Amicus Curiae Brief — Atlantic Richfield Company, Petitioner v. Gregory A. Christian, et al.

No. 17-1498

In The

Supreme Court of the United States

____________________

ATLANTIC RICHFIELD COMPANY,

Petitioner,

v.

GREGORY A. CHRISTIAN, et al.,

____________________

Respondents.

On Writ of Certiorari

to the Supreme Court of Montana

____________________

BRIEF AMICUS CURIAE OF PACIFIC LEGAL

FOUNDATION AND PROPERTY AND

ENVIRONMENT RESEARCH CENTER

IN SUPPORT OF RESPONDENTS

____________________

JONATHAN WOOD

TIMOTHY SNOWBALL

Counsel of Record

Pacific Legal Foundation

Pacific Legal Foundation

930 G Street

3100 Clarendon Blvd.,

Sacramento, California 95814

Suite 610

Telephone: (916) 419-7111

Arlington, Virginia 22201

TSnowball@pacificlegal.org

Telephone: (202) 888-6881

JWood@pacificlegal.org

Counsel for Amici Curiae Pacific Legal Foundation

and Property and Environment Research Center

i

Question Presented

Whether the Comprehensive Environmental

Response, Compensation, and Liability Act, which

expressly preserves “obligations or liabilities of any

person under Federal or State law, including common

law,” nonetheless impliedly preempts state common

law property rights if they would require a polluter to

fund restoration work beyond that ordered by the

Environmental Protection Agency.

ii

Table of Contents

Question Presented ...................................................... i

Table of Authorities ................................................... iii

Interest of Amici Curiae ............................................. 1

Introduction and Summary of Argument .................. 2

Argument .................................................................... 4

I. CERCLA does not preempt innocent

landowners’ property rights ............................... 4

A. CERCLA supplements the common

law’s role of encouraging responsible

environmental behavior; it does

not supplant it................................................. 9

B. Interpreting CERCLA to preempt

property rights would raise significant

constitutional concerns under

the Takings Clause ....................................... 14

C. Preemption would needlessly interfere

with traditional state authority to

regulate land use and the environment ....... 17

Conclusion ................................................................. 20

iii

Table of Authorities

Cases

Atlantic Richfield Co. v. Mont. Second Judicial

District, 408 P.3d 515 (Mont. 2017) ............... 3-4, 7

Christian v. Atlantic Richfield,

358 P.3d 131 (Mont. 2015) .................................. 10

City of Monterey v. Del Monte Dunes at

Monterey, Ltd., 526 U.S. 687 (1999) ................... 11

Clark v. Martinez,

543 U.S. 371 (2005) ............................................. 16

Coniston Corp. v. Village of Hoffman Estates,

844 F.2d 461 (7th Cir. 1988) ............................... 12

Crowell v. Benson,

285 U.S. 22 (1932) ............................................... 16

Edward J. DeBartolo Corp. v. Fla. Gulf

Coast Bldg. and Const. Trades Council,

485 U.S. 568 (1988) ............................................. 16

Freeman v. Grain Processing Corp.,

848 N.W.2d 58 (Iowa 2014) ................................... 1

Gregory v. Ashcroft,

501 U.S. 452 (1991) ............................................. 18

Gunn v. Minton,

568 U.S. 251 (2013) ............................................ 5-6

Haw. Hous. Auth. v. Midkiff,

467 U.S. 229 (1984) ........................................ 14-15

iv

Hodel v. Virginia Surface Min. and Reclamation

Ass’n, Inc., 452 U.S. 264 (1981)........................... 17

Huron Portland Cement Co. v. City of Detroit,

362 U.S. 440 (1960) ............................................. 17

Int’l Paper Co. v. Ouellette,

479 U.S. 481 (1987) ........................................ 13-14

Int’l News Service v. Associated Press,

248 U.S. 215 (1918) ............................................. 10

Kelo v. City of New London,

545 U.S. 469 (2005) ....................................... 12, 15

Knick v. Township of Scott,

139 S. Ct. 2162 (2019) ..................................... 1, 16

Koontz v. St. Johns River Water Mgmt. Dist.,

570 U.S. 595 (2013) ............................................... 1

Lampi v. Speed,

261 P.3d 1000 (Mont. 2011) ................................ 11

Loretto v. Teleprompter Manhattan CATV Corp.,

458 U.S. 419 (1982) ............................................. 15

Medtronic, Inc. v. Lohr,

518 U.S. 470 (1996) ............................................. 17

Merrick v. Diageo Americas Supply, Inc.,

805 F.3d 685 (6th Cir. 2015) ............................... 14

Nat’l Fed. of Indep. Bus. v. Sebelius,

567 U.S. 519 (2012) ............................................. 18

v

New State Ice Co. v. Liebmann,

285 U.S. 262 (1932) ............................................. 19

Public Lands Access Ass’n v. Bd. of Cty.

