Supreme Court declines to hear public nuisance suit in its original jurisdiction: Ohio v. Wyandotte

Ohio v. Wyandotte, 1 ELR 20124, decided by the Supreme Court on March 23, 1971, puts to rest expectations that the Court might actively employ its original jurisdiction to hear environmental lawsuits brought by a state against citizens of another state. The decision sets out a reasonable policy toward the present-day allocation of judicial business in a complicated national system of courts, but it raises important questions about (1) how far the Court will go in upholding the constitutionality of the expanded state court in personam jurisdiction necessary as an alternative to the Court's original jurisdiction, and (2) the soundness of the Court's dictum that similar cases when brought in lower federal courts would require the application of state law under the Erie doctrine.

In Ohio v. Wyandotte, the State of Ohio moved for leve to file a bill of complaint in the Supreme Court's original jurisdiction to enjoin three chemical manufacturers from dumping toxic mercury into streams whose courses ultimately reach Lake Erie, polluting its waters, fish and vegetation and causing an alleged public nuisance.The Court declined to exercise its original jurisdiction, because the public nuisance theory advanced by Ohio was premised on local law which Ohio's state courts are competent to consider, because various national and international governmental units are investigating the pollution involved, and because resolution of the case by the Supreme Court would require novel and complex factual determinations which are outside the Court's general competence and, further, do not raise the important questions of federal law which is the Court's primary responsibility. Jurisdiction was denied even though jurisdiction in similar nuisance actions was [1 ELR 10039] granted four times between 1901 and 1931,¹ and even though the Court admits that "it may have initially been contemplated that this Court would always exercise its original jurisdiction when called upon to do so." 1 ELR 20125. Mr. Justice Harlan wrote for the majority, with Mr. Justice Douglas in dissent.

In discussing alternative forums in which Ohio might seek judicial relief, the Court implied that it would have been more appropriate for Ohio to have brought the action in its own state courts. Besides citing the inadequacy of the Supreme Court to the task, and the near mootness of the controversy, the Court gives two reasons for its decision. First, the Court cites "modern principles of the scope of subject matter and in personam jurisdiction" (1 ELR 20126), especially long-arm statute jurisdiction (1 ELR 20125), for the proposition that Ohio's state courts have at least as strong a claim as the Supreme Court to jurisdiction in the present case. Second, the Court assumes that an action such as this does not raise a federal question, nor is there diversity,² hence federal district court jurisdiction is unavailable. Since federal jurisdiction is lacking, the case can only be adjudicated in the state courts, which is just as well, the Court concludes, because even if federal district court jurisdiction were available, public nuisance and choice of law issues would have to be governed by local law under Erie R.R. v. Tompkins, 304 U.S. 64 (1938). The state courts of the state in which the aggrieved partly resides are believed to be preferable to those of the state in which defendant resides. The principle that no state should be compelled to resort to the tribunals of other states for redress, since parochial factors might lead to the appearance, if not the reality, of bias, apparently still convinces the Court. 1 ELR 20126.

Dictum regarding the possible extension of state court jurisdiction over non-residents

It is true that the jurisdictional power of state courts has been greatly increased in the wake of the fundamental transformation of our national economy over the years. McGee v. International Life Insurance Co., 355 U.S. 220 (1957). Particularly since the decision in International Shoe Co. v. Washington, 326 U.S. 310 (1945), the reach of state courts beyond their territorial boundaries to bring corporate and individual defendants within their jurisdiction has been transformed by replacement of the old tests for adequate jurisdiction, keyed to physical presence, domicile, consent, etc., with a frankly modern, liberalized "interest" test keyed to the continuity and extent of the defendants' activities within the forum state and to the connection between those activities and the cause of action.

