to

whether Mr. Wolf acted as B & W’s agent, B & W as Mr.

Wolf's agent, Mr. Berland as B & W’s agent or B & W as

an independent corporation performing management ser-

vices for Mr. Wolf during the relevant time frame, there

is no debate that B & W was authorized to and did exer

cise control over the parcel sufficient to bring the company

within the scope of the ‘owner or operator” designation.

App. 9

B & W’s name appears on the lease to Moss, on legal

papers initiated against Moss in August 1990, and on the

contract with the asbestos company that performed the

cleanup after the EPA ordered compliance.

Clearly, the district judge was justified in concluding

that B & W was an “owner or operator” within the terms

of the asbestos NESHAP. Having been deemed an owner

or operator, B & W has no valid challenge against ap-

plication of the Act, regardless of how minimal the com-

pany’s responsibilities or knowledge may actually have

been. The Act imposes strict liability on all owners and

operators of properties in violation of the Act. See, e.g.,

United States v. Hugo Key and Son, 731 F. Supp. 1135,

sl (D. R.I. 1989); United States v. Ben’s Truck and

quipment, Inc., 17 Env’tl L. Rep. 20,777 (E.D. Cal. 1986)

“dhe Act and the asbestos NESHAP provide strict liabil-

ity for civil violations of their provisions. . . . Strict lia-

bility is essential to meet the purpose of the Act to pro-

tect and improve the quality of the nation’s air.”’). Thus

the judge did not abuse his discretion in imposing liability

on B & W.

ITI.

Defendants challenge the amount of the penalty imposed

by the district court pursuant to the recommendations of

Magistrate Judge Gottschall, arguing that the court (1) set

an improper date for the period of penalty; (2) failed to

mitigate the penalty amount; and (3) excessively punished

defendants relative to the sentences imposed on other,

similarly situated defendants in Clean Air Act cases. These

contentions, which we review only for abuse of discretion,

merit little discussion. U.S. Environmental Protection Agen-

cy v. Environmental Waste Control, Inc., 917 F.2d 327,

335 (7th Cir. 1991), certiorari denied, 111 S. Ct. 1621 (as-

sessment of a civil penalty “is committed to the informed

discretion of the trial court.”’).

App. 10

With respect to the penalty amount, defendants contend

that the court below erred as to the date at which Wolf

learned of the violations. The district court delayed im-

position of the penalty until November 15, 30 days after

the date it found that Mr. Wolf knew of the violations,

reasoning that 30 days gave Mr. Wolf sufficient time to

begin removing the asbestos. Mr. Wolf now argues that

the penalty clock should not begin ticking until December

5, since he claims he did not know of the violations until

November 5.

This argument fails to recognize that the Act does not

require courts to toll the penalty period until violators

possess actual knowledge. Technically, the Act imposes

strict liability from the first day of the offense. The gov-

ernment asserted at oral argument that the assessment

of civil penalties in the case of hazardous air pollutants

requires no notice whatsoever to the violator. In the case

of Mr. Wolf, who was incapacitated in the hospital with

a heart ailment when the asbestos violations began, this

assertion gives us serious pause: it would hardly seem fair

to charge him $25,000 a day for events totally outside his

knowledge. But the magistrate judge used her informed

discretion (a) to determine that Mr. Wolf had actual

knowledge of the asbestos problems by October 15, a find-

ing amply supported by the evidence, and (b) to toll the

penalty period for an additional 30 days to allow clean-

up to commence. While we feel that the Clean Air Acts

penalty provisions must out of fundamental fairness con-

tain an implied requirement of reasonableness, the court

acted well within its discretion in starting the penalty

period on November 15.

Defendants further contend that the lower court misap-

plied the penalty criteria set forth in section 113(e) of the

Act, which authorizes consideration of:

App. il

(in addition to such other factors as justice may re-

quire) the size of the business, the economic impact

of the penalty on the business, the violator’s full com-

pliance history and good faith efforts to comply, the

duration of the violation as established by any credi-

ble evidence . . . payment by the violator of penalties

previously assessed for the same violation, the eco-

nomic benefit of noncompliance, and the seriousness

of the violation.

42 U.S.C. § 7413(e).

The district court held that none of these factors man-

dated a reduction in the size of the penalty. Defendants

dispute the district court’s application of the mitigating

factors point by point, but their efforts are unavailing.

In considering fines under the Act, courts generally pre-

sume that the maximum penalty should be imposed. United

States v. Midwest Suspension and Brake, 824 F. Supp.

713, 735 (E.D. Mich. 1993). The Act does not prescribe

with precision how or with what weight to apply the miti-

gating factors, and the district court did not abuse its dis-

cretion in deciding that the seriousness of the violation,

which one EPA investigator called “probably the single

most contaminated site I have seen,” its duration, and

the delay before remediation, merited imposition of the

statutory maximum.

Defendants also complain that compared to fines imposed

on other Clean Air Act defendants, the joint and several

penalty of $1,675,000 (for which Mr. Wolf's liability was

reduced to $1,500,000) issued in this case is excessive.

Comparisons with other cases, many of which resulted in

plea agreements or did not involve asbestos, do not illu-

minate the treatment that should be accorded these defen-

dants. There is ample evidence in the record to support

the fine imposed by the lower court.

App. 12

IV.

Finally, defendants contend that the magistrate judge

erred in excluding from evidence an EPA internal memo-

randum which, they argue, bolsters their contention that

the parcel was in better and safer condition than the EPA

admitted. Defendants seek on appeal to characterize this

document as an admission against interest. The magistrate

judge, accepting testimony that the author of the memo-

randum viewed it as a hypothetical exercise regarding a

fictitious piece of property, excluded the memorandum on

relevance grounds. Her decision is reviewable only for

abuse of discretion. Taylor v. National R.R. Passenger

Corp., 920 F.2d 1372, 1875 (7th Cir. 1990). Counsel for

defendants failed to explain how a memorandum by some-

one completely in the dark about the circumstances in this

case could assist in factfinding. The EPA memorandum

was properly excluded. -

Judgment affirmed.

