Common Law Nuisance in Hazardous Waste Litigation: Has It Survived Milwaukee II?

Jeffrey Trauberman

Editors' Note: The following Article by Jeffrey Trauberman is written in the form of a legal memorandum. If this type of material proves useful to our readers, we will continue to publish memoranda on important environmental law issues from time to time.

Mr. Trauberman is Director of the Toxic Substances Program of the Environmental Law Institute.

[13 ELR 10043]

Issues:

1. Is compliance with federal and state environmental statutes and regulations a defense to a federal or state common law negligence or nuisance action?

2. Does the existence of a federal regulatory statute governing a particular activity bar a federal or state common law claim with respect to that activity?

Conclusions:

1. Compliance with federal and state statutes is not a defense to a common law liability claim, although compliance is often relevant to liability under negligence and nuisance claims.

2. The existence of a comprehensive federal regulatory statute can bar a federal common law action where federal law is the appropriate law to apply (e.g., in certain cases of interstate pollution or where uniformity of law is otherwise deemed necessary). Where state law may be applied consistently with the preemption provisions of a federal statute, however, the federal statute should not bar state common law liability.

Analysis:

Federal and state statutes regulate numerous activities that create environmental pollution. Regulations issued under these statutes often form a pervasive network of controls on industry. It is only natural, therefore, that industry defendants who have complied with such requirements at great expense ask the question "Is compliance with state and federal environmental statutes and regulations enough to bar further liability under state common law?" Unfortunately for such enterprises, the answer is often "no."

Industry defendants may also wonder whether a comprehensive federal regulatory statute governing an activity bars the application of federal or state common law liability to that activity. Where a comprehensive federal law is applicable, federal common law liability is probably "preempted," in the sense that the federal statute occupies the field of federal liability. Where states have the discretion to impose additional legislative controls despite the comprehensive federal coverage, state common law liability typically may be invoked.

I. Compliance As a Defense to Common Law Liability

The general rule of law is that although statutes and regulations are quite relevant to a finding of liability for negligence and nuisance, compliance with a statutory or regulatory standard is not a defense to either a negligence or nuisance action. Cases which support that proposition (although not all involve pollution) can be found in: W. PROSSER, LAW OF TORTS 203-204 nn.54-57 (negligence); Id. 607 nn.94-95 (plaintiff may obtain compensation under the law of eminent domain for nuisance authorized by legislature); W. RODGERS, ENVIRONMENTAL LAW 141 nn.29-33; 65 CORPUS JURIS SECUNDUM (CJS) § 2(7), p. 471 nn.63-70 (negligence); 66 CJS § 7b, p. 738 nn.34-36 (nuisance); 66 CJS § 17b, c, p. 763 nn.29, 32-37 (nuisance); 58 AM. JUR. 2D §§ 230-231 nn.11-15 (nuisance).

This general proposition is also embodied in the RESTATEMENT 2D OF TORTS § 288C, governing negligence:

Compliance with a legislative enactment or an administrative regulation does not prevent a finding of negligence where a reasonable man would take additional precautions.

The relationship between statutory compliance and common law liability is also specifically addressed in § 821C of the RESTATEMENT 2D (TORTS) comment f, governing public nuisances:

In the case of negligence as a matter of law, the standard defined by a legislative enactment is normally a minimum standard, applicable to the ordinary situations contemplated by the legislation …. The same general principle applies to public nuisance. Consideration may appropriately be given, however, to the fact that acts were taken in reliance upon legislation, as when expensive screening processes are installed to reduce the level of pollution to a legislative maximum.

[13 ELR 10044]

In addition, if there has been established a comprehensive set of legislative acts or administrative regulations governing the details of a particular kind of conduct, the courts are slow to declare an activity to be a public nuisance if it complies with the regulations.

