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General Electric Co. v. Whitman

April 1, 2003

GENERAL ELECTRIC COMPANY, PLAINTIFF,
v.
CHRISTINE TODD WHITMAN, ADMINISTRATOR, UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, AND UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, DEFENDANTS.



The opinion of the court was delivered by: John D. Bates United States District Judge

MEMORANDUM OPINION

Plaintiff General Electric Company ("GE") and defendants the United States Environmental Protection Agency and its administrator, Christine Todd Whitman (collectively "EPA"), are before the Court on EPA's motion to dismiss or for summary judgment. GE raises a broad constitutional challenge to section 106 of the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA" or "the Act"), 42 U.S.C. § 9601 et seq., and seeks a declaratory judgment that section 106, 42 U.S.C. § 9606, in tandem with sections 107(c)(3) and 113(h), 42 U.S.C. §§ 9607(c)(3), 9613(h), creates a regime that violates the Due Process Clause of the Fifth Amendment. Amended Complaint at ¶ 1.

EPA urges dismissal of GE's action on the ground that section 113(h) postpones judicial review of any challenges to EPA action under CERCLA -- including constitutional challenges to the statute itself -- until EPA seeks to enforce its remedial actions in court. Even if there is jurisdiction to review GE's challenge at this time, EPA contends that these sections of CERCLA do not violate GE's due process rights. EPA also argues that GE's challenge constitutes a facial attack on CERCLA that cannot prevail because there are circumstances in which the challenged provisions plainly could be applied in a constitutional manner.

GE counters that it is not seeking pre-enforcement review of any specific EPA order, which it concedes would be barred until EPA seeks enforcement in court, nor is it pursuing a purely facial challenge to CERCLA. Rather, GE asserts that it is challenging the constitutionality of CERCLA's statutory scheme as "interpreted and applied" generally by EPA. As a result, GE contends that the jurisdictional bar under section 113(h) does not apply here.

As to the merits, GE argues that CERCLA's provisions violate due process by failing to provide a hearing and other procedural safeguards before EPA issues an administrative order requiring remediation of a hazardous waste site. GE notes that if one refuses to comply with an administrative order, one risks considerable penalties, including punitive damages; alternatively, EPA may complete the remediation itself, and then seek recovery of its costs, plus treble damages, from the non-complying party. And even if one complies with a cleanup order, one can only seek reimbursement of expenses from EPA in court once EPA determines the site is completely remediated, which is often several years later. Thus, GE contends, there is no assurance that there will be a prompt post-order hearing in court. Moreover, GE maintains that EPA issues such orders, without hearings or other procedural safeguards, even when there is no emergency warranting immediate remediation. GE contends that CERCLA thus amounts to a coercive regime that creates a "Hobson's choice" for parties faced with section 106 orders under CERCLA: comply with EPA's order without receiving a hearing on EPA's proposed remedy, or refuse and risk stiff and mounting penalties.

Upon consideration of the pleadings, the briefing (including briefs by amicus curiae), *fn1 oral argument, and the entire record herein, the Court finds that, in light of section 113(h), it does not have subject matter jurisdiction over GE's broad, pre-enforcement constitutional challenge to CERCLA. Because this Court concludes that section 113(h) bars judicial review at this time, the Court does not address the merits of GE's due process claim. Therefore, the Court grants EPA's motion to dismiss.