A true Copy:

Teste:

Clerk of the United States Court of

Appeals for the Seventh Circuit

App. 13

UNITED STATES COURT OF APPEALS

For the Seventh Circuit

Chicago, Illinois 60604

JUDGMENT — WITHOUT ORAL ARGUMENT

Date: October 24, 1994

BEFORE:

Honorable WALTER J. CUMMINGS, Circuit Judge

Honorable WILLIAM J. BAUER, Circuit Judge

Honorable RICHARD D. CuDAHY, Circuit Judge

No. 94-1892

UNITED STATES OF AMERICA, Pee:

Plaintiff-Appellee

VS.

B&W INVESTMENT PROPERTIES and LOUIS WOLF,

Defendants-Appellants

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 91 C 5886—Charles P. Kocoras, Judge.

The judgment of the District Court is AFFIRMED, with

costs, in accordance with the decision of this court entered

on this date.

App. 14

UNITED STATES COURT OF APPEALS

For the Seventh Circuit

Chicago, Illinois 60604

December 2, 1994.

Before

Hon. WALTER J. CUMMINGS, Circuit Judge

Hon. WILLIAM J. BAUER, Circuit Judge

Hon. RICHARD D. CupDAny, Circuit Judge

UNITED STATES OF AMERICA, en

Plaintiff-Appellee,

No. 94-1892 VS.

B & W INVESTMENT PROPERTIES and LOUIS WOLF,

Defendants-Appellants.

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

Ne. 91 C 5886—Charles P. Kocoras, Judge.

ORDER

On consideration of the petition for rehearing with sug-

gestion for rehearing en banc filed by defendants-appellants

on November 21, 1994, lines 12-13 of the first paragraph

on page 6 of the October 24, 1994, slip opinion are amended

by striking “outside the purview of state implementation

plans” and substituting “for which apparently no state

implementation plan was involved.”

App. 15

No judge in active service has requested a vote on the

suggestion for rehearing en banc and all of the judges

on the original panel have voted to deny a rehearing.

Accordingly,

IT IS ORDERED that the aforesaid petition for rehear-

ing be, and the same is hereby, DENIED.

App. 16

[Received September 16, 1991]

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

UNITED STATES OF AMERICA, ook

Plaintiff,

B&W INVESTMENT PROPERTIES, INC.

and LOUIS WOLF,

Defendants.

Action No. 91 C 5886

Judge Kocoras

Magistrate Judge Gottschall

COMPLAINT

Plaintiff, the United States of America, by the authority

of the Attorney General and at the request of the Admin-

istrator of the United States Environmental Protection

Agency (“EPA”), alleges as follows:

NATURE OF THE ACTION

1. This is a civil action against the defendants, B&W

Investment Properties, Inc. and Louis Wolf for injunctive

relief and civil penalties under section 113 of the Clean

Air Act (the “Act’’), 42 U.S.C. § 7413, for violations of

sections 112(c) and 114 of the Act, 42 U.S.C. § 7412(c) and

§ 7414 (as in effect before the amendments of November

App. 17

15, 1990, Pub. L. No. 101-549, 104 Stat. 2399), and the

National Emissions Standards for Hazardous Air Pollu-

tants for asbestos (the “asbestos NESHAP”’), 42 C.F.R.

Part 61, Subpart M (as in effect before the amendments

of 55 Fed. Reg. 48406 (Nov. 20, 1999) and 56 Fed. Reg.

1669 (Jan. 16, 1991)). This action is based on violations

that occurred during the renovation of buildings contain-

ing friable asbestos materials within the meaning of 40

C.F.R. § 141, and located at or near 1926 South 54th

Avenue, Cicero, Cook County, Illinois.

JURISDICTION AND VENUE

2. This Court has jurisdiction over the subject matter

of this action under section 113(b) of the Act, 42 U.S.C.

§ 7413(b), and under 28 U.S.C. §§ 1331, 1345, and 1355.

3. This Court has jurisdiction over the defendants and

venue properly lies in this district under section 113(b) of

the Act, 42 U.S.C. § 7413(b), and under 28 U.S.C. § 1391(b),

because the violations alleged in this action occurred with-

in this district at a building located at or near 1926 South

54th Avenue, Cicero, Cook County, Illinois.

AUTHORITY

4. Authority to bring this action is vested in the United

States Department of Justice under section 305 of the Act,

42 U.S.C. § 7605, and under 28 U.S.C. §§516 and 519.

NOTICE

5. Notice of the commencement of this action has been

given to the State of Illinois, as provided under section

113(b) of the Act, 42 U.S.C. § 7413(b).

App. 18

DEFENDANTS

6. Defendant B&W Investment Properties, Inc.

(“B&W’’) is a corporation organized under the laws of the

State of Illinois and is registered to conduct business in

the State of Illinois, with its principal place of business

located at 134 North LaSalle Street, Suite 1624, Chicago,

Illinois. B&W is primarily in the business of property in-

vestment and management.

7. Defendant Louis Wolf of 253 East Delaware, Chi-

cago, Illinois, at all times relevant to the matters alleged

herein, had a controlling interest in B&W.

8. Each defendant is a “person” within the meaning

of section 302(e) of the Act, 42 U.S.C. § 7602(e).

