Smith v. The Department of Natural Resources

2015 IL App (5th) 140583, 35 N.E.3d 1281

• Court: Appellate Court of Illinois
• Decided: July 10, 2015
• Docket: 5-14-0583
• Status: Unpublished

Opinion

NOTICE 2015 IL App (5th) 140583 Decision filed 07/10/15. The text of this decision may be NO. 5-14-0583 changed or corrected prior to the filing of a Peti ion for Rehearing or the disposition of IN THE the same.

APPELLATE COURT OF ILLINOIS

FIFTH DISTRICT ________________________________________________________________________

MARIE SMITH, MARK DONHAM, ) Appeal from the VITO MASTRANGELO, SAM STEARNS, ) Circuit Court of TABITHA TRIPP, NATHAN CZUBA, ) Madison County. ANNETTE McMICHAEL, and SOUTHERN ) ILLINOISANS AGAINST FRACTURING OUR ) ENVIRONMENT (SAFE), an Illinois Not-for-Profit ) Corporation, ) ) Plaintiffs-Appellants, ) ) v. ) No. 14-CH-711 ) THE DEPARTMENT OF NATURAL RESOURCES, ) an Illinois State Agency, MARC MILLER, Director ) of Natural Resources, PAT QUINN, Governor of ) the State of Illinois, and JESSE WHITE, Secretary ) of State of the State of Illinois, ) Honorable ) Barbara L. Crowder, Defendants-Appellees. ) Judge, presiding. ________________________________________________________________________

JUSTICE WELCH delivered the judgment of the court, with opinion. Justices Schwarm and Moore concurred in the judgment and opinion.

OPINION

¶1 The plaintiffs, Marie Smith, Mark Donham, Vito Mastrangelo, Sam Stearns,

Tabitha Tripp, Nathan Czuba, Annette McMichael, and Southern Illinoisans Against

Fracturing Our Environment (SAFE), sought a preliminary injunction to prevent the

1 implementation of the rules adopted by the defendant, the Illinois Department of Natural

Resources (IDNR), under the Hydraulic Fracturing Regulatory Act (Hydraulic Fracturing

Act or Act) (225 ILCS 732/1-1 et seq. (West Supp. 2013)). The circuit court of Madison

County entered an order denying the complaint for preliminary relief. For the reasons

which follow, we affirm the decision of the circuit court.

¶2 The plaintiffs are individual landowners from various counties in Illinois as well

as SAFE, an Illinois not-for-profit corporation with its registered office in Johnson

County, Illinois. The plaintiff landowners anticipate that hydraulic fracturing will occur

in their locales. Most of the plaintiff landowners own the mineral rights in their land.

¶3 Fracking is an oil and/or gas operation that uses vertical and horizontal wellbores

together with large amounts of water, chemical additives, pressure, and explosive charges

to reach and extract oil and gas from underground. The Hydraulic Fracturing Act applies

to all wells in which high-volume horizontal hydraulic fracturing operations are planned,

have occurred, or are occurring in Illinois. 225 ILCS 732/1-20 (West Supp. 2013). The

Act was signed into law on June 17, 2013. Section 1-130 of the Hydraulic Fracturing Act

(225 ILCS 732/1-130 (West Supp. 2013)) grants the IDNR the authority to adopt rules

that may be necessary to accomplish the purposes of the Act.

¶4 On November 15, 2013, the IDNR published its first notice of its proposed rules

for the Hydraulic Fracturing Act pursuant to the general rulemaking provisions of the

Illinois Administrative Procedure Act (Administrative Procedure Act) (5 ILCS 100/5-40

(West 2012)) and scheduled two public hearings, the first for November 26, 2013, in

Chicago, and the second for December 3, 2013, in Ina. After receiving requests for 2 further public hearings, the IDNR scheduled three additional hearings as follows:

December 5, 2013, in Effingham; December 17, 2013, in Decatur; and December 19,

2013, in Carbondale. The Effingham hearing was thereafter rescheduled for December

16, 2013.

