Indiana Law Review


Environmental Law: The Roles of Commerce, Citizens,
and the Land in an Era of Intensifying Competition

John C. Hamilton*

Environmental law is, as the developments reported here demonstrate,

much more than "environmental regulation.' ' It is a multifaceted re-
flection of growing competition among several interests. Although strug-
gles among individuals, interest groups, economic combinations, and
political parties have been integral to the American political process

from before the Constitution's creation, in latter days—and in terms of
the environment—that process of intermeshing and sometimes clashing
interests now includes, in an increasingly intense form, conflicts among
private individuals and organizations, their government, both state and

federal, and even conflicts between levels of government itself.

Indiana, in 1992, was unusually active both in terms of expanding

the body of environmental law and of testing the relationship of national

ideals over development as compared with, and sometimes in competition

with, individual liberty and responsibility.

Because Indiana produced so much new law affecting environmental
matters, this Article will include three main parts. The first part will

discuss the Commerce Clause and out-of-state waste (Part I); the second,
citizens' right to sue and the Four County Landfill (Part II); and the

third, flood plain regulation and its impact on notions of property (Part

III). This Article will also include three shorter "interludes" involving

more circumscribed subjects: construction of the solid waste "character"

law; 1992 environmental legislation and regulations; and environmental

consent decrees and citizen suits under state law.

I. State Regulation of Solid Waste and the Commerce Clause

The struggle between the states and the national government over

commerce has been with us since the Articles of Confederation. One
of the essential reasons why the Constitution was created in 1787 was
to break down the thirteen protected markets the original states had
created during the Revolutionary War. However, it was not until the

1840s, with the rise of the railroads and the movement of immigrants
and free blacks, that the Supreme Court approached the Commerce

* Partner, Doran, Blackmond, Ready, Hamilton & Williams, South Bend, Indiana.
B.A., 1964, University of Notre Dame; LL.B., 1967, Harvard Law School. The author
thanks Professor Robert F. Blomquist, Valparaiso University School of Law, for reviewing

and making helpful comments on a draft of this Article.



922 INDIANA LAW REVIEW [Vol. 26:921

Clause in terms familiar to present day debates. 1 Under the aegis of the

Commerce Clause of the United States Constitution, as well as decisional
law developments,2 the national economy was so successfully encouraged
and fostered that, by the late twentieth century, this country has reached

a level of development that is the envy of much of the world. However,
as high levels of economic development have been achieved across the

country, counter-pressures oriented toward preservation of local resources

have led to a running fight between localities and states, on the one

hand, and the national economy, on the other, over the issue of garbage,

or as it is antiseptically called in modern parlance, * 'solid waste." 3

Because states on the eastern and western seaboards are running out

of room to do away with the waste products of their shares of the
national economy, the cost of dumping solid waste within their borders

has so increased that it has become
'

'economic" to transport it hundreds

of miles to states where, relatively speaking, dumping grounds are cheap.4

Because of this differential in cost of dumping, several states in which

this excess of waste from other states was dumped attempted by a variety
of methods either to ban, or restrict, the flow of such waste. Almost

all these efforts were defeated, primarily on the basis of the "dormant"

effect of the Commerce Clause.5

Nevertheless, as Chief Justice Rehnquist, dissenting in Chemical

Waste Management, Inc. v. Hunt, 6 noted, these Commerce Clause solid
waste cases seem not to have dissuaded states from trying, as best they

can, to avoid unlimited imposition of solid and hazardous waste within

1. Cooley v. Board of Wardens, 12 How.' 299, 318-21 (1852); Passenger Cases,

48 U.S. (7 How. 571) (1849); Thurlow v. Massachusetts, 46 U.S. (5 How. 504) (1847);
2 Charles Warren, The Supreme Court in United States History 134-35, 138-39,
152-55, 168-82, 236-38 (1937).

2. Morton J. Horwitz, The Transformation of American Law 1780-1960 65
passim (1992).

3. Solid waste is the subject of extensive federal statutory and regulatory law,

including, most prominently, the Resource Conservation and Recovery Act of 1976, 42

U.S.C. § 6901-6987 (1988 & Supp. II 1990) (RCRA) and related regulations, 40 C.F.R.
§§ 240-81 (1992). RCRA treats waste differently, depending on whether it is hazardous,
see 42 U.S.C. § 6903(5) (1988), or solid waste that does not fit the definition of hazardous

waste, see 42 U.S.C. § 6903(27) (1988).

4. The first in a growing series of "garbage as commerce" cases, City of Philadelphia

v. New Jersey, 437 U.S. 617 (1978), evidences the economic pressures that led to exportation
of municipal and hazardous waste.

5. The latest Supreme Court decisions in this area, Fort Gratiot Sanitary Landfill,

Inc. v. Michigan Dep't of Natural Resources, 112 S. Ct. 2019 (1992) and Chemical Waste

Management, Inc. v. Hunt, 112 S. Ct. 2009 (1992), have reaffirmed, in emphatic terms,

Commerce Clause protection of the interstate shipment of both municipal and hazardous
waste.

6. 112 S. Ct. 2009 (1992).



1993] ENVIRONMENTAL LAW 923

their borders. 7 Indiana presents a good example of this effort of some

states, by any reasonable means, to stem the flow of out of state waste. 8

The state's first attempt occurred in 1990. Indiana passed legislation

that attempted to slow the receipt of out-of-state hazardous and solid

waste by several indirect methods.9 Almost immediately a group located

in Pennsylvania involved in brokering waste, that is, arranging its con-

solidation from several public and private generators for shipment else-

where, filed suit. 10 They obtained injunctive relief against several provisions

in the new legislation that imposed differential regulatory effects on out
of state waste, on the ground that they conflicted with the Commerce
Clause. 11 The state did not appeal. Rather, in 1991, the State enacted

new legislation that attempted to deal with the problem of uncontrolled

dumping of out of state waste by different means. 12

Although the 1991 legislation, like its predecessor, did not directly

restrict the flow of solid waste into the state, it did attempt to regulate

both truckers who carried waste to this state and the brokers who
arranged its shipment here. 13 One of the problems the new legislation
attempted to deal with was the practice of "back hauling." Trailers

that had been used to carry solid waste from Indiana were used on the

return trip to ship ordinary goods, including food, back across Indiana's

borders. The new legislation attacked the problem both by an outright
ban and by a system of informational stickers applied to tractors used

to haul solid waste. 14 The legislation also included a differential tipping

fee for out-of-state waste, as well as imposition of a system of permits

applied to all waste transfer stations, wherever located, and a requirement

that out of state brokers of waste post bonds to cover possible liability

for violating Indiana's solid waste regulations. 15

7. Id. at 2019

8. For examples of other states' recent and unsuccessful efforts, see In re Southeast

Ark. Landfill, 981 F.2d 372 (8th Cir. 1992); Chemical Waste Management, Inc. v. Templet,

967 F.2d 1058 (5th Cir. 1992).

9. 1990 Ind. Acts c. 10, § 15. Those methods included verified statements by

truck drivers hauling out of state waste as to where "the largest part of the solid waste

was generated." Id. As to out of state waste, the driver was required to present a statement
from a public official in the state where the waste was generated, that it did not include

hazardous or infectious waste.

10. Government Suppliers Consol. Serv., Inc. v. Bayh, 753 F. Supp. 739 (S.D.

Ind. 1990).

11. Id. at 748-49.

12. Ind. Code § 13-7-10.5 (Supp. 1992).
13. See generally Peter M. Racher, Clean Air Act Amendments Leave Small Business

Up In the Air, 25 Ind. L. Rev. 1183, 1194-1200 (1992).
14. Ind. Code § 13-7-31 (Supp. 1992).
15. Id. §§ 13-7-31-1 to -17 (Supp. 1992).



924 INDIANA LAW REVIEW [Vol. 26:921

The same plaintiffs who had defeated the 1990 legislation attacked
Indiana's 1991 effort. Although they met with almost complete defeat

in district court, 16 they achieved total victory in the United States Court

>f Appeals for the Seventh Circuit. 17

The state attempted to defend its legislation before the Seventh

Circuit on grounds that it promoted health and safety of the citizens

of Indiana18 as well as the reputation of products shipped from this

state.
19 The court of appeals found little evidence supporting such a

view. The court concluded that health of the citizens of Indiana would

not be promoted by the back haul ban because, among other factors,
only citizens outside the state would be affected by goods shipped out

of state in trailers that had brought solid waste to Indiana, and trailers

coming into the state may have carried waste outside the state. 20

Although the Seventh Circuit was urged to review the Indiana leg-

islation pursuant to a balancing test,21 its analysis of the actual impact

of the back haul ban and stickering program persuaded the court that

in fact the legislation discriminated directly against such out of state

commerce.22 The court therefore scrutinized the legislation, with the

burden on the state to justify the discrimination "by a valid factor
unrelated to economic protectionism. ,,23 The court of appeals had little

1*6. Government Suppliers Consol. Serv., Inc. v. Bayh, No. IP 91 899 C (S.D.
Ind. Feb. 5, 1992) (Order on Plaintiff's Motion for a Declaratory Judgment).

17. Government Suppliers Consol. Serv., Inc. v. Bayh, 975 F.2d 1267 (7th Cir.

1992), cert, denied, 113 S. Ct. 977 (1993).

18. Bayh, 975 F.2d at 1279-80.

19. The state asserted that goods shipped in trailers that had carried waste would

be undesirable to the market. Id. at 1272-73, 1280.

20. Id. at 1279-80.

21. Generally called the "Pike Test," referring to Pike v. Bruce Church, Inc., 397

U.S. 137 (1970):

Where the statute regulates even-handedly to effectuate a legitimate local public

interest, and its effects on interstate commerce are only incidental, it will be

upheld unless the burden imposed on such commerce is clearly excessive in

relation to the putative local benefits, (citation omitted). If a legitimate local

purpose is found, then the question becomes one of degree. And the extent of
the burden that will be tolerated will of course depend on the nature of the

local interest involved, and on whether it could be promoted as well with a

lesser impact on interstate activities. Occasionally the Court has candidly un-

dertaken a balancing approach in resolving these issues, (citation omitted), but

more frequently it has spoken in terms of "direct" and "indirect" effects and

burdens.

Id. at 142.

22. Bayh, 975 F.2d at 1278-79.

23. New Energy Co. v. Limbach, 486 U.S. 269, 274 (1988); see also Fort Gratiot
Sanitary Landfill, Inc. v. Michigan Dep't of Natural Resources, 112 S. Ct. 2019, 2023-

24 (1992).



1993] ENVIRONMENTAL LAW 925

difficulty concluding that all parts of the Indiana legislation attacked

by the brokers on appeal failed the test.24 The court went on to conclude

that even under the Pike25 test, the legislation must fail. 26

The decision in Government Suppliers Consolidated Services, Inc.

v. Bayh 21 is the latest in what is developing to be quite a long series

of decisions that have found improper a variety of attempts by states

and local units of government to regulate the flow of garbage and

hazardous waste into their jurisdictions. It seems difficult from this

vantage point to imagine what form of state regulation of such waste

might find acceptance by the United States Supreme Court. 28 This does

not mean, however, that the pressure to resist the flow of waste from

one jurisdiction to another has ceased.

Senator Dan Coats of Indiana has, since early 1991, authored leg-
islation allowing individual states to take control of out of state waste

disposal within their borders by various ^eans.29 So far none of those

efforts have been successful. 30 While it seems clear that in the absence

of federal legislation, Indiana's ability to affect seriously the flow of

solid waste into this state is quite limited.

Decisions stripping from the states any ability to preserve their lands

from what they perceive to be excess burdens of waste generated by

other sectors of the country31 raise potentially quite large questions for

the future. Although the debate over the transfer of solid waste from

one part of the country to another has generally been dealt with in

terms of commerce and the dormant power of the Commerce Clause
of the Constitution, underlying this debate is a question of resources

and the control of resources. Although the Supreme Court once rec-

ognized a state's ability to protect its resources in the context of Com-

24. Bayh, 975 F.2d at 1279-81.

25. See supra note 21.

26. 975 F.2d at 1285-86.

27. 975 F.2d 1267 (7th Cir. 1992), cert, denied, 113 S. Ct. 977 (1993).

28. On the other hand, at least two elements of Indiana's initiative survived, either
because they were not attacked at all (a 14-day delay imposed on trailers used to carry

food before they might carry waste, Ind. Code § 16-1-28-13.5 (Supp. 1992)), or because
the plaintiffs lost the issue in the district court and did not pursue the matter on appeal

(inspection of transfer stations located outside as well as inside the state, id. § 13-7-10.5-

16 (Supp. 1992)). 975 F.2d at 1272 n.5, 1279. Given the failure of the legislation discussed

above, it is unlikely these provisions will achieve much of benefit to Indiana citizens.
29. S. 2877 102d Cong., 2d Sess. (1992); S. 2384, 102d Cong., 2d Sess. (1992);

S. 153, 102d Cong., 1st Sess. (1991).

30. Although S. 2877 passed the Senate by a vote of 89-2 on July 23, 1992, it

failed to pass the House.

31. See Fort Gratiot Sanitary Landfill, Inc. v. Michigan Dep't of Natural Resources,

112 S. Ct. 2019, 2030-31 (Rehnquist, C.J., dissenting).



926 INDIANA LAW REVIEW [Vol. 26:921

merce Clause analysis,32 the latest series of decisions over solid waste

arguably have rendered absolute, in terms of national value, the process

of commerce itself. Thus, if a thing is defined as an item in commerce,
in light of the solid waste cases and other Commerce Clause cases on
which they are based, a state's ability to preserve its natural resources

may be limited to quite small areas of jurisdiction. In the future, it
may well be that states will be able to regulate (and possibly control)
exploitation of their resources only if they can present a sufficiently

precise and well-defined health interest.