9. Each defendant is an ‘owner or operator” within the

meaning of sections 111(aX5) and 112(aX8) of the Act, 42

U.S.C. §§ 7411(aX5) and 7412(aX3), and 40 C.F.R. § 61.02.

STATUTORY AND

REGULATORY BACKGROUND

10. Section 112(b) of the Act, 42 U.S.C. § 7412(b), au-

thorizes the Administrator of EPA (“the Administrator’’)

to publish a list of air pollutants that he determines are

hazardous.

11. A “hazardous air pollutant’, as defined in section

112(aX1) of the Act, 42 U.S.C. § 7412(aX1), is an air pollu-

tant “to which no ambient air quality standard is appli-

cable and which in the judgment of the Administrator

causes, or contributes to, air pollution which may reason-

ably be anticipated to result in an increase in mortality

or an increase in serious irreversible, or incapacitating ir-

reversible, illness.”

App. 19

12. Section 112(b) of the Act, 42 U.S.C. § 7412(b), au-

thorizes the Administrator to prescribe an emission stan-

dard for each hazardous air pollutant. These emission stan-

dards constitute the National Emission Standards for Haz-

ardous Air Pollutants (““NESHAP’’).

13. Section 112(eX1) of the Act, 42 U.S.C. § 7412(eX1),

provides that where the establishment of an emission stan-

dard for a hazardous air pollutant is not feasible, the Ad-

ministrator may instead promulgate a work practice stan-

dard, or other appropriate standard, for that pollutant.

Section 112(eX5) of the Act, 42 U.S.C. § 7412(eX5), provides

that any such work practice standard shall be treated as

an “emission standard.”

14. Pursuant to section 112(b) of the Act, 42 U.S.C.

§ 7412(b), the Administrator identified asbestos as a haz-

ardous air pollutant. Pursuant to section 112(e) of the Act,

42 U.S.C. § 7412(e), the Administrator determined that it

is not feasible to prescribe or enforce emission standards

for asbestos. Accordingly, the Administrator promulgated

work practice standards to regulate asbestos emissions.

These regulations, referred to herein as the “asbestos

NESHAP”, are codified at 40 C.F.R. Part 61, Subpart

M, §§ 61.140-61.156. The asbestos NESHAP contains work

practice standards pursuant to section 112(b) and (e) of

the Act, 42 U.S.C. § 7412(b) and (e), including regulations

relating to the emission, handling, and disposal of asbestos.

15. The asbestos NESHAP at 40 C.F.R. § 61.141 de-

fines ‘friable asbestos” material as “‘material containing

more than 1 percent asbestos by weight that hand pres-

sure can crumble, pulverize, or reduce to powder when

dry.”

16. The general provisions of the NESHAP regulations,

applicable to the asbestos NESHAP, define an “owner

App. 20

or operator” at 40 C.F.R. § 61.02 as “any person who

owns, leases, operates, controls, or supervises a stationary

source.”’

17. Section 111(aX3) of the Act, 42 U.S.C. § 7411(aX3),

defines “stationary source’ as “any building, structure,

facility, or installation which emits or may emit any air

pollutant.” The general provisions of the NESHAP regu-

lations define “stationary source” at 40 C.F.R. § 61.02 as

“any building, structure, facility or installation which emits

or may emit any air pollutant which has been designated

as hazardous by the Administrator.”

18. The asbestos NESHAP at 40 C.F.R. § 61.141 de-

fines “renovation” in relevant part as “altering in any

way one or more facility components.”

19. The asbestos NESHAP at 40 C.F.R. § 61.141 de-

fines “facility component” as “any pipe, duct, boiler, tank,

reactor, turbine, or furnace at or in a facility; or any struc-

tural member of a facility.”

20. The asbestos NESHAP at 40 C.F.R. § 61.141 de-

fines “facility” as “any institutional, commercial, or indus-

trial structure, installation, or building (excluding apart-

ment buildings having no more than four dwelling units).”

21. Section 114(a) of the Act, 42 U.S.C. § 7414(a), au-

thorizes the Administrator of EPA to establish reporting

requirements applicable to owners and operators of emis-

sion sources subject to various requirements promulgated

under section 112 of the Act, 42 U.S.C. § 7412, includ-

ing the asbestos NESHAP, to enable EPA to determine

whether an owner or operator has violated section 112

of the Act.

22. The asbestos NESHAP at 40 C.F.R. §§ 61.145 and

61.146 requires each owner or operator of a renovation

App. 21

operation to provide EPA with timely, advance written

notice of the intention to renovate a facility. EPA has

delegated implementation of the asbestos NESHAP to the

State of Illinois. In Illinois, therefore, each owner or

operator of a renovation operation must provide the State

of Illinois with timely, advance written notice of the in-

tention to renovate a facility. When a renovation opera-

tion involves stripping or removing at least 80 linear

meters (260 linear feet) of friable asbestos materials from

pipes, or at least 15 square meters (160 square feet) of

friable asbestos materials from other facility components,

notice regarding the renovation must be given as early

as possible before renovation begins. 40 C.F.R. §§ 61.145

and 61.146(bX4).

23. The asbestos NESHAP at 40 C.F.R. §§ 61.145 and

61.146(c) also requires the owners or operators of renova-

tion projects to provide accurate information in the notifi-

cation regarding, among other things, the estimated amount

of friable asbestos material in the facility, the location of

the facility being renovated, the methods to be used to

remove the asbestos, and the scheduled start and com-

pletion dates of the renovation. 40 C.F.R. §§ 61.145 and

61.146(c).

24. The asbestos NESHAP at 40 C.F.R. §§ 61.145 and

61.147 requires each owner or operator of a renovation

activity to follow specific standards for the handling and

disposal of friable asbestos material if the building being

demolished or renovated contains at least 80 meters (260

linear feet) of friable asbestos material on pipes or at least

15 meters (160 square feet) of friable asbestos on other

facility components.