¶5 Following the public hearings and the receipt of 38,000 public comments and

43,000 pages of written comments, the IDNR submitted its revised proposed rules to the

Joint Committee on Administrative Rules (JCAR), which is a legislative committee that

has authority over the adoption of rules. The submission of the revised proposed rules to

JCAR commenced the second notice period pursuant to section 5-40(c) of the

Administrative Procedure Act (5 ILCS 100/5-40(c) (West 2012)). As part of the second

notice period, the IDNR published its response to the public comments. Attached to the

revised proposed rules was a listing of over 200 sources that the IDNR reviewed in order

to prepare the revised proposed rules.

¶6 The second notice period was set to expire by default 45 days after it had

commenced. On September 16, 2014, JCAR voted to extend the second notice for

another 45 days. On November 6, 2014, JCAR voted to adopt the proposed rules. On

November 10, 2014, the plaintiffs filed a nine-count "complaint for declaratory judgment

and preliminary and permanent injunction."

¶7 According to the complaint, the IDNR administrative regulations were invalid as

the IDNR had failed to comply with the required statutory rulemaking procedures in the

following manner: (1) the IDNR did not include a summary of the proposed rules in its

regulatory agenda prior to the first notice period in violation of section 5-60 of the 3 Administrative Procedure Act (5 ILCS 100/5-60 (West 2012)) and failed to state its

reason in writing for not doing so, along with the facts that form the basis for that reason;

(2) the IDNR failed to comply with section 5-40(b) of the Administrative Procedure Act

(5 ILCS 100/5-40(b) (West 2012)) by not giving sufficient notice of the public hearings;

(3) the IDNR failed to make available an agency representative to respond to general

questions from the public regarding the agency's proposal and the rulemaking process in

violation of section 5-40(b) of the Administrative Procedure Act (5 ILCS 100/5-40(b)

(West 2012)); (4) the IDNR violated section 5-40 of the Administrative Procedure Act (5

ILCS 100/5-40 (West 2012)) by denying some citizens admittance to the public hearings,

by not allowing some citizens to speak during the hearings, and by setting a

predetermined time allotment of two hours at the hearings; (5) the IDNR failed to

disclose, in its first notice, any published studies, published reports, or underlying data

that was used in drafting the proposed rules or failed to use any published studies,

published reports, or underlying data in drafting the proposed rules; (6) the IDNR

provided false statements in its first notice when it indicated that other documents were

not incorporated into the rules by reference, in violation of section 5-75 of the

Administrative Procedure Act (5 ILCS 100/5-75 (West 2012)) and when it indicated that

the rulemaking did not affect units of local government; (7) the IDNR violated the "spirit

and purpose" of the Administrative Procedure Act by not publishing the transcript of the

public hearings on its website until August 29, 2014; (8) the IDNR's cumulative

violations of the Administrative Procedure Act deprived the plaintiffs of their rights

under the Administrative Procedure Act; and (9) the IDNR violated section 1-97 of the 4 Hydraulic Fracturing Act (225 ILCS 732/1-97 (West Supp. 2013)) by failing to submit a

statutorily required report to the General Assembly by February 1, 2014.

¶8 Also, on November 10, 2014, the plaintiffs filed a motion for preliminary relief,

seeking a preliminary injunction to enjoin the defendants from adopting and filing the

administrative regulations approved by JCAR and to prohibit the Secretary of State from

publishing them. The motion alleged that the rules were "incomplete, inadequate, and

invalidly enacted" and, as such, would cause "irreparable harm to the Plaintiffs and other

members of the public who were deprived of an adequate opportunity to participate in the

development of the proposed rules as required under [the Act]."

¶9 The motion further alleged that the plaintiffs had no other adequate remedy under

the law or in equity to correct the deficiencies with the rulemaking, and that they would

suffer harm to their rights as Illinois citizens and landowners unless the defendants were

prohibited from publishing the rules. Accordingly, the motion requested the following

relief: (1) a finding that the IDNR failed to comply with multiple mandatory statutory

rulemaking procedure requirements under the Administrative Procedure Act, which

rendered the rules invalid; (2) the entry of an order prohibiting the IDNR from adopting

or filing the regulations; and (3) the entry of an order prohibiting the Secretary of State

from publishing the regulations.

