12 ELR 20184 | Environmental Law Reporter | copyright © 1982 | All rights reserved
New Jersey v. United StatesNo. 81-945 (D.D.C. November 10, 1981)
The district court dismisses the State of New Jersey's lawsuit seeking a declaration that provisions of the New Jersey Spill Compensation and Control Act (SCCA) are not preempted by § 114(c) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The SCCA authorizes the state to collect taxes from petroleum and chemical industries located within the state in order to maintain the New Jersey Spill Compensation Fund. The court rules that New Jersey is not threatened with imminent federal action against its program since the United States has not taken a position on § 114(c) of CERCLA that could be construed as adverse to the state's program. In addition, the state is under no obligation to comply with § 114(c) and is not currently refraining from any activity because of that section. Furthermore, New Jersey is currently involved in litigation in the New Jersey courts in which four corporations are alleging that the SCCA is preempted by CERCLA. Therefore, the state is guaranteed a judicial ruling on the legality of its taxes and will not be tangibly harmed by the court's refusal to reach the merits of this dispute.
Counsel for Plaintiffs
Mary C. Jacobson, Deputy Attorney General
36 W. State St., Trenton NJ 08625
Counsel for Defendants
Nancy L. Long
Land and Natural Resources Division
Department of Justice, Washington DC 20530
Counsel for Intervenor Natural Resources Defense Council, Inc.
Natural Resources Defense Council, Inc.
1725 I St. NW, Washington DC 20006
Counsel for Intervenor Chemical Manufacturers Ass'n
Roberts B. Owen
Covington & Burling
888 16th St. NW, Washington DC 20006
[12 ELR 20185]
A) Procedural Overview
This action is brought by the State of New Jersey, seeking a declaratory judgment that various provisions of the New Jersey Spill Compensation and Control Act ("New Jersey Spill Act") are not preempted by the Comprehensive Environmental Response, Compensation and Liability Act of 1980, Pub. L. No. 96-510, 94th Stat. 2767 (1980) ("Superfund Act"). The New Jersey Spill Act authorizes the state to collect taxes from the petroleum and chemical industries located within the state in order to maintain the New Jersey Spill Compensation Fund ("the minifund"). As with the Superfund Act, the general purpose of the New Jersey fund is to prevent, contain and remove hazardous waste discharges which threaten the environment.
The present controversy focuses on § 114(c) of the Superfund legislation, which provides:
Except as provided in this Act, no person may be required to contribute to any fund, the purpose which is to pay compensation for claims for any costs of response or damages or claims which may be compensated under this title. Nothing in this section shall preclude any State from using general revenues for such a fund, or from imposing a tax or fee upon any person or upon any substance in order to finance the purchase or prepositioning of hazardous substance response equipment or of other preparations for the response to a release of hazardous substances which affects such State.
New Jersey seeks a declaration that this provision does not preclude the state from using its fund for the following activities:
(1) the cleanup and removal of petroleum discharges;
(2) State Spill Fund administration;
(3) the purchase and prepositioning of hazardous substance response equipment;
(4) The ten per cent or other state share of response costs required by § 114(c)(3) as a prerequisite to the receipt by a state of federal funds;
(5) payment of third-party damage claims;
(6) advancement of funds for cleanup purposes if federal Superfund reimbursement is granted;
(7) payment of damages claims and response costs eligible for compensation under the Superfund Act or implementing regulations promulgated thereunder, but for which no federal reimbursement is provided upon prompt application for the same by the state.
The essence of New Jersey's argument on the merits is that only an extremely narrow interpretation of § 114(c) is consistent with the broad, remedial purposes of the Superfund legislation. Thus, the state contends, § 114(c) should be read as prohibiting only those state taxes which are used for identical activities as those financed by the Superfund legislation.
The Chemical Manufacturers Association ("CMA"), intervenor-defendant, interprets § 114(c) in a much broader fashion, suggesting that the provision essentially precludes the states from collecting any taxes which are earmarked for the purposes of preventing and cleaning up hazardous waste spills. The United States has taken no position on the preemption issue.
B) Other Litigation
The Exxon Corporation and four other corporations required to apy taxes under the New Jersey Spill Act brought suit in federal district court in New Jersey alleging preemption and seeking a refund of taxes paid. Exxon Corporation et al. v. Robert Hunt, et al., No. 71-1458M [11 ELR 20886] (D.N.J.). On July 27, 1981, Judge Meanor dismissed the suit under 28 U.S.C. § 1341, the anti-tax injunction statute, holding that the corporations have an effective and efficient remedy for their grievances in the state courts. Judge Meanor strongly recommended that the corporations seek an immediate adjudication of their claims in the state court system.