25. The asbestos NESHAP requires the operator of a

renovation operation to follow specific standards for the

App. 22

handling and disposal of friable asbestos materials. 40

C.F.R. §§ 61.145(d), 61.147, and 61.152.

26. The asbestos NESHAP at 40 C.F.R. § 61.147(e)(1)

requires that friable asbestos material that has been re-

moved or stripped be adequately wetted to ensure that

it remains wet until it is collected for disposal.

27. In accordance with section 112(dX1) of the Act, 42

U.S.C. § 7412(dX1), EPA delegated authority to the State of

Illinois to implement and enforce the asbestos NESHAP.

In accordance with section 112(dX2) of the Act, 42 U.S.C.

§ 7412(dX2), EPA retained the authority to bring an action

for any violation of the Act.

28. Section 112(c) of the Act, 42 U.S.C. § 7412(c), pro-

hibits any stationary source from emitting any air pollu-

tant in violation of any NESHAP promulgated by the Ad-

ministrator of EPA. A violation of a NESHAP is a viola-

tion of section 112(c) of the Act.

29. Section 113(b) of the Act, 42 U.S.C. § 7413(b), pro-

vides that the Administrator of EPA may commence a

civil action for an injunction er for the assessment of a

civil penalty of up to $25,000 per day for each violation,

or both, whenever any person fails or refuses to comply

with any requirement of section 112(c) or 114 of the Act,

42 U.S.C. §§ 7412(c) or 7414.

FACTUAL BACKGROUND

30. The property located at or near 1926 South 54th

Avenue in Cicero, Cook County, Illinois is part of blocks

6 and 18 in Grant Land Association’s Resubdivision in sec-

tion 21, township 39 north, range 13 east of the third prin-

cipal meridian, covering approximately 5.5 acres.

App. 23

31. On or about August 31, 1990, the property located

at or near 1926 South 54th Avenue in Cicero, Cook Coun-

ty, Illinois included four buildings (“the buildings’).

32. The buildings are a “facility” as defined by the

asbestos NESHAP at 40 C.F.R. § 61.141 (hereinafter “the

facility’’).

33. The facility is a “stationary source” as defined by

section 111(aX3) of the Act, 42 U.S.C. § 7411(aX3), and the

asbestos NESHAP at 40 C.F.R. § 61.02 because it emitted

or had the capacity to emit asbestos.

34. On or about August 31, 1990, the facility contained

more than 260 linear feet (80 linear meters) of friable as-

bestos materials on pipes and at least 160 linear square

feet (15 square meters) of friable asbestos materials on

other facility components.

35. On or about August 31, 1990, defendants were the

owners or operators of a stationary source because they

jointly or individually owned, leased, operated, controlled,

or supervised the facility, which was the subject of a reno-

vation operation.

FIRST CLAIM FOR RELIEF

(WORK PRACTICE VIOLATION)

36. Plaintiff realleges and incorporates by reference

paragraphs 1-35 above.

37. Defendants failed to adequately wet friable asbestos

materials at the facility to ensure that the friable asbestos

materials remained wet until collected for disposal, in vio-

lation of section 112 of the Act, 42 U.S.C. § 7412, and 40

C.F.R. § 61.147(eX1) of the asbestos NESHAP.

App. 24

38. Under section 113(b) of the Act, 42 U.S.C. § 7413(b),

each defendant is subject to injunctive relief and to a civil

penalty for up to $25,000 per day for each violation of

section 112(c) of the Act, 42 U.S.C. § 7412(c).

39. Unless restrained by order of this Court, defen-

dants will continue to violate the requirements of the Act,

42 U.S.C. § 7401, et seg., and the asbestos NESHAP, 40

C.F.R. Part 61, Subpart M.

SECOND CLAIM FOR RELIEF

(NOTICE VIOLATION)

40. Plaintiff realleges and incorporates by reference

paragraphs 1-35 above.

41. Defendants failed to submit notification of intent

to renovate as soon as possible before the start of the

renovation operation at the facility, in violation of section

114 of the Act, 42 U.S.C. § 7414, and 40 C.F.R.

§ 61.146(bX3) of the asbestos NESHAP.

42. Under section 113(b) of the Act, 42 U.S.C. § 7413(b),

each defendant is subject to injunctive relief and to civil

penalties of up to $25,000 per day for each violation of

section 114 of the Act, 42 U.S.C. § 7414.

43. Unless restrained by order of this Court, defen-

dants will continue to violate the requirements of the Act,

42 U.S.C. § 7401, et seqg., and the asbestos NESHAP, 40

C.F.R. Part 61, Subpart M.

PRAYER FOR RELIEF

WHEREFORE, plaintiff, the United States of America,

prays that this Court enter judgment in its favor against

defendants B&W Investment Properties, Inc. and Louis

Wolf, and that this Court:

te ip

App. 25

A. award the United States civil penalties against each

defendant of not more than $25,000 per day for each vio-

lation of the Act and the regulations promulgated there-

under;

B. permanently enjoin defendants from further viola-

tions of the Clean Air Act and the asbestos NESHAP;

C. award the United States its costs and disbursements

incurred in this action; and

D. grant such other relief as the Court may deem just

and proper.

