Environmental Law & Policy Center Files Suit in Cook Circuit Court (Ill.) to Enjoin $1.3B Illiana Tollway


ct-met-xxxx-quick-take-illiana-gfxThe Environmental Law & Policy Center filed the suit in Cook County, Illinois Circuit Court on behalf of the Sierra Club and Openlands to stop the proposed $1.3 billion Illiana Tollway linking northern Illinois and northwestern Indiana. It claims that the Illinois Department of Transportation does not have authority to develop the trucking corridor primarily designed for commercial transport. Essentially, the claim is that the project would destroy important farmland and wildlife habitat.

The proposed highway would be 47 miles in length and would link Interstate 55 in Will County, Illinois and Interstate 65 in Lake County, Indiana.

It also argues that the Chicago Metropolitan Agency for Planning’s policy committee erred when it voted in October to include the tollway in its long-term development plan for the region. Even though the policy committee included it in the long term plan, the agency’s board voted against the project. The lawsuit argues that board approval is necessary under Illinois law and IDOT cannot legally circumvent statutory requirement.

Illinois Gov. Pat Quinn and Indiana Gov. Mike Pence claim the tollway would help transport goods by truck, reduce congestion and create thousands of jobs. State officials state that private investors will be sought to pay most of the cost for construction, operation and maintenance with tolls repaying state debt. it is estimated that it could take up to 18 years for the tolls to start generating a profit.

The lawsuit against IDOT, the Board of the Chicago Metropolitan Agency for Planning (CMAP) and the MPO Policy Committee alleges that an October 2013 vote by the MPO Policy Committee to approve amending the GO TO 2040 Plan to include the proposed Illiana Tollway as a financially constrained project was in fact illegal.  State law required that the inclusion of the Illiana Tollway first be approved by the CMAP Board—which rejected the amendment in a 10-4 vote just one week earlier. The lawsuit seeks a court order declaring that the proposed Illiana Tollway hasn’t received the necessary approval to proceed.

Posted in Agriculture, Planning and Zoning

From the Seventh Circuit: HUD-owned Properties — Money Laundering, Fraud, and Theft of Government Funds

FraudFrom the Seventh Circuit Court of Appeals, we have US vs. Farano — a real estate financing fraud case.

As a result of a real estate financing fraud scheme during the housing bubble, Brunt, Farano, Murphy, and Scullark were charged with mail and wire fraud; Brunt and Scullark with money laundering and Farano with theft of federal government funds, under 18 U.S.C. 641, 1341, 1343, 1957(a).

The scheme involved buying HUD-owned properties at a discount by using a “front” nonprofit corporation that received kickbacks. The properties were resold, with false promises that the defendants would rehabilitate the properties and find tenants. The defendants obtained the mortgages for buyers by submitting false information regarding the conditions of the properties and buyers’ assets, income, employment, and intentions to occupy the properties. A loan officer and appraisers were bribed.

The trial court judge refused to separate the trials. A jury convicted the defendants, and the judge sentenced Brunt to 151 months in prison, Farano to 108, Murphy to 72, and Scullark to 78. He ordered them all to pay restitution.

The Seventh Circuit affirmed except regarding an order of restitution to refinancing lenders, which it vacated for consideration of whether the refinancing banks that are seeking restitution had based their refinancing decisions on fraudulent representations by the defendants. The also court expressed concern about how long the case took.

We would be remiss if we ended this opinion without expressing our concern with the length of time that this case has taken to reach us—six and a half years since indictment. The initial delays were attributable largely to the complexity of the government’s investigation of the defendants, which continued after the indictment was returned and resulted in a superseding indictment that added Murphy as a defendant. Trial was scheduled to begin on January 31, 2011—already more than three years since the initial indictment—but on the eve of trial Brunt switched lawyers, and as a result the trial was postponed nine months; it shouldn’t have been postponed that long for that reason. The trial took nine weeks, and after that the defendants were allowed two months for briefing their motions for acquittal, which was followed seven months later by sentencing. The defendants filed their notices of appeal in July 2012, other than Murphy, who filed in October of that year. The defendants’ lawyers than withdrew, and new counsel were appointed. The appeal was not argued until 19 months after the original notices of appeal. The delay troubles us, especially as there must now be further proceedings in the district court.

