District of Columbia Circuit Allows Constitutional Challenge to CERCLA
 
April 15, 2004
 
Robert Rhodes - Atlanta

On March 2, 2004, the U.S. Court of Appeals for the District of Columbia Circuit upheld the right of General Electric Company (GE) to challenge the constitutionality of the unilateral administrative order (UAO) scheme authorized by Section 106 of the Comprehensive Environmental Response, Compensation & Liability Act (CERCLA), 42 U.S.C. §§ 9606, and related provisions. The appeals court in General Electric Co. v. Environmental Protection Agency, Case No. 03-5114, overturned the ruling of the District of Columbia District Court, which had concluded that Section 113(h) of CERCLA, 42 U.S.C. § 9613, prohibited GE’s challenge.

Under Section 106, EPA is authorized to issue UAOs to parties deemed potentially responsible for the costs of environmental cleanup. If the recipient of such an order fails to comply, EPA is authorized to file a civil action in federal district court to enforce the order. A recalcitrant party is potentially subject to the imposition of penalties of up to $27,500 per day and may further be subject to punitive damages in an amount equal to three times the cost incurred by the government from the Superfund to cleanup the site. See 42 U.S.C. §§ 9606(b)(1), 9607(c)(3).

The lower court had determined that GE’s constitutional challenge was precluded by the Section 113(h) bar on “pre-enforcement review.” This provision states:

No federal court shall have jurisdiction under federal law other than under section 1332 of the Title 28 (relating to diversity of citizenship jurisdiction) or under state law which is applicable or relevant and appropriate under section 9621 of this title (relating to cleanup standards) to review any challenges to removal or remedial action selected under section 9604 of this title, or to review any order issued under section 9606(a) of this title… .

The circuit court relied primarily upon the “plain language” rule of statutory interpretation. The court’s reading of Section 113(h), as quoted above, led it to conclude that Congress only intended to preclude jurisdiction for pre-enforcement review of specific individual UAOs issued pursuant to Section 106. On the other hand, the language of the statute did not preclude a facial due process challenge to the overarching UAO scheme authorized by Section 106.

The appellate panel rejected EPA’s primary argument that, since GE was the subject of multiple Section 106 UAOs, its facial constitutionality lawsuit, in fact, constituted a challenge to those individual orders. The Court did not find this argument at all persuasive in the face of the plain language of the statute. The court also rejected EPA’s assertion that consideration of GE’s constitutional claims would frustrate the overall purpose of CERCLA. To the contrary, the court concluded:

A decision on GE’s due process claim that is favorable to GE would afford EPA an opportunity to provide due process review at an early stage. A decision rejecting GE’s due process claim would remove a later impediment to EPA’s enforcement action.

We now await the trial court’s ruling on the constitutionality of CERCLA’s nearly 25-year-old UAO scheme that essentially requires order recipients to act now and ask questions later.

For more information, e-mail Robert L. Rhodes at robert.rhodes@hklaw.com, or call toll free, 1-888-688-8500.