Indiana Law Review


The Evolution of Indiana Environmental Law:
A View Toward the Future

Robert F. Blomquist*

I. Introduction

1989-90 has been a watershed in the evolution' of environmental

law in Indiana. The Indiana legislature, assisted by the vigorous leadership

of Governor Evan Bayh,^ and the Indiana judiciary, crafted significant

new environmental laws during 1989-90. These legal innovations are
rooted in common law tort principles moderately protective of environ-
mental interests,^ but shaped by more recent statutory enactments ad-

dressing general environmental policy concerns.* In addition, some federal

courts resolved Indiana environmental disputes by reaching decisions that

applied both Indiana law and federal law.

A plethora of federal environmental laws^ and rapidly changing

* Professor of Law, Valparaiso University School of Law. B.S., University of

Pennsylvania, 1973; J.D., Cornell Law School, 1977.
1

.

This evolution can be viewed as both a species of broad-based cultural evolution

as well as a particular instance of legal evolution whereby modern societies respond to

pressures of growth, development, and technology with more comprehensive and stringent

environmental regulation. See generally J. Bronowski, The Ascent of Man (1973). See
also W. RoDGERS, Jr., 1 Environmental Law: Am and Water at v. (1986) (the concept
of evolution "tends to surface regularly, probably because the facts, players, policies,

rules, and strategies [of environmental regulation] invariably drift and move when plotted
over time") [hereinafter Rodgers].

2. Governor Bayh's key environmental policy advisors are Barton R. Peterson,

Executive Assistant to the Governor, and Kathy Prosser, Commissioner of the Indiana

Department of Environmental Management. I gratefully acknowledge their assistance in

providing background information for this Article.

3. See generally Erbich Products Co. Inc. v. Wills, 509 N.E.2d 850 (Ind. Ct.

App. 1987) (although ultra-hazardous activity could give rise to strict liability, the storage

of chlorine in and of itself is not an ultra-hazardous activity that would give rise to strict

liability for its release into the environment, resulting in personal injury and property

damage, because the challenged activity could be carried out in a safe manner).

4. See, e.g., Ind. Code § 13-7-4-1 (Supp. 1990) (prohibiting discharges, contam-
ination, or deposit of contaminants); id. § 34-1-52-1 (1988) (nuisance); id. § 13-7-22.5

(1988) (responsible property transfer law).

5. A list of key federal environmental statutes enacted since 1970 includes the
National Environmental Policy Act of 1969, 42 U.S.C. §§ 4321-4370(a) (1988); Clean Air

Act, 42 U.S.C. §§ 7401-7642 (1988), as amended by Act of 1977, Pub. L. No. 95-95;
Federal Water Pollution Control Act, 33 U.S.C. §§ 1251-1376 (1988), as amended by the
Clean Water Act of 1977, Pub. L. No. 95-217; Noise Control Act of 1972, 42 U.S.C.

§§ 4901-31 (1988), as amended by The Quiet Communities Act of 1978, Pub. L. No. 95-



790 INDIANA LAW REVIEW [Vol. 24:789

demographic and economic trends^ prodded jurists and policymakers

addressing Indiana environmental issues to encounter what Professor

WiUiam H. Rodgers, Jr. calls a
*

'spectacle of ever-burgeoning regulation"

of things environmental.^ The result was a remarkable output of Indiana

environmental laws — statutory, case law, and regulatory — during the
past year. Indeed, as suggested later in this Article, Indiana's recent

environmental lawmaking activity is likely to produce further legal changes

during the remainder of the decade and into the next century as the

current legal regime ** produces its own dissatisfactions, gives rise to new
'gaps' to be filled, and creates its own demands for more regulation."^

This Article is divided into three major parts. The first section

scrutinizes key state environmental legislative enactments during the sur-

vey period. In light of the unusual output of environmental statutes

during 1989-90, I devote considerable space to an analysis of key leg-

islative provisions. The second section analyzes state judicial decisions

interpreting Indiana environmental and natural resources law and federal

court opinions addressing specific Indiana environmental disputes. Fi-

nally, the Article concludes by providing a view of probable future trends

and developments in Indiana environmental law.^

II. Key Indiana Environmental Legislation, 1989-90

Indiana's 1990 Second Regular Session of the 106th General Assembly

enacted several major bills pertaining to the environment. The General

Assembly also generated a variety of less important environmental sta-

609; Resource Conservation and Recovery Act of 1976, 42 U.S.C. §§ 6901-6991 (1988);

Toxic Substances Control Act of 1976, 15 U.S.C. §§ 2601-2629 (1988); Federal Insecticide,

Fungicide, and Rodenticide Act of 1977, 7 U.S.C. §§ 136-136y (1988); Safe Drinking

Water Amendments of 1977, 42 U.S.C. §§ 300f-300j-10 (1988); Comprehensive Environ-
mental Response, Compensation, and Liability Act of 1980, 42 U.S.C. §§ 9601-9675 (1988),

as amended by Superfund Amendments and Reauthorization Act of 1986, Pub. L. 96-

510, Pub. L. No. 99-962.

6. See generally Indiana Department of Environmental Management, The
Protection of Indiana's Groundwater: Strategy and Draft Implementation Plan
(1987); Indlvna Department of Environmental Management, What Are Indlu^a's
Plans for Management of Solid and Hazardous Waste in the 1990s?: A Discussion
Document (July 1988) (detailing Indiana population trends, solid waste landfill capacity
projections, and industry waste management trends); Indlusta Department of Environ-
mental Management, 1986 Annual Report.

7. Blomquist, The Beauty of Complexity (Book Review), 39 Hast L.J. 555, 568

(1988) (quoting Rodgers supra note 1, § 1.3, at 17).
8. Id. See generally S. 82, 107th Gen. Assembly Sess. (1991) (recycling by gov-

ernment bodies); S. 276, 107th Gen. Assembly Sess. (1991) (recycling/remanufacturing

income tax credits).

9. Environmental rulemaking, a critical aspect of developing environmental law

in Indiana, is beyond the scope of this Article. Similarly, the details of significant legislative

changes in environmental regulations of property transfers is beyond the scope of this

Article.



1991] ENVIRONMENTAL LAW 791

tutes. The legislation addressed six subject areas: solid waste planning,

management, and recycling; pollution prevention; underground storage

tanks; natural resources; water pollution; and pesticides regulation. Be-

cause recent legislative developments placed great emphasis on solid waste

planning, management, and recycHng policy, a substantial portion of

the Article discusses these issues in considerable detail.

A. Solid Waste Planning, Management, and Recycling

Public Law No. 10-1990'° (the **Act") revolutionizes solid waste
planning in Indiana. The Act consists of five major policy themes: (1)
instituting mandatory solid waste planning; (2) establishing new and
complex local governmental entities known as "county solid waste man-
agement districts" and **joint solid waste management districts** with
extensive powers and responsibilities; (3) providing a variety of govern-

mental tools to finance solid waste planning, management, and recycling

activities; (4) promoting recycled product use and discouraging waste

production; and (5) regulating solid waste transportation by imposing

certification and reporting requirements on waste haulers.''

1. State and Regional Solid Waste Planning. —
a. General state policies and goals

In Indiana Code section 13-9.5-11, the Act'^ articulates broad state-
wide policy principles and goals relating to soHd waste. Initially, the

legislature indicated a policy preference for source reduction, recycling.

10. Indiana House Enrolled Act No. 1240, Pub. L. No. 10-1990 (amending Ind.

Code § 13-7-1-1 (1988 & Supp. 1990)) [hereinafter the Act]. Section 17 of the Act (adding
a new article, Indiana Code § 13-9.5) defines key terminology for solid waste planning.
"Landfill" is defined as "a solid waste management disposal facility at which solid waste

is deposited on or in the ground as an intended place of final location," but does not

include "[a] site that is devoted solely to receiving . . . [fjill dirt [or] [v]egetative matter

subject to disposal as a result of landscaping, yard maintenance, land clearing, or any

combination [thereof]-" Ind. Code § 13-9.5-1-19 (Supp. 1990).
"Recycling" refers to "a process by which materials that would otherwise become

solid waste are collected, separated or processed, and converted into materials or products

for reuse or sale." Id. § 13-9.5-1-24.

"SoHd waste" tracks the existing definitions of Indiana Code § 13-17-1-22 except
that the Act excepts from the definition waste regulated under Indiana Code § 13-7-8-5

and "[a]ny infectious waste (as defined in IC 16-1-9.7-3) that is disposed of at an incinerator

permitted under rules adopted by the solid waste management board to dispose of infectious

waste." Id. § 13-9.5-1-26.

"Source reduction" refers to "a reduction in the amount of soUd waste generated

that is achieved through action affecting the source of the solid waste." Id. § 13-9.5-30.

11. Id. §§ 13-9.5-1-2 to -11-5.

12. Id. § 13-9.5-11 (amending Ind. Code § 13-7-1-1 (1988 & Supp. 1990)).



792 INDIANA LAW REVIEW [Vol. 24:789

and other solid waste management alternatives over incineration and

landfill disposal as solid waste management methods.'^ To implement
this preference for solid waste management, the Act set the goal of

reducing the amount of solid waste incinerated and disposed of in Indiana

by thirty-five percent before January 1, 1996; and by fifty percent before

January 1, 2001J*

b. State solid waste planning

The Act also establishes state solid waste planning responsibilities.*^

Two state entities are to be involved with these duties: the Indiana
Department of Environmental Management (IDEM)** and the state En-
vironmental Policy Commission.*^ The legislation envisions a four-step

13. Id.

14. Id. Cf. Regional Note, The 1988 Pennsylvania Municipal Waste Planning,

Recycling, and Waste Reduction Act, 9 Temple Envir. & Tech. L. Rev. 107, 110, 113-
14 (1990) (describing other states' recycling and waste reduction goals) [hereinafter Regional

Note]. For example:

The Pennsylvania [legislation] calls for twenty-five percent recycling of the state's

soHd waste stream by 1997. [53 Pa. Cons. Stat. Ann. § 4000.102(c)(1) (Purdon

1989)]. By comparison, Florida's law calls for a thirty percent recycling by 1994

[Fla. Stat. Ann. § 403.706(4) (West 1989)]; Maryland's law seeks twenty percent

recycHng by 1994 [Md. Envtl. Code Ann. § 9-505(18) (1989)]; Connecticut's
mandatory recycling goal is twenty-five percent recycling by 1991 [1987 Conn.

Pub. Acts 87-544, § 1 (Reg. Sess.)].

Id. at 113-14 (footnotes omitted).

15. Indiana House Enrolled Act No. 1240, Pub. L. No. 10-1990, § 17 (adding a

new article, Ind. Code § 13-9.5 (Supp. 1990)).
16. The Indiana Chamber of Commerce described IDEM's purpose:

This department, established as a result of General Assembly action in 1985,

administers the Environmental Management Act and other state environmental

statutes previously carried out by the Indiana State Board of Health. It cooperates

with the U.S. Environmental Protection Agency and is responsible for imple-

menting state programs concerning water and air pollution control, solid waste

management, and low-level radioactive waste.

Indiana Chamber of Commerce, Here is Your Indiana Government 25 (1987).
17. The Chamber of Commerce also stated the purpose of the State Environmental

Policy Commission:

This commission was created by the Indiana General Assembly in 1985 to provide

ongoing evaluation of Indiana's environmental program. It makes reports and

legislative recommendations for the governor, the commissioner of the Department

of Environmental Management and General Assembly.
The commission is composed of 12 members. The Speaker of the House and

the president pro tempore of the Senate each appoint four legislators, not more

than two from the same political party, and the governor appoints four members

representing environmental and economic interests, not more than two from the

same political party.

Id. at 26.



1991] ENVIRONMENTAL LAW 793

process of interaction between these two entities. First, the IDEM is
required to submit to the Environmental PoHcy Commission a draft of

a state solid waste management plan.*^ Second, the Environmental Policy

Commission must revise the IDEM draft plan to assure a twenty-year
state solid waste management plan covering four key planning com-

ponents. The twenty-year plan must establish in order of priority: (1)
voluntary statewide goals for source reduction; (2) criteria for alternatives

to final disposal, including recycling, composting, and the availability

of markets; (3) general criteria for the siting, construction, operation,

closing, and monitoring of final disposal facilities; (4) criteria and other

elements to be considered in the adoption of district solid waste man-

agement plans. ^^

After receiving the Environmental Policy Commission revisions, the

IDEM commissioner must adopt the state plan in final form and provide
for its implementation by rules adopted under Indiana Code section 4-
22-2.2° Finally, the process of statewide solid waste management planning

comes full circle. The Act mandates that after the IDEM commissioner
adopts the state plan, the Environmental Policy Commission must review

it every five years,^^ using the earlier three steps of interaction with the

IDEM.22

c. Regional solid waste planning

Indiana Code section 13-9.5-4^^ — consisting of many detailed re-
quirements — places the most important and palpable planning respon-
sibilities on solid waste management districts.^ Each district must adopt
and submit to the IDEM commissioner for approval its own solid waste
management plan that meets a variety of specific technical and procedural

criteria.^^ The most important requirements for district solid waste man-
agement plans include: public meeting prerequisites; format standards;

18. IND. Code § 13-9.5-3-1 (Supp. 1990).
19. Id. § 13-9.5-3-3. 'Tinal disposal facility" is defined as: "(1) A landfill; (2)

an incinerator; or (3) a waste-to-energy facility" but not including "a transfer station."

Id. § 13-9.5-1-14. Moreover, the Act requires IDEM to supply a model format to be used
in preparing district solid waste plans. Id. § 13-9.5-4-2(c).

Another section allows the Environmental Policy Commission to go beyond the

minimum plan requirements to "'make other revisions [to the state plan] that are not
inconsistent with [Chapter 3]." Id. § 13-9.5-3-1(2).

20. Ind. Code § 13-9.5-3-2 (Supp. 1990). The Code authorizes the state Solid
Waste Management Board to adopt rules on solid waste. Id. § 13-l-12-8(a) (1988).

21. Id. § 13-9.5-3-4 (Supp. 1990).

22. One additional requirement for future revisions of the state plan is that they
must be developed with the advice of the solid waste planning advisory council. Id.

23. Id. § 13-9.5-4.

24. See infra notes 25-41 and accompanying text.

25. iND. Code § 13-9.5-4-1 (Supp. 1990).



794 INDIANA LAW REVIEW [Vol. 24:789

long-range demographic projections for the district;^^ descriptions of the

origin, content, and weight or volume of the solid waste to be generated

in the district at the time the district plan is developed, and projections

of the origin, content, and weight or volume of the solid waste expected

to be generated in the district in the next five years, ten years, and

twenty years ;^^ and a solid waste facility's inventory and needs pro-

jection.^^

The Act also mandates certain procedural requirements to be followed

in district solid waste management plans.^^ Each district must integrate

its approach to solid waste management with a thorough and balanced

consideration of **[s]ource reduction"; "[a]Iternatives to complete or

partial dependence on final disposal facilities, including recycling and

composting"; and, alternatives to **[f]inal disposal facilities," like land-

fills and incinerators.^° Furthermore, district solid waste management

plans must articulate goals and objectives;^^ consider alternate means of

achieving district goals;^^ describe projected operational and capital costs;

propose a means of financing the implementation of the district plan;"

and provide for ** surveillance and enforcement procedures" needed for

implemention.^"*

Prevailing dormant Commerce Clause precedent prohibits a state
from banning the importation of waste from another state.^^ Thus, a

potentially vulnerable provision of the Act is section 13-9.5-4-8. This

section allows a district plan **to the extent it is constitutionally per-

missible [to] include provisions to restrict or prohibit the disposal within

the district of solid waste originating from another state if the district

reasonably considers the provisions necessary to accomplish the long-

range planning goals of the district. "^^ Although the statutory predicate

of an out-of-state ban requires the ban to be constitutional, the legislature

26. Id. § 13-9.5-4-8(1). A district plan must include: "(1) The results of a dem-
ographic study of the district predicting the population of the district five (5) years, ten

(10) years, and twenty (20) years after the year the district plan is adopted." Id.

27. Id. § 13-9.5-4-5(2).

28. Id. §§ 13-9.5-4-5(3), -5(5).

29. For a general discussion of the importance of process values in environmental

law and policy, see Blomquist, Rethinking the Citizen as Prosecutor Model ofEnvironmental
Enforcement Under the Clean Water Act: Some Overlooked Problems of Outcome-In-
dependent Values, 22 Ga. L. Rev. 337 (1988).

30. IND. Code § 13-9.5-4-6 (Supp. 1990).
31. Id. § 13-9.5-4-7(1).

32. Id. § 13-9.5-4-7(2).

33. Id. § 13-9.5-4-7(3).

34. Id. § 13-9.5-4-7(6).

35. See generally Note, Hazardous Waste in Interstate Commerce: Minimizing the

Problem after City of Philadelphia v. New Jersey, 24 Val. U.L. Rev. 77 (1989).
36. iND. Code § 13-9.5-4-8 (Supp. 1990).



1991] ENVIRONMENTAL LAW 795

implicitly suggests that districts consider experimentation with such bans.

This, in turn, is likely to trigger litigation by out-of-state generators and

transporters challenging the district bans."

