Petition for Writ of Certiorari — Scott v. City of Hammond

84 wl > 1 a 7's US.

* i JUL 5 1984

ALEXANDER L. STEVAS,

CLERK

IN THE

Supreme Court of the United States

OCTOBER TERM 1984

WILLIAM J. SCOTT, on his own behalf and on behalf

of all persons similarly situated,

Petitioner,

VS.

CITY OF HAMMOND, INDIANA; UNITED STATES

ENVIRONMENTAL PROTECTION AGENCY; DOUGLAS

M. COSTLE, Administrator of the United States Environmen-

tal Protection Agency; and the HAMMOND-MUNSTER SAN-

ITARY DISTRICT,

Respondents.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

, JOSEPH V. KARAGANIS*

A. BRUCE WHITE

KATHLEEN M. DONAHUE

KARAGANIS, GAIL & WHITE LTD.

150 North Wacker Drive

Suite 2500

Chicago, Illinois 60606

(312) 782-1905

Attorneys for Petitioner

* Counsel of Record

Pandick Midwest Inc., Chicago © 454-7600

i

QUESTIONS PRESENTED

1. Where, as here, subject matter jurisdiction is based on

diversity of citizenship and the claim for relief is grounded in

state law, does the Court of Appeals have the authority under

the Tenth Amendment, the Rules of Decision Act, 28 U.S.C.

Section 1654, and the decision of this Court in Erie v. Tompkins

to fashion a federal common law choice of law rule to replace

the choice of law of the forum state?

2. Where, as here, subject matter jurisdiction is based on

diversity of citizenship and the claim for relief is based on state

law, did the Court of Appeals err in holding that venue would

lie only in the district where the defendant resides, in con-

travention of the venue statute governing diversity cases which

allows venue to exist in the district where the plaintiff resides?

3. Is the state law tort claim preserved by the 1972 Federal

Water Pollution Control Act Amendments, which the Court of

Appeals held was available to plaintiff under Indiana law, a

claim grounded in state law or federal law?

4. If the state tort law claim preserved by the 1972 Federal

Water Pollution Control Act Amendments is grounded in

federal law, does a federal district court then have federal

question jurisdiction over the claim under 28 U.S.C. Section

1331? |

5. If the state tort law claim preserved by the 1972 Federal

Water Pollution Control Act Amendments is predicated on

federal law, does a federal court in applying this “federal”

claim have the authority to ignore or disregard either the choice

of law or substantive law of the forum state in shaping a

“uniform” “federal” common law of liability and relief predi-

cated on federal law?

‘3

6. Is a holding that the state law claim preserved by the

1972 Federal Water Pollution Control Act Amendments is

grounded in federal law really a holding that a federal common

law of tort liability exists—a decision prohibited by this Court's

decision in Milwaukee II?

7. If the federal court must apply the law of the State of

Indiana, should the Court of Appeals have remanded to the

district court to apply the choice of law rules of the State of

Indiana to determine whether the complaint stated a claim

upon which relief could be granted?

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TABLE OF CONTENTS

THE TENTH AMENDMENT AND ERIE V.

TOMPKINS PROHIBIT THE FASHIONING

OF FEDERAL COMMON LAW CHOICE OF

LAW IN A DIVERSITY ACTION BASED ON

TTT tiie niatcislsctahnmndisitensahaabhiniesnaseenneminninsonene

A. The Historical Framework Governing

Determination of Tort Liability When the

Tortious Conduct Occurs in One State and

the Injury Occurs in Another State..................

B. The Intent of Congress to Preserve State

C. The Tenth Amendment Mandate of Frie......

THE COURT OF APPEALS DECISION

RAISES CONSTITUTIONAL ANOMALIES

WHICH IF ALLOWED TO STAND WILL

VIOLATE ERIE, THE EXPRESS INTENT OF

CONGRESS TO PRESERVE STATE LAW,

AND THIS COURT’S HOLDING IN MIL-

i dedi bhdtenbiienabinicbiisneinssisanisinnsanaanerinacnees

A. The Conflict Between the Court of Appeals’

Milwaukee I Analysis and Congressional In-

tent to Preserve State Law ...........cc.cccccsscsseeess

B. The Conflict Between the Court of Appeals’

Analysis and Milwaukee I] ............cccccccccseeeeess

12

13

16

18

20

20

iv

C. Adoption of a Federal Interstitial Common

Law of Tort Law Selectively Incorporating

State Tort Law Principles Will Apply With

Equal Force to Similar Statutory Schemes.....

Ill. RECONCILING MILWAUKEE I, MIL-

WAUKEE II, THE CLEAN WATER ACT,

PAGE

25

Vv

TABLE OF AUTHORITIES

Cases

Boatland, Inc. v. Brunswick Corp., 558 F.2d 818

Be Rg Eee ee ee een ee

Bolling v. Sharpe, 347 U.S. 497 (1954) ......ccceeeeee

Butner v. United States, 440 U.S. 48 (1979) ...........

Cameron v. Vandegriff, 53 Ark. 381, 13 S.W. 1092

Calder v. Jones,

TTI cinncesceiadiinsnepaiteenibahannnpicheininatasnipelnbinianameinilinadake

City of Milwaukee v. Illinois (“Milwaukee II”),

GOR SE, See NOD cidenrecneenitininisiomaninntiinn

Day & Zimmermann, Inc. v. Challoner, 423 U.S. 3

OPCS B ciiccertiieicitaiclaicenineiincbenmaniniemientaaiinatiiohin

Del Costello v. IBT, —. U.S. ——., 103 S.Ct.