Commissioners of Madison Cty.,

321 P.3d 38 (Mont. 2014) ................................... 1-2

Rapanos v. United States,

547 U.S. 715 (2006) ............................................. 17

Rice v. Santa Fe Elevator Corp.,

331 U.S. 218 (1947) ............................................. 17

Sackett v. EPA,

566 U.S. 120 (2012) ............................................... 1

Solid Waste Agency of N. Cook Cty. v.

U.S. Army Corps of Eng’rs,

531 U.S. 159 (2001) ........................................ 17-18

United States Army Corps of Eng’rs v.

Hawkes Co., Inc.,

136 S. Ct. 1807 (2016) ........................................... 1

United States v. 564.54 Acres of Land,

441 U.S. 506 (1979) ........................................ 12-13

Virginia Uranium, Inc. v. Warren,

139 S. Ct. 1894 (2019) ........................................ 4-5

Weyerhaeuser v. U.S. Fish and Wildlife Serv.,

139 S. Ct. 361 (2018) ............................................. 1

Whalen v. Union Bag & Paper Co.,

101 N.E. 805 (N.Y. 1913) ..................................... 11

vi

Constitutions

U.S. Const. amend. V ........................................... 14-15

Mont. Const. art. IX, § 1 ............................................. 5

Statutes

42 U.S.C. § 9607(a) ..................................................... 7

42 U.S.C. § 9607(q) ..................................................... 7

42 U.S.C. § 9613(b) ..................................................... 5

42 U.S.C. § 9613(f) ...................................................... 9

42 U.S.C. § 9613(h) ..................................................... 5

42 U.S.C. § 9614(a) ..................................................... 6

42 U.S.C. § 9622(e)(6) ........................................... 6, 17

42 U.S.C. § 9652 .......................................................... 2

42 U.S.C. § 9652(d) ...................................... 5-6, 14, 16

42 U.S.C. § 9659 .......................................................... 9

42 U.S.C. § 9659(h) ..................................................... 6

Rules

Sup. Ct. R. 37.3(a) ....................................................... 1

Sup. Ct. R. 37.6 ........................................................... 1

vii

Other Authorities

Adler, Jonathan H., Clean Politics, Dirty Profits,

in Political Environmentalism: Going

Behind the Green Curtain

(Terry L. Anderson ed., 2000) ............................. 20

Adler, Jonathan H., Conservative Principles

for Environmental Reform,

23 Duke Envtl. L. & Pol’y F. 253 (2013) ............. 10

Adler, Jonathan H., Free & Green: A New

Approach to Environmental Protection,

24 Harv. J.L. & Pub. Pol’y 653 (2001) .......... 11, 13

Adler, Jonathan H., Is the Common Law a

Free-Market Solution to Pollution?,

24 Critical Rev. 61 (2012) .................................... 13

Adler, Jonathan H., Jurisdictional Mismatch

in Environmental Federalism,

14 N.Y.U. Envtl. L.J. 130 (2005) ......................... 19

Adler, Jonathan H., Letting Fifty Flowers Bloom:

Using Federalism to Spur Innovation, in The

Jurisdynamics of Environmental Protection:

Change and the Pragmatic Voice in

Environmental Law (Jim Chen ed., 2004).... 18, 20

Adler, Jonathan, Is the Common Law the

Solution to Pollution?, PERC Reports

vol. 29 (2011), https://www.perc.org/

2011/06/09/is-the-common-law-thesolution-to-pollution/ ........................................... 12

viii

Anderson, Terry L. & Leal, Donald R.,

Free Market Environmentalism for

the Next Generation (2015) .................................. 12

Butler, Henry N., A Defense of Common

Law Environmentalism: The Discovery

of Better Environmental Policy,

58 Case W. Res. L. Rev. 705 (2008) .................... 19

Butler, Henry N. & Macey, Jonathan R.,

Using Federalism to Improve

Environmental Policy (1996) ............................... 19

Coase, Ronald, The Problem of Social Cost,

3 J.L. & Econ. 1 (1960) ........................................ 10

Epstein, Richard A., Takings: Private Property

and the Power of Eminent Domain (1985) .......... 10

Farber, Daniel A., Eco-pragmatism: Making

Sensible Environmental Decisions in an

Uncertain World (1999) ....................................... 19

McConnell, Michael W., Federalism: Evaluating

the Founders’ Design,

54 U. Chi. L. Rev. 1484 (1987) ............................ 18

Meiners, Roger & Yandle, Bruce, The Common

Law: How It Protects the Environment,

PERC Policy Series Issue No. PS-13 (1998),

https://www.perc.org/wp-content/uploads/

2018/02/PS13.pdf .............................................. 9-10

Sandefur, Timothy & Sandefur, Christina,

Cornerstone of Liberty: Property Rights in

21st-Century America (2d. ed. 2015) ................... 12

ix

Sandefur, Timothy, Mine and Thine Distinct:

What Kelo Says About Our Path,

10 Chap. L. Rev. 1 (2006) .................................... 12

1

Interest of Amici Curiae1

Founded in 1973, Pacific Legal Foundation (PLF)

is a nonprofit legal foundation that defends the

principles of liberty and limited government,

including the protection of private property rights. In

pursuing its mission, PLF and its attorneys have

frequently litigated environmental and propertyrights cases before this Court. See, e.g., Knick v.