As one of the Great Lake states, Indiana is the beneficiary of Lake
Michigan. Will the national economy, in future years, require the trans-

shipment of water from well-watered* states to drier areas of the country,

especially should endemic drought increase in other areas, such as the

southwest and Great Plains states?33 In Sporhase v. Nebraska™ the
Supreme Court held that groundwater is an article of commerce and
that a state's claim to it as its natural resource does not exempt state

regulation of it from the Commerce Clause.35 The Court held that
Nebraska's effort to restrict the transfer of groundwater to a state that

did not allow its waters to be transferred to Nebraska constituted an

impermissible burden on interstate commerce. 36 Although it is true that

the Supreme Court commiserated with the state's interest in conserving

its own water in times of drought,37 it is quite unclear whether the Court
would recognize such an interest if a number of states sustained great
drought over long periods. On what constitutional basis might Indiana
or other water-rich states preserve the waters they have in the face of

private or public efforts to transfer water from their boundaries? Senator

Coats' effort to persuade Congress to allow the states to control some

aspects of interstate commerce is one approach, though difficult to achieve

in terms of legislative politics, that can succeed. For example, the Great

Lakes states have banded together successfully to protect their greatest

water resource. In 1986 Congress was persuaded to pass legislation that

appeared to ban diversion of water from the Great Lakes basin.38 How-

32. E.g., Hudson County Water Co. v. McCarter, 209 U.S. 349, 356-57 (1908).
33. Concerns over global climate change has led commentators to review water

policy in terms of shifting drought patterns and consequent demand for large scale transfers

of water. E.g., Ludwik A. Teclaff, The River Basin Concept and Global Climate Change,

8 Pace Envtl. L. Rev. 355, 377-78 (1991); A. Dan Tarlock, Western Water Law, Global
Warming, and Growth Limitations, 24 Loy. L.A. L. Rev. 979, 999-1001 (1991).

34. 458 U.S. 941 (1982).

35. Id. at 951-54.

36. Id. at 957-58. See generally Richard S. Harnsberger et al., Interstate Transfers

of Water: State Options After Sporhase, 70 Neb. L. Rev. 754, 763-74 (1991).

37. Sporhase, 458 U.S. at 955-57.

38. 42 U.S.C. § 1962d-20 (1988). See generally Stephen Frerichs & K. William



1993] ENVIRONMENTAL LAW 927

ever, Congress acted before global warming and possible climate change

became matters of general notice. Should the climate change and should

great droughts extend over time and space, would the current ban on

diversion of water from the Great Lakes survive future Congresses?

Given the decline of states' ability to preserve and conserve resources

within their borders as commerce is made supreme, Senator Coats' efforts
to persuade some of the other states to combine in Congress against

imported waste—the Great Lake States' recent and so far successful
union to safeguard their greatest water asset—suggest an era of increas-
ingly intense regional politics over dwindling resources and environmental

values.

Interlude No. 1: Indiana's Solid Waste
'

"Character" Requirements,

Retroactivity, and Legislative History

In 1990 the Indiana legislature enacted a "character law" intended

to govern any application to operate a solid waste disposal facility in

this state.
39 Indiana Code section 13-7-10.2-340 provides that before an

application for a new, renewed, or substantially modified permit may
be granted, the applicant "and each person who is a responsible party"41

must submit to the Indiana Department of Environmental Management
(IDEM) a statement disclosing much financial, experiential, and personal
information, including criminal histories, if any.42

Easter, Regulation of Interbasin Transfers and Consumptive Uses from the Great Lakes,

30 Nat. Resources J. 561, 578-79 (1990). 42 U.S.C. § 1962d-20(d) provides:

No water .shall be diverted from any portion of the Great Lakes within the
United States, or from any tributary within the United States of any of the

Great Lakes, for use outside the Great Lakes basin unless such diversion is

approved by the Governor of each of the Great Lakes States.

Id.

39. Ind. Code § 13-7-10.2 (Supp. 1992). As set forth at id. §§ 13-7-10.2-1 and
13-7-10-l(e), the good character requirements apply to applications for permits to control

solid waste, see id. § 13-7-1-22 (Supp. 1992); Ind. Admin. Code tit. 329, r. 1-1-1 to 2-

21-16 (1992), hazardous waste, see Ind. Code § 13-7-8.5 to 8.7 (1988 & Supp. 1992);
Ind. Admin. Code tit. 329, r. 3-1-1 to 3-59-9 (1992) and atomic radiation, see Ind. Code

§ 13-7-9 (1988).

40. Ind. Code § 13-7-10.2-3 (Supp. 1992).
41. Id. The Indiana Code defines responsible party as:

(1) an officer, a corporation director, or a senior management official of a

corporation, partnership, or business association that is an applicant; or

(2) an individual, a corporation, a partnership, or a business association that

owns, directly or indirectly, at least a twenty percent (20%) interest in the

applicant.

Id. § 13-7-10.2-2 (Supp. 1992).

42. Id. § 13-7-10.2-3(a)(l), (b), and (c).



928 INDIANA LAW REVIEW [Vol. 26:921

The new legislation was enacted on March 20, 1990; it was given
effect upon passage due to a declaration of an emergency. 43 In the
meantime, Chemical Waste Management of Indiana, Inc. (Chem Waste),
operator of the only extant hazardous waste landfill in Indiana, had on

file with IDEM since December 1988, an application under the Resource
Conservation and Recovery Act (RCRA) for a Part B permit.44 IDEM
applied it to Chem Waste's pending Part B permit application. By January
1992, no permit having yet been issued, and IDEM still apparently
considering Chem Waste's application in terms of the good character
statute. Chem Waste sued IDEM for injunctive and declaratory relief.
Chem Waste contended that the statute should not be applied retroactively
and that it was unconstitutional in several respects.45

After issuing a preliminary injunction against application of the

statute to Chem Waste, the trial court granted partial summary judgment
on the ground that the statute was not retroactive. The trial court did

not decide any of the constitutional issues that Chem Waste had raised.46

On appeal IDEM presented two arguments. First, it asserted that the
trial court had no jurisdiction because Chem Waste had not exhausted
its administrative remedies before filing suit. Second, it argued that the

statute did have retroactive effect since it had been enacted as an

emergency matter and was made effective on the day of enactment. 47

The court resolved the exhaustion of administrative remedies issue

relying primarily on a well-known Indiana Supreme Court case on the

availability of declaratory relief in the context of administrative pro-

ceedings.48 It concluded that Chem Waste could pursue a declaration of
its rights in the matter without first having exhausted its administrative

remedies because (1) retroactivity involved a question of law rather than

fact; (2) a judicial decision on the issue would not disrupt the admin-

istrative process; in fact it would likely simplify IDEM's review of pending
permit applications; and (3) Chem Waste's declaratory relief action
attacked an agency policy, rather than "an agency action subject to

judicial review."49

43. 1990 Ind. Acts 1863, 1871.

44. Indiana Dep't of Envtl. Management v. Chemical Waste Management, 604

N.E.2d 1199, 1201 (Ind. Ct. App. 1992).
45. Id. at 1201-02.

46. Id. at 1202, 1203-04 n.2.

47. Id. at 1202, 1205. IDEM also argued, as to retroactivity, that the record
contained disputed issues of fact. The court quickly disposed of this argument, by referring

to the trial court's analysis of retroactivity and questions of fact: "The trial court expressly

decided that the sole undisputed, material fact . . . was that Chemical's application was

pending prior to the effective date of the Character Law." Id. at 1204.

48. Wilson v. Board of Ind. Employment Sec. Div., 385 N.E.2d 438 (Ind. 1979),
cert, denied, 444 U.S. 874 (1979).

49. Chem Waste, 604 N.E.2d at 1202-03.



1993] ENVIRONMENTAL LAW 929

The court then turned to retroactivity. Its resolution of that issue

appears to have established a form of legislative history as all but

invincibly conclusive on whether a statute is to be given retroactive effect.

The court noted the general rule that "a law shall be prospective

only in the absence of an express statement that it be retroactive/

'

50
It

reviewed two features of the legislation that supported prospective ap-

plication. First, the Good Character Law affects an * 'applicant" "that
applies for ... a permit." 51 This and similar uses of the term "applicant"

persuaded the court that the Good Character Law could only affect one
who "applies," which event could only occur after the statute came
into existence. 52

Second, the court confronted and roundly rejected IDEM's argument
that the declaration of emergency implied legislative intent that the law

be applied retroactively. Its first point appears unremarkable: "applicants

have a right to have their applications considered in accordance with

the laws in effect when the application is made."53 The court's second
point, on the other hand, appears to be new.

The court described its second ground as "more conclusive" than
the proposition it had just stated. On the same day that the Good
Character Law was passed another provision in the state's environmental
legislative scheme which dealt with financial statements preceding con-

struction or operation of solid waste landfills had also been enacted. 54

Unlike the Good Character Law, the financial statement provision was
accompanied by an uncodified, but specific provision calling for ret-

roactive effect in rather clear terms:

This act applies to:

(1) a permit application that is filed on or after the effective

date of this act,

(2) a permit application that was filed before the effective date

of this act but was not granted or denied . . . before the effective

date of this act, and

(3) a permit application that was filed before the effective date

of this act and that was granted . . . before the effective date

of this act if the . . . action in granting the permit was appealed

50. Id. at 1204.

51. Ind. Code § 13-7-10.2-1 (Supp. 1992).
52. See Chem Waste, 604 N.E.2d at 1204-05.
53. Id. at 1205. In Board of Dental Examiners v. Judd, 554 N.E.2d 829 (Ind.

Ct. App. 1990), one of the cases the court cited for this proposition, contained the

following: "[W]hile no one has an absolute right to practice dentistry, . . . dentists, like

members of other professions and trades, have a cognizable property interest in their

ability to practice, and the practice may not be regulated arbitrarily." Id. at 832.
54. Ind. Code § 13-7-22-2 (Supp. 1992).



930 INDIANA LAW REVIEW [Vol. 26:921

. . . and that appeal is pending on the effective date of this

act
55

The court said of this rather clear expression of legislative intent, "[T]his

uncodified application clause is precisely the type of expression required

to put a statute in reverse." 56 The Legislature's silence as to retroactivity

of the Good Character Law left the court "with no doubt that the
General Assembly did not intend for the Character Law to be applied
to permit applications pending on the effective date of the act." 57

Although Indiana Department of Environmental Management v.
Chemical Waste Management of Indiana, Inc. 58 certainly is an important
clarification of environmental regulatory law, as is true of other "en-

vironmental" cases, its holding on legislative history extends to all

legislation enmeshed in questions of retroactivity. The very ease in

establishing conclusively that the financial statement law would be given

retroactive effect will likely simplify future disputes. Ambiguity that had

attended statements of emergency, in light of Indiana's relative paucity

of formal legislative history, 59 should no longer exist. If a statute is not

attended by a statement of intended application as the financial statement

legislation was, it will likely, and automatically, be given prospective

effect only. Chemical Waste Management has thus given legislators a
sure way of establishing retroactivity when they do intend it.

Interlude No. 2: New Legislation

Indiana's output of legislation affecting environmental issues was

not as extensive as in 1990 and 1991." Nevertheless, at least three pieces
of legislation are worthy of note.

a. Indiana Heritage Trust Program.—In 1992 the Indiana General
Assembly added chapter 14-3-20, known as the "Indiana Heritage Trust
Program."61

55. 1990 Ind. Acts ch. 107, § 3.

56. Chem Waste, 604 N.E.2d at 1205.
57. Id.

58. 604 N.E.2d 1199 (Ind. Ct. App. 1992).

59. See, e.g., O'Laughlin v. Barton, 582 N.E.2d 817, 821 (Ind. 1991) (Trial court

erred when it considered affidavits of four legislators offered to establish legislative intent).

60. See Racher, supra note 13.

61. Indiana Code § 14-3-20-1 (Supp. 1992), subsection (l)(b) provides that the trust

program: "[w]ill acquire real property for new and existing state parks, state forests,

nature preserves, fish and wildlife areas, wetlands, trails, and river corridors. The program

will insure that Indiana's rich natural heritage is preserved or enhanced for succeeding

generations."



1993] ENVIRONMENTAL LAW 931

The trust fund will receive regular appropriations by the General

Assembly, donations, and fees from "environmental license plates."62

The fund itself will be allocated to purchase and maintain property for

state park purposes, state forests, nature preserves, fish or wildlife

management, and outdoor recreation, historical, or archeological sites.

Of note is the fact that the funds cannot be used to pay for costs of
removal and remedial action relating to hazardous substances or the cost

of waste water treatment.

If properly funded, this legislation could go far to enable Indiana

to benefit from the work of private organizations such as the Nature

Conservancy, in acquiring and preserving acreage having environmental

or recreational values. The legislation could well be successful in terms

of its purpose since it establishes a private partnership. The partnership

will succeed, however, only to the extent that private individuals provide

both small and large donations. Given the apparent public concern over

environmental issues in recent years, and provided the trust fund is

publicized sufficiently, it may well prove a success. A good sign of the
possibility of that success will be the number of "vanity" environmental

license plates purchased by the public.

b. Composting.—Another relatively positive legislative development

in 1992 was the enactment of a ban on depositing "vegetative matter

resulting from landscaping, maintenance, and land clearing projects"63

in a solid waste landfill after September 30, 1994. The new legislation

includes provisions governing "composting facilities," 64 no doubt on the

theory that with the ban against depositing compostable materials in

landfills, a private market for composting operations should follow.

One may operate a composting facility "only if the person registers
the composting facility with the Department." 65 The legislation prescribes

information to be submitted to the department including, the area it is

to serve, an estimate of the volume of materials it will process annually

as well as any other information IDEM might require by rule. 66 A
composting facility is prohibited from being located within 200 feet of

a drinking water well or a residence in existence when the facility is

first registered with IDEM. Furthermore, a privately operated composting
facility must be located outside the ten-year flood plain and must be

62. Ind. Code §§ 9-18-29-1 to -5 (Supp. 1992). Each environmental license plate

purchased under that legislation will produce an additional fee of $25.00. Id.

63. Id. § 13-7-29-3 (Supp. 1992). The legislation also provides that "[a]fter June

30, 1994, a person may not knowingly combine" compostable materials subject to the

statute with other types of solid waste. Id. § 13-7-35-9 (Supp. 1992).