BACKGROUND

I. The CERCLA Framework

Congress designed CERCLA "in response to the serious environmental and health risks posed by industrial pollution." United States v. Bestfoods, 524 U.S. 51, 55 (1998). As its name implies, CERCLA is "a comprehensive statute that grants the President broad power to command government agencies and private parties to clean up hazardous waste sites." Key Tronic Corp. v. United States, 511 U.S. 809, 814 (1994). Also known as the Superfund law, CERCLA provides the President (typically through the Administrator of EPA) with extensive authority to enforce the cleanup provisions of the Act. CERCLA requires that sites contaminated by toxic wastes be abated and cleaned up expeditiously by, or at the expense of, "those responsible for the hazardous condition." Control Data Corp. v. S.C.S.C. Corp., 53 F.3d 930, 936 (8th Cir. 1995). "These actions typically require private parties to incur substantial costs in removing hazardous wastes and responding to hazardous conditions." Key Tronic, 511 U.S. at 814. Those subject to liability for cleanup orders under CERCLA are referred to as "potentially responsible parties," or PRPs. See 42 U.S.C. § 9607(a). In order to be effective, CERCLA authorizes EPA to address contaminated sites without first having to undergo judicial review of issues relating to liability or the adequacy of the cleanup remedy. See Boarhead Corp. v. Erickson, 923 F.2d 1011, 1019 (3rd Cir. 1991); 42 U.S.C. § 9613(h).

The Act "allow[s] the EPA to undertake direct removal or remedial action to protect the public health or welfare or the environment when it determines that release of a hazardous substance poses an imminent and substantial danger." Barmet Aluminum Corp. v. Reilly, 927 F.2d 289, 290-91 (6th Cir. 1991). CERCLA contemplates two distinct kinds of clean-up actions arising under its statutory framework: removal actions and remedial actions. See 42 U.S.C. §§ 9601(23)-(24). Removal actions, which occur before remedial action is undertaken, are short-term actions taken to halt any immediate risks posed by hazardous wastes, and often involve actions to study, monitor, evaluate, clean up and otherwise "prevent, minimize, or mitigate damage to the public health or welfare or the environment." Id. § 9601(23). Remedial actions are more permanent remedies and measures taken to clean up contamination, actions "taken instead of or in addition to removal actions." Id. § 9601(24). Remedial actions include investigation, testing, storage, abatement, confinement, repair, excavation, dredging, relocation, incineration, "and any monitoring reasonably required to . . . protect the public health and welfare and the environment." Id.

Hazardous waste sites that pose the greatest danger to public health and the environment are listed on the National Priorities List (NPL). See Ohio v. EPA, 838 F.2d 1325, 1327 (D.C. Cir. 1988). Sites listed on the NPL "are considered the leading candidates for cleanup financed by the Superfund program." Washington State Dep't of Transp. v. EPA, 917 F.2d 1309, 1311 (D.C. Cir. 1990); see also 42 U.S.C. § 9605(a)(8)(B). EPA has listed at least three sites on the NPL with respect to which EPA considers GE to be a PRP or otherwise liable under CERCLA. See 40 C.F.R. Pt. 300, App. B. Before EPA can propose remedies for site cleanup and abatement, information is obtained, data gathered, remediation investigated, and alternative options considered. See 40 C.F.R. §§ 300.430, 300.5. Moreover, before EPA selects a remedy, the public, the community, neighbors, interested parties, and all PRPs have several opportunities to comment (in writing and at hearings) on the proposed remedy. Id. at § 300.430(f).

Section 122 of CERCLA authorizes EPA to initiate negotiations with PRPs to "allow [for the] expedient and efficient settlements of potential liability." Dravo Corp. v. Zuber, 13 F.3d 1222, 1227 (8th Cir. 1994); 42 U.S.C. § 9622. If negotiations fail, one option under CERCLA for cleaning a hazardous waste site is for EPA to perform the remediation itself, using money taken out of the Superfund established by Congress. EPA would then bring an action in federal district court under section 107 of CERCLA to recover its costs from parties responsible for the contamination. See 42 U.S.C. §§ 9607(a)(4)(A), 9611(a). Given the limited funds available in the Superfund in relation to the enormity of the hazardous waste problem nationwide, cost recovery actions under section 107 are critical for replenishing the Superfund. See Solid State Circuits, Inc. v. EPA, 812 F.2d 383, 388 (8th Cir. 1987).