Township of Scott, 139 S. Ct. 2162 (2019);

Weyerhaeuser v. U.S. Fish and Wildlife Serv., 139 S.

Ct. 361 (2018); United States Army Corps of Eng’rs v.

Hawkes Co., Inc., 136 S. Ct. 1807 (2016); Koontz v. St.

Johns River Water Mgmt. Dist., 570 U.S. 595 (2013);

Sackett v. EPA, 566 U.S. 120 (2012).

The Property and Environment Research Center

(PERC) is the nation’s oldest and largest institute

dedicated to improving environmental quality

through property rights and markets. It has produced

extensive scholarship on the environmental benefits

of clear and secure property rights. PERC has also

participated as amicus in cases that involve property

rights, individual liberty, and environmental

stewardship. See, e.g., Freeman v. Grain Processing

Corp., 848 N.W.2d 58 (Iowa 2014); Public Lands

1 Pursuant to this Court’s Rule 37.3(a), all parties have consented

to the filing of this brief. Pursuant to Rule 37.6, Amici Curiae

affirm that no counsel for any party authored this brief in whole

or in part, and no counsel or party made a monetary contribution

intended to fund the preparation or submission of this brief. No

person other than Amici Curiae, its members, or its counsel made

a monetary contribution to its preparation or submission.

2

Access Ass’n v. Bd. of Cty. Commissioners of Madison

Cty., 321 P.3d 38 (Mont. 2014).

This case is of significant interest to amici because

the preemption arguments raised would erode

constitutionally protected property rights while also

limiting the ability of states and private property

owners to secure a cleaner environment. Amici believe

their unique perspectives and experiences will aid this

Court in the consideration of the issues presented in

this case.

Introduction and Summary of Argument

In this case, innocent landowners seek to

vindicate their constitutionally protected property

rights by having a neighboring polluter restore their

properties to their pre-contamination condition.

Looking to avoid full financial responsibility for its

actions, that polluter2 asks this Court to hold that the

federal Comprehensive Environmental Response,

Compensation, and Liability Act (CERCLA) preempts

any state requirement that polluters pay for

remediation beyond CERCLA’s federal floor.

However, CERCLA does not compel this result.

Indeed, Congress directed that “nothing” in CERCLA

“shall affect or modify in any way the obligations or

liabilities of any person under other Federal or State

law, including common law[.]” 42 U.S.C. § 9652.

This savings clause respects the longstanding role

of property rights in protecting the environment, a

To be more precise, Atlantic Richfield purchased Anaconda

Copper Mining Company (the company responsible for most of

the pollution) decades ago, bringing it within a larger mining and

2

3

role that CERCLA supplements rather than

supplants. Secure property rights discourage

environmental damage by forcing would-be polluters

to internalize the harms imposed on neighboring

property owners. And where this incentive isn’t

heeded, property rights enable anyone whose property

is damaged by another to demand that property be

restored. Where property rights are insecure, these

incentives are weakened, leading to worse

environmental outcomes.

This Court should not upend this longstanding

regime without some clear indication Congress

intended that result. Atlantic Richfield and the

United States provide no such indicia. Indeed, they

principally rely on a policy argument unmoored from

the statute’s text: that polluters are more likely to

settle their CERCLA claims with EPA if doing so also

conclusively resolves in the polluters’ favor liability

owed to the state or neighboring property owners.

That may be logically sound, but it doesn’t follow that

Congress intended CERCLA to have this effect. As the

Supreme Court of Montana recognized, there is no

evidence that “Congress’s objective” in enacting

CERCLA “was to condemn, in perpetuity, the private

property of an individual property owner because that

oil conglomerate. ARCO Br. at 8. Atlantic Richfield continued

operating the smelter itself for three years after the sale, before

determining that falling copper prices and environmental

regulation made it no longer profitable. See id. Although it may

now regret its purchase, Atlantic Richfield does not deny that its

ownership of Anaconda makes it liable for Anaconda’s pollution.

Nor does this change in ownership play any role in Atlantic

Richfield’s preemption argument. Therefore, for clarity and

simplicity, this brief will refer to the two companies as a single

entity.

4

property happened to have been contaminated by a

third party.” Atlantic Richfield Co. v. Mont. Second

Judicial District, 408 P.3d 515, 521 (Mont. 2017).

Interpreting CERCLA to authorize EPA and

polluters to bargain away the private property rights

of

innocent

landowners

would

raise

core

constitutional concerns under the Takings Clause. If

the statute preempts these rights, it could trigger

immeasurable liability for the federal government to

pay just compensation for the property rights taken.

That these rights would be taken for the financial

benefit of a private entity compounds the problem

further, by offending the Takings Clause’s “public use”

requirement. This interpretation would also interfere

with state authority in an area traditionally occupied

by the state, without any clear statement that

Congress intended this effect.

Courts have long avoided interpretations of

statutes that would trigger such significant

constitutional concerns and should do so again here.