64. Id. §§ 13-7-35-1 to -10 (Supp. 1992).

65. Id. § 13-7-35-4.

66. Id. § 13-7-35-5.



932 INDIANA LAW REVIEW [Vol. 26:921

designed to prevent compost from being placed within five feet of the

water table. It must control run-off, manage leachate and maintain

controls for dust, odor and noise. The operator of the composting

facility must report annually the volume of material it processed during

the preceding year. 67

The Legislature's anticipation that by banning the dumping of com-

postable materials in a landfill will create a market for composting,

reflects what may be the most interesting future thrust of environmental
regulation. By excluding certain materials from traditionally easy and

cheap disposal, the Legislature has raised the cost of such disposal and

may have, thereby, encouraged a new industry servicing a new market.
On the other hand, provisions requiring annual reports and potentially
close administrative oversight of a business that should not have much
adverse environmental impact is a questionable extension of governmental

responsibility with two possible adverse results. First, IDEM itself has
more than enough work to do in terms of air pollution, hazardous

waste, and other major regulatory agendas. Adding oversight of what

may turn out to be a number of small composting businesses may
interfere with the agency's primary functions. Second, imposing close

administrative oversight on what theoretically could be small businesses

may add a level of cost that will, at least to some extent, inhibit easy
entry into a market place the Legislature has otherwise likely created.

The vegetative material ban should go far to ease volume pressures

on Indiana's limited reserves of solid waste landfills. Finally, it may
demonstrate how environmental regulation by market preclusion can
achieve success in creating new arenas for the free market system to

operate.

c. Voluntary Remediation.—A third environmental initiative that
may have a positive impact on the state is the Legislature's provision
for voluntary remediation of sites contaminated by hazardous substances

and some forms of petroleum, subject to IDEM's oversight and ap-
proval. 68 In general terms the legislation is intended to allow a site

burdened with hazardous substances as defined in the Comprehensive

Environmental Response, Compensation, and Liability Act (CERCLA),69

as well as "petroleum" defined as "petroleum asphalt or crude oil" 70

67. Id. § 13-7-35-6.

68. Id. §§ 13-7-8.9-1 to -23 (Supp. 1992).

69. 42 U.S.C. § 9601(14) (1988).

70. Ind. Code § 13-7-8.9-3 (Supp. 1992). The addition of some portion of petroleum,
not including refined gasoline or other petroleum derived products, responds to the

petroleum exclusion in 42 U.S.C. § 9601(14). See Wilshire Westwood Assoc, v. Atlantic

Richfield Corp., 881 F.2d 801, 804-10 (9th Cir. 1989); Niecko v. Emro Mktg. Co., 769
F. Supp. 973, 981-82 (E.D. Mich. 1991). Compare City of New York v. Exxon Corp.,
744 F. Supp. 474, 489-90 (S.D. N.Y. 1990).



1993] ENVIRONMENTAL LAW 933

of certain characteristics, to be remediated by private parties with some
protection against future liability.

In terms of effectiveness, the voluntary remediation law has two

problems. First, it is true that an applicant who obtains the department's
approval is saved from state litigation during the course of the remediation71

and is issued a certificate of completion from IDEM. It is also true
that IDEM can grant the applicant a covenant not to sue which is good
against any claimant under state law. 72 However, the statute specifically

provides that the voluntary program of remediation will not save persons

affected thereby from liability under federal legislation such as CERCLA
or the Resource Conservation and Recovery Act (RCRA).73

The second problem with the program of voluntary remediation is
that it involves a rigorous regime of oversight by IDEM that appears
little different from what would result from an enforcement action

initiated by the agency in the first instance. However, a voluntary

remediation might be advisable where the contaminated site is likely not

to rise to the level of the national priority list established pursuant to

CERCLA and therefore, become the object of an action for response
costs or contribution under CERCLA. On the other hand, the sheer
cost of complying with the various administrative processes established

within the statute may deter smaller businesses from attempting to
undertake the effort of voluntarily remediating contaminated property.

It remains to be seen to what extent this version of volunteerism will

actually be used.

II. Citizens and the Fragile "Right" to Sue

Beginning with the Clean Air Amendments in 1970, 74 Congress has
inserted a series of "citizen suit" provisions in no fewer than seventeen

pieces of environmental legislation. All of them run to a pattern reflective
of the notion that federal and state agencies should take the lead when
it comes to protecting the environment by way of civil litigation. 75 First,
before a citizen can bring suit, he or she must give written notice to

the Environmental Protection Agency Administrator, the state in which
the proposed suit is to be brought, and the actual defendant in the

71. Ind. Code § 13-7-8.9-1 8(e) (Supp. 1992).
72. Id. § 13-7-8.9-18 (Supp. 1992).

73. Id. § 13-7-8.9-18(d) (Supp. 1992).

74. 42 U.S.C. § 7604 (1983 & Supp. 1992). See Hallstrom v. Tillamook County,
493 U.S. 20, 23 n.l (1989) (collecting statutes).

75. E.g., Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Found., 484 U.S. 49,
60 (1987); United States v. City of Green Forest, 921 F.2d 1394, 1403 (8th Cir. 1990),

cert, denied, 112 S. Ct. 914 (1991).



934 INDIANA LAW REVIEW [Vol. 26:921

case.
76 Second, a citizen may not file an action if the federal or state

government has taken appropriate steps to remedy the situation giving

rise to the claim.
77

The Clean Water Act and, specifically, its National Pollutant Dis-

charge Elimination System (NPDES) program, has produced most of
the reported cases involving citizen suit litigation. 78 The plaintiff's burden

76. 42 U.S.C. § 6972(b)(1) (Supp. 1992). This section is similar to, but more

complicated than other environmental notice provisions. Section 6972(a)(1)(A) authorizes

citizens to file suits in federal court against "any person . . . who is alleged to be in

violation of any permit, standard, regulation, condition, requirement, prohibition, or order

which has become effective pursuant to this chapter . . . ." Id. Section 6972(b)(1)(A)

requires that such a suit be preceded by 60 days notice given to the Administrator of

the EPA, the "State in which the alleged violation occurs" and "the alleged violator of

such permit, standard." Id.

The complications start at this point. First, the 60-day notice applies to enforce those

of RCRA's requirements that apply to the solid waste (not hazardous waste) disposal

business. If the alleged violation is of subchapter III of the Act (42 U.S.C. §§ 6921-34

(1983)), which deals with hazardous waste, then, under 42 U.S.C. § 6972(b)(1), a citizen

suit "may be brought immediately after such notification." § 6972(b)(1). See, e.g., Dague
v. City of Burlington, 935 F.2d 1343, 1349-52 (2d Cir. 1991), rev'd on other grounds,

112 S. Ct. 2638 (1992). Compare 33 U.S.C. § 1365(a) (allowing immediate notice in Clean

Water Act cases where toxics are involved).

Second, RCRA allows citizens to sue for injunctive relief against any person:
[fjncluding any past or present generator, past or present transporter, or past

or present owner or operator of a treatment, storage or disposal facility, who

has contributed or who is contributing to the past or present handling, storage,

treatment, transportation, or disposal of any solid or hazardous waste which

may present an imminent and substantial endangerment to health or the envi-
ronment.

42 U.S.C. 6972(a)(1)(B) (Supp. 1992). 42 U.S.C. § 6972(b)(2)(A) mandates that one who

would bring an imminent endangerment claim under § 6972(a)(1)(B) must give ninety days

notice before filing suit.

77. Again, the RCRA citizen suit provision is similar to, but more complicated
than, other "due diligence" defenses. 42 U.S.C. § 6972(b)(1)(B) governs § 6972(a)(1)(A)

claims alleging violations of permits, standards, and regulations issued under the act. It

precludes a citizen suit "if the Administrator [of the EPAJ or State has commenced and

is diligently prosecuting a civil or criminal action in a court ... to require compliance

with such permit, standard, regulation ....." 42 U.S.C. § 6972(b)(1)(B).

The due diligence bar to an imminent endangerment claim under 42 U.S.C. §

6972(a)(1)(B) added quite a bit more complexity, affected as it obviously was by CERCLA.
42 U.S.C. § 6972(b)(2)(B) bars a citizen's suit for imminent endangerment if the EPA
has, among other things, brought and is diligently pursuing the government's suit for

imminent endangerment provided in 42 U.S.C. § 6973 or a suit to recover response costs

under 42 U.S.C. § 9606, or is actually engaging in a removal action under 42 U.S.C. §

9604. 42 U.S.C. § 6972(b)(2)(C) makes similar actions by the state bars to suit. See Merry

v. Westinghouse Elec. Corp., 697 F. Supp. 180, 182 (M.D. Pa. 1988); H.R. Conf. Rep.

No. 1133, 98th Cong., 2nd Sess., reprinted in 1984 U.S.C.C.A.N. 5649, 5688-89.

78. See, e.g., National Resources Defense Council, Inc. v. Watkins, 954 F.2d 974

(4th Cir. 1992); National Resources Defense Council, Inc. v. Lowengart & Co., 776 F.
Supp. 996 (M.D. Pa. 1991).



1993] ENVIRONMENTAL LAW 935

of proof in a NPDES case, relatively speaking, is quite easy since the
NPDES permit holder is required by law to make admissions of viol-
ations.

79 In comparison, RCRA's citizen suit provision has, over the
years, generated relatively few reported cases. 80

Indiana has produced more than its fair share of citizen suit litigation

over hazardous waste. One hazardous waste landfill, the Four County
Landfill in northern Fulton County, has produced no fewer than fifteen

published decisions and orders from 1987 through 1992. 81

All, to one degree or another, involve aspects of RCRA's citizen
suit statute. The cases reflect a good deal of initial success for the

citizens group, Supporters to Oppose Pollution, Inc. (STOP). However,

STOP ultimately failed in its efforts to remedy the Four County Landfill.
The story of that failure reflects problems with citizen suit legislation

79. See United States v. Dexter Corp., 132 F.R.D. 8 (D. Conn. 1990); Lauren

Mileo O'Sullivan, Citizen Suits Under the Clean Water Act, 38 Rutgers L. Rev. 813,

820-21 (1986).

80. Environmental Defense Fund, Inc. v. Lamphier, 714 F.2d 331, 337-38 (4th

Cir. 1983) is an early example of a decision favorable to citizen suits under RCRA. Most
of the other reported cases involve the procedural defenses in RCRA already discussed.
E.g., Hallstrom v. Tillamook County, 493 U.S. 20 (1989); Garcia v. Cecos Int'l., Inc.,

761 F.2d 76, 79 (1st Cir. 1985); McGregor v. Industrial Excess Landfill, Inc., 709 F.

Supp. 1401, 1406-08 (N.D. Ohio 1987), aff'd, 856 F.2d 39 (6th Cir. 1988). In a few

cases, citizens did obtain some relief under the statute. E.g., Dague v. City of Burlington,

733 F. Supp. 23 (D. Vt. 1990), aff'd, 935 F.2d 1343 (2d Cir. 1991), rev'd on other

grounds, 112 S. Ct. 2638 (1992).

81. Environmental Waste Control, Inc. v. Agency for Toxic Substances & Disease
Registry, 763 F. Supp. 1576 (N.D. Ga. 1991); United States v. Environmental Waste

Control, Inc. "131 B.R. 410 (N.D. Ind. 1991), aff'd, 973 F.2d 1320 (7th Cir. 1992);

Supporters to Oppose Pollution, Inc. v. Heritage Group, 760 F. Supp. 1338 (N.D. Ind.

1991), aff'd, 973 F.2d 1320 (7th Cir. 1992); In re Environmental Waste Control, Inc.,

125 B.R. 546 (N.D. Ind. 1991); Supporters to Oppose Pollution, Inc. v. Heritage Group,

33 E.R.C. 1052 (N.D. Ind. 1991), aff'd, 973 F.2d 1320 (7th Cir. 1992); Supporters to

Oppose Pollution, Inc. v. Heritage Group, 32 E.R.C. 1154 (N.D. Ind. 1990); United

States v. Environmental Waste Control, Inc., 737 F. Supp. 1485 (N.D. Ind. 1990); In re

Environmental Waste Control, Inc., 31 E.R.C. 1462 (N.D. Ind. 1990); United States v.

Environmental Waste Control, Inc., 31 E.R.C. 1458 (N.D. Ind. 1990); United States (EPA)

v. Environmental Waste Control, Inc., 710 F. Supp. 1172 (N.D. Ind. 1989); aff'd, 917

F.2d 327 (7th Cir. 1990), cert, denied, 111 S. Ct. 1621 (1991); United States (EPA) v.

Environmental Waste Control, Inc., 698 F. Supp. 1422 (N.D. Ind. 1988); United States

(EPA) v. Environmental Waste Control, Inc., 26 E.R.C. 2075 (N.D. Ind. 1987); In re

Environmental Waste Control, 122 B.R. 341 (Bankr. N.D. Ind. 1990).

For a description of the Four County Litigation through the original judgment (March,

1989), see Robert M. Blomquist, The Evolution of Indiana Environmental Law: A View
Toward the Future, 24 Ind. L. Rev. 789, 818-29 (1991). Because of the large number

and intertwined nature of the Four County Landfill reported decisions, the names of the

cases will be abbreviated hereinafter as follows: Supporters to Oppose Pollution, Inc. v.

Heritage (STOP); United States v. Environmental Waste Control, Inc. and In re Envi-

ronmental Waste Control, Inc. (EWC).



936 INDIANA LAW REVIEW [Vol. 26:921

in its present state, and it reflects practical difficulties and traps that

may befall counsel not wary enough to cope with the kind of litigation
RCRA can generate. 82 What follows is a cautionary tale anyone who
considers bringing an environmental citizens suit should review quite

closely.

