Chicago City Hall says a city administrative law judge overstepped his authority in finding the city’s public health commissioner illegally denied a permit to a company seeking to operate a metal recycling facility on the city’s South Side.
In a complaint filed in Cook County Circuit Court on June 30, attorneys for the administration of Mayor Brandon Johnson asked the court to overturn the decision from Administrative Law Judge Mitchell Ex and allow the city to block the permit required by Reserve Management Group (RMG), the company formerly known as General Iron, to operate its new scrap yard and recycling center.
In that decision, ALJ Ex concluded Chicago Public Health Commissioner Allison Arwady essentially engaged in illegal rulemaking by using an “environmental justice” review, known as a “health impact assessment," seemingly at the behest of the administration of President Joe Biden, to side with left-wing community activists, and abruptly reverse course to deny RMG’s permit request.
“The City has referred to the HIA as simply a ‘tool’ to be used by the Commissioner (Arwady) to inform her decision,” ALJ Ex wrote. “This characterization greatly understates the critical effect that the HIA played in the decision to deny the permit.
“The HIA set new standards for (the) permit – standards which were only known to the CDPH and were admittedly ‘subjective’ at best.”
However, in appealing that decision, Chicago city attorneys argued the ALJ failed to recognize the broad authority the city claims its ordinances give to its public health commissioners to subjectively review such development proposals on a “case-by-case basis,” even at the apparent prodding of outside government agencies, such as the U.S. Environmental Protection Agency – an organization the city calls its “federal partners.”
And the city argued Ex overreached in reviewing at all the manner and methods used by Arwady to arrive at the decision to deny the permit.
The city argued city ordinance does not give ALJs, like Ex, operating through the Department of Administrative Hearings, the power to review the methods used by city officials to deny such permits, only to “provide aggrieved permit applicants the opportunity to contest facts with their own evidence” and then determine if the evidence presented by the city justifies the ultimate decision.
“Any action beyond that by DOAH would remove the decision on (the) permit from the hands of the Commissioner of CDPH, where the Municipal Code firmly vests it, in contravention of local law governing both CDPH and DOAH,” the city wrote.
RMG has sought since 2018 to develop and open the metal recycling center on 175 acres in Chicago’s South Deering neighborhood.
RMG, then known as General Iron, operated a recycling plant for decades on the city’s North Side, until the city under former Mayor Lori Lightfoot pressed the company to close that plant, citing pollution concerns.
The closing of that facility prompted RMG to seek to build what it has called a “state-of-the-art” facility in South Deering.
The company also now does business as South Side Recycling.
Even though the company acted at the city’s direction, the Lightfoot administration rejected RMG’s permit application in early 2022. Arwady at the time said the decision was based on the results of the HIA, which allegedly showed “potential adverse changes in air quality and quality of life that would be caused by operations, and health vulnerabilities in the surrounding communities.”
In response, RMG has argued the city lacked the authority to base its decision on the HIA’s conclusions or any other environmental analyses or rules not explicitly allowed within city ordinance or state or federal law.
RMG noted it “had satisfied every measurable requirement” to obtain the permit, a fact known by city officials for months before denying the permit.
RMG argued the city had conducted the HIA to bow to pressure from community activists opposed to the project and their allies within the Biden administration. RMG asserted the denial was “purely subjective,” and was not “based on science or any objective measurable standards.”
In its appeal, the city asserts ALJ Ex committed legal errors by agreeing with RMG that the city’s use of the HIA amounted to “an unauthorized permitting requirement or standard,” illegally made on the fly and never formally published for public knowledge.
In this instance, the city argued, city ordinances give Arwady the authority to move beyond the rules spelled out in law and formal regulations, and use other means, like the HIA, to review the permit request using “data about the surrounding community, and the effect a proposed facility would have on the environment and public health.”
RMG has said this approach amounts to lawless behavior by the city.
Both the city’s Department of Administrative Hearings, which employs ALJ Ex, and RMG are named as defendants in the city’s appeal.
No defendants have yet filed responses to the city’s complaint.
In a separate action, RMG has already sued the city over those alleged illegal actions, saying the city owes them $100 million if the company is ultimately blocked from opening and operating the recycling center. That lawsuit is on hold while RMG and the city move through the administrative hearing and appeals process over the permit denial. The lawsuit would resume if Arwady’s decision is allowed to stand.