At oral argument on this motion, the parties revealed that Exxon and the other corporations are indeed pursuing their grievances in state court. In addition, Judge Meanor's ruling has been appealed to the Third Circuit Court of Appeals and is awaiting review by that tribunal.
C) Motion to Dismiss
The instant motion was filed by the United States. The government contends that this court lacks jurisdiction because the suit does not present a case or controversy within the confines of Article III. New Jersey and CMA contend that the suit is presently justiciable. For the reasons articulated below, the court finds that New Jersey's complaint for declaratory relief does not involve a case or controversy that is currently ripe for review.
A suit for declaratory judgment is not justiciable unless it is of sufficient immediacy and reality to warrant judicial intervention. Lake Carriers Association v. MacMullan, 406 U.S. 498, 506 [2 ELR 20283] (1972); Maryland Casualty Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 273 (1941). Ordinarily, this requirement precludes a party from challenging or seeking a declaration as to the interpretation of a statute where it is not clear the statute will ever be applied to the party's conduct.
In United Public Workers v. Mitchell, 330 U.S. 75 (1946), the Court held that constitutional challenges to various provisions of the Hatch Act did not present a case or controversy because no rights of the plaintiffs had, at the time of the suit, been interfered with by the Civil Service Commission. The Court stressed that "no threat or interference by the Commission with rights of these appellants appears beyond that implied by the existence of the law and the regulations." 330 U.S. at 91 (Emphasis supplied).
Similarly, in National Student Association v. Hershey, 412 F.2d 1103, 1110 (D.C. Cir. 1969), the court emphasized that the "mere existence of a statute, regulation or articulated policy," is generally not enough to sustain a judicial challenge, "even by one who reasonably believes that the law applies to him and will be enforced against him according to its terms." See also Babbitt v. United Farm Workers National Union, 442 U.S. 289, 292 (1979) ("a plaintiff who challenges a statute must demonstrate a realistic danger of sustaining a direct injury as a result of the statute's operation or enforcement") (Emphasis supplied).
Thus, a court will ordinarily refuse to intercede in a dispute when the challenged statute has not yet been applied to the complainant's conduct. Further, as the foregoing language from Hershey implies, a court should be even more reluctant to consider an action for declaratory judgment when it is unclear whether the statute even regulates the actions the plaintiff desires to engage in. In such a situation, any injury is purely conjectural; a court should refrain from considering hypothetical interpretations of a statute which may interfere with the plaintiff's actions. For example, in Public Service Commission of Utah v. Wycoff Co., 344 U.S. 237 (1952), the complainant sought a declaratory judgment that the Utah Public Service Commission [12 ELR 20186] was preempted from employing its regulatory authority to interfere with transportation routes authorized by the Interstate Commerce Commission. Observing that the sole purpose of the action was to "guard against the possibility" that the Commission would attempt to apply its statutory authority to the plaintiff's transportation routes, 344 U.S. at 244 (emphasis in original), the Court concluded that the case was non-justiciable. Of particular pertinence to this suit, the court determined that plaintiff's generalized fear of "some form of administrative or judicial action" proscribing its transportation lines was insufficient to trigger judicial involvement. 344 U.S. at 245.
In Alabama State Federation of Labor v. McAdory, 325 U.S. 450 (1945), the plaintiff sought a declaratory judgment that certain sections of an Alabama law regulating labor unions was unconstitutional. The Court found the suit fatally flawed in that it was uncertain whether the ambiguous provisions at issue even applied to plaintiff's actions. 325 U.S. at 459. Again, the bare possibility that the statute could, at some future date, be interpreted by the state to include plaintiff's conduct, was deemed insufficient to quealify the case for immediate judicial intervention. 325 U.S. at 462. See United States v. Fruehauf, 365 U.S. 146 (1961).
Applying these principles to the case at hand compels the conclusion that New Jersey's request for declaratory relief is not presently justiciable. The state does not contend that enforcement action against it under § 114(c) has occurred or is imminent. Any such contention would be unsupportable. It is undenied that the United States has genuinely taken no position on the scope of § 114(c), and does not even have in place an administrative mechanism for formulating an authoritative position on the section. There has been no delegation of power from the President to any agency to enforce the section, as there has been with other provisions in the Superfund legislation, see Exec. Order 12286, 46 Fed. Reg. 9901 (1981), and there is no expectation that such a delegation will occur soon.
