Judges: Wood
Filed: Jan. 16, 2019
Latest Update: Mar. 03, 2020
Summary: In the United States Court of Appeals For the Seventh Circuit _ No. 17-3107 EOR ENERGY LLC, et al., Plaintiffs-Appellants, v. ILLINOIS ENVIRONMENTAL PROTECTION AGENCY, et al., Defendants-Appellees. _ Appeal from the United States District Court for the Central District of Illinois. No. 3:16-cv-03122 — Sue E. Myerscough, Judge. _ ARGUED SEPTEMBER 21, 2018 — DECIDED JANUARY 16, 2019 _ Before WOOD, Chief Judge, and FLAUM and HAMILTON, Cir- cuit Judges. WOOD, Chief Judge. In March 2007 the Illinois
Summary: In the United States Court of Appeals For the Seventh Circuit _ No. 17-3107 EOR ENERGY LLC, et al., Plaintiffs-Appellants, v. ILLINOIS ENVIRONMENTAL PROTECTION AGENCY, et al., Defendants-Appellees. _ Appeal from the United States District Court for the Central District of Illinois. No. 3:16-cv-03122 — Sue E. Myerscough, Judge. _ ARGUED SEPTEMBER 21, 2018 — DECIDED JANUARY 16, 2019 _ Before WOOD, Chief Judge, and FLAUM and HAMILTON, Cir- cuit Judges. WOOD, Chief Judge. In March 2007 the Illinois E..
More
In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 17‐3107
EOR ENERGY LLC, et al.,
Plaintiffs‐Appellants,
v.
ILLINOIS ENVIRONMENTAL PROTECTION AGENCY, et al.,
Defendants‐Appellees.
____________________
Appeal from the United States District Court for the
Central District of Illinois.
No. 3:16‐cv‐03122 — Sue E. Myerscough, Judge.
____________________
ARGUED SEPTEMBER 21, 2018 — DECIDED JANUARY 16, 2019
____________________
Before WOOD, Chief Judge, and FLAUM and HAMILTON, Cir‐
cuit Judges.
WOOD, Chief Judge. In March 2007 the Illinois Environmen‐
tal Protection Agency (IEPA) brought charges before the Illi‐
nois Pollution Control Board (the Board) against EOR Energy,
LLC (EOR) and AET Environmental, Inc. (AET). The IEPA ac‐
cused EOR and AET of violating the Illinois Environmental
Protection Act, 415 ILCS 5/1–5/58, by transporting hazardous‐
waste acid into Illinois, storing that waste, and then injecting
2 No. 17‐3107
it into EOR’s industrial wells in Illinois. EOR challenged its
prosecution by arguing that under the environmental law
scheme put in place by Illinois, the IEPA and the Board do not
have jurisdiction over EOR’s acid dumping. EOR took that ar‐
gument all the way through the Illinois courts, losing at every
turn. The state courts determined that under Illinois law,
EOR’s jurisdictional argument is meritless.
Having lost in the state courts, EOR has turned to the fed‐
eral courthouse. It would like the federal district court to issue
a declaratory judgment that under federal law, the IEPA and
the Board do not have jurisdiction over any future attempts
to dump similar acidic waste into its wells. The district court
dismissed the case on several grounds: the Eleventh Amend‐
ment, issue preclusion, and a hint of Rooker‐Feldman, to the
extent that EOR was trying to undo the adverse decisions
from the state courts. We agree with the district court that this
suit cannot proceed in federal court: it is blocked by claim and
issue preclusion; in some respects Rooker‐Feldman deprives
the district court of subject‐matter jurisdiction; and to the ex‐
tent that anything else remains, EOR is stymied by the Elev‐
enth Amendment.