A. The Four County Landfill

The Four County Landfill was operated from 1973 until 1978 by
the owners of the land, James Wilkins and his father. In 1978, Envi-

ronmental Waste Control, Inc. (EWC) was formed, and ultimately became
solely owned by Stephen Shambaugh. EWC entered into a ten year lease
with Wilkins that allowed EWC to operate a landfill on Wilkins' land. 83
Beginning in 1980 the landfill began to dispose of only hazardous waste. 84

By the mid-1980s, groundwater underlying the landfill was observed
to be contaminated with relatively low levels of various hazardous sub-

stances including benzene, carbon tetrachloride, 1,2 dichloroethane, chlo-

roform, tetrachloroethylene, and trichloroethylene. 85

B. A Four County Chronology

As was true of many hazardous waste landfills in operation at the
time,the 1980 amendments to RCRA came into effect, the Four County
Landfill automatically received "interim status* ' when EWC submitted
its "Part A" permit application in November 1980. 86 In the meantime,
STOP, an organization made up of residents in the vicinity of the
landfill, actively and vocally opposed the Landfill's receipt of waste. In

February 1987 the Environmental Protection Agency (EPA), by the

Justice Department, filed suit against Shambaugh, Wilkins, and EWC
seeking civil penalties and closure of the landfill. 87 By the time of trial,
the government asserted that the landfill lost its interim status because,

as of a date in November 1985, it did not have an adequate ground

water monitoring system in place and because it did not then have

sufficient insurance; it disposed waste in unlined cells; its groundwater

82. The author was lead counsel for STOP from December 1987, forward. EWC,
111 F. Supp. 1485, 1489 (N.D. Ind. 1990).

83. EWC, 710 F. Supp. 1172, 1181-82 (N.D. Ind. 1989).
84. Id. at 1181.

85. Id. at 1226-27.

86. Id. at 1183. The district court described the Part A permit process in some
detail. Id. at 1182. See also Northside Sanitary Landfill, Inc. v. Thomas, 804 F.2d 371,

373 (7th Cir. 1986); United States v. Conservation Chem. Co., 660 F. Supp. 1236, 1237

(N.D. Ind. 1987).

87. EWC, 710 F. Supp. at 1182.



1993] ENVIRONMENTAL LAW 937

monitoring system did not comply with regulations issued under RCRA;
and, finally, a "release'' of hazardous waste or constituents had occurred

in groundwater beneath the landfill.

The court granted STOP'S motion for leave to intervene in November
1987 on the basis of the recently enacted 42 U.S.C. § 9613(i),88 and in

view of the fact that, in § 9613(i)'s terms, the government did not make
any showing that the intervener's "interest is adequately represented by

existing parties." 89 STOP sought "nothing short of permanent closure."90

1. The EWC Trial—The trial consumed thirty court days from
December 1988 through February 1989. In the middle of the trial, the

government's lawyers disclosed to STOP a July 1986 loan agreement
among Shambaugh, Wilkins, and an entity known as Resources Unlim-
ited, Inc. (RUI), by which, among other things, RUI agreed to loan
EWC money and to serve as its broker of waste shipped to the landfill.
RUI was a subsidiary of Heritage Environmental Services, Inc. Both
companies were part of an organization called the Heritage Group.91

The court issued its decision March 1989. In addition to imposing
a fine on the defendants of $2.78 million, for the first, and apparently
still the only time in the history of litigation under RCRA, the court
closed the Four County Landfill permanently in specific response to
STOP'S request for that relief. 92 In addition to the permanent closure
order, the court ordered Shambaugh and EWC to take corrective action
at the landfill, "forthwith."93

2. The EWC Bankruptcies and Heritage—Within ten business days
of the trial court's decision, each of the defendants in EWC filed for
protection under Chapter 11 of the Bankruptcy Code. Following the

bankruptcy filing, in addition to reporting approximately $2 million in

cash on frand, 94 EWC disclosed contract documents by which, from
December 1986, RUI controlled a bank account into which all of EWC's
receipts were deposited. 95 The documents also reflected the fact that in

August 1988, RUI had agreed to pay Shambaugh and Wilkins $250,000
each for an option to purchase the landfill within the next three years

for a prize between $5 million and $10 million. 95 RUI eventually

88. EWC, 698 F. Supp. 1422, 1425 (N.D. Ind. 1988).
89. Id. at 1440-41.

90. EWC, 710 F. Supp. at 1181.
91. Id. at 1203-04 & n.28.
92. EWC, 917 F.2d at 331-32 & n.2; EWC, 710 F. Supp. at 1245-47.
93. EWC, 710 F. Supp. at 1249-55.
94. EWC, 125 B.R. 546, 547 (Bankr. N.D. Ind. 1991).
95. Appendix for Appellants at 35, 65-66, Supporters to Oppose Pollution, Inc.

Heritage, No. 91-1247 (7th Cir. 1991) (hereinafter STOP Appendix).
96. Id. at 37-38, 72-87.



938 INDIANA LAW REVIEW [Vol. 26:921

filed a secured claim against EWC's estate in the amount of $430,000. 97

3. STOP'S First Complaint Against Heritage.—In July 1989 STOP
gave "immediate" notice of its intent to sue as provided by 42 U.S.C.

§§ 6972(b)(1) and 2(A), and filed the first of what would become three

separate actions against the Heritage Group and others, including RUI
and Heritage Environmental Services, Inc.

In October 1989 the Heritage Group moved to dismiss STOP'S
complaint on several grounds. One ground asserted that STOP had not
given ninety days notice of its claim of imminent endangerment, contrary

to 42 U.S.C. § 6972(b)(2)(A). Another, based on res judicata, contended

that STOP'S failure to name the Heritage Group as an additional party
defendant in EWC barred it from doing so in a second action. A third
contended that STOP'S claim based on the hazardous waste provisions
in RCRA was barred in terms of 42 U.S.C. § 6972(b)(1)(B) because the
government was diligently pursuing EWC, then on appeal.

4. Hallstrom and STOP'S Second Complaint.—In the meantime,
on November 7, 1989, the Supreme Court issued its decision in Hallstrom
v. Tillamook County9* that the sixty-day notice requirement in 42 U.S.C.

§ 6972(b)(1) was a mandatory condition precedent to suit and that failure

to give the notice before suit was filed required dismissal of the action,

no matter how far along it may have proceeded."
Later, in November 1989, in an effort to comply with the Supreme

Court's holding in Hallstrom, STOP dismissed its first complaint against
Heritage and immediately filed a new suit by way of a slightly revised
complaint.

STOP'S second complaint against Heritage was, like the first, in two

counts. Count I sought relief for the Landfill's imminent endangerment. 100

Count I was new in terms of the claims asserted in EWC. Neither the
government nor STOP had asserted a claim for imminent endangerment

97. In re EWC, No. 89-30581 (Bankr. N.D. Ind. 1989).
98. 493 U.S. 20 (1989).

99. The Supreme Court left open the option of plaintiffs giving notice and filing

suit in compliance with the statute. Id. at 32.

The Supreme Court was not presented with the immediate notice required in suits

involving hazardous waste. The district court in EWC did face that issue; it concluded
that the immediate notice should not be treated as jurisdictional. 710 F. Supp. 1172,

1190. The Seventh Circuit affirmed this and several other procedural rulings in a footnote.

EWC, 917 F.2d 327, 331 & n.l; see also Dague v. City of Burlington, 935 F.2d 1343,
1349-52 (2d Cir. 1991). (Court would not dismiss untimely RCRA notice as to some claims
where others were subject of immediate notice pursuant to 42 U.S.C. § 6972(b)(l)&(2)).

100. STOP Appendix at 24, 27-125. STOP incorrectly cited 42 U.S.C. § 6973(a) as
the basis for its suit. Section 6973(a) authorizes the government to bring imminent

endangerment cases in terms essentially identical to 42 U.S.C. § 6972(a)(l)(B)'s authorization

of citizens to do so.



1993] ENVIRONMENTAL LAW 939

in EWC. Count II, on the other hand, was presented as derivative of
the claims both the government and STOP had raised in EWC. It sought
to hold Heritage liable for the remedies awarded in EWC and for current
and future violations of RCRA's hazardous waste provisions at the
landfill.

101

5. Second Complaint Against Heritage Dismissed.—The district court
dismissed STOP'S complaint against Heritage in July 1990. 102 The court
addressed only two of the group's positions, which it held were conclusive.

The court treated Count II, the claim based on alleged violations of

RCRA's hazardous waste provisions, first. While the court discussed
Heritage's contention that the government's involvement in the appeal

in EWC and the pending EWC bankruptcies constituted * 'diligent pros-
ecution of an action in court" for purposes of 42 U.S.C. § 6972(b)(1)(A),

its actual holding sounded as though it was based on principles of res

judicata. 103

Having dismissed count II, the court then dismissed count I, imminent

endangerment, because STOP had not complied with the ninety-day
notice requirement in 42 U.S.C. § 6972(b)(2)(A). 104 The court acknowl-

edged that STOP had given presuit notices in July of the previous year,
just before it filed its first suit against Heritage. However, relying on

dictum in Hallstrom v. Tillamook County, 105 the court concluded that

notice may be given only when no litigation exists among the affected
parties.

106 In August 1990, STOP gave a new round of RCRA presuit
notices

107
as a prelude to a third suit against Heritage. 108

101. STOP Appendix for Appellant at 47-48. Unlike the claim of imminent en-
dangerment, which specifically covers past actions, 42 U.S.C. §§ 6972(a)(1)(B), 6973(a),

Count IPs claims, based as they were on 42 U.S.C. § 6972(a)(1)(A), could lie only if it

included current or future violations of the hazardous waste provisions. See Gawaltney

of Smithfield Ltd. v. Chesapeake Bay Found., Inc., 484 U.S. 49, 58-59 (1987); McClellan

Ecological Seepage Situation v. Weinberger, 707 F. Supp. 1182, 1187 (E.D. Cal. 1989).

102. STOP, 32 E.R.C. 1154 (N.D. Ind. 1990).
103. Given the breadth of the order in the original EPA action, STOP'S allegations

that the Heritage Group committed substantially the same violations as those of the original

defendants bars STOP from commencing a new action for the same violations as in the
EPA action. The EPA (and STOP) continue to pursue the EPA action. Therefore, this
citizen suit is barred by 42 U.S.C. § 6972(b)(1)(B). Id. at 1156.

104. Id.; see infra note 181 and related text for the operative language of RCRA
§ 6972(b)(2)(A).

105. 493 U.S. 20 (1989) ("Retroactive operation of our decision will further the

congressional purpose of giving agencies and alleged violators a 60-day nonadversarial

period to achieve compliance with RCRA regulations."). Id. at 32.
106. STOP, 32 E.R.C. at 1156. In Coalition Against Columbus Center v. New

York City, 750 F. Supp. 93, 95 (S.D.N.Y. 1990), the court noted that a Clean Air Act

claim had not been preceded by timely notice. However, since the proper period had run

since a post-complaint notice had been given, the court stated it would dismiss the claim



940 INDIANA LAW REVIEW [Vol. 26:921

6. 1989 Judgment in EWC Affirmed.—In October 1990, the Seventh
Circuit affirmed all aspects of the district court's judgment in EWC,
including a number of jurisdictional and procedural rulings important

environmental citizens suits, not the least of which was the court's

order permanently closing the landfill. 109 At the end of its opinion, the
Seventh Circuit approved, in passing, several other rulings. In one of

them, the district court concluded that a winning citizen who had in-
tervened pursuant to 42 U.S.C. § 9613(i) could obtain attorneys fees

and expenses, even though § 9613(i) did not so provide. 110

7. Third Complaint Against Heritage.—By November, 1990, more
than ninety days had passed since STOP had given its new round of
presuit notices to Heritage. That month, STOP filed its third complaint
against Heritage. 111 Unlike the earlier complaints, it was limited to a

claim of imminent endangerment.

8. STOP'S Third Complaint Dismissed.—The district court dis-
missed STOP'S third complaint in March 1991. 112 The district court
presented two grounds for dismissing the last of STOP'S complaints
against Heritage. The first, once again, involved the notice provision in

without prejudice and allow plaintiffs to refile immediately, presumably on the basis of

the original notice.

This result probably violates the decision in Hallstrom v. Tillamook County: ''Pe-

titioners remain free to give notice and file their suit in compliance with the statute to

enforce pertinent environmental standards." 493 U.S. at 32 (emphasis added) . It appears

that, where a claim is dismissed because of a bad pre-suit notice, the Supreme Court

would require a new and timely notice be given before the new action may be filed.
That, at least, is what the district court held as to STOP'S second complaint against

Heritage STOP, 32 E.R.C. at 1156.
107. STOP Appendix at 244-53.
108. STOP, 760 F. Supp. 1338, 1339 (N.D. Ind. 1991).
109. In addition to holding that RCRA authorized permanent closure of an interim

status facility by judicial decree, the Seventh Circuit held that the court properly balanced

the equities, "notwithstanding that it may not have even been required to undertake such
a balance. It is an accepted equitable principle that a court does not have to balance the

equities in a case where the defendant's conduct has been willful." EWC, 917 F.2d at
332. Compare, N.R.D.C. v. Texaco Refining, 906 F.2d 934, 939-41 (3d Cir. 1990) (Court

balances equities in environmental case.).

The court made clear that a citizen group had the same power as the government

to obtain permanent judicial closure of a RCRA facility: "Our conclusion is in no way
changed by the fact that it was STOP, and not the EPA, that asked for permanent
closure of the Landfill." EWC, 917 F.2d at 332 & n.2.

110. Id. at 335. The district court had concluded that, "for attorney fee purposes,

an intervention under 42 U.S.C. § 961 3(i) may be deemed a suit brought pursuant to the
citizens suit section." [42 U.S.C. § 6972] EWC, 710 F. Supp. 1172, 1248 (N.D. Ind.
1989).

111. STOP Appendix at 202-54.
112. STOP, 760 F. Supp. 1338 (N.D. Ind. 1991).



1993] ENVIRONMENTAL LAW 941

42 U.S.C. § 6972(b)(1)(B). While STOP had given more than ninety
days notice before filing its complaint, once again, STOP had not done
so during a "nonadversarial" period. Whereas the earlier dismissal was

based upon the pendency of the original complaint against Heritage, it
was the pendency of the court's nonfinal dismissal of the second com-

plaint against Heritage that destroyed the possibility of a "nonadver-

sarial" period following the August 1991 notice. 113

Unlike the July 1990 dismissal of STOP'S second complaint—when
the court refused to consider Heritage's reliance on res judicata as a

defense—this time the court held that, because STOP had failed to name
Heritage as defendants in the original EPA suit, it was barred from
suing them thereafter on the basis of res judicata. Relying on a long

line of Seventh Circuit authority, the court concluded that STOP'S claim
of imminent endangerment, although different in some respects from
the claims STOP and the government asserted in EWC, was not such
as to avoid the Seventh Circuit's cases defining ''the same cause of

action" 114 and, in fact, constituted nothing more than a change in legal
theory. 115

C. The Seventh Circuit's Decision

1. The Seventh Circuit's Rulings on Res Judicata.—The Seventh
Circuit affirmed the district court's dismissal of STOP'S third complaint
grounded on res judicata. 116 First, it held that Federated Department

Stores, Inc. v. Moitie117 "scotches equitable arguments" for exceptions

to merger and bar. 118 The court then rejected STOP'S arguments that
its claim of imminent endangerment was different in kind—was a different
cause of action—from claims of hazardous waste violations that both
STOP and the government had alleged in EWC. In so doing, the court

113. Id. at 1342. The dismissal was "nonfinal" because STOP had filed a motion
to alter or amend the judgment pursuant to Rule 59(e) of the Federal Rules of Civil
Procedure, which was not ruled on until January 1991.