Mr. Justice Harlan, writing about the jurisdiction of Ohio's courts to hear this action, said the following:

The courts of Ohio, under modern principles of the scope of subject matter and in personam jurisdiction, have a claim as compelling as any that can be made out for this Court to exercise jurisdiction to adjudicate the instant controversy. … In essence, the State has charged Dow Canada and Wyandotte with the commission of acts, albeit beyond Ohio's territorial boundaries, that have produced and, it is said, continue to produce disastrous effects within Ohio's own domain. While this Court… if called upon to assess the validity of any decree rendered… would be alert to ascertain whether the judgment rested upon an even-handed application of justice, it is unlikely that we would totally deny Ohio's competence to act if the allegations made here are proved true. See e.g., International Shoe Co. v. State of Washington, 326 U.S. 310 (1945). … 1 ELR at 20126.

Mr. Justice Harlan appears to be saying that a corporation's business activities within a state provide a sufficient basis for jurisdiction over a public nuisance suit against a non-resident, even though the offending activity actually occurs outside the state and bears no relation to other activities of the defendant within the state's borders. If in fact Mr. Justice Harlan is of this view, he has indicated that the Court is prepared to liberalize and clarify further the "minimum contacts" doctrine delineated in International Shoe, supra, and subsequent cases. If he also means that a public nuisance originating outside a state's borders and causing harmful effects within them supplies a sufficient jurisdictional nexus even where the defendants have no contacts with the jurisdiction other than the effects of the nuisance itself, then he has indicated that the Court is willing to endorse an expansion of the jurisdictional power of the state courts which is indeed remarkable.

The greatest effect of the doctrine set forth in International Shoe and elaborated in subsequent decisions has been to expand state court jurisdiction over cases where a non-resident defendant conducts sporadic business activities in the jurisdiction and is sued for a wrong arising directly out of those activities. (Continuous contacts with related claims, an easier category of cases, of which International Shoe is an instance, was covered in part by earlier law.) Most of the long-arm statutes are directed to the case of sporadic activity with related claims, and cases subsequent to International Shoe have solidifed a liberal interpretation. See, e.g., McGee v. International Life Ins. Co., 355 U.S. 220 (1957). But see also Hansen v. Denkla, 357 U.S. 235 (1958). The situation in Ohio v. Wyandotte, however, is quite [1 ELR 10040] different. Although the opinion does not say so explicitly, defendants apparently had some continuous activities in Ohio. But the public nuisance claim does not "arise out" of those activities in the sense that, e.g., a policyholder's rights arise out of the insurance company's doing minimal business in the forum state (McGee, supra), a tort claimant's rights arise out of the explosion of a radiator shipped into the forum state for sale (Gray v. American Radiator, __ Ill. __ (1961)), or an out-of-state manufacturer can be reached for purposes of litigating taxes assessed by the forum state for income which arises out of in-state solicitations (International Shoe, supra). Rather, the alleged wrong in Ohio v. Wyandotte is the activity of dumping mercury, and that activity is conducted entirely outside the forum state. International Shoe would fit the facts comfortably if the mercury were dumped as part of the business activity of Dow or Wyandotte within Ohio; however, their activities are related to the harm caused only in that the out-of-state dumping probably does help the defendants in the manufacture of products, some of which are then sold by virtue of business activity in Ohio.

If Mr. Justice Harlan's dictum does mean that the Court is willing to allow state courts to assume jurisdiction where, through an unrelated activity, a corporation already engaged in continuous activities in the state causes a severe public nuisance, the opinion tends to clarify a point left undiscussed in International Shoe. It will also assist in a clarification of confused state law which, although it usually allows jurisdiction, is muddled with older principles based upon a quantitative examination of the extent of defendant's activities within the state. See Note, Development in the Law: State-Court Jurisdiction, 73 Harv.L.Rev. 909, 930 (1960).