On the other hand, section 106 allows EPA to order parties to clean a site contaminated with hazardous waste, and to file a civil action in federal district court to compel a party to comply with EPA's proposed remedy. 42 U.S.C. § 9606(a). The section 106 administrative orders lie at the heart of GE's due process challenge in this case. See Am. Compl. ¶ 2. Before issuing a section 106 order, however, EPA must determine "that there may be an imminent and substantial endangerment to the public health or welfare or the environment because of an actual or threatened release of a hazardous substance from a facility." 42 U.S.C. § 9606(a). Given the imminent nature of the potential danger to the public welfare and the environment, CERCLA does not require EPA to provide a hearing prior to issuing a section 106 order. Under the penalty provision of section 106(b), any person who, "without sufficient cause," willfully violates a section 106 order, or fails or refuses to comply with such an order, may be fined up to $27,500 for each day the violation or non-compliance continues -- a very strong incentive to encourage quick compliance. Id. § 9606(b). In addition, under section 107, a party who fails to comply with a section 106 order also faces the possibility of punitive damages up to three times "the amount of any costs incurred by the [Superfund] as a result of such failure to take proper action." Id. § 9607(c)(3).

But these fines and damages are not automatic; EPA must bring a civil action in district court to compel compliance with its order. Even then, the district court has discretion as to whether noncompliance warrants a fine, penalties, or punitive damages, and if so, how much. Id. The non-complying party has the opportunity at this stage to raise all challenges to a section 106 order, including challenges to the appropriateness of EPA's selected remedy for abatement of the site, claims that a party is not liable for the site or waste, assertions that EPA failed to follow applicable guidelines or regulations, or any other defenses to liability that may be available. This judicial hearing occurs before any recovery costs, fines or penalties are imposed on a party. See Barmet Aluminum, 927 F.2d at 294-96; Solid State Circuits, 812 F.2d at 389-92. Under the statute, if the district court determines that a party had "sufficient cause" for not complying with the order, no penalties or fines can be imposed. See 42 U.S.C. §§ 9606(b), 9607(c)(3).

The scope, nature and limits of judicial review of EPA action under CERCLA are set out in section 113. See id. § 9613. The relevant provision here is section 113(h), entitled "Timing of review," which limits -- or more precisely postpones -- when a challenge may be brought in federal district court to removal or remedial actions or section 106 orders issued by EPA. Id. § 9613(h).

There is, pursuant to section 113(h), no jurisdiction in federal court for such challenges except in five enumerated circumstances: 1) when EPA brings a cost recovery action under section 107; 2) when EPA brings an action to enforce a section 106(a) order or to recover penalties for violations of orders; 3) when a party brings an action seeking reimbursement from EPA under section 106(b)(2); 4) in a citizen suit brought under 42 U.S.C. § 9659; or 5) when EPA brings an action under section 106 seeking to compel a remedial action. The thrust of section 113(h) is that one cannot obtain pre-enforcement review of EPA orders (including section 106 orders) or EPA response actions with respect to a contaminated site.

II. GE's Amended Complaint

GE contends that sections 106, 107(c)(3), and 113(h) of CERCLA work together to create a coercive regime that denies it and other PRPs their due process right to an impartial hearing prior to the issuance of a section 106 order. GE maintains that one subject to a section 106 order "does not receive any prior hearing before the order becomes effective." Am. Compl. ¶ 2. EPA's use of these administrative orders coupled with the threat of substantial fines and penalties, GE claims, is "coercive" and "deprive[s] persons of their ability to challenge the propriety" of such orders in a timely fashion, thereby leaving "no practical choice but to comply." Id. Because CERCLA allows EPA such broad latitude, GE argues that EPA controls and manipulates the timing of any post-enforcement review, preventing prompt review of EPA's orders and resulting in delay that undermines any meaningful opportunity for review, which in turn allows statutory fines and penalties for non-compliance to amass rapidly. Id. ¶ 3.

The [section 106] regime thus imposes a classic and unconstitutional Hobson's choice: Either do nothing and risk severe punishment without meaningful recourse or comply and wait indefinitely before having any opportunity to be heard on the legality and rationality of the underlying order. Id. ¶ 4.

