Clean Harbors Services Inc v. Illinois International Port District

Filing 27

MEMORANDUM Opinion and Order.Presently before the Court is the Port District's Motion to Dismiss counts II and III of Clean Harbors' Amended Complaint 13 . For the reasons explained below, the Port District's motion is granted. Als o as explained below, the Court dismisses Count II of the Port District's counterclaim against Clean Harbors. Counts II and III in Clean Harbors' Amended Complaint and Count II in the Port District's Counterclaim are hereby dismissed. The parties may seek leave to file an amended complaint and/or counterclaim after they have sufficiently complied with RCRA's pre-suit notice requirements. In the meantime, the parties should proceed with discovery. The Court does not expect that the RCRA claim(s) will substantially alter the scope of discovery in this matter. Signed by the Honorable Thomas M. Durkin on 2/25/2013:Mailed notice(srn, )

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
Clean Harbors Services, Inc.,
Plaintiff,
v.
The Illinois International Port District, an
Illinois Municipal Corporation,
Defendant.

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No. 12 C 7837
Judge Thomas M. Durkin

MEMORANDUM OPINION AND ORDER
Plaintiff Clean Harbors Services, Inc. (“Clean Harbors”) brings this action
against Defendant The Illinois International Port District (“Port District”) asserting
claims under the Comprehensive Environmental Response, Compensation, and
Liability Act (“CERCLA”), 42 U.S.C. §§ 9607, 9613, the Resource Conservation and
Recovery Act (“RCRA”), 42 U.S.C. § 6972, and state law. Presently before the Court
is the Port District’s Motion to Dismiss Counts II and III of Clean Harbors’
Amended Complaint. R. 13. For the reasons explained below, the Port District’s
motion is granted. Also as explained below, the Court dismisses Count II of the Port
District’s counterclaim against Clean Harbors.
Legal Standard
A Rule 12(b)(6) motion challenges the sufficiency of the complaint. See
Hallinan v. Fraternal Order of Police of Chicago Lodge No. 7, 570 F.3d 811, 820 (7th
Cir. 2009). Under Rule 8(a)(2), a complaint must include “a short and plain
statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P.
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8(a)(2). Under the federal notice pleading standards, a plaintiff's “factual allegations
must be enough to raise a right to relief above the speculative level.” Bell Atlantic v.
Twombly, 550 U.S. 544, 555 (2007). Put differently, a “complaint must contain
sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible
on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S.
at 570). “In evaluating the sufficiency of the complaint, [courts] view it in the light
most favorable to the plaintiff, taking as true all well-pleaded factual allegations
and making all possible inferences from the allegations in the plaintiff's favor.”
AnchorBank, FSB v. Hofer, 649 F.3d 610, 614 (7th Cir. 2011). The following
background is a summary of the relevant allegations in the Amended Complaint,
viewed in the light most favorable to the plaintiff, Clean Harbors.
Background
This case involves contaminated property located at 11700 and 11800 South
Stony Island in Chicago, Illinois. The Port District has owned the property since
1955. In the 1970s, the Port District leased the property to a now-dissolved
company, Hyon Waste Management Services, Inc. Hyon Waste operated a series of
surface impoundments at the property for the treatment, storage, and disposal of
hazardous wastes and disposed of tens of millions of gallons of waste.
Beginning in September 1980, the Port District leased the southern portion of
the property to ChemClear, Inc., which was later acquired by Clean Harbors.
Beginning in November 1990, the Port District leased the northern portion of the
property to CMW Chemical Services, Inc., which was also later acquired by Clean

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Harbors. (Throughout this Order, the Court refers to Clean Harbors and its
predecessors collectively as “Clean Harbors.”) Clean Harbors operated a waste
processing facility at the property that processed hazardous wastes for disposal or
recycling at offsite locations. Clean Harbors and the Port District are co-permittees
on permits issued by the Illinois Environmental Protection Agency (“IEPA”).
At some point in the past few years, IEPA directed the Port District and
Clean Harbors to conduct a RCRA facility investigation of the property. The parties
performed the investigation and discovered contamination primarily related to
Hyon Waste’s operations in the 1970s. The Port District and Clean Harbors
subsequently worked with IEPA to develop a corrective action plan to address the
contamination. IEPA gave its final approval for a corrective action plan in 2012,
which is projected to cost $5 million to $5.7 million. To date, Clean Harbors has
incurred more than $1 million in costs related to the investigation.
On September 30, 2012, after disagreements arose between Clean Harbors
and the Port District, Clean Harbors filed the instant lawsuit. The original
complaint contained five counts. Count I asserted a cost recovery claim under
CERCLA § 107(a), 42 U.S.C. § 9607(a). Count II asserted a claim under the Illinois
Joint Tortfeasor Contribution Act, 740 ILCS 100/1 et seq. Count III sought a
declaratory judgment concerning the parties’ lease obligations. Count IV asserted
an unjust enrichment claim. Count V asserted a quantum merit claim.
On October 2, 2012, Clean Harbors provided written notice to the Port
District, IEPA, and the U.S. Environmental Protection Agency (“EPA”) of its intent

