The Appellate Court of Illinois, Third District, recently issued an opinion in City of Morris v. Community Landfill Co., Case No. 3-09-0847, which concerned the Morris Community Landfill, which is operated by the Community Landfill Co. (“CLC”) on land owned by the City of Morris, IL. This case shows the importance of complying with federal and state environmental requirements with respect to financial assurance.
Generally, all owners and operators of facilities that treat, store, or dispose of hazardous waste are required to provide proof that they will have sufficient funds to pay for the clean up, closure, and post-closure care of their facilities. They also must demonstrate that they have sufficient funds to pay for the clean up of any accidental releases of hazardous constituents during the active life of their facilities, and compensate any third parties for any resulting bodily injury or property damage.
In 1999, Illinois EPA determined that CLC was required to post over $17 million in financial assurance for the landfill. In May 2000, CLC and the City purchased $17.1 million in bonds from Frontier Insurance; however, a month later, the U.S. Treasury Department removed Frontier from a list of approved sureties. CLC never obtained any financial assurance in addition to or in lieu of the Frontier bonds and stopped paying premiums on the Frontier bonds in 2001. Nevertheless, CLC continued to conduct waste disposal operations at the landfill. In 2003, the State of Illinois filed a complaint against CLC and the City, alleging that they were conducting disposal operations at the Morris Community Landfill without adequate financial assurance.
The Illinois Pollution Control Board granted the State’s motion for summary judgment and ruled that CLC and the City were jointly and severally obligated to post financial assurance in the amount of $17,427,366, which was CLC’s estimated cost for closure/postclosure care of the landfill. The Board imposed penalties of $399,308.98 against the City and $1,059,534.70 against CLC.
The Appellate Court affirmed in part and reversed in part. First, the Court affirmed the Board’s ruling in all respects with respect to CLC. CLC clearly failed to obtain the required financial assurance, because Frontier was not an approved surety and CLC stopped paying premiums in 2001.
Second, the Court reversed the Board’s ruling with respect to the City. The Court ruled that the City was not liable for providing financial assurance for the landfill because the City was not involved in the day-to-day operations of the landfill and, thus, did not “conduct disposal operations.”
Stay tuned to the Illinois Environmental Law Blog for more news and developments. To set up a free initial consultation to discuss your legal matter, please contact Chicago environmental attorney Dave Scriven-Young at (312) 239-9722 or dscriven-young@pecklaw.com.
