United States v. Stringfellow

No. CV-83-2501-MML (C.D. Cal. April 9, 1984)

The court rules that § 107 of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) is retroactive as applied to defendants if it creates new legal obligations, and may be challenged under the Contract Clause. The court rules that CERCLA § 107 satisfies the first prong of the retroactivity test because it applies to past generation and disposal of wastes. It rules that CERCLA's focus on the present effects of disposal as well does not prevent it from being found retroactive, because it is the timing of the transaction giving rise to liability that determines retroactivity. It declines to rule on whether CERCLA applies new liability on defendants, the second prong of the retroactivity test, but notes that it will hold CERCLA § 107 retroactive if defendants demonstrate that they would not have been liable prior to enactment of CERCLA. The court next rules that the Contract Clause of the Constitution applies indirectly to CERCLA, since the Fifth Amendment's Due Process Clause provides essentially the same protection against impairment of contracts by federal action as the Contract Clause provides against state action.

[Related cases are published at 14 ELR 20381 and 20385 — Ed.]

Counsel are listed at 14 ELR 20381.

[14 ELR 20388]

Lucas, J.:

Order Denying in Part and Granting in Part Defendants' Motion for Summary Judgment re Retroactivity

Defendants' motion for summary judgment on the issue of retroactivity came on for hearing before the Honorable Malcolm M. Lucas, District Judge. After careful consideration of the papers filed and oral argument of counsel, the Court denies in part and grants in part defendants' motion.

The generator and transporter defendants originally filed motions for summary judgment¹ on the theory that the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA") § 107, 42 U.S.C. § 9607 (1980) is unconstitutional as applied to them under the facts in this case.² Plaintiffs filed an application for an order continuing the hearing on these motions. On October 19, 1983, the court issued an order granting plaintiffs' request for continuance insofar as it relates to the constitutionality of CERCLA § 107 as applied, but directed the parties to address the issue of whether CERCLA § 107 is constitutional on its face.

[14 ELR 20389]

After considering the briefs and oral argument of counsel the court has determined that it is unnecessary to reach the issue of CERCLA § 107's facial constitutionality. A court should not make unnecessary determinations of constitutional questions. Ashwander v. Tennessee Valley Authority, 297 U.S. 289, 346-47 (1936). Here, the defendants raised a narrow constitutional challenge to the retroactive application of CERCLA § 107 to these particular defendants under the circumstances of this case. The Court need not reach the broader issue of whether the statute is constitutional on its face.

The defendants may refile their motion for summary judgment challenging the constitutional validity of CERCLA § 107 as applied within a reasonable time after discovery in this phase of the case has been completed.

Is CERCLA § 107 Retroactive As Applied to the Generator Defendants in This Case?

Before the constitutional issue is reached, however, this Court must determine whether CERCLA § 107 is retroactive. There is a strong presumption against retroactive construction of statutes. United States v. Heth, 7 U.S. (3 Cranch) 399 (1806). However, when it is clear that Congress intended the statute to be applied retroactively, that presumption may be overcome. Id. at 413.

A statute is retroactive when it (1) applies to "transactions or considerations already past," and (2) imposes duties or liabilities as to those past transactions or considerations that did not exist prior to the enactment of the statute. Society for Propagating the Gospel v. Wheeler, 22 F. Cas. 756, 767 (C.C.D.N.H. 1814) (No. 13,156), quoted in Sturges v. Carter, 114 U.S. 511, 519 (1884). See also Slawson, Constitutional and Legislative Considerations in Retroactive Lawmaking, 48 CALIF. L. REV. 216, 217-18 (1960); Note, Generator Liability Under Superfund for Clean-Up of Abandoned Hazardous Waste Dumpsites, 130 U. PA. L. REV. 1229, 1235 (1982) (hereinafter cited as Generator Liability). Therefore, two inquiries must be made in order to determine whether CERCLA is retroactive.

The first inquiry is a matter of congressional intent and statutory construction. Here, the inquiry is whether CERCLA § 107 addresses past "transactions" by the generator and transporter defendants. The plaintiffs argue that because CERCLA addresses the present effects of waste generation and disposal, CERCLA is prospective rather than retroactive. Apparently, the argument is that the "transaction addressed by CERCLA § 107 is the present effect of the disposal rather than the acts of waste generation and disposal. The defendants argue that it is the "transaction" or act of waste generation and disposal that gives CERCLA § 107 its retroactive effect. The Court agrees with the defendants.

Even assuming that present effects could be construed as Section 107 not only requires present bad effects of waste generation and disposal before liability attaches to the defendants, but also requires that the defendants engaged in the acts of generation or disposal of wastes. Therefore, even if the Court were to accept plaintiffs' argument, the statute can be construed as addressing two sets of transactions: (1) the present bad effects of waste generation and disposal, and (2) the acts of waste generation and disposal.

Here, the parties do not dispute that the defendants' acts of waste generation or disposal at the Stringfellow site were completed prior to the enactment of CERCLA § 107 and, therefore, are past acts or "transactions." Hence, although plaintiffs may argue that CERCLA § 107 has prospective application insofar as it addresses present bad effects of waste generation and disposal, this does not preclude defendants from asserting that CERCLA § 107 has retroactive application insomuch as it also addresses defendants past acts of generation or disposal of waste at the String-fellow site.

