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On June 20, 2019, the Supreme Court of Illinois affirmed an appellate court’s ruling on an Illinois Pollution Control Board (“Board”) decision involving groundwater monitoring at clean construction or demolition debris fill sites, in The County of Will v. The Pollution Control Board, 2019 IL 122798, Case Nos. 122798, 122813. The case concerned the Board’s adoption of regulations governing the use of clean construction or demolition debris (“CCDD”) and uncontaminated soil (“US”) as fill material at CCDD fill operations.

CCDD is uncontaminated broken concrete without protruding metal bars, stone, bricks, rock, or reclaimed asphalt pavement generated from construction or demolition activities. See IEPA’s Webpage on CCDD, https://www2.illinois.gov/epa/topics/waste-management/waste-disposal/ccdd/Pages/default.aspx. US is soil generated during construction or demolition activities that does not contain contaminants in concentrations that pose a threat to human health and safety and the environment. See id. When CCDD is used at fill below grade, it is not considered waste as long as the filled area is not within the setback zone of a well and, within 30 days after filling is complete, the CCDD is covered with US, pavement, or some type of structure. See id. Examples of CCDD or US fill operations include a current or former quarry, mine, or other excavation where CDD or US is used as fill. See id.

Rulemaking Background

In 2010, the Illinois General Assembly amended provisions of the Illinois Environmental Protection Act, 415 ILCS 5/1, et seq. (“Act”), concerning use of CCDD to address the use of US and the protection of groundwater. The Act was amended to require the Illinois Environmental Protection Agency (“Agency”) to propose and the Board to adopt regulations for the use of CCDD and US as fill material at fill operations that “must include standards and procedures necessary to protect groundwater, which may include, but shall not be limited to, the following . . . .” 415 ILCS 5/22.51(f)(1). The procedures listed included requirements for testing and certification of soil used as fill material, as well as groundwater monitoring.

In the Agency’s rulemaking proposal, Subpart G of the proposed regulations included requirements for groundwater monitoring at fill operations. In the Agency’s Statement of Reasons, it noted that its outreach efforts resolved certain concerns raised by stakeholders, but disagreements remained, including opposition over the requirements for groundwater monitoring. The Agency acknowledged that its proposal would increase costs for fill site operators, but the extent of such costs were unknown and outweighed by the benefits of groundwater monitoring.

Ultimately, the Board concluded that groundwater monitoring was not economically reasonable and could potentially result in fill operations closing. The Board reasoned that groundwater protection can be achieved without requiring groundwater monitoring. The Board deleted the groundwater monitoring requirements from the proposed regulations in the First and Second Notice Opinions and strengthened the front-end procedures to require soil testing and certifications whenever the source of the CCDD or US is a potentially impacted property. The Board asserted that CCDD and US used as fill material are not classified as wastes and thus do not require the more stringent rules that exist for nonhazardous waste landfills. The Board also noted that the record did not demonstrate that CCDD or US fill sites are a source of groundwater contamination, and there was no evidence these sites are not operating within the law. In the Final Opinion and Order, the Board concluded that groundwater monitoring was not required and did not adopt Subpart G.

On the same date as the Final Opinion and Order, the Board opened a subdocket in the rulemaking to continue to examine the issue of groundwater testing in response to a recommendation by the Joint Committee on Administrative Rules (“JCAR”). Additional testimony and public comments were received and a hearing was held. The Agency maintained that groundwater monitoring requirements should be included in the rules and emphasized that groundwater monitoring is “the single most important measure for achieving groundwater protection.” However, the Board ultimately held that it “remained unconvinced that groundwater monitoring for permitted CCDD and uncontaminated soil fills sites is required for the protection of groundwater.” The Board also revisited the issue of whether CCDD and US placed in permitted facilities are considered “waste,” but maintained that the Board cannot treat CCDD and US regulated under Part 1100 as waste.

Appeal

The State and Will County appealed the Board’s Final Opinion and Order in the subdocket. Appellants argued that the Board’s decision was arbitrary because it considered the issue of whether CCDD and US constitute “waste,” which was a factor that the legislature did not intend it to consider. The appellate court rejected this argument, asserting that the Board was forced to consider the issue due to the State equating Subpart G to inert waste landfill regulations. The appellate court also rejected the Appellants’ arguments that the Board failed to consider important aspects of the problem targeted by the legislature – i.e., dangers posed by historic operations and costs of groundwater monitoring. Lastly, Appellants argued that the Board’s ruling ran counter to the evidence. The appellate court disagreed, finding that the Board’s decision was adequately supported by the record. The appellate court affirmed the Board’s decision. The State and Will County appealed to the Supreme Court of Illinois (“Court”), which affirmed the appellate court’s decision on June 20, 2019.

In its opinion, the Court focused on the fact that the Act created the Board as “an independent body of five technically qualified members” whose “expertise is essential in crafting regulations.” As such, the judicial review of Board decisions to adopt certain regulations is limited and based on whether the decision is arbitrary and capricious – typically, “administrative action taken under statutory authority will not be set aside unless it has been clearly arbitrary, unreasonable or capricious.” The Court explained that the parties strayed from the familiar standard, and instead relied upon a threefold inquiry based upon Greer v. Illinois Housing Development Authority, 122 Ill. 2d 462 (1988).