114. See, e.g., Car Carriers, Inc. v. Ford Motor Co., 789 F.2d 589, 593 (7th Cir.

1986).

115. STOP, 760 F. Supp. at 1345. Since res judicata was available to Heritage, in
part due to its "privity" with the EWC defendants, in a last ditch effort to impose
liability on Heritage, STOP attempted to enforce the March 1989 judgment in EWC
directly against Heritage. STOP hoped to persuade a court, whether district or appellate,
that the very privity that triggered res judicata should allow STOP to execute the source
of that res judicata effect, the judgment in EWC, directly against Heritage. The district
court rejected the position, EWC, 131 B.R. 410, 422-23, and the Seventh Circuit affirmed
in emphatic terms. STOP, 973 F.2d 1320, 1327-28.

116. STOP, 973 F.2d 1320, 1325 (7th Cir. 1992).
117. 452 U.S. 394 (1981).

118. STOP, 973 F.2d at 1325.



942 INDIANA LAW REVIEW [Vol. 26:921

relied essentially on the definition of "cause of action" in Car Carriers,

Inc. v. Ford Motor Co.. n9

Having rejected all of STOP'S opening arguments, the court turned
STOP'S effort to make use, in its reply brief, of the rule of non-

preclusion as to a successful plaintiff who later sues parties in privity
with the judgment debtor in Restatement (Second) of Judgments, Section

49. The Court apparently misunderstood STOP'S argument: "In its reply
brief [STOP] tries to retract the concession in its opening brief that

Heritage is the privy of EWC. This comes too late and is more than
a little odd, for the assertion that Heritage controlled EWC's actions
is the foundation of [STOP's] substantive contentions." 120 The court
then completed the res judicata portion of its opinion by referring to

an important Supreme Court decision on collateral estoppel: "[T]he

sequence here tracks Montana v. United States121 (citation omitted): suit
No. 1 by or against the cat's paw, followed by suit No. 2 by or against

the cat. Under Montana, cat and cat's paw are the same, and the second
suit must be dismissed." 122

2. Implications.—On its face, the opinion holds that any plaintiff
must name all defendants in privity with each other, before judgment,
or face an insuperable defense of preclusion based on that judgment.

Whether the plaintiff won a judgment or lost the suit does not matter.
The holding that a plaintiff who won an unsatisfied judgment against
parties* in privity with nonparties is precluded from suing the nonparties

in a second suit is new law in this circuit and everywhere else.
Montana v. United States™ first, did not involve claim preclusion

at all. Second, its facts, and its holding, were limited to a plaintiff

—

and the party who controlled the plaintiff—who lost the first action.
Montana, therefore, serves as no authority for the result the Seventh

Circuit reached in STOP v. Heritage. 124

STOP v. Heritage's holding that a winning plaintiff is precluded by
merger from suing another obligor in a later suit thus appears unique

—

but for the result in Lowell Staats Mining Co. v. Philadelphia Electric

Co. 125 Staats Mining did involve preclusion of a plaintiff who had won
a judgment in the first action from suing, in a second action, a partner

of a defendant in the first. However, the Tenth Circuit was careful to

note that the first judgment merged the later claim because controlling

119. 789 F.2d 589 (7th Cir. 1986).

120. Id. at 1327.

121. 440 U.S. 147 (1979).

122. STOP, 973 F.2d at 1327.
123. 440 U.S. 147 (1979).

124. 973 F.2d 1320 (7th Cir. 1992).

125. 878 F.2d 1271 (10th Cir. 1989).



1993] ENVIRONMENTAL LAW 943

state substantive law rendered partners jointly and severally liable for

partnership obligations. The Tenth Circuit did not reject the general rule

of nonpreclusion as to successful plaintiffs bringing second actions. 126

The Seventh Circuit's holding is, in fact, unique. The holding could

have a profound effect on all litigation involving multiple defendants.

Plaintiffs must invest inordinate resources into finding all possible de-

fendants before filing suit (or at least before judgment). For impecunious

plaintiffs, such as citizen groups like STOP, the extra burden may be
unbearable. Thus, in addition to the several statutory barriers citizen

environmental litigants must face, they now face an all but insuperable
practical one. For, under STOP v. Heritage, "silent partners" actually
responsible for environmental damage will benefit from creating fronts

and shadow corporations.

The government played no role in STOP'S efforts to impose liability

beyond the original EWC defendants. Nevertheless, the government should
be concerned about the Seventh Circuit's holding on preclusion. The

government was the other winning plaintiff in EWC. There is nothing
about the holding that would not apply in equal measure to a suit the

government might bring against defendants such as Heritage after a

successful, but unsatisfied, first action. 127

Interlude No. 3: State ex rel Prosser v. Indiana Waste Systems 128—
Indiana Consent Decrees and Indiana Citizen Suits

For years the Gary city dump had been a thorn in the side of
Indiana's environmental agency. As early as 1977 the state had sought

an injunction against the dump due to various violations of environmental
requirements. 129 Over the next eleven years, the case encompassed another

appeal, a permanent injunction (almost immediately vacated), lengthy

periods of inactivity, a contempt citation which also was stayed, and,

finally, an "Agreed Judgment" between the Indiana Department of

Environmental Management (IDEM) and the city in December 1988. 13°

126. Lowell Staats Min. Co., Inc. v. Philadelphia Elec. Co., 878 F.2d 1271, 1279

(10th Cir. 1989).

127. The Seventh Circuit described the district court's decision in terms that put

the government in the same shoes as STOP: "[B]ecause by [STOP's] own argument
Heritage is at least a privy of EWC (if it is not EWC's alter ego), the final judgment
concerning EWC in the case the EPA and [STOP] jointly prosecuted forecloses any later
litigation against Heritage under RCRA." 973 F.2d at 1325.

128. 603 N.E.2d 181 (Ind. Ct. App. 1992).

129. The early history of the Gary dump litigation is described in City of Gary v.
Stream Pollution Control Bd., 422 N.E.2d 312, 313-15 (Ind. Ct. App. 1981).

130. State ex rel. Prosser v. Indiana Waste Sys., Inc., 603 N.E.2d 181, 183 (Ind.

Ct. App. 1992); see also State ex rel. Prosser v. Lake Circuit Court, 565 N.E.2d 751,

752-53 (Ind. 1991).



944 INDIANA LAW REVIEW [Vol. 26:921

Under the agreed judgment, the dump could operate until January
1, 1990 with closure to be completed by June 30, 1991. On January 2,
1990, the city requested the court to stay the Agreed Judgment. By May

1990, the city (under pressure of yet another order compelling

compliance with the December 1988 agreement) and Indiana Waste Sys-
tems, Inc. (IWS), an operator of solid waste landfills, were negotiating

a basis for IWS to manage the dump, subject to state approval. 131 That
deal fell through and, on May 31, the city told the court it did not
have an agreement with IWS. The City again requested an extension to
seek another third-party operator. The court continued the case until

June 4, 1990. 132

On June 4, the city stated that it had reached an agreement with
a competitor of IWS. 133 The next day, both the city and the State
submitted to the court an agreed judgment, to which was attached an

agreement between Mid-American and the city. 134 The court stayed earlier
enforcement orders and set a hearing for July 2. On June 29, IWS filed
a motion to intervene together with a complaint. 135 The court reset the

July 2 hearing on the agreed judgment to July 27. On that date, however,
the court granted IWS' motion for leave to intervene and delayed the

hearing on the agreed judgment. On December 21, 1990, the court
rejected the agreed judgment and replaced it with a set of alternative

proposed "resolutions of the case." 136 After the state and city rejected

the court's alternatives, 137 the court entered a judgment that rejected the

agreed judgment of June 1990, and reaffirmed a series of earlier orders. 138

All parties appealed.

131. IWS owned land adjacent to the city's dump which it intended to operate as
a landfill once it received a permit to do so. It was also suing the city over pollution

of its property allegedly emanating from the city's dump. 603 N.E.2d at 183 n.3; 565

N.E.2d at 752-53.

132. Prosser, 603 N.E.2d at 183-84.

133. The agreement was allegedly made with Mid-American Waste Systems of Indiana

(Mid-American). Id. at 184.

134. Id. According to the agreement, "Mid-American was to operate the Dump,
and perform remedial activities, and to be responsible for closure and post-closure activities

at the Dump." Id.
135. IWS' complaint was based on Indiana Code § 13-6-l-l(a). This section provides

in relevant part: "a corporation . . . maintaining an office in Indiana may bring an action
for declaratory and equitable relief in the name of the state against ... a state agency,
or ... a city, ... or an official, ... for the protection of the environment of Indiana

from significant pollution, impairment, or destruction." Ind. Code. § 13-6-l-l(a) (Supp.

1992).

136. Prosser, 603 N.E.2d at 184-85 n.4.

137. IWS accepted both.
138. Prosser, 603 N.E.2d at 184.



1993] ENVIRONMENTAL LAW 945

Although several issues were presented on the appeal, only two merit

attention here. They involve the status of Indiana environmental consent

decrees and how one portion of Indiana's citizen suit statute operates.
1. Environmental Consent Decrees in Indiana.—Indiana has long

had a clear rule on the extent to which a court may reject an agreed
judgment proposed by the parties. In State v. Huebner139 the Indiana

Supreme Court held that, when presented with an agreed resolution of
the case, the court does not perform a judicial act. The duty of the
court is ministerial—to have the writing entered as agreed upon. 140 Given
this established rule, the appellate court had little difficulty rejecting

IWS' argument that the court had "discretion to evaluate the substance

of the agreement, and, when the trial court finds the agreement unrea-
sonable . . . the court may refuse to approve" 141 it.

Although adherence to the rule of nondiscretion was no doubt correct

for an intermediate court of appeal, the supreme court might revisit this

area of the law when confronted with a proposed agreed equitable decree
that would operate over some substantial period of time and require

ongoing judicial oversight. 142 As IWS argued, federal cases grant trial
courts some discretion to reject proposed consent decrees. 143 On the other
hand, where a specialized agency presents a comprehensive agreement

reflective of the agency's expertise, it can be argued that the need for

judicial oversight is negligible. 144

2. Indiana Citizen Suits and Diligent Prosecution.—Although the
court considered IWS' arguments against the June 5 agreed judgment,

it also concluded that the trial court had no basis for granting it leave

to intervene. Noting that it was presented with a case of first impression,

the court, concluded that the diligent prosecution bar in Indiana Code
section 13-6-1-1 (b)(2) 145 left IWS with no interest on which to intervene,

139. 104 N.E.2d 385 (Ind. 1952).

140. Id. at 388. See Ingoglia v. Fogelson Cos., 530 N.E.2d 1190, 1199 (Ind. Ct.

App. 1988); Ash v. Chandler, 530 N.E.2d 303, 306 (Ind. Ct. App. 1988); compare Hanover

Logansport, Inc. v. Robert C. Anderson, Inc., 512 N.E.2d 465, 470-71 (Ind. Ct. App.

1987).

141. Prosser, 603 N.E.2d at 185-86.

142. Ingoglia, 530 N.E.2d at 1199-1200.

143. E.g., Donovan v. Robbins, 752 F.2d 1170, 1177 (7th Cir. 1984). The court's

extent of discretion is circumscribed. See Durrett v. Housing Auth. of Providence, 896

F.2d 600, 603 (1st Cir. 1990), United States v. City of Alexandria, 614 F.2d 1358, 1360-

62 (5th Cir. 1980); United States v. City of Miami, 614 F.2d 1322, 1332-33 (5th Cir.

1980).

144. Alexandria, 614 F.2d at 1333.

145. This section provides that a citizen or corporation that brings suit under this

section "may not maintain the action" unless "the agency that commences an administrative
proceeding or a civil action on the alleged pollution, impairment, or destruction does not

diligently pursue the administrative proceeding or civil action." Ind. Code § 13-6-1 -1(b)(2)
(Supp. 1992).



946 INDIANA LAW REVIEW [Vol. 26:921

since it failed to show that the state had not diligently prosecuted its

case against Gary through the June 5 agreed judgment. 146 Because no

Indiana authority was available, the court construed Indiana Code section
13-6-1-1 (b)(2)'s diligent prosecution clause in terms of RCRA's diligent
prosecution defense147 and two federal cases. 148 The court refused IWS's
invitation to define diligence in a way that "would require courts' ' to
consider the nature and substance of the agency's actions," and to

"second guess the agency's motives in determining whether the agency

was diligent in its pursuit of the case." 149 Instead, after discussing the

federal cases the court synopsized their approaches to "diligence:"

[T]he courts did not consider the substance of the government

action, nor did the court in either case speculate or attempt to

evaluate possible motives. Rather, the issue of whether the gov-

ernment was diligently prosecuting its case focused on the degree

to which the government remained involved in the case after

commencing the action. 150

The court concluded that IWS had no standing because the State
had maintained an active involvement in the case against the city,

including its effort to resolve it by way of the agreed judgment. 151 The
court's distillation of federal authority appears to be a workable standard.

The decision does not resolve problems with Indiana Code section
13-6-1-1 itself. Several inherent problems with this legislation raise doubts

about how many claims will be pursued under it. First, it is somewhat
unclear what sort of claims the statute actually covers. A federal court
concluded a few years ago that the statute did not control "environ-

mental" claims that fell within the framework of traditional causes of

action.
152 The statute will likely be applied to claims which the Attorney

General might bring, presumably including attempts to enforce state

environmental statutes or regulations or in some other way to defend
the interests of the State or substantial segments of its population.

The very size and complexity of such "AG-like" cases is likely to

limit the scope of section 13-6-1-1, at least from the point of view of

146. State ex rel. Prosser v. Indiana Waste Sys., Inc., 603 N.E.2d 181, 187-89 (Ind.

Ct. App. 1991).

147. 42 U.S.C. § 6972(b)(1)(B) (1988).