Respectfully submitted,

/si John C. Cruden

Chief, Environmental Enforcement

Section

Environment and Natural Resources

Division

United States Department of Justice

Washington, DC 20530

/s/ Thaddeus R. Lightfoot

Trial Attorney

Environmental Enforcement Section

United States Department of Justice

P.O. Box 7611, Ben Franklin Station

Washington, DC 20044

202/514-4242

Fred Forman

United States Attorney

Northern District of Illinois

By: /s/_ Linda A. Wawzenski

Assistant United States Attorney

Northern District of Illinois

219 South Dearborn Street

Chicago, Illinois 60604

312/353-1994

App. 26

[Letterhead Of]

UNITED STATES

ENVIRONMENTAL PROTECTION AGENCY

REGION 5

230 SOUTH DEARBORN ST.

CHICAGO, ILLINOIS 60604

HAND DELIVERED

B and W Investment Properties

1384 N. LaSalle Street — Suite 1126

Chicago, Illinois 60602

Re: Asbestos Removal at

1954 S. 54th Avenue

Chicago, Illinois

To Whom It May Concern:

Enclosed is an order issued this day by the United

States Environmental Protection Agency (U.S. EPA),

Region V, which requires the cessation of all renovation

activities at 1954 S. 54th Avenue, Cicero, Illinois. Renova-

tion activities shall not resume and demolition shall not

begin until it has been demonstrated to U.S. EPA that

all previously distributed asbestos containing material has

been properly cleaned up and disposed of in accordance

with applicable regulations.

Your prompt attention to this matter will prevent fur-

ther violation of the National Emission Standards for

Hazardous Air Pollutants.

Sincerely yours,

Shirley A. Mitchell for

David. Kee, Director

Air and Radiation Division

Enclosure

ke eK *

App. 27

[Dated August 30, 1990]

UNITED STATES

ENVIRONMENTAL PROTECTION AGENCY

REGION V

In the matter of:

B and W Investment Properties

Chicago, Illinois

Proceeding Pursuant to §§ 113(aX3)

and 114(aXii) of the Clean Air Act

as amended, 42 U.S.C. §§ 7413(aX3)

and 7414(a\ii)

Administrative Order

EPA-5-90-A-113(a)-35

STATUTORY AUTHORITY

The following order and information request is issued pur-

suant to Sections 113(aX3) and 114(a\Xii) of the Clean Air

Act as amended, 42 U.S.C. 8§ 7413(aX3) and 7414(a\ii).

Under Section 114(aXii) of the Clean Air Act (the “Act’’)

as amended, the Administrator of the United States En-

vironmental Protection Agency (U.S. EPA), may require

any person who owns or operates any emission source or

who is subject to any requirement of the Act to provide

information required by the Administrator.

Section 112 of the Act, 42 U.S.C. § 7412, authorizes U.S.

EPA to promulgate National Emission Standards for Haz-

ardous Air Pollutants. Standards promulgated under Sec-

tion 112 of the Act are codified at 40 C.F.R. Part 61,

App. 28

§ 112(cX1) of the Act. 40 C.F.R. § 61.0(aHc) prohibits any

owner or operator from operating any subject stationary

source in viclation of regulations promulgated under Sec-

tion 112 of the Act. 40 C.F.R. §61.0&d) prohibits any

owner or operator subject to the standard from failing

to report as required by the standard.

Certain asbestos standards promulgated under Section 112

of the Act apply to a demolition or a renovation opera-

tion, if there are at least 80 linear meters (260 linear feet)

of friable asbestos material on pipes or at least 15 square

meters (160 square feet) of friable asbestos material on

other facility components (the “‘cut-off’’) to be stripped or

removed at a facility to be renovated. 40 C.F.R. § 61.145(d).

If the amount of friable asbestos material to be removed

from either a demolition or renovation operation is abové

the “cut-off’, then the procedures for emission control

during removal and waste disposal set forth in 40 C.F.R.

§§ 61.147 and 61.152 apply.

The asbestos demolition and renovation standards apply

to both the operator of an operation and the owner of a

facility to be demolished or renovated. 40 C.F'.R. § 61.145.

“Owner or operator” means any person who owns, leases,

operates, controls, or supervises a stationary source. 40

C.F.R. § 61.102. A facility is any institutional, commer-

cial or industrial structure, installation or building. A fadil-

ity component includes any pipe, duct, boiler, tank, re-

actor, turbine, furnace or structural member. 40 C.F.R.

§ 61.141.

The asbestos demolition and renovation standards include

notification requirements. The standard requires that

either the operator or owner provide U.S. EPA a writ-

ten notice of intent to demolish or renovate friable

asbestos material. 40 C.F.R. § 61.146(a). Time require-

ments for this notice are set forth at Section 61.146(b).

eee A A A

> + velit Pu Acetaetial

App. 29

The asbestos demolition and renovation standards also re-

quire that all notices contain the following information:

the name and address of the owner or operator; the size,

age, and prior use of the facility; the approximate amount

of friable asbestos material present in the facility in terms

of linear feet (linear measure) on pipe and in terms of sur-

face area (square measure) on other facility components;

location of facility; and scheduled starting and completion

dates. In addition, notices for demolitions and renovations

above the “cut-off must contain: nature and method of

planned demolition or renovation; asbestos removal emis-

sion control procedures; waste handling emission proce-

dures; and, name and location of the waste disposal site

where the friable asbestos waste material will be de-

posited. Notices for demolitions below the “cut-off” must

contain the techniques of estimating the amount of friable

asbestos material. 40 C.F.R. §§ 61.145(b) and 61.146(c).

The asbestos renovation standard also requires, among

other things, the following procedures for asbestos emis-

sion control: removing asbestos from the facility prior to

wrecking or dismantling; wetting any exposed asbestos

material; carefully lowering the asbestos-containing ma-

terial to the ground; using a local exhaust ventilation and

collection system designed and operated to capture par-

ticulate asbestos; and, transporting asbestos materials,

removed or stripped more than fifty feet above ground

level that were not removed in units or sections, in dust-

tight chutes or containers. 40 C.F.R. § 61.147.