A district must "reconsider and, if appropriate, amend its solid
waste management plan at least once every five . . . years* *^^ by following

the substantive and procedural requirements applicable to initial plans. ^^

If a district fails to submit a proper district plan — either by failing
to submit any plan at all or by submitting a deficient revised plan after

receiving written comments from the IDEM commissioner on changes
required to make the district plan acceptable"^ — the IDEM commissioner
adopts a solid waste management plan for the district. "^^

2. New, Complicated and Powerful Local Governmental

Entities. —

a. Types of solid waste management districts

The Act"*^ places the burden on each of Indiana's ninety-two counties,'*^

on or before July 1, 1991, to either (a) "[j]oin with one ... or more

other counties in estabUshing a joint solid waste management district

37. See, e.g.. Government Suppliers Consolidating Serv., Inc. v. Bayh, 734 F.

Supp. 853 (S.D. Ind. 1990) (Out-of-state companies engaged in the business of hauling

solid waste by truck to permanent disposal sites brought an action challenging an Indiana

law imposing certain requirements on haulers who dumped solid waste in landfills located
in Indiana. On the companies' motion for temporary restraining order, converted into a
motion for preliminary injunction, the court held that although the companies were not

entitled to a preliminary injunction against the statutory provision imposing an allegedly

discriminatory tipping fee on trash dumped in Indiana landfills, and the companies were
not entitled to a preliminary injunction against the provision requiring haulers to certify

from where the largest part of the solid waste was generated, companies were entitled to

a preliminary injunction against the requirement that a health officer from the foreign

state generating the waste certify that the waste contains no hazardous or infectious waste.).

See also Government Suppliers Consolidating Serv., Inc. v. Bayh, 753 F. Supp. 739 (S.D.

Ind. 1990) (out-of-state certification requirement and tipping fees held unconstitutional as

a violation of interstate commerce).

38. Ind. Code § 13-9.5-4-1 1(a) (Supp. 1990).
39. See supra notes 23-34 and accompanying text.

40. Ind. Code § 13-9.5-4-3(c) (Supp. 1990).
41. Id. § 13-9.5-4-10.

42. Id. § 13-9.5-2.

43. Query: Given the present practice of municipal collection and transport of a

significant portion of nonhazardous solid waste, would it not have made more policy
sense for the legislature to have crafted an approach similar to Pennsylvania's recent solid

waste legislation which requires that all of the state's municipalities pass recycling legislation

or face uniform state penalties for failure to meet the laws' standards and deadlines? See

53 Pa. Cons. Stat. Ann. § 4000.1501(a), (b) (Purdon 1989). See also Regional Note,
supra note 14, at 114.



796 INDIANA LAW REVIEW [Vol. 24:789

that includes the entire area of all the acting counties'* or (b) **[d]esignate

itself as a county solid waste management district.*'^ In the case of a

county choosing to designate itself a single-county district, the legal

mechanism for achieving this purpose is straightforward: the county must

pass an ordinance specifying its intent/^ However, counties choosing the

alternative option of forming a joint solid waste management district

must not only pass county-specific ordinances expressing their intent,

counties must also pass ordinances that "include the approval of an

agreement governing the operation of the joint district. "'*^ Moreover,

unlike the relatively simple formation of a single-county district, counties

that have decided to become part Of a joint district must submit their

respective enabling ordinances — incorporating the joint district agree-
ment — to the IDEM commissioner within thirty days of adoption.*^

Although a county's decision either to designate itself a single-county

district or to join with other counties in a joint district is of considerable

strategic importance, the Act allows municipal governments to freely

change their decisions. Specifically, the Act allows one district to merge

with another district,'** while authorizing a county to exercise the option

of withdrawing from a joint solid waste management district if the
county's withdrawal ordinance is enacted before the IDEM commissioner
approves the pending joint district plan.'*^

44. Ind. Code § 13-9.5-2-l(a) (Supp. 1990). A county's failure to comply with
this requirement before July 2, 1991 leads to the county's automatic designation as a

single-county district by the IDEM. Id. § 13-9.5-2-l(c).
45. Id. § 13-9.5-2-l(a).

46. Id. § 13-9.5-2-l(b) (emphasis added).

47. Id. § 13-9.5-2-3. Although there exists no express power for the IDEM Com-
missioner to disapprove or modify a joint district agreement, this power is probably

inherent given the authority of the Commissioner to disapprove district plans under Indiana

Code § 13-9.5-4-3(c).
48. Id. § 13-9.5-4-12. Merging districts must, however, strictly comply with the

specific statutory requirements that provide in pertinent part:

(a) A district may merge with one ... or more other districts after the adoption
of identical resolutions by the board of each district to be merged.

(b) Upon adoption of identical resolutions under subsection (a), a board for
the resulting merged district shall be established using the procedures set forth

in IC 13-9.5-2.

(c) A merged district must adopt its district plan within thirty . . . days after
the merger is completed and file the district plan with the commissioner.

(d) A district plan adopted under this section is considered approved unless the
commissioner notifies the district within thirty . . . days after the district plan

is filed with the commissioner that the district plan fails to comply with the

state plan.

Id.

49. Id. § 13-9.5-4-13. Even if a county timely withdraws from a joint district before



1991] ENVIRONMENTAL LAW 797

b. Composition of district boards

After one or more counties form a solid waste management district,

the Act requires that a board of directors be appointed.^° The board

of directors is determined by an elaborate representational scheme that

is apportioned among the executive and legislative branches of the coun-
ties and municipalities within the district.^^ The form of the respective

district boards follows their respective geographic configurations. The

statute provides for two basic structures: a single-county district board

and a joint district board. However, certain variations on these basic

structures are also permitted.

The basic organizational structure for a single-county district requires

that a board consist of the following: two members from the county
executive; one member from the county fiscal body; one member from
the executive body of the largest city or town in the district; one member
from the legislative body of the largest city or town in the district; one

member from the executive body of a smaller city or town in the district;

the IDEM Commissioner has approved a pending joint district plan, the county's withdrawal
will be ineffective under the Act if it does not follow the detailed follow-up regulations

of § 13, which provides in pertinent part:

(a) Before the district plan of a joint district is approved [by the IDEM
Commissioner], a county may by ordinance of its executive remove itself from
the joint district and:

(1) Designate itself as a country district;

(2) Join into a joint district; or

(3) Join with one ... or more other counties in establishing a new joint

district.

(b) If a county designates itself as a county district ... the board appointed

for the new county district under IC 13-9.5-2-4 must file a district plan with

the commissioner within ten (10) days after the passage of the ordinance. If

the district plan is not filed, the removal of the county from the joint district

is not effective.

(c) If a county desires to join into a joint district . . . , the board of the other

district must approve the addition of the county to the district, amend its district
plan to include the additional county, and file the amended district plan with

the commissioner within thirty (30) days after the addition of the county to the

district. If the district plan is not filed, the removal of the county under subsection

(a) is not effective.

(d) If a county desires to join in establishing a new joint district under subsection
(a)(3), the board of the new joint district must, within thirty . . . days after
the adoption of an ordinance establishing the joint district and approving an

agreement governing the operation of the joint district, file a new district plan
with the commissioner. If the district plan is not filed, the removal of the county

under subsection (a) is not effective.

Id.

50. Id. § 13-9.5-2-4.

51. Id. § 13-9.5-2.



798 INDIANA LAW REVIEW [Vol. 24:789

and one additional member of the county executive. '^ The basic organ-
izational structure for a joint district with only two counties requires

that a board consist of the following: one member from the county
executive of each participating county; one member from the county
fiscal body of each participating county; one member from the executive
body of the largest city/town in the joint district; one member from
the legislative body of the largest city/town in the joint district; executives

of each second-class city in the joint district; by agreement, additional

members appointed by the county executive — from among their mem-
bership — based on the county's population; and, in the event of an
even number on the joint district board, one additional member appointed
by the county executive of the most populous county in the district,

from among its membership."
One of the Act's more interesting and thoughtful organizational

mandates for solid waste management districts^"* is the requirement that
each district board ** appoint and convene a solid waste management
advisory committee of citizens, including representatives of the solid

waste management industry operating in the district, who are knowl-
edgeable about and interested in environmental issues."'^ These citizen

advisory committees have two broad legislative purposes: to **(1) [s]tudy

the subjects and problems specified by the [district] board and recommend

to the board additional problems in need of study and discussion, [and]

(2) [i]f invited by the board to do so, participate, without the right to

vote, in the deliberations of the board. "^^

52. Id. § 13-9.5-2-5(a). The Act provides for more complex arrangements in certain

instances. For a single-county district with two second class cities, the executive of each

city serves as a member of the district board. Id. § 13-9.5-2-5(b). In the case of a single-
county district with three second class cities, the district board requires inclusion of one

member from the county executive, two members from the county fiscal body, the executives
of each second or third class city, and one member from "the fiscal body of each town
appointed by the fiscal body." Id. § 13-9.5-2-5(d). Moreover, in the unique case of

Indianapolis/Marion County (having what the Act refers to as "a county having a

consolidated city"), if Marion County chooses to become a single-county district, its board

would be the Board of Public Works. Id. § 13-9.5-2-5(c).

53. Id. § 13-9.5-2-6. The Act provides for a variation on joint district membership

in the event of three or more counties comprising the district. In such a case, the counties

may enter into an "interlocal cooperation agreement" under Indiana Code § 36-1-7 regarding
the memberships and terms of office for the district board provided that all such board

members be "elected officials." Id. § 13-9.5-2-6(d).
54. Other organizational strictures for both single-county districts and joint districts

include term of office provisions, id. § 13-9.5-2-8(b), and required officers of the board,

id. § 13-9.5-2-9(b) (neither applies to Indianapolis/Marion County).

55. Id. § 13-9.5-2-10.

56. Id. § 13-9.5-2-10(a).



1991] ENVIRONMENTAL LAW 799

c. District powers

Once a solid waste management district is formed and a board of

directors is appointed, the Act provides for broad categories of gov-

ernmental powers to be exercised. These governmental powers fall into

three basic categories: (1) solid waste management powers, (2) fiscal

powers, and (3) solid waste management and planning powers.

The most important solid waste management powers include the

power to develop and implement a district solid waste management plan;

the power to plan, design, finance, construct, manage and maintain solid

waste management facilities; the power to acquire real and personal

property for solid waste management or disposal; and the power to hire

necessary personnel in accordance with an approved budget while con-

tracting for professional services. ^^ Key fiscal powers of solid waste

management districts entail the power to impose district fees on the

disposal of solid waste within the district; the power to disburse and

receive funds; the power to borrow money from the district planning
revolving loan fund; and the power to levy a district tax to pay for

solid waste management operating costs, subject to regular budget and

tax levy procedures. ^^ Significant general powers also allow districts to

sell or lease facilities; sue and be sued; borrow in anticipation of taxes;

and to adopt resolutions that have the force of law.^^ A district board
does not have the express power of eminent domain or the power to

"exclusively control" solid waste collection and disposal activities within

a district.^

In an expansive and cumbersome section, the Act authorizes district

boards to delegate various powers. First, the district may delegate au-
thority to board officers.*^ Second, the board may delegate its powers
to **any board or legislative body of a municipality," but the district

must ratify any exercise of taxing powers. Further, the delegation of

powers to a municipal board must be followed by approval of the

municipal legislative body involving tax and fiscal matters.^^ Third, del-

egation of a district board's powers **must contain reasonable standards

57. Id. § 13-9.5-2-ll(a)(l), -11(a)(6), -11(a)(9), -ll(a)(16). Incidental solid waste

management powers are the power to contract, the power to enter property for examination

and testing, and "[tjhe power to otherwise do all things necessary for the reduction,

management, and disposal of solid waste and the recovery of waste products from the

solid waste stream." Id. § 13-9.5-2-1 1(a)(7), -ll(a)(12), -ll(a)(17).

58. Id. § 13-9.5-2-1 1(a)(2), -11(a)(3), -11(a)(5), -ll(a)(14). Incidental district fiscal

powers pertain to authority to accept gifts, grants, and loans. Id. § 13-9.5-2-1 l(a)(13).

59. Id. § 13-9.5-2-1 1(a)(4), -11(a)(8), -ll(a)(19), -ll(a)(15), -ll(a)(18).

60. Id. § 13-9.5-2-1 1(b).

61. Id. § 13-9.5-2-12(b).

62. Id. § 13-8.5-2-12(a).



800 INDIANA LAW REVIEW [Vol. 24:789

and parameters within which the delegated powers may be exercised. "^^

3. New and Expansive Local Governmental Financing Tools. — In
addition to instituting solid waste planning^ and establishing new local
governmental entities to plan and manage solid waste,^^ the Act also

provides these new governmental entities with a variety of new tools to
finance waste management activities. Section 13-9.5-9 of the Act creates

a special taxing district within each solid waste management district to
provide solid waste management services to persons within the district.^

The special taxing district is conterminous with the particular territory

of the solid waste district.^''

a. Solid waste management fees

In addition to the power to impose soUd waste disposal fees to pay

for the expense of developing and implementing a district solid waste

plan,^* the Act also authorizes district boards to establish soUd waste

management fees.^^ These fees apply to persons owning real property

benefited by waste collection systems or waste disposal facilities. ^^ District

63. Id. § 13-9. 5-2- 12(c). A number of interpretational questions remain open re-
garding this section. Query: Is the delegation of authority to "any board or legislative

body of a municipality" limited by the geographic scope of a district? While such an

interpretation would conform to the structure and purpose of the Act, it would be wise

for the legislature to clarify this issue. Query: What are the implications of a delegation
of authority without "reasonable standards and parameters"? Would the exercise of
authority be ultra vires and, therefore, void, or merely voidable, depending on particular

facts and circumstances? Who would be authorized to sue to challenge grants of a board's
delegated powers?

64. See supra notes 10-41 and accompanying text.

65. See supra notes 42-63 and accompanying text.

66. IND. Code § 13-9.5-9-l(a) (Supp. 1990).
67. Id. § 13-9.5-9-10)). Examples of other taxing districts include park, sanitation,

flood control, thoroughfare, and redevelopment districts. Chapter 9 of the Act establishes

a new type of special taxing district under Indiana law: a solid waste facilities special
taxing district. Id. § 13-9. 5-9- 1(a). The structure and purpose of Chapter 9 authorizes the
districts to have the power to issue bonds to finance solid waste facilities and to levy an

unlimited ad valorem property tax to pay debt service. Id. § 13-9.5-9-3. As a result of
the ability of solid waste management districts to levy the tax, the bonds should be freely

marketable and sell at competitive interest rates.

68. Id. § 13-9.5-7. Revenue collected under this chapter is known as the "district
solid waste management fund" for the particular solid waste district. Id. § 13-9.5-7-2.

69. Id. § 13-9.5-9-2(a).

70. Id. The district solid waste management board may fix the solid waste man-
agement fees on the basis of the following:

(1) A flat charge for each residence or building in use in the waste management
district.

(2) On weight or volume of the refuse received.
(3) On the average number of containers or bags of refuse received.



1991] ENVIRONMENTAL LAW 801

boards may exercise reasonable discretion in adopting differing solid
waste management fee schemes based upon a variety of fiscal factors.^'

Solid waste management fees may be used, together with other revenues,
to pay for the following expenses: (1) solid waste management facilities*

costs; (2) solid waste management facilities* operation and maintenance

costs; and (3) principal and interest charges on district waste management

or revenue bonds.^^

b. Waste management district bonds

Boards are allowed to issue waste management district bonds^^ for

payment of costs of solid waste management facilities. ^"^ The solid waste

(4) On the relative difficulty associated with the collection or management of
the solid waste received.

(5) On any other criteria that the board determines to be logically related to
the service.

(6) On any combination of these criteria.
Id. § 13-9.5-9-2(b).

71. Id. % 13-9.5-9-2(d). These factors — which are subject to a discretionary
balancing test — include: **(!) [t]he cost of furnishing . . . [solid waste] services ... to
various classes of owners of property; (2) [t]he distance of the property benefited from

the facility; [and] (3) [a]ny other variations the board determines to be logically related

to the cost of the service." Id.

72. Id. § 13-9.5-9-2(g).

73. Id. § 13-9.5-9-3. The bond issuing process commences when plans and spec-

ifications are proposed according to the public bidding requirements of § 36-1-12 or a

resolution approving a request for proposals under § 13-9.5-8 has been adopted. Thereafter,

the board must adopt a resolution declaring that the "public health and welfare" and

the "public utility and benefit" would be served by constructing, modifying, acquiring,

or maintaining a solid waste facility. Id. § 13-9.5-9-3(b).

74. The term "facility" is quite broad:

"Facility" means any facility, plant, works, system, building, structure, im-

provement, machinery, equipment, fixture, or other real or personal property

of any nature that is to be used, occupied, or employed for the collection,

storage, separation, processing, recovery, treatment, marketing, transfer, or dis-

posal of solid waste.

Id. § 13-9.5-1-13. Therefore, "facility" includes more than just disposal facilities, such

as landfills and incinerators, but also includes recycling and composting facilities.

"Cost" is also broadly defined under the Act.

"Cost," as applied to a facility or any part of a facility, includes the following:

(1) The cost of construction, modification, decommissioning, disposal, or ac-
quisition of the facihty or any part of the facility.

(2) Financing charges.

(3) Interest before and during construction and for a reasonable period after

the construction as determined by the board.

(4) The cost of funding reserves to secure the payment of principal and interest
on bonds issued by the district.

(5) The cost of funding an operation and maintenance reserve fund.



802 INDIANA LAW REVIEW [Vol. 24:789

management district boards levy the special tax on real estate each year

in the amount necessary to pay principal and interest on the waste

management district bonds.^^ The waste management district bonds are

*' special obligations*' and not **in any respect" obligations of the counties

and municipalities that make up the district.^* Rather, the bonds are to
be payable out of a special tax levied upon all property of the district.^^

c. Revenue bonds

Solid waste management district boards may also issue revenue bonds
to finance the costs of solid waste facilities."^* A board must authorize
revenue bonds by resolution, and specify as part of the resolution that

the bonds are payable ** solely from and secured by a lien upon the
revenues of all or part of the facilities. *'^^ Like waste management district
bonds, revenue bonds are special obligations of the district and not a

debt of any local governmental entity.

d. Waste management development bonds

The Act allocates additional power to solid waste management district
boards to finance solid waste facilities by providing financing similar to

industrial development bond financing. Specifically, boards are authorized
to make direct loans to users or developers for the cost of acquisition,
construction, or installation of facilities, including real property, ma-

chinery, or equipment.*^ Development bonds need to be secured by the

pledge of one or more bonds or other secured or unsecured debt ob-
ligations of the users or developers.*'

(6) The cost of funding a major repair or replacement fund.