BE 4 Te iced cintancntinsincditnaninniggicntieminatie

Erie v. Tompkins, 304 U.S. 64 (1938) .......ccccseeeeeee

Illinois v. City of Milwaukee (“‘Milwaukee I’), 406

8 Eg. | Fea eec re Naren

International Union, U.A.A. & A.I.W. v. Hoosier

Cardinal Corporation, 383 U.S. 696 ( 1966) ........

Klaxon v. Stentor Electric Mfg. Co., 313 U.S. 487

IPE Dchelecshaniasesiesseniisntadianstitsiitayis eaaniiciesenaitiniiiliaaiiishien

Krauss v. Manhattan Life Insurance Company of

New York, 643 F.2d 98 (2d Cir. 1981)...

Lettieri v. Equitable Life Assur. Soc. of the United

States, 627 F.2d 930 (9th Cir. 1980) .......... ee

Liew v. Official Receiver and Liquidator (Hong

Kong), 685 F.2d 1192 (9th Cir. 1982)...

Maroon v. State Department of Mental Health, 411

N.E.2d 404 (Ind. App. 1980) ..........cceeeeeeeseeeeees

PAGE

19

21

27

14

ll

passim

9

22, 23

passim

passim

22, 23

9, 10, 19

19

19

19

10, 14, 15,

27

Melville vy. American Home Assur. Co., 584 F.2d

Re Ce Sk ED cecitemnnctosaernasinochamentiidsiiaiietiinin

Metropolitan Sanitary District v. United States

Steel Corp., 30 Ill. App. 3d 360, 332 N.E.2d 426

(lst Dist. 1975), leave to appeal den., 60 Ti. 2d

597, cert. denied, 424 U.S. 976 (1976) .........cce

Middlesex County Sewerage Authority v. National

Sea Clammers, Association, 453 U.S. 1 (1981)...

Nevada v. Hall, 440 U.S. 410, rehearing den., 441

ae DEE CECE D cttvntinnnentiiiiiebaiamuiiiinians

People ex rel. Scott v. United States Steel Corp., 40

Ill. App. 3d 607, 352 N.E.2d 225 (Ist Dist.

Rodrigue v. Aetna Casualty and Surety Company,

SOO Was SOS CORO D cxrsinnwntsicticnemntinaniinnivhiiinsliend

Ruckman v. Green, 16 N.Y.S.C. Rep. (9 Hun) 225

( BFE pcan nenennitengnsvecinssneunsininiienenininsinitnninmintadainnivesisiannaas

Scott v. City of Hammond, 519 F.Supp. 292 (N.D.

Ss CUES D ninncssanntvciiniininisaiiaahnei a ediieibnintnae

Simpson v. State, 92 Ga. 41, 17 S.E. 984 (Ga.

Silkwood v. Kerr-McGee Corp., —_— U.S. —_,

Fa eS Cee iiidadinnstinintainenbinaniniphnanabensiit

Thayer v. Brooks, 17 Ohio 489, 49 Am. Dec. 474

SS TSA Meany See Renee

United States v. Kimbell Foods, Inc., 440 U.S. 715

I Nr aL mere ee TOD erie Ee

Washington v. General Motors Corporation, 406

ees. Gabe CCU VdE Dieses. crasnineianbimnnaniniede

PAGE

19

22, 23

Vii

PAGE

Constitutional Provisions

Re ££ & F980) | ll

os RG 8 A YR eee 21

8 Poe 21

a eh CNN encictseesnetestnnsintrnsnntaicnnecinnmnnnennnnpnnienaiia passim

U.S. Const. amend. XIV, sec. 1, cl. 1 ..................00. 21

Statutes

Water Pollution Control Act Amendments of 1956,

Pe MEI TDD cccctcnentnisnsectesecnnnnstneteenenses 17

Federal Water Pollution Control Act, as amended,

So Wttien CUI BA 8 C8 BOD cecrenseceersrrennens 13, 16, 20,

22

Section 303(d), 33 U.S.C. Section 1313(d)..... 7

Section 510, 33 U.S.C. Section 1370................. 17

Clean Air Act, 42 U.S.C. Section 7401 ef seg. .......... 25

Section 116, 42 U.S.C. Section 7476 ................. 25

Section 304(e), 42 U.S.C. Section 7604(e) ..... 25

Consumer Product Safety Act, 15 U.S.C. Section

Oe EI icaiteieeeiishelillininiiiicinintsinicinnentienciitnannniecenense 25

Section 25, 15 U.S.C. Section 2074 ................... 25

Resource Conservation and Recovery Act, 42

U.S.C. Sections SPOIL OF GOR. .......rceveecerersesesesccvsesees 25

Section 3009, 42 U.S.C. Section 6929 ............... 25

Section 7002(f), 42 U.S.C. Section 6972(f) .... 25

a ictintidiinneniinniticnneccapminiiin ll

Judicial Code, as amended

ae es I REI © D vccienerececesiscerecctescrtcins 3

pe Ey Gt) ee 3,8

gE | ES a a 8,24

vill

PAGE

ee a I Ci ttt icctnennsienstineinnaincitininne 3, 8,9

28 U.S.C. Section 1391( a) .................0000 ne ll

2B WB. Base CII ©) veeecncsercerrentBiericersees 11

y REE le | EOE 28

Miscellaneous

1 Congressional Research Service, A Legisiative

History of the Water Pollution Control Act

Amendments of 1972, 93rd Cong. Ist Sess. 823

PI th iacnaninseanenscctlpsneetvianetiensaniececiinaninaabannannenanen 16

2 Congressional Research Service, A Legislative

History of the Water Pollution Control Act

Amendments of 1972, 93rd Cong. Ist Sess. 1499

4 SR ae rine en 16

Proposed Amendments to the Water Pollution Con-

trol Act: Hearings on S.890 and S.928 Before a

Subdcomm. of the Senate Comm. on Public

Works, 85th Cong. Ist Sess. 48 (April 22, 1955). 17

Restatement of Conflict of Laws, (1934) ................ 14

Restatement of Conflict of Laws, Section 377,

Ilustrations 1 and 4 ( 1934) .................cccccccccsssseees 15

Restatement (Second) of Conflict of Laws, Sec-

tions 145, 146, and 156-163 (1971)... 15

IN THE

Supreme Court of the United States

OCTOBER TERM 1984

WILLIAM J. SCOTT, on his own behalf and on behalf

of all persons similarly situated,

Petitioner,

vs.

