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Aminoil, Inc. v. EPA

Citation: 14 ELR 20801
No. Nos. CV84-5853 Kn (Px), -5863 Kn (Px), 599 F. Supp. 69/21 ERC 1817/(C.D. Cal., 09/28/1984) Preliminary injunction granted

The court rules that there may be preenforcement review of the constitutionality of penalties under § 106(b) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and treble damages under § 107(c)(3) of CERCLA for violations of administrative orders issued under § 106(a) of CERCLA. Initially the court rules that CERCLA does not provide for preenforcement review of the validity of § 106(a) orders. The statute is silent on the subject, but the emergency public health and environment protection purposes of § 106(a) and the legislative history make clear that Congress did not intend to allow remedial action to be delayed by petitions for preenforcement review of abatement orders. The court distinguishes another case allowing limited preenforcement review and notes that plaintiffs here have not demonstrated that the order lacked a rational basis, a prerequisite for early review under the other case.

The court rules that the issues of daily penalties and treble damages are reviewable. The issues concern the constitutionality of the overall scheme, not the merits of the particular order. Since the questions are purely legal and have a direct and immediate impact on plaintiff's decision to comply with the order, they are ripe for review.

The court next rules that preliminary relief is appropriate in this case. To obtain a preliminary injunction, plaintiff must meet the burden of proving irreparable injury, probability of success on the merits, likelihood of greater injury than will be suffered by defendant, and that the injunction is in the public interest. Alternatively, it may prove either a combination of probability of success on the merits and possibility of irreparable injury or that serious questions are raised and the balance of hardships tips sharply in plaintiff's favor. The court notes that CERCLA could impose daily penalties of up to $5,000 or damages of three times the cost of cleaning up the hazardous substance disposal site if plaintiff refuses to comply with the order to develop and implement a remedial plan.The statute does not, however, set any time limit within which EPA must seek penalties or take a clean-up action, thus allowing potential liability to mount to considerable levels. Nor does CERCLA provide for a hearing before imposition of sanctions. While CERCLA does exempt from the penalty provisions parties who can demonstrate "sufficient cause" for noncompliance, the legislative history indicates that the exemption is to be construed too narrowly to be helpful to plaintiff. Additionally, there is no protection for parties who comply with administrative orders under protest.

The court concludes that plaintiff probably will prevail on the merits. The private interest at stake, due process, is strong. The Supreme Court has long recognized that imposition of severe penalties without a prior hearing infringes due process rights. Unlike the Clean Air Act and Surface Mining Control and Reclamation Act, CERCLA provides no right of hearing to challenge the validity of the order or penalties. Thus there is a serious risk that plaintiff will be erroneously deprived of its response costs because the cost of not complying with the order is sufficiently great to persuade it to obey the order without challenge. The government has a serious interest in obtaining expeditious responses to § 106(a) orders to protect the public health and environment and to reduce demands on limited government response funds. There are less onerous means by which these interests can be protected, however. Since plaintiff confronts the distinct possibility of irreparable injury, this is an appropriate case for a preliminary injunction barring defendant from levying penalties under § 106(a) or seeking treble damages under § 107(c)(3).

Counsel for Plaintiffs
Edward S. Renwick
600 Wilshire Blvd., 17th Floor, Los Angeles CA 90017
(213) 628-7131

Barbara C. Sasiska
5757 Wilshire Blvd., Suite 600, Los Angeles CA 90036
(213) 934-4300

Counsel for Defendants
George Henderson
Land and Natural Resources Division
Department of Justice, Washington, DC 20530
(202) 633-2327

Susan L. Durbin, Louis Verdugo Jr., Deputy Attorneys General
3580 Wilshire Blvd., Suite 800, Los Angeles CA 90010
(213) 736-2610