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

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386012_1325%3A1

## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1995
- **Citation:** 514 U.S. 1126

## Text

ES SNP ey OT AT SRA RRS RT AA SRA SANE Sakoatl. ARE Nhat

Supreme Court, u.3.

(» =
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,
V.

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

i
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.

il

TABLE OF CONTENTS

PAGE
Questions Presembed oo. scccscccccccanvenvenrers i
aes. 46 RUD kis nds kdscdidaeeseiias ill
CR GE inca ickdnasdasndsdeneekssedaans
CUE oo csascieccussiiicneindiadia
Statutory Provisions Involved ................
hohemmemt of the GH ..kccccsscsccnccessesss
a) Procedural Statement ................
DB) Fact) Diabet ..n cc cccccesscecees
c) Post-Trial Proceedings ..............
Reason for Granting the Writ ................ 9
CRRENUIIR o o000csckesthiaeeke ieee 13

on ff» & HT LO Ee

sopenag — ee

iil

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.

Se

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

a

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

et

‘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)

fc

oe

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).

ee

es
ee, —
a ves

aed

ee ee
a ON tt il

———

= =

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

ee
a

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
a

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).

A.

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)).

B.

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

C.

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

A.

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.

B.

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.

C.

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,

V.

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.

ee
ee

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

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386012_1325%3A1. Public record. Not legal advice.