CITY OF HAMMOND, INDIANA; UNITED STATES

ENVIRONMENTAL PROTECTION AGENCY; DOUGLAS

M. COSTLE, Administrator of the United States Environmen-

tal Protection Agency; and the HAMMOND-MUNSTER SAN-

ITARY DISTRICT,

Respondents.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

PARTIES INVOLVED

The judgment of the Court of Appeals involves several

different cases which were consolidated either at the District

Court or the Court of Appeals. The instant petition involves

only case No. 80 C 4563, in the United States District Court for

the Northern District of Illinois, William J. Scott v. City of

Hammond, Indiana, et al.'

‘This case and People of the State of Illinois, et al v. The

Sanitary District of Hammond, et al., No. 80 C 4775 in the United

Footnote continued on following page.

This petition involves a diversity action brought by plain-

tiff and Petitioner William J. Scott, a citizen of Illinois against

defendants and respondents the City of Hammond, Indiana

and the Hammond-Munster Sanitary Dist.ict, both municipal

corporations and citizens of Indiana.?

PETITION

Petitioner William J. Scott prays that a writ of certiorari

issue to review the judgment of the United States Court of

Appeals for the Seventh Circuit entered on March 27, 1984,

App. at D-1,3 as modified by the Court of Appeal’s order of

May 29, 1984 denying rehearing, App. at B-1.

Footnote continued from preceding page.

States District Court for the Northern District of Illinois, were

consolidated in a single appeal, No. 81-2236, before the Seventh

Circuit.

In addition, the Seventh Circuit consolidated the “Hammond

Cases” involved in No. 81-2236 for argument with People of the State

of Illinois, et al. vy. Milwaukee, appeal No. 77-2246 on remand from

the Supreme Court of the United States.

The People of the State of Illinois have filed a separate Petition

for a Writ of Certiorari from the judgment of the Seventh Circuit in

Appeals Nos. 77-2246 and 81-2236.

2In a separate count of the Complaint, not involved in the

decision of the Court of Appeals below or this Petition, Petitioner

Scott sought relief from the United States Environmental Protection

Agency and Douglas M. Costle, Administrator of the United Siates

Environmental Protection Agency.

3 Petitioner William J. Scott hereby adopts and incorporates as

the Appendices to this Petition the Appendices to the Petition for a

Writ of Certiorari filed by the Petitioners in People of the State of

Illinois et al. v. Milwaukee and People of the State of Illinois, et al. v.

Sanitary District of Hammond, et al. (Seventh Circuit Nos. 77-2246

and 81-2236).

miaialh Cc ncinseel es

3

The jurisdiction of this Court is invoked under 28 U.S.C.

Section 1254(1). The jurisdiction of the Court of Appeals was

invoked under 28 U.S.C. Section 1292(b). The jurisdiction of

the District Court over Petitioner Scott’s state law claims was

based on the diversity of citizenship statute, 28 U.S.C. Section

1332.

OPINIONS

The March 27, 1984 opinion of the Court of Appeals is not

yet reported and is contained in the Illinois Appendices at A-1.

The Seventh Circuit’s order of May 29, 1984, denying Petitioner

William J. Scott’s petition for rehearing and modifying the

March 27, 1984 opinion is also unreported and is included in

the Illinois Appendices at B-1.

The opinion of the District Court in the Hammond case is

reported as Scott v. City of Hammond, ind., 519 F.Supp. 292

(N.D. Ill. 1981), and is contained at F-1 of the [Illinois

Appendices.

CONSTI ‘UTIONAL PROVISIONS INVOLVED

Article VI, Section 2:

This Constitution, and the Laws of the United States

which shall be made in Pursuance thereof; and all

Treaties made, or which shall be made, under the

Authority of the United States, shall be the Supreme

Law of the Land; and the Judges in every State shall

be bound thereby, any Thing in the Constitution or

Laws of any State to the Contrary notwithstanding.

Tenth Amendment:

The powers not delegated to the United States by the

Constitution, nor prohibited by it to the States, are

reserved to the States respectively, or to the people.

4

STATUTORY PROVISIONS INVOLVED

Relevant statute governing law to be applied:

The Rules of Decision Act, 28 U.S.C. Section 1652

The laws of the several states, except where the Con-

stitution or treaties of the United States or Acts of Congress

otherwise require or provide, shall be regarded as rules of

decision in civil actions in the courts of the United States,

in cases where they apply.

Relevant statutes relating to subject matter jurisdiction:

Federal Question Subject Matter Jurisdiction, 28 U.S.C.

Section 1331(a)

The district courts shall have original jurisdiction of all civil

actions wherein the matter in controversy exceeds the sum

or value of $10,000, exclusive of interest and costs, and

arises under the Constitution, laws, or treaties of the

United States.

Diversity of Citizenship Subject Matter Jurisdiction, 28

U.S.C. Section 1332(a)

The district courts shall have original jurisdiction of all civil

actions where the matter in controversy exceeds the sum or

value of $10,000, exclusive of interest and costs, and is

between—

(1) citizens of different States

Relevant statutes relating to Venue:

Venue based on diversity of citizenship jurisdiction, 28

U.S.C. Section 1391(a)

A civil action wherein jurisdiction is founded only on

diversity of citizenship may, except as otherwise provided

by law, be brought only in the judicial district where ali

plaintiffs or all defendants reside, or in which the claim

arose.

