United States v. Environmental Waste Control, Inc.

No. S87-55 (N.D. Ind. March 14, 1990)

The court holds that a hazardous waste site operator is not entitled to a stay of the court's permanent injunction for violations of the Resource Conservation and Recovery Act (RCRA) to allow it to accept additional hazardous waste pending appeal. The court holds that defendant has not demonstrated a likelihood of winning a reversal on appeal that would allow its continued operation as a landfill. Defendant's motion for stay of the permanent injunction is also inconsistent with the public interest, since defendants seek to receive more hazardous waste to obtain the revenues necessary to proceed with a closure plan that has been rejected by Indiana. Moreover, the acceptance of additional hazardous waste at a landfill operated by persons whose mismanagement and disregard for environmental laws led the court to enter an unprecedented permanent closure order, and who lack any present regulatory authority to operate a hazardous waste landfill, would not be in the public interest. Further, defendants have not demonstrated that they will be irreparably harmed by denial of the stay motion. The courtnext holds that an intervening citizen group, which prevailed at trial and was entitled to recover its litigation costs, is not entitled to reopen consideration of the case during appeal, even though new information has arisen concerning defendants' connections to other companies. The citizen group's failure to engage in discovery on this issue before trial precludes any Rule 60(b) motion to reopen the judgment.

[Prior decisions in this litigation are published at 19 ELR 20674 and 20 ELR 20035. A subsequent decision on attorneys fees is published at 20 ELR 21254.]

Counsel for Plaintiff
Robert Oakley, Frank Bentkover, Sam Boxerman
Land and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Victor A. Franklin
U.S. Environmental Protection Agency
230 S. Dearborn St., Chicago Il 60604
(312) 353-2000

Counsel for Defendants
George W. Pendygraft, George Plews
Pendygraft & Plews
1346 N. Delaware St., Indianapolis IN 46202-2415
(317) 637-0700

James H. Pankow
Jones, Oberchain, Ford, Pankow & Lewis
1800 Valley American Bank Bldg., P.O. Box 4577, South Bend IN 46634
(219) 233-1194

[20 ELR 21252]

Miller, J.:

Opinion

On March 29, 1989, following a trial encompassing several months, the court imposed significant civil penalties against the defendants for violations of the Resource Conservation and Recovery Act of 1976, 42 U.S.C. § 6901 et seq. ("RCRA"), and entered a permanent injunction against the defendants' operation of the hazardous waste disposal facility known as the Four County Landfill. United States (EPA) v. Environmental Waste Control, Inc., 710 F. Supp. 1172 (N.D. Ind. 1989). The court also determined that an intervening citizen's group calling itself Supporters to Oppose Pollution, Inc. ("STOP") was a prevailing party and so was entitled to recover its costs of litigation relating to the claims on which it succeeded, including reasonable attorney and expert witness fees, pursuant to 42 U.S.C. § 6972(e). For purposes of this memorandum, the reader's familiarity with that order is presumed.

Much has happened since then. Although the case now pends before the United States Court of Appeals for the Seventh Circuit as that court's Cause No. 89-2197, and oral argument was held in that court on January 25, several motions pend in this court. STOP has moved for an award of fees and costs; EWC has moved for what it describes as a partial stay pending appeal; and STOP has moved to vacate the judgment pursuant to Fed. R. Civ. P. 60 to allow the addition of new defendants. Those motions are ripe. In addition, STOP has filed motions for sanctions, under Fed. R. Civ. P. 11 and 28 U.S.C. § 1927, and to supplement the record on appeal; those motions are not yet ripe.

The court has deferred ruling on the motion for partial stay and the motion to vacate in the hopes of simultaneously disposing of the remaining motions. To date, the court has not quite completed its analysis of the fee and costs petition and remaining motions suggest that it will be a long wait before all matters are ripe. The hope of simultaneous resolution is too poor a reason to defer rulings on some issues. Accordingly, the court reluctantly concludes that it will be necessary to rule in a piecemeal fashion. This order addresses the motion to stay and the motion to vacate.

I. EWC's Motion for Stay Pending Appeal

EWC requests the court to grant what it describes as a stay of the permanent injunction pending appeal, to allow it to receive hazardous wastes at the Four County Landfill for the purpose of raising funds necessary to achieve the closure and corrective action required by the March 29 order, and to pay the fine and fees if the March 29 order should be affirmed on appeal. EWC computes the cost of compliance with the March 29 order at $11.8 million, apart from STOP's undetermined fees and costs. EWC argues that each of the elements necessary to support a stay pending appeal is present here, because (1) the stay is consistent with the public interest; (2) the stay would not unduly harm the plaintiff, the Environmental Protection Agency, or the intervenor, STOP¹; (3) EWC has some likelihood of winning the appeal; and (4) EWC will suffer irreparable injury absent a stay. Glick v. Koenig, 766 F.2d 265, 269 (7th Cir. 1985); Adams v. Walker, 488 F.2d 1064 (7th Cir. 1973).