148. Prosser, 603 N.E.2d at 187-89. See Dague v. City of Burlington, 935 F.2d

1343 (2d Cir. 1991) and McGregor v. Industrial Excess Landfill, Inc., 709 F. Supp. 1401

(N.D. Ohio 1987), aff'd, 856 F.2d 39 (6th Cir. 1988).

149. Prosser, 603 N.E.2d at 188.

150. Id. at 189.

151. Id.

152. Massa v. Peabody Coal Co., 698 F. Supp. 1446, 1452 (S.D. Ind. 1988).



1993] ENVIRONMENTAL LAW 947

ordinary citizens. Unlike federal citizen suit statutes, section 13-6-1-1 has

no provision for an award of attorneys fees or expenses to successful

claimants. 153 It is far more likely, therefore, that Indiana Code section
13-6-1-1, with its pre-conditions to suit, will be chosen as a shield rather

than as a sword, as it was in State ex rel. Prosser v. Indiana Waste

Systems, Inc..

D. The Seventh Circuit's Decision in STOP v. Heritage Group

1. The Seventh Circuit's Ruling on Diligent Prosecution.—As we
return to the Seventh Circuit's decision in STOP v. Heritage Group,
and specifically its holding on diligent prosecution, it may be well to
review what has and has not occurred at the Four County Landfill.

First, despite the fact that the district court in EWS ordered corrective
action "forthwith" in March 1989, in fact no remediation at the landfill

has occurred. By March 1991, the district court noted that data disclosed
after the trial in EWC showed contamination in the groundwater at the
landfill to have reached "spectacularly high levels." 154 Second, the district

court's corrective action order by which the landfill was to be cleaned

up on a rush basis was issued under RCRA, not CERCLA. 155 The
CERCLA remedy remains unused—more than four years after the order
was issued.

Nevertheless, because the government won a judgment, according to
the Seventh Circuit, it has diligently prosecuted "an action" that bars

any citizen from attempting to achieve what that original action was

intended to achieve. This despite the fact that, once the government

obtained, its unenforceable judgment against the bankrupt EWC defen-
dants, it took no action against third parties the citizens attempted to

sue. The court's view of diligent prosecution bars STOP (and possibly
others) from even attempting to achieve remediation.

The court's construction of 42 U.S.C. § 6972(b)(1)(B) is not compelled

by its language. The relevant language is: "If the Administrator ... is

153. Compare 42 U.S.C. § 6972(e) (1988) and 33 U.S.C. § 1365(d) (1988).
154. EWC, 125 B.R. 546, 548, 551 (Bankr. N.D. Ind. 1991).
155. EWC, 710 F. Supp. 1172, 1241-42; 1248-55 (N.D. Ind. 1989). On March 29,

1989, the district court ordered corrective action on the basis of these findings,

The EPA has demonstrated its entitlement to an order that EWC implement a
corrective action plan in light of the release of hazardous waste constituents

into the groundwater beneath the Landfill. . . . Time is of the essence in rem-

edying such contamination; to await the passage of the contamination from the

facility's boundaries simply compounds the difficulties. As the EPA noted during
final argument, one need not await a catastrophe before ordering corrective

action.

Id. at 1241.



948 INDIANA LAW REVIEW [Vol. 26:921

diligently prosecuting a civil or criminal action ... to require compli-

ance.

'

M56 This does not support an interpretation that, in effect, has

amended § 6972(b)(1)(B) to provide a citizen suit is barred, if the
Administrator is diligently prosecuting a civil or criminal action or as

a result of an action has obtained a judgment against any party. The

plain wording of § 6972(b)(1)(B) seems to mean precisely the contrary.
Even though the government had obtained a judgment in EWC against
some parties responsible for violations of RCRA and its regulations,
when STOP brought its suits against Heritage, the government was not
diligently prosecuting an action that had any bearing on the problem

that gave rise to the EWC case.
Several Clean Water Act cases 157 have made it clear that earlier

litigation by the government does not preclude later citizen recourse to

the courts, where the government's action has ceased, 158 or is irrelevant

to the problems the citizens wish to address. 159 These cases are consistent

with available legislative history. The Clean Water Act's diligent pros-
ecution clause first appeared as section 505 of the Federal Water Pollution

Control Act Amendments of 1972. 160 In a senate report, 161 the Public
Works Committee said of the notice/diligent prosecution language in
section 505:

The Committee has provided a period of time after notice

before a citizen may file an action against an alleged violator.
The time between this and filing of the action should give the

administrative enforcement office an opportunity to act on the

alleged violation.

It should be emphasized that if the agency had not initiated

abatement proceedings following notice or if the citizen believed

efforts initiated by the agency to be inadequate, the citizen might

156. 42 U.S.C. § 6972(b)(1)(B).

157. 33 U.S.C. § 1365(b)(1)(B) provides that no citizen suit "may be commenced
if the Administrator or State has commenced and is diligently prosecuting a civil or

criminal action ... to require compliance." Id.

158. New York Coastal Fishermen's Ass'n. v. Department of Sanitation, 772 F.
Supp. 162, 165-69 (S.D.N.Y. 1991); Connecticut Fund for Env't v. L & W Indus., 631
F. Supp. 1289, 1291 (D. Conn. 1986); S.P.I. R.G. v. Georgia-Pacific Corp., 615 F. Supp.

1419, 1427-28 (D. N.J. 1985). See United States v. City of Green Forest, 921 F.2d 1394,

1405 (8th Cir. 1990).

159. Hudson River Fishermen's Ass'n. v. Westchester County, 686 F. Supp. 1044,
1052-53 (S.D.N.Y. 1988) (Citizen's suits are not barred "when it appears that the Gov-

ernment's effort does not address the factual grievances asserted by private attorneys

general."). Id.

160. Codified at 33 U.S.C.A. § 1365 (West 1986 & Supp. 1993).
161. S. Rep. No. 414, 92nd Cong., 1st Sess. (1972), reprinted in 1972 U.S.C.C.A.N.

3668, 3745-46.



1993] ENVIRONMENTAL LAW 949

choose to file the action. In such case, the court would be

expected to consider the petition against the background of the

agency action and could determine that such action would be

adequate to justify suspension, dismissal, or consolidation of the

citizen petition. On the other hand, if the court viewed the
agency's action as inadequate, it would have jurisdiction to

consider the citizen action notwithstanding any pending agency

action. 162

In Dague v. City of Burlington, 162 a case brought under RCRA over
a leaking landfill, the State of Vermont had earlier entered into an

"Assurance of Discontinuance' ' in the form of a state court order

"requiring compliance with the standards alleged to have been vio-

lated." 164 On this basis the defendant argued that the citizen plaintiffs
were barred from suit due to the state's diligent prosecution. The Second

Circuit held that a citizen could sue the defendant free of the bar in

§ 6972(b)(1)(B) because, first, the consent decree was not the product

of a suit, and therefore was not "an action." Second, the court then

assumed the consent decree was "an action" and still upheld the citizens'

right to sue. Although the state did some things to enforce the Assurance,

its "conduct does not meet the level of diligence that would trigger the

prohibition of a citizen suit." 165 The state's later act of filing suit did

not constitute diligent prosecution166 in light of the actual effect of the

state's actions and inaction.

2. Implications.—If followed by other courts, the Seventh Circuit's
clear preference for SuperFund legislation, the "heavy artillery" 167 of

cleanup laws, will go far to prevent those without wealth from enforcing

any part "of- RCRA and to moot § 6972. First, while CERCLA does
contain a citizen suit provision, 168 its scope is distinctly limited. 169 In

162. Cf., S. Conf. Rep. No. 92-1236, 92nd Cong., 2d Sess. (1972), reprinted in,

1972 U.S.C.C.A.N. 3776, 3822-23 (emphasis added).

163. 935 F.2d 1343 (2d Cir. 1991).

164. The State brought suit against the city to enforce the consent decree, after

citizens filed the suit at issue on appeal.

165. 935 F.2d at 1353.

166. Id. "Beyond this one action, the state made no attempt to ensure compliance
with the rest of the Assurance; instead it allowed the City numerous extensions." See

State Ex Rel. Prosser v. Indiana Waste Sys., Inc., 603 N.E.2d 181, 188-89 (Ind. Ct. App.
1992).

167. STOP, 973 F.2d 1320, 1324 (7th Cir. 1992).
168. 42 U.S.C.A. § 9659 (West Supp. 1993).

169. Section 9659(a)(1) and (2) allows citizens to bring civil actions "against any

person . . . who is alleged to be in violation of any standard, regulation, condition,
requirement, or order which has become effective pursuant to this chapter," or "against



950 INDIANA LAW REVIEW [Vol. 26:921

Regan v. Cherry Corp., 110 the court reviewed CERCLA's legislative
history bearing on citizen suits, and concluded that CERCLA did not
authorize citizen suits to force potentially responsible parties to clean

up waste sites:

[R]ather than create a duplicative private action for response

costs, Congress intended to establish a citizens suit provision

through which the public could prod the executive branch into

zealously enforcing hazardous waste laws. In addition, Congress

intended that [Section 9659] establish private attorneys general

to supplement administrative action and aid in attacking CER-
CLA violators. 171

In Cadillac Fairview/California v. Dow Chemical Co., 112 the Ninth Circuit
held that 42 U.S.C. § 9606(a) did not provide a private cause of action

for injunctive relief.

Thus, the citizens' role in enforcing CERCLA appears limited. Ac-
cording to the language of § 9659, citizens may only enforce settlements
or cleanups after they have been agreed to or ordered, or force federal

agencies to perform non-discretionary duties. Private parties may not
initiate cleanups. CERCLA allows suit by a private party under § 9607(a)
if that party has incurred actual response costs. 173 For a private party

who does not (or cannot) actually incur response costs due to a hazardous
waste site, prosecution under RCRA is the only federal means to achieve
cleanup.

The Seventh Circuit's decision on diligent prosecution reflects a clear

preference for large entities and interests, including the government. For

example, the court's solicitude for the EPA's ability to make concessions174

reflects a fear that if a citizen suitor like STOP can assert a claim
against a silent partner of a penniless judgment debtor, "fear of this

liability will lead" the silent partner "to fight to the death in the initial

suit." 175 Why is this a bad result? If a complicated set of interrelated

the President or any other officer of the United States . . . where there is alleged a failure

of the President or of such other officer to perform any act or duty under this chapter

. . . which is not discretionary." Id.

170. 706 F. Supp. 145 (D.R.I. 1989).

171. Id. at 149. See also H.R. Rep. No. 253 (Pt. 3), 99th Cong., 2d Sess. 37 (1985),

reprinted in 1986 U.S.C.C.A.N., 3038, 3060.

172. 840 F.2d 691 (9th Cir. 1988).

173. E.g., McGregor v. Industrial Excess Landfill, Inc., 856 F.2d 39, 43-44 (6th

Cir. 1988); see also Ascon Properties, Inc. v. Mobil Oil Co., 866 F.2d 1149, 1154 (9th

Cir. 1989).

174. STOP, 973 F.2d 1320, 1324 (7th Cir. 1992) ("An administrator unable to make

concessions is unable to obtain them. A private plaintiff waiting in the wings then is the
captain of the litigation.").

175. Id.



1993] ENVIRONMENTAL LAW 951

business organizations understands that a RCRA citizen plaintiff can
prosecute an action even though the federal government has given up

enforcing a judgment against one part of the set, perhaps the entire

group would come forward and "fight to the death the first action.'

'

If the goal of RCRA litigation is to reduce or avoid environmental
degradation, why should one be concerned with the fact that parties
responsible appreciate the full scope of their exposure?

Finally, as the Four County Landfill litigation demonstrates, the

court's solicitude for the government's position of primacy in environ-

mental litigation rests on uncertain foundations. The Four County Land-

fill demonstrates, as well as any other failed federal enforcement action,

how limited the government's resources actually are. It is this disjunction
between the reality of the contaminated groundwater flowing from the

Four County Landfill in the face of the government's actual enforcement

abilities, on the one hand, and the Seventh Circuit's construction of

"diligent prosecution," on the other, that calls for, as the court itself

implicitly suggested, comprehensive revision of RCRA's citizen suit statute
and all statutes like it.

Perhaps the court's decision is a reflection of distaste for environ-

mental citizen suits. Even if one were to accept the argument that citizen

suit statutes provide indirect subsidies to established environmental ad-

vocates or organizations, 176 STOP'S efforts demonstrate that RCRA, at
least, because of its essentially localized focus, should remain the tool

of local communities to achieve some level of security in the face of

environmental assaults on neighborhoods.

3. "Nonadversarial" Presuit Notice.—In the course of affirming
the judgment, the Seventh Circuit described, but did not decide the

appropriateness of, the district court's acceptance of a "nonadversarial"

presuit notice. 177 No doubt it did not do so because its decision on res
judicata permanently barred STOP from claiming imminent endanger-
ment. On the other hand, the appellate court's description of the trial
court's decision based on "nonadversariness" was sufficiently benign 178

to signal approval to anyone reading the district court's decision. 179

This notion of "nonadversariness" will not be found anywhere in

RCRA's presuit notice provision:

176. Michael S. Greve, The Private Enforcement of Environmental Law, 65 Tul.

L. Rev. 339, 386-91 (1990).

177. STOP, 973 F.2d at 1322-23.
178. Id. at 1322. "The district judge dismissed [STOP] II because Heritage still

had not received the 90 days of nonadversarial time that the statute contemplates." Id.

(Court's emphasis).