Venue based on federal question jurisdiction, 28 U.S.C.

Section 1391(b)

5

A civil action wherein jurisdiction is not founded solely on

diversity of citizenship may be brought only in the judicial

district where all defendants reside, or in which the claim

arose, except as otherwise provided by law.

Relevant Statutes or rules relating to in personam jurisdiction:

Rule 4(e) of the Federal Rules of Civil Procedure

* - *

Whenever a statute or rule of court of the state in which

the district court is held provides (1) for service of a

summons or of a notice, or of an order in lieu of summons

upon a party not an inhabitant of or found within the state

... Service may ... be made under the circumstances and

in the manner prescribed in the statute or rule.

Illinois Statutes relevant to in personam jurisdiction:

Personal service outside state, Ill. Rev. Stat., ch. 110, Par.

2-208

Section 2-208. Personal service outside State. (a) Person-

al service of summons may be made upon any party

outside the State. If upon a citizen or resident of this State

or upon a person who has submitted to the jurisdiction of

the courts of this State, it shall have the force and effect of

personal service of summons within this State. ...

Act submitting to jurisdiction—Process, Ill. Rev. Stat., ch.

110, Par. 2-209

Section 2-209. Act submitting to jurisdictioz.—Process.

(a) Any person, whether or not a citizen or resident of this

State, who in person or through an agent does any of the

acts hereinafter enumerated, thereby submits such person

... to the jurisdiction of the courts of this State as to any

cause of action arising from the doing of any of such acts:

(2) The commission of a tortious act within this State.

Relevant provisions of the Federal Water Pollution Control

Act:

F.W.P.C.A. Section 505(e), 33 U.S.C. Section 1365(e)

6

Statutory or common law nights not restricted

Nothing in this section shall restrict any right which any

person (or class of persons) may have under any statute or

common law to seek enforcement of any effluent standard

or limitation or to seek other relief (including relief against

the Administrator or a State agency).

F.W.P.C.A. Section 510, 33 U.S.C. Section 1370

State authority

Except as expressly provided in this chapter, nothing in this

chapter shall (1) preclude or deny the right of any State or

political subdivision thereof or interstate agency to adopt

or enforce (A) any standard or limitation respecting

discharges of pollutants, or (B) any requirement respect-

ing control or abatement of pollution; except that if an

effluent limitation, or other limitation, effluent standard,

prohibition, pretreatment standard, or standard of per-

formance is in effect under this chapter, such State or

political subdivision or interstate agency may not adopt or

enforce any effluent limitation, or other limitation, effluent

standard, prohibition, pretreatment standard, or standard

of performance which is less stringent than the effluent

limitation, or other limitation, effluent standard, prohibi-

tion, pretreatment standard, or standard of performance

under this chapter; or (2) be construed as impairing or in

any manner affecting any right or jurisdiction of the States

with respect to the waters (including boundary waters) of

such States.

STATEMENT OF THE CASE

In the summer of 1980, large clumps of fecal matter mixed

with industrial grease began washing ashore on Chicago’s

beaches. These masses floated into the nearshore swimming

areas of Chicago’s beaches and actually washed onto the beach

shore, contaminating the sand with a foul stinking mess.

This contamination of Chicago’s Lake Michigan bathing

waters and beaches continyed for several weeks causing the

virtual shutdown of the beaches in the hottest days of the

summer. Earlier investigations of shoreline currents had estab-

lished that contaminants are carried either South or North

along Chicago’s lakefront depending on the weather; and a

detailed hunt for the source of the contamination revealed that

Hammond, Indiana, was discharging raw human and industrial

waste from a pumping station along the shore of Lake Michi-

gan.

William J. Scott, a Chicago resident and Illinois citizen,

brought suit against Hammond and its Sanitary District seeking

damages and injunctive relief under Illinois tort common law.

The suit was brought on Scott’s personal behalf and as a class

action on behalf of all other users of the contaminated beaches.

Plaintiff sought damages of one million dollars for the weeks of

beach closures.4¢

4There are two other counts in Scott’s complaint not directly

relevant here. In Count II, Scott also claimed that the facts alleged

entitled him to recover damages and injunctive relief under the

federal common law of nuisance. That count was rendered moot by

this Court’s decision in Milwaukee I].

Scott’s complaint also brought a claim (Count III) against the

EPA Administrator for failure to establish water quality standards

and water quality based effluent limitations to prevent the disgraceful

raw sewage situation in Lake Michigan. That count is not involved in

this Petition. The only way to prevent raw sewage discharges under

the Clean Water Act is through water quality based effluent limita-

tions established pursuant to Section 303(d). 42 U.S.C. Section

1313(d). The key mechanism for such Section 303(d) limits (called

total maximum daily loads, “TMDLs”) have not been prepared by

the states more than 10 years after the statutory deadline. Scott

cannot sue the State of Indiana for failure to meet its duty under the

Clean Water Act as a result of this Court’s decision in Middlesex

County Sewage Authority v. National Sea Clammers Ass’n, 453 US. 1

(1982), that 42 U.S.C. Section 1983 is not available. Thus, 12 years

after the passage of the Clean Water Act the discharge of raw sewage

is permitted under the Act.

8

After Scott filed his complaint with his state law claims

based on diversity of citizenship under 28 U.S.C. Section 1332,

a subsequently filed state court suit by the State of Illinois and

the Metropolitan Sanitary District of Chicago was removed by

defendant Hammond from Illinois State Court to the federal

District Court. The basis for removal was that the federal

common law count provided federal question jurisdiction under

28 U.S.C. Section 1331.

After this Court’s decision in Milwaukee II,“Hammond

moved to dismiss Scott’s complaint for failure to state a claim

upon which relief could be granted. The District Court denied

the motion to dismiss and held that Scott had stated a claim

upon which relief could be granted under state law.