The EPA opposes EWC's motion. It notes that EWC seeks an order allowing it to proceed with a closure plan that the State of Indiana has rejected, which the court cannot do. The EPA further argues that insufficient evidence supports the proposition that the tasks EWC seeks to perform under its closure plan are necessary; less expensive measures may suffice. The EPA asserts that the stay is sought, not to accomplish necessary ends, but rather to achieve EWC's long-standing goal of expansion, to render the facility more marketable, and to continue the salaries of defendants Shambaugh and Wilkins. The EPA also argues that EWC will suffer no irreparable injury should the stay be denied: EWC will have the same opportunity to proceed with its plans at the landfill in the event of reversal on appeal.

STOP, too, opposes the motion. It questions whether the relief sought actually can be described as a "stay," in that the Landfill has no authority to accept hazardous wastes even apart from the injunction. STOP notes that EWC seeks leave to accept 150,000 cubic yards of hazardous waste (and to relocate another 250,000 cubic yards) during the appeal's pendency, while the Landfill received only 307,411 cubic yards of hazardous waste during the three years or so before the March 29 order; accordingly, EWC asks to accelerate its business pursuant to the "stay."² STOP, too, notes that Indiana has rejected the closure plan EWC seeks to implement pursuant to the stay.

The court does not believe that analysis of the appropriate considerations warrants the relief EWC seeks. Of the four factors set forth above, the strongest for EWC is the likelihood of reversal on appeal. This court was required to decide many questions of first impression, and the court recognizes the likelihood that the appellate court may disagree with this court's conclusions. To reopen the Landfill, however, EWC will have to achieve a virtual sweep of those issues: the reviewing court would have to find error not only in the permanent injunction granted STOP, but also in the determination that the Landfill lost its interim status due to insurance and groundwater monitoring shortcomings. Anything less will leave EWC with neither interim status nor a Part B permit to operate the Landfill. On balance, then, even recognizing the difficulty of the numerous issues that confronted this court and now confront the Seventh Circuit, the court does not believe that EWC has demonstrated a likelihood of winning a reversal that would allow its continued operation of the Landfill.

The court does not believe that the public interest warrants the acceptance of an additional 150,000 cubic yards of hazardous waste. First, to the extent the relief sought would empower EWC to proceed with a closure plan rejected by Indiana, the order would offend the public interest by running afoul of Northside Sanitary Landfill, Inc. v. Thomas, 804 F.2d 371 [17 ELR 20215] (7th Cir. 1986). Second, while EWC contends that the need for hazardous waste disposal facilities renders the Landfill's continued operation consistent with the public interest, it identifies no entity that has been required to stockpile its hazardous waste or go out of business. Finally, the acceptance of additional hazardous waste at a Landfill operated by persons whose mismanagement and disregard for environmental laws led the court to enter an unprecedented permanent closure order, and who lack any present regulatory authority to operate a hazardous waste landfill, would not be in the public interest. The court agrees with the comments of the EPA:

Certainly the possibility that defendants may lack funds to pay for the civil penalty does not constitute a reason for the landfill to be reopened. Much of the penalty was imposed for the illegal operation of the Four County Landfill; it simply makes no sense to allow defendants to continue to operate the landfill illegally (i.e., without interim status or a final permit) so that they can pay off the penalty for their prior violation of the law.

(EPA's response to motion for stay, at 10).

The same considerations lead the court to disagree with EWC's contention that a "stay" order that would allow continued acceptance of hazardous waste at the Landfill would unduly harm the EPA or STOP. Finally, the court agrees with the EPA that EWC has not demonstrated that it will be irreparably harmed by denial of the stay motion. If its proposed action turns out to be permissible under the Seventh Circuit's eventual ruling and Indiana's ultimate action on the closure plan, EWC will have suffered no apparent injury as a result of the delay.

Accordingly, the court concludes that EWC's motion for a stay should be denied.