Posted in Federal Cases, Real Estate

From the Seventh Circuit: Wire and Mail Fraud Based on Scheme to Assist Homeowners Facing Foreclosure

Foreclosure NoticeFrom the Seventh Circuit Court of Appeals, we have US vs. Daniel — a real estate wire fraud and mail fraud case.

Daniel was vice president of Rymtech.  Rymtech billed itself as a mortgage reduction program and purported to provide financial assistance to homeowners facing foreclosure. Daniel recruited homeowners to place their properties in the program and instructed them to sign over title to straw purchasers called “A buyers.”

Homeowners were told that title would be placed in trust, that A buyers would obtain financing to pay off the mortgage, and that they would regain clear title in five years. Daniel instructed loan officers to prepare fraudulent loan applications on behalf of A buyers. Even if Rymtech had invested all of the owners’ equity, unrealistically high rates of return would have been required to make the mortgage payments. The equity was actually primarily used to operate Rymtech.

When its finances started to disintegrate, Daniel continued to recruit homeowners. After the program failed Daniel was convicted of wire fraud, 18 U.S.C. 1343 and mail fraud, 18 U.S.C. 1341. The Seventh Circuit affirmed, rejecting a challenge to the sufficiency of the evidence and an argument that the court erred in rejecting his proposed instruction, requiring the jury to agree unanimously on a specific fraudulent representation, pretense, promise, or act. Unanimity is only required for the existence of the scheme itself and not in regard to a specific false representation.

Posted in Federal Cases, Real Estate

IDEM Publishes the States’ View of the Air — an Analysis of Air Quality

Air QualityAir quality across the nation has improved over the past ten years or more. The analysis contained in the States View of the Air indicates that progress has been made from 2000 through 2012 for ozone and fine particles (PM-2.5). The national ambient air quality standards in place in 2012 were applied to all time periods in this analysis to demonstrate the progress made.

This is the third year for this report. It was originally intended as a complimentary document to the American Lung Association’s annual report called “The State of the Air.” The report starts with the same air quality data used by the ALA for the period of 2000 – 2012.

The review of data in this report differs from the ALA. First, the design values used for both ozone and PM-2.5 are based on average values for each county. EPA’s guidance for attainment/nonattainment designation purposes focuses on the worst design value for a county. However, some believe that this is inconsistent with what people are actually breathing.

A second difference is that when design values for a number of counties are being grouped to determine the overall value for a metropolitan statistical area, the individual design values for each county are weighted by the population of that county to determine a population weighted average value. This value is believed to be more consistent with what the population is being exposed than the EPA model.

The analysis of Indiana’s data reveals the following:

Ozone.  IDEM believes that significant progress has been made in ozone levels in Indiana. In the 2000 – 2002 time period, approximately 0.2 million people (3.5%) lived in counties that met the ozone standard. By 2010 – 2012 this had increased to approximately 4.0 million people (60.5%). Figure IN-1 shows the distribution of people by year.

24-Hour PM-2.5. It also believes that significant progress has been made in 24-hour PM-2.5 levels in Indiana. In the 2000 – 2002 time period, approximately 1.3 million people (20.5%) lived in counties where 24-hour PM-2.5 levels met the standard. By 2010 -2012 this was approximately 3.7 million people (56.2%) and the rest of the population lived in areas where PM-2.5 was not measured. Figure IN-2 shows the distribution of people by year.