(7) Legal and underwriting expenses.

(8) Municipal bond insurance premiums.

(9) The cost of plans, specifications, surveys, and estimates of costs and revenues.

(10) Other expenses necessary or incidental to determining the feasibility or

practicability of constructing the facility.

(11) Administrative expense.

(12) Other expenses necessary or incidental to the construction, modification,

or acquisition of the facility, the financing of the construction, modification,

or acquisition, and the placing of the facihty in operation.

Id. § 13-9.5-1-6.

75. Id. § 13-9.5-9-3(h).

76. Id. § 13-9.5-9-3(f).

77. Id.

78. Id. § 13-9.5-9-4(a).

79. Id. § 13-9.5-9-4(c).

80. Id. § 13-9.5(a)(5).

81. Id.



1991] ENVIRONMENTAL LAW 803

e. District notes

The Act also empowers solid waste management districts to borrow

money by issuing notes pending receipt of grants or in anticipation of
the issuance of bonds. *^ District notes may be sold at public or private
sales. ^^ The maximum maturity of the notes is five years, and they are
payable from the proceeds of the anticipated grant or bond revenue. *"*

4. Recycling and Waste Reduction Incentives and Regulation. —
The legislature has delegated mandatory command and control authority
to the state solid waste management board to adopt rules **establishing

a date after which the disposal of recyclable materials in a final disposal

facility will be prohibited or, if disposal is necessary, restricted to the

greatest extent practicable.'*^^ The Act also provides a panoply of ec-
onomic incentives and study provisions to encourage recycling and waste

reduction activities. First, Indiana Code section 13-9.5-5 imposes a state
solid waste management fee beginning January 1, 1991, on the disposal

of solid waste in a final disposal facility in Indiana (such as a landfill,

waste-to-energy facility, or incinerator).^^ Revenue from the fund is paid

into the state solid waste management fund. Money in the fund will be
used to provide grants and loans to promote recycling within Indiana.*^

82. Id. The financing agreement between a developer or user and a district waste

management board must provide for payments sufficient to pay the district's debt service

on the bonds and may not exceed 40 years duration. Id. § 13-9.5-9-5(f).
83. Id. § 13-9.5-9-7(b).

84. Id. § 13-9.5-9-70)), (c). For general bond provisions dealing with matters such

as terms of issue, type of interest, redemption, reserves, maturity, taxability, security, and

other matters, see id. § 13-9.5-9-8.

85. Id. § 13-7-28-3. The "solid waste management board" refers to the pre-existing

state board established by Indiana Code § 13-1-12. "Final disposal facility" means "(1)

an incinerator (as defined in IC 13-7-1-13.5); or (2) [a] solid waste landfill." Id. § 13-7-

28-1. For purposes of the chapter, '"solid waste landfill' means a solid waste disposal

facility at which solid waste is deposited on or beneath the surface of the ground as an

intended place of final location." Id. § 13-7-28-2.

86. Id. § 13-9.5-5-1. The fee for soUd waste generated in Indiana is 50c; per ton.

The fee for solid waste generated outside Indiana is the greater of the following:

(A) The cost per ton of disposing of sohd waste, including tipping fees and

state and local govermnent fees, in the final disposal facility that is closest to

the area in which the solid waste was generated, minus the fee actually charged

for the disposal or incineration of the solid waste by the owner or operator of

the final disposal facility in Indiana.

(B) Fifty cents. . . .

Id. § 13-9.5-5-l(a)(2). Whether the out-of-state generation state disposal fee will pass

constitutional scrutiny under the dormant commerce clause analysis is a problematic issue.

See supra note 37.

87. IND. Code § 13-9.5-5-10?) (Supp. 1990). The owner or operator of a final
disposal facility will be responsible for collecting the fees and will receive as compensation



804 INDIANA LAW REVIEW [Vol. 24:789

In addition to the state solid waste management fee, the fund may also
receive appropriations from the legislature and gifts and loans.*®

Second, the Act also adds a new recycling promotion and assistance

fund.*^ The purpose of this provision is **to promote and assist recycling

throughout Indiana by focusing economic development efforts on bus-

inesses and projects involving recycling.'*^ Third, the Act creates man-

dates for state consideration of markets for new products made from
recycled materials.^^ Fourth, the legislation requires the state Department

of Commerce to consider the state economic development assistance's
potential environmental impact and to give priority to businesses and

industries that "convert recyclable materials into useful products or [that]

create markets for products made from recycled materials. **'2

Fifth, the Act renames the state energy development board the

** Indiana recycling and energy development board. "^^ The Act mandates
additional responsibilities of the board that include consideration of

projects creating markets and new products from recycled materials.'*
Sixth, the Act requires the IDEM to establish two new task forces: a
**packaging waste reduction task force"'^ and a "recycled paper task

force.*'^

In light of these overlapping recycling provisions in the Act, jux-

taposed with the mandatory state and regional solid waste planning

provisions discussed above,'^ the planning process will at first probably

an amount equal to 1% of the fees collected. Id. § 13-9.5-5-4. The fee does not apply
to the disposal of solid waste by a person who generated the solid waste and disposed
of it at a site owned by the person and limited to disposal of the person's solid waste.
Id. § 13-9.5-5-5.

88. The Indiana Department of Environmental Management will administer the
money in the fund. Grants and loans from this fund will probably concentrate on assisting
local governments and not-for-profit organizations in establishing recycling programs. Id.

§ 13-9.5-5-2.

89. Id. § 4-23-5.5-14 (1988 & Supp. 1990).
90. Id. § 4-23-5.5-14. Sources of money for the fund consist of appropriations

from the legislature, repayment of proceeds of loans made from the fund, gifts and
donations, and money from the soHd waste management fund. Id. § 4-23-5.5-150)). During
the 1990 legislative session, no state money was appropriated to either the state solid
waste management fund or the recycling promotion and assistance fund. Thus, all funding
for the initial year will have to come from the 50C per ton state solid waste disposal fee.
Regulations addressing the distribution of monies between the two funds would help clarify

and guide distribution policies.

91. Id. § 4-3-11-6.

92. Id. § 4-4-3-8.1.

93. Id. § 4-23-5.5-2(a).

94. Id. § 4-23-5.5-6.

95. Id. § 13-7-3-14 (Supp. 1990).

96. Id. § 13-7-3-15.

97. See supra notes 10-41 and accompanying text.



1991] ENVIRONMENTAL LAW 805

focus on ideas for recycling. **Recycling is popular. It allows community

groups, municipalities, and businesses to work cooperatively toward a
common goal. There are many attractive options to evaluate, and much
to learn. **^* However, as the July 1, 1992 deadline for preparation of

district sohd waste plans approaches,

the planning focus will naturally shift away ifrom recycling to
solid waste treatment and disposal. Community leaders will have
the political and legal responsibility to answer the tough questions

on long-term solid waste management. They must consider spe-

cific energy recovery, incinerator and landfill operations in detail.

This discussion is not popular or attractive, but it is as necessary

as the discussion on recycling.^

Specific recycUng and waste reduction policies that likely will be con-

sidered in the course of sohd waste planning in Indiana include curbside

pickup, closed loop recycling, user-fees, composting, mandated reduced

excess packaging, and household hazardous waste recycling programs. '^

5. Solid Waste Transportation Regulations. — Two important solid
waste hauling certification requirements are incorporated into the Act.

The first provision, section 13-7-22-2.7(c), requires a hauler who trans-
ports soUd waste to a final disposal facility in Indiana to present to the

owner/operator of the facility (1) a written statement in which the hauler

certifies under oath the Indiana county or the state in which the largest

part of the solid waste was generated, and (2) if the largest part of the

solid waste was generated outside Indiana, a document in which an

officer of the state or local government who has responsibility for
protection of public health certifies that the solid waste generated in

that state is not subject to regulation as a hazardous waste under federal

law or as an infectious waste under Indiana law.**'*

98. Indiana Recycling Coalition Newsletter No. 1 (Aug. 1990).

99. Id,

100. Id. See also The Institute for Local Self-Rell^nce, Indiana's Alternatives
TO Solid Waste Disposal (May 1990).

101. Ind. Code § 13-7-22-2.7(c) (Supp. 1990). The solid waste must not be "subject
to regulation as hazardous waste under the federal Solid Waste Disposal Act (42 U.S.C.

§§ 6901-6992k) or as infectious waste under Indiana Code section 16-1-9.7." Id. The
hauler certificate is not required under § 13-7-22-2.7(g) if the county executive or local

district board of the county where the disposal facility is located has entered into an

agreement with a governmental unit in a county in another state, but contiguous to Indiana,

and the hauler certifies that the largest part of the waste was generated in that governmental

unit, or if the IDEM Commissioner exempts solid waste generated in a contiguous county,
if the Commissioner determines that the disposal will not impair the long-term disposal

capacity of Indiana or the health and safety of the people of Indiana. Id. § 13-7-22-

2.7(h). Moreover, the hauler certificate requirements do not apply to disposal of waste



806 INDIANA LAW REVIEW [Vol. 24:789

The Act's second solid waste hauler certification requirement is in

section 13-9.5-11-1. '^^ This provision requires that after June 30, 1990,

a hauler disposing of waste in Indiana certify under oath the origin of

the largest part of the soUd waste by volume. Moreover, under this

section, after June 30, 1990, a hauler that collects waste in Indiana and

takes waste to a transfer station or final disposal facility outside Indiana

is required to maintain records that identify the county and state of

origin of the largest part of the solid waste by volume, and is also

required to file quarterly reports stating the location of the out-of-state

transfer station or disposal facility and the volume of waste from each

county and state taken to each facility. ^°^

6. Miscellaneous Solid Waste Mandates. — In addition to the solid
waste planning, management, and recycling provisions, the General As-

sembly enacted and the Governor signed a miscellany of new solid waste

laws during 1990. First, the legislature tightened administrative and

financial disclosure requirements in four separate bills. Portions of Public

Law No. 70-1990 require IDEM to designate ten of its employees as

by generators in a site owned by the generator and limited to the generator's use, i.e.,

'captive sites." Id. § 13-7-22-2.7(b).

Query: Does the burden on interstate commerce created by the hauler certification

requirement pass constitutional muster under the dormant Commerce Clause analysis? See
supra note 37.

102. Id. § 13-9.5-11-1.

103. Id. § 13-9.5-11-2. If the hauler picks up waste from other than the point of

origin (i.e., a transfer station), the hauler may obtain certification from the owner of the
transfer station of the waste's county and state of origin. Captive sites are exempt. Id.

§§ 13-9.5-11-3, -4. Query: Does the burden on interstate commerce created by the hauler

record provision comply with the dormant Commerce Clause? See supra note 37.
Two additional statutes passed by the Indiana General Assembly deal with other

solid waste transportation issues. Indiana Code Chapter 31 addresses municipal waste

transportation and requires municipal waste collection and transportation vehicles (including

trucks or rail cars used to transport solid waste from a generator or processing facility

to a processing facihty in Indiana) to be Hcensed by IDEM. Id. § 13-7-31-9. This provision
also grants IDEM power to inspect vehicles transporting municipal waste. Id. § 13-7-31-
11. Moreover, municipal waste collection and transportation vehicles transporting waste

from processing facilities must (1) bear a placard, stating that the vehicle is carrying

municipal wastes, and (2) be accompanied by a manifest stating the weight of solid wastes

transported, the processing facility from which the waste is transported, and the destination

and name of the transporter. Under this statute, a solid waste or processing facility in
Indiana may not accept a shipment of waste from a vehicle not licensed and not accompanied
by a proper manifest. Id. § 13-7-31-12.

Indiana Code § 16-1-28-13.5 specifies that trucks used to transport more than 4,000
pounds of solid waste to a landfill, incinerator, or transfer station may not be used to
transport food less than 15 days after transporting solid waste, unless properly sanitized.

Id. § 16-1-28-15.5. Under this legislation, the State Board of Health may adopt rules to
implement the law and to require documentation regarding transportation of food and

to establish procedures for sanitizing trucks. Id. § 16- 1-28- 13. 5(g).



1991] ENVIRONMENTAL LAW 807

landfill inspectors. '°^ The Act also requires permit applicants for haz-

ardous waste landfills, soHd waste landfills or transfer stations to assure

financial responsibility for closure and post-closure, and monitoring and

maintenance costs. ^°^ Likewise, Public Law 107-1990 prohibits IDEM
from issuing an **original permit" for the construction or operation of

a solid waste disposal facility unless the permit applicant submits an

audited financial statement indicating that the applicant's net worth is

at least $250,000 and swears or affirms that there are no outstanding

hens, judgments, or other obligations arising from the appHcant's vio-

lation of an environmental law.'^ Similarly, Public Law No. 19-1990
adds administrative requirements by specifying that the state solid waste

management board address detailed conditions in authorizing the issuance

of permits to control solid waste, hazardous waste, and atomic radiation

at hazardous waste facilities, incinerators, solid waste landfills, and

transfer stations in Indiana. *°^ Public Law No. 109-1990 concludes the

104. Id. § 13-7-22-3.

105. Id. §§ 13-7-22-3, -32. Financial responsibility under the legislation may be
established by any one or combination of the following legal means in an appropriate

amount: (1) trust fund agreement, (2) surety bond with a standby trust fund agreement,

(3) letter of credit with a standby trust fund agreement, (4) insurance policy with a standby

trust fund agreement, or (5) proof that the applicant meets a financial test established

by the state waste management board, in the event that the applicant "derives less than

fifty percent ... of the persons' gross revenue from waste management." Id. § 13-7-32-

5(b). The discretionary financial test may offer applicants an opportunity to evade the
more specific and rigorous financial assurances by creating multiple interconnected corporate

entities and having one entity that does not derive more than 50*^0 of its gross revenue

from waste management apply for the permit. The specific financial assurance provisions

arguably provide insufficient monetary protection against potential environmental problems

that may develop at various facilities. See id. § 13-7-32-6(a) (in the case of a solid waste
landfill or hazardous waste landfill the "greater of . . . $15,(XX) for each acre or part of

an acre" or "an amount determined by the [IDEM] Commissioner that is sufficient to

[properly] close the hazardous waste landfill or solid waste landfill. . . ."); id. § 13-7-32-

6(b) (in the case of a transfer station "the greater of . . . $4,000 for each acre or part

of an acre" or "an amount determined by the [IDEM] Commissioner that is sufficient

to [properly] close the transfer station. . . ."). The legislature should consider amending

these financial provisions by substantially raising the minimum dollar financial assurance
to more accurately reflect closure and monitoring costs of similarly situated facilities.

106. Id. § 13-7-22-2. Although this provision is sound and will provide a modicum
of financial protection to the public in the event that environmental problems arise at

the site, it is fundamental that an applicant could strategically file bankruptcy under the

federal bankruptcy laws notwithstanding technical insolvency. In the event of a bankruptcy

filing, the government would have an unsecured claim for cleanup expenses with the

possibility of claiming limited priority for remedial expenses deemed to be "administrative

expenses" by the bankruptcy court. See generally Environmental Protection: Law and
Policy 682-84 (F. Anderson, D. Mandelker & A. Tarlock eds., 2d ed. 1990).

107. Ind. Code § 13-7-10-1 (Supp. 1990). This section added an amendment to
existing legislation. The amendment expands the definition of "facility" to encompass "a



808 INDIANA LAW REVIEW [Vol. 24:789

miscellaneous additional administrative requirements enacted during the

1990 General Assembly. It requires applicants for permits concerning

solid waste, hazardous waste, and atomic radiation to submit a disclosure

statement with the permit application demonstrating the applicant's **good

character. "'°^ Moreover, this legislation compels applicants for solid waste

management facility permits to demonstrate a need for the facility in

the area in which the facility will be located. ^^

Second, the legislature created another category of miscellaneous

solid waste provisions that were passed into law during the 1990 General

Assembly that strengthen the regulation of asbestos removal workers

and asbestos contractors. Public Law No. 19-1990 generally requires that
persons who work on asbestos removal projects be properly accredited
or licensed. ''°

A third miscellaneous solid waste statute enacted during the review
period requires a retailer, wholesaler, or manufacturer of lead acid

batteries, upon selling new lead batteries, to accept used lead batteries
from its customers. •" This legislation also requires retail establishments

in which lead batteries are sold to conspicuously post notices regarding

battery recycling laws of Indiana. ^'^ The new law specifically restricts
lead battery disposal practices and establishes a criminal offense for

violation of the provisions."^

The fourth significant miscellaneous solid waste legislative enactment

during the last General Assembly requires IDEM to develop an infor-
mational clearinghouse on various environmental topics and to assist in

the development of public educational programs on alternatives to landfill

disposal."^ Fifth, the legislature also requires that operators of outdoor

waste tire sites must obtain a permit. This legislation also subjects the

waste tire storage operator to state inspections."^

structure or area of land used for the disposal, treatment, storage, recovery, processing,

or transferring of solid waste, hazardous waste, or atomic radiation" and specifically

includes the generic types of facilities mentioned in the text by way of nonexclusive

example. Id. Therefore, the practical effect of this amendment will be to require the state
Solid Waste Management Board to promulgate rules prescribing standards for a wide
panoply of solid waste facilities in the state.