CERCLA’s savings clause should be taken at face

value and this Court should hold that CERCLA does

not affect Atlantic Richfield’s liability to neighboring

property owners under Montana common law,

including the duty to pay restoration damages.

Argument

I.

CERCLA does not preempt innocent

landowners’ property rights

“Invoking some brooding federal interest or

appealing to a judicial policy preference should never

be enough to win preemption of a state law;” instead,

5

a party seeking to displace state law must identify “‘a

constitutional text or a federal statute’ that does the

displacing[.]” Virginia Uranium, Inc. v. Warren, 139

S. Ct. 1894, 1901 (2019). Rather than supporting

preemption, CERCLA’s text expressly preserves the

common-law property rights invoked by the plaintiffs.

42 U.S.C. § 9652(d) (“Nothing in this chapter shall

affect or modify in any way the obligations or

liabilities of any person under other Federal or State

law, including common law, with respect to releases of

hazardous substances or other pollutants or

contaminants.”).3

Atlantic Richfield and amicus United States

search in vain for some statutory text in which to moor

their theory that CERCLA preempts the property

rights at issue here. First, they argue that CERCLA

Section 113 deprives Montana courts of jurisdiction to

hear this case. See ARCO Br. at 25-32. That section

grants federal district courts exclusive jurisdiction

“over all controversies arising under” CERCLA, then

excludes from this grant certain CERCLA claims,

including “challenges to removal or remedial action”

supervised by EPA. 42 U.S.C. § 9613(b), (h). These

common law claims do not arise under CERCLA,

therefore Section 113 has no effect on this case. See

Gunn v. Minton, 568 U.S. 251, 257 (2013) (a claim

3 The United States notes that the landowners’ complaint cites

the Montana Constitution’s healthy environment clause, Mont.

Const. art. IX, § 1, rather than relying solely on the common law

of trespass and nuisance. US Br. at 29-30 n.4. But its argument

assigns no significance to this fact. Therefore, this brief will

proceed by characterizing the landowners’ claims generally as

common law property rights claims.

6

“arises under” federal law if “federal law creates the

cause of action asserted”).

In arguing otherwise, Atlantic Richfield and the

United States invert the statutory text, reading

Section 113(h) as a free-floating provision that broadly

preempts any claims that could be characterized

vaguely as a “challenge” to an EPA-supervised

cleanup rather than a qualification of Section 113(b)’s

grant of federal jurisdiction over claims arising under

CERCLA. See ARCO Br. at 21-22 (arguing Section

113(h)’s reference to “challenges” requires Section

113(b) to be interpreted broadly to reach anything

that could be characterized as a challenge). Their

reading is not only contrary to the text, which does not

address any claims that do not arise under CERCLA,

but also cannot be squared with CERCLA’s broad

savings clauses. See, e.g., 42 U.S.C. §§ 9614(a),

9652(d), 9659(h). This Court should reject this

invitation to interpret Section 113(h) to nullify

Congress’ decision to preserve the claims pressed

here.

Next, Atlantic Richfield and the United States

argue that Section 122(e)(6) preempts the claims. 42

U.S.C. § 9622(e)(6). That provision bars potentially

responsible parties from undertaking remedial action

without EPA approval during the pendency of an

EPA-supervised cleanup. See id. Despite asserting

this provision preempts these claims, both Atlantic

Richfield and the United States appear to concede

that the landowners are not responsible for the

contamination and, since the statute of limitations

has long run, face no potential liability. See ARCO Br.

7

at 22-24; US Br. at 15; Atlantic Richfield, 408 P.3d at

522-23.

Even

assuming

that

landowners

could

nevertheless be potentially responsible parties, the

sole basis for that assertion is that they own

contaminated property. See 42 U.S.C. § 9607(a)

(identifying four categories of covered persons).

Although the statute allows ownership of

contaminated property as a means to determine a

potentially responsible party, Congress has

recognized that the broadest interpretation of this

provision would result in extreme unfairness to

innocent property owners whose land has been

contaminated by someone else. CERCLA, therefore,

carves out several cases where property owners

cannot be potentially responsible parties. This

includes innocent property owners whose land was

contaminated by a neighbors’ pollution, whom

CERCLA provides “shall not be considered to be”

potentially responsible parties if they take reasonable

steps to ensure they do not make the contamination

worse. See 42 U.S.C. § 9607(q). Atlantic Richfield and

the United States offer no reason why the landowners

do not enjoy the protection of this provision.

Even if the innocent landowners were potentially

responsible parties, Section 122(e)(6) would merely

require them to wait until the EPA-supervised

cleanup is complete before taking any further action;

it would not preempt their claims. See Atlantic

Richfield, 408 P.3d at 522-23. Due to the substantial

risk that a cleanup could exhaust the responsible

party’s resources, this provision gives EPA’s

supervised cleanup priority by requiring it to be

8

funded and completed before anything else. But that

prioritization does not imply that all subordinated

claims are void. Section 122(e)(6) does not subject the

private property of innocent landowners to permanent

federal control.4

Aside from these weak statutory hooks, Atlantic

Richfield offers a policy argument. It observes that

CERCLA encourages polluters to undertake cleanups

by using the threat of even greater liability to spur

polluters to settle with EPA. See ARCO Br. at 50.