¶ 10 Thereafter, on November 14, 2014, the IDNR filed the adopted rules with the

Secretary of State pursuant to section 5-65 of the Administrative Procedure Act (5 ILCS

100/5-65 (West 2012)). The rules became effective when they were filed with the

Secretary of State. 5 ILCS 100/5-40(d) (West 2012). 5 ¶ 11 On November 18, 2014, the defendants filed an objection to the plaintiffs' motion

for preliminary relief, arguing that the plaintiffs' request to enjoin adoption and filing of

the regulations was moot because the rules had been filed with the Secretary of State on

November 14, 2014, and had become effective on that date. The objection further argued

that the plaintiffs failed to demonstrate irreparable harm as required to obtain a

preliminary injunction in that they offered "nothing more than conclusory allegations that

they [would] suffer irreparable harm." Specifically, the objection argued that the

plaintiffs' argument with regard to irreparable harm was "based entirely on speculation"

in that the plaintiffs had not alleged any of the following facts: "that anyone has applied

or will apply for a permit to conduct horizontal high volume hydraulic fracturing on or

near any property" owned by them; that such an application for a permit would be

granted; and that even if such a permit existed, imminent harm would result to them or

their property. The objection argued that the plaintiffs failed to set forth "any basis to

conclude that the mere enactment of rules setting forth standards and procedures for

permitting and regulating hydraulic fracturing *** [would] cause any harm to [them], let

alone irreparable harm." (Emphasis in original.)

¶ 12 Furthermore, the objection argued that the plaintiffs failed to demonstrate an

inadequate remedy at law and that there was a likelihood of success on the merits. The

objection noted that section 1-50 of the Act (225 ILCS 732/1-50 (West Supp. 2013))

allowed any person having an interest that is or may be adversely affected by a hydraulic

fracturing permit application to request a public hearing. The objection further noted that

decisions on permit applications were subject to judicial review under the Administrative 6 Review Law (225 ILCS 732/1-53(d) (West Supp. 2013)). Therefore, the objection

argued that the plaintiffs failed to demonstrate that this procedure was inadequate to

address any alleged harms that they may suffer. With regard to the likelihood of the

success on the merits, the objection argued that the plaintiffs failed to demonstrate that

the IDNR violated the Administrative Procedure Act during the rulemaking process.

¶ 13 On November 18, 2014, a hearing was held on the plaintiffs' motion for

preliminary relief. At the hearing, the trial court accepted the facts pled in the complaint

as true for the purposes of the hearing. The court did not allow the presentation of

witnesses or affidavits and just accepted arguments of counsel. After hearing arguments,

the court took the matter under advisement.

¶ 14 On November 21, 2014, the trial court entered a written order denying the

plaintiffs' motion for preliminary relief. In its order, the court noted that the plaintiffs had

clearly stated that the request for the preliminary injunction was based solely on their

allegations "that mandatory procedural requirements governing how an agency adopts

rules were violated." The court concluded that it was "unable to determine whether the

IDNR allowed reasonable participation in a preliminary injunction hearing." The court

concluded that it was not clear, without discovery and further briefing, whether the IDNR

violated the Administrative Procedure Act during the rulemaking procedure.

¶ 15 Further, the trial court noted that the plaintiffs must establish the following

elements in order to be entitled to a preliminary injunction: they possess a clear right or

interest needing protection; they have no adequate remedy at law; irreparable harm will

result if the preliminary injunction is not granted; and there is a reasonable likelihood of 7 success on the merits. With regard to the first element, clear right or interest in need of

protection, the court noted that the plaintiffs are citizens of Illinois and therefore have an

interest in having the government comply with the applicable law. The court also noted

that the plaintiffs include landowners, mineral interest owners, and members of

communities where high-volume horizontal hydraulic fracturing would be permitted

under the rules. Accordingly, the court found that the plaintiffs have a clearly

ascertainable right.