Complex federal regulatory programs, such as those under the Resource Conservation and Recovery Act (RCRA), 42 U.S.C. §§ 6901-6987, ELR STAT. 41901, and the Federal Water Pollution Control Act (FWPCA), 33 U.S.C. §§ 1251-1376, ELR STAT. 42101, seem to satisfy the Restatement's definition of a "comprehensive set of legislative acts or administrative regulations." Thus, defendants might legitimately claim that compliance with these federal statutes bars a common law nuisance or negligence claim.

Few courts have expressly accepted this as a defense, however. Probably the closest a court has recently come to adopting an explicit compliance defense is in Mabray v. Velsicol Chemical Corp., 480 F. Supp. 1240 (W.D. Tenn. 1979). That case involved a plaintiff who sought to recover for injuries caused by the defendant's negligence in exposing her to hazardous chemicals. In dicta, the court stated

If Velsicol is able to prove the allegations that it discharged the instant chemicals pursuant to a valid NPDES permit issued under the FWCPA [sic], it may well have an absolute defense to plaintiff's tort claims ….

Id. at 1245.

The overwhelming tide of judicial opinion, however, suggests that the contrary is true. Common law liability may by imposed for harm to health and the environment despite statutory compliance. Cases suggesting this result include:

Villiage of Wilsonville v. SCA Services, Inc., 426 N.E.2d 824, 11 ELR 20698 (Ill. 1981) (hazardous waste land-fill enjoined as common law nuisance despite license to operate by state environmental protection agency).

Borland v. Sanders Lead Co., 369 So. 2d 523 (Ala. 1979) (compliance with state air pollution statutes does not bar liability for damages).

Burch v. Amsterdam Corp., 366 A.2d 1079, 1085-86 nn. 17, 19 (D.C. Cir. 1976) (compliance with federal labeling standards does not bar liability for damages for failure to warn).

Raymond v. Riegel Textile, 484 F.2d 1025 (1st Cir. 1973) (compliance with federal flammability standards does not bar liability for damages).

Rayborn v. Smiley, 253 So. 2d 664, 2 ELR 20084 (La. Ct. App. 1971) (compliance with "requirements of state and federal health authorities" does not bar liability for odorous nuisance).

Venuto v. Owens Corning Fiberglas Corp., 22 Cal. App. 116, 99 Cal. Rptr. 350 (Cal. Ct. App. 1971) (compliance with local air pollution control requirements does not bar liability for nuisance).

Urie v. Franconia, 218 A.2d 360, 362 (N.H. 1966) (compliance with statutory standard does not bar liability for water pollution nuisance).

Hubbard-Hall Chemical Co. v. Silverman, 340 F.2d 402, 403 (1st Cir. 1965) (compliance with federal pesticide labeling standard does not bar liability for personal injuries for failure to warn).

II. "Preemption" of Federal Common Law Liability

A. Federal Common Law and Federal Water Pollution Statutes

An issue related to the use of statutory compliance as a defense to common law liability is the degree to which federal statutory directives may preempt additional liability under federal and state common law. This is different from the question of compliance as a defense, because the defendant in preemption cases generally denies the applicability of the common law standard to his conduct. However, the effect on the plaintiff's case is similar since it bars relief.

The Supreme Court has spoken decisively on this controversy in Milwaukee v. Illinois (Milwaukee II), 451 U.S. 304, 11 ELR 20406 (1981), rev'g 599 F.2d 151, 9 ELR 20347 (7th Cir. 1979), and Middlesex County Sewerage Authority v. National Sea Clammers Ass'n, 453 U.S. 1, 11 ELR 20684 (1981), rev'g sub nom. National Sea Clammers Ass'n v. City of New York, 616 F.2d 1222, 10 ELR 20155 (1980). In Milwaukee II, the State of Illinois sought to end the City of Milwaukee's discharges of untreated and inadequately treated sewage into Lake Michigan, relying on a cause of action based on federal common law nuisance. The Court rejected plaintiffs' claims. In distinguishing the issue of preemption which arises when federal and state laws are alleged to conflict and preemption in the federal common law context, the Court explained that there is a presumption against the validity of federal common law. Only in 'restrictive instances," 451 U.S. at 313, 11 ELR at 20408, and as a "necessary expedient," 451 U.S. at 314, 11 ELR at 20408, should the court impose federal common law liability. In the area of water pollution, the Court ruled that the FWPCA is such a "comprehensive" regulatory system that has occupied the field to an extent that courts could not develop separate substantive standards. The Court stated:

At least so far as concerns the claims of respondents, Congress has not left the formulation of appropriate federal standards to the courts through applications of often vague and indeterminate nuisance concepts and maxims of equity jurisprudence, but rather has occupied the field through the establishment of a comprehensive regulatory program [the 1972 Amendments to the FWPCA] supervised by an expert administrative agency.