In 2002 a tire production facility in Colorado experienced
an emergency overheating of industrial acid. AET Environ‐
mental was hired by the plant to dispose of the acid. When it
could not find a nearby waste disposal plant that would ac‐
cept the acid, AET decided to ship the acid to EOR, an oil com‐
pany with wells in Illinois. EOR stored the acid in Illinois for
two years. At that point, it decided to inject some of the acid
into its wells. It ultimately disposed of the rest of the acid after
several inspections and investigations into the safety of the
acid as potentially dangerous hazardous waste. Five years
No. 17‐3107 3
later, the IEPA brought charges before the Board against EOR
and AET (collectively EOR), identifying the transportation,
storage, and injection of the acid as violations of Illinois envi‐
ronmental law. In June 2012, the IEPA filed an unopposed
motion for summary judgment. The Board granted that mo‐
tion and imposed $60,000 in sanctions against AET and
$200,000 against EOR. EOR then filed a motion for reconsid‐
eration, arguing for the first time that the Board did not have
jurisdiction under state law over its suit. EOR asserted that it
was not injecting “waste” into its wells. Instead, it said, it was
merely injecting an acid that was used to treat the wells and
aid in petroleum extraction. Therefore, according to EOR, the
Illinois Department of Natural Resources (the Department)
had exclusive jurisdiction over EOR’s injection of acid into a
“Class II well” under the Illinois Oil and Gas Act, 225 ILCS
725/1. The Board rejected this argument and denied EOR’s
motion for reconsideration.
EOR appealed directly to the Appellate Court of Illinois
(Fourth District), which affirmed the Board’s decision. E.O.R.
Energy, LLC v. Pollution Control Bd., 2015 IL App (4th) 130443,
¶ 100 (2015). The Appellate Court emphasized that this was a
matter of state law, specifically Illinois’s “comprehensive stat‐
utory structure for the regulation of underground injection of
materials into wells in Illinois,” although the statutory scheme
was “promulgated with federal approval.” Id. at ¶ 83. The
court interpreted the Illinois Environmental Protection Act as
giving the Board jurisdiction to decide this type of case, and
the IEPA jurisdiction to enforce this matter, “[b]ecause the
acid material was both a ‘waste’ and a ‘hazardous waste’
within the meaning of the Act.” Id. at ¶¶ 72–80. It further held
that not only was the Department’s jurisdiction in this area
4 No. 17‐3107
not exclusive; it was non‐existent. The court held that the De‐
partment’s authority is limited to the injection of certain fluids
associated with oil and gas production. Id. at ¶¶ 81–88. Both
the Supreme Court of Illinois, E.O.R. Energy, LLC v. Pollution
Control Bd., 396 Ill. Dec. 175 (2015), and the Supreme Court of
the United States, E.O.R. Energy, LLC v. Illinois Pollution Con‐
trol Bd., 136 S. Ct. 1684 (2016), declined to hear EOR’s appeals.
Almost immediately after losing in state court, EOR and
AET filed this action, purportedly seeking a declaratory judg‐
ment through the citizen‐suit provisions of the two federal
laws—the Resource Conservation and Recovery Act, 42
U.S.C. §§ 6901–6992k, and the Safe Drinking Water Act, 42
U.S.C. §§ 300f–300j‐27—that allow states to develop their own
statutory schemes after obtaining federal approval. As it did
in the state‐court action, EOR argues that Class II injection
wells in Illinois are exclusively regulated by the Department,
and so the IEPA is not empowered to require EOR to obtain a
Class I permit or otherwise prosecute EOR for (as it describes
in its brief) trying “to use cheap or off‐spec acid similar to that
used in the 2002‐2004 acidization” into its Class II wells. The
district court granted the IEPA’s motion to dismiss for failure
to state a claim upon which relief can be granted. We review
that dismissal de novo. Kubiak v. City of Chicago, 810 F.3d 476,
480 (7th Cir. 2016).
EOR’s complaint, which we must accept as true at this
stage, paints a clear picture of what it would like to do. EOR
wants to continue injecting the hazardous acid into its wells,
but this time it would like to do so armed with a declaratory
judgment from a federal court that will protect it from another
enforcement action brought by the IEPA and another penalty
No. 17‐3107 5
imposed by the Board. As EOR puts it, it would like to con‐
duct these operations “without fear of a similar ordeal as they
are currently enduring.” It cites past litigation costs and the
enforcement of the state court’s order—through fines and the
direction to obtain permits or cease unlawful conduct—as the
kinds of harms it seeks to avoid with a federal court order.
We emphatically reject this undisguised attempt to exe‐
cute an end‐run around the state court’s decision. That court
has considered and ruled on EOR’s arguments about the dis‐
tribution of power among Illinois’s environmental agencies.