Annual PM-2.5. Finally, some progress has been made in annual PM-2.5 levels in Indiana. In the 2000 – 2002 time period, approximately 1.0 million people (16.0%) lived in counties where annual PM-2.5 levels met the standard. By 2010 – 2012 this had increased to approximately 3.7 million people (56.2%) and the rest of the population lived in areas where PM-2.5 was not measured. Figure IN-3 shows the distribution of people by year.

Not great, but better.

Posted in Clean Air, EPA, IDEM

Indiana Supreme Court Addresses the Applicability Indiana Trial Rules 54(B) and 56(C)

Dry CleanersFrom the Indiana Supreme Court, we have this case handed down on February 20, 2014. Mitchell vs. 10th and Bypass LLC reverses an order granting a motion to vacate partial summary judgment in an environmental remediation action. The Indiana Supreme Court tackled the apparently conflicting Indiana Trial Rules 54(B) and 56(C).

Asserting a claim for an environmental legal action (“ELA”) as set out in Ind. Code §§ 13-30-9 and alleging a violation of Indiana’s anti-dumping statute, see I.C. §§ 13-30-3, 10th and The Bypass, LLC filed a complaint on December 30, 2008 against Mitchell individually, and J.T. Mitchell, Inc.—a corporation Mitchell owned; the Sevan Corporation; and Elway, Inc. (collectively “Defendants”). The complaint alleged that Defendants were responsible for environmental contamination while operating certain dry cleaning businesses at a site owned by the LLC and located on East 10th Street in Bloomington. In particular, according to the complaint, the Defendants “caused and/or contributed to the release of a hazardous substance into the subsurface soil and groundwater of the Site, . . . [and] dumped chlorinated solvents and other solid waste onto the Site without Plaintiff’s consent.”

On June 30, 2009, Mitchell in his individual capacity filed a motion for partial summary judgment on grounds that he was not personally liable for LLC’s damages and that neither the responsible corporate officer doctrine nor the doctrine of piercing the corporate veil was applicable in imposing on him any personal liability. In support of his motion Mitchell designated several exhibits including his affidavit which alleged in pertinent part:

“I never individually operated a dry cleaning business at Plaintiff’s real estate. . . . My involvement in the dry cleaning business at Plaintiff’s real estate was at all times as an officer or employee of J.T. Mitchell, Inc. . . . I never dumped, nor was I at any time involved in any capacity in the dumping of chemical waste on Plaintiff’s real estate. . . . I never caused or contributed to the release of a hazardous substance into the surface or subsurface soil or ground water at Plaintiff’s real estate.”

LLC filed its own motion for partial summary judgment seeking to impose individual liability on Mitchell. In support of the motion LLC designated several exhibits none of which disputed the material substance of Mitchell’s affidavit. After conducting a hearing the trial court entered an order on January 11, 2010 granting Mitchell’s motion for partial summary judgment and denying LLC’s motion. The order declared that there is no evidence that Mitchell caused a spill of hazardous waste or other violation of the ELA or Indiana dumping statutes . . .

Perc FreeBut a year later LLC obtained a recorded statement from a former Mitchell employee who had previously worked at the dry cleaning facility on East 10th Street. According to her, sometime around 1988 or 1989 there was a spill at the facility of a dry cleaning solvent—perchloroethylene - commonly referred to as PERC. The former employee alleged that Mitchell had left the valve open on the back of a 55-gallon PERC drum causing the solvent to spill onto the floor. She asserted that after she informed Mitchell of the spill, he personally instructed her to “mop it up” and to “put a fan on it and it would evaporate.” As a result of the spill and clean-up, she suffered chemical burns and developed other health problems.  Mitchell paid for her medical expenses personally in lieu of submitting a worker’s compensation claim.