451 U.S. at 317, 11 ELR at 20409.

In National Sea Clammers, the Court extended the Milwaukee II rationale. In that case private plaintiffs sued various state and federal governmental entities alleging injury to waters in which they fished due to ocean dumping and discharging of sewage and other waste. The plaintiffs sought relief under a variety of legal theories, including the federal common law of nuisance and the Marine Protection, Research, and Sanctuaries Act (MPRSA), 16 U.S.C. §§ 1401-1444, ELR STAT. 41821. With respect to the federal common law claim the court relied on its recently issued opinion in Milwaukee II and stated:

[Milwaukee II] disposes entirely of respondents' federal common law claims, since there is no reason to suppose that the pre-emptive effect of the FWPCA is any less when pollution of coastal waters is at issue. To the extent that this litigation involves ocean waters not covered by [13 ELR 10045] the FWPCA, and regulated under the MPRSA, we see no cause for differing treatment of the preemption question. The regulatory scheme of the MPRSA is no less comprehensive, with respect to ocean dumping, than are analogous provisions of the FWPCA.

453 U.S. at 22, 11 ELR at 20689 (footnote omitted).

In response to the Supreme Court's decisions in Milwaukee II and National Sea Clammers, several lower federal courts have since dismissed federal common law nuisance claims under the FWPCA. See, e.g., Illinois v. Outboard Marine Corp., 680 F.2d 473, 12 ELR 20797 (7th Cir. 1982) (Milwaukee II preempts federal common law of nuisance resulting from discharges prior to 1972 FWPCA amendments); In re Oswego Barge Corp., 664 F.2d 327, 12 ELR 20119 (2d Cir. 1981), reh'g denied 673 F.2d 47, 12 ELR 20400 (2d Cir. 1982) (government failed to rebut presumption that § 311 of the FWPCA preempts the federal government's right under federal common law nuisance, maritime tort law, and the Refuse Act to recover from the owner of a discharging vessel the oil spill cleanup costs); Love v. New York State Dep't of Environmental Conservation, 529 F. Supp. 832, 12 ELR 20571 (S.D.N.Y. 1981) (FWPCA preempts federal common law).

B. Federal Common Law and Other Federal Statutes

The rulings in Milwaukee II and subsequent cases involving water pollution affirm that the FWPCA has entirely preempted federal common law nuisance in the area of water pollution. This raises the question whether other federal statutes, such as the Clean Air Act, 42 U.S.C. §§ 7401-7642, ELR STAT. 42201, the Comprehensive Environmental Response, Compensation, and Liability Act (Superfund), 42 U.S.C. §§ 9601-9657, ELR STAT. 41941, and RCRA are also sufficiently "comprehensive" to supplant the common law.

Before the enactment of Superfund, a RCRA defendant might have been able to use Illinois v. Milwaukee (Milwaukee I), 406 U.S. 91, 2 ELR 20201 (1972), in which the Supreme Court initially approved the application of federal common law to water pollution, and Milwaukee II (had Milwaukee II been decided) to urge a court to limit the federal government's right to relief to those circumstances where an activity was specifically regulated under the statute. The argument would be that RCRA, like the FWPCA, comprehensively occupied the field of federal liability for hazardous waste pollution. With the enactment of Superfund, however, it is clear that Congress intended to impose supplementary and complementary liability on enterprises releasing hazardous chemicals. Furthermore, § 107(j) of Superfund, 42 U.S.C. § 9607(j), ELR STAT. 41948, containing a liability exemption for so-called "federally permitted releases" states that

[n]othing in this paragraph shall affect or modify in any way the obligations or liability of any person under any other provision of State or Federal law, including common law, for damages, injury, or loss resulting from a release of any hazardous substance or for removal or remedial action or the costs of removal or remedial action of each hazardous substance.