Thus, New Jersey is certainly not in apprehension of imminent federal action threatening its program. In fact, New Jersey acknowledges that it fears just the opposite, that the United States will take no action against it for the foreseeable future but will eventually seek to enforce § 114(c) against the state at some indeterminate point in time. As the caselaw makes plain, apprehension of conceivable future action is far too tenuous and hypothetical to justify present judicial consideration. There is certainly a significant likelihood that the United States will never seek to apply § 114(c) to the state's program. As noted, at this stage, the federal government has not taken a position on the scope of the provision that could in any way be construed as adverse to the state's program. If anything, the state's pleadings reveal that those federal policymakers who have considered the section favor New Jersey's broad interpretation of it. See Plaintiff's Memorandum of Points and Authorities in Opposition to Defendant's Motion to Dismiss at 15 and Appendix at 19 (officials in Environmental Protection Agency support expansive right of states to tax industry for individual state minifunds).
Accordingly, it appears not only possible, but probable, that the United States will never seek to enforce the provision in a way that is inimical to New Jersey's program. A court should certainly be hesitant to consider the substantive merits of a "dispute" which is contingent upon the occurrence of an apparently unlikely event. In the absence of any authoritative federal regulation or enforcement effort inconsistent with New Jersey's program, the instant suit appears to be no more than the state's demand for a judicial pronouncement affirming what the state contends is already clear: that the prohibitory features of § 114(c) do not apply to the activities funded by the state's program. In other words, what the state seeks is a blatantly advisory opinion validating a program the state has no concrete reason to believe is in jeopardy. See generally Railway Ass'n v. Corsi, 362 U.S. 88, 93 (1944); Maryland Casualty Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 273 (1941).
The state and the Chemical Manufacturers Association cite a number of cases of the proposition that challenges to statutes not yet applied to the plaintiff's conduct can be justiciable. These cases are thoroughly inapposite to the one at hand.
Lake Carriers' Association v. MacMullan, 406 U.S. 498 [2 ELR 20283] (1972), a case heavily relied upon by the state and CMA, involved a complaint to have the Michigan Watercraft Pollution Control Act of 1970 declared invalid on various grounds. The Court held that a present case or controversy existed because the plaintiff was under a present, unambiguous obligation to comply with the provisions at issue. 406 U.S. at 508. More importantly, the Court noted, the state was actively seeking to attain universal compliance with the statute through the threat of future enforcement action. 406 U.S. at 507. Of direct relevance to this case, the Court, in a footnote, distinguished Public Service Commission v. Wycoff Co., supra, as "a case where a carrier sought relief in a federal court against a state commission in order 'to guard against the possibility' . . . that the Commission would assume jurisdiction. Here . . . the confrontation between the parties has already arisen." 406 U.S. at 508 n.12.
The instant case is dissimilar from Lake Carriers Association in obvious respects. First, there is not an unambiguous obligation to comply with § 114(c); rather, the essence of the state's substantive argument is that there is no obligation imposed upon it by the provision. Second, the federal government is not seeking to attain New Jersey's compliance with § 114(c), through a threatened enforcement action or otherwise. The state evidently desires to "guard against the possibility" that the United States will attempt to enforce § 114(c) instead of seeking judicial resolution of a current "confrontation" between the parties.
In Babbitt v. United Farm Workers National Union, 442 U.S. 287 (1979), another case strenuously cited by the state and CMA, appellees brought suit to secure a declaratory judgment that various sections of the Arizona Employment Relations Act were unconstitutional. The Court held that attacks on certain sections, providing for criminal penalties for the failure to comply with specified election procedures and limitations on consumer publicity, were presently justiciable because the very existence of the provisions in controversy hampered plaintiff's ability to exercise important rights. 442 U.S. at 294.In particular, the Court stressed that the risk to plaintiff of criminal prosecution was not "wholly speculative"; accordingly, the very existence of the provision chilled the exercise of First Amendment rights and generated a current case or controversy. 442 U.S. at 294. See also Epperson v. Arkansas, 393 U.S. 97 (1968) (state statute providing for criminal penalties for teaching Darwinian evolution currently justiciable because of ongoing threat to First Amendment rights).
In stark contrast to Babbitt and other cases authorizing preenforcement review, the instant suit does not involve any possibility of ultimate enforcement action that is more than "wholly speculative." As a result, this suit does not involve a statutory provision which tangibly infringes on the state's rights or interests in any way. The state acknowledges that it will proceed with the implementation and enforcement of its Spill Act even without a judicial declaration as to the scope of § 114(c). Thus, the state does not contend that it is currently refraining from engaging in any necessary or protected activity because of § 114(c).