Under section 107, EPA may implement its own remedy and then seek recovery of the costs of the remediation from PRPs in federal court. Similarly, under section 106(a), EPA may seek an injunction in federal court requiring a person to implement the agency's proposed remedial plan. GE concedes that, in both these situations, "the PRPs receive a timely hearing in court without being forced to do the work first and without being subject to fines and penalties." Id. ¶ 15. However, GE contends that under section 106(a) EPA may also issue an administrative order requiring a cleanup "without a hearing upon a finding that 'there is imminent or substantial endangerment to the public health or environment because of an actual or threatened release of a hazardous substance from a facility.'" Id. ¶ 16 (quoting 42 U.S.C. §9606(a)). "It is the use of this unilateral order authority [pursuant to section 106] in concededly non-emergency, non-time-sensitive situations, which is the subject of this complaint." Am. Compl. ¶ 16. *fn2 GE's amended complaint discusses three hazardous waste sites as to which EPA contends that GE is, or may be, responsible for disposal of hazardous waste: 1) a factory building in Hoboken, New Jersey, where GE made mercury vapor lamps in the 1920s and other lighting products until the factory was sold in 1948; 2) two manufacturing facilities in Hudson Falls and Fort Edward, New York, where GE discharged PCBs into the Upper Hudson River well into the 1970s; and 3) Fletcher Paint Works in Milford, New Hampshire, a now-bankrupt company to whom GE sold Pyranol (an oil containing PCBs) from 1956 to 1968 for use in the manufacture of paint. See Am. Compl. ¶¶ 31-47. GE's amended complaint details these waste sites and GE's role, or lack of role, in the contamination of the sites. These sites have all been listed on the NPL. See 40 C.F.R. Pt. 300, App. B. EPA acknowledges that these sites "are either at or near the stage where remedial action will be selected and implemented." Defs. Motion to Dismiss at 6.

Indeed, EPA has already issued section 106 orders to GE for removal or remediation action at these waste sites. On February 24, 1997, EPA ordered GE to maintain security for the Hoboken site, provide temporary evacuation and housing for the former residents, and provide complete maintenance for the building. Am. Compl. ¶ 33. On April 1, 1998, EPA ordered GE to demolish the factory. Id. ¶ 34. At the Hudson River facilities, EPA has listed 40 miles of the Hudson River on the National Priorities List as a Superfund site due to the PCBs discharged into the river. Id. ¶ 38. GE's amended complaint states that "the EPA recently announced that it is now considering dredging projects" to remove the PCBs in the river, a project GE contends will take a decade and cost hundreds of millions of dollars to complete. Id.. ¶ 41. GE believes "EPA will choose not to implement these projects itself because of the enormous cost and technological challenges that would be involved." Id. ¶ 42. "Instead," GE warns, "EPA will invoke CERCLA's unilateral orders regime and require GE to implement a massive dredging remedy." Id.

GE thus contends, as illustrated by these examples, that the CERCLA regime is unconstitutional because it permits administrative orders "without prior hearing in cases that do not present urgent circumstances requiring immediate action," and does not allow for a meaningful, prompt judicial hearing once an order is issued. Id. ¶ 54. Therefore, GE seeks a declaratory judgment that the use of section 106 orders, in conjunction with sections 107(c)(3) and 113(h), "is unconstitutional as violative of due process." Id.

ANALYSIS

GE asserts federal question jurisdiction under 28 U.S.C. § 1331 as the basis for subject matter jurisdiction over its constitutional challenge to CERCLA. EPA counters that pre-enforcement challenges to EPA response actions, even if framed in constitutional terms, are precluded under section 113(h) of CERCLA.