Because of the importance of the question, the District

Court certified its decision for interlocutory appeal pursuant to

28 U.S.C. Section 1292(b). App. at E-1. The Court of Appeals

granted the motion for interlocutory appeal and consolidated

the Hammond interlocutory appeal with the Milwaukee case.

On appeal, the Seventh Circuit reversed the District Court

and held that in the Scott case—a diversity case based on state

law—the only applicable law was Indiana law and not Illinois

law.5 The Court further indicated that the only venue for an

action by Scott in a diversity case based on state law was in a

federal district court or in a state court in Indiana where the

defendant resided. The Court of Appeals refused to acknowl-

edge that—even if Indiana law was applied—under the whole

law of Indiana, the Indiana choice of law rules mandated

application of Illinois law. Despite the request of Petitioner

Scott to remand to the District Court to apply Indiana law—the

choice of law dictated by the Court of Appeals—the Court of

Appeals refused to remand. Instead, the Court of Appeals

ordered dismissal of the case, thereby denying Petitioner Scott

any remedy.

5 The decision of the Court of Appeals was by two judges: Judges

Fairchild and Cudahy. Judge Sprecher, the third member of the

panel, voted to affirm the district court, but died soon after oral

argument without writing a dissenting opinion. -

REASONS FOR GRANTING THE WRIT

In attempting to reconcile Congress’ clear intent to pre-

serve state tort law when it passed the Federal Water Pollution

Control Act with the allegedly preemptive effects of a footnote

in Illinois v. City of Milwaukee (“Milwaukee I”), 406 U.S. 91

(1972), the Court of Appeals has rewritten the Constitution

and several statutes of the United States. To understand the

constitutional dimensions of the Court of Appeals decision one

must understand the operative facts of this case:

l. A citizen of one state engaged in tortious acts in

one state which caused injury to a citizen of another state

in another state.®

2. The injured citizen brought suit in the state of the

injury seeking recovery under state tort law.

3. The suit was brought in the federal district court in

the district where the injury occurred and was bought

under the subject matter jurisdiction of diversity of

citizenship. 28 U.S.C. Section 1332.

Given such facts, this should be a simple case. The Court

of Appeals appeared to acknowledge that the tort law claim

asserted by plaintiff Scott was grounded in state law, albeit the

state tort law of Indiana. (App. B, at B-3, modifying footnote 2

of the Court of Appeals opinion).

Under Erie v. Tompkins, 304 U.S. 64 (1938); Klaxon v.

Stentor Electric Mfg. Co., 313 U.S. 487 (1941); and Day &

Zimmermann, Inc. v. Challoner, 423 U.S. 3 (1975), the federal

6 In this case the tortfeasor dumped fecal material into the water

and the fecal material traveled into the victim’s state. For analytical

purposes, the fecal material could just as easily been a rock, a bullet,

or poisonous fumes. Similarly, the path by which the injurious

material traveled could just as easily been the air, the groundwater or

along an interstate highway. See discussion infra.

10

courts are constitutionally mandated under the Tenth Amend-

ment to apply the choice of law rules of the forum state.

Applying the Erie framework to this case, the Court of Appeals

was required to apply the choice of law rules of Illinois, because

Illinois was the forum state. Illinois choice of law rules would

have applied Illinois substantive tort law. People ex rel. Scott v.

United States Steel Corp., 40 Ill. App. 3d 607, 352 N.E.2d 225

( lst Dist. 1976); Metropolitan Sanitary District v. United States

Steel Corp., 30 Ill. App. 3d 360, 332 N.E.2d 426 (Ist Dist.

1975), leave to appeal den., 60 Ill. 2d 597, cert. denied, 424 US.

976 (1976). Even if Indiana had been the forum state, Indiana

choice of law rules dictated the application of Illinois law as the

law of the place of injury. Maroon v. State Department of

Mental Health, 411 N.E.2d 404 (Ind. App. 1980).

But what should be a simple Erie diversity case has been

rendered unnecessarily and extraordinarily complex by the

Court of Appeals decision to engraft a series of federal common

law principles onto this case.

l. The Court of Appeals adopted a federal common law

choice of law rule dictating choice of law of the tortfeasor state.

Contrary to Erie and Klaxon, the Court of Appeals, in a

diversity case based on state tort law, mandated a federal

choice of law dramatically different than that of the forum state.

The Court of Appeals mandated the application of Indiana law

in complete disregard of the choice of law rules of the forum

state—lIllinois. To compound matters further, the Court of

Appeals mandated a federal choice of Indiana substantive tort

law even though Indiana choice of law rules would dictate

application of Illinois substantive tort law. In this diversity case

based on state tort law, the Court of Appeals chose to ignore

both the law of Illinois and the law of Indiana and fashion a

federal choice of law rule.

2. The Court of Appeals disregarded the federal venue

statutes governing this case. The Court of Appeals fashioned a

federal common law venue rule that places venue of a state tort

diversity action solely in the state or federal courts of the

ll

tortfeasor’s state. Such judicially mandated venue flies in the

face of the diversity venue statute—28 U.S.C. Section

1391(a)—which allows such an action to be brought in the

district court where the plaintiff resides. Indeed, even if this

case is characterized as falling under Section 1391(b), Congress

has declared that venue can exist in the district where the claim

arose, i.e., Illinois, Cf. Milwaukee v. Illinois (“Milwaukee II’’),

451 U.S. 304 (1981) (App. G at G-16 n.5).

3. The Court of Appeals rewrote the law of in personam

jurisdiction, disregarding the mandate of Rule 4 of the Federal

Rules of Civil Procedure and the forum state long arm statute it

incorporates. Despite clear constitutional authority that such in

personam jurisdiction exists, the Court of Appeals appears to

have held that Illinois courts or federal courts in Illinois acting

in a diversity case do not have in personam jurisdiction over an

out-of-state tortfeasor who shoots a bullet, or throws a rock or

dumps sewage into Illinois causing injury in Illinois. This Court

has recently confirmed that such in personam jurisdiction exists.

