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Federal Judge John Z. Lee on Jan. 17, refused to dismiss five of the six counts of an amended complaint that the City filed against Nicor and ComEd in a 2016 lawsuit related to water quality and contamination in areas near James Park. The surviving counts seek to hold Nicor and Com Ed liable under the federal Resource Conservation and Recovery Act (RCRA), and common law theories of trespass, nuisance, and breach of franchise agreement.

The one count the Judge dismissed alleged a violation of the City’s Hazardous Substances Ordinance. He also struck a claim for civil penalties sought under RCRA.

Because the Court was ruling on a motion to dismiss the complaint for failure to state an actionable claim, the Court was required to assume that all well-pleaded allegations in the complaint were true and to draw all possible inferences in favor of the City. As such, the decision does not constitute a decision on whether any of the allegations are true.  

Summary of the Complaint’s Allegations

The complaint, filed in the Northern District Court of Illinois, alleges that the Skokie Manufactured Gas Plant (Skokie MGP), located just outside of the City of Evanston at Oakton Street and McCormick Blvd, was in operation between  1910 and 1950. Skokie MGP allegedly employed a process to enhance the caloric value of manufactured gas, and the process left behind dense oily waste materials (MG Waste Oils) that were stored in above-ground tanks at the plant. Allegedly, some MG Waste Oils also condensed along the inside of the pipelines that were part of Skokie MGP’s distribution infrastructure, which was used to transport manufactured gas through Evanston.

The complaint alleges that MG Waste Oils leaked out of the Skokie MGP’s above-ground tanks and out of the distribution pipelines into the soil and groundwater at James Park, Dawes Elementary School, Levy Senior Center, and surrounding properties in Evanston. The suit defines the “impacted area” as bounded by Oakton Street to the north, Dodge Avenue to the east, Mulford Street on the south, and the North Shore Canal on the west.

Judge Lee summarized some allegations as follows, “Plaintiff alleges that the released WG Waste Oils present an imminent and substantial endangerment to health or the environment in two ways. First, released MG Waste Oils have entered and penetrated the Dodge Avenue Water Line, … which conveys potable water to local residents. MG Waste Oils coating the Dodge Avenue Water Line have contaminated Evanston’s drinking water and threaten future contamination.

“Second, [the complaint alleges] as MG Waste Oils have degraded in the soil, groundwater, and bedrock over time, they have released methane gas as a byproduct. Methane gas has been found at high pressure and concentration within the Impacted Area. And when methane is present at sufficiently high pressure and concentration in a given area, it can be easily ignited, resulting in an explosion.”

The complaint seeks to hold Nicor and Com Ed liable, alleging, “The Defendants or their corporate predecessors owned and operated the Skokie MGP and its distribution infrastructure.”

Judge Lee’s decision means that the suit can now proceed.

The City’s Stance with Residents

The City carried out extensive water testing in the area in the summer of 2016. The City maintained in meetings with residents that only small, benign levels of contaminants were present in the samples they took – so small, they say, that federal and state environmental agencies have been slow to address the issue.

 At a Sept. 1, 2016, meeting with residents, Public Works Director Dave Stoneback said that the water was safe. “Everything is inconclusive,” Mr. Stoneback said. “… But I want to stress that it is in such low concentrations that it is not a health threat to you.”

City officials at that meeting further maintained that the lawsuit primarily serves to compel the utilities to account for the gas lines that they inherited from their corporate predecessors.

 James Park Neighbors on Nov. 14 submitted a petition, signed by about 150 neighborhood residents, to the City Council stating their concern about the water quality. The petition asked the City to determine the extent of the contamination and replace the impacted water lines.

City Council that same day authorized the City Manager to retain SCS Engineers, a Madison, Wis., engineering firm, to conduct further tests at a cost not to exceed $250,000.

In the  first phase, SCS was to collect samples from a total of 67 sites, to  analyze the samples for coal tar products, volatile organic compounds, and semi-volatile organic compounds, and to prepare a summary report for a not-to-exceed cost of $122,000. The remaining funds will be used to collect additional samples in the future, depending on the results of these samples.

The results of the first phase of the study have not yet been released.

City’s Comments on the Suit

In a Jan. 17 statement on Judge Lee’s ruling, City officials said, “Today, the federal court determined that the City of Evanston’s claims against Nicor and ComEd must go forward in the federal environmental lawsuit. Nicor and ComEd spent tremendous energy and money to defeat the City’s Amended Complaint. They failed. Nicor and ComEd must now answer the City’s Complaint.”

 The statement added that potential damages against the utilities could be “substantial. The City is entitled under federal law to have all attorneys’ fees and expert consultant fees reimbursed. The City will also seek punitive damages against both entities, which Judge Lee expressly indicated that the City could pursue. This is all in addition to Nicor and ComEd paying for any necessary remediation activities.”

On Nov. 7 Grant Farrar, the City’s Corporation Counsel, told City Council that the attorney fees paid to litigate the James Park environmental case were $28,195 in 2013, $360,136 in 2014, $592,320 in 2015, and $660,300 in 2016, for a rounded total of $1,640,952.