Incentives to settle are stronger, it continues, if

CERCLA settlements also resolved any other

remediation liability to the state or neighboring

property owners. See id.

It may be that giving polluters additional benefits

from settlement would increase their incentives to

settle. Likewise, people would be more likely to

promptly pay their speeding tickets if doing so voided

all liability for past car accidents. But it doesn’t follow

that a court should create such incentive from whole

cloth, even if public policy generally encourages

tickets to be promptly paid.

CERCLA encourages settlement between EPA

and polluters, to be sure. It does so by giving settling

parties certainty regarding their liability under

Atlantic Richfield’s and the United States’ contrary

interpretation of Section 122(e)(6) would lead to absurd results,

including that an innocent owner of land designated by EPA as

within the boundaries of a CERCLA site would be forever

prohibited from improving her own property—perhaps even

moving a few shovelfuls of dirt—without EPA’s permission. A

more significant and unwarranted intrusion on private property

rights would be difficult to imagine.

4

9

CERCLA. See 42 U.S.C. § 9613(f) (providing for

settlements that cap a settling parties’ liability and

authorize contribution claims against non-settling

parties). CERCLA does not, however, authorize EPA

and polluters to bargain away the property rights of

innocent landowners not party to the negotiations.5

And this Court should not read such an effect into

CERCLA, as doing so would undermine the common

law’s role in promoting responsible environmental

decisions, would raise significant constitutional

questions under the Takings Clause, and would

frustrate state efforts to find innovative ways to

promote better environmental outcomes.

A.

CERCLA supplements the common

law’s role of encouraging responsible

environmental behavior; it does not

supplant it

Historically, protection against harmful pollution

“came primarily through” the common law, especially

“legal actions for trespass and nuisance.” Roger

Meiners & Bruce Yandle, The Common Law: How It

Protects the Environment, PERC Policy Series Issue

No. PS-13 at 3 (1998).6 The right to be left alone and

to enjoy your property in peace are essential property

5 CERCLA gives affected landowners, like every other member of

the public, a limited right to comment on EPA’s proposed plan.

See US Br. at 32. This is no substitute for the common law’s

protection of property rights. Indeed, CERCLA does not permit

affected landowners to challenge a cleanup plan as inadequate to

protect their rights. They (again, like the public generally) may

only challenge it on the grounds that it violates CERCLA’s public

health standards. 42 U.S.C. § 9659.

6

https://www.perc.org/wp-content/uploads/2018/02/PS13.pdf.

10

rights. See Int’l News Service v. Associated Press, 248

U.S. 215, 250 (1918) (Brandeis, J., dissenting) (“An

essential element of individual property is the legal

right to exclude others from enjoying it.”); see also

Richard A. Epstein, Takings: Private Property and the

Power of Eminent Domain 63 (1985). The common law

protects these rights by forbidding anyone from

entering the land of another without permission

(trespass) or substantially and unreasonably

interfering with her enjoyment of it (nuisance). See,

e.g., Christian v. Atlantic Richfield, 358 P.3d 131, 140

(Mont. 2015).

Secure property rights discourage pollution by

forcing would-be polluters to account for the harms

imposed on others. See Jonathan H. Adler,

Conservative Principles for Environmental Reform, 23

Duke Envtl. L. & Pol’y F. 253, 276-77 (2013)

(describing the “polluter pays” principle underlying

the common law). Often, pollution results when

environmental harms are borne by someone other

than the polluter, such as when a factory’s emissions

affect its neighbors’ air or water quality but do not

interfere with the factory’s operations. See generally

Ronald Coase, The Problem of Social Cost, 3 J.L. &

Econ. 1 (1960). If the neighbors have no mechanism to

stop the factory or force it to pay for the damage, the

factory will have little incentive to avoid or reduce

these harms.

Secure property rights correct these incentives, by

forbidding the polluter from imposing these harms or

requiring it to compensate the neighbors for them. See

Meiners & Yandle, supra. Property rights are not

secure, however, unless property owners have

11

adequate means to protect them. To ensure adequate

protection, judicial remedies for trespass and

nuisance are not limited to compensation for lost

property value. Instead, violators’ actions may be

enjoined or they may be required to restore the

property to its prior condition, even if the cost of these

remedies exceeds the value of the property. See Lampi

v. Speed, 261 P.3d 1000, 1004-05 (Mont. 2011).

Although these remedies may seem unreasonable

from the perspective of the polluter, they play an

essential role by disincentivizing the violation of

property rights and encouraging the resolution of

competing demands to land and other resources

through voluntary exchange. Jonathan H. Adler, Free

& Green: A New Approach to Environmental

Protection, 24 Harv. J.L. & Pub. Pol’y 653, 667-68

(2001).