Calder v. Jones, ___ U.S. ___, 104. S.Ct. 1482 (1984) (“The

fact that the actions causing the effects in California were

performed outside the State did not prevent the State from

asserting jurisdiction over a cause of action arising out of those

effects.” 104 S.Ct. at 1485-86).

4. The Court of Appeals fashioned a federal common law of

torts. Rather than examining the substantive tort law of either

Illinois or Indiana as to whether plaintiff Scott stated a claim

upon which relief can be granted, the Court of Appeals

fashioned a federal common law tort rule based on an in-

corporation of the Restatement (Second) of Torts and held that

Scott failed to state a claim because he failed to allege special

damages. (App. A, at pp. A24-A25). The District Court had

found that plaintiff Scott did state a claim upon which relief can

be granted under Illinois law. App. F at F-12 n.5). In its 1970

Constitution, Illinois had eliminated the special damage

requirement for tort recovery. (Jd.).

12

Each of the federal common law principles crafted by the

Court of Appeals (choice of law, venue, in personam jurisdic-

' won and substantive tort law) is unprecedented and violates the

constitutional framework established for diversity cases

grounded in state law. The Court of Appeals entire analysis is

based on its inconsistent and contradictory attempts to divine

and reconcile the obscure meaning of footnote law in Mil-

waukee I and Milwaukee II with the clear and manifest intent

of Congress to leave claims for tortious injury to state law.

That Congress wished issues of tort remedies for water

pollution injuries to be addressed by state law, and not federal

law, is clear. The Court of Appeals purported to honor

Congress’ intent by declaring that the state law of the tortfea-

sor’s state would be the law applied to redress tortious injury

from water pollution. At the same time, the Court of Appeals

read the footnotes of Milwaukee I to declare a constitutional

prohibition against the application of state law. Further, the:

Court of Appeals never examined the mandate of the Tenth

Amendment and Erie as applied to the state law choice of law

mac by the Court of Appeals.

The Court of Appeals’ declaration that the law of the

tortfeasor’s state governs tort remedies in a diversity case based

on state tort law creates bizarre constitutional anomalies. To

address these anomalies, this Court must clarify and reconcile:

a) the relationship of the intent of Congress to preserve state

tort law; b) the nature of the continuing preemptive role, if any,

of Milwaukee I on state law; and, c) the role of the Tenth

Amendment and Erie as applied to this diversity case. The

Court should grant certiorari.

THE TENTH AMENDMENT AND ERIE V. TOMPKINS

PROHIBIT THE FASHIONING OF FEDERAL COM-

MON LAW CHOICE OF LAW IN A DIVERSITY AC-

TION BASED ON STATE LAW

The Court of Appeals fashioned a federal choice of law to

mandate application of Indiana state tort law to this diversity

13

case without analyzing the requirements of the Tenth Amend-

ment and Erie. If the Indiana state tort remedy which the

Court of Appeals found to be preserved by Congress is

grounded in state law, then Erie and its progeny prohibit the

action of the Court of Appeals.’

To place the Evie analysis in constitutional perspective, it is

necessary to review: a) the historical state choice of law rules

followed for identifying the law to be applied to interstate torts;

b) the declared intent of Congress to preserve state tort law;

and, c) the Tenth Amendment mandate of Erie and its

progeny.

A.

The Historical Framework Governing Determination of Tort

Liability When the Tortious Conduct Occurs in One State

and the Injury Occurs in Another State

To appreciate how the Constitution—particularly the

Tenth Amendment—affects the choice of which law applies in

this case, it is useful to explore the well-developed body of law

followed for over one hundred years by the states, including

Illinois and Indiana, regarding the law to be applied in

interstate torts.

Two distinct principles arise from this body of law. First,

under the Tenth Amendment, absent action by Congress to oust

state tort law, it has been state tort law, not federal tort law,

which determines whether there is tort liability. This principle

has long been the rule regardless of whether the tortfeasor or

tort victim are citizens of different states, regardless of whether

the tortious conduct was initiated in one state and caused injury

7 As discussed infra, there are other serious constitutional prob-

lems if the state law preserved by Congress in the passage of the 1972

amendments is not state law, but federal law selectively incorporating

state law.

14

in another state, and regardless of whether it is the law of the

tortfeasor’s state or the law of the place of injury which has

been applied.

Second, the vast majority of states have recognized in their

choice of law rules the right of the state of injury to apply its

law. See e.g., Ruckman v. Green, 16 N.Y.S.C. Rep. (9 Hun)

225 (1876):

The cause of action arises upon the injury suffered by the

complaining party, and so in respect to the lands situated

in this state, the cause of action necessarily arose here,

although the nuisance which produced the injury was

situated in another State. There is no sound principle, we

think, which precludes a party whose property is specially

injured by a nuisance which casts upon it offensive and

noxious vapors because of the interposition of a state line

between the nuisance and the property so injured; ...

Id. at 229.

See also, Thayer v. Brooks, 17 Ohio 489, 49 Am. Dec. 474

(1848); Cameron v. Vandegriff, 53 Ark. 381, 13 S.W. 1092

(1890); Cf. Simpson v. State, 92 Ga. 41, 17 S.E. 984 (1893).

This choice of law rule has been applied in Illinois, People ex.

rel. Scott v. United States Steel Corp., 40 Ill. App. 3d 607, 352

N.E.2d 225 (1st Dist. 1976); Metropolitan Sanitary District v.