¶ 16 As for the likelihood of success on the merits, the court noted that the plaintiffs

had alleged multiple violations by the IDNR in its rulemaking procedures. The court

then noted that the plaintiffs are not required to prove that they will win in order to meet

this element. Instead, they need only raise a fair question as to the likelihood of their

success on the merits.

¶ 17 With regard to irreparable harm, the court stated as follows:

"Plaintiffs failed to establish that they will suffer irreparable harm if the Secretary

of State publishes the adopted rules. IDNR through JCAR adopted the rules. The

rules will allow applications to be filed. Facts must be alleged with certainty as to

what harm the plaintiffs will incur. Conclusory allegations that some of the

plaintiffs have land near some areas where someone may file an application for a

permit do not state irreparable harm. No applications have been filed, let alone

granted. Plaintiffs have not established imminent harm or irreparable injury will

occur simply by the publishing of the rules."

¶ 18 Accordingly, the trial court concluded that the plaintiffs had not met their burden 8 of proof regarding irreparable injury and therefore it could not grant the preliminary

injunction. The plaintiffs appeal.

¶ 19 Initially, the defendants argue that the plaintiffs' requested interlocutory relief is

moot in that the relief requested in their motion for preliminary injunction, to prohibit the

IDNR from adopting or filing the revised regulations and to prohibit the Secretary of

State from publishing the regulations, has already occurred. The plaintiffs concede that

the regulations were adopted and published after their motion for preliminary relief was

filed. The defendants note that the plaintiffs are now asking this court in their appellate

brief (1) to enter injunctive relief that prohibits the use of the regulations until a decision

on the merits can be made and (2) to direct the defendants to publish a notice in the

Illinois Register that the regulations have been enjoined. The defendants argue that this

relief was not requested in the trial court, and therefore, has been forfeited.

¶ 20 The plaintiffs counter that their requested relief was not "so limited" as their

motion also requested that the trial court find that the IDNR had failed to comply with

mandatory rulemaking procedures and that the plaintiffs had shown the requisite

elements for the issuance of a preliminary injunction. In support of this position, the

plaintiffs point out that during the hearing, the defendants' counsel advised that the rules

had been filed by the IDNR and the plaintiffs noted that there were still several levels of

remedies available. The plaintiffs also argue that they have made it clear that

"prohibition of the use of the invalid rules" was the goal of the motion for preliminary

injunction and the lawsuit. After reviewing the record, we agree with the plaintiffs and

will address the issue of whether the plaintiffs have raised a fair question as to the 9 requisite elements for the issuance of a preliminary injunction.

¶ 21 The purpose of a preliminary injunction is to preserve the status quo until the

merits of the case are decided. City of Kankakee v. Department of Revenue, 2013 IL App

(3d) 120599, ¶ 17. A preliminary injunction is an extraordinary remedy that is applicable

only in extreme emergency situations where serious harm would result if not issued. Id.

To establish entitlement to a preliminary injunction, the plaintiff must demonstrate the

following: (1) a clearly ascertainable right in need of protection; (2) that they will suffer

irreparable harm if the injunction does not issue; (3) no adequate remedy at law for the

injury; and (4) the likelihood of success on the merits. People ex rel. Klaeren v. Village

of Lisle, 202 Ill. 2d 164, 177 (2002). The party seeking the injunction must raise a fair

question concerning the existence of the claimed right, i.e., a fair question as to the

existence of each element. Clinton Landfill, Inc. v. Mahomet Valley Water Authority, 406

Ill. App. 3d 374, 378 (2010).

¶ 22 At the preliminary injunction stage, the trial court should not consider contested

issues of fact, nor should it decide the merits of the case. Harper v. Missouri Pacific R.R.

Co., 264 Ill. App. 3d 238, 249 (1994). In general, an abuse of discretion standard of

review applies to the trial court's decision to grant or deny a preliminary injunction.

Clinton Landfill, 406 Ill. App. 3d at 378. A trial court abuses its discretion where its

ruling is arbitrary, fanciful, or unreasonable or where no reasonable person would adopt

the court's view. World Painting Co. v. Costigan, 2012 IL App (4th) 110869, ¶ 12. The

relevant question for the reviewing court is whether there was a sufficient showing made

to the circuit court to sustain its order. Scheffel Financial Services, Inc. v. Heil, 2014 IL 10 App (5th) 130600, ¶ 9.