179. STOP, 760 F. Supp. 1338, 1340-42 (N.D. Ind. 1991).



952 INDIANA LAW REVIEW [Vol. 26:921

No action [for imminent endangerment] may be com-
menced . . . prior to ninety days after plaintiff has given notice
of the endangerment to —
(i) the Administrator;

(ii) the State in which the alleged endangerment may occur;
(iii) any person alleged to have contributed or to be contributing

to the past or present handling, storage, treatment, transpor-

tation, or disposal of any solid or hazardous waste. 180

Insertion of a requirement of "nonadversariness" into this otherwise

clear statutory language depends, as noted earlier, upon dictum in the
Supreme Court's opinion in Hallstrom v. Tillamook County. 181 Almost

at the end of its opinion the Supreme Court described Congress' purpose

in enacting RCRA's notice provisions as to give "agencies and alleged
violators a 60-day nonadversarial period to achieve compliance with

RCRA regulations." 182 This was an interpretation of what Congress may
have intended when it enacted § 6972. Given Hallstrom 's rather simple
set of facts, the case did not anticipate the sort of long-running and

complicated litigation that had engulfed the Four County Landfill for

some five years. The issue in Hallstrom centered on the fact that neither
EPA nor the State of Oregon had been given presuit notice of any
kind. 183 From the point of view of Oregon and the EPA, suit had begun
before either could involve itself in "compliance with RCRA regulations."
There was no "adversarial" period during which any form of notice

had been given. In STOP v. Heritage, all parties were given statutorily
sufficient notice "to achieve compliance with RCRA regulations" long
before the imminent endangerment claim in STOP'S third compalint was
commenced. 184

Hallstrom stands clearly for literal interpretation of § 6972.
185 But

does it also stand for the proposition that its own language ("nonad-
versarial period") — dictum on the facts of Hallstrom itself — must
also be followed literally? Nothing in Hallstrom compels a conclusion

of "nonadversariness" as an additional condition precedent to suit. To
the contrary, almost immediately after its use of the words, "nonad-

versarial period," the Supreme Court said: "Nor will the dismissal of
this action have the inequitable result of depriving the petitioners of

180. 42 U.S.C. § 6972(b)(2)(A).

181. 493 U.S. 20 (1989).

182. Id. at 32.

183. Id. at 23-24.

184. Aug. 10, 1990, when notice of STOP'S third complaint was given, preceded

November 20, 1990, the date when the complaint was filed, by 102 days. STOP Appendix
at 203-04, 244-53.

185. Hallstrom, 493 U.S. at 25-26.



1993] ENVIRONMENTAL LAW 953

their 'right to a day in court.' (Citation omitted). Petitioners remain

free to give notice and file their suit in compliance with the statute to

enforce pertinent environmental standards." 186

In the bulk of cases, § 6972(b)(2)(A) should have the effect of giving

those receiving notice an opportunity to render litigation unnecessary.

On the other hand, Section 6972(b)(2)(A) does not appear to require an
absence of litigation before a notice period may begin to operate. That,
however, was the effect of the district court's decision on STOP'S third
complaint. 187 In the Four County Landfill litigation, factually related

issues were litigated, nonstop, from 1987 through 1991. Should the

existence of "factually related issues" in other cases preclude the pos-

sibility of giving citizen suit notice to anyone as to one or more of

those related issues? Even if one were to assume that the "factually

related issues" must at least involve the same parties, must the citizen

suitor dismiss the earlier action before sending the notice? What if the
earlier action involved different factual issues or claims under different

environmental statutes? Will the Seventh Circuit's broad reading of

"cause of action" be applied in this context?

What of the "immediate notice" for violation of hazardous 188 waste
provisions allowed by §§ 6972(b)(1)(A) and (2)(A)? In Dague v. City

of Burlington, 189 the Second Circuit had little difficulty holding that

where a case involved claims subject both to the sixty-day notice and

the immediate notice called for in § 6972(b)(1)(A) (as well as the ninety-

day notice requirement in § 6972(b)(2)(A)), 190 failure to comply with the

sixty/ninety day notice requirements was excused by the fact that im-

mediate notice had been given. 191

The court set the issue in these terms:

186. Id. at 32.

187. STOP, 760 F. Supp. 1338, 1342 (N.D. Ind. 1991).
188. E.g., 42 U.S.C. § 6972(b)(2)(A):

(2)(A) No action [for imminent endangerment] may be commenced . . . prior to
ninety days after the plaintiff has given notice of the endangerment. . . . [Ejxcept

that such action may be brought immediately after such notification in the case
of an action under this section respecting a violation of [the hazardous waste

provisions of RCRA].
189. 935 F.2d 1343, 1349-52 (2d Cir. 1992), rev'd on other grounds, 112 S. Ct.

2638 (1992).

190. Id. at 1349-50. The case actually involved a fourth notice requirement: the 60-

day notice in 33 U.S.C. § 1365(a).

191. Dague, 935 F.2d at 1352. The court said, in this context, "Although the

Supreme Court's language in Hallstrom leans toward a strict application of the notice

and delay requirement, rigid adherence in this case, which involves hazardous wastes,

would lean too far, for it would circumvent congress's intent in enacting these statutes."

Id.



954 INDIANA LAW REVIEW [Vol. 26:921

[Plaintiffs' hazardous waste claims in Count I (subchapter III

violations) could be brought immediately after giving notice to

the administrator of the EPA, the state and the alleged violator.
The remaining question, therefore, is whether the notice and

delay requirements apply when allegations of subchapter III
violations are combined with non-subchapter III claims in a

single "hybrid'' complaint. Neither Congress nor the Supreme

Court in Hallstrom addressed the problems associated with this

type of "hybrid" situation. 192

The Second Circuit approved the lower court's analysis that, where a
hazardous waste claim had been properly filed immediately after notice

pursuant to § 6972(b)(1)(A), the plaintiff need neither to defer com-

mencement of the whole action until the longer notice periods had been

fulfilled, nor seek leave to amend the complaint to include claims re-
quiring greater notice after their notice periods had run. 193 It is readily

apparent from the Second Circuit's approach to the problem of "hybrid"

RCRA claims that, when a claim properly follows an immediate presuit
notice, no "nonadversarial" period for the other related claims would

be required by either the statute or the holding in Hallstrom. At least

one district court has followed this aspect of Dague as it concluded that
a RCRA notice of a claim later added to a then pending action would
not be rejected because it had been given during an "adversarial"

period. 194

Because the Seventh Circuit did not actually hold STOP must give
"nonadversarial" notices under RCRA, this issue, at least, may be open
in this circuit for further argument. Given the court's attitude in STOP
v. Heritage, however, it is likely, in the absence of legislative clarification,

that the court will require "nonadversarial" notice in future cases.

E. Epilogue

As can readily be seen, STOP'S part in the Four County Landfill
ended not with a bang, but with a whimper. But while STOP failed,
its travails as it attempted to make use of an environmental citizens'
suit statute may help others to avoid the pitfalls that led to its ultimate
loss of victory. At the very least, what the courts have done to RCRA's
citizen suit statute by interpretation may help Congress to review the

192. Id. at 1351.

193. Id. at 1351-52.

194. Zands v. Nelson, 779 F. Supp. 1254, 1258-61 (S.D. Cal. 1991). The court

specifically rejected the district court's decision in STOP, 760 F. Supp. 1338, 1340-42

(N.D. Ind.), on this point.



1993] ENVIRONMENTAL LAW 955

environmental citizen suit so that ordinary people may do what, as in
this case, the federal government will not, or cannot, do.

As of February 19, 1993, no remediation of the Four County Landfill
has occurred. The State of Indiana is spending, on average, $90,000 per

month to remove leachate from, and repair the eroding surface of, the

Four County Landfill. Negotiations among generators of waste deposited
at the landfill to achieve some form of cleanup are still ongoing. 195

EWC's bankruptcy appears close to liquidation as it approaches the end
of its fourth year, the $2 million in cash having been consumed in

various carrying costs. 196 RUI's motion to collect $430,000 from EWC's
estate based on its secured claim has not been decided yet. 197

III. Flood Plains Regulation and the Takings Clause

Indiana's current Flood Control Act was enacted in 1987. 198 Pursuant

to Indiana Code section 13-2-22- 13(a) one may not maintain "in or on
any floodway a permanent structure for use as an abode or place of

residence." 199 Floodway is defined as, "the channel of river or stream

and those portions of the flood plains adjoining the channel, which are

reasonably required to efficiently carry and discharge the flood water

or flood flow of any river or stream."200 Indiana Code section 13-2-22-

13(b) excludes far more than just residences from floodways. It makes
unlawful the presence of:

[A]ny structure, obstruction, deposit, or excavation in or on any

floodway . . . which will adversely affect the efficiency of, or

unduly restrict capacity of, the floodway, or, . . . will constitute

an unreasonable hazard to the safety of life or property, or

result in unreasonably detrimental effects upon the fish, wildlife,

or botanical resources . . . . 201

All such structures, obstructions, etc., are declared by subsection (b) to

be public nuisances. 202

195. Telephone Inverview with Patricia Carrasquero, Section Chief, SuperFund,

Indiana Department of Environmental Management (February 19, 1993).
196. EWC, 131 B.R. 410, 416 (N.D. Ind. 1991).
197. In re Environmental Waste Control, Inc., No. S92-00478M (N.D. Ind. 1992).

198. 1987 Ind. Acts ch. 34, § 73 amended by 1990 Ind. Acts ch. 102, § 1; 1990

Ind. Acts ch. 28, § 6; 1991 Ind. Acts ch. 124, § 1. The predecessor to this legislation

was enacted in 1945. 1945 Ind. Acts ch. 318, § 15.

199. Ind. Code § 13-2-22- 13(a) (Supp. 1992). The prohibition of residences in
floodways is subject to a number of exceptions set forth in subsections (a)(2) and (3).

200. Id. § 13-2-22-3(12) (1988).

201. Id. § 13-2-22-13(b) (Supp. 1992).

202. Id.



956 INDIANA LAW REVIEW [Vol. 26:921

The Director of the Department of Natural Resources (DNR),203 is
authorized to execute the Act by various means including investigations204

and eminent domain. 205 Finally, subparagraph (d) of Indiana Code section
lT-2-22-13 provides that the Director of the Department of Natural

Resources may issue permits to construct a structure, obstruction, deposit
or excavation in a floodway or improve an existing residence (within

established limits), if the Director is of the opinion that the,

[A]pplicant has clearly proven that the structure, obstruction,

deposit, or excavation will not adversely affect the efficiency of,

or unduly restrict the capacity of, the floodway, will not con-

stitute an unreasonable hazard to the safety of life or property,

and will not result in unreasonably detrimental effects upon fish,

wildlife, or botanical resources. 206

In Indiana Department of Natural Resources v. United Refuse Co.,

Inc.,
201 the Department refused to grant a permit to the operator of a

solid waste landfill to expand its operations adjacent to a stream called

"Junk Ditch" in Allen County. After denial of the permit, the landfill

operator sought administrative review, which culminated in a final order

that confirmed the permit denial. The landfill operator sought judicial
review. The trial court reversed the order and the Department appealed.

While several issues were presented on appeal, one bears directly on the

environmental aspects of the case, although it comes in the form of an

administrative procedural issue.

The appellate court concluded that the trial court improperly imposed

upon the Department in the administrative hearing the burden of proving

that the permit should not be granted. The issue was a matter of first
impression. 208 The court held that Indiana Code section 13-2-22- 13(d)(2)
intended that the permit applicant "is to bear the burden of showing

that all requirements for a permit's issuance are met."209 The court held

that the administrative law judge properly found that the landfill operator

had failed to prove "that no harm would come to fish, wildlife or
botanical resources"210 as a result of its project.

203. The Director of the Department of Natural Resources fulfills these and other

licensing functions formerly carried out by the Commission. Id. § 14-3 -3 -24(b) (Supp.

1992).

204. Id. § 13-2-22-7 (1988).

205. Id. § 13-2-22-10 (1988). See generally Ind. Code § § 13-2-22-11 and 13-2-22-

13(c) (1988 & Supp. 1992).
206. Id. § 13-2-22-13(d) (Supp. 1992).

207. 598 N.E.2d 603 (Ind. Ct. App. 1992).

208. Id. at 605.

209. Id.

210. Id. at 606.



1993] ENVIRONMENTAL LAW 957

The court's decision is consistent with the clear letter of the statute.

What is remarkable about the statute itself is the strictness of the burden
of proof it establishes when combined with the discretion that the
Department has in issuing any permit.

On the other hand, another 1992 case demonstrates that this leg-
islation is not as draconian in effect as some of its provisions may
appear on their face. In State v. Adams,211 the defendant owned land
that included a stream. Large amounts of rock, gravel, and other debris

collected in the stream, especially after heavy rains and consequent floods.

Adams excavated this creek rock and gravel but did not excavate the
natural creek bed. The State informed Adams that he was required to
obtain a permit to continue the excavation and prosecuted him for an

infraction under Indiana Code section 13-2-22- 13(h)212 after Adams re-
fused to do so. The trial court found the defendant guilty but then

granted his motion to correct errors. The State appealed. The court of

appeals affirmed. It held that since Indiana Code section 13-2-22- 13(b)
makes unlawful an ''excavation" which will "adversely affect the ef-

ficiency of, or unduly restrict capacity of the floodway."213 the trial

court's conclusion that Adams' conduct "was consistent with the purposes

of the statute" was correct:

Adams removed accumulated rocks and debris and did not ex-
cavate the natural stream bed. He did not alter the present water
course of the stream. Granted, the rocks and debris were placed

in the stream by acts of nature and, when he removed them,
Adams thereby arguably altered the "natural" course of the
stream. However . . . Adams removed obstructions which would
likely "have increased the likelihood of and damage from a flood.

This is the very event the statute seeks to prevent. 214

Implicit in the court's conclusion is a recognition of priorities among
the interests the Legislature intended to promote by way of Indiana

Code section 13-2-22-13(b). A floodway has, as its obviously primary
function, channeling flood waters so that they do not expand beyond

the floodway itself. In order to avoid "unreasonable hazards to the

safety of life or property" 215 most structures or obstructions are either

211. 583 N.E.2d 799 (Ind. Ct. App. 1992)

212. Section 13-2-22-13(h) provides in relevant part:

[A] person who fails to:

(2) obtain a permit under subsection (d); commits a Class C infraction. Each
day a person violates subsection . . . (d) constitutes a separate infraction.

Ind. Code § 13-2-22-1 3(h) (Supp. 1992).
213. Adams, 583 N.E.2d at 800.