The asbestos renovation standard also requires the follow-

ing procedures for disposal of asbestos-containing waste

material: wet the asbestos-containing waste; discharge no

visible emission to the outside air from collection and

wetting operations; seal all asbestos-containing material

in leak-tight containers after wetting; label the container

App. 30

with proper warning labels; and deposit all asbestos-con-

taining material at a waste disposal site, which operates

in accordance with 40 C.F.R. § 61.152.

STATEMENT OF FACTS

1. Band W Investment Properties, 134 N. LaSalle Street,

Chicago, Illinois is an operator of property located at

1954 S. 54th Avenue, Cicero, Illinois (‘Cicero prop-

erty”’).

2. The Cicero property consists of several buildings and

land in the vicinity of the buildings.

3. On or about August 6, 1990, Mr. Juan J. Vasquez com-

menced a demolition and/or renovation operation at

buildings located at the Cicero property. Mr. Vasquez

had been hired by agents of B and W Investment

Properties to rernove asbestos containing materials

from facility components at the Cicero property.

4. On August 28, 1990, inspectors from both the U.S.

EPA and the Cook County Department of Environ-

mental Control inspected the Cicero property. The in-

spectors found that the facility contained more than

260 linear feet of friable asbestos material on pipes

and at least 160 square feet of friable asbestos ma-

terial on other facility components. The inspectors

found a large number of bags of asbestos-containing

material.

5. The inspectors observed open and damaged bags of

dry friable asbestos inside buildings at the Cicero prop-

erty. The inspectors also found dry friable asbestos

on the ground outside of the building. The inspectors

observations indicate that the requirements of 40 C.F.R.

§ 61.152 were violated.

App. 31

The inspectors took samples of suspected asbestos-con-

taining materials. Analysis of these samples indicate

the material at the Cicero property contained asbestos.

Neither the U.S. EPA nor the Illinois Environmen-

tal Protection Agency received the required notifica-

tion of intent to renovate. Failure to submit the re-

quired notification is a violation of 40 C.F.R. § 61.146.

IT IS ORDERED THAT:

B and W Investment Properties and its agents shall

immediately cease and desist all demolition and/or

renovation activities at the Cicero property.

Demolition and/or renovation activities shall not. re-

sume until and unless all of the following conditions

are met:

a. B and W Investment Properties submit to U.S.

EPA, Region V a plan detailing the steps it will

take to clean up and dispose of all previously dis-

turbed asbestos, asbestos-containing material and

asbestos contaminated material at the Cicero prop-

erty. The plan shall specify how B and W Invest-

ment Properties will comply with the asbestos

standards found at 40 C.F.R. Part 61, Subpart M.

b. B and W Investment Properties shall submit a

notification of intent to demolish and/or renovate.

The notice must be sent to the parties listed be-

low and must meet the requirements of 40 C.F.R.

§ 61.146.

Otto Klein

Division of Air Pollution Control

Illinois Environmental Protection Agency

2200 Churchill Road

Springfield, Illinois 62794-9276

10.

11.

12.

App. 32

Rochelle Marceillars

U.S. EPA — 5AC-26-I

230 S. Dearborn

Chicago, Illinois 60604

Robert D. Roache

Cook County Department

of Environmental Control

Maybrook Civic Center

1500 Maybrook Drive

Maywood, Illinois 6015:

ec. U.S. EPA approval of the plan submitted in

response to paragraph 9.a. is required before any

work starts at the Cicero property.

B and W Investment Properties shall notify U.S.

EPA, in advance, of the date when cleanup and dis-

posal is scheduled to begin, on what dates and at

what times it shall take place and when it has been

completed.

B and W Investment Properties shall immediately

post warning signs at the Cicero property indicating

the presence of asbestos and shall make all reason-

able efforts to prevent entry of unauthorized persons

into the Cicero property. The warning signs shall be

placed at every entry or access point to every build-

ing at the Cicero property. B and W Investment Prop-

erties shall secure the buildings at the Cicero prop-

erty to prevent the release of asbestos into the air

outside the buildings.

For any and all subsequent demolition and renova-

tion operations at any location subject to the stan-

dards at 40 C.F.R. § 61.145, B and W Investment

Properties shall achieve and maintain compliance with

Section 112 of the Act and the standards set forth

in 40 C.F.R. § 61.140 et seq.

13.

14.

15.

16.

17.

18.

App. 33

This Order in no way affects B and W Investment

Properties responsibility to comply with other local,

State and Federal laws and regulations, including

other applicable provisions of 40 C.F.R. Part 61 and

State or County orders to cease work at the Cicero

property.

Nothing contained in this Order shall be construed

to prevent or limit U.S. EPA’s right to bring a civil

action under Section 113(b) of the Clean Air Act, 42

U.S.C. § 7413(b), to obtain penalties or injunctive

relief available under the Act or other Federal stat-

utes, based on past violations of the Act occurring

on or before today, or based upon noncompliance with

the Order.

Nothing in this Order shall be construed to restrict

in any way U.S. EPA’s authority to request addi-

tional information under Section 114 of the Act, 42

U.S.C. § 7414.

The plan required to be submitted in paragraph 9.a.

and the notifications required by paragraph 10 shall

be submitted to:

Shirley Mitchell, Acting Branch Chief

Air Compliance Branch

U.S. EPA — 5AC-26-I

230 S. Dearborn

Chicago, Illinois 60604

This Order is effective on the date of signature by

the Division Director of the Air and Radiation Divi-

sion.

U.S. EPA has elected to issue this Order pursuant

to Section 113(a) of the Act in order to prevent fur-

ther harm to human health and to the environment

App. 34

through continued emissions of asbestos-containing

materials from the Cicero property.