To allow anyone to violate their neighbors’ rights

so long as they were willing to pay what a court later

deems fair market value would “deprive the poor

litigant of his little property by giving it to those

already rich.” Whalen v. Union Bag & Paper Co., 101

N.E. 805, 806 (N.Y. 1913). In effect, it would give those

with the means to exercise it a private equivalent to

the government’s eminent-domain power. See City of

Monterey v. Del Monte Dunes at Monterey, Ltd., 526

U.S. 687, 710-11 (1999) (discussing the differences

between the Takings Clause’s just compensation

requirement and traditional equitable relief for

private property rights violations).

Remedies like restoration damages better reflect

the richness of property. Property is not merely an

economic asset but essential to individual liberty and

12

dignity. See Timothy Sandefur & Christina Sandefur,

Cornerstone of Liberty: Property Rights in 21stCentury America (2d. ed. 2015). As a result, remedies

that only address economic effects would

systematically fall short. They would fail to account

for the sentimental value property may hold due to

memories formed there. Coniston Corp. v. Village of

Hoffman Estates, 844 F.2d 461, 464 (7th Cir. 1988).

They would ignore the role property plays in the

formation of community. See Timothy Sandefur, Mine

and Thine Distinct: What Kelo Says About Our Path,

10 Chap. L. Rev. 1, 40-42 (2006) (describing the

impact of this Court’s decision in Kelo v. City of New

London, 545 U.S. 469 (2005), on the Fort Trumbell

community). And they would fail to account for

property’s role in empowering individuals to express

and act on their idiosyncratic values, such as when

conservationists purchase land to protect or improve

its environmental assets. See Terry L. Anderson &

Donald R. Leal, Free Market Environmentalism for the

Next Generation (2015) (describing cases where

property rights have enabled individuals and

conservation groups to protect valued environmental

assets, like rare ecosystems, vistas, or streams).

Restoration damages protect property in its fuller

sense by encouraging negotiation over expropriation,

which allows the property owner to demand a price

that reflects this broader range of values. See

Jonathan Adler, Is the Common Law the Solution to

Pollution?, PERC Reports vol. 29 (2011);7 see also

United States v. 564.54 Acres of Land, 441 U.S. 506,

514 (1979) (acknowledging that the use of “fair market

https://www.perc.org/2011/06/09/is-the-common-law-the-solu

tion-to-pollution/.

7

13

value” to determine just compensation under the

Takings Clause systematically undercompensates

property owners by ignoring the subjective or

idiosyncratic value they have in their property).

Common-law property rights have been

supplemented by environmental regulation intended

to address the common law’s perceived shortcomings,

such as concerns for people who lack the resources to

enforce their own rights or complex environmental

problems that may require scientific or technical

expertise unavailable to the average property owner.

See Jonathan H. Adler, Is the Common Law a FreeMarket Solution to Pollution?, 24 Critical Rev. 61, 63

(2012). CERCLA is an example of this. It authorizes

EPA to address significant and immediate public

health concerns where the common law moves slowly,

pollution problems are overly complex, or the

distribution of harms makes it difficult for individual

property owners to enforce their rights. But this

supplementation does not supplant the key role

property rights play. Indeed, environmental

regulation is most effective when it respects and

supports common law property rights, rather than

discarding them. See Adler, Free & Green, supra at

688-89.

Polluters have long asserted that federal

environmental regulation preempts this common law

regime. Thus, courts have confronted, under several

federal environmental statutes, arguments that

federal permits create a right to pollute that

supersedes others’ property rights. This Court

rejected that argument under the Clean Water Act.

See Int’l Paper Co. v. Ouellette, 479 U.S. 481, 497-500

14

(1987) (federal permitees are subject to the common

law of the state where the discharge occurs). Several

circuits have rejected the argument under the Clean

Air Act, including rejecting the argument that

common law should be preempted “simply because it

is the product of a less sophisticated or expert-driven

process than that” administered by a federal agency.

see, e.g., Merrick v. Diageo Americas Supply, Inc., 805

F.3d 685, 695 (6th Cir. 2015).

Congress has rarely found it necessary or

advantageous to preempt state common law to protect

the environment, preferring to set a federal floor

above which states are free to regulate but not a

federal ceiling beyond which states cannot go. That is

precisely what Congress has done in enacting

CERCLA. See, e.g., 42 U.S.C. § 9652(d) (preserving

states regulation, including common law).

B.

Interpreting CERCLA to preempt

property rights would raise

significant constitutional concerns

under the Takings Clause

Preemption should also be disfavored because it

would raise significant constitutional concerns under

the Takings Clause. This Court’s cases counsel the

avoidance of statutory interpretations that raise such

concerns. The Court should follow that precedent

here.

The Takings Clause protects individual property

rights by forbidding the taking of property except for

a legitimate public use. See U.S. Const. amend. V.