Relying on provisions of Indiana Trial Rule 54(B), LLC filed a motion to vacate the trial court’s January 11, 2010 order entering partial summary judgment in Mitchell’s favor. The LLC contended that newly discovered inculpatory evidence established Mitchell’s individual liability. LLC filed a brief in support of its motion and attached Johnson’s statement and deposition as exhibits. Mitchell responded with a memorandum in opposition arguing in part that pursuant to Indiana Trial Rule 56 newly discovered evidence must be properly designated and timely submitted—neither of which, according to Mitchell, was done in this case. The trial court entered an order granting LLC’s motion to vacate. The order declared in part the “[o]rder granting partial summary judgment was a non-final order, [and] . . . therefore is subject to revision at any time before entry of a final judgment.” The Court of Appeals granted Mitchell’s petition for interlocutory review and affirmed the judgment of the trial court.

In this case, the trial court’s order granting Mitchell’s motion for partial summary judgment was not final. Rule 60(B) was amended (effective January 1, 2009) which is the current version of the Rule, and the Rule in effect at the time the LLC filed its motion. The amendment deleted the word “final” such that the rule now provides in relevant part, “the court may relieve a party or his legal representative from a judgment, including a judgment by default. . . .” So the express language of the rule no longer limits relief only from a “final” judgment . In light of the  amendment, LLC is not precluded from seeking Trial Rule 60(B) relief from the trial court’s January 2010 order on grounds that the order was not a final judgment. On this point the Indiana Supreme Court held that the trial court erred and reversed.

Posted in Clean Water, Hazardous Waste, Indiana Cases, Real Estate

Indiana Court of Appeals Addresses Procedural Issue Related to Appeal from BZA Decision

Hilton Homewood SuitesFrom the Indiana Court of Appeals, we have this case handed down on April 10, 2014. HRC Hotels vs Metropolitan BZA and Myers deals with procedural and jurisdictional issue relating to standing to appeal from a BZA decision.

Myers Y. Cooper Corporation requested a variance for its property to build a pet day-care facility. At the hearing, I-465 LLC, the owner of an adjacent Hilton Homewood Suites Hotel, protested due to the noise that would be caused by pets staying so close to its hotel.  The Marion County Metropolitan Development Commission Board of Zoning Appeals granted the variance. HRC Hotels, LLC, the parent company of I-465 LLC, then filed a petition for judicial review in the trial court. Myers Cooper responded, arguing that HRC Hotels lacked standing to file the petition for judicial review.

After the 30 day deadline to file a review petition had passed, HRC Hotels filed a motion to amend the petition for judicial review to substitute I-465 LLC as the real party in interest. The trial court dismissed HRC Hotels’ petition concluding that HRC Hotels lacked standing to file a petition for judicial review and therefore the trial court lacked subject-matter jurisdiction to consider HRC Hotels’ motion to substitute the real party in interest. HRC appealed.

Pet Day CareThe Indiana Court of Appeals conclude that the standing requirements under IC 36-7-4- 1603 are procedural rather than jurisdictional. Therefore, HRC Hotels’ alleged lack of standing when the petition was filed does not deprive the trial court of subject-matter jurisdiction. Because the trial court has subject-matter jurisdiction to consider HRC Hotels’ motion to amend its petition for judicial review, it should substitute I-465 LLC as a real party in interest and hear the merits of the petition for judicial review. The trial court was reversed and the case was remanded to the trial court for further proceedings.

. . . Tthe fact that HRC Hotels lacks standing because it did not appear before the BZA is not a ‘real jurisdictional problem.’ We understand real jurisdictional problems to be when the trial court renders a decision in a case that it has not been granted the power to decide,” Chief Judge Nancy Vaidik wrote.  She continued, “. . . I-465 LLC, as the owner of the hotel adjacent to the Property, is a true owner of the right sought to be enforced.  Moreover, HRC Hotels filed its motion to amend its petition and substitute I-465 LLC as the real party in interest exactly thirty days after Myers Cooper filed its motion to dismiss for lack of standing,” she wrote. “Because this Court allowed a substitution under Trial Rule 17(A)(2) sixty-four days after the defendant objected, we find a substitution after thirty days to be reasonable.”