As indicated above, Mr. Justice Harlan's dictum may reach much further. In last month's Summary and Comments ELR discussed in detail a Tench Circuit decision in which Texas successfully defended an injunction obtained in federal district court enjoining a public nuisance caused by cattle ranchers across the border in New Mexico. On the facts of Texas v. Pankey, 1 ELR 20089, discussed at 1 ELR 10018-22, Texas's state courts appeared to lack in personam jurisdiction over the ranchers who were polluting the New Canadian River with a toxic pesticide. (For a discussion of the novel and important public nuisance theory premised on federal common law advanced by Texas, see 1 ELR 10018-20 and discussion in this comment, infra.) Mr. Justice Harlan may be saying that in circumstances like those in Pankey, even though the cattlemen in New Mexico have no contact with the forum state other than the alleged nuisance which they cause, they nevertheless can be sued in Texas's courts "under modern principles of the scope of subject matter and in personam jurisdiction." 1 ELR 20126. If the Court's dictum reaches this far, then the major category of cases which could be adequately disposed of by state courts under Ohio v. Wyandotte can be turned away from the Supreme Court's original jurisdiction. If the dictum does not reach this far, then the suitable forum still is in the Supreme Court. Unfortunately, the Court's dictum does not give the states clear guidance about how to proceed.

In summation, the scope of the decision in Ohio v. Wyandotte remains unclear. Opportunities do remain open, however, for the Court in the near future to clarify its policies about the allocation of interstate pollution suits between state and federal courts. The Court has not yet decided whether it will hear Washington v. General Motors, No. 45 Original (U.S. 1970), discussed at 1 ELR 10021, in which 19 states have joined to seek injunctive relief against the four major automobile manufacturers on two state and one federal claim. And the Court has agreed to review the Ninth Circuit's denial of the parens patriae basis of Hawaii's suit against the automobile manufacturers for price-fixing. Hawaii v. Standard Oil Co. of California, __ F.2d __, 1 ELR ___ (9th Cir., Sept. 25, 1970), cert. granted 39 U.S.L.W. 3375 (March 2, 1971). The suit, similar in jurisdictional respects to Washington v. General Motors, supra, probably will not be decided until next term.

The effect of Ohio v. Wyandotte on possible federal district actions in which a state advances a federal common law public nuisance theory.

The Court in Ohio v. Wyandotte did not discuss the possibility that Ohio's claim might raise a federal question based on federal common law public nuisance principles. Such a federal question would give the district courts jurisdiction under 28 U.S.C. § 1331(c) as a cause of action arising under federal law and the Constitution. Ohio apparently did not make this argument to the Court, although just such an argument was made in Texas v. Pankey, 1 ELR 20089, and upheld on appeal by the Tenth Circuit. Because the federal common law nuisance argument has attractive substantive and jurisdictional aspects, ELR discussed the Pankey decision in detail in last month's Summary and Comments. 1 ELR 10018. The Supreme Court's decision in Ohio v. Wyandotte to limit use of its original jurisdiction makes all the more important a sympathetic hearing for the federal public nuisance theory.

Mr. Justice Harlan states that on the facts of Ohio v. Wyandotte both the Supreme Court and the relevant federal district court would have to apply state law under the Erie doctrine, assuming jurisdiction in either court is otherwise obtainable. However, in similar circumstances in Texas v. Pankey, supra, the Tenth Circuit accepted Texas's argument that the district [1 ELR 10041] court should not have dismissed the case for lack of jurisdiction, accepting Mr. Justice Holmes's reasoning in Georgia v. Tennessee Copper Co., 206 U.S. 230 (1906), and holding that a state's entry into the union and its commitment to the Constitution "inherently insured or guaranteed to it a right of protection by a federal court against improper pollution or impairment by outside sources of its appropriate environmental and resource conditions." Texas v. Pankey, 1 ELR 20089, 20090. The Tenth Circuit further reasoned:

Federal common law and not the varying common law of the individual States is, we think, entitled and necessary to be recognized as a basis for dealing in uniform standard with the environmental rights of a State against improper impairment by sources outside its domain. The more would this seem to be imperative in the present era of growing concern on the part of a State about its ecological conditions and impairments of them. In the outside sources of such impairment, more conflicting disputes, increasing assertions and proliferating contentions would seem to be inevitable. Until the field has been made the subject of comprehensive legislation or authorized administrative standards, only a federal common law basis can provide an adequate means for dealing with such claims as alleged federal rights. 1 ELR 20090