Thus, property cannot be taken for purely private

benefit. Haw. Hous. Auth. v. Midkiff, 467 U.S. 229,

15

245 (1984); see Kelo, 545 U.S. at 477 (“[I]t has long

been accepted that the sovereign may not take the

property of A for the sole purpose of transferring it to

another private party B, even though A is paid just

compensation.”). Atlantic Richfield’s interpretation of

CERCLA as preempting property rights would raise

serious concerns that Congress has taken these rights

for private benefit, i.e. to protect polluters from full

financial responsibility for their actions.8

The taken property is not used in any sense by the

public. That leaves only the possibility that the taking

of property from one private party and giving it to

another private party can be justified by some public

benefit, which is itself a dubious interpretation of the

public use requirement. See Kelo, 545 U.S. at 505-23

(Thomas, J., dissenting). This question is distinct from

whether CERCLA generally has a legitimate public

purpose. Cleaning up contaminated properties that

pose public health risks is a legitimate public purpose.

But the question in this case would be whether, after

EPA’s cleanup efforts are done, taking property to

protect the polluter from having to fund any further

cleanup confers a public benefit. It is dubious that the

public benefits from less environmental remediation.

The Takings Clause also requires the government

to pay just compensation when property is taken. See

U.S. Const. amend. V. If the property rights invoked

8 Atlantic Richfield’s preemption theory would have the effect of

authorizing the continued physical occupation of property by

contamination put there by a neighboring polluter, by taking

property owners’ rights to protect themselves from this invasion

under common law. This would be a per se taking. See Loretto v.

Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982).

16

in this case are preempted, as Atlantic Richfield

argues, this obligation would be triggered. CERCLA

provides no mechanism to compensate property

owners for this taking. Thus, preemption of these

claims could trigger significant, unanticipated federal

liability under the just compensation clause, as any

property owner similarly deprived of her rights would

have a claim under the Fifth Amendment and the

Tucker Act. See Knick v. Township of Scott, 139 S. Ct.

2162, 2170 (2019).

This Court should demand a clear statement from

Congress before triggering such liability. See Clark v.

Martinez, 543 U.S. 371, 381-82 (2005). Atlantic

Richfield and the United States have identified no

such clear statement. Instead, as has been noted

several times in this brief, CERCLA’s text says the

opposite, as it expressly preserves common law claims

like these. See, e.g., 42 U.S.C. § 9652(d)

When

serious

doubt

of

a

statute’s

constitutionality is raised, “it is a cardinal principle

that this Court will first ascertain whether a

construction of the statute is fairly possible by which

the question may be avoided.” Crowell v. Benson, 285

U.S. 22, 62 (1932). Here, the question can be avoided

by interpreting CERCLA to preserve the

constitutionally protected property rights invoked

here, as CERCLA’s text provides. See 42 U.S.C.

§ 9652(d); see also Edward J. DeBartolo Corp. v. Fla.

Gulf Coast Bldg. and Const. Trades Council, 485 U.S.

568, 575 (1988) (Courts should not “lightly assume

that Congress intended to infringe constitutionally

protected liberties . . . .”).

17

C.

Preemption would needlessly

interfere with traditional state

authority to regulate land use

and the environment

Preemption is especially disfavored where

“Congress has ‘legislated . . . in a field which the

States have traditionally occupied.’” Medtronic, Inc. v.

Lohr, 518 U.S. 470, 485 (1996) (quoting Rice v. Santa

Fe Elevator Corp., 331 U.S. 218, 230 (1947)). For

preemption to apply in these areas, this Court has

demanded a clear statement from Congress. See Solid

Waste Agency of N. Cook Cty. v. U.S. Army Corps of

Eng’rs, 531 U.S. 159, 174 (2001) (SWANCC); see also

Rapanos v. United States, 547 U.S. 715, 776 (2006)

(Kennedy, J., concurring). This case concerns areas of

traditional state authority and the requisite clear

statement has not been identified.

Land use and environmental regulation are both

fields that states have traditionally occupied. See

Huron Portland Cement Co. v. City of Detroit, 362 U.S.

440, 442 (1960). The federal government, in contrast,

enjoys no general authority to regulate property or the

environment. It may do so only to the extent

authorized by the Commerce Clause or other

enumerated power. See, e.g., Hodel v. Virginia Surface

Min. and Reclamation Ass’n, Inc., 452 U.S. 264 (1981)

(the Commerce Clause authorizes Congress to

regulate the environmental impacts of economic

activity).9

Atlantic Richfield and the United States’ exceedingly broad

interpretation of 42 U.S.C. § 9622(e)(6) would raise another

significant constitutional concern. It purports to exert federal

9

18

The presumption against preemption in an area

of traditional state authority shows due regard for the

many benefits of federalism. Federalism provides

decentralized government “sensitive to the diverse

needs of a heterogenous society; it increases

opportunity for citizen involvement in democratic

processes; it allows for more innovation and

experimentation in government; and it makes

government more responsive by putting the States in

competition for a mobile citizenry.” Gregory v.

Ashcroft, 501 U.S. 452, 458 (1991); see Michael W.

McConnell, Federalism: Evaluating the Founders’

Design, 54 U. Chi. L. Rev. 1484, 1491-1511 (1987).