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to file a RCRA citizen suit against the Port District pursuant to 42 U.S.C. § 6972.
The notice letter accused the Port District of violating the parties’ IEPA permit by
refusing to implement the corrective action plan, refusing to grant Clean Harbors
access to the property, and refusing to execute other documents to allow for the
closure of RCRA units at the property. R. 6, Am. Compl., Ex. R. 1 The notice letter
did not allege that any condition at the property may present an imminent and
substantial endangerment to health or the environment. Id.
On October 31, 2012, Clean Harbors filed an amended complaint adding two
new counts against the Port District. The new Count II asserts a contribution claim
under CERCLA § 113(f), 42 U.S.C. § 9613(f). The new Count III asserts a claim for
“RCRA Relief” under 42 U.S.C. § 6972. The RCRA claim alleges not only that the
Port District violated the parties’ IEPA permit, Am. Compl. ¶¶ 135-44, but also that
the Port District’s actions at the property may present an imminent and substantial
endangerment to health or the environment. Id. ¶¶ 132-33, 145.
On December 11, 2012, the Port District filed its motion to dismiss the new
Counts II and III of the Amended Complaint, answered the remaining counts, and
asserted a six-count counterclaim against Clean Harbors. Relevant here, Count II of
the counterclaim alleges that Clean Harbors’ actions may present an imminent and
substantial endangerment to health or the environment under RCRA.

On a motion to dismiss, courts “consider documents attached to the complaint as
part of the complaint itself.” Reger Dev., LLC v. Nat’l City Bank, 592 F.3d 759, 764
(7th Cir. 2010).
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Analysis
I.

Port District’s Motion To Dismiss
A.

CERCLA § 113(f) (Count II)

CERCLA § 113(f)(1) provides that any person may seek contribution from
other potentially liable parties “during or following any civil action under section
9606 of this title [CERCLA § 106] or under section 9607(a) of this title [CERCLA
§ 107(a)].” 42 U.S.C. § 9613(f)(1) (emphasis added). 2
The Port District argues that Clean Harbors fails to state a contribution
claim under § 113(f)(1) because Clean Harbors has not alleged that a civil action
was filed against it under § 106 or § 107(a). As a result, the Port District argues,
this action is not “during or following” a civil action as § 113(f)(1) requires.
In Cooper Industries, Inc. v. Aviall Services, Inc., 543 U.S. 157, 160-61 (2004),
the Supreme Court confirmed that a party who has not been sued under § 106 or
§ 107(a) may not invoke § 113(f)(1). Like Clean Harbors here, the plaintiff in Cooper
Industries cleaned up contaminated property at the direction of a state agency, but
“[n]either the [state agency] nor the EPA . . . took judicial or administrative
measures to compel the cleanup.” Id. at 164. The Supreme Court held that “Section
113(f)(1) . . . authorizes contribution claims only ‘during or following’ a civil action
under § 106 or § 107(a), and it is undisputed that [the plaintiff] has never been
Separately, CERCLA § 113(f)(3)(B) provides that “[a] person who has resolved its
liability to the United States or a State for some or all of a response action or for
some or all of the costs of such action in an administrative or judicially approved
settlement may seek contribution from any person who is not a party to a
settlement.” 42 U.S.C. § 9613(f)(3)(B). Although Count II cites § 113(f) generally,
Clean Harbors does not contend that § 113(f)(3)(B) applies here.
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subject to such an action. [The plaintiff] therefore has no § 113(f)(1) claim.” Id. at
168. See also United States v. Atlantic Research Corp., 551 U.S. 128, 133 (2007) (“In
Cooper Industries, we held that a private party could seek contribution from other
liable parties only after having been sued under § 106 or § 107(a).”).
Clean Harbors concedes that it has not been sued under § 106 or § 107(a) and
that existing precedent bars its § 113(f)(1) claim. Clean Harbors explains that it
merely seeks to preserve an argument that costs incurred “at the direction of the
regulating agency (the IEPA/USEPA), but not in the context of a formal, civil
enforcement action,” are recoverable under § 113(f)(1). R. 22 at 5.
This Court is obviously required to follow Supreme Court precedent, which
has already rejected the exact argument that Clean Harbors apparently seeks to
preserve. Like the plaintiff in Cooper Industries, although Clean Harbors incurred
response costs at the direction of a state agency, it is undisputed that Clean
Harbors has not been subject to a civil action under CERCLA § 106 or § 107(a). As a
result, Clean Harbors fails to state a claim in Count II under § 113(f)(1).
B.

