In 2004, the Illinois legislature amended the Illinois Environmental Protection Act to authorize mandatory injunctions to require cleanups of landfills. But could the courts use the statute to order cleanups of older landfills in cases that were already pending at the time of the amendment? That’s the question the Illinois Supreme Court debated during its November term, hearing oral argument in People ex rel. Madigan v. J. T. Einoder, Inc. Our detailed summary of the facts and lower court opinions in Einoder is here.

Einoder involved a landfill site held in a land trust for the benefit of one of the corporate defendants, which was wholly owned by the defendant husband. The second corporate defendant – 90% owned by the defendant wife – leased equipment and operators to the first corporation for use at the site.

The Attorney General filed suit in 2000 after several citations over the previous five years, alleging open dumping, unpermitted waste disposal operations, development and operation of a solid waste management site without a permit, and various other violations. In a bifurcated trial, the Court first found for the State on most major claims, and later, issued a permanent injunction requiring the defendants to remove the above-grade waste pile, as well as imposing substantial fines. The Appellate Court affirmed, holding that the legislature intended that the 2004 amendments, adopted four years after the case was filed, should apply retroactively.

Counsel for the defendants began. He explained that the case involved two principal issues: (1) the individual liability of a corporate officer for the corporation’s violations of the Environmental Protection Act; and (2) whether the 2004 amendments to the Act imposed a new liability for past actions. Prior to 2004, no mandatory injunctive relief was possible for improper deposit of non-hazardous material (which this was). Counsel argued that the statutory amendment did not clearly indicate any intent to apply retroactively. When the law is silent on retroactive application, Illinois law requires that the court turn to Section 4 of the Statute on Statutes, which requires the court to determine whether the change was substantive or procedural. Counsel argued that Judge Mason had followed the proper framework in dissent, concluding that the amendment could not be applied retroactively. Counsel commended the Court to Justice Stevens’ opinion in Landgraf v. USI Film Products, which he described as a scholarly discussion of why statutes should ordinarily not apply retroactively. If the statute changes the substantive burden on one of the parties, then retroactive application if barred. Counsel argued for a broad definition of what constitutes a “substantive” change – anything which makes a substantial difference to the consequences of a party’s action qualifies. A “procedural” change, in contrast, is limited to the machinery of litigating the suit. A change of penalty is not merely procedural. Justice Burke asked counsel how the fact that the mandatory injunction – which the State insists is a purely procedural change – might cost the defendants as much as $130 million factors in. Counsel argued that analytically, that was relevant to the third step. First, we ask whether the legislature indicated that the statute applied retroactively. If not, we then ask whether the statutory change is substantive or procedural. Even if procedural, then we ask whether the change should nevertheless not be applied retroactively. If the additional burden is significant, even if the change might technically be called procedural, it is unreasonable and unfair to apply retroactively. Counsel argued that this case involved a hill of clean construction debris, all of it non-hazardous. Justice Burke asked whether it was true that there was testimony from the mayor and city officials about removing the hill. Counsel said yes, the mayor had testified that the hill and the landfill shouldn’t be removed because the town wanted to put energy-generating windmills there. Counsel argued that removing the hill of debris would take 48,000 truckloads at a cost of anywhere from $8 to $130 million, depending on the witness. If the defendants are required to peel away the top layer of vegetation on the hill, counsel argued, the result would be an environmental disaster. Chief Justice Garman asked whether a mandatory injunction was always substantive, or it depended on the facts. Counsel argued that it was tempting to say that just one truckload wasn’t a big deal, but 48,000 truckloads were indisputably a substantive change. The Chief Justice said so in this case it’s a substantive change. Counsel responded that the injunction here made a difference between fines only and a massively burdensome multi-million dollar injunction. Counsel then turned briefly to the remedial issue. He pointed out that Landgraf involved an amendment to remedies. The Supreme Court nevertheless held that the change couldn’t apply retroactively. Counsel closed by asking that the Court apply a three-factor definition holding that a statute cannot apply retroactively when it impairs rights a party possessed when he or she acted, imposes new duties, or increases a party’s liability for past acts.