Thus, just as "changes in the American legal system and the development of American society have rendered untenable… the view that this Court must stand willing to adjudicate all or most legal disputes that arise between one State and citizens of another… ,"³ so have "historical, judicial and other conceptual factors…" helped supply the evolving substance of matters which "arise under" the Constitution and laws of the United States.⁴

There are definite disadvantages to having either the Supreme Court or the federal district courts apply state public nuisance concepts in resolving important environmental conflicts between states and polluters who are citizens of another state. The reasons why the Supreme Court might wish to apply federal common law when and if it allows such suits in its original jurisdiction are set at 1 ELR 10020-1 and will not be discussed here. Those reasons suggest that Mr. Justice Harlan's dictum that the Supreme Court would apply Erie if it decided to take Ohio v. Wyandotte or similar cases is unwisely restrictive.⁵

The reasons why the district courts should not be constrained from applying federal common law in insterstate pollution cases of the kind discussed here deserve closer attention.⁶ First, cases like Texas v. Pankey, Ohio v. Wyandotte, Hawaii v. Standard Oil (parens patriae), Washington v. General Motors (public nuisance count) and the multi-district treble damage suit (public nuisance count) are extremely important interstate pollution actions, hardly as localized as ordinary nuisance actions, yet possessing all the essential elements of the wrong. Their interstate nature makes them as important as "federal questions" in many other fields, and the arguments for federal jurisdiction in diversity cases apply with equal or even greater force here, because something very much like diversity exists (state v. citizens of another state), and because suits in which a state is a party are more open to a tendency in the courts to reflect state interests in a way in which they would not were the suits between private parties.

Second, as the circuit court in Pankey appears to acknowledge, uniformity of decision in this area will be better achieved if states do not have widely varying rights of action under which some of them may impose stringent burdens upon the citizens of others, perhaps at a great economic loss, in order that citizens in the forum states may fully enjoy what those states' courts alone have decided is a fair level of environmental quality.⁷ The Erie doctrine stands for many things, but, if nothing else, it declares the principle that parties in like circumstances should have the same law applied to their causes, in order to encourage uniformity of decision and discourage forum-shopping. In interstate pollution cases a reasonable content to read into the doctrine of uniformity of decision is that with respect to persons outside a state's boundaries, a state's rights should be governed by general principles, much as they are under the Commerce Clause cases, and not entirely by the enthusiasm of one state for uniquely high environmental quality, or by fortunate strength of local law.

Third, nuisance law pre-eminently requires a balancing of interests. It is perhaps asking too much of a state's courts that they be called upon by the state's attorney general to balance local health, aesthetic and property interests against neighboring, or perhaps distant interests, usually economic alone, and to strain to demonstrate that partiality did not to some extent influence the close trading-off of interests which the case may require. Perhaps the Court in Ohio v. [1 ELR 10042] Wyandotte had this possibility in mind when, in referring the case to Ohio's courts, it said that if called upon to assess the validity of any decree rendered against Dow or Wyandotte, it "would be alert to ascertain whether the judgment rested upon an even-handed application of justice. …" 1 ELR 20126. Of course the alternative federal district court forum likewise may not be able to dispell the suspicion of state bias. However, the circuit courts of appeal, the next step for a dissatisfied unsuccessful defendant in the federal system, do not suffer from such an appearance, and certainly the Supreme Court does not. On the other hand, if the cause of action is local, the state supreme court is the court of last resort, and barring denial of due process, this final review within the state is still subject to some appearance of bias in favor of interests asserted by the state's attorney general.