108. Id. § 13-7-10.2-3.

109. Id. § 13-7-10-1.5. This localized need assessment may be subject to constitutional
attack for violation of the dormant Commerce Clause doctrine. See supra note 37.

110. IND. Code § 13-1-1-24 (Supp. 1990).
111. Id. § 13-1-15.

112. Id. § 13-1-15-6.

113. Id. § 13-1-15-7.

114. Id. § 13-7-3-14. The mandated environmental topics include the following:

Source separation, recycling, composting, solid waste minimization, solid waste reduction,

hazardous waste minimization, and hazardous waste reduction. Id.

115. Id. §§ 13-7-23-7, -10. As used in the statute, waste tire storage sites subject



1991] ENVIRONMENTAL LAW 809

The sixth miscellaneous solid waste bill enacted provides a price

preference for state agency purchases of supplies that contain recycled

materials."^ Specifically, state agencies must give a price preference of

ten percent over competing non-conforming supplies when at least one

of the following descriptions is fulfilled:

(1) At least fifty percent ... of the volume of the original

components of the supplies consisted of recycled materials.

(2) The cost of purchasing recycled materials constituted fifty

percent ... of the cost of producing the supplies.

(3) A percentage by weight or volume of recycled materials
which [IDEM] determines by rule is eligible for procurement

preference . . . .^"

Seventh, the 1990 General Assembly also enacted new legislation
addressing changes to the responsible property transfer laws.*'^

B. Pollution Prevention

As a complement to the public information clearinghouse mandate
established in separate legislation during the 1990 General Assembly, ^'^

Public Law No. 105-1990 creates the division of pollution prevention
and technical assistance within IDEM.'^^ Perhaps the most significant

component of this important new law is the expansive definition of
"pollution prevention" that governs the activities addressed in the statute:

(a) "Pollution prevention'* means the employment by a business

of a practice that reduces the industrial use of toxic materials

or reduces the environmental . . . waste[s] without diluting

or concentrating the waste before the release, handling,

storage, transport, treatment, or disposal of the waste. The

term includes changes in production technology, materials.

to regulation are sites **at which five hundred ... or more waste tires ... are accumulated

in the outdoors at a single location . . . and . . . are not completely enclosed within a

structure or vehicle." Id. § 13-7-23-5. In addition, the legislation provides for various

exceptions for recycling programs and retail tire outlets under a certain size. Id. § 13-7-

23-6.

116. Id. § 5-17-6-20.

117. Id.

118. Id. §§ 13-7-22.5-1.5 to -22.

119. See supra note 114 and accompanying text.

120. Ind. Code §§ 13-7-27-2(2), -9-2-1 (Supp. 1990). The division of pollution
prevention and technical assistance does not take effect until June 30, 1993. Until that

date, an office of pollution prevention and technical assistance is constituted within IDEM.
Id.



810 INDIANA LAW REVIEW [Vol. 24:789

processes, operations, or procedures, or the use of inprocess,

inline, or closed loop recycling according to standard en-

gineering practices.

(b) The term does not include a practice that is applied to an

environmental waste after the waste is generated or comes

into existence or after the waste exists in production or

commercial operation.

(c) The term does not promote or require any of the following:

(1) Waste burning in industrial furnaces, boilers, smelters,

or cement kilns for purposes of energy recovery.

(2) The transfer of an environmental waste (otherwise known
as waste shifting) from one. . .environmental medium
to any of the following:

(A) Another environmental medium.

(B) The workplace environment.

(C) A product.
(3) Off-site waste recycling.

(4) Any other method of end-of-pipe management of en-
vironmental wastes, including waste exchange and the

incorporation or imbedding of regulated environmental

wastes into products or byproducts.*^'

The scope of "pollution prevention*' activities under IDEM juris-
diction favorably conforms to the rigorous approach recently recom-

mended to Congress by the U.S. Office of Technology Assessment (OTA)
which urged "a comprehensive, multimedia approach to reducing waste
going into the air, land, and water . . . .*'*22 indeed, Indiana's approach

to pollution prevention — in OTA parlance — adopts **a new highly
visible waste reduction program" '^^ by requiring IDEM to undertake a
variety of governmental activities including the following:

- Periodic "review [of] state environmental programs and pro-

jects for their ability and progress in promoting multimedia

industrial pollution prevention."

- "Encouraging regulatory flexibility to afford businesses the

opportunity to develop or implement pollution prevention

technologies and practices."

121. Id. § 13-9-1-14.

122. U.S. Congress, Office of Technology Assessment, Serious Reduction of
Hazardous Waste: For Pollution Prevention and Industrial Efficiency 4 [hereinafter
OTA Report]. See also Blomquist, Beyond the EPA and OTA Reports: Toward a
Comprehensive Theory and Approach to Hazardous Waste Reduction in America, 18
Envtl. L. 816 (1988).

123. OTA Report, supra note 122, at 40.



1991] ENVIRONMENTAL LAW 811

- Promoting coordination between governmental regulatory pro-

grams in all media of environmental pollution.

- **Develop[ing] policies and programs to reduce the generation

of municipal wastes, reduce the generation of household haz-

ardous wastes and pollutants, and reduce the use of toxic

materials in consumer products by means of industrial pol-

lution prevention.
'**2'*

A pathbreaking provision in the new statute allows the IDEM to
**seek unified reporting and permitting authority from the United States

Environmental Protection Agency with respect to federal toxic material,

waste management, and pollution control laws and regulations . . . .'*'^^

Section 13, article 9 also establishes a pollution prevention board, '^^

forms a safe materials institute at a public or private Indiana University

or not-for-profit corporation, '^^ authorizes the IDEM to make pollution
prevention grants to non-profit organizations,'^^ and establishes a com-

puter-based state information clearing house for pollution prevention. '^9

This legislation is reportedly ** considered one of the best three pieces

of pollution prevention legislation in the country by the National Toxic's

Campaign, **'^° an environmental lobby group instrumental in passing

similar laws throughout the country. A variety of additional legislative
proposals regarding pollution prevention in Indiana are being formulated

for the 1991 Indiana General Assembly. '^* Accordingly, it appears that

124. IND. Code § 13-9-1.3-5 (Supp. 1990).
125. Id. § 13-9-1.3-7.

126. Id. § 13-9-3-1.

127. Id. § 13-9-4-1. A novel directive to the Safe Materials Institute established
under the legislation requires the Institute to encourage business to develop what are

known as "multi-media pollution prevention plans." Id. § 13-9-5-1.

128. Id. § 13-9-2-10.

129. Id. § 13-9-2-9.

130. Undated Memorandum from Grant Smith, Indiana Toxic Action Campaign
Coordinator at 1 [hereinafter Smith]. The Toxic Action Project is a state-wide project of

the Citizens Action Coalition of Indiana.

131. The Indiana Toxic Action Project described some proposals in progress for

the 1991 General Assembly:

(1) [T]he Industrial Efficiency and Pollution Prevention Planning Act of 1991.

This legislation would require companies which file toxic release inventories under

the community right to know law to complete and submit to the [I]DEM pollution
prevention plans. Planning requirements now exist in twelve states and are
considered to be a middle ground between completely voluntary programs and

strictly regulatory programs. Planning requirements are designed to get business

to go [through] the steps of planning how to implement pollution prevention
programs at their facilities; and



812 INDIANA LAW REVIEW [Vol. 24:789

Indiana Code section 13, article 9 may evolve into a more comprehensive
statute in coming years.

C Underground Storage Tanks
More than 1.4 million underground storage tank systems exist in

the United States. These tanks store everything from petroleum products

to hazardous materials. Of these, the U.S. Environmental Protection
Agency estimates that approximately 189,000 tank systems are leaking. '^^

Spurred on by recent federal legislation'^^ and EPA rulemaking'^'*
regarding underground storage tanks, the Indiana General Assembly

enacted Public Law No. 13-1990,'^^ which made important changes in
the state's underground storage tank program.

(2) The Truth in Toxics Act. Much more detailed information is required by
state government and the public in determining the extent to which industry is

actually pursuing pollution prevention. This legislation would ask for through-

put information as to the use of toxic chemicals ... on a mass balance level.

Such reporting requirements exist now in New Jersey and Massachusetts. This
higher level of detail concerning the amount, use, and emissions of chemicals

has been in effect since 1986 in New Jersey and has not compromised the
competitive position of industry in the state.

Smith, supra note 130.

132. M. Hannbfan, Underground Storage Tanks: A Technical Paper 1 (1989).
133. In the 1984 Hazardous and Solid Waste Amendments (HSWA) to the Resource

Conservation and Recovery Act, Congress mandated the development and implementation

of a comprehensive regulatory program for underground storage tanks (USTs). This

legislation also required UST owners to notify states of the existence of their tanks. The
EPA was also required under HSWA to issue design, construction, installation, and
compatibility standards for new USTs and to issue operating regulations applicable to all
tank owners. See Pub. L. No. 89-272, Title II, §§ 9001-9010, as added Nov. 8, 1984;

Pub. L. No. 98-616, Title VI, § 601(a), 98 Stat. 3277-3287 (1984) (codified at 42 U.S.C.

§§ 6991-69911).

Subsequent federal legislation, the Superfund Amendments and Reauthorization Act
of 1986 (SARA), modified Pub. L. No. 89-272 by mandating that EPA issue regulations
requiring owners and operators of UST systems to maintain evidence that they are financially
responsible for corrective action and for compensating third parties for bodily injury and

property damage arising from operating a UST. See id., as amended Oct. 17, 1986, Pub.

L. No. 99-499, Title II, § 205(a), 100 Stat. 1696 (1986) (codified at 42 U.S.C. §§ 6991-

69911).

134. On September 23, 1988, EPA published the final technical standards for USTs.
40 C.F.R. §§ 280.1-280.74 (1990). On October 26, 1988, the final financial responsibility
regulations were published by EPA. See 40 C.F.R. §§ 280.90-280.111 (1990). Key re-
quirements of this federal regulation include the following: construction standards for new

USTs; upgrading of existing USTs over ten years to the performance level established for
new tank systems; spill prevention equipment standards; overfill prevention equipment

standards; reporting requirements; recordkeeping requirements; release detection require-

ments; spill containment and notification procedures; and minimal financial assurance

provisions. Id.

135. Indiana House Enrolled Act No. 1393, Pub. L. No. 13-1990, § 6 (codified at

IND. Code § 13-7-20-12 (Supp. 1990)).



1991] ENVIRONMENTAL LAW 813

First, the new state legislation amends current law to require the

IDEM and the state fire marshall to jointly operate **an underground
storage tank release detection, prevention, and correction program. **'^^

However, consistent with notions of cooperative federalism whereby

Congress and the U.S. Environmental Protection Agency set minimum
national standards for environmental protection programs, the recently

enacted Indiana legislation mandates that state standards and regulations

for underground storage tank (UST) programs *'must be no less stringent

than** federal standards. '^^

Second, the statute requires the state fire marshall to establish in-

dustry standards for persons involved in underground storage tank in-

stallation, testing, upgrading, and removal. ^^^ These standards also include

procedures for certification revocation.

Third, the new statute makes numerous changes to the funding of
the underground petroleum storage tank excess liability fund.'^^ These

changes focus on bonding authority,'"^ increased fee charges per tank,''**

loan guarantee procedures from the state rainy day fund,'*^ and estab-

lishment of a UST financial assurance board. ''^

D. Natural Resources

The State of Indiana administers, preserves, and protects a wide
range of natural resources. Given guidance by legislation and regulations

on matters including fish and wildlife, forestry, historic preservation and

archeology, nature preserves, outdoor recreation, surface mining recla-

mation, and other matters, the Indiana Department of Natural Resources

(IDNR), supervised by the Natural Resources Commission, pursues nu-

merous important responsibilities. '"^^ The General Assembly enacted a

136. iND. Code § 13-7-20-12(a) (Supp. 1990). The joint administration is to be
governed by rules adopted by the "fire prevention and building safety commission" with

IDEM and the state fire marshall operating the program "under a memorandum of
agreement . . . that must contain the specific duties of the department and the state fire

marshall." Id.

137. Id. § 13-7-20-12(b). Specific reference is made to "regulations adopted by the
administrator of the Environmental Protection Agency under 42 U.S.C. § 6991 through

6991i, as amended." Id.

138. Id. § 13-7-20-13.1.

139. Id. § 13-7-20-31.

140. Id. §§ 4-4-11-1 to -31.

141. Id. § 13-7-20-32.

142. Id. § 13-7-20-33.3.

143. Id. § 13-7-20-35.

144. The Indiana Chamber of Commerce describes the function of the Indiana
Department of Natural Resources as follows:

The Indiana Department of Natural Resources oversees various forms of con-



814 INDIANA LAW REVIEW [Vol. 24:789

variety of substantial, additional natural resource laws during the 1990

legislative session that will require IDNR to undertake further admin-
istrative responsibilities. First, Public Law No. 22-1990 allows the IDNR
director to impose civil penalties up to $1,000 per violation for certain

infractions of the state flood plain law.^'^^ Second, the new statute restricts
participation in IDNR*s surface coal mining reclamation bond pool

fund.*"^ Third, the statute directs the IDNR to formulate timber man-
agement plans for each classified forest within Indiana, ''*'' and toughens

certain procedures for granting and renewing surface coal mining and

reclamation permits.
^"^^

Fourth, the statute adds to the IDNR's responsibilities in regulating

the impact of surface coal mines on certain historical and archeological

sites.
^"^^ Significantly, the new legislation provides for measures to mitigate

the effects of mining operations on important archeological sites while

liberalizing the types of information the agency must consider in assessing

the archeological significance of proposed mining sites. '^°

Fifth, the legislation authorizes the Natural Resources Commission

to designate, by rulemaking, various Indiana streams to be **recreational

streams. '*^^' Moreover, the new statute permits the IDNR to conduct
onsite investigations and to issue temporary restraining orders to stop

water withdrawals by certain water pumping installations if an owner

of a lake, by riparian right, complains of a significant drop in the level

of the fresh water lake.^"

servation and manages the state's mineral and wildlife programs, flood control

and water resources, recreational areas and historical landmarks. It has a director

appointed by the governor; three deputy directors and a full-time staff of 1,510.

The Department has jurisdiction over all public and private waters in the state

as well as adjoining lands necessary for flood control purposes. All works of

any flood control nature must be approved by the Natural Resources Commission.

It has certain regulatory functions, including approval of construction and the

floodways of rivers and streams; inspection and enforcement of maintenance

and repair of dams, levees, dikes and floodwalls; approval of work to alter

shoreline or beds of public freshwater lakes; review of plans for reconstruction

or construction of drainage ditches, and removal of minerals and withdrawal

of water from navigable waters.

Indiana Chamber of Commerce, Here is Your Indiana Government 17 (1987).
145. IND. Code § 13-2-22-21 (Supp. 1990).
146. Id. § 13-4.1-6.5-4.

147. Id. § 6-1.1-6-16 (1988 & Supp. 1990). This section changes prior law, which
simply required that owners or operators of classified forest follow "minimum standards
of good timber management prescribed by the Department of Natural Resources." See
id.

148. Id. § 13-4.1-4-5.1 (Supp. 1990).

149. Id. §§ 13-4.1-3-3.1, -4-3.1.

150. Id.

151. Id. §§ 13-2-33-4, -5.

152. Id. §§ 13-2-2.6-9 to -12.



1991] ENVIRONMENTAL LAW 815

E. Water Pollution

Two significant legislative changes in Indiana water pollution control
law occurred as a result of legislation enacted during the 1990 General

Assembly. The first change apparently provides for more protection of

the state's diverse water bodies. Public Law No. 19-90 addresses fresh-
water pollution concerns due to the 1988 oil spill caused by a storage

tank's failure on the Monongahela River. ^^^ The statute requires the state

water pollution control board to adopt rules directing the construction

of secondary containment structures at facilities in which hazardous

materials are stored or handled. ^5"* Importantly, ** secondary containment

structure" is defined as **a structure or part of a structure that prevents

or impedes a hazardous material that is released accidentally from entering

surface water or groundwater."'^^ Moreover, the legislature has specif-

ically delegated power to the board to require the **development by the

owner or operator of each facility at which hazardous materials are

stored or handled of a plan for responding to the release of a hazardous

material at that facility. "'^^ The exemption provisions of this statute,
however, arguably go too far in requiring the board to adopt generic

exemptions from secondary containment structures in planning require-

ments for expansive categories of facilities that should be regulated by

the state.'"

153. Id. § 13-1-3-19.

Supplies of drinking water to some 23,000 residents of suburban Pittsburgh,

Pennsylvania, were cut off after a storage tank at Floreffe, Pennsylvania, spilled

about 3.3 million liters (860,000 gallons) of diesel oil into the Monongahela

River on January 2 [1988]. The oil slick spread into West Virginia, and by

January 10 it was 77 km (48 mi) long and had reached Steubenville, Ohio. The
oil was eventually cleaned up by a combination of inflatable booms with deep
skirts, activated carbon, and bentonite.

Britannica World Data Annual 197 (1989).
154. IND. Code § 13-l-3-19(d)(l) (Supp. 1990).
155. Id. § 13-l-3-19(d).

156. Id.

157. Id. § 13-l-3-19(e). The pertinent exemption language provides:

The rules adopted under this section must provide exemptions for the following:

(1) A facility that is subject to similar requirements under other administrative
rules or under state law, federal law, or federal regulation.

(2) Hazardous materials that are stored or transferred as products packaged

for distribution to and use by the pubUc.

(3) An aboveground storage tank that is used to store oils or petroleum products
and that has a capacity of not more than six hundred sixty (660) gallons.