First, its decision is final. Second, there is no federal interest
in which state agency is authorized to take action. And above
all, EOR ignores the duty of the federal courts to respect state‐
court judgments and the jurisdictional barrier that would ex‐
ist if what it really wants is lower federal‐court review of the
state‐court results.
To the extent EOR wanted the district court and now this
court to review and set aside the state court’s adverse deci‐
sion, it runs into the Rooker‐Feldman doctrine, under which
lower federal courts lack jurisdiction to review state‐court
judgments or to decide matters inextricably related to state
court decisions. See Rooker v. Fidelity Trust Co., 263 U.S. 413,
415–16 (1923); District of Columbia Court of Appeals v. Feldman,
460 U.S. 462, 482–86 (1983); Exxon Mobil Corp. v. Saudi Basic
Indus. Corp., 544 U.S. 280, 284 (2005).
The heart of EOR’s claim is that the Illinois Appellate
Court declared the wrong rule of law and that we should cor‐
rect it. EOR would like us to hold that the IEPA and the Board
indeed lack jurisdiction to hold EOR accountable for dump‐
ing acidic waste into its wells. But if EOR believed that the
6 No. 17‐3107
Illinois court got it wrong, its remedy was to ask the state su‐
preme court, and thereafter the Supreme Court of the United
States, to correct the error. It filed the necessary petitions, but
those courts chose not to hear its case. That was the end of the
line. There is no asterisk appended to the Rooker‐Feldman doc‐
trine saying that it evaporates once certiorari is denied. The
state court has adjudicated EOR’s claim, and that is that: it
may not come to the federal courthouse for Round Two.
It may be more accurate, however, to read EOR’s com‐
plaint and briefs in this court as acquiescing in the state
court’s judgment, including the penalties it imposed, and ask‐
ing simply for a new ruling on the pure issues of law. In that
case, we do not face a Rooker‐Feldman problem, but EOR is no
better off. The reason is simple: litigants cannot simply ignore
legal rulings from a competent state court and receive a do‐
over in federal court. The full faith and credit statute, 28
U.S.C. § 1738, dictates the opposite rule: federal courts must
give the same preclusive effect to a state‐court judgment that
it would receive under state law. See, e.g., Marrese v. American
Academy of Orthopaedic Surgeons, 470 U.S. 373, 380 (1985).
Even if, as EOR insists, its federal‐law arguments are dif‐
ferent from the questions relating to the allocation of powers
among the state agencies that were decided on the merits in
the prior litigation, that does not matter. Illinois applies claim
preclusion when the original state court rendered a final judg‐
ment on the merits; the claims arise out of the same nucleus
of fact; and the parties are identical. See Hudson v. City of Chi‐
cago, 228 Ill. 2d 462, 467 (2008). This blocks parties not only
from re‐litigating the issues the state court actually enter‐
tained; it also bars litigation of any theory that could have
been raised. And if that were not enough, EOR also faces issue
No. 17‐3107 7
preclusion. EOR raised its jurisdictional argument in the prior
state proceedings, and that issue was necessary to the Illinois
court’s decision on the merits. Under those circumstances,
EOR may not re‐litigate that issue. See Du Page Forklift Serv.,
Inc. v. Material Handling Servs., Inc., 195 Ill. 2d 71, 77 (2001).
We add for good measure that the Eleventh Amendment
prohibits a federal court from ordering any relief against a
state agency based on state law. Pennhurst State Sch. & Hosp.
v. Halderman, 465 U.S. 89, 100–01, 106 (1984). Although the en‐
forcement of environmental laws is in part accomplished
through a partnership between the states and the federal gov‐
ernment, federal law has nothing to say about which agency
a state is entitled to use in carrying out those tasks. That is
purely a matter of state law.
EOR also has asked this court for the opportunity to cure
and refile its complaint. We deny its request. There is no way
that EOR could remedy the errors outlined above. Any
change in the suit that would remove these flaws would also
destroy EOR’s standing and the entire point of its lawsuit. If
EOR intends to ignore the state court’s rulings and inject the
same kinds of hazardous waste acid into the same kinds of
wells, then it will have to account for its actions before the
state authorities. If, on the other hand, EOR wants to inject
into its wells an entirely different acid that is not hazardous
waste under Illinois law, then it will have to take its chances
in a future proceeding that is not at this time ripe for any fed‐
eral‐court action.
We AFFIRM the judgment of the district court.