RCRA Relief (Count III)

The Port District argues that Count III fails to state a claim for several
different reasons. The Court does not need to go beyond the fact that Clean Harbors
failed to comply with RCRA’s pre-suit notice requirements.
RCRA authorizes two general types of citizen suits. First, a plaintiff may
commence a civil action against “any person . . . who is alleged to be in violation of
any permit, standard, regulation, condition, requirement, prohibition, or order

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which has become effective pursuant to this chapter.” 42 U.S.C. § 6972(a)(1)(A). In
order to proceed under subsection (a)(1)(A), a plaintiff is generally required to
provide 60 days advance notice. Id. § 6972(b)(1)(A). (“No action may be commenced
under subsection (a)(1)(A) . . . prior to 60 days after the plaintiff has given notice of
the violation to (i) the [EPA] Administrator; (ii) the State in which the alleged
violation occurs; [and] (iii) to any alleged violator of such permit, standard,
regulation, condition, requirement, prohibition, or order.”).
Second, a plaintiff may commence a civil action against “any person . . . who
has contributed or who is contributing to the past or present handling, storage,
treatment, transportation, or disposal of any solid or hazardous waste which may
present an imminent and substantial endangerment to health or the environment.”
Id. § 6972(a)(1)(B). In order to proceed under subsection (a)(1)(B), a plaintiff is
generally required to provide 90 days advance notice. Id. § 6972(b)(2)(A) (“No action
may be commenced under subsection (a)(1)(B) . . . prior to ninety days after the
plaintiff has given notice of the endangerment to (i) the [EPA] Administrator; (ii)
the State in which the alleged endangerment may occur; [and] (iii) any person
alleged to have contributed or to be contributing to the past or present handling,
storage, treatment, transportation, or disposal of any solid or hazardous waste.”).
For both subsections (a)(1)(A) and (a)(1)(B), there is an exception where a
plaintiff is not required to wait 60 or 90 days after providing notice. A civil action
“may be brought immediately after such notification in the case of an action . . .

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respecting a violation of [RCRA] subchapter III.” Id. § 6972(b)(1)(A), (b)(2)(A). RCRA
subchapter III governs hazardous waste management. Id. §§ 6921-6939.
Clean Harbors filed its Amended Complaint only 29 days after sending its
RCRA notice letter. As a result, Count III was filed prematurely unless the
subchapter III exception applies. Clean Harbors argues that “Subchapter III relates
to all hazardous waste. This RCRA action relates to hazardous waste and, therefore
is a Subchapter III action under RCRA.” R. 22 at 8.
As an initial matter, even if the subchapter III exception applied here, it
would not allow Clean Harbors to proceed on an imminent and substantial
endangerment claim under subsection (a)(1)(B). Clean Harbors failed to provide any
notice of such a claim. Clean Harbors’ notice letter alleged only that the Port
District violated the parties’ IEPA permit; it did not allege that the Port District
contributed or is contributing to a condition on the property which may present an
imminent and substantial endangerment to health or the environment. The
subchapter III exception does not relieve a party of its obligation to provide the
required notice; instead, it simply provides that an action “may be brought
immediately after such notification.” Id. § 6972(b)(2)(A) (emphasis added). 3 Because
Clean Harbors failed to provide the pre-suit notice required by § 6972(b)(2)(A), it
cannot proceed on its imminent and substantial endangerment claim.