Yet this language by itself does not prevent a defendant from claiming that RCRA preempted federal common law with respect to ongoing hazardous waste disposal (i.e., disposal occurring after RCRA's effective date), and that Superfund's enactment merely provides an additional set of statutory remedies for the federal government. Section 107(j) of Superfund, it might be argued, does not revive any federal common law that might be preempted by RCRA. Furthermore, under Milwaukee I and II, and according to the district court's reasoning in the recent decision in United States v. Outboard Marine Corp., 13 ELR 20033 (N.D. Ill. 1982), state common law remedies might also be unavailable to the federal government for releases of hazardous chemicals occurring after RCRA's effective date. So far, however, no one has persuaded the courts to adopt this reasoning.

Several courts have recently addressed the effect of RCRA and Superfund on federal common law. Courts ruled in both City of Philadelphia v. Stepan Chemical Co., 544 F. Supp. 1135, 12 ELR 20915 (E.D. Pa. 1982) and United States v. Price, 523 F. Supp. 1055, 11 ELR 21047 (D.N.J. 1981), aff'd 688 F.2d 204, 12 ELR 21020 (3d Cir. 1982), that RCRA and Superfund, due to their comprehensive nature, have occupied the field of hazardous waste disposal and therefore preclude federal common law nuisance claims. See also United States v. Diamond Shamrock Corp., 12 ELR 20819 (N.D. Ohio 1981) (federal common law nuisance action to abate hazardous waste discharges is precluded by failure to allege interstate effects of pollution; United States v. Kin-Buc, Inc., 11 ELR 20977 (D.N.J. 1981), vacating 11 ELR 20472 (dismissing in light of Milwaukee II claims under federal common law nuisance for water pollution emanating from hazardous waste disposal site).

At least two courts have held that the Clean Air Act precludes federal common law nuisance actions. In United States v. Kin-Buc, Inc., 532 F. Supp. 699, 12 ELR 20459 (D.N.J. 1982), a federal district court in New Jersey held that the Clean Air Act preempts federal common law challenges to air pollution emanating from a hazardous waste site. The Second Circuit in New England Legal Foundation v. Costle, 666 F.2d 30, 11 ELR 20888 (2d Cir. 1981), found that the Clean Air Act establishes a comprehensive clean air regulatory program, leaving no room for a federal common law challenge to sulfur dioxide emissions from a power plant.

Rulings restricting the federal government to explicit federal statutory remedies when a comprehensive regulatory statute exists are especially significant where that same comprehensive statute is invoked to bar other federal statutory remedies. For example, several courts have already determined that § 311 of the FWPCA is the exclusive means of federal recovery of oil spill cleanup and removal costs. See, e.g., In re Oswego Barge Corp., 664 F.2d 327, 12 ELR 20119 (2d Cir. 1981), reh'g denied, 673 F.2d 47, 12 ELR 20400 (2d Cir. 1982); United States v. Dixie Carriers, 627 F.2d 736, 10 ELR 20935 (5th Cir. 1980); In re Steuart Transportation Co., 596 F.2d 609, 9 ELR 20237 (4th Cir. 1979); but see United States v. City of Redwood City, 640 F.2d 963, 11 ELR 20341 (9th Cir. 1981); United States v. M/V Big Sam, 480 F. Supp. 290 (E.D. La. 1979), final judgment 505 F. Supp. 1029, 11 ELR 20502 (E.D. La. 1981), aff'd in part, remanded 681 F.2d 432, 12 ELR 20994 (5th Cir. 1982), reh'g en banc, No. 81-3127 (5th Cir. Dec. 13, 1982) (FWPCA is exclusive [13 ELR 10046] remedy for recovery for dischargers but not third parties).