(4) Tanks subject to regulation adopted by the administrator of the United

States Environmental Protection Agency under 42 U.S.C. § 6991 through

699 l(i), as amended.

(5) Tanks subject to IC 13-7-20.

Id.



816 INDIANA LAW REVIEW [Vol. 24:789

The second change in state water pollution control law during the

survey period creates the prospect of less protection of Indiana waters.

Public Law No. 106-1990 allows the water pollution control board to
grant a variance from a water quality standard for a maximum period
of five years, or when the permit expires, whichever is longer. ^^* Prior

to this statute, the maximum permissible period for all variance appli-
cations before the water pollution control board was one year.'^'

In light of the primacy of water quality standards in maintaining

ambient water standards for designated uses,'^ it is surprising that this

statute allows such significant extensions of variance timeframes, even

if the prior one-year variance time limitation arguably created admin-

istrative problems in reviewing or modifying NPDES permits.'^* Indeed,
as Professor William H. Rodgers, Jr. observed, although one might

expect to find "moderating influences*' in **a world of universal con-

straint and ubiquitous violation [of] water quality standards, *'**^^ there

needs to be "legal limits to this pattern, especially for violators who
choose to defend [their non-compliance] on the ground that the standard

should conform to their practice. '*'^^

158. Id. § 13-7-7-6 (1988 & Supp. 1990).
159. Id. § 13-7-7-6(a) (1988), amended by id. § 13-7-7-6 (Supp. 1990).
160. The terms water quality criteria and water quality standards often are used

synonymously. . . . Water quality criteria can be defined as ambient water stan-

dards, or legal expressions of permissible amounts of pollutants allowed in a

defined water segment. This formulation typically appears in one or both of

two forms: quantitative and descriptive. Examples of quantitative criteria are:

not less than 5 parts per million of dissolved oxygen or more than 500 micrograms

per liter of dissolved solids or more than 200 fecal coliforms per 100 milliliters

of water. Examples of descriptive criteria are: Surface waters must be "free

from floating debris, scum and other floating materials attributable to municipal,

industrial or other discharges of agricultural practices in amounts sufficient to

be unsightly or deleterious."

Rodgers, supra note 1, at 243 (footnote omitted).

161. National Pollution Discharge Elimination System (NPDES) permits "are for
fixed terms not exceeding five years." 33 U.S.C. § 1342(b)(1)(B). See 40 C.F.R. § 122.46

(1990).

162. Rodgers, supra note 1, at 255.

163. Id. at 256 (footnotes omitted). Professor Rodgers continues his analysis on

this point and analyzes the New York case of Koch v. Dyson, 85 A.D.2d 346, 448
N.Y.S.2d 698 (1982) to advance his argument. In Koch,

a power plant anticipated discharges into water already exceeding the thermal

pollution standards. Granting of a variance was upheld without noticeable ag-

onizing. Had the issue arisen under the Clean Air Act, by contrast, the legal
problem would be called nonattainment, the nongrowth prospects would be

conceded, and the new source would be obliged to buy, borrow, or beg to
partake of this fully allocated resource.

Rodgers, supra note 1, at 256 (footnotes omitted).



1991] ENVIRONMENTAL LAW 817

F, Pesticides

Public Law No. 113-1990 largely consists of a series of technical
amendments to preexisting pesticide regulatory standards in Indiana.*^

A few amendments will result in significant legal changes in this important
policy area.

Indiana Code section 15-3-3.5-18.1 expands current pesticide law to
make it unlawful to distribute an unregistered, adulterated, or misbranded
product. '<^^ Moreover, the state chemist — as the key regulatory official
involved in administering and enforcing the pesticide laws — is afforded
new enforcement powers under another section. The state chemist may
deny, suspend, revoke, or amend a person's pesticide registration for
violating pesticide regulation, or "may warn, cite, or impose a civil
penalty"*^ within the statutory confines. Related changes afford the

state chemist additional enforcement flexibility in sanctioning holders of

licenses, permits, or certifications for pesticide use in Indiana'^^ in the

event of violations of appropriate law.

III. State and Federal Environmental Case Law, 1989-90

Federal and state decisions involving Indiana environmental disputes

broke new ground during the survey period.'^ These decisions may be
usefully grouped into three subject areas: (1) hazardous and toxic subst-

ances, (2) administrative law, and (3) natural resources.

A. Hazardous and Toxic Substances

Several federal and state decisions rendered during the survey period

significantly contributed to the expanding and complex area of hazardous

and toxic substance law.

164. IND. Code §§ 15-3-3.5-2 to -26 (1988 & Supp. 1990).
165. Id. § 15-3-3.5-18.1 (Supp. 1990).

166. Id. § 15-3-3.5-18.3.

167. Id. §§ 15-3-3.6-14. -14.5 (1988 & Supp. 1990).
168. The United States Court of Appeals for the Seventh Circuit reviewed several

environmental matters within its territorial jurisdiction during the survey period. However,

none of these decisions focused on Indiana environmental disputes. See Wisconsin Elec.

Power Co. v. Reilly, 893 F.2d 901 (7th Cir. 1990); American Paper Inst., Inc. v. U.S.

Envt'l. Protection Agency, 882 F.2d 287 (7th Cir. 1989), revised by 890 F.2d 869 (7th

Cir. 1989); Rosenberg v. Tazewell County, 882 F.2d 1165 (7th Cir. 1989); National-

Standard Co. V. Adamkus, 881 F.2d 352 (7th Cir. 1989). Moreover, environmental case
law from other federal circuits and other state courts constitute persuasive authority for

environmental disputes in Indiana. See generally American Bar Association Section
Natural Resources, Energy and Environmental Law, 1989 The Year in Review
(1990).



818 INDIANA LAW REVIEW [Vol. 24:789

7. Citizens May Intervene and Substantially Expand RCRA Civil
Penalty Enforcement Action. — United States v. Environmental Waste
Control, Inc.^^^ was a landmark citizen enforcement action under the

Resource Conservation and Recovery Act of 1976 (RCRA)^'^° that resulted

in the highest penalty ever assessed in such actions.'^* United States

District Judge Robert Miller permanently shut down a previously licensed
hazardous waste landfill located in Fulton County, Indiana, otherwise

known as the "Four County Landfill. **'^2 Concluding that the site had

169. 710 F. Supp. 1172 (N.D. Ind. 1989). aff'd, 917 F.2d 327 (7th Cir. 1990),

petition for cert, filed, (U.S. Jan. 29, 1991) (No. 90-1229). See also 698 F. Supp. 1422

(N.D. Ind. 1988) (denial of defendants' summary judgment motion); 737 F. Supp. 1485

(N.D. Ind. 1990) (ruling on citizen group's attorneys' fees and costs) for other aspects

of the case.

170. 42 U.S.C. §§ 6901-6992 (1989).

171. See generally Note, Putting Recovery Back Into RCRA: An Effective Addition
to the Resource Conservation and Recovery Act, 25 Val. U.L. Rev. 59 (1990). I have

assisted the citizen group intervenor. Supporters to Oppose Pollution, Inc. (STOP), during

portions of the litigation by assisting lead counsel John C. Hamilton of South Bend,

Indiana. The views expressed in this analysis are my own and should not be ascribed to
either STOP or Mr. Hamilton.

In United States Environmental Protection Agency, Enforcement Accomplish-

ments Report: FY 1989 7-8 (1990) (emphasis in original), the EPA describes the litigation
as follows:

On March 29, 1989, EPA and STOP, Inc., a citizens' group, obtained a judgment
against Environmental Waste Control (EWC), Inc., for improper hazardous

waste management practices under the Resource Conservation and Recovery Act

(RCRA). EPA had alleged the following counts against defendants regarding
the operation of the "Four-County Landfill" in Fulton, IN: (1) operating the

landfill without legal authorization as a result of a false certification for com-

pHance with groundwater monitoring and insurance requirements; (2) inadequacy

in the existing system for monitoring possible groundwater contamination; (3)

violation of the minimum technology requirement designed to limit migration
of contaminants from the disposal area; and (4) the need for corrective action

at the site to remedy ongoing releases of hazardous waste constituents into the

groundwater site. This is one of the most favorable decisions out of a number

of cases EPA has successfully prosecuted in an initiative against owners and
operators who have failed to certify proper groundwater monitoring systems and
proper financial capability for hazardous waste management activity.

The ruling upheld EPA's assertion that the landfill lost its authority to legally
operate on November 8, 1985, after it falsely certified to EPA that the landfill
had met both groundwater monitoring and liability requirements. It also required

defendants to cease immediately receiving hazardous wastes for storage and

disposal at the site, and to implement closure upon approval of a closure plan.
In addition, it ordered the defendants to implement the corrective action plan

proposed by EPA. The judgment included the imposition of a civil penalty of
$2,778,000, which is the largest civil penalty assessed by a court under the

Resource Conservation and Recovery Act.
172. Environmental Waste Control, Inc., 710 F. Supp. at 1178.



1991] ENVIRONMENTAL LAW 819

lost its interim status because the owners and operators had filed a false

certificate of compliance with regulatory authorities, Judge Miller also

found that the landfill's groundwater monitoring system was inadequate

and that hazardous waste constituents had been illegally released into

the groundwater.'^^ In assessing a civil penalty of $2,778,000, '^"^ the court

summarized and simplified the overwhelming evidence of environmental

law violations at Four County Landfill:

Through the last day of trial, the Landfill had operated illegally

by continuing to accept and store hazardous waste with neither

interim status nor a final permit for 1,173 days, and each such

day constitutes a separate violation; on the EPA's first claim,
[the Landfill] faces civil penalties of as much as $29,325,000.
The Landfill placed hazardous waste in unlined trenches as part
of its lateral expansion for 468 days . . .; with each such day

viewed as a separate violation, [the Landfill] faces civil penalties

of as much as $11,700,000 on the EPA's second claim. [The
Landfill also] faces civil penalties for 773 days of violations, or

as much as $19,325,000 on the EPA's third claim.

In all, then, [the Landfill] faces civil penalties totalling $60,350,000,

even setting aside the additional penalties STOP [the citizen
group] seeks .... The imposition of $60,000,000 or more in

civil penalties would be wholly punitive and would far exceed

the scope of any proper deterrent purpose. On the other hand,
this landfill should have ceased operation . . . when it had no
lined cells in which to place hazardous waste in accordance with

the law. It did not cease operation then. . . . The Landfill should

have ceased operation . . . when its interim status was lost.
Again, it did not do so; it continued to operate, ultimately

earning income in excess of $10,000,000 per year. [The Landfill]

has been faced more than once with a choice between disobeying
the law or continuing its operations; each time [the Landfill]

chose to disobey the law and make more money. Substantial
penalties, albeit penalties well below $60,000,000 are warranted. '^^

173. Id. at 1225-28.

174. Within a few days of the order in Environmental Waste Control, Inc., 710

F. Supp. at 1248-55, the defendants filed for bankruptcy protection. See In re Environmental

Waste Control, Inc., 31 Envt. Rep. Cas. (BNA) 1462 (N.D. Ind. 1990) (denial of EPA's
motion to withdraw reference of disclosure statements and plan of reorganization); In re

Stephen Shambaugh, 30 Envt. Rep. Cas. (BNA) 2038 (Bankr. N.D. Ind. 1989) (denial of
motion to withdraw reference of cases to the bankruptcy court). That matter is still

pending. Recovery of the civil penalty and citizen suit attorney fees will largely depend

on the outcome of the bankruptcy litigation.

175. Environmental Waste Control, Inc., 710 F. Supp. at 1244-45.



820 INDIANA LAW REVIEW [Vol. 24:789

Judge Miller's eighty-three-page printed opinion is a veritable primer

on RCRA. The scholarly opinion is a substantive contribution to the
law of RCRA enforcement actions in numerous respects. First, the court
held that the EPA had authority under the statute to "proceed on the
issues of groundwater monitoring and financial assurance require-

ments.*''^^ This holding was based on a reading of section 6928(a) which,

according to the court, '* authorizes the EPA to bring an independent
enforcement action, even in a RCRA authorized state" •^'^ like Indiana.
According to Judge Miller's analysis, **[t]he sole restriction on this

enforcement authority is that the EPA must notify the state before
commencing any action. "'^^ However, **[s]ection 6928 'explicitly reserves

federal authority in the face of an authorized state program. '"^^^

A second significant aspect of the opinion is the expansive and
flexible manner in which the court dealt with the problem of citizen

suit notice under RCRA. The court found that the exception to the
usual sixty-day notice in RCRA actions was applicable because the citizen
group had made allegations concerning hazardous waste mismanage-
ment. '^° In Hght of these allegations, the citizen suit could **be brought

immediately after some notification" to the EPA, the IDEM, and the
Four County Landfill's owners and operators.'*' The court reasoned that

this result was justified because the rationale of using a notice period

as a
*

'non-adversarial period in which environmental conflicts might be

resolved administratively" did not apply in the case of environmental

disputes concerning hazardous waste management.'*^ The district court

concluded — in a flexible interpretation of litigation reality juxtaposed
with the requirements of the statute — that "those entitled to notice
under [RCRA] . . . had ample notice" of the citizen suit claims by virtue
of STOP'S motion to intervene.'*^ This motion, in turn, attached a
proposed complaint which fully set forth all allegations, and the motion

papers were served on the EPA, the IDEM, and the owners/operators
of the Four County Landfill. Moreover, the court interpreted 42 U.S.C.

176. Id. at 1186. The court also upheld the EPA's authority under 42 U.S.C. §
6928(h) to seek corrective action whenever it determines that "there is or has been a

release of hazardous waste into the environment." Id. at 1187.

177. Id. (citing United States v. Allegan Metal Finishing Co., 696 F. Supp. 275,

282 (W.D. Mich. 1988); United States v. Conservation Chemical Co. of 111., 660 F. Supp.

1236, 1244 (N.D. Ind. 1987)).

178. Id. (citing 42 U.S.C. § 6928(a)(2) (1988)).

179. Id. (quoting Wyckoff Co. v. Environmental Protection Agency, 796 F.2d 1197,
1201 (9th Cir. 1986)).

180. Id. at 1187-93.

181. Id. at 1189 (citing 42 U.S.C. § 6972(b)(1)(A)).

182. This motion attached a proposed complaint. Id. at 1190.

183. Id. at 1191.



1991] ENVIRONMENTAL LAW 821

§ 9613(i) — the section utilized by the citizen group to intervene in the
RCRA enforcement action — to have resulted in an **absolute" right
to intervene because the court had earlier ** placed no conditions upon

STOP'S intervention. '*'*'* Accordingly, the court found that no inde-

pendent ground of federal jurisdiction need be shown'*' and that such

intervention came within a federal court's ancillary jurisdiction.'*^

Third, the Environmental Waste Control court shed considerable

light on the defense of primary jurisdiction in citizen environmental

enforcement actions. Approving of dicta in another federal district court

opinion, the court noted that **if the primary jurisdiction doctrines apply

at all to citizens' claims, it should be invoked * sparingly where it would

serve to preempt a citizens' suit."'*^ Furthermore, Judge Miller pointed

out that "[t]estimony and exhibits introduced by STOP rang with frus-
tration at the ongoing alleged violations occurring at the Landfill and

[the citizens'] repeated attempts to get Indiana to act."'** The court

acknowledged that ready resort to the primary jurisdiction doctrine might

lead to situations in which **delay by the state or federal government

could frustrate the congressional interest of broadened enforcement" of

citizen suits. '*^ Thus, the court concluded that **[t]o deprive STOP the
opportunity to bring its claims . . . would thwart the legislative intent

behind the RCRA and CERCLA provisions for citizen interven-
tion '"^

184. Id.

185. Id. at 1192 (citation omitted).

186. Id. "The exercise of ancillary jurisdiction promotes judicial economy and

fairness. The EPA filed this enforcement action alleging that the defendants violated
provisions of RCRA. STOP'S additional claims, while different in nature, allege violations
of RCRA. ... All alleged RCRA violations are contained in the same lawsuit." Id.

187. Id. at 1195 (quoting Merry v. Westinghouse Elec. Corp., 697 F. Supp. 180,

182 (M.D. Pa. 1988)). EarHer in its opinion, the court catalogued four major distinguishable

principles encompassed by what is euphemistically referred to as the "primary jurisdiction

doctrine": "Primary exclusive jurisdiction, true primary jurisdiction, statutory exceptions,

and agency [immunity]." Id. at 1193 (citing United States v. L.A. Tucker Truck Lines,

344 U.S. 33, 39 (1952) (Frankfurter, J., dissenting) and Botein, Primary Jurisdiction: The

Needfor Better Court/Agency Interaction, 29 RtrroERS L. Rev. 867, 868 (1976)). According
to the Environmental Waste Control court:

"Primary exclusive jurisdiction" deprives the court of all power over a case

except the very Umited power ... to review an agency's determination. "True

primary jurisdiction" affords an agency the initial opportunity to consider a

legal issue or find facts, but the court retains the power to render a judgment.

Id. "EWC's assertions involving EPA's and STOP'S claims could only fall, if at all,
within the boundaries of these two doctrines." Id.

188. Id. at 1195.

189. Id. (summarizing Merry v. Westinghouse Elec. Corp., 697 F. Supp. 180 (M.D.

Pa. 1988)).

