Judicial Rulings By SHELLY DAVIS

U.S. Supreme Court

Federal court went too far on limiting Milwaukee pollution

The U.S. Supreme Court April 28 ruled in a 6-3 decision involving the city of Milwaukee and the state of Illinois that the federal courts cannot impose stiffer pollution control standards than those set by Congress.

The ruling, pending an appeal being drawn up by the Illinois Attorney General's Office, may result in the introduction of legislation at the federal level to obtain the right of a state to sue a polluter from another state in order to protect public health regardless of various federal statutes.

In 1972 Illinois filed suit against Milwaukee in the U.S. District Court for the Northern District of Illinois (City of Milwaukee et al v. Illinois et al). Illinois sought, under federal common law, to bar Milwaukee from discharging its untreated or partially treated sewage into Lake Michigan. The federal court orderd Milwaukee to eliminate overflows into the lake and to achieve specific effluent limitations on the untreated sewage entering the lake.

The U.S. Supreme Court reversed that order, however, saying that Illinois had not sought relief through all the channels provided for by statutory law. Citing the passage of amendments added to the Federal Water Pollution Control Act five months after Illinois brought suit, Justice William Rehnquist, speaking for the majority said, "Congress has not left the formulation of appropriate federal standards to the courts through application of often vague and indeterminate nuisance concepts . . . but rather has. . . a comprehensive regulatory program supervised by an expert administrative agency.

"Federal courts lack authority to impose more stringent effluent limitations under federal common law than those imposed by the agency. . . ."

Justice Harry Blackmun, along with justices Thurgood Marshall and John Paul Stevens, disagreed with the majority, saying that the remedy of federal common law does not disappear simply because Congress addressed the matter in question. Blackmun said the majority's opinion could lead states "to turn to their own courts for statutory or common law assistance in filling the interstices of the federal statute" rather than "promoting a more uniform federal approach to the problem of alleviating interstate pollution."

Illinois Supreme Court

High court upholds order to close and exhume Wilsonville dump

THE HAZARDOUS waste disposal site, situated partially in the boundaries of Wilsonville, is a public nuisance, should be closed and materials buried on the site removed, ordered the Illinois Supreme Court May 22 after four years of legal battling (The Village of Wilsonville et al. v. SCA Services, Inc.).

According to Don Ramsell of the State Attorney General's Office, the court's unanimous decision has established that a state seeking to protect the health and safety of its citizens "can attack a supposedly legally licensed corporation" on the grounds it is creating a public nuisance. The case has been followed closely by the waste industry nationwide, Ramsell said, and if appealed to the U.S. Supreme Court, it will have even further significance.

Meanwhile on June 12, SCA Services filed a petition with the Illinois Supreme Court for a rehearing. Commenting on the petition, Atty. Gen. Tyrone Fahner said, "The suggestion that the U.S. Supreme Court ruling in the Milwaukee case [see above] relating to federal common law bears on the Wilsonville case is without merit."

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The Wilsonville site, owned by SCA Services, Inc. and operated by its subsidiary, Earthline Corp., was established in 1976 after Earthline had received a permit to operate from the Illinois Environmental Protection Agency (IEPA). The site is situated above an abandoned mine. Wilsonville filed suit in April 1977, seeking an injunction to have the site closed as a public nuisance. The Macoupin County Farm Bureau, Macoupin County and the Illinois Attorney General's Office later joined the suit. Not parties to the suit but filing briefs as friends of the court in support of SCA Services were: Monsanto Company, John Sexton Sand and Gravel Corp. and the Chicago Association of Commerce.

In lengthy technical arguments which were disputed by SCA Services, the Village of Wilsonville maintained that the dump should be closed because of mined land subsidence; the possibility of "explosive interaction" between various chemicals buried on the site—including potentially cancer-causing PCBs; excessive permeability of the soil; and water leakage that could lead to the release of chemicals into the soil and the water table. (After the inception of the suit, the General Assembly passed a law prohibiting the location of hazardous waste sites above a shaft or tunneled mine. The law, however, does not apply retroactively.)

Further testimony indicated that dust, odors, and spillage of chemical materials in the village caused burning eyes, running noses, nausea and shortness of breath to persons in the area. Speaking for the high court and affirming the lower court's order to close and exhume the site, Justice William G. Clark said, "... when the dust and odors the trial court found to be present . . . are considered together with other evidence indicating that air, water and earth in and around the site will become contaminated, the trial court's relief is not excessive."

Regarding the licensing of SCA Services by the IEPA, Clark said the permits issued by the IEPA were based on data supplied by the company "which have been proved at trial to be inaccurate."

In a brief filed with the appellate court, the U.S. Environmental Protection Agency (USEPA) had suggested as a friend of the court that the case be remanded to circuit court to examine alternatives to closing or exhuming the site. The latter, the USEPA said, could be dangerous to workers and Wilsonville residents. The high court dismissed the suggestion, noting that the materials can be transported and that the USEPA's alternative solutions did not solve the problem of the landfill being located over an abandoned mine. Clark said, "Since the trial court has decided the likelihood exists that great harm will be done if the materials are not moved, it seems only reasonable that the materials must be taken somewhere safer than where they are now deposited. It is the defendant's responsibility to make certain the exhumation is performed in a careful manner."

It is unlikely, however, that removal of the hazardous materials will begin until SCA Services decides whether it will appeal the case. (For previous coverage of this case, see Illinois Issues, August 1977, pp. 4-6, and October 1978, p. 29.)

Illinois Bell must pay back Chicago customers for overcharges on message tax

ILLINOIS BELL Telephone must pay back overcharges it made to customers during the period between July 1967 and July 1977, the Illinois Supreme Court ruled 4-2 on June 6 in the second half of a multi-million dollar tax suit.