In its response, Clean Harbors concedes that the subsection III exception “provides
that a citizen suit may be brought immediately after notice,” R. 22 at 8 (emphasis
added), but then appears to suggest that it was not actually required to notify EPA
and IEPA at all. Id. Clean Harbors does not cite any authority for this assertion,
which is contrary to the plain language of the statute.
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In any event, the subchapter III exception does not apply here because Clean
Harbors cannot state a claim for a violation of RCRA subchapter III. Under 42
U.S.C. § 6926(b), a state may obtain authorization from EPA to administer and
enforce its own hazardous waste program, which then operates in lieu of the federal
RCRA program. Illinois is authorized to administer and enforce its own hazardous
waste program. See, e.g., 51 Fed. Reg. 3778 (Jan. 30, 1986). Indeed, Clean Harbors
alleges that the permits at issue are IEPA permits.
As the court explained in Evco Associates, Inc. v. C.J. Saporito Plating Co.,
No. 93 C 2038, 1994 WL 687552, at *4 (N.D. Ill. Dec. 7, 1994), “the consensus is that
section 6972(a)(1)(A) subchapter III citizen suits are precluded in states with their
own authorized hazardous waste program . . . because there are no effective federal
hazardous waste requirements that can be violated.” (Citing Clorox Co. v.
Chromium Corp., 158 F.R.D. 120, 123-24 (N.D. Ill. 1994), Orange Env’t, Inc. v. Cnty.
of Orange, 860 F. Supp. 1003, 1020 (S.D.N.Y. 1994), City of Heath v. Ashland Oil
Co., 834 F. Supp. 971, 979 (S.D. Ohio 1993), and Thompson v. Thomas, 680 F. Supp.
1, 3 (D. D.C. 1987).) Thus, the Evco court concluded that the plaintiff could not
avoid the 60-day waiting period under the subsection III exception:
Evco failed to provide proper notice and then wait the
necessary period before seeking to amend its complaint to
add a RCRA claim, as mandated by section 6972(b). The
only way it can avoid the waiting period is if it properly
alleged a subchapter III claim, and in this case such a
claim is barred by the fact that Illinois law supersedes the
federal hazardous waste regulations.
Id.

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Although Clean Harbors asks the Court not to follow Evco simply because it
was decided 18 years ago and has not been cited by other courts, R. 22 at 8, the
Seventh Circuit reached a similar result a few years later in AM International, Inc.
v. Datacard Corp., 106 F.3d 1342 (7th Cir. 1997). In AM International, after
explaining the subchapter III exception to RCRA’s pre-suit notice requirements, id.
at 1349-50, the Seventh Circuit expressly held that because the State of Ohio had
received EPA authorization to promulgate its own hazardous waste program, “the
federal [subchapter III] regulation [at issue] was ineffective in Ohio at the time of
the amended complaint and cannot be the basis for injunctive relief” under 42
U.S.C. § 6972(a)(1)(A). Am Int’l, 106 F.3d at 1350.
Like the plaintiffs in Evco and AM International, Clean Harbors’ RCRA claim
cannot be based on a violation of RCRA subchapter III because EPA has authorized
Illinois to administer and enforce its own hazardous waste program. As a result, the
subchapter III exception does not apply. And because Clean Harbors did not
otherwise comply with the RCRA pre-suit notice requirements, Clean Harbors fails
to state a claim under both 42 U.S.C. § 6972(a)(1)(A) and (a)(1)(B).
II.

Port District’s RCRA Counterclaim (Count II)
In Count II of its counterclaim, R. 16, the Port District asserts an imminent

and substantial endangerment claim of its own under § 6972(a)(1)(B). In its
response to the Port District’s motion to dismiss, Clean Harbors notes that the Port
District failed to provide notice before filing its counterclaim. R. 22 at 9. The Port
District does not contest that it failed to notify Clean Harbors, IEPA, and EPA of its

