ILNews

Court overturns breach-of-contract ruling

Jennifer Nelson
January 1, 2007
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The Indiana Court of Appeals reversed a Marion Superior Court decision granting partial summary judgment in favor of the defendant on an issue of breach of contract, ruling a state agency couldn't approve a cleanup that didn't comply to federal standards.

In Indiana Department of Environmental Management v. Raybestos Products Co., No. 49A02-0609-CV-782, IDEM appealed the trial court's grant of partial summary judgment to Raybestos on the issue of a breeched agreed order and a judgment of more than $16 million to Raybestos after a bench trial.

Raybestos - which makes car brakes and clutches - is located next to Shelly Ditch, an open earthen drain pool that empties into Sugar Creek. IDEM tested the water in Shelly Ditch in 1995 and found polychlorinated biphenyls (PCBs) in the water downstream from the plant. IDEM sent Raybestos a notice of potential liability, and the two parties entered into an "agreed order" in which Raybestos would prepare a risk assessment subject to the approval of IDEM. IDEM approved a plan submitted by Raybestos that would clean the water to contain no more than 238 parts per million of PCB in certain "hot spots."

Following personnel changes, IDEM decided to disapprove the cleanup proposal, fearing it would set a bad precedent, and withdrew its approval of the risk assessment.

An administrative law judge reviewed IDEM's actions and determined Raybestos waived its right to seek review based upon the terms of the agreed order. Raybestos sought judicial review of the administrative law judge's ruling. The Marion Circuit judge determined Raybestos did not waive its right and IDEM had no authority to withdraw its approval; the judge order IDEM to re-approve the risk assessment and cleanup. Instead of appealing, IDEM contacted the Environmental Protection Agency to get involved. The EPA issued a unilateral administrative order requiring Raybestos to clean up the PCB levels to no greater than 10 parts per million, as is required by federal regulation.

Raybestos filed a complaint in Marion Superior Court of breach of contract against IDEM and sought damages for the more costly EPA-ordered cleanup. The trial court granted partial summary judgment to Raybestos on the breach issue and entered judgment of more than $16 million in damages and attorney fees.

The Court of Appeals determined the 238 parts per million cleanup proposed by Raybestos and based on the approved risk assessment by IDEM did not meet applicable federal standards. In the agreement order between the two parties, it stated in cases of conflict in applicable laws, rules, or ordinances that the most stringent standard would apply - the 10 parts per million of PCB in the water. An agreement that would permit cleanup levels more than 20 times that of the applicable federal regulations would be contrary to public policy and Raybestos can't rely on that agreement to recover for any breach by IDEM, wrote Judge Paul Mathias.
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  1. Hail to our Constitutional Law Expert in the Executive Office! “What you’re not paying attention to is the fact that I just took an action to change the law,” Obama said.

  2. What is this, the Ind Supreme Court thinking that there is a separation of powers and limited enumerated powers as delegated by a dusty old document? Such eighteen century thinking, so rare and unwanted by the elites in this modern age. Dictate to us, dictate over us, the massess are chanting! George Soros agrees. Time to change with times Ind Supreme Court, says all President Snows. Rule by executive decree is the new black.

  3. I made the same argument before a commission of the Indiana Supreme Court and then to the fedeal district and federal appellate courts. Fell flat. So very glad to read that some judges still beleive that evidentiary foundations matter.

  4. KUDOS to the Indiana Supreme Court for realizing that some bureacracies need to go to the stake. Recall what RWR said: "No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we'll ever see on this earth!" NOW ... what next to this rare and inspiring chopping block? Well, the Commission on Gender and Race (but not religion!?!) is way overdue. And some other Board's could be cut with a positive for State and the reputation of the Indiana judiciary.

  5. During a visit where an informant with police wears audio and video, does the video necessary have to show hand to hand transaction of money and narcotics?

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