"Because federal courts are courts of limited jurisdiction, a plaintiff may invoke the jurisdiction of a federal court only pursuant to a statutory grant of authority to adjudicate the asserted claim. Moreover, when the plaintiff seeks to sue the United States or an instrumentality thereof, he may not rely on the general federal question jurisdiction of 28 U.S.C. § 1331, but must identify a specific statutory provision that waives the government's sovereign immunity from suit." Clinton County Comm'rs v. EPA, 116 F.3d 1018, 1021 (3rd Cir. 1997) (en banc) (citations omitted) (finding no subject matter jurisdiction under 28 U.S.C. § 1331 to raise pre-enforcement challenge to section 106 order); see Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377 (1994); United States v. Sherwood, 312 U.S. 584, 586 (1941). It is well settled that such waivers of immunity must be "unequivocally expressed," United States v. Nordic Village, Inc., 503 U.S. 30, 33 (1992) (quoting United States v. Mitchell, 445 U.S. 535, 538 (1980)), and are to be "construed strictly in favor of the sovereign," id. (quoting McMahon v. United States, 342 U.S. 25, 27 (1951)).

Congress amended CERCLA in 1986 through the Superfund Amendments Reauthorization Act ("SARA"), adding the timing of review provision in section 113(h) that delays judicial review of any challenges to removal or remedial actions or EPA orders under section 106 until EPA seeks to enforce its orders. Given this clear limitation on pre-enforcement judicial review, this Court must determine whether GE's constitutional attack on CERCLA is the type of pre-enforcement challenge that Congress intended to preclude:

In cases involving delayed judicial review of final agency actions, we shall find that Congress has allocated initial review to an administrative body where such intent is "fairly discernable in the statutory scheme." Whether a statute is intended to preclude initial judicial review is determined from the statute's language, structure, and purpose, its legislative history, and whether the claims can be afforded meaningful review. Thunder Basin Coal Co. v. Reich, 510 U.S. 200, 207 (1994) (citations omitted); see also Block v. Community Nutrition Institute, 467 U.S. 340, 351 (1984) (presumption of judicial review of agency actions is overcome "whenever the congressional intent to preclude review is fairly discernable in the statutory scheme").

Based on the language, structure, purpose, and legislative history of section 113(h), and extensive federal case law applying it, the Court concludes that Congress intended to preclude judicial review of GE's broad, pre-enforcement constitutional challenge to CERCLA's administrative order regime.

I. Thunder Basin Coal Co. v. Reich

The jurisdictional analysis of GE's constitutional challenge to CERCLA is informed by the Supreme Court's analysis in Thunder Basin Coal Co. v. Reich. There, plaintiffs brought a due process challenge to the Federal Mine Safety and Health Amendments Act, 30 U.S.C. § 801 et seq. ("Mine Act"). That Act requires unannounced safety inspections of the nation's mines, and requires that a representative of the miners be given an opportunity to participate in such inspections. 30 U.S.C. § 813(f). Similar to CERCLA, the Mine Act gives the Secretary of Labor broad authority to compel immediate compliance with agency orders issued under the Act through the use of civil penalties and sanctions. Challenges to enforcement under the Mine Act are reviewed by the Mine Safety and Health Review Commission ("Commission"), and then by the appropriate court of appeals. Id. § 816(a)(1). When mine workers sought to designate two union officials as their representatives for safety inspections, the mine owner brought suit in federal district court seeking pre-enforcement injunctive relief. Raising the same "Hobson's choice" due process argument that GE asserts here, the mine owner contended that

requiring [mine operators] to challenge MSHA's interpretation of 30 U.S.C. § 813(f) and 30 CFR pt. 40 through the statutory-review process would violate the Due Process Clause of the Fifth Amendment, since the company would be forced to choose between violating the Act and incurring possible escalating daily penalties, or, on the other hand, complying with the designations and suffering irreparable harm. Thunder Basin, 510 U.S. at 205.

The Supreme Court found that this constitutional challenge was precisely "the type Congress intended to be reviewed within the statutory structure." Id. at 212. The Court thus held that the Act precluded district court jurisdiction over the owner's pre-enforcement claims, including its constitutional challenge, because such claims must go to the Commission first, and then to the court of appeals for judicial review:

As for petitioner's constitutional claim, we agree that "[a]djudication of the constitutionality of congressional enactments has generally been thought beyond the jurisdiction of administrative agencies." This rule is not mandatory, however . . . . The Commission has addressed constitutional questions in previous enforcement proceedings. Even if this were not the case, however, petitioner's statutory and constitutional claims here can be ...


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