C. Federal Statutes and State Statutory and Common Law

Although the Supreme Court has emphatically denied the existence of a federal common law nuisance remedy where the conduct in question falls within the scope of a comprehensive federal pollution statute such as the FWPCA, the Court did not determine whether or how plaintiffs alleging state statutory and common law nuisance actions are affected by these comprehensive federal statutory regimes. See Illinois v. Milwaukee, 451 U.S. at 310 n.4, 11 ELR at 20407 n.4 (the issue is whether federal legislation has supplanted federal common law, not whether state law applies).

This issue has been litigated recently in the lower federal courts, however. In Scott v. Hammond, 519 F. Supp. 292, 12 ELR 20128 (N.D. Ill. 1981), a federal district court in Illinois was faced with deciding whether causes of action based on Illinois statutory and common law could be invoked against non-Illinois water polluters. The court held that the interstate water pollution claims were not purely federal questions and, therefore, state law could be applied. Yet, that same court subsequently reversed itself in Chicago Park District v. Hammond, 530 F. Supp. 291 (N.D. Ill. 1981). The court held that neither Illinois statutory nor common law could be applied against out-of-state polluters under the Supreme Court's Milwaukee II ruling. Expressing the need for "[u]niformity in the interstate regulation of pollution," 530 F. Supp. at 293, the court indicated that the FWPCA should be the exclusive remedy in such cases. See also City of Evansville v. Kentucky Liquid Recycling, 604 F.2d 1008, 9 ELR 20679 (7th Cir. 1979), cert. denied, 444 U.S. 1025 (1980) (dismissing state law claims from interstate water pollution action); Illinois v. Sanitary District of Hammond, 530 F. Supp. 293 (N.D. Ill. 1981) (Milwaukee II case did not disturb holding in Evansville that state law was preempted by the FWPCA). However, in City of Philadelphia v. Stepan Chemical Co., 544 F. Supp. 1135, 12 ELR 20915 (E.D. Pa. 1982), a federal district court in Pennsylvania upheld state common law nuisance, strict liability, and negligence claims in an action also seeking recovery under Superfund for intrastate pollution.

None of the cases discussed above indicates under what circumstances federal law and not state law must be applied. The answer to this question has its doctrinal roots in several cases leading up to and including the Supreme Court's decision in Milwaukee I, 406 U.S. 91, 2 ELR 20201 (1972), where the Court outlined the contours and application of federal common law nuisance. See generally Comment, Requiem for the Federal Common Law of Nuisance, 11 ELR 10191, 10192 (1981).

A recent case addressing this issue is United States v. Outboard Marine Corp., 13 ELR 20033 (N.D. Ill. 1982). In that case, the United States sued, inter alia, the Monsanto Corporation, a polychlorinated biphenyl (PCB) manufacturer, on a state products liability theory in connection with the contamination of navigable waters by PCBs. The court dismissed the federal government's state products liability theory, holding that "[a] suit by the United States to protect navigable waters from pollution requires a federal rule of decision under Milwaukee I and a statutory rule of decision under Milwaukee II." 13 ELR at 20034. The court continued:

The crucial factors in Milwaukee I and Milwaukee II were the federal interests affected by water pollution and the nature of the environmental problem Congress addressed in [the 1972 FWPCA]. The scope of the Supreme Court's holding is determined by these factors, not by the legal theories under which the Government brings its water pollution suits."

Id. (footnote omitted).

Thus, the Illinois federal district court read Milwaukee II to bar a state common law suit in federal court where Milwaukee I originally had dictated the need to apply federal common law. See also United States v. Price, 523 F. Supp. 1055, 11 ELR 21047 (D.N.J. 1981), aff'd, 688 F.2d 204, 12 ELR 21020 (3d Cir. 1982) (since intrastate pollution at issue does not require a uniform federal rule of decision or implicate important federalism concerns, development of federal common law is not appropriate). If the rule of law endorsed by the Illinois federal district court is adopted in other jurisdictions, the federal government likely will need to rely only on explicit federal statutory remedies where a comprehensive federal regulatory statute exists. The United States will not be able to avail itself of either federal or state common law. See McCastle v. Rollins Environmental Services of Louisiana, Inc., No. 81-185A, 2 CHEM. & RAD. WASTE LITIG. REP. 783 (M.D. La. May 13, 1981), id., at 787 (M.D. La. June 5, 1981) (state law not federal common law applies to strictly intrastate air pollution).

