Jump to Navigation
Jump to Content

Exxon Corp. v. Hunt

ELR Citation: 16 ELR 20396
Nos. No. 84-978, 475 U.S. 355/23 ERC 2057/(U.S., 03/10/1986) Aff'd in part, rev'd in part

The Court rules that §114(c) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) preempts state superfunds financed by special taxes and used to pay expenses that could be paid under CERCLA. Section 114(c) states that it preempts funds used to pay "costs of response or damages or claims which may be compensated under" CERCLA. The Court first rules that the words "costs of response or damages or claims" must be read as a unit and that the entire phrase is modified by "which may be compensated." Although the parties in this challenge to the New Jersey Spill Compensation and Control Act (SCCA) had agreed on this point, the Solicitor General appearing as amicus curiae, argued that "which may be compensated" modified claims only, thus preempting all uses of state funds for reimbursement of response costs or damages and uses for claims overlapping with items covered by CERCLA. The Solicitor General further argued that "claim" means only private-party reimbursement claims, not a state's use of the fund to finance its own cleanup efforts. The Court finds no support for separate reading of "claims" in the legislative history of §114(c). Parallel use of "removal costs or damages or claims" as a unit in §114(b) and the listing of response costs, natural resource damages, and third-party cleanup claims in §111(a) as legitimate uses of the federal fund, indicate that Congress employed the terms throughout the statute as a shorthand way of referring to all the possible uses of the fund. Finally, the Court reasons, if Congress did not intend to preempt state funds used to fund state response actions, it would not have expressly allowed limited uses of state funds for such purposes in the last sentence of §114(c).

The Court next rules that §114(c) preempts state funds from being used for expenses that potentially could be paid under CERCLA. New Jersey's argument that the provision only bars actual duplicate funding makes no sense since § 114(b) expressly prohibits double recovery from the federal and other funds. The Court also rejects the state's argument that §114(c) should be read to preempt only uses of the state fund that duplicate uses that would have been made of the federal fund had not the state acted first. Although this interpretation is consistent with CERCLA's broad remedial purpose, Congress also showed concern about overtaxing industry. Had Congress intended to make the subtle distinction argued by the state, it would not have used language that on its face bars all overlap between state and federal fund uses. The legislative history supports this conclusion, one Senate colloquy arguably to the contrary notwithstanding.

The Court also rules that §114(c) does not preempt any uses of the SCCA for which funds are not available under CERCLA. The Court rules that the national contingency plan (NCP) is the guide for determining whether costs may be compensated by CERCLA, and that the 10 percent share of remedial action costs that states must pay under CERCLA §104(c)(3)(C) is not included among such costs. Uses of the SCCA not authorized under the NCP also are not preempted. Such uses include compensation for third-party damages, personnel and equipment costs, fund administration, and research. Finally, the Court rejects the state's argument that since the SCCA had only been used for non-preempted activities, the state act should be allowed to stand in its entirety.

The Court remands the case to the New Jersey Supreme Court for it to consider according to state law whether, or to what extent, the preempted portions of the SCCA are several from the non-preempted portions.

A dissent would uphold the SCCA, limiting §114(c)'s preemptive effect to state laws whose principal purpose is to fund CERCLA-eligible activities.

[The lower court opinions in this case appear at 12 ELR 20734 and 14 ELR 20923. Related cases appear at 11 ELR 20886, 12 ELR 20184, 20401, and 20822.]

Counsel for Appellants
John J. Carlin Jr., Lisa Pollak
Farrell, Curtis, Carlin & Davidson
43 Maple Ave., P.O. Box 145, Morristown NJ 07960
(201) 267-8130

Counsel for Appellees
Irwin J. Kimmelman, Attorney General; Michael R. Cole, Ass't Attorney General; Mary C. Jacobsen, Deputy Attorney General
8th Fl., Justice Complex, CN080, Trenton NJ 08625
(609) 292-8740

JUSTICE POWELL took no part in the consideration or decision of this case.