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Aminoil, Inc. v. EPA

Citation: 17 ELR 20377
No. Nos. CV84-5853 Kn (Px), -5863 Kn (Px), 646 F. Supp. 294/24 ERC 1943/(C.D. Cal., 06/30/1986) Plaintiffs' motion for partial summary judgment granted in part

The court holds that the potential imposition of punitive damages under §107(c) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) for failure to comply with a §106(a) cleanup order does not violate the due process rights of responsible parties. The court initially holds that plaintiffs' challenge to the constitutionality of daily penalties under CERCLA §106(b) is moot, since the government has stated no daily penalties will be assessed. After reviewing the case law and legislative history behind §107(c), which provides that treble damages may be assessed against a party who fails to comply with an EPA administrative order without sufficient cause, the court construes §107(c) to provide for a good faith defense. Reading a good faith defense into the section satisfies the three factors to be considered in determining whether due process has been met. First, the private interest here, the right to challenge the merits of an administrative order without the unreasonable threat of punitive damages, is substantial since it relates to plaintiff's opportunity to be heard at a meaningful time and in a meaningful manner. Second, since this court and others have held that there is no preenforcement review of EPA's administrative orders, the decision not to comply with the order could place a substantial risk on plaintiffs. The court rejects the government's argument that plaintiffs must present a reasonable defense. The risk of an erroneous deprivation would be substantial if an objective standard were used in determining the reasonableness of plaintiffs' position, since what may be considered reasonable by one court may be found unreasonable by another. A plaintiff could foreseeably choose to forego a meritorious challenge in the face of such uncertainty. The government's interest in the threat of significant sanctions, however, deserves serious consideration. This interest and the requirements of due process can be satisfied by the incorporation of a good faith defense. The court also holds that the potential imposition of damages under §107(c) does not violate plaintiffs' First Amendment right to petition.

[An earlier decision in this litigation appears at 14 ELR 20801.]

Counsel for Plaintiffs
Edward S. Renwick, Cynthia L. Burch
Hanna & Morton
600 Wilshire Blvd., 17th Fl., Los Angeles CA 90017
(213) 628-7131

Counsel for Defendants
Robert C. Bonner, U.S. Attorney; Joseph F. Butler, Ass't U.S. Attorney
312 N. Spring St., Los Angeles CA 90012
(213) 688-2434