190. Id.



822 INDIANA LAW REVIEW [Vol. 24:789

Fourth, the district court in Environmental Waste Control amplified

vital principles regarding the use of collateral estoppel in complex en-

vironmental litigation in which prior administrative orders or consent

decrees may have preceded enforcement litigation. In addressing this
question, the court held that rules of collateral estoppel, rather than res

judicata, should govern the effect of an earlier state administrative action

involving the Four County Landfill.'^' The court then determined that

the earlier Indiana administrative proceeding did not have collateral

estoppel effect with respect to the EPA*s and the intervening citizen
group's claims under RCRA. The court based its holding on the failure
of the Four County Landfill's owners and operators to establish essential

issue preclusion parameters: that the enforcement suit at bar presented

the same issue that was resolved in the Indiana administrative proceeding;

that the administrative consent order in the Indiana proceeding was a

final decision on the merits; and that an identity of parties existed as

governing Indiana law requires. '^^

A fifth noteworthy dimension of the case is its analysis of the
persons liable for hazardous waste storage sites under RCRA.'^^ In a

matter of first impression, the court held that a "facility can have more

than one operator for RCRA purposes.'*'^'* Adopting the reasoning from
its earlier opinion in the case disposing of the defendants' summary
judgment motion, the court reasoned:

[I]t is difficult to believe that if three persons operated a haz-

ardous waste facility as a joint venture on property owned by
four other persons, only two of the persons (one as an owner,

another as an operator) could be liable for civil penalties under

. . . RCRA. Not every act will render a person an operator,
but the court is unpersuaded that no more than one person may
be an operator with respect to a given hazardous waste facility. ^^^

Sixth, the court also made new law in interpreting the meaning of
the EPA's minimal insurance coverage regulation for hazardous waste
sites. These regulations read as follows:

191. Id. at 1196-97.

192. Id. at 1197-1201.

193. The pertinent provisions of RCRA applying to "owners" and "operators" of
hazardous waste storage sites define "operator" as "the person responsible for the overall

operation of the facility," while "owner" is defined as "the person who owns a facility
or part of a facility." 40 C.F.R. § 260.10 (1989). The term "person" is defined at 42

U.S.C. § 6903(15) (1988).

194. Environmental Waste Control, Inc., 710 F. Supp. at 1202.

195. Id. (quoting United States v. Environmental Waste Control, Inc., 698 F. Supp.

1422, 1429-30 (N.D. Ind. 1988)).



1991] ENVIRONMENTAL LAW 823

(a) The owner or operator must have and maintain liabihty

coverage for sudden, accidental occurrences in the amount

of at least $1 million per occurrence with an annual aggregate

of at least $2 million, exclusive of legal defense costs.

(b) The owner or operator must have and maintain liability

coverage for non-sudden , accidental occurrences in the

amount of at least $3 million per occurrence with an annual

aggregate of at least $6 million, exclusive of legal defense

costs.
'^^

The court ruled on a number of novel insurance issues. Initially,

the district court held that certification of compliance with RCRA re-
gulations mandated both certification and actual compliance. '^^ In ad-

dition, the Environmental Waste Control court ruled that the explicit

Umits of an environmental liability insurance policy governed; a general

policy endorsement regarding the insurer's commitment to issue a cer-

tificate of liability insurance attesting to the site's compliance with federal

environmental financial responsibility obhgations did not operate to pro-

vide additional coverage for purposes of judging whether the owners

and operators complied with federal financial responsibility obligations.'^^

Moreover, Judge Miller found the EPA regulations to be clear and
unambiguous'^^ and that the EPA was not estopped from enforcing
regulatory minimum liability regulations as a result of alleged misin-
formation verbally supplied over EPA's **hothne" telephone inquiry
service. ^<^ The court also held that good faith efforts to obtain appropriate

RCRA liability insurance coverage, although pertinent to civil penalty
assessment, were not relevant in determining compliance with RCRA
financial responsibility requirements.^°'

Seventh, the court amphfied the meaning of EPA's groundwater
monitoring certification regulation.^^2 That regulation **require[s] that a

hazardous waste landfill's groundwater monitoring system consist of at

least four wells: one well . . . required to be installed hydraulically

upgradient from the limit of the waste management area, while the
remaining wells (at least three) [are] to be installed hydraulically down-

196. 40 C.F.R. § 265.147(a), (b) (1985) (emphasis added).

197. Environmental Waste Control, Inc., 710 F. Supp. at 1205. These certification

requirements are mandated by 42 U.S.C. § 6925(e)(2) (1988), which compels compliance

certification with financial responsibility and groundwater monitoring requirements.

198. Environmental Waste Control, Inc., 710 F. Supp. at 1206-07.

199. Id. at 1209-11.

200. Id. at 1211-12.

201. Id. at 1212-13.

202. 40 C.F.R. § 265.91(a) (1985).



824 INDIANA LAW REVIEW [Vol. 24:789

gradient at the limit of the waste management area.**^^^ The purpose of

this regulatory requirement was succinctly described as follows:

The groundwater monitoring system is intended to provide im-

mediate detection of any release of hazardous waste or hazardous

waste constituents into the groundwater. Prompt detection re-

duces the cost and effort involved in arresting the spread of

contaminants and restoring the quality of the groundwater.^^^

Eighth, the court reaffirmed its earlier partial summary judgment
against the defendants^^^ while concomitantly clarifying the **minimum

technology" provision of RCRA.^^** Ninth, the court determined that the

Four County Landfill's groundwater monitoring system failed to protect

the environment and human health as required by statute^°^ and EPA
regulation.^°* In its rationale on groundwater assessment, the court dem-

onstrated a sophisticated grasp of difficult scientific principles^^^ and an

admirable facility to focus on relevant scientific information while in-

sisting that the defendants bear the burden of demonstrating adequate

groundwater monitoring.

A tenth remarkable aspect of the Environmental Waste Control
decision is the court's review of enforcement claims of release of haz-

ardous wastes into the environment. The district court followed Seventh
Circuit precedent and gave the EPA regional administrator's determi-
nation of a hazardous waste release at the landfill a presumption of

regularity.^^^ The court also emphasized the importance of the required

203. Environmental Waste Control, Inc., 710 F. Supp. at 1213 (citing 40 C.F.R.

§ 265.91(a)).

204. Id.

205. Id. at 1221.

206. Id. at 1220-21. The court reasoned that:

42 U.S.C. § 6924 requires owners and operators of hazardous waste facilities

to meet certain minimum technology standards. Section 6924(o)(l)(A) required
owners and operators of existing landfills to use two more liners and with a

leachate collection system above and below the liners when conducting a ''lateral
expansion" with respect to waste received after May 8, 1985. Owners and
operators were required to notify the EPA of such lateral expansion at least
sixty days before receiving any waste for placement in that expansion. 42 U.S.C.

§ 6936(b)(2). EWC violated both these sections by failing to notify the EPA
of its intended lateral expansion and by placing hazardous waste in unlined cells

and trenches.

Id.

207. Id. at 1222 (citing 42 U.S.C. § 6925(e) (1988)).

208. Id. at 1225 (citing 40 C.F.R. § 265.90(a)).

209. See generally R. Patrick, E. Ford & J. Quarles, Groundwater Contami-
nation IN THE United States (2d ed. 1987); P. Birkeland & E. Larson, Putnam's
Geology (5th ed. 1989).

210. Environmental Waste Control, Inc., 710 F. Supp. at 1226.



1991] ENVIRONMENTAL LAW 825

self-monitoring by hazardous waste landfill owners and operators^'' and

carefully reviewed the presence of six carcinogens in the groundwater

beneath the landfill, several at levels exceeding maximum contaminant
levels (MCLs) under the Safe Drinking Water Act.^'^

,

Finally and most importantly, the court addressed remedies.^'^ Sub-

dividing its treatment of this issue into five parts — loss of interim
status, corrective action, civil penalty, permanent closure, and attorneys'

fees — the court candidly observed:
The matter of remedies presents the most troubling [of] issues

in this case. Some of the issues, such as the loss of interim
status and corrective action, present relatively little difficulty in

light of the proven violations. The issues of the amount of civil

penalties and the permanent closure sought by STOP, however,
present thorny questions. No party has cited cases addressing
those issues, and the court's research has disclosed none. This

court appears to write on a clean slate with respect to these

issues.^*'*

a. Loss of interim status

The Environmental Waste Control court concluded that **[Four County

Landfill] lost its interim status to operate ... on November 8, 1985
because it lacked the requisite insurance and an adequate groundwater

monitoring system. Having lost interim status and lacking a final permit

to operate a hazardous waste facility, EWC has no legal basis to continue
its operation of the Four County Landfill. "^^^ The court reasoned that
whatever form of prosecutorial discretion the EPA may exercise in
assessing consent orders short of a loss of interim status under RCRA,
when the EPA seeks a shutdown, the court should look to the statutory
language and structure that **provide that hazardous waste facilities may
operate only through a final permit ... or interim status, "^'^^ neither

of which the defendants possessed. Moreover, the court concluded that

the defendants' purported **good faith" in making the Part A certification
of interim compliance had no bearing on the remedy of loss of interim

status. Even if it did have bearing, the court held that the defendants

211. Id.

212. Id. at 1227.

213. Id. at 1240.

214. Id.

215. Id. (citing Vineland Chem. Co. v. United States Envt'l. Protection Agency,
810 F.2d 402 (3d Cir. 1987)).

216. Id. (citing 42 U.S.C. § 6925(e)).



826 INDIANA LAW REVIEW [Vol. 24:789

did not act "in good faith in failing to install a minimally adequate

groundwater monitoring system by the deadline date."^'^

b. Corrective action

As a remedy for the site's demonstrated release of hazardous waste

constituents into the groundwater beneath the landfill, the court ordered

that the corrective action plan, requested by EPA, be implemented by
the defendants.^'^ The court articulated the following rationale: **Time

is of the essence in remedying such contamination; to await the passage

of the contamination from the facility's boundaries simply compounds

the difficulties. [0]ne need not await a catastrophe before ordering

corrective action. "^'^ However, the court did not combine its order for

implementation of a corrective action plan with the citizen group's request

for the appointment of a special master to implement the plan because

**the proposed plan require[d] EWC to report to EPA frequently, "^^o

c. Civil penalty

In its most extensive discussion of remedial relief in Environmental

Waste Control, the court imposed a $2,778,000 civil penalty on the

defendants jointly and severally.^^* In reaching this penalty assessment,

the court rejected EPA's argument that pursuant to EPA's interpretation
of RCRA's civil penalty provision,^^^ **the [judiciary] should presume a
penalty of $25,000 per day to be reduced downward only upon a showing
of mitigating considerations. "^^^ Judge Miller noted that although the

EPA may adopt regulations for its own administrative assessment of
civil penalties, the agency **may not . . . impinge upon the discretion

Congress has afforded the courts. "^^ Thus, a district court has discretion

217. Id. at 1241. The court also concluded that although "Indiana's regulatory

agency found no insufficiency in the landfill's insurance coverage," and although 42 U.S.C.

§ 6926(d) provides that **[a]ny action by a State under a hazardous waste program authorized

under this section shall have the same force and effect as action taken by the Administrator

under this subchapter" this did not insulate the Landfill from RCRA hability "because
the state took no action." Id.

218. Id.

219. Id.

220. Id. at 1242.

221. Id. at 1242-45.

222. 42 U.S.C. § 6928(g) (1988).

223. Environmental Waste Control, Inc.y 710 F. Supp. at 1242 (citing Brief for

EPA, at 48 n.23 (citations omitted)).
224. Id. (citing Chesapeake Bay Found., Inc. v. Gwaltney of Smithfield, Ltd., 791

F.2d 304 (4th Cir. 1986), rev'd on other grounds, 484 U.S. 49 (1987)).



1991] ENVIRONMENTAL LAW 827

to assess civil penalties under RCRA^^^ with Congress's guidance of

discretionary factors in RCRA legislation.^^ These two statutory factors
are the seriousness of the violation and any good faith efforts to comply

with applicable requirements.

The court viewed defendants' * illegal operation of a hazardous waste

facility, "22^ "placement of hazardous waste in unHned trenches, "^^* and

actions leading to the groundwater monitoring system's ** continuing

inadequacies"^^^ to be serious violations of RCRA. Because the purpose
of civil penalties is to ** provide a meaningful deterrence without being

overly punitive, "^^° the court assessed penalties of $2,000 per day for

the various RCRA violations determined earher in the opinion. ^^" In
making this assessment, ^^^ the court concluded that the penalty should

exceed the amount imposed in United States v. T & S Brass and Bronze
Works, Inc. of $1,000 per day **for considerably less egregious con-

duct, "^^ but not more than $2,000 per day because such penalties '*would

be overly punitive. "^^'^

d. Permanent closure

The district court stated that **[n]o reported case has considered the

quantum of proof that should be required to close a facility permanently,

rather than simply order the facility's owners and operators to comply

with RCRA in the future and/or to take remedial action. "^^^ Writing
on a clean slate, the court sketched a tentative benchmark that something

more than a simple violation of RCRA must be shown. **Such relief

225. Id. (quoting United States v. T & S Brass and Bronze Works, Inc., 681 F.
Supp. 314, 322 (D.S.C. 1988)).

226. Id. (citing 42 U.S.C. § 6928(a)(3)).

227. Id. (citing 42 U.S.C. § 6928(a)(3)).

228. Id.

229. Id. at 1243.

230. Id. at 1244.

231. Id. (citation omitted).

232. Id. at 1245.

233. Id. (citing United States v. T & S Brass and Bronze Works, Inc., 681 F. Supp.
314 (D.S.C. 1988)).

234. Id.

235. Id. The court's annotated citations for this proposition stated:

See, e.g., United States v. Charles George Trucking Co., 823 F.2d 685 (1st Cir.

1987) (defendant ordered to disclose information pursuant to RCRA and CER-
CLA); Environmental Defense Fund, Inc. v. Lamphier, 714 F.2d 331 (4th Cir.

1983) (citizens obtained injunction requiring future compliance); United States

V. Clow Water Systems, 701 F. Supp. 1345 (S.D. Ohio 1988) (corrective action
order entered on summary judgment).

Id.



828 INDIANA LAW REVIEW [Vol. 24:789

should be granted only in unusual, perhaps even extraordinary, cases. ''^^^

The court recognized that mere technical violations — such as a failure
to provide sufficient insurance, failure to provide required information

to a regulatory body, or infrequent lapses of regulatory compliance —
would make imposition of a permanent closure remedy extremely un-
likely. ^'^ The overwhelming record of persistent violations, delays, and

misstatements to regulatory officials,^^* however, coupled with examples

of arguably reckless^''' and intentional conduct^ led the court to conclude

that ample reason for permanently closing the landfill existed. In the

final analysis, the district court concluded that the defendants* action

and inaction ** demonstrated an inability to operate a hazardous waste

facility in sufficient compliance with RCRA to achieve [the] congressional
purpose* *2'*' of eliminating **air pollution, subsurface leachate and surface

run off* from land disposal practices in the nation.^^^

e. Attorneys* fees

Instead of bringing suit under either of the citizen provisions of

RCRA243 or CERCLA,2^ STOP had technically intervened as of right
in the EPA*s enforcement action in Environmental Waste Control.^^

236. Id. at 1245-46.

237. Id. at 1246.

238. Id. at 1246-47.

239. The court stated:

EWC was forbidden from lateral expansion into unlined cells after May 8, 1985.
Despite the lack of double-lined cells with leachate collection systems, EWC
continued to accept hazardous waste after that date. EWC had no appropriate
cells until August, 1986. Perhaps most significantly, Indiana warned EWC re-
peatedly to apply cover to exposed hazardous waste. EWC did so sporadically,
if at all. As a result, hazardous waste lay uncovered, allowing carcinogenic
hazardous waste constituents to be swept from the site into the surrounding

area by wind and surface water.

Id. at 1246.

240. The court recognized:

At least one example undermines trust in EWC's representations. The EPA Task
Force examined the Landfill's waste analysis plan in June, 1986 and found that

parts of it were not being followed. The Task Force appears to have expressed

concern regarding the procedures for sampling and analyzing waste in barrels,

and EWC stated that it did not accept barrels in the future. Yet on October
11, 1988, more than two years later, [the citizen plaintiffs] videotaped Landfill

personnel pushing barrels into a working cell.

Id. at 1246-47.

241. Id.

242. Id.

243. See 42 U.S.C. § 6972(a) (1988).

244. See id. § 9659(a).

245. The citizen group intervened pursuant to 42 U.S.C. § 9613(i).



1991] ENVIRONMENTAL LAW 829

The court concluded, nevertheless, that "citizen groups intervening as

a matter of right [should] be able to recover their costs and attorneys*

fees."^'^ The court predicated this remedial holding on "the common
concern of RCRA and CERCLA with hazardous waste and the common
purpose of each Act's authorization of attorneys' fees to promote citizen

enforcement.*'^'^'' The court declined to estabHsh a reserve to pay costs

for post-trial and appellate matters without legal authority or an evi-

dentiary basis.
2^*^

2. Controversial Views of Indiana "Toxic Torts" Law by the Sev-
enth Circuit. — In City ofBloomington v. Westinghouse Electric Corp.y^^
the court affirmed the district court's Rule 12(b)(6) dismissal of Bloom-

ington's second amended complaint which was based upon theories of

nuisance, trespass, and abnormally dangerous activities for the alleged

actions of Monsanto Company in contributing polychlorinated biphenyls
(PCBs) contamination at a city-owned landfill, sewage treatment plant,

and connected sewers.^^^ According to the complaint, Monsanto had sold

PCBs to Westinghouse's Bloomington, Indiana factory where Westing-
house used the substances as an insulator in the manufacture of electrical

capacitors. "Westinghouse waste containing PCBs was hauled to various
Bloomington area landfills and small concentrations of PCBs also got
into the sewer effluent of the Westinghouse plant. "^^^

246. Environmental Waste Control, Inc., 710 F. Supp. at 1248.

247. Id.

248. Id.

249. 891 F.2d 611 (7th Cir. 1989).