Posted in Indiana Cases, Real Estate

New Legislation: Transparency and Efficiency in the IDEM and DNR Permitting Process

DNR logoThe new legislation described in this post is aimed at streamlining Indiana’s complex regulatory process and eliminating some of the overlap between IDEM and DNR.

SEA 271 authorizes a study of the water resources in the state and the impact they have on economic development and rural Indiana, in particular agriculture. The bill requires a review of government structure for water management and how state and local entities can better coordinate activities.

It states that the legislative council should assign to the appropriate committee for the 2014 legislative interim the responsibility: (1) to receive testimony about a number of subjects related to water resources, including certain recommendations of the utility regulatory commission, the effect of water resource availability on state and regional economic development decisions, coordination of state government activities relating to water resources, and key elements that a state water plan should contain; and (2) to study the potential creation of a water institute and a water management authority.

The Indiana Departments of Environmental Management and Natural Resources have been charged with implementing a process by Jan. 1, 2015, to improve efficiency and transparency in permitting programs for water quality certifications, isolated wetland activity and floodway activity. Currently, many activities are subject to a permit from both DNR and IDEM and frequently from Federal agencies, as well.

PrintHEA 1217 began as an effort to require IDEM and DNR to implement one permitting program, but agency concerns about cost and their administrative software led to a focus on: (1) informing individuals of the permits they need, (2) changing permit forms and processes so that duplicate information is not needed, (3) determining how one agency can serve as the single point of contact for collecting applications and issuing permits, (4) creating a process for timely review, and (5) monitoring of the process. Farm Bureau views this as an important step in regulatory reform and will work with the agencies in the coming months to ensure that the process is completed on time and fulfills the intent of the General Assembly.

The statute directs the DNR and IDEM to develop and implement a process to improve efficiency and transparency in programs for: (1) water quality certifications from IDEM under Section 401 of the federal Clean Water Act; (2) permits from IDEM for wetland activity in a state regulated wetland; and (3) permits from the director of the DNR for a structure, obstruction, deposit, or excavation in a floodway. Requires DNR and IDEM to determine how to ensure that a person proposing to perform wetland work is informed of every state permit the person needs, to change application forms and processes to ensure that a person is not required to provide the same information separately to DNR and IDEM, to determine how either DNR or IDEM may serve as the single point of contact for applicants, to create an internal process to ensure that the appropriate office within DNR or IDEM receives and timely reviews each permit application, and to ensure that the processing of each permit application is monitored.

Posted in Agriculture, Clean Water, IDEM, Indiana General Assembly

New Legislation: Indiana General Assembly Passes Tough Ag Trespass Bill

No trespassingIndiana amended its criminal mischief and criminal trespass statutes to add language that applied to agricultural property. The rationale for this legislation originated with the ag lobby — particularly interests related to confined feeding operations.

The Indiana General Assembly attempted to pass legislation in the 2013 long session.  Because of significant opposition by both animal-rights activists and those remonstrating against confined feeding operations near their homes, as well as the specter of First Amendment issues, the legislation was shelved.

The original bill, SB 373, was drafted to protect Indiana farmers from unauthorized videotaping on their farms. It later morphed into a criminal trespass and criminal mischief bill after significant opposition from the Indiana Broadcasters Association and the Hoosier Press Association, among many others. My April 10, 2013 post is here. It didn’t pass last year.

Despite all the controversy last year, this year’s legislation was enacted with broad support. The measure passed the Senate 40-8 and cleared the House 67-30.

SEA 101 modifies the existing crime of institutional criminal mischief by adding causing property damage to an agricultural operation. And Indiana farmers will no longer be required to post “no trespassing” signs to protect the production areas of their farms. If a trespasser commits an intentional act that causes property damage, it could result in additional penalties, depending on the amount of damage caused.

The bill does not ban taking photgraphs or making videos, nor does it modify existing law on reporting animal abuse, and contains no penalties for misleading statements on a job application – designed to gain access to a confined feeding operation. Those are the elements contained in agricultural protection bills that animal-rights activists have come to label “ag-gag” measures.