The only concrete harm even arguably articulated by the state involves the risk that the funds it disburses under the Spill Act will ultimately be declared illegal by the United States at some point in the distant future; at that time, the state maintains, it will be subjected to enormous refund actions which could injure the state's economy. Not only is this doomsday prediction completely hypothetical, it is almost certainly apocryphal. The Exxon Corporation and other companies subject to New Jersey's program apparently followed Judge Meanor's suggestion and have filed suit in New Jersey state court, seeking a refund of monies collected by the state. Moreover, Judge Meanor's ruling declining jurisdiction has been appealed to the Third Circuit Court of Appeals. If the Third Circuit upholds Judge Meanor's ruling, it would be because the court agrees that the state judicial system provides a satisfactory forum, within the meaning of the anti-tax injunction statute, for adjudication of the precise issue presented by the instant suit. On the other hand, the Third Circuit may reverse Judge Meanor's decision and find that the federaldistrict court in New Jersey has jurisdiction over the dispute. In either case, the Third Circuit's ultimate ruling will ensure the parties of an "effective and efficient" forum for the consideration of the [12 ELR 20187] specific issue presently at bar. Thus, the state is guaranteed a judicial ruling on the legality of its taxes even if this court declines to reach the merits of this dispute. The assurance of an alternative, satisfactory forum minimizes any risk that the state will be compelled to disgorge, in the distant future, the tax monies it will collect pursuant to the operation of its program.
Therefore, the existence of an alternative avenue for attaining judicial review eviscerates any argument by New Jersey that it will be tangibly harmed by this court's refusal to consider the substantive validity of its complaint. See Abbott Laboratories v. Gardner, 387 U.S. 136 (1967). It is significant as well that the alternate judicial forum will invariably be superior than this one for the consideration of § 114(c)'s meaning. In this suit, New Jersey seeks a generalized, facial assessment of the scope of § 114(c). This kind of suit is ordinarily frowned upon by the courts. See Hodel v. Virginia Surface Mining & Reclamation Ass'n, U.S. , 101 S. Ct. 2352, 2369 [11 ELR 20569] (1981); Socialist Labor Party v. Gilligan, 406 U.S. 583 (1972).
While it is true, as New Jersey suggests, that the issue presented here is largely one of law, this characterization does not dispense with the desirability of having a concrete factual context for decisionmaking. National Wildlife Federation v. Marsh, No. 80-1391, slip op. at 5 [11 ELR 21024] (D.C. Cir. September 30, 1981); Diamond Shamrock Corp. v. Costle, 580 F.2d 670, 674 [8 ELR 20488] (D.C. Cir. 1978). A determination of the proper scope of § 114(c) would clearly be aided by presentation of a specific context raising all factors conceivably pertinent to a judicial decision. See Toilet Goods Association v. Gardner, 387 U.S. 158 (1967). A suit by a corporation in state or federal court in New Jersey, complaining about particular taxes collected and dispersed by the state, would present such a concrete factual paradigm to assist in judicial review. In contrast, the instant suit seeks consideration of § 114(c)'s meaning on a generic, abstract level, without reference to specific taxes levied and distributed. Thus, not only are there alternative judicial forums available to New Jersey, but these forums are essentially superior to this one for the consideration of the issue presented by New Jersey's complaint.
New Jersey's suit for declaratory relief is not of sufficient immediacy and reality to warrant judicial intervention. Any case or controversy depicted by the suit is hypothetical in nature because there is no concrete reason to suspect the United States will ever seek to enforce § 114(c) against the state. The state is suffering no tangible infringement on its interests as a result of the provision. This court's refusal to consider the merits of the complaint will work no hardship on New Jersey, since alternative and, in fact, superior, forums exist for judicial review of the issues presented here. Thus, the United States' motion to dismiss is granted.
An appropriate Order accompanies this Memorandum.
This matter comes before the court on defendant's Motion to Dismiss and plaintiff's Cross-Motion for Summary Judgment. Upon consideration of the parties' arguments and memoranda, and the record in this case, it is, by the court, this 10th day of November, 1981.
ORDERED that Defendant's Motion to Dismiss is granted; and it is further
ORDERED that Plaintiff's Cross-Motion for Summary Judgment is denied.
12 ELR 20184 | Environmental Law Reporter | copyright © 1982 | All rights reserved