United States Steel Corp., 30 Ill. App. 3d 360, 332 N.E.2d 426

(lst Dist. 1975) leave to appeal den., 60 Ill.2d 597, cert. denied,

424 U.S. 976 (1976); and also in Indiana, Maroon v. State

Department of Mental Health, 411 N.E.2d 404 (Ind. App.

1980).

These state choice of law principies allowing the state of

the injury to apply its law were reflected in the first Restatement

of Conflicts of Laws, (1934). Under the first Restatement®, the

8 Contrary to their use by the Court of Appeals, the Restatements

of the American Law Institute on various legal subjects do not

constitute sources of law which may be applied by federal courts

under the authority of the American Law Institute. The federal courts

may only apply law for which the courts find its authority in the

Footnote continued on following page.

15

law of the state of the wrong—i.e., the place where the injury

occurred—determined whether there was tort liability. Consid-

er the following examples from the first Restatement:

l. A, standing in State X, fires a gun and lodges a

bullet in the body of B who is standing in State Y. The

place of the wrong is in Y.

4. A, in State X, throws out noxious fumes from a

chimney which destroys the grass of B in State Y. The

place of the wrong is in Y.

Restatement of Conflict of Laws, Section 377, Illustra-

tions | and 4 (1934)°9

The Restatement (Second) of Conflicts of Laws, while

shifting toward the significant contacts analysis of Section 145

as the test to be applied in choosing the law to be applied, also

recognizes that the law of the state of injury is normally the law

that governs in determining tort liability where the tortfeasor is

in another state. See generally, Restatement (Second) of

Conflicts of Laws, Sections 146, 156-163.

Indeed, Indiana still follows the place of injury doctrine

and would apply Illinois tort law to determine the liability of an

Indiana tortfeasor for injury caused in Illinois. See Maroon v.

State Department of Mental Health, 411 N.E.2d 404 (Ind. App.

1980).

Footnote continued from preceding page.

Constitution, Acts of Congress or the laws of the states. In meeting its

constitutional duty to apply state law under the Tenth Amendment

and Erie in diversity cases, the federal courts must look to the state

choice of law of the forum state—not the general pronouncements of

the Restatement.

Contrary to the Court of Appeals’ attempt to distinguish these

cases, they not only involve property damage, but also involve

perscnal injury. Compare the Restatement examples noted above

with the Court of Appeals’ statements that these cases were limited to

property damage. App. A, at pp. A-17 to A-18, n.3.

16

There the Indiana courts applied Illinois substantive tort law

directly against the State of Indiana where then tortious acts of

state officials (release of a sexual psychopath) occurred in

Indiana, but the injury (murder of an Illinois resident by the

psychopath ) occurred in Illinois.

Thus, at least a hundred years of well-established law

governs the application of state law where the tortfeasor and his

tortious conduct are in one state and the victim and the injury

are in another.

The Intent of Congress

to Preserve State Law

There can be no question that Congress wanted to preserve

State tort law and state choice of law rules governing state tort

law with the passage of the Federal Water Pollution Control

Act:

It should be noted, however, that the section would

specifically preserve any rights or remedies under any

other law. Thus, if damages could be shown, other

remedies would remain available. Compliance with

requirements under this Act would no: be a defense to a

common law action for damages.

2 Congressional Research Service, A Legislative His-

tory of the Water Pollution Control Act Amendments of

1972, 93rd Cong. Ist Sess. 1499 (1973).

The House Committee on Public Works echoed similar senti-

ments:

The Committee considers section 510 [33 U.S.C. Section

1370] to be of extreme importance in assuring the States of

the right to adopt or enforce provisions at least as strict as

those established in this legislation. Thus, the Committee

rejected in most instances suggestions for preemption by the

17

Federal government and preempted the States only where

the situation warranted it based upon the urgent need for

uniformity such as in section 312(f) relating to marine

sanitation devices.

1 Congressional Research Service, A Legislative His-

tory of the Water Pollution Control Act Amendments of

1972, 93rd Cong. Ist Sess. 823 (1973).

Indeed, the legislative history of the predecessor of Section

510(2), Section 1(b) of the 1956 federal water pollution

legislation—from which the current Section 510(2) was lifted

in haec verba—demonstrates that Congress intended to pre-

serve state tort law to cover just the kind of situation involved

here. Consider the following colloquy between Senator Robert

Kerr, Assistant Secretary of the Department of Health Educa-

tion and Welfare, Roswell Perkins and Sidney Saperstein of the

Office of General Counsel of HEW:

Senator KERR. What would be the effect of this law [the

federal law] against the United States Steel Co.—let’s say

against Monsanto Chemical Co., at St. Louis—from whose

plant obnoxious sewage and materials were permitted to

get into the Mississippi River, and somebody with a farm

at Cairo, Illinois would have some overflow and his land

would be ruined by chemical substances in that overflow

which he identified as either being Monsanto Chemical Co.

products or similar in character to it. Would he then,

under the provisions of this act, have a basis for suit for

damages against the chemical company in St. Louis?

Mr. PERKINS. There would be no change—

Senator KERR. I did not ask that.

Mr. SAPERSTEIN. Senator, just as under existing law,

this act does not give the private party a basis for another

cause of action against another private party. This law

merely authorizes the Federal Government to step in when

the interests—health or welfare—of the citizens of one

state are adversely affected by the pollution originative of

another state.

It does not give those private parties which are adversely

affected the right to come into court and sue. They would

have to do that under the common law or statutes now in

existence.

18

Senator KERR. They have that right under the law now?

Mr. SAPERSTEIN. Yes sir.

