Wagner Seed Co. v. Daggert

No. 86-CV-97 (E.D.N.Y. January 27, 1986)

The court rules that the recipient of a Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) § 106 order is not entitled to preenforcement review of the validity of its alleged Act-of-God defense, but is entitled to review of two of its constitutional claims. A building in which plaintiff stored pesticides and fertilizer was destroyed by a fire, apparently caused by lightning. The water used to extinguish the blaze carried hazardous substances onto neighboring properties. After plaintiff took certain measures to contain and clean up the contamination, the Environmental Protection Agency (EPA) issued a CERCLA § 106 order demanding further action.

Ruling from the bench, the court holds that it lacks jurisdiction to hear plaintiff's claims that it has a valid Act-of-God defense under CERCLA § 107 and that the automatic penalties for non-compliance with the § 106 order effectively deprive plaintiff of the opportunity to assert the defense. As other courts have held, preenforcement review would interfere with the ability Congress intended § 106 to give EPA to act quickly to clean up hazardous substance releases. Plaintiff's rights are fully protected by review if and when EPA elects to enforce the order in court. The court next holds that plaintiff's claim that paragraph 31 of the order violates due process, because it makes EPA the final judge of the sufficiency of the work performed, is not ripe for review since the paragraph has no effect prior to enforcement. Finally, the court rules that it does have jurisdiction over plaintiff's claim that the daily penalties and treble damages under § 106 violate due process, but holds that plaintiff has failed to establish a likelihood of success on the merits.

Counsel for Plaintiff
Frank L. Amoroso
Rivkin, Radler, Dunne & Bayh
100 Garden City Plaza, Garden City NY 11530
(516) 746-7500

Counsel for Defendant
Janice Siegel, Ass't U.S. Attorney
225 Cadman Plaza East, Brooklyn NY 11201
(212) 330-7106

[16 ELR 20367]

Bramwell, J.:

Oral Opinion

THE COURT: I am going to put a statement on the record for the parties in connection with this matter.

Plaintiff Wagner Seed Co. (Wagner) commenced this action against the United States Environmental Protection Agency (EPA) and its Regional Administrator, Christopher Daggert, seeking declaratory and injunctive relief. Jurisdiction is predicated upon the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. § 9601 et seq. This afternoon plaintiff moves, by order to show cause and pursuant to Rule 65 of the Federal Rules of Civil Procedure for alternate preliminary injunctive relief. Defendantsoppose the motion.

The relevant facts are as follows: Wagner operated a warehouse in Farmingdale, New York for sale of various agricultural products including pesticides and fertilizers. On June 1, 1985, the warehouse, located at 81 Secatoque Avenue (The Secatoque site), was destroyed by a fire apparently caused by a bolt of lightning. As a result of firefighting efforts, a substantial amount of water ran off the property. Thus, fertilizers and pesticides which had been stored in the warehouse were dispersed with the run-off into neighboring parcels of land.

According to plaintiff, immediately after the fire, it expended substantial funds in pursuing testing and remediation programs to remove any soil contaminated by the run-off. Plaintiff claims that under the direction of the New York State Department of Environmental Conservation (DEC) it had nearly completed a costly excavation of the soil on the neighboring properties.

In November, 1985, however, the EPA took over as the lead agency in supervising the clean-up. According to defendant, tests of soil from areas which had received run-off showed the presence of substances which are hazardous within the meaning of CERCLA including lindine, endrin, aldrin and dieldrin. Also according to the EPA, soil and debris on the Secatoque site and adjoining properties threatens an aquifer which lies below the sites and ultimately drinking water. On December 31, 1985, defendant Daggert, issues an administrative order pursuant to § 106(a) of CERCLA ("the order") which requires the performance of certain tasks intended to accomplish the property and records violates the 4th Amendment prohibition against unreasonable searches and seizures.

The Court makes no ruling with respect to paragraphs 32, 39, and 40 of the order. Counsel for defendants has represented to the Court that the restriction on the designated coordinator objected to by plaintiff will be deleted from the order by amendment and that defendants will not attempt to gain access to plaintiff's property or records without judicial process. Thus, the Court will only address the following claims:

(1) that plaintiff has an Act of God defense to liability under CERCLA;

(2) that plaintiff had no opportunity to raise the defense prior to this issuance of the order;

(3) that paragraph 31 violates due process; and

(4) that the provision for imposition of daily fines and penalties violates due process.