/s/ Shirley A. Mitchell

for David Kee, Director

Air and Radiation Division

Date August 30, 1990

App. 35

Excerpt from Appellants’ Petition for Rehearing

with Suggestion for Rehearing in banc

filed in the United States Court of Appeals for

the Seventh Circuit on November 21, 1994

ARGUMENT

Appellants seek rehearing and hearing in banc by this

Court with respect to the issue raised in its appeal pro-

viding that under 42 USC 7413(bX2) the USEPA was re-

quired to serve notice upon the appellant prior to the in-

stitution of suit. This Court ruled that USEPA has the

independent right to bring a direct action absent of that

provision pursuant to 42 USC 7412(c). The crux of the

argument concerns State Implementation Plans for am-

bient air quality standards including hazardous air pollu-

tants such as asbestos. 42 USC 7412(dX1) states:

“Each state may develop and submit to the adminis-

trator a procedure for implementing and enforcing

emissions standards for hazardous air pollutants for

stationary sources located in such state. If the admin-

istrator finds the state procedure is adequate, he shall

delegate to such state any authority he has under this

chapter to implement and enforce such standards.”

Therefore, if the Administrator approves a State Imple-

mentation Plan (SIP), then the Administrator has dele-

gated that authority to the state. At that point, the pro-

visions of 42 USC 7413(aX1) become effective in order to

commence an enforcement action and a prerequisite for

subject matter jurisdiction for the Trial Court.

This is in fact the case as it exists before this Court.

The Illinois legislature had passed a State Statute under

Chapter 111% Section 1009.1, as in effect of the date of

this occurrence, that being August of 1990. That Statute

superseded prior Statutes in effect and dating back to the

Enea Sf a al

App. 36

time of USEPA approval of the Illinois SIP Plan. Under

Illinois Act, the Pollution Control Board enacts regula-

tions, which include NESHAP regulations. In 35 Illinois

Administrative Code Section 201 et seq., the Illinois Pollu-

tion Control Board has enacted such regulations. Those

regulations were submitted and approved by the Environ-

mental Protection Agency in 45 FR 11493 on February

21, 1980 and 40 CFR Index 52.722. This enactment took

place prior to the dates alleged in the occurrences that

are before this Court. Therefore, they were effective at

the time of the incident which is now on appeal.

Accordingly, it is the position of the Appellant, that the

Court in making its determination of October 24, 1994,

clearly failed to recognize that the Federal Government

had delegated and relinquished its authority under 112(dX1).

At that point, the State of Illinois had the authority and

obligation to enforce, by its own Statute and the approval

of USEPA of the SIP. This Court does not recognize the

impact that once this delegation has taken place, and

thereafter, the enforcement provisions as enumerated in

Section 113(aX1) must be followed. Clearly, 113(aX1) pro-

vides that the Administrator must find that the existence

of violations of the applicable State Implementation Plan.

And if they exist, then the Administrator may issue an

order to comply with such requirement and thereafter

bring a civil action. But in either event, notice must be

given and the failure to remedy must extend beyond the

30th day after such notice prior to bringing a civil en-

forcement action. (42 U.S.C. 7413(aX1)).

The Court in its decision stated that the EPA’s author-

ity to pursue violations under 112(c) gave rise to a direct

action under 42 USC 7413(bX8). This is not applicable in

the case before the Court because the EPA has delegated

and relinquished this authority under 112(d) and there-

App. 37

after, must give notice under 113(aX1) that it will assert

its authority if the State and violator do not comply with-

in 30 days. To exemplify this proposition, one need only

look to the Illinois Statute to see exactly what authority

the State has to regulate. Chapter 111% Section 1009.1(b)

provides:

The provisions of Section 111 of the Federal Clean

Air Act (42 USC 7411), as amended relating to stan-

dards of performance for new stationary sources, and

Section 112 of the Federal Clean Air Act (42 USC

7412) as amended, relating to the establishment of

national emissions standards for hazardous air pollu-

tants are applicable to the state and are enforceable

under this act.

To go further, Chapter 111%, Section 1009.1(dX2) pro-

hibits:

“construct, install, modify or operate any equipment,

building, facility, source or installation which is the

subject to regulation under Sections 111, 112, 165 or

173 of the Clean Air Act .. .”

So what has occurred is that Illinois has adopted the

Federal Statute by the aforestated Statutory provisions.

The Federal Government on the other hand, has agreed

both through the aforestated Statute (42 USC 7412(d)) and

by the Federal Register as previously cited, to delegate

enforcement back to the State of Illinois. The Federal

Government approved 35 Illinois Administrative Code,

Section 201 et seq. as a State Implementation Plan, which

includes part 231 Hazardous Air Pollutants enacted same

as a Federal Law. In that approval and enactment as

Federal Law, the USEPA delegates back to the State

of Illinois the right and obligation of enforcement. Al-

though circular, this is the reason that USEPA must give

the notice that it will exercise its jurisdiction if the State

and the violator do not comply after 30 days. It is for

App. 38

these reasons, that Appellants contend that the Court’s

decision with regard to notice is erroneous and for such

seek this rehearing.

The Court in its decision recognizes the pre-condition

of notice as stated in United States v. General Motors

Corp., 876 F.2d 1060, 1063 (1st Cir. 1989) affirmed, 496

U.S. 530; United States v. Ford Motor Co., 736 F.Supp.