214. Id. at 801.

215. Ind. Code § 13-2-22-13(b).



958 INDIANA LAW REVIEW [Vol. 26:921

to be removed or not constructed at all. 216 As a result of Indiana Code
chapter 13-2-22, generally speaking, floodways governed by the Act will

tend to be vacant and therefore will be available as a site of fish,

wildlife, or botanical resources. However, as the court's decision in

Adams seems to reflect, natural accretion of flood debris, which may
enhance fish, wildlife or botanical resources, will not be given priority

over the floodway's ability to receive and enable flood waters to pass

through with efficiency and safety. Human needs come first.
However, Mclntyre v. Guthrie211 sheds a good deal of doubt on the

trial court's conclusion in Adams that the defendant's excavations fulfilled
the intent of the Flood Control Act. The first Mclntyre case involved

a DNR permit that authorized upstream landowners' clearing and chang-
ing a stream bed. The court held that downstream riparian landowners

who claimed the authorized work had injured their property were not
required to exhaust administrative remedies triggered by Indiana Code
section 13-2-22-22 before suing upstream permit holders because the

statute did not provide them with an administrative remedy. 218 As a
result, in the second Mclntyre case, the downstream owners sued the

permit holder for injunction and damages. The court of appeals affirmed

an award of damages against the permit holder due to changes that

caused an increase in the flow of water resulting in additional property

erosion.219 The court specifically held that the fact that the upper owners

had been granted a permit to clear the banks of the creek relieved them

of no liability under the circumstances:

The [upper owners] do not point to, nor does our research

reveal, any authority granting the DNR the authority to limit
or preclude civil liability simply by approving action under the

Flood Control Act. Because this case concerns the [lower owners']

private property rights, as opposed to Flood Control Act viol-

ations, the DNR permit provides no grounds for reversal.220

Possibly had the defendant's excavations in Adams caused injury to
downstream riparian owners, the trial court's ruling might have been

different. Adams and Mclntyre together provide a small example of how
environmental cases tend to present greater problems of unintended

216. See also id. § 13-2-22-13(a) and (0- (The latter subsection authorizes the director

to remove or eliminate any structure, obstruction, deposit or excavation in any flood way

meeting certain conditions).

217. 596 N.E.2d 979 (Ind. Ct. App. 1992); Guthrie v. Mclntyre, 563 N.E.2d 651

(Ind. Ct. App. 1990).

218. 563 N.E.2d at 652.

219. 596 N.E.2d at 981-82.

220. Id. at 983.



1993] ENVIRONMENTAL LAW 959

consequences than other areas of litigation. The answer to this tendency

toward diffuse consequences is not necessarily more administrative de-
cision-making; rather, part of the answer might be found in expanding

litigant and judicial consciousness to include greater awareness of how
environmental issues impinge on, and interact with, the law.

Returning to the Mclntyre cases, could the downstream owners assert

a private claim against the upstream defendants (assuming they had no

DNR permit) for having violated Indiana Code section 13-2-22- 13(b)?
The answer appears to be "no." Although it has no bearing on floodway
regulation, but rather involves the extension of riparian rights into the

waters of Indiana fresh water lakes, the court in Zapffe v. Srbeny 221

was presented with the question of whether Indiana Code section 13-2-

11.1-2222 implied a private cause of action against one who violated it.
The court held, both forthrightly and quite broadly, that none of Title

13 provides a private right of action.223 On the other hand, a private
litigant might make use Of the citizen suit provision224 to prod the State
into enforcing the Flood Control Act (or other provision in Title 13)

in a particular case.

While the Town of Beverly Shores v. Bagnall 225 does not involve
the Flood Control Act, it presents a factual situation that provides an

appropriate setting for a discussion of the United States Supreme Court's

decision in Lucas v. South Carolina Coastal Council 226 As will be seen,
Lucas is likely to inspire a good deal of litigation over regulatory takings,

including, but by no means limited to Indiana's regulation of floodways.

In Town of Beverly Shores v. Bagnalls, the Bagnalls owned a fifty
foot-wide, 275 -foot-deep lot located on a sand dune which they intended

to level in order to build a house. Other houses had been built on fifty-

foot-wide lots in the past, but apparently before a 1982 ordinance forbade

constructing houses on undersized lots and lots less than 100 feet in

width. After the building commissioner denied the Bagnall' s application

for a building permit, because the lot was undersized and too narrow,

they sought a variance from the Board of Zoning Appeals (BZA). The

BZA also denied the application. The Bagnalls filed suit and won a
judgment in the trial court. Among a number of conclusions adverse
to the BZA's refusal to grant a variance, the trial court held that it

constituted a taking of the Bagnall's property. 227 The court's conclusion

221. 587 N.E.2d 177 (Ind. Ct. App. 1992).

222. Ind. Code § 13-2-11.1-2 (1988).
223. Zapffe, 587 N.E.2d at 181.

224. Ind. Code § 13-6-1-1 (Supp. 1992).
225. 590 N.E.2d 1059 (Ind. 1992).

226. 112 S. Ct. 2886 (1992).

227. 570 N.E.2d 1363, 1368 (Ind. Ct. App. 1991).



960 INDIANA LAW REVIEW [Vol. 26:921

was apparently based on the fact that the plaintiff's property was zoned

residential and could be used for no other purpose. 228

On the town's appeal the judgment was affirmed, but remanded to
allow the board either to "compensate the property owner for the taking

or grant the petitioner's requested relief."229 The dissent argued that the

trial court substituted its discretion for the board's decision to preserve

the Indiana Dunes.230 The supreme court granted transfer and reversed. 231

The court stated it would avoid the takings issues because the BZA's

decision could be supported by another local ordinance dealing specifically

with protection of dune property.232 In that context the court said:

We agree with the trial court that peveling a sand dune cannot
be said to be injurious to the public health. Nor can we imagine
even the most enthusiastic environmentalist arguing with a straight

face that leveling the dune would leave the populace imperiled

or undermine public morality. On the other hand, we find nothing
"vague" about the BZA's finding that damage to existing to-
pography is contrary to the "general welfare." 233

In effect, the landowner's permit application did not respond to re-

mediation requirements in an ordinance the BZA did not cite in its own
findings.

Having shored up the legislative basis for the BZA's permit denial,

the court provided two reasons for not confronting the constitutional

issue: first the Bagnalls' failure to provide plans in compliance with the

Dune topography ordinance and, second, the principle that courts will
not decide cases on constitutional issues when they can be resolved on
other grounds.234 The court explained its ruling:

We do not wish to imply, however, that any denial of a building
permit for the Bagnalls would pass constitutional muster. WTe
simply cannot tell from the record whether the board, if presented

228. Id.

229. Id. at 1369.

230. Id. at 1370. "The town of Beverly Shores is part of the Indiana Dunes National

Lakeshore, a national park extending along the shoreline of southern Lake Michigan.

Authorization of the park in the 1960s culminated a 50-year fight to save the dunes from

the encroachment of industrialization. The area is a highly unique and richly diverse

ecosystem which prompted the poet Carl Sandburg to write, 'The dunes are to the Midwest

what the Grand Canyon is to Arizona and the Yosemite is to California. They constitute

a signature of time and eternity.'" Id.

231. Town of Beverly Shores v. Bagnall, 590 N.E.2d 1059 (Ind. 1992).
232. Id. at 1062-63.

233. Id. at 1063.

234. Id.



1993] ENVIRONMENTAL LAW 961

with a petition to construct a home under plans which would
protect the dune, would deny the petition solely on grounds that

the lot does not conform to the width and square footage

requirements of the 1982 ordinance. . . .

[W]e ... do not know whether the Bagnalls will be denied any
use of their property, since they have not sought approval for

plans which might mitigate damage to the dune. There is thus

no basis upon which to resolve a takings claim. 235

The court's resolution of the issue the Bagnalls presented leaves the

takings question quite unclear. If the Bagnalls present the town with

plans designed to mitigate adverse impact on a dune within a fifty foot
wide lot, will the Town be required to issue the permit or pay the
BagnalPs the value of their property?

In Lucas v. South Carolina Coastal Council, a case involving de-

velopment of a barrier island, the Supreme Court held that if a state

regulation causes private property to be without economic value, the

state will be required to make just compensation under the takings
clause, no matter what the State's basis for the regulation is. 236 The

Court's decision is not quite so rigorous as first appears, since it took

pains to make clear how seldom a regulation should remove all economic
value. Quoting Justice Holmes' opinion that began the Supreme Court's

jurisprudence on takings by regulation (rather than physical invasion),

Pennsylvania Coal Co. v. Mahon™ Justice Scalia wrote,
And the functional basis for permitting the government, by
regulation, to affect property values without compensation —
that "Government hardly could go on if to some extent values
incident to property could not be diminished without paying for

every such change in the general law," . . . does not apply to

the relatively rare situations where the government has deprived

a landowner of all economically beneficial uses. 238

How Indiana courts will address regulatory takings claims in view
of Lucas, of course remains to be seen. A few courts have dealt with
regulatory takings claims in terms of Lucas. 239 Returning specifically to

235. Id. at 1063-64.

236. Lucus v. South Carolina Coastal Council, 112 S. Ct. 2886, 2893-95 (1992).

The court does recognize an exception where "the logically antecedent inquiry into the

nature of the owner's estate shows that the proscribed use interests were not part of his

title to begin with." Id. at 2899.

237. 260 U.S. 393, 413 (1922).

238. Lucas, 112 S. Ct. at 2894.

239. Rehard v. Lee County, 968 F.2d 1131, 1134-36 (11th Cir. 1992) (40-acre

undeveloped parcel of waterfront land); Bernardsville Quarry, Inc. v. Borough of Ber-

nardsville, 608 A.2d 1377, 1383-90 (N.J. 1992) (quarry); Stevens v. City of Cannon Beach,

835 P.2d 940 (Or. Ct. App. 1992) (lots on "dry sand area" of beach front).



962 INDIANA LAW REVIEW [Vol. 26:921

floodway regulation, the Supreme Court in First Luthern Church v. Los

Angeles County240 dealt with flood plain regulation in the context of a

claim of a temporary taking. 241 The court held that a temporary taking
was compensable.242 However, because the case had come up to the
Supreme Court on the pleadings, the matter was remanded for a de-

termination whether, in fact, the landowner had been "denied all use

of its property for a considerable period of years."243 On remand the
California Court of Appeals concluded that the flood control ordinance

was a valid exercise of police power244 and it did not take away all the

use of the owner's property.245 It is unclear whether the California court's

approach to the property owner's alleged loss of all utility would pass

muster under the rule announced in Lucas. The court seemed to argue

that appropriateness of the flood control measure was so clear that the

property owner's interests, whatever they might be246 must take second

place. Given the Supreme Court's emphasis on economic values, future

plaintiffs may well have greater success against flood plain regulations,
no matter how clear the danger or how appropriate the legislation may
be. 247

IV. Conclusion

As Indiana and the rest of the country come to grips with the
implications of full economic development, and possibly over-develop-

240. 482 U.S. 304 (1987).

241. The regulation provided that "[a] person shall not construct, reconstruct, place

or enlarge any building or structure, any portion of which is, or will be, located within

the outer boundary lines of the interim flood protection area located in Mill Creek

Canyon." Id. at 307.

242. Id. at 317-20.

243. Id. at 321-22.

244. First English Evangelical Luthern Church v. County of Los Angeles, 258 Cal.

Rptr. 893, 898-901 (Cal. Ct. App. 1989), cert, denied, 493 U.S. 1056 (1990).

245. 258 Cal. Rptr. at 901-06.

246. The court decided the matter, again, on the pleadings. The court described

the plaintiff's allegation of loss of use:

True, the complaint alleges [the ordinance] denies First English "all use" of

Lutherglen. But as will be seen shortly, the ordinance does not deny First English

"all use" of this property. It does not even prevent occupancy and use of any

structures which may have survived the flood. It only prohibits the reconstruction
of structures which were demolished or damaged by the raging waters and the

construction of new structures. In no sense does it prohibit uses of this camp-

ground property which can be carried out without the reconstruction of de-

molished buildings or the erection of new ones.

Id. at 902.

247. See Powers v. Skagit County, 835 P.2d 230, 236 (Wash. Ct. App. 1992)

(Dismissal reversed in order to allow property owner to show flood plain regulation

rendered his land capable of no economically viable use).



1993] ENVIRONMENTAL LAW 963

ment in terms of its impact on our physical environment, some basic

questions have arisen or at least approach national consciousness. If the

fundamental purpose of the Commerce Clause was to achieve a fully
developed national economy, and if that full development has been

achieved, have we reached the point where we should consider re-defining
what commerce is? Has the time come to balance the policy of supporting

economic exploitation of natural resources by placing an independent

value in natural resources themselves? Is it possible to re-define notions

of commerce so that local protection of natural conditions, including

natural resources, can be preserved from economic exploitation generated

from outside a locality's boundaries? If our system is incapable of

flexibility when it comes to a 200 year gloss on the Commerce Clause,
then, is it likely that the country will witness increased multi-state regional

politics akin to the regional politics that marked the era that preceded

the Civil War? Is the Great Lakes organization of states and Canadian

provinces a foretaste of things to come?

Moving on to individual citizens' relationship to their environment,

whether natural or man-made, have they, with the rise of larger and

larger governmental and corporate structures, lost the ability to control

any part of that environment? Has the command and control form of
regulation the Environmental Protection Agency administered over the

last twenty years or so promoted a national sense that the federal

government will effectively protect and promote environmental goals and

values? If one doubts whether the command and control approach to
environmental regulation can ever be "successful* ' (given the govern-

ment's past record of incapacity to deal with the multitude of environ-

mental problems its jurisdiction encompasses), why should citizens not
have substantially freer access to the courts than the multitude of dis-

cordant citizen suit provisions now allow? Is it time for a comprehensively
revised uniform environmental citizen suit statute to be enacted?

Finally, turning to the regulation of land, in order to preserve

"environmental" values, is the notion of what "property" is at risk?

Before this question may be answered, are property interests to be defined
in terms of the lifetime of the current owner or can they (or should

they) be defined in terms of the property's value over the total time of

its potential utility? As this country reaches a point of full economic

development and possibly over-development, is it time for the definition

of property rights to be reconsidered in terms of an "economic" analysis

that is not limited to the current market but, rather, includes, as it did

in earlier times, future generations as a present interest group? If it is

attempted, can such reconsideration be achieved without harm to the

letter and spirit of the takings clause?

1992 was a dynamic year for "environmental" law in Indiana.

Indiana, however, merely reflects what is happening across the country.



964 INDIANA LAW REVIEW [Vol. 26:921

As traditional notions of "environmental regulation'' are shown in the

cases to be, in various ways, insufficient to the task, much deeper themes
involving cultural and attitudinal changes about established constitutional

^premises may be approaching the stage of discourse