The Court declines to follow the statement to the contrary in United States v. Price, 523 F. Supp. 1055, 1017 [11 ELR 21047] (D.N.J. 1981), aff'd, 688 F.2d 204 [12 ELR 21020] (3rd Cir. 1982), and other cases cited by plaintiffs in support of the view that when a statute addresses present effects it is not retroactive even when those present effects were the result of past acts. All statutes are enacted to remedy present effects. If present effects were determinative of retroactivity, no statute could ever be construed as retroactive.

Moreover, it is generally accepted that Congress intended CERCLA § 107 to have retroactive effect as applied to the past acts of generator and transporter defendants. Generator Liability, 130 U. PA. L. REV. at 1242-45; Note, Inactive or Abandoned Hazardous Waste Disposal Sites: Coping with a Costly Past, 53 SO. CAL. L. REV. 1709, 1717 (1980). In fact, it is clear that retroactive application of CERCLA § 107 was intended by Congress because the statute was enacted, in part, to address defective, inactive or abandoned hazardous waste sites. Id. S. REP. NO. 848, 96th Cong., 2nd Sess. 9-11 (1980); H.R. REP. NO. 1016, 96th Cong., 2nd Sess. 25 (1980); U.S. CODE CONG. & ADMIN. NEWS 1980, at 6119. Furthermore, CERCLA § 107 is constructed in the past tense, indicating that it applies to past activities. United States v. Wade, 546 F. Supp. 785, 793 [12 ELR 21051] (E.D. Pa. 1982); Generator Liability, 130 U. PA. L. REV. at 1239-41.

The second inquiry that must be addressed in order to determine whether CERCLA § 107 is retroactive as applied to the generator and transporter defendants in this case is whether the liability imposed upon the defendants for the past acts of waste generation and disposal is "new" liability or merely duplicative of law existing prior to the enactment of CERCLA § 107. The parties will necessarily have to address this issue if they refile summary judgment motion papers on the issue of CERCLA § 107's constitutionality as applied.

However, the Court notes that it is generally accepted that prior law did not impose liability for clean-up of hazardous waste sites on generator and transporter defendants who did not own or operate the disposal sites. See generally Note, Liability for Generators of Hazardous Waste: The Failure of Existing Enforcement Mechanisms, 69 GEO. L.J. 1047 (1981). See also Note, Strict Liability for Generators, Transporters, and Disposers of Hazardous Waste Disposal Sites: Coping With a Costly Past, 53 SO. CAL. L. REV. 1709 (1980). Reaching such generator and transporter defendants under the common law theories of trespass, negligence, nuisance, or strict liability proved to be extremely difficult. Id. In addition, liability for clean-up of hazardous waste sites was not generally imposed upon generator and transporter defendants under federal and state legislation existing prior to the enactment or CERCLA § 107. See id.

If the Court later determines that CERCLA § 107 imposes liability on these generator and transporter defendants that did not exist prior to the enactment of CERCLA § 107, then the Court will conclude that CERCLA § 107 is retroactive as applied to these defendants. In this instance, CERCLA § 107 would be retroactive because it imposes new liability on completed past transactions.

Whether the Contract Clause Applies to Federal Legislation

Plaintiffs argue that the defendants cannot challenge CERCLA § 107's constitutionality under the Contracts Clause, U.S. CONST. art. I, § 10, because the Contracts Clause applies only to state legislation, not federal legislation. The Ninth Circuit has held that "the Fifth Amendment's due process clause provides essentially the same restraint against federal impairment of the obligation of contracts" as the Contracts Clause. Northwestern National Life Insurance Co. v. Tahoe Regional Planning Agency, 632 F.2d 104, 106 (9th Cir. 1980). Therefore, in the Ninth Circuit, the dictates of Contracts Clause jurisprudence are applicable to federal legislation. See also Kennecott Corp. v. E.P.A., 684 F.2d 1007, 1016 [12 ELR 21037] (D.C. Cir. 1982). But see Peick v. Pension Benefit Guaranty Corp., 724 F.2d 1247, 1264-65 (7th Cir. 1983).

Conclusion

The Court will not address the issue of whether CERCLA § 107 is unconstitutional on its face. Instead, the defendants may refile their summary judgment motion on the constitutionality of CERCLA § 107 as applied within a reasonable time after discovery is completed. That motion, if filed, should address the issue of whether CERCLA § 107 imposes new liability upon these generator and transporter defendants. In addition, the Court holds that defendants may challenge this federal legislation under Contracts Clause jurisprudence.

Insofar as the standard of liability imposed upon these generator and transporter defendants by CERCLA § 107 may have a bearing on the constitutionality of CERCLA § 107 as applied, or may circumvent the constitutional question altogether, the parties should also address that issue in their summary judgment motion papers.

IT IS SO ORDERED.

IT IS FURTHER ORDERED that the Clerk shall serve, by United States mail, copies of this Order on counsel for the parties in this matter.

1. The transporter defendants' motion was captioned as a motion to dismiss. However, the Court will treat the transporter defendants' motion in the same procedural posture as the generator defendants' summary judgment motion because the issues raised are identical.

2. Defendants' constitutional challenge is made under the Contracts Clause, U.S. CONST., art I, § 10, and the Taking Clause, and the Due Process Clause, U.S. CONST., amend. V.