250. Id. at 613.

251. Id. at 612-13. The court stated the elaborate procedural history of the case

worthy of full exposition — as follows:
In April 1981 the City of Bloomington, Indiana, and its Utilities Service Board

(collectively **City") sued Westinghouse Electric Corporation for $149,000,000

damages and equitable relief alleging Westinghouse discharged waste containing

polychlorinated biphenyls (PCBs) into Bloomington's sewers and into its Winston-

Thomas Sewage Treatment Plant. In October 1981 the City filed an amended

complaint adding Monsanto Company as a defendant and also covering the
presence of PCB waste at the City's Lemon Lane landfill. The amended complaint
sought $80,000,000 in damages and equitable relief from Monsanto. Proceedings

were stayed in October 1983 to permit Westinghouse and the City to negotiate

a settlement. The negotiations resulted in an agreement — referred to by the
parties in the lower court as a consent decree — approved by Judge DiUin in
August 1985.

In March 1986 the City filed its second amended complaint solely against

Monsanto, reasserting liabiHty under theories of public and private nuisance,

trespass, abnormally dangerous activity, and negligence, and adding a willful

and wanton misconduct count as well as three counts under the Racketeering

Influenced Corrupt Organizations Act (RICO). The ad damnum was $387,000,000.



830 INDIANA LAW REVIEW [Vol. 24:789

Because the case arose as a diversity suit, the Seventh Circuit applied

Indiana tort law to resolve the issue of whether the City had stated

various **toxic tort"^^^ causes of action.

a. Nuisance

A majority of the panel affirmed the district court's dismissal of
the City's public and private nuisance counts based on precedent from

a 1977 Indiana Court of Appeals decision which had stated that the

essence of the tort of nuisance is one party "using his property to the

detriment of the use and enjoyment of others. "^^ Yet, as recognized

in Judge Cudahy's dissenting opinion,^^'* the majority's reliance on one

state intermediate appellate court's isolated dicta to stand for an inflexible

On June 27, 1988, the district court handed down an opinion dismissing the
counts of the second amended complaint based on nuisance, trespass, abnormally

dangerous activity and RICO. Two days thereafter the district court denied leave
to file a third amended complaint and a week thereafter the case went to trial

on the negligence and willful and wanton misconduct counts contained in the

second amended complaint. The jury found in favor of Monsanto and on July

18, 1988, judgment was entered in its favor.

The City has appealed basically on the ground that the trial evidence presented

jury issues under the theories of nuisance, abnormally dangerous activity, and

trespass, and that the trial court therefore erred in granting the defendant's

Rule 12(b)(6) motion to dismiss these claims. If the City is right, it's entitled

to a new trial. We conclude, however, that the City had no viable claim against
Monsanto based on those theories and therefore affirm.

Id.

252. The field of toxic torts law has exploded in the past decade. During the last

ten years a number of important books, articles, and judicial opinions have been pubUshed

that attempt to define the nature of toxic torts. See generally M. Searcy, 1 A Gutoe
TO Toxic Torts § 1.01 (1989) ("Because of the scale and insidiousness of toxic injury,

the application of traditional legal principles has been inadequate to compensate the injured

victims in many cases. The legal system itself has therefore had to change in order to
accommodate itself to the challenge of compensating these victims. In the 1980s, the law

of toxic torts has come of age."); Toxic Torts and Product Liability: Changing
Tactics for Changing Times 11 (M. Brown ed. 1989) (toxic tort actions typically involve

plaintiffs who "contend that they have sustained actual or potential physical injuries,
emotional distress, property damages, and economic losses, which were caused by substances

in the air, ground and water"); Developments in the Law

.

— Toxic Waste Litigation, 99
Harv. L. Rev. 1458, 1602-1603 (1986) (footnotes omitted) ("Compensation of toxic waste

victims and deterrence of future personal injury stemming from exposure to hazardous

substances present a serious challenge to our society. Hazardous waste sites are increasingly

located in residential communities, and environmentally-induced cancers are now considered
a major public health problem.").

253. Westinghouse, 891 F.2d at 614 (citing Friendship Farms Camps, Inc. v. Parson,

172 Ind. App. 73, 76, 359 N.E.2d 280, 282 (1977)).
254. See id. at 618 (Cudahy, J., dissenting).



1991] ENVIRONMENTAL LAW 831

**requirement" of Indiana nuisance law,^" without conducting meaningful

review of Indiana's expansive statutory provision on nuisance,^^^ was

misplaced. The real reason for the Westinghouse majority's result was

probably based on a judicial policy assessment that it is inappropriate

to hold **manufacturers [like Monsanto] liable for public or private

nuisance claims arising from the use of their product subsequent to the

point of sale.""^ The majority noted the absence of Indiana precedent

on the question and referred to two federal court decisions applying

New Hampshire law for the proposition that ** manufacturers [are] not
liable for nuisance claims arising from the use of their product subsequent

to sale.
"258

b. Trespass

The majority opinion in Westinghouse also affirmed the trial court's
dismissal of the City's trespass claim against Monsanto.^^^ The court

premised its ruling on Indiana's adoption of the Restatement (Second)

of Torts rule that imposes liability for trespass if the actor ''intentionally

. . . enters land in the possession of another, or causes a thing or a

third person to do so . . . ."^^ This rule led the court to conclude that

"Monsanto did not deposit PCB wastes in City property nor did Mon-
santo instruct Westinghouse to do so. Therefore, any trespass was West-

inghouse's sole responsibility. "^^^ The court's analysis of intent, however,

is subject to criticism for omission of any discussion about the character

of an actor's conduct sufficient to trigger a finding of intent. It is

possible under traditional principles of tort law that the City could have

adduced evidence to prove that Monsanto's sale of PCBs to Westinghouse
in significant quantities over the years would have led Monsanto deci-
sionmakers to possess "substantial certainty" that the PCB wastes would
be discharged in public disposal facilities. Under the Restatement ap-

255. Id. at 614.

256. As quoted by Judge Cudahy, see supra note 254, the Indiana Nuisance Statute
states that "[wjhatever is injurious to the senses, or an obstruction of the free use of

property, so as essentially to interfere with the comfortable enjoyment of life or property,

is a nuisance, and the subject of an action." Ind. Code Ann. § 34-1-52-1 (Burns 1986).
257. 891 F.2d at 614 (footnote omitted).

258. Id. at 614 n.4 (citing City of Manchester v. National Gypsum Co., 637 F.
Supp. 646, 656 (D.R.I. 1986) (asbestos); Town of Hooksett School Dist. v. W.R. Grace
& Co., 617 F. Supp. 126, 133 (D.N.H. 1984) (asbestos)).

259. Id. at 615.

260. Id. (quoting Restatement (Second) of Torts § 158(a) (1965) (emphasis in

original)).

261. Id.



832 INDIANA LAW REVIEW [Vol. 24:789

proach to intent, ^^substantial certainty'* that a given act will result in

certain unlawful consequences triggers a finding of intent.
^^^

c. Abnormally dangerous activity

Although the court of appeals acknowledged that ** Indiana recognizes

the doctrine of strict liability stemming from carrying on an abnormally

dangerous activity,**^" the majority opinion upheld the trial court's

dismissal of this count based on lack of causation. The court stated

that the harm to the City's sewage treatment plant and landfill was not

caused by any abnormally dangerous activity of Monsanto, but by the

buyer's failure to safeguard its waste.^^

In dissent. Judge Cudahy criticized the majority for allowing the
trial court to **eschew [ ] clear Indiana precedent adopting section 520

[of the Restatement (Second) of Torts] and instead created its own
criteria, without any basis in Indiana law for assessing the adequacy of

the City's abnormally dangerous activity claim. "^^^ In closing. Judge

Cudahy observed:

It seems to me that, on the basis of the majority opinion, sellers
of toxic chemicals and other dangerous substances, simply by

virtue of their commercial status, become insulated from any

liability — except that cognizable under a negligence or product

262. See Restatement (Second) of Torts § 8A (1965). 'The line has been drawn
by the courts at the point where the known danger ceases to be only a foreseeable risk
which a reasonable person would avoid, and becomes in the mind of the actor a substantial

certainty." W. Keeton, D. Dobbs, R. Keeton, D. Owen, Prosser and Keeton on Torts
36 (5th ed. 1984) (footnote omitted).

263. Westinghouse, 891 F.2d at 615 (citing Enos Coal Mining Co. v. Schuchart,

243 Ind. 692, 188 N.E.2d 406 (1963); Erbrich Products Co., Inc. v. Wills, 509 N.E.2d

850, 853 (Ind. Ct. App. 1987)).
264. Id.

265. Id. at 619 (Cudahy, J., dissenting). Judge Cudahy interpreted Erbrich Products

Co. V. Wills, 509 N.E.2d 850, 853 (Ind. Ct. App. 1987) to require a court to decide on

a case-by-case basis whether the factors in Restatement (Second) of Torts § 520 militated

in favor of finding a particular activity as "abnormally dangerous." Westinghouse, 891

F.2d at 619 (Cudahy, J., dissenting). According to § 520:

Those factors are:

(a) Existence of a high degree of risk of some harm to the person, land or

chattels of another;

(b) Likelihood that the harm that results from [the activity] will be great;

(c) Inability to eUminate the risk by the exercise of reasonable care;

(d) Extent to which the activity is not a matter of common usage;
(e) Inappropriateness of the activity to the place where it is carried on; and

(0 Extent to which its value to the community is outweighed by its dangerous

attribute.

Restatement (Second) of Torts § 520 (1965).



1991] ENVIRONMENTAL LAW 833

liability theory — beyond the point of sale for any of their
activities occurring either before or after the sale. . . . This seems

to me a potentially dangerous precedent, [and] one inconsistent
with Indiana law.^^

The dissent was particularly troubled because there were extensive

allegations regarding Monsanto's involvement **in events subsequent to

the [PCB] sale ''^67

3. Federal Court Review of Remedial Action Proposed at a Su-

perfund Site is Barred. — In Schalk v. Reilly,^^ which involved another
aspect of waste problems addressed in City of Bloomington v. West-

inghouse Electric Corp. ,^^^ citizens brought actions to challenge a consent

decree between Westinghouse and the EPA **to clean up hazardous waste
sites in and around Bloomington, Indiana. "^70 Focusing its attention on

section 113(h)(4) of CERCLA, the United States Court of Appeals for
the Seventh Circuit held that the federal courts lack subject matter

jurisdiction to consider challenges to remedial actions that have not yet

been completed. ^^* Adopting the reasoning of the Eleventh Circuit, the

court agreed that

[t]he plain language of the statute indicates that Section 113(h)(4)

[allowing a citizen suit under 42 U.S.C. § 9659 to proceed in

certain circumstances] applies only after a remedial action is

actually completed. This section refers in the past tense to re-

medial actions taken under Section 104 or secured under 106.

Absent clear legislative intent to the contrary, this language is

conclusive.2^^

Moreover, the court was also persuaded that the ** relevant legislative

history supports the conclusion that federal courts are deprived of subject

matter jurisdiction where remedial action has not yet been completed. ''^^^

In addition, the court concluded that ample opportunity for public

comment and involvement was provided regarding Westinghouse*s pro-
posal to incinerate hazardous waste as part of necessary Superfund

remedial action. ^^^^

266. Westinghouse, 891 F.2d at 619-20.

267. Id. at 619.

268. 900 F.2d 1091 (7th Cir. 1990).

269. 891 F.2d 611 (7th Cir. 1989). See supra notes 249-67 and accompanying text.

270. Schalk, 900 F.2d at 1092.

271. 42 U.S.C. § 9613(h) (1988).

272. Schalk, 900 F.2d at 1095 (quoting Alabama v. EPA, 871 F.2d 1548, 1557
(11th Cir. 1989) (emphasis in original)).

273. Id. at 1096.

274. Id. at 1097. Less extensive portions of the opinion rejected the plaintiffs'



834 INDIANA LAW REVIEW [Vol. 24:789

4. Judicial Consideration of a Motion for Judgment on the Evidence

in a Toxic Tort Suit Must Not Compare Evidence. — In Sipes v. Osmose
Wood Preserving Co.,^^^ the Supreme Court of Indiana reversed the
court of appeais's and the trial court's approval of a Trial Rule 50

motion for judgment on the evidence.^^^ The case involved a toxic tort

suit against a chemical company for negligence, strict liability, and failure

to warn^^^ based on allegations that the plaintiff "became extremely ill

subsequent to sawing wood treated with a chemical compound of chro-
mium, copper and arsenic (CCA)"^^* manufactured by the defendant

corporation.

The supreme court recognized that although the court of appeals

had cited the correct test for ruling on a Trial Rule 50 motion,^^' the

court of appeals applied the law incorrectly in upholding dismissal of

plaintiff's punitive damage claims by weighing all the evidence relevant

to punitive damages.^^^ After reviewing a variety of evidence in the record

on the issue of whether the defendant corporation **consciously and

intentionally engaged in misconduct, knowing that such misconduct would

probably result in injury*' to others,^^' the supreme court articulated the

correct application of the law to the facts of the underlying motion:

Judgment on the evidence is proper only when there is no
probative evidence or reasonable inferences which could support

a judgment. [Plaintiff] presented probative evidence, though peo-

ple could differ as to the result on the issue of punitive damages.

Judgment on the evidence was therefore improper; the issue of

punitive damages should have been presented to the jury.^*^

argument that subject matter jurisdiction existed under the National Environmental Policy

Act (NEPA), 42 U.S.C. § 4321 (1988), to consider the EPA's failure to perform an

Environmental Impact Statement (EIS). The court rejected this claim, citing a United

States Supreme Court decision, Block v. Community Nutrition Inst,, 467 U.S. 340, 345

(1984), for the proposition that "review is not available when a federal statute specifically

precludes judicial review." Shalk, 900 F.2d at 1097. The court gave scant attention to

further assertions that plaintiffs' "Fifth Amendment rights to substantive and procedural
due process, meaningful access to the courts, and equal protection" were violated, char-

acterizing the arguments as "novel theories [that] rest on undesirable expansions of the

meaning of the Fifth Amendment. . . ." Id. at 1098.
275. 546 N.E.2d 1223 (Ind. 1989).

276. Id. at 1226.

277. Id. at 1224.

278. Id.

279. Id. at 1224-25. Jones v. Gleim, 468 N.E.2d 205 (Ind. 1984), describes the

appellate standard for reviewing grants of Trial Rule 50 motions.

280. Sipes, 546 N.E.2d at 1225.

281. Id.

282. Id. at 1226.



1991] ENVIRONMENTAL LAW 835

5. EPA May Regulate Sites with Injection Wells Under RCRA. —
In a remarkable decision at the intersection of several federal environ-

mental statutes, Circuit Judge Richard Posner wrote an opinion for the

United States Court of Appeals for the Seventh Circuit in Inland Steel

Co. V. EPA.^^^ Two steel companies — Inland Steel Co. and Bethlehem
Steel Corp. — challenged orders by the EPA requiring them to take
corrective action under RCRA at steel manufacturing facilities in Northern
Indiana.^*'* In rejecting their challenge, and upholding EPA*s corrective

action orders, the court of appeals held that RCRA regulation did not
exempt the deep injection wells used by the steel makers for disposal

of unwanted hazardous by-product liquid wastes.^^^ The linchpin of the

court's holding was that the RCRA exemption was inapplicable; although
the steel companies had water discharge permits for their injection wells,

they were not, according to the court, ''required by the Clean Water

Act to have . . . permit[s].**^**

Judge Posner' s opinion is a valuable addition to environmental

jurisprudence on two levels: first, general observations about hazardous

waste regulation and reality; and, second, specific analysis of ostensibly

conflicting environmental policies regarding different environmental me-

dia. On the general level, the court's opinion acknowledges the apparent
complexity of the problem presented: "The legal and technical matrix
in which this challenge is embedded is immensely complex . . . ."^^^ Yet,

in setting the stage for its analysis, the court indicated that the **com-

plexities are irrelevant" and that the court will resolve the issues by

"simplify[ing] ruthlessly. "^^^ In this Alexandrian spirit,^*' the court de-

scribed that the steel companies' real motivation was to attempt to avoid

the extremely expensive EPA corrective action orders on inactive waste
management units on their property, even though the EPA had no plans
to restrict the operation of the deep injection wells themselves.^^ More-

over, Judge Posner's opinion trenchantly points out the unrealistic nature

of the steel companies' argument that being issued past deep well injection

permits under the Clean Water Act makes them exempt from RCRA.

283. 901 F.2d 1419 (7th Cir. 1990).

284. The EPA's corrective action order was issued pursuant to 42 U.S.C. § 6924(u)

(1988).

285. Inland Steel Co., 901 F.2d at 1422.

286. Id. (emphasis in original).

287. Id. at 1420.

288. Id.

289. The Gordian Knot was an intricate knot tied by King Gordius of Phrygia and

cut by Alexander the Great with his sword after hearing an oracle promise that whoever

could undo it would be the next ruler of Asia. American Herifage Dictionary of the
English Language 568 (1969).

290. Inland Steel Co., 901 F.2d at 1421.



836 INDIANA LAW REVIEW [Vol. 24:789

According to the court, "[t]he companies have begged Indiana to continue

including the deep injection wells in the permits that it periodically

renews, though the state has no desire to include them because it does

not think that these particular wells" need a Section 402 permit.^'^

On the specific level of analysis, the Inland Steel decision is note-
worthy in several important respects. Initially, the court framed the

ostensible conflict between the Clean Water Act and RCRA as follows:

We are in a Statutory Cloud Cuckoo Land in which ** solid
waste'* expressly includes liquid wastes. 42 U.S.C. § 6903(27).