Fourth, at least some difficulty may be encountered by state courts in enforcing decrees, espcially if the defendant only has minimal contacts with the jurisdiction, so that the forum state must ask that the judgment be enforced by the courts of another state. The most effective remedies in the nuisance actions discussed here are injunctive, and a court awarding injunctive relief may also have difficulty policing its decree if the defendant does business at a distance from the state. Furthermore, there is authority that an equitable injunctive order need not be enforced under full faith and credit principles. See Beale, The Conflict of Laws (1935) § 449.1. Contempt fines may have to be levied, and they are entitled to full faith and credit. Fewer problems are likely to be encountered in enforcing federal court orders.

Fifth, although in personam jurisdiction in general is as subject to res judicata as is the binding effect of a final order on the substantive issue itself (assuming that the issue of jurisdiction is raised by defendant and is determined by the court), nevertheless states which are asked to give full faith and credit to judgments brought to them from state forums adjudicating the nuisance may hear collateral attacks on trial court's jurisdiction, especially where the claim of jurisdiction rests on little more than that defendant caused a nuisance in the state of trial.

Sixth, pre-emption is likely to be alleged in most public nuisance cases of the kind discussed here. Since federal pre-emption is the more likely argument, federal district courts would be better prepared to take up that issue than the state courts. In Texas v. Pankey relevant pre-emption arguments could be made in the district court on remand with respect to both the Federal Water Pollution Control Act and the Federal Insecticide, Fungicide, and Rodenticide Act. See discussion of pre-emption in Pankey at 1 ELR 10020. In Ohio v. Wyandotte, the United States as amicus curiae argued that the cause of action which Ohio sought to bring was not pre-empted by either the Boundary Waters Treaty of 1909, 36 Stat. 2450, or by the Federal Water Pollution Control Act, as amended, 33 U.S.C. § 1151 et seq. Brief for United States as Amicus Curiae at 13, 18, Ohio v. Wyandotte, supra. Other cases will most likely raise similar pre-emption problems which should be considered by federal courts.

Seventh, and quite simply, if the arguments set out at 1 ELR 10020 are correct that federal common law should be applied by the Supreme Court when and if it exercises its original jurisdiction in similar cases, then inconsistence between two bodies of law available to the states can only be avoided by having the federal district courts, as well as the Supreme Court, apply federal common law. Furthermore, to have the district courts apply state law and the Supreme Court apply federal law would create unavoidable conflicts on appeal.

1. Missouri v. Illinois, 180 U.S. 208 (1901) (complaint filed), 200 U.S. 496 (final judgment); Georgia v. Tennessee Copper, 206 U.S. 230 (1907); New York v. New Jersey, 256 U.S. 296 (1921); New Jersey v. New York City, 283 U.S. 473 (1931).

2. A state is not a "party" for purposes of obtaining diversity jurisdiction under 28 U.S.C. § 1332.

3. Ohio v. Wyandotte, 1 ELR 20124, 20125 per Harlan, J.

4. Texas v. Pankey, 1 ELR 20089, 20090. See also Mr. Justice Frankfurter's remarks in the same vein in Romero v. International Terminal Operating Co., 358 U.S. 354.

5. Of course in many situations the Court must apply state law, e.g., original actions where a state sues another state and no federal question is involved. Perhaps this is all Mr. Justice Harlan had in mind, since Ohio did not argue that a federal question existed. On this reading his dictum says nothing about what law the Court would apply if Texas v. Pankey were before it, and the Court might well still accept the federal common law argument.

6. This discussion proceeds on the assumption that either state or federal pre-emption has not taken place or that if state or federal legislation in the field exists, valid and explicit administrative standards thereunder have not been promulgated. See Texas v. Pankey, 1 ELR 20089, 20090.

7. No doubt the law of the state where the injury ultimately occurs, and not the law of the state where the activity resulting in the harm takes place, is the applicable law. 16 Am. Jur. 2d § 72; 20 Am. Jur. 2d § 121 et seq; Restatement of the Conflict of Laws § 377 et seq. (1934).