1539, 1547 (W.D.Mo. 1990); United States v. Louisiana

Pacific Corp., 682 F.Supp. 1122, 1128 (D.Colo. 1987). How-

ever, looking at the decision itself, the Court failed to

recognize as stated in United States v. General Motors,

“once an original or revised SIP is approved by the EPA,

it becomes Federal Law and is enforceable in one of two

ways. Under either method, the first step is for the EPA

to issue a notice of non-compliance. If the violator con-

tinues and the EPA cannot through negotiations reach

some agreement with the polluting source, the agency

may enforce the SIP either by issuing an Administrator

Order under Section 120 or by instituting an enforcement

action under Section 113, which provides for injunctive

relief as well as civil penalties of up to $25,000.00 per day

”. Here, this Court must follow the same construc-

tion. There is an approved SIP by EPA which is Federal

Law. The commencement of enforcement begins in the

same manner. The action for enforcement must commence

with either the Administrative Order or the 30 day notice

as prescribed by 113(aX1). Thereafter, and Appellants sub-

mit only after said notice, USEPA may bring an enforce-

ment action under 113(bX2).

This Court has relied upon Dow Chemical v. United

States Environmental Protection Agency, 635 Fed.Supp.

126 (M.D.La. 1986); United States v. Hugo Key & Son,

Inc., 735 Fed.Supp. 1135 (D. R.I. 1989) and United States

v. Tzavah Urban Renewal Corp., 696 Fed.Supp. 1013 (D.

App. 39

N.J. 1988) in standing for the proposition that the US

EPA may pursue violations of 112(c) under 113(bX3) of

the Clean Air Act. However, the Court’s reliance upon

these cases for such proposition is misguided.

In Dow, the Court dealt primarily with the questions

of subject matter jurisdiction. The request by USEPA to

Dow was an informational request under 42 USC 7414

of the Act. Dow brought the action that was before the

Court, and said action was not an enforcement action. US

EPA never brought an enforcement action on its infor-

mation request, and to the contrary, a review of that deci-

sion reveals that the State of Louisiana thereafter, de-

cided to prosecute Dow. The action brought by Dow

sought pre-enforcement review of the validity of an order

issued by USEPA against Dow. Obviously, an order was

issued and notice was given to Dow seeking information

under 114 of the act. This case did not deal with USEPA

enforcing a SIP.

Likewise, in Hugo Key, the Court once again dealt with

the Administrator of EPA requiring information under

Section 42 USC 7414(a). A written request under 114(a)

was an order to enable the administrator to determine

whether or not there were any violations of 112(c). In

Hugo Key, a written request was made on May 15, 1986,

an attempt under 114(a) to make a determination as to

whether or not there was any violations of the act. The

request was to be complied with within ten (10) days.

Hugo Key failed to respond to the reporting requirement.

Thereafter, a compliance order was issued by USEPA on

June 30, 1986. Hugo Key once again did not respond to

the compliance order. The action brought in Hugo Key

was an action brought pursuant to 114(a) of the Clean Air

Act, not 112(c) of the Clean Air Act. The threshold issue

in Hugo Key involved enforcement of the reporting re-

App. 40

quirements under 114 of the Act. The opinion in Hugo

Key did not deal with the State Implementation Plan, and

even if it did, notice was given.

Lastly, this Court has relied upon the decision in United

States v. Tzavah Urban Renewal Corp., for the proposi-

tion that notice is not required. However, as in the previ-

ous decisions in Hugo Key, notice was in fact given. In

Tzavah, on December 9, 1987 EPA issued Tzavah a com-

pliance order, index number 70234, mandating compliance

with 40 CFR, part 61, sukpart M, during all renovations

and/or demolition in which friable asbestos is present. Ac-

cordingly, at that point, USEPA became involved and

gave notice. In July of 1988, more than seven (7) months

after the compliance order, the violations continued at the

site. It was at that time that another notice was given

for compliance within 48 hours, Tzavah at 1077. It was

after these two notices were sent, that the action was

brought for injunctive relief. Clearly, Tzavah had notice.

Notice was not the issue in the Tzavah case but only the

time period involved in the notice was contested. The time

period that was in fact contested was that period involved

in the second, notice, which was 48 hours. This was after

a period of non-compliance for seven (7) months after ser-

vice of the first notice. Lastly, Tzavah does not deal with

State Implementation Plans for none were alleged -or

cited.

Appellant in its Reply Brief attached as Exhibit A, the

notice given by USEPA. It is once again attached to this

Petition for Rehearing. Reading the order in its entire-

ty, one will note that it is in fact an order issued by US

EPA intending to exercise its jurisdiction under 42 USC

7414(aXii) “determining whether any person is in viola-

tion of any such standard or any requirement of such a

Plan.”

App. 41

Going to paragraph 14 of that order, the relief to be

sought by USEPA is not for penalties and injunctive relief

based on this violation, but based upon non-compliance

with the order. Therefore, it is apparent that even US

EPA in its original order, acknowledges that it only has

the right to bring an action based upon non-compliance

with the order. Since notice is mandatory, and the order

was not served, the Trial Court lacked subject matter

jurisdiction. Accordingly, the judgment should have been

reversed.

CONCLUSION

The enactment of the Illinois Environmental Protection

Act (Title 35 Illinois Administrative Code) by the Federal

Government was in fact a State Implementation Plan.

Once enacted, the Federal Government delegated to the

State of Illinois enforcement provisions subject to its

becoming involved in the event of non-compliance. Such

involvement is encompassed in 42 USC 7413(aX1). In order

to become involved in State Implementation Plans, the

Federal Government must give notice. No notice was

served here, thus the jurisdictional subject matter pre-

requisite was not met. Appellants seek such a finding a

reversal on rehearing.

Respectfully submitted,

/s/ Robert A. Egan

Egan and Trapp

221 North LaSalle Street

Suite 1238

Chicago, Illinois 60601

312-263-2227

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