Under Greer, an action is arbitrary and capricious if the administrative agency: “(1) relies on factors which the legislature did not intend for the agency to consider; (2) entirely fails to consider an important aspect of the problem; or (3) offers an explanation for its decision which runs counter to the evidence before the agency, or which is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.” Each of these factors is discussed below.

A. Did the Board Rely on Factors that the Legislature Did Not Intend the Board to Consider?

The State argued that the Board relied upon an improper factor when it analyzed whether CCDD and US were “waste.” The Court noted that it was the State that first asserted this argument and forced the Board to consider it. On numerous occasions, the State argued that CCDD and US are waste and, in the subdocket, the State claimed that CCDD is not in fact “clean.” Moreover, the Court held that the question of whether CCDD and US are waste is relevant to the question of what regulations are necessary to protect groundwater. Because Section 22.51 of the Act instructed the Board to adopt rules for the use of CCDD and US that include “standards and procedures necessary to protect groundwater,” the definitions of CCDD and US are a relevant factor in the Board’s rulemaking. Therefore, the Court determined that the Board’s decision was not arbitrary and capricious for analyzing whether CCDD and US were waste.

B. Did the Board Fail to Consider an Important Aspect of the Problem Targeted by the Legislature?

Appellants argued that the Board ignored two important aspects of groundwater protection: (1) costs of groundwater monitoring and (2) hazards of older and noncompliant fill operations. Appellants noted that the Board’s Final Opinion and Order did not discuss costs. The Court held that the Board did not ignore the costs of groundwater monitoring, as it was discussed in length in the Board’s First and Second Notice Opinions. As such, the Court found that the Board’s decision was not arbitrary and capricious for failing to consider the costs of groundwater monitoring.

The State also asserted that the Board did not give enough attention to the materials placed in fill operations between 1997 and 2010 that pose a current threat to groundwater, and that negligent generators and haulers continue to direct noncompliant CCDD and US material into fill operations. The Court explained that the State’s argument did not meet the second Greer factor as the legislature here was concerned with materials that met the statutory definitions of CCDD and US, not with older and noncompliant materials that may not have met such definitions. The Court held that the Board properly focused on evidence from CCDD and US fill sites, holding that the Board’s decision was not arbitrary and capricious for failing to consider the hazards of older and noncompliant fill.

C. Did the Board Offer an Explanation for its Decision that was Counter to the Evidence or Implausible?

The State contended that the Board’s decision to not adopt groundwater monitoring requirements ran counter to the evidence presented. The State focused on evidence from the Agency regarding exceedances in contaminants at 10 of the 12 fill operations where it tested soil. The Court explained that, “[w]hen acting in its quasi-legislative capacity, the Board has no burden to support its conclusions with a given quantum of evidence.” The Court elaborated, stating that the Board’s dockets generated an extensive record and its orders were supported by that record. The Board considered the evidence presented, explaining in its orders why it did not support groundwater monitoring. The Court also noted that at no point in the proceedings did the Board dismiss the need for groundwater protection rules. The Court held that the Board exercised its rulemaking authority, concluding that the back-end monitoring was unnecessary because front-end certification and screening was sufficient to protect groundwater. The Court held that the Board’s decision was not arbitrary and capricious for offering an explanation that was counter to the evidence or implausible.

In its conclusion, the Court noted that if the legislature believes that the Board’s decision to not adopt groundwater monitoring requirements runs counter to its mandate to protect groundwater, then the legislature may direct the Board to adopt a groundwater monitoring program for CCDD and US fill sites. Also, any person may present a rulemaking proposal regarding groundwater monitoring to the Board.

Dissent

One Justice dissented, focusing on the argument that the Act expressly requires the Board to adopt standards and procedures necessary to protect groundwater, without any limitation on timeframe. The dissent asserted that the Board focused on whether there was evidence of groundwater contamination, instead of focusing on how to protect groundwater from potential contamination. The dissent further contended that the Board’s “narrow reading” of its statutory duty to establish standards and procedures necessary to protect groundwater is not supported by the Act.

Additionally, the dissent contended that the record in the proceeding refutes the Board’s contention that groundwater harm is only a “perceived problem” not supported by the record, and that groundwater monitoring is unduly costly. Fill sites in compliance with existing regulations have been discovered to have levels of PNAs and metals above the maximum allowable concentrations. The dissent contended that the record showed that front-end engineering is “imperfect at best” and that the Board’s assertion that groundwater monitoring is too costly is inconsistent with the record. The dissent concluded with stating that the Board adopted a “laissez-faire ‘wait-and-see’” approach in adopting only front-end screening, which ignored important aspects of Sections 22.51 and 22.51a of the Act.

Conclusion

Of note, the Court did not rule that the threefold inquiry in Greer is the proper standard to use in future cases to determine whether a quasi-legislative decision by the Board is arbitrary and capricious. The Court noted that, while the appellate court had used the Greer factors in prior cases, the Supreme Court of Illinois has never used the threefold inquiry. The Court decided to use it in this case since the parties used the Greer guidelines in their arguments, which “provide[d] a useful rubric in this case where the parties’ arguments would be otherwise difficult to cabin analytically.” Regardless of the framework used, however, the standard remains “arbitrary and capricious,” which makes it very difficult to overturn the Board’s adoption of environmental regulations, particularly given the extensive record that is generally created.