Preserving the common law’s role respects the

diversity of states and localities. Federalism allows

the tailoring of environmental regulation to the

specific needs of a community, while also benefitting

from access to local knowledge. See Jonathan H.

Adler, Letting Fifty Flowers Bloom: Using Federalism

to Spur Innovation, in The Jurisdynamics of

Environmental Protection: Change and the Pragmatic

Voice in Environmental Law 263 (Jim Chen ed., 2004).

control over any innocent landowner’s use of her private property

if it is within the boundaries set by EPA for a CERCLA site. See

US Br. at 32-35. This capacious assertion of authority gives no

regard to whether the property is used for economic activities

regulated under the Commerce Clause nor, for that matter, any

consideration relevant to any other enumerated power. Instead,

it asserts control over property as such, which this Court has

previously suggested the Constitution does not authorize. See

SWANCC, 531 U.S. at 173-74; cf. Nat’l Fed. of Indep. Bus. v.

Sebelius, 567 U.S. 519, 554-55 (2012) (expanding the Commerce

Clause beyond the regulation of economic activity that

substantially effects interstate commerce could fundamentally

change the relation between the citizen and the federal

government).

19

One-size-fits-all federal policies, by contrast, are less

likely to account for this variation. See Daniel A.

Farber,

Eco-pragmatism:

Making

Sensible

Environmental Decisions in an Uncertain World 181

(1999). Consequently, federalism allows communities

to decide for themselves how to weigh economic costs

versus environmental benefits. See Henry N. Butler &

Jonathan R. Macey, Using Federalism to Improve

Environmental Policy 27 (1996). It rejects the hubris

that only a bureaucrat in Washington, D.C., is

qualified to make these value judgments.10

Environmental federalism also spurs innovation.

See Henry N. Butler, A Defense of Common Law

Environmentalism:

The

Discovery

of

Better

Environmental Policy, 58 Case W. Res. L. Rev. 705

(2008). By setting different standards or requiring

different cleanup techniques, states can serve as

laboratories of experiment “without risk to the rest of

the country.” New State Ice Co. v. Liebmann, 285 U.S.

262, 311 (1932); see Jonathan H. Adler, Jurisdictional

Mismatch in Environmental Federalism, 14 N.Y.U.

Envtl. L.J. 130, 137 (2005). The benefits of this

Atlantic Richfield’s and the United States’ positions, by

contrast, place tremendous faith in the federal administrative

state, repeatedly dismissing the competency of a jury composed

of members of the community affected by pollution to reasonably

strike the balance between environmental harms and cleanup

costs differently than distant federal bureaucrats. See ARCO Br.

at 7, 25, 44, 49; US Br. at 15, 29, 32. They ignore that juries

resolve such questions, even under their theory, for sites that

haven’t been designated for federal action under CERCLA. If

Congress agreed with Atlantic Richfield and the United States

that EPA officials alone were qualified to weigh these competing

concerns, it would have preempted all state common law claims

in favor of exclusive EPA authority to manage all pollution and

its abatement. But it didn’t.

10

20

experimentation and the information it reveals are

not limited to the laboratory state. Instead, all states

and the federal government benefit from seeing the

results of these experiments.

Finally, federalism promotes accountability by

having decision-making power as close to the people

as possible. If state regulation, including common law,

falls short, it is more realistic that affected citizens

can seek redress through the local political process

than they could if the fault was due to a misjudgment

of a distant (and democratically unaccountable)

agency. See Adler, Letting Fifty Flowers Bloom, supra

at 268. Absent clear and effective lines of

accountability, environmental regulation can easily go

off course. An agency may be “captured” by special

interests or otherwise influenced by rent-seeking

behavior. Jonathan H. Adler, Clean Politics, Dirty

Profits, in Political Environmentalism: Going Behind

the Green Curtain 4 (Terry L. Anderson ed., 2000).

Preserving the common law’s role in regulating

pollution mitigates these risks.

Conclusion

Preemption here would interfere with the

common law’s longstanding role in mitigating

pollution. It would raise significant constitutional

concerns under the Takings Clause, by taking private

property rights for the benefit of private interests and

triggering incalculable liability for federal taxpayers.

And it would interfere with state authority in a field

traditionally occupied by the states, undermining the

benefits of environmental federalism. Nothing in

CERCLA compels this result. Instead, the law’s text

preserves the common law claims raised here.

21

This Court should hold that the property-rights

claims asserted in this case are not preempted and

affirm the decision of the Montana Supreme Court.

DATED: October, 2019.

Respectfully submitted,

JONATHAN WOOD

Counsel of Record

Pacific Legal Foundation

3100 Clarendon Blvd.,

Suite 610

Arlington, Virginia 22201

Telephone: (202) 888-6881

JWood@pacificlegal.org

TIMOTHY SNOWBALL

Pacific Legal Foundation

930 G Street

Sacramento, California 95814

Telephone: (916) 419-7111

TSnowball@pacificlegal.org

Counsel for Amici Curiae Pacific Legal Foundation

and Property and Environment Research Center