¶ 23 However, where the trial court does not make any factual findings and instead

rules on a question of law, the standard of review is de novo. Clinton Landfill, 406 Ill.

App. 3d at 378. Furthermore, where an answer is not filed, an injunction must be

measured by the sufficiency of the complaint and all well-pleaded facts are to be taken as

true. McErlean v. Harvey Area Community Organization, 9 Ill. App. 3d 527, 529 (1972).

¶ 24 The plaintiffs first argue that the irreparable-harm element for the issuance of a

preliminary injunction should be presumed where the defendants failed to follow the

Administrative Procedure Act during the rulemaking process. The plaintiffs ask this

court to hold that "when the mandatory rulemaking provisions are violated, rendering the

rulemaking invalid, the result is irreparable harm to Illinois citizens, specifically, in this

case to the [p]laintiffs." In support of their position, they cite People ex rel. Sherman v.

Cryns, 203 Ill. 2d 264, 277 (2003), which states that where an injunction is sought by the

State or a governmental agency pursuant to express authorization of a statute, the

requisite elements necessary to obtain an injunction need not be satisfied. Instead, the

State or agency seeking the injunction only need to show that the statute was violated and

that the statute relied upon specifically allows for injunctive relief. Id. "The principle

underlying the willingness of the courts to issue statutory injunctions to public bodies to

restrain violations of a statute is that harm to the public at large can be presumed from the

statutory violation alone." People ex rel. Hartigan v. Stianos, 131 Ill. App. 3d 575, 580

(1985).

¶ 25 In response, the defendants argue that irreparable harm should not be presumed in 11 this case. The defendants note that the plaintiffs are not government agencies seeking to

enjoin a statutory violation nor does the Hydraulic Fracturing Act or the Administrative

Procedure Act expressly authorize actions to enjoin statutory violations. The defendants

acknowledge that the Administrative Procedure Act does expressly authorize challenges

to the adoption of regulations under section 5-35(b) of the Administrative Procedure Act

(5 ILCS 100/5-35(b) (West 2012)), but argue that the provision does not expressly

authorize actions to enjoin statutory violations. Accordingly, the defendants argue that

the rule set forth in Sherman is inapplicable to the present case, which was brought by

private parties to enjoin violations of statutes that do not expressly provide for such

actions.

¶ 26 After carefully reviewing the case law, we decline to extend the rule set forth in

Sherman to the present action. As noted by the defendants, the plaintiffs are private

parties, not the State or a government agency, seeking to enjoin alleged violations of the

Administrative Procedure Act, which does not expressly provide for injunctive relief for

statutory violations. Section 5-35(b) of the Administrative Procedure Act (5 ILCS 100/5-

35(b) (West 2012)) does expressly authorize challenges to the adoption of regulations on

the ground of noncompliance with the procedural requirements; however, this provision

does not explicitly provide for injunctive relief where the Administrative Procedure Act

has been violated. Accordingly, we will not extend the rule set forth in Sherman to this

case and, therefore, the plaintiffs' motion must establish a fair question as to the existence

of each element.

¶ 27 Because we conclude that the plaintiffs have failed to establish a fair question as to 12 the existence of irreparable harm, we will not address the remaining elements necessary

to obtain a preliminary injunction. See Smith Oil Corp. v. Viking Chemical Co., 127 Ill.

App. 3d 423, 431-32 (1984) (where the party seeking the injunction has failed to establish

a fair question as to the existence of irreparable harm, the issuance of an injunction is not

warranted). As previously explained, an injunction is only authorized where the party

seeking it has raised a fair question that, among the other requirements, he will suffer

irreparable harm without the granting of the injunction. Smith Oil Corp. v. Viking

Chemical Co., 127 Ill. App. 3d 423, 431 (1984). An alleged injury is irreparable where it

is of such nature that the injured party cannot be adequately compensated in damages or

when the damages cannot be measured by any certain pecuniary standard. Kalbfleisch v.