Another issue that has not been definitively addressed by any federal or state court is the effect of RCRA and Superfund on state and private plaintiffs attempting to invoke state common law and statutory theories. The Chicago Park District court refused to apply state law against out-of-state polluters. However, the court did not indicate precisely when state law was inappropriate to apply.

It would seem that, according to the Outboard Marine district court, the availability of state law might be judged under Milwaukee I criteria. Where uniformity is required, federal law would govern.

On the other hand, the need for uniformity alone should not be controlling. Congress typically addresses preemption and limitation of state common law and statutory remedies in fairly clear terms. For example, under the Price-Anderson Act Congress was quite explicit in limiting the aggregate common law and statutory liability of nuclear licensees for a nuclear "incident." 42 U.S.C. § 2210(e), ELR STAT. 41234. Under §§ 107(j) and 114(a) of Superfund, 42 U.S.C. §§ 9607(j) and 9614(a) ELR STAT. 41948, 41952, and § 3009 of RCRA, 42 U.S.C. § 6929, ELR STAT. 41911, Congress was similarly explicit in permitting additional state control of and liability for hazardous chemical risks. Looking at the preemption provisions of the Toxic Substances Control Act (TSCA), 15 U.S.C. §§ 2601 and 2617, ELR STAT. 41335, 41347, one district court has held that the federal regulatory program under TSCA does not preempt a state common law nuisance action arising out of the operation of a hazardous waste landfill. See Chappell v. SCA Services, Inc., 540 F. Supp. 1087, 1100 (C.D. Ill. 1982). The court [13 ELR 10047] specifically noted the effect on injured private parties of the Supreme Court's Milwaukee II ruling and the Seventh Circuit's Evansville opinion that damages were not appropriate under the citizens' suit provision of the FWPCA, which is "virtually identical" to that in TSCA. See 540 F. Supp. at 1099-1100, citing City of Evansville v. Kentucky Liquid Recycling, Inc., 604 F.2d 1008, 9 ELR 20679 (7th Cir. 1979), cert. denied, 444 U.S. 1025 (1980). After these two rulings, said the Chappell court, "it would appear that a state common law nuisance action may be the only way plaintiffs can recover for any damages which have accrued to them." 540 F. Supp. at 1100.As under RCRA, Superfund, and TSCA, where Congress has spoken to preemption and has failed to preempt state common law and statutory remedies, one would expect such remedies to remain available to nonfederal plaintiffs.

Conclusions

As the above analysis suggests, compliance with a statutory or regulatory requirement is not typically a defense to a common law liability claim. While compliance is relevant to liability, it is not at all dispositive.

Where the particular case involves a uniquely federal question, however, a comprehensive federal statutory regime may bar the application of federal common law under the Supreme Court's Milwaukee II and National Sea Clammers decisions. Some courts would apply this bar to both federal and nonfederal plaintiffs. Where federal law is the exclusive remedy, state common law is not a viable source of liability.

When does federal law exclude state remedies? The answer should be determined by looking at how the federal statutes themselves treat state legal regimes. Examination of federal statutory preemption provisions and their legislative history likely will yield the most definitive answers.

In the area of hazardous chemical control under RCRA, Superfund, and TSCA state remedies are generally preserved, although TSCA bars certain state-specific actions. With respect to injuries caused by hazardous chemicals within the scope of these statutes, state common law remedies would seem to be available, at least to nonfederal plaintiffs. Federal litigants, however, may face somewhat more powerful arguments from defendants alleging statutory preemption of certain federal common law claims.