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intent to file a RCRA imminent and substantial endangerment claim. The Port
District instead replies that Clean Harbors likely waived its ability to challenge the
lack of notice because it answered the counterclaim and that, in any event, RCRA’s
pre-suit notice requirements do not apply to counterclaims. R. 23 at 6-7.
The Court has an independent obligation to ensure that the parties have
complied with RCRA’s pre-suit notice requirements. In Hallstrom v. Tillamook
County, 493 U.S. 20, 31 (1989), the Supreme Court made clear that RCRA’s pre-suit
notice requirements “are mandatory conditions precedent to commencing suit under
the RCRA citizen suit provision; a district court may not disregard these
requirements at its discretion.” Indeed, in Hallstrom, the Supreme Court held that
where the plaintiff failed to comply with 42 U.S.C. § 6972(b), dismissal was required
even after years of litigation and substantive rulings. Id. at 32.
Turning to the merits, the few courts that have addressed this issue are split
on whether RCRA’s pre-suit notice requirements apply to counterclaims. Compare
Premier Assoc., Inc. v. EXL Polymers, Inc., No. 08 CV 3490, 2010 WL 2838497, at
*5-6 (N.D. Ga. July 19, 2010), and City of Bangor v. Citizens Commc’ns Co., No. 02183, 2006 WL 2516976, at *3-4 (D. Me. Aug. 28, 2006), with Portsmouth
Redevelopment & Housing Auth., 847 F. Supp. 380, 386 (E.D. Va. 1994).
Notably, the courts that have held that RCRA’s pre-suit notice requirements
do not apply to counterclaims did so largely because notice would have been
superfluous. In City of Bangor, 2006 WL 2516976, at *3-4, the court explained that
application of the notice and delay requirements to RCRA
counterclaims in circumstances similar to those presented
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serves no discernible purpose. Generally, requiring notice
and delay before the commencement of a RCRA citizen
suit serves two goals: (1) “notice allows Government
agencies
to
take
responsibility
for
enforcing
environmental regulations, thus obviating the need for
citizen suits” and (2) “notice gives the alleged violator ‘an
opportunity to bring itself into complete compliance with
the Act and thus likewise render unnecessary a citizen
suit.’” Hallstrom, 493 U.S. at 29 (citations omitted).
Having already received notice from a plaintiff, additional
notice to government agencies in connection with the
filing of a RCRA counterclaim would simply be
duplicative. With respect to the second goal, suffice it to
say that notice to a plaintiff, who has already commenced
a citizen suit, is unlikely to prompt that plaintiff to bring
itself into complete compliance with RCRA and then
decide to drop the citizen suit it has already commenced.
Similarly, in Premier Associates, 2010 WL 2838497, at *5-6, after the plaintiff gave
proper notice and filed a RCRA citizen suit, the defendant asserted a counterclaim
and argued that the plaintiff “had already provided ‘notice’ when it asserted RCRA
claims” and that “it would be superfluous for [the defendant] to be required to
provide its own notice.” The court found City of Bangor persuasive and held that the
defendant was not required to comply with the RCRA pre-suit notice requirements
before asserting its RCRA counterclaims in this action. Id.
This Court agrees that as a general matter, 42 U.S.C. § 6972(b) would not
require a counter-plaintiff to provide a superfluous notice. Thus, for example, if
Clean Harbors had properly notified IEPA and EPA that conditions at the property
may present an imminent and substantial endangerment to health or the
environment, requiring the Port District to serve a similar notice before it could
proceed on its counterclaim would serve no discernible purpose. IEPA and EPA

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would already be on notice of the claim from Clean Harbors and could have
intervened if they chose and obviated the need for a citizen suit.
The problem here is that the Port District’s counterclaim is different from the
claim asserted in Clean Harbors’ notice to IEPA and EPA. As the Seventh Circuit
explained in Adkins v. VIM Recycling, Inc., 644 F.3d 483, 486 (7th Cir. 2011), and as
the Port District itself argues, R. 15 at 5, RCRA “provides for two distinct types of
citizen suits—‘violation’ actions in subsection (a)(1)(A) and ‘endangerment’ actions
in subsection (a)(1)(B).” (Emphasis added.) As discussed above, Clean Harbors’
notice letter alleged only a “violation” action under (a)(1)(A); it did not allege an
“endangerment” action under (a)(1)(B). As a result, the Port District, in its
counterclaim, seeks to litigate an imminent and substantial endangerment citizen
suit for which no one has provided notice to IEPA and EPA.
This problem is exacerbated by the fact that, as the Court already held, Clean
Harbors failed to properly comply with RCRA’s pre-suit notice requirements even
for its “violation” claim under subsection (a)(1)(A). To say the least, it would be an
odd result if one party’s insufficient pre-suit RCRA notice somehow opened the door
for other parties to assert their own RCRA citizen suit claims free of the notice
requirements of 42 U.S.C. § 6972(b). Such a rule would subvert § 6972(b)’s purpose
of ensuring adequate notice to EPA and the relevant State.
The Port District suggests that requiring a delay period for a compulsory
counterclaim could raise issues under the Federal Rules of Civil Procedure. But
Rule 13(e) expressly addresses “Counterclaim[s] Maturing or Acquired After

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Pleading” and provides that “[t]he court may permit a party to file a supplemental
pleading asserting a counterclaim that matured or was acquired by the party after
serving an earlier pleading.” Fed. R. Civ. P. 13(e). Thus, a defendant wishing to
inject a new RCRA citizen suit claim into a case as a counter-plaintiff can comply
with both 42 U.S.C. § 6972(b) and Rule 13 by providing the required notice and then
seeking leave to file a supplemental pleading after 60 or 90 days.
Conclusion
Counts II and III in Clean Harbors’ Amended Complaint and Count II in the
Port District’s Counterclaim are hereby dismissed. The parties may seek leave to
file an amended complaint and/or counterclaim after they have sufficiently complied
with RCRA’s pre-suit notice requirements. In the meantime, the parties should
proceed with discovery. The Court does not expect that the RCRA claim(s) will
substantially alter the scope of discovery in this matter.

ENTERED:

_______________________________
Honorable Thomas M. Durkin
United States District Judge

Dated: February 25, 2013

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