Columbia Community Unit School District Unit No. 4, 396 Ill. App. 3d 1105, 1116

(2009). "The requirement of the showing of imminent injury is not satisfied by proof of a

speculative possibility of injury and such relief will not be granted to allay unfounded

fears or misapprehensions." (Internal quotation marks omitted.) Smith Oil Corp., 127 Ill.

App. 3d at 431.

¶ 28 The plaintiffs argue that they have established a fair question as to irreparable

harm in that they "lack *** any opportunity to remedy the deficient, invalid rulemaking

before the rules are applied." The plaintiffs argue that the invalid rules will trigger the

permit application process under the Hydraulic Fracturing Act, which will result in the

approval of invalid permits for high-volume horizontal hydraulic fracturing operations

on, under, or near their property. Specifically, they argue that the irreparable harm is the

use of the invalid rules during the pendency of the litigation. The defendants counter that 13 the plaintiffs have only offered "conclusory and speculative allegations advancing

generalized grievances that fall far short of the required showing of immediate and

irreparable harm specific to them."

¶ 29 Here, the trial court did not allow the presentation of witnesses or affidavits and

instead relied on the arguments of counsel in making its decision. After hearing

arguments of counsel, the court concluded that the plaintiffs had failed to establish that

they will suffer irreparable harm if a preliminary injunction was not issued. The court

noted that in order to establish irreparable harm, facts must be alleged with certainty as to

what harm the plaintiffs will incur. The court concluded that "[c]onclusory allegations

that some of the plaintiffs have land near some areas where someone may file an

application for a permit do not state irreparable harm." The court noted that no

applications have been filed, let alone granted.

¶ 30 We agree with the trial court that the plaintiffs have not established a fair question

that they will suffer an imminent, cognizable harm as a result of the use of the allegedly

invalid rules during the pendency of the litigation. The plaintiffs' claims are too

speculative to justify the extraordinary relief afforded by the issuance of a preliminary

injunction. Therefore, we conclude that the plaintiffs have failed to raise a fair question

as to the existence of irreparable harm.

¶ 31 For the foregoing reasons, we affirm the judgment of the circuit court of Madison

County.

¶ 32 Affirmed. 14 2015 IL App (5th) 140583

NO. 5-14-0583

IN THE

FIFTH DISTRICT _____________________________________________________________________________________

MARIE SMITH, MARK DONHAM, VITO MASTRANGELO, ) Appeal from the SAM STEARNS, TABITHA TRIPP, NATHAN CZUBA, ) Circuit Court of ANNETTE McMICHAEL, and SOUTHERN ILLINOISANS ) Madison County. AGAINST FRACTURING OUR ENVIRONMENT (SAFE), ) an Illinois Not-for-Profit Corporation, ) ) Plaintiffs-Appellants, ) ) v. ) No. 14-CH-711 ) THE DEPARTMENT OF NATURAL RESOURCES, ) an Illinois State Agency, MARC MILLER, Director of ) Natural Resources, PAT QUINN, Governor of the State of ) Illinois, and JESSE WHITE, Secretary of State of the State ) of Illinois, ) Honorable ) Barbara L. Crowder, Defendants-Appellees. ) Judge, presiding. _____________________________________________________________________________________

Opinion Filed: July 10, 2015 _____________________________________________________________________________________

Justices: Honorable Thomas M. Welch, J.

Honorable S. Gene Schwarm, J., and Honorable James R. Moore, J., Concur _____________________________________________________________________________________

Attorneys Penni S. Livingston, Livingston Law Firm, 5701 Perrin Road, Fairview Heights, for IL 62208; Natalie Laczek, P.O. Box 232, Riverside, IL 60546; Vito A. Appellants Mastrangelo, P.O. Box 1253, Mt. Vernon, IL 62864 _____________________________________________________________________________________

Attorneys Lisa Madigan, Attorney General, State of Illinois, Carolyn E. Shapiro, Solicitor for General, Brett E. Legner, Deputy Solicitor General, 100 West Randolph Street, Appellees 12th Floor, Chicago, IL 60601 _____________________________________________________________________________________