Counsel for the Attorney General followed. Counsel argued that defendants disputed the particulars of the scope of the injunction and its cost, but in fact, that wasn’t the issue. According to counsel, before the lower courts the defendants had assumed that the new statute would apply retroactively, and merely argued that their liability under it should be capped, while before the Supreme Court, they have relied solely on the retroactivity issue. Counsel argued that since the defendants purportedly didn’t challenge the constitutionality of retroactive application, the question became one purely of legislative intent. Even if the legislature hadn’t indicated its intent, counsel argued, the change was procedural. Counsel argued that the legislature indicated its intent that the statute apply retroactively in various ways, including by instructing courts to construe the statute liberally, and by saying it intended to “restore” and “protect” the quality of the environment, while ensuring that violators would bear the costs of cleanup. Justice Thomas pointed out that counsel’s argument – and the Appellate Court’s below – relied on existing provisions of the Act, but the Supreme Court had earlier indicated that only the intent of the amendment was relevant. If the amendment was silent, the analysis continued with the substantive vs. procedural issue. Counsel responded that the real issue was whether the legislature indicated the temporal reach of the statute. The plaintiff was looking at the amended language, counsel argued, but reading it in conjunction with the rest of the Act. Justice Thomas asked counsel if he was saying that the amendatory Act encompasses the Act prior to the amendment, and counsel explained that the amendments had to be read in concert with what they were amending. Justice Thomas commented that it was a little hard to get one’s arms around, the analysis looks to the Act in conjunction with the rest of the Act in order to divine legislative intent, but then looks at the amendment only to classify it as retroactive or prospective. Counsel responded that even if the analysis reached that second step, the amendment merely added a new remedy. Justice Burke asked whether the new section wasn’t more permissive – it uses the word “may,” at the request of the Agency. Counsel agreed. Justice Burke suggested that this was a fairly fact-intensive case, with a landfill that stopped being used prior to the amendment, a remedy that was highly detrimental to the defendant and the Mayor and City Council arguing against the Attorney General’s preferred position. Counsel responded that the Mayor’s opposition to the remedy of removal was irrelevant to retroactivity. Justice Kilbride asked what the scope of the Department’s authority was before the 2004 amendment. Counsel responded that the first case ever questioning the Department’s authority to seek a mandatory injunction was in 2004, so when this case was filed, the State believed a mandatory injunction was possible. Counsel attempted to distinguish Landgraf, arguing that it was about the quintessentially backwards-looking nature of compensatory damages. Mandatory injunctive relief, counsel argued, is forward-looking. Justice Karmeier asked counsel whether he thought the Court would have to overrule prior precedent if it disagreed with the State, and counsel said yes.

When defendant’s counsel rose for rebuttal, Justice Karmeier repeated the question he’d closed the plaintiff’s presentation with: would the Court have to overrule prior precedent to find for you? Counsel responded no, but the Court would have to repudiate most of its leading cases on retroactivity to find for plaintiff. Counsel stated that it was undisputed that the amendment itself does not address the issue of retroactivity. Counsel argued that if it’s permissible to refer to a thirty-year old statutory preamble for the analysis, one might as well discard all of retroactivity analysis, since there will always be something to rely on. The bottom line, counsel argued, is that if a statutory amendment imposes a substantive burden on a party, it can’t apply retroactively. Counsel briefly continued with the issues relating to the defendant wife. Counsel argued that under the cases, if a party doesn’t have active participation in the events at issue, you don’t have personal liability. According to counsel, the wife defendant didn’t do anything approaching enough to justify personal liability under the cases. Justice Thomas suggested that the State would argue that the wife had played a substantial role in decision making. Counsel responded that the contracts said that the price to be charged each truck was determined by the person on site. The wife signed those in a purely ministerial capacity as president of the company.

We expect Einoder to be decided in four to six months.

Image courtesy of Flickr by Mace Ojala (no changes).