Claiming an IDEM official gave “disparate treatment out of sheer vindictiveness” and “orchestrated a campaign of official harassment,” environmental consultants and business owners have filed a lawsuit against the Indiana Department of Environment Management and Douglas R. Louks, deputy assistant commissioner of the IDEM Office of Land Quality.
Golars Environmental and Remediation Services, LLC, an environmental engineering firm and certified Minority and Women’s Business Enterprise in Noblesville, along with three independent gas station owners and the United States Small Business Owners Association, which represents about 900 independent gas and convenience stores in Indiana, filed the proposed class action Thursday in Marion Superior Court, Civil Division 1. The plaintiffs allege IDEM refused to properly process claims submitted to the Excess Liability Trust Fund (ETLF) and attempted to close sites which still had high concentrations of hazardous substances.
“IDEM took unlawful actions that exceeded their statutory authority, imperiling both the environment and public health as well as harming the small businesses directly involved. They must now be held to account,” said Greg Zoeller, general counsel for Golars Environmental and Remediation Services, LLC, one of the plaintiffs.
IDEM said it had received a copy of the lawsuit Thursday evening but declined to comment until completing its review of the document. Additionally, IDEM said, once served, the agency does not comment on pending litigation. IDEM did provide a link to its website where more information about the Excess Liability Trust Fund could be found.
Along with the state’s environmental agency, the lawsuit names Louks, both individually and in his official capacity, as a defendant. He is accused of having “maliciously targeted” Golars and trying to put the company out of business but the lawsuit does not identify a reason why Louks took such action.
The complaint does note, Louks began targeting Golars after its CEO Om Narla was recognized by the Indianapolis Business Journal in 2018 as an up and coming business professional.
Louks, a graduate of Indiana University Robert H. McKinney School of Law, worked in the private sector before joining IDEM’s office of legal counsel in 2015, according to the environmental agency’s website. He worked as branch chief for the Underground Storage Tank program before becoming deputy assistant commissioner.
The lawsuit is brought against IDEM under the Indiana Tort Claims Act. It is also brought against Louks personally, under Indiana Code section 34-13-3-5 for his “malicious, willful, and wanton actions” against the plaintiffs, and under 42 U.S.C. section 1983.
Plaintiffs also are seeking injunctive relief and to recover damages for the denial and delays of their reimbursement payments and for violations of their equal protection rights. Golars, Daleen1, Inc., Sail Capital Investments, LLC, Warren Travel Plaza, Inc., and USSBOA are also seeking damages of defamation, commercial disparagement, fraudulent inducement and tortious interference with contractual and business relationships.
Attorneys William Wagner of Taft Stettinius & Hollister and Zoeller are representing the plaintiffs in Golars, LLC, Deleen1, Inc., Sail Capital Investments, LLC, Warren Travel Plaza, Inc., and United States Small Business Owners Association LLC, on behalf of themselves, and all others similarly situated v. The Indiana Department of Environmental Management and Douglas R. Louks, individually and in his official capacity as IDEM Office of Land Quality, Deputy Assistant Commissioner, 49D01-2005-PL-016086.
The lawsuit alleges IDEM, through Louks, sought to undermine the Legislature’s intent by reducing the number of eligible parties who could get reimbursed through the ETLF. In turn, this would curtail the amount of payments from the fund and, since that money would pay Golars for its services, could ultimately drive the environmental company out of business.
The plaintiffs claim Louks demanded Golars’ clients, many of who are new Americans of Indian descent, sign the Agreed Orders. Some of the clients, including some of the named plaintiffs and members of the class, signed the orders because of IDEM’s and Louks’ “coervice demands and fraudulent misrepresentations,” while other refused and had their ELTF claims “improperly denied.”
In 2018, Louks, according to the complaint, published the “ELTF Reimbursement Suspension Policy.” Then he began to “fraudulently induce” Golars’ clients into signing Agreed Orders under the policy in which they accepted personal liability for the investigation and remediation of any contamination caused by gasoline leaking from an underground storage tanks at their gas stations.
Daleen1, a plaintiff in the lawsuit and a client of Golars, appealed IDEM’s policy of denying claims if the Agreed Orders were not signed. IDEM’s Office of Environmental Adjudication declared the policy was unlawful and the Indiana Attorney General issued an opinion with the same conclusion.
IDEM did not seek a judicial review of the OEA’s order and has not rescinded the policy.
Next, the plaintiffs allege, Louks directed the ELTF claim reviewers to deny all of Golars’ claims for reimbursement even though the agency had approved the remediation plans ahead of time and the company followed those plans. The agency maintained Golars failed to prove its work was “reasonable and cost effective.”
In addition, Louks directed IDEM staff to not review Golars’ technical reports, the lawsuit alleges. The delay in getting approval for those reports means Golars has been unable to submit invoices, requiring it to pay and carry the costs for subcontractors and utility vendors.
As of April 23, 2020, IDEM had failed or refused to pay more than $800,000 in claims that Golars had submitted. The lawsuit asserts that IDEM’s “intentional failure to promptly issue payment” has all but exhausted Golars’ funds used to cover remediation costs.
Several things happened when Golars raised concerns about the reimbursements, according to the complaint. IDEM stopped posting payment information on its website so Golars could no longer see when other consultants were paid. Also, the agency posted “erroneous and defamatory communications” about Golars on its website when the company requested updates on its reimbursements.
Moreover, the complaint alleges, Louks falsely accused Golars of engaging in criminal activity by submitting ELTF claims that were not eligible for reimbursement. The suit also claims that while a Golars employee was delivering documents to IDEM, Louks threatened his receptionist she would lose her job if she continued to time-stamp Golars’ status letters.
Along with stopping the reimbursements, the lawsuit contends Louks prevented Golars from remediating the soil, groundwater and vapor contamination at 30 ELTF sites by having “No Further Action” orders issued. The sites still have “high levels of contamination” which, the lawsuit states, puts Hoosiers’ health at risk and exposes Golars’ clients to lawsuits and diminishes the value of their properties.
Plaintiffs filed a public records request in September 2019 based on their belief that Louks has told one or more people that Golars was “raping the Fund” and falsely accused Golars of criminal conduct. They are seeking Louks’ communications that reference the word “raped.”
However, in their complaint, the plaintiffs state they have no assurance the search for the relevant documents will be “performed adequately.” They claim they have been told that Louks “would be tasked to search his own emails” and while IDEM said its Office of Legal Counsel is reviewing the communications he pulled, no documents have been produced.
“Golars and its clients have exhausted their administrative remedies,” the complaint states. “And as a result of Louks’ actions, IDEM’s ELTF clams reviewers have applied tactics that Louks used to maliciously target Golars and its clients to other ELTF applicants and their environmental consultants.”