With respect to these claims, the Court must make three determinations. First, it must determine whether subject matter jurisdiction exists. Assuming such jurisdiction, the Court must then decide whether the remaining claims are ripe for review. Finally, any claim which is both within the Court's jurisdiction and ripe for review must be measured against the standards for issuance of a preliminary clean-up and stabilization of the contaminated sites. The order also provides that non-compliance with its provisions may subject plaintiff to civil penalties of up to $5,000 per day and/or punitive treble damages.

By this motion, plaintiff seeks alternative preliminary relief. First, plaintiff asks that the Court stay enforcement of the order, or at least the fines and penalties provision thereof until the Court determines the merits of plaintiff's substantive defenses to its enforcement. As an absolute defense, plaintiff claims that it is excused from liability under CERCLA because the warehouse fire was caused by an Act of God. Plaintiff also claims that to the extent the order requires plaintiff to forego its defense to avoid being subjected to fines and penalties, it violates due process. Alternatively, plaintiff asks that three provisions of the order be enjoined. It claims that paragraph 31 of the order offends due process because it makes the EPA the final arbiter of the technical sufficiency of any work performed pursuant to the order. It also contends that paragraph 32 of the order which precludes counsel for plaintiff from being the on-site coordinator of the clean-up offends rights under the 5th and 6th Amendments. Finally, it argues that paragraphs 39 and 40 which allegedly give the EPA unimpeded access to Wagner's injunction in this Circuit.

First, the Court concludes that it has no jurisdiction to consider the first two claims listed above because they relate to the merits of this particular administrative order. Courts addressing the issue are virtually unanimous in holding that a federal court lacks subject matter jurisdiction to review the merits of a CERCLA order prior to enforcement of the order.

The legislative history of CERCLA reveals that Congress intended to empower the EPA to take prompt action to clean up hazardous waste sites without the delays associated with litigation. The review requested by plaintiff would hamstring the EPA and eviscerate the quick response authorized by the statute. The EPA's resources should not be focused on litigation while working on a response. If plaintiff does not comply with the order, the EPA may, pursuant to 42 U.S.C. § 9606(a), elect to respond to the problems at the site or to bring an action to enforce its order. Whichever choice is made, plaintiff will have an opportunity at that time to defend against liability under the Order or the Act. Thus, to the extent that pre-enforcement review of the merits of this particular order is sought, the Court lacks jurisdiction to hear arguments raised by plaintiff.

The third claim listed above is too ill-defined to determine whether it does or does not to the merits of this particular administrative order. Even if pre-enforcement review were available, however, this challenge to paragraph 31 of the order would not be ripe. No work has been done to date under the order, let alone work whose sufficiency is in dispute. Thus, there is no live controversy as to paragraph 31.

The Court now turns to plaintiff's final claim. Since the issues of the daily penalties and the treble damages raise a controversy involving the constitutionality of the statutory scheme, the Court has jurisdiction. Although the Court has some doubts about the ripeness of the treble damages, it will nonetheless address the claim. Thus, plaintiff's challenge will be considered under the standards for issuance of a preliminary injunction.

In this circuit, a preliminary injunction may issue if the moving party demonstrates, (1) irreparable harm, and (2) either a likelihood of success on the merits or serious questions going to the merits to create a fair ground for litigation and a balance of hardships tipping decidedly in the movant's favor. Plaintiff's due process challenge to the fines and penalties provisions of the statute focuses on Ex Parte Young which held that a statute denies due process if the penalties for disobeying it are so severe that they effectively intimidate a party into not seeking judicial review. For all the seasons set forth in Section II(a)(2) of defendant's memoranda, however,the Court finds that there is no due process violation here and rejects the reasoning of the principal case relied on by plaintiff, (Aminoil, Inc. v. U.S. EPA, 599 F. Supp. 69 [14 ELR 20801].) As a result, the Court concludes that plaintiff has not demonstrated either a likelihood of success on the merits or even serious questions going to the merits of the fourth claim.

For all these reasons, plaintiff's application for preliminary injunction is DENIED in all respects.