This same subsection, however, contains the statutory language

on which the companies do rely: **The term *solid waste' . . .

does not include . . . solid or dissolved materials in . . . industrial

discharges which are point sources subject to permits under"

Section 402 of the Clean Water Act, 33 U.S.C. § 1342. The

companies argue that the wastes that they pump into their deep
injection well is a point source within the meaning of the Clean

Water Act because pollutants might be discharged from them.

33 U.S.C. § 1362(14). If they are right on both counts and

therefore subject to the permit requirements of Section 402 of

the Clean Water Act, then the wells are not solid waste disposal

facilities and are not regulable under the Resource Conservation

and Recovery Act.^^^

In resolving this statutory tension between RCRA and the Clean
Water Act, the court engaged in pragmatic policy analysis. The court
noted that the Clean Water Act does not exempt from RCRA a form
of waste disposal that poses any environmental hazard to a part of the

environment other than to the navigable waters of the United States.^'^

The court observed that

[t]he purpose of the [RCRA] exemption ... is to avoid dupli-
cative regulation, not to create a regulatory hole through which

billions of gallons of hazardous wastes be pumped into the earth
without any controls provided they are pumped deeply enough
to endanger neither navigable waters nor the supply of drinking

water, the latter being protected by the Safe Drinking Water

Act, 42 U.S.C. §§ 300f et. seq,"^^

The court justified its focus on practicahty in the final paragraph
of its opinion:

291. Id. See 33 U.S.C. § 1342 (1988).

292. Inland Steel Co., 901 F.2d at 1421-22.

293. Id. at 1423.

294. Id.



1991] ENVIRONMENTAL LAW 837

Regulation is not a seamless whole, and when the seam reflects

a compromise we are duty-bound to honor it if constitu-
tional. . . . But we can find no indication that Congress intended
to exempt the owners of deep injection wells from regulation

under [RCRA], and the language of the Act does not so com-

pellingly prescribe such a result that we must do or die without
reasoning why. If the language does not compel, neither is it

deformed by the EPA's interpretation, to which we owe some,
perhaps considerable, deference . . . .^^

6. City's Decision to Place Landfill Off Limits for City Garbage

Upheld, — In a short but strongly worded opinion. Judge Easterbrook,
writing for the United States Circuit Court of Appeals for the Seventh

Circuit in Northside Sanitary Landfill, Inc. v. City of Indianapolisj^^

rebuffed the landfill's due process challenge to the city's decision not

to have its waste haulers deposit city garbage at the landfill in question.

In an opening salvo foreshadowing the result, the court opined: **Despite

constant reminders that a federal court is not a Board of Zoning Appeals,

persons disappointed with local land-use decisions persist in seeking new
avenues of review. "^'^ Examining the rationality of Indianapolis's action

under the rational basis due process test, the court concluded:

Indianapolis told waste haulers to stop using Northside because

chemicals from refuse dropped off there might seep into the

water supply. Leakage was the reason for its placement on the

National Priorities List. Indianapolis . . . also fears that as a

former user of Northside's services, it is potentially liable for

cleanup costs at the site, and it does not want these costs to

mount. These are rational grounds for governmental action.

Northside wanted the district court to hold a trial to determine

whether these are the real reasons Indianapolis put its dump off
limits, but governmental action passes the rational basis test if

a sound reason may be hypothesized. The government need not
prove the reason to a court's satisfaction.^'^

After disposing of the constitutional issue, the Seventh Circuit in-

dicated a willingness to consider appropriate sanctions in environmental

cases when a party "appears to be pursuing a common tactic of mul-
tiplying litigation in order to buy time — and perhaps to make matters
so costly for its adversaries that they will cave in."^^

295. Id. at 1424 (citations omitted).

296. 902 F.2d 521 (7th Cir. 1990).

297. Id. at 522 (citations omitted).

298. Id.

299. Id. at 523.



838 INDIANA LAW REVIEW [Vol. 24:789

7. Seller Not Liable for Breach of Warranty of Habitability for
Conveying Home Insulated with Urea Formaldehyde. — In the recent
Indiana Court of Appeals decision Kaminszky v. Kukuch,^^ the court

refused to hold a seller liable for breach of an implied warranty of

habitability in a toxic tort suit brought by a couple trying to have the

sale of their house rescinded after they discovered it was insulated with

urea formaldehyde.

Tibor and Judit Kaminszky purchased the house from Abel Kukuch

in 1985. Prior to the purchase, the Kaminszkys inspected the house three

times. During one inspection, they saw insulation similar to the insulation

in their previous home, but they did not specifically ask what type of

insulation the purchased house contained. Before the sale, Kukuch had
rented the house to tenants. In 1978, he hired a contractor to install

insulation. Kukuch testified that he rehed on the contractor's expertise

to use the best insulation available, and that he was not informed what

type of insulation was used.^°'

After the sale, the buyers experienced skin irritation and dizziness.

While cleaning the house, they discovered an access panel covered with

wallpaper, which on closer examination revealed a different type of

insulation than what they had earUer observed. Testing revealed that it

was urea formaldehyde foam insulation.
The Kaminszkys initiated suit alleging mutual mistake and that Ku-

kuch had breached the impHed warranty of habitability and failed to

disclose key facts.^^^ The buyers sought rescission and damages. The
Lake County Superior Court ruled in favor of the buyers, and the sellers

appealed. ^°^

The Indiana Court of Appeals noted that the implied warranty of

fitness in the sale of a new house has evolved in various judicial decisions
from liability for a builder-vendor to the immediate purchaser, and was

then extended to encompass subsequent purchasers.^^ The court com-
pleted its review by rejecting the buyers' argument that the seller should

have disclosed the presence of the formaldehyde insulation, finding that

the seller had relied on an installer to use the best insulation available. ^°^

B. Administrative Law

L EPA May Not Base Enforcement Action on a Memorandum

300. 553 N.E.2d 868 (Ind. Ct. App. 1990).
301. Id. at 869.

302. Id. at 870.

303. Id.

304. Id.

305. Id.



1991] ENVIRONMENTAL LAW 839

Not Promulgated Within Appropriate Notice and Comment Formalities.
— In United States v. Zimmer Products, Inc.,^^ the district court
invalidated the EPA's reliance upon an agency guidance memorandum
to estabhsh air violations for a paper manufacturer.^°^ After the Indiana

State Implementation Plan (SIP) had been approved by the EPA, the
agency distributed what it characterized as an * internal memorandum"
to the chiefs of the Air Programs branch in EPA regional offices. The
memorandum — authored by Richard Rhoads, Director of EPA's Control
Programs Development Division (Rhoads memo) — articulated the dif-
ficulties that the EPA had experienced in assuring compliance with air
emission limitations in the paper industry when using certain control
equipment. To alleviate these problems, the Rhoads memo instructed
EPA regional offices that units of emissions in mass volatile organic
compounds (VOC) per volume of coating ''cannot be used.''^°* Rather,
emission limitations **must be based on mass VOC per volume of solids
consumed. *'^^

Zimmer Paper Products runs a manufacturing plant in Indianapolis
which coats, prints, and cuts paper for food packaging over-wrap and

labels. After an EPA inspection in 1987, Zimmer was given a notice
of violation for failure to comply with Indiana's SIP; later, the EPA
commenced an action against Zimmer for injunctive relief and civil
penalties.^'^

In opposition to Zimmer's argument that the Rhoads memo was
actually being relied upon by the EPA as a legislative rule, the government
contended that the memo was a "policy statement" or "interpretative
rule" which clarified how to determine whether add-on controls, such
as incinerators, could conform with Indiana's emissions limitations. In

other words, the EPA argued that the memo was merely intended to
provide guidance with the emissions limitations and was not a substantive

change to those limitations.^*

•

The district court, on cross-motions for summary judgment, ruled
for Zimmer because the Rhoads memo made two substantive changes
in the regulations which had the effect of imposing more stringent
requirements on Zimmer. ^'^ First, the memo changed the requirements
under the applicable air emissions standard by requiring that emissions

be measured in units of "volumes of [coating] solids consumed" rather

306. 30 Env't Rep. Cas. (BNA) 2093 (S.D. Ind. 1989).
307. Id. at 2100.

308. Id. at 2094 (emphasis in original).

309. Id. (emphasis in original).

310. Id.

311. M at 2094-95.
312. Id. at 2100.



840 INDIANA LAW REVIEW [Vol. 24:789

than in pounds of VOC per gallon of coating solution.^'^ Second, the
court construed the memo to require that if add-on equipment was used
to achieve compliance, then the emissions must be equivalent to those

attainable by using a higher solids/low solvent coating.^''* Indeed, the

court concluded that EPA*s Rhoads memo represented **a real change
on the regulatory approach — recognized as such by agency officials
— rather than a mere interpretation of existing regulations.*'^'^

C. Natural Resources

1. The Department of Natural Resources is Entitled to Recover on

Behalf of the State a Full Measure of Natural Resources Damages During
Time of Illegally Imposed Injunction. — Because natural resources dam-
ages are taking center stage in current hazardous waste cleanup actions

under CERCLA,^'^ the Indiana judiciary's analysis in Ridenour v. Furness^^"^

is instructive. This case is but a part of a multi-year saga that has taken

place in Indiana between the director of the State Department of Natural

Resources (DNR) and commercial perch fishermen of Lake Michigan.
In the dispute that led to the appellate court opinion at bar, the fishermen

successfully enjoined the DNR's enforcement of an administrative ban
on gill nets.^'* On appeal, the DNR prevailed and the injunction against
enforcing the gill net ban was dissolved. ^'^

The DNR filed a new application in the trial court which sought
**to recover damages it [had] suffered because of the erroneous in-

junction. "^^^ In particular, **the DNR sought damages for the value of
the salmon and trout incidentally caught and destroyed by those fishermen

who continued to fish with gill nets during the period of the erroneous
injunction. "^2' Moreover, "the DNR sought as damages the amount of

313. Id. at 2096.

314. Id.

315. Id. at 2098.

316. See, e.g., Ohio v. Interior Dep't, 880 F.2d 432 (D.C. Cir. 1989).

317. 546 N.E.2d 322 (Ind. Ct. App. 1989).
318. Id. at 324.

Gill fishing nets are commonly deployed by commercial fishermen in order to
catch perch fish. A gill net also incidentally catches a variety of other fish as
well, however. Following several years of study DNR fisheries biologists concluded
that immature chinook salmon and lake trout dominated the catch of fish

incidentally caught and destroyed in the gill nets utilized by commercial perch

fishermen. As a result of the monitoring studies, the DNR promulgated an
emergency order , . . temporarily banning the use of gill fishing nets by com-

mercial fishermen. . . .

Id.

319. Id. (explaining the procedural history of the case).

320. Id.

321. Id.



1991] ENVIRONMENTAL LAW 841

profits on the harvest of perch fish earned by the fishermen while under

the protection of the injunction. '^^^^ After entering a partial summary
judgment against DNR on the perch profit element of damages, the
trial court heard evidence at a bench trial on the issue of the damages

sustained from the incidental catch of sport fish. On the basis of hatchery
production cost testimony and estimated mortality of the sport fish, the

trial court assessed natural resources damages in the amount of $1,906.16.^"

The DNR argued three issues on appeal: first, whether the trial court
correctly assessed damages for the sport fish destroyed during the period

of the erroneous injunction; second, whether the DNR is entitled to
recover fishermen's profits on the perch harvest during the erroneous

injunction; and, third, whether the trial court erred in failing to apportion

damages between the fishermen. ^^^^

a. Destruction of sport fish

Observing that **damages for the total destruction of personal prop-

erty [including animals] are measured by the fair market value of the

property at the time of the loss,*'^^^ the court of appeals recognized

that a problem exists when no market value exists for the property
destroyed.^^^ Analogizing the matter of unlawful destruction of sport

fish to a litigant who suffered a wrongful imposition of an injunction
for harvesting a wheat crop,^^^ the court held that the lower court failed

to take into account the fish's ^^development time." Accordingly, the

court expanded the DNR's scope of damages to encompass feeding costs
in raising fish in a hatchery until they reached a ten to fourteen-inch

size.^^* The court specifically noted that its holding does not suggest
that the cost of ecological protection of the fish habitat is a measurable

element of damage or that it may be computed as part of DNR's
recoverable damages.^^'

b. Perch

The court of appeals disagreed with the trial court's conclusion that
**profits earned from the catch of perch were not an element of damages

recoverable by the DNR for having been wrongfully enjoined. ""° An-

322. Id.

323. Id. at 325.

324. Id.

325. Id. (citations omitted).

326. Id. at 326.

327. Id. (citing Ross v. Felter, 71 Ind. App. 58, 123 N.E. 20 (1919)).
328. Id. at 327.

329. Id. at 327 n.3.

330. Id. at 327.



842 INDIANA LAW REVIEW [Vol. 24:789

ticipating the Indiana Supreme Court's decision in Ralston v. Lake

Superior Court,^^^ the court analyzed the issue as follows:

[F]ishermen have no constitutional or statutory right to the fish

in the Indiana waters of Lake Michigan. Rather, fishermen can

fish in Lake Michigan only by virtue of annual licenses bestowed

by the DNR. . . . There is indication that the commercial fish-
ermen could have caught some perch through the use of alter-

native fishing methods. Thus, the damages recoverable by the

DNR would be the difference in profits the fishermen received
for the perch harvested with the use of gill nets and the profits

the fishermen could receive for the perch harvested using alter-

native fishing methods and technology. The fishermen would be
entitled to diminish the amount of damages recoverable by the
DNR, however, only if they come forward with information that
they could have legitimately captured some perch through the

use of equipment other than the gill nets and the profits they

would have derived therefrom."^

c. Apportionment

Finally, the appellate court reversed the trial court's holding of joint

and several damages. The court noted that **the damages caused by
each defendant can be ascertained without difficulty," and that the **trial

court erred in failing to apportion the award of damages between the

fishermen.""^

2. Commercial Fishermen Possess No Property Rights in Fish Which
Vest Them With Standing to Seek Injunction Against DNR's Gill Net
Fishing Regulations. — In Ralston v. Lake Superior Court^^^ — a case
related to Ridenour v. Furness^^^ — the Indiana Supreme Court reviewed
a continuing dispute between commercial fishermen and the DNR re-
garding a past gill net order."^ The court noted that the trial court
erred in holding the DNR director in contempt for not following a
prohibitory injunction restraining enforcement of a 1983 emergency gill

net regulation because the matter became moot when the DNR regulation
expired at the end of 1983."^ The supreme court then articulated and

331. 546 N.E.2d 1212 (Ind. 1989).

332. Ridenour, 546 N.E.2d at 327-28 (citation omitted).

333. Id. at 328.

334. 546 N.E.2d 1212 (Ind. 1989).

335. 546 N.E.2d 322 (Ind. Ct. App. 1989).

336. Ralston, 546 N.E.2d at 1214.

337. Id.



1991] ENVIRONMENTAL LAW 843

reinvigorated a long-dormant principle that should discourage the pro-

liferation of lawsuits by commercial fishermen against the DNR. Ac-
cording to the court: **[The fisherman] possessed no property right that

vests him with standing to seek an injunction against the Department's

regulations. He has no property interest in the fish. The fish belong to
all the people.

''"8

IV. Conclusion: A View Toward the Future

In sum, Indiana lawmakers, joined by state and federal judges, have

crafted numerous important policy changes in environmental law during

the review period. Based on past developments, the following trends in

Indiana law and policy are probable.

1. Solid waste management and planning will cause major disrup-

tions and costs to Indiana's local governments. Given the natural in-

cHnation to avoid doing what one does not have to do, it seems likely

that several solid waste planning districts will delay implementing needed

changes in solid waste facilities, taxes, and recycling policies. Therefore,

the problem will likely be shifted back to the General Assembly within

the next few years. The General Assembly will probably respond with
mandatory recycling, required waste reduction, and landfill bans, con-

tinuing the evolution of solid waste planning in the state.

2. Political pressure on Congress will Hkely persist for passage of

federal legislation allowing states to limit or ban certain categories of

interstate waste. Without the ability to bar or control interstate waste

shipments, states such as Indiana will be frustrated in effective solid

waste planning and management due to uncertainties caused by fluc-
tuations in the type and quantity of solid waste coming into the state

from beyond its borders.

3. Toxic tort lawsuits will continue to befuddle the courts. Until

the legislature decides to regulate personal and property injuries caused

by exposure to toxic substances, courts will have to decide whether

exposure to insidious, and often unseen, substances over long periods

of time are actionable under traditional common law theories. In a
related way, courts will be increasingly asked to meld common law
compensatory remedies with legislatively sanctioned judicial remedies for

cleanup of abandoned hazardous waste sites. Legislative change at the

state or federal levels may have a significant impact on this area of the
law.

4. The Indiana judiciary will be asked to apply the public trust
doctrine to the state's water-related natural resources such as sand,

lakebed, and other resources. In support of this argument, the courts

338. Id. (citing Smith v. State, 155 Ind. 611, 58 N.E. 1044 (1990)).



844 INDIANA LAW REVIEW [Vol. 24:789

will be presented with persuasive authority from other jurisdictions that

have adopted the public trust doctrine."'

339. Public trust law recognizes that *'some types of natural resources are held

in trust by government for the benefit of the public. These resources are protected

by the trust against unfair dealing and dissipation, which is classical trust language

suggesting the necessity for procedural correctness and substantive care.*' The

first steps in analysis "require an understanding of what public resources are

committed perpetually to what public uses."

RoDOERS, supra note 1, at 158 (footnotes omitted). See generally Note, Indiana's Lake

Michigan Shoreline: Recommended Shoreland Regulationsfor a Valuable Natural Resource

^

25 Val. U.L. Rev. 99 (1990).