Previously, the court had ruled in the case that Bell had computed the Chicago message tax on its customers' bills incorrectly, resulting in an illegal tax on a tax. According to the Court, Bell has overcharged its customers some $11.5 million, including $1.6 million in overcharges Bell was ordered to set aside between late 1978 and early 1980, when the Circuit Court of Cook County told Bell to stop imposing the tax.

The ruling could also affect 105 other communities and four other telephone companies named in the suit that computed similar municipal taxes in the same manner as Bell.

At issue in the class action suit, Charles A. Getto v. The City of Chicago, was a 5 percent message tax imposed by Chicago on Bell. Bell passed this cost onto its customers, but in doing so computed the 5 percent on top of its gross receipts, which included all taxes assessed. This meant that the message tax was again being taxed, resulting in a 1.5 percent increase over what customers legally had to pay.

In allowing the retroactive claims, Justice Daniel P. Ward, speaking for the majority, disputed Bell's claim that the tax was voluntarily paid without protest since 1955. "Though the charge designated 'City' does appear separately on the subscriber's bill, it is not stated which municipal tax is involved, or what portion of the bill is being taxed," he said.

"Even if it were held that the [customer] had sufficient knowledge of all facts to permit a conclusion that all payments prior to 1977 were voluntary," Ward continued, "we judge that the implicit and real threat that phone service would be shut off for non-payment . . . would forbid application of the voluntary payment doctrine."

Justices Robert C. Underwood and Howard C. Ryan dissented, saying, "If retroactive recovery is permitted there will be obvious and substantial financial prejudice to the city and the utility, which long ago expended funds resulting from the now challenged computations."

Justice William G. Clark did not participate in the consideration of this case.

More rulings on page 30

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The township — not the county — collects real estate taxes

A TOWNSHIP collector, not the county collector, is responsible for collecting real estate taxes prior to September 1 and investing those funds in revenue-producing accounts, ruled the Illinois Supreme Court in a May 22 decision.

The case, The Town of Peoria et al. v. Edward T. O'Connor, County Treasurer and ex officio County Collector, et al., concerned a resolution adopted by the Peoria County Board in 1976. The resolution authorized printed directions on tax bills instructing persons paying their real estate tax installments by mail to send their payments to the county collector and instructing those paying in person to either the township or the county collector.

However, Justice Robert C. Underwood said, in speaking for the high court,". . . there is no authority for the county's proposed dual-collection system." The county has the power to collect real estate taxes only after September 1 (when the township collector makes the final settlement and returns the books to the county) or in situations where there is no township collector (Ill. Rev. Stat., 1979, ch. 120, sees. 671 and 680).

Regarding investment of funds not turned over to the county collector, Underwood said, "The township collector is, of course, a custodian of public funds . . . and thus has not only the authority, but also the duty, to deposit such funds in revenue-producing fashion for the public benefit." He also said that since the township is not a public agency, it may not benefit from the interest earned on those investments but that "this investment income should be credited to the public agencies for which the investments were made."

A gift is a gift is marital property

UNLESS "clear, convincing, and unmistakable evidence" is given that marital property was not intended for a gift, it can be divided upon a divorce, the Illinois Supreme Court ruled April 4.

In the case In re Marriage of Mary Ann Rogers and Robert Rogers, Robert had used part of his inheritance money to purchase a home held in joint tenancy with his wife. Robert claimed that the inheritance money placed into the house was to be used as "his" investment not for mutual benefit with his wife.

Pointing out that the state's new marriage law incorporates a partnership theory of marriage and distinguishes between marital property and nonmarital property, Justice William G. Clark, speaking for the high court said, "It may be anachronistic now to refer to an intent to convey a gift to the other spouse, but it is not anachronistic to refer to an intent to convey a gift to the marriage." Therefore, a marital residence owned by both spouses, even if one spouse has paid for it out of nonmarital funds, "will be presumed ... as marital property absent convincing rebutting evidence."

The Supreme Court upheld the rulings of the Circuit Court of DuPage County and the 2nd District Appellate Court that the house should be treated as marital property. Since Robert had no evidence, such as written contract to indicate his investment was not a gift, he was presumed to have intended a gift of one-half of the property.

A utility's pollution control facilities cannot be assessed for tax purposes

POLLUTION control facilities can only be taxed if they produce a product or service, the Illinois Supreme Court said in a May 22 ruling involving 12 Commonwealth Edison facilities in Cook County.

The case, Commonwealth Edison Company v. The Department of Local Government Affairs (DLGA) et. al. concerned whether the equipment installed by Edison was either economically productive or had a productive earning value according to the Revenue Act of 1939 (Ill. Rev. Stat. 1977, ch. 120, sees. 502a-1, 502a-3). Because the cost of the equipment was included in the rate base, the DLGA maintained that the facilities could be assessed for tax purposes. Also at issue was whether an amendment to the act, effective in January 1980, changed the meaning of the act or simply clarified it.

Justice Thomas J. Moran, speaking for the high court, said the amendment specifically points out that it is "not intended to nor does it make any change in the meaning of any provision in this Section" (Ill. Rev. Stat. 1979, ch. 120, sec. 502a-3). The amendment sets out that a pollution control facility can only be assessed if it results in a "commercially saleable by-product or increases the production or reduces the production costs of the products or services otherwise sold. . . ."

". . . the amendment expressly clarified the previously ambiguous terms," Moran said, referring to the terms "economic productivity" and "productive earning value."

"We therefore hold that the amendment to [the act] may be used to interpret the phrases," Moran concluded in reversing the ruling of the Cook County Circuit Court and affirming that of the 1st District Appellate Court.

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