However, it provides agricultural property the same protection against trespass that is now provided to schools, churches and private homes. Trespass and damages of more than $750 to agricultural property could result in a Class D felony with potential jail time of up to three years. Damages of $50,000 or more could result in a Class C felony with the potential for eight years in jail.

Combine this with SB 186, providing Indiana farmers the right to use all generally accepted farming practices and new technologies, and the ag lobby can claim a pretty successful year.

Posted in Agriculture, Real Estate

Christmas in April: USDA’s Ag Marketing Service Assesses a 15¢ Fee to Promote the Christmas Tree Industry

Christmas tree farmThe USDA is authorizing an industry-funded program for farmers that helps promote and inform the public about fresh-cut Christmas trees. The program is apparently intended to be similar to the “Got Milk?” or “Pork: The Other White Meat” campaigns.

A federal regulation that took effect last week imposes a 15 cent assessment on every Christmas tree cut and sold in the U.S. or imported into the country. Small producers that sell fewer than 500 trees a year would not be required to pay in.

The USDA’s Agriculture Marketing Service published the rule in November 2011, but it delayed the program shortly thereafter to give the industry more time to comment and to reconsider the program. In other words, it met with significant opposition, particularly from conservative organizations concerned about the imposition of a new tax that will most likely be passed on to consumers. The delay in implementation of the regulation was lifted as a result of a provision in the new farm bill, which President Barack Obama signed into law in February.

The USDA received more than 500 comments on the regulation. The Heritage Foundation argued that the rule was “an inappropriate use of governmental power in a society based on free markets, limited government, and individual freedom.”

The USDA’s check-off programs (commodity research and promotion programs) are funded by the various industries they support. The programs allow farmers and producers to pool their resources. Roughly 20 industries currently fund their own checkoff programs.

The National Christmas Tree Association is concerned about losing market share to artificial trees and foreign imports. It says that 20 years ago 50% of American households bought a Christmas tree each year. In 2012, less than 25% of households now buy fresh-cut Christmas trees.  The Association maintains that Christmas tree farmers need the program to counter market trends.

Theoretically, the check-off program would encourage new farming methods resulting in healthier trees that retain their needles longer. As a practical matter, it’s an advertising program that consumers will ultimately pay for.

Posted in Agriculture

Janet McCabe’s Confirmation Hearing Continues before the Senate’s Environment and Public Works Committee

Janet McCabeJanet McCabe is the acting assistant administrator for Air and Radiation at the Environmental Protection Agency.

She is waiting for Senate consideration of her nomination to be the permanent administrator. Her Senate confirmation hearings are ongoing.

Ms. McCabe held several leadership positions in the Indiana Department of Environmental Management’s Office of Air Quality and was the office’s Assistant Commissioner from 1998 to 2005.

Republicans have accused the Obama administration of waging a “war on coal” through various regulations affecting coal-fired power plants.

She testified at her confirmation hearing that when she was at the Indiana Department of Environmental Management she worked with both Indiana industries and public health and environmental groups to improve air quality while supporting business. “I come from Indiana where people rely on coal,” said McCabe.

McCabe told the Senate Environment and Public Works Committee that her experience as head of air quality for IDEM from 1998 to 2005 taught her that “government works best when all perspectives are at the table.”

Democrats on the Environment and Public Works Committee defended McCabe and the EPA’s proposed carbon pollution standards for new and existing coal-fired power plants. Sen. Barbara Boxer (D-Calif.), chairwoman of the committee, called  her “eminently qualified.” Boxer then used much of her allotted time to criticize Republicans for attempting to defeat the EPA carbon emissions rules.

McCabe is a highly qualified public servant who has devoted much of her career to environmental concerns and the administration of environmental agencies. She deserves confirmation.

You can find the videocast of the April 8, 2014 public hearing here.

Posted in Clean Air, EPA