II. STOP's Rule 60 Motion

On October 10, STOP moved to vacate the March 29 judgment to allow it to amend its complaint to join additional parties-defendant. During the bankruptcy proceedings that have followed [20 ELR 21253] the March 29 order, STOP obtained information that leads it to believe that The Heritage Group, Inc., Resources Unlimited, Inc., Heritage Environmental Services, Inc. and Asphalt Materials, Inc. (hereinafter collectively referred to as "Heritage") are so interrelatedwith EWC as to render those entities equally liable for RCRA violations at the Four County Landfill on theories of "alter ego" or joint venture. STOP concedes that in light of the pendency of the appeal from the judgment to be vacated, the court cannot simply grant its motion, but rather must certify to the circuit court that sufficient grounds appear to exist for reopening the judgment. Egger v. Phillips, 710 F.2d 292, 328-329 (7th Cir.), cert. denied 464 U.S. 918 (1983). STOP requests that the court do so with the intention to grant relief under Rule 60(b)(1), (2), Fed. R. Civ. P.

The EPA opposes STOP's effort to reopen the judgment it already has obtained. It argues that STOP cannot meet the requirements of Rule 60(b): STOP can show no due diligence because it has not shown any pretrial effort to discover the new evidence on which the motion is based. The EPA also notes the delay that would inhere in the granting of such a motion: the appeal would halt; novel legal theories would arise for decision; additional discovery would be needed; if STOP's theories with respect to Heritage survived dispositive motions, an additional trial would be required (at least as to some issues). Finally, the EPA notes that its assent to STOP's intervention, see 42 U.S.C. § 961(i), was conditioned upon STOP's raising no issues or claims extraneous to those then before the court.³ STOP, the EPA notes, has filed a separate action against Heritage, and should be content with that suit.

Heritage also opposes STOP's motion, contending that STOP did not raise the issue within a reasonable time, as required by Rule 60(b). Heritage echoes EPA's argument that with due diligence, STOP could have discovered before trial the evidence on which it now relies. Heritage also argues that while STOP identifies the new result it hopes to obtain, it has made no showing that such a result is probable and, of course, Heritage argues that a new result attributing liability to Heritage is improbable. Finally, Heritage contends that the court would have no subject matter over STOP's amended claim, because that claim would be grounded wholly upon state agency principles and involve no parties of diverse citizenship.

STOP, in turn, requests a stay of consideration of the Rule 60(b) motion pending resolution of whether its complaint in the separate cause of action against Heritage (Cause No. S89-534) states a claim upon which relief can be granted.⁴ Because the court does not believe such a determination is necessary to resolve the Rule 60(b) motion, the court declines to stay its consideration of that motion.

The court agrees with the EPA and Heritage that STOP's failure to engage in discovery on these issues before the trial of this cause (a failure adequately defended for other purposes in STOP's motion for attorney fees) precludes the granting of the Rule 60(b) motion. While the court intends no criticism of counsel's commendable efforts to limit the cost of the litigation, Rule 60(b) offers no lower standard for a party that engaged in limited discovery for economic purposes. Rule 60(b) requires an effort to have been made: "apparently plaintiff claims that the contents of the broadcast were not discovered in time to move for a new trial under Rule 59(b), but she offers no explanation why they could not have been discovered, as required by Rule 60." Mumford v. Bowen, 814 F.2d 328, 330 (7th Cir. 1986).

For the foregoing reasons, the court concludes — without addressing the merits of STOP's separate claims against Heritage — that STOP's Rule 60(b) motion should be denied. When a district court concludes that a Rule 60(b) motion filed during the pendency of an appeal is without merit, the court is to deny the motion without certification to the circuit court. Graefenhain v. Pabst Brewing Co., 870 F.2d 1198, 1211 (7th Cir. 1989); Textile Banking Co., Inc. v. Renschler, 657 F.2d 844, 849-850 n.2 (7th Cir. 1981). Accordingly, the court denies STOP's motion.

III. Order

For the foregoing reasons, the court now DENIES EWC's motion for a partial stay and DENIES STOP's motion to vacate judgment. The Court will address the remaining pending matters in due course.

SO ORDERED.

1. The argument rests on the proposition that the Landfill poses no imminent public health endangerment, a proposition that STOP contests. Motions not yet ripe squarely address this issue. Because the court's ruling on EWC's motion does not depend on resolution of that issue, the court deems it appropriate to defer the issue to a later time.

2. The court notes, however, that EWC received nearly 150,000 cubic yards in the eight months preceding the order.

3. Earlier in this litigation, the court rejected EWC's similar attack on STOP's claims. There, however, the court held that EWC had no standing to raise such a challenge: "If the EPA effectively conditioned STOP's intervention upon later events, it is the EPA, and the EPA alone, that can seek the benefit of those conditions." (October 26, 1988 Memorandum and Order, at 45).

4. Because Heritage similarly moved to stay proceedings in Cause No. S89-534 pending resolution of the Rule 60(b) motion in this case, Cause No. S89-534 has not reached the state of response to the complaint. The court recently denied the stay motion in Cause No. S89-534.