Proposed Amendments to the Water Pollution Con-

trol Act: Hearings on S.890 and S.928 Before a

Subcomm. of the Senate Comm. on Public Works,

85th Cong., Ist Sess. 48 (April 22, 1955). (emphasis

added )

This colloquy, when considered in conjunction with the

clear statements in the legislative history of the 1972 amend-

ments, is strong evidence that Congress wished to have the issue

of tort liability addressed under state law. 1°

There is absolutely no evidence that Congress wished to

destroy either state tort law or the state choice of law rules

which had regulated which state’s tort law should be applied.

Nor is there any evidence that Congress wished to override the

Tenth Amendment mandate of Erie, that in matters relegated

to state law, neither Congress nor the federal courts had any

business adopting federal rules to govern state law actions. In

other words, Congress may oust state law remedies, but once

Congress has chosen to preserve such state law remedies,

Congress cannot constitutionally dictate the content of those

state remecies. See discussion of Erie, below.

Cc.

The Tenth Amendment Mandate of Erie

In Erie and its progeny, this Court has repeatedly held that

where, as here the tort law under which relief is sought is

grounded in state law; and where, as here, the basis of federal

subject matter jurisdiction is diversity of citizenship, the federal

10 Indeed the legislative history demonstrating intent to preserve

state tort remedies here under the FWPCA is clearer and broader

than that found by this Court to preserve state tort remedies in

Silkwood vy. Kerr-McGee Corp., a> comme. Cee OLS

(1984).

19

courts are constitutionally precluded from ignoring state

law—including state choice of law rules—and from applying ad

hoc federal common law rules as to substantive law and choice

of law.

There is no federal general common law. Congress has no

power to declare substantive rules of common law appli-

cable in a state whether they be local in their nature or

‘general,’ be they commercial law or a part of the law of

torts. And no clause in the Constitution purports to confer

such a power upon the federal courts.

Erie v. Tompkins, 304 U.S. at 78.

The Tenth Amendment prohibition announced in Erie against

federal courts fashioning substantive federal law in enforcing

claims based on state law was applied to choice of law

questions as well as in Klaxon:

It is not for the federal courts to thwart such local policies

by enforcing an independent ‘general law’ of conflict of

laws ... the proper function of the ... federal court is to

ascertain what the state law is not what it ought to be.

313 U.S. at 496-497.

Indeed where as here the state tort remedy which the

Court of Appeals acknowledged to be available to plaintiff is

grounded in state law, Erie indicated that even Congress would

be prohibited by the Tenth Amendment from dictating the

content of state tort law and choice of law rules. Erie, 304 U:S.

at 78. Clearly the choice of law rules of the forum state should

be applied in this case."

11 Even assuming arguendo that the Seventh Circuit correctly

concluded that Indiana law governs this case and not Illinois law, the

Court of Appeal’s judgment was wrong. Rather than reverse with

instructions to dismiss and deprive Petitioner Scott of any remedy, the

Court should have remanded with instructions to apply Indiana law to

the factual allegations of Scott’s complaint. See, e.g., Krauss v.

Manhattan Life Insurance Company of New York, 643 F.2d 98 (2d

Cir. 1981); Boatland, Inc. v. Brunswick Corp., 558 F.2d 818 ( 6th Cir.

1977); Liew v. Official Receiver and Liquidator (Hong Kong), 685

F.2d 1192 (9th Cir. 1982); Lettieri v. Equitable Life Assur. Soc. of the

United States, 627 F.2d 930 (9th Cir. 1980); Melville v. American

Home Assur. Co., 584 F.2d 1306 (3rd Cir. 1978).

*

20

II.

THE COURT OF APPEALS DECISION RAISES CON-

STITUTIONAL ANOMALIES WHICH IF ALLOWED

TO STAND WILL VIOLATE ERIE, THE EXPRESS

INTENT OF CONGRESS TO PRESERVE STATE LAW,

AND THIS COURT’S HOLDING IN MILWAUKEE II

The Court of Appeals’ decision to fashion a federal choice

of law mandating application of the tortfeasor’s state law stems

from its tortured attempts to divine and reconcile the footnote

law of Milwaukee I and Milwaukee II with the clear intent of

the Congress to preserve state law and the constitutional

mandates of Erie (the Tenth Amendment). But the analysis of

the Court of Appeals creates such constitutional anomalies that

it cannot withstand rational analysis. If allowed to stand, the

decision below will violate Erie; and the only constitutional

theory on which it can stand also violates the express allocation

of power between the federal and state governments by Con-

gress in the 1972 amendments and violates the holding of

Milwaukee II that federal common law in this area no longer

exists.

A.

The Conflict Between the Court of Appeals’ Milwaukee I

Analysis and Congressional Intent to Preserve State Law

Consider the following logical dilemmas created by the

Court of Appeal’s decision:

1. Indiana law cannot apply under the Court of Appeals’

Milwaukee I analysis. If footnote 6 of Milwaukee I (App. S at

S-13) is really a declaration that the Constitution bars the

application of state law to a diversity action between citizens of

two states seeking redress for tortious injury, '? then the Court of

12 Contrary to the Court of Appeals’ perception of Milwaukee I,

there is nothing in the Constitution that prohibits the application of

Footnote continued on following page.

21

Appeals erred in applying Indiana tort law to this controversy.

If the Constitution bars state law, it bars Indiana law as well as

lilinois law.

2. The Court of Appeals’ Milwaukee I analysis overrides

Congressional power to declare that state law shall govern. If

footnote 6 of Milwaukee I ( App. S at S-13) is a declaration that

the Constitution prohibits the application of state law, then

Congress has no power to declare that state law shall govern

tortious injury. If footnote 6 is held to have such permanent

preemptive effect, this Court’s Milwaukee I decision will destroy

the allocation of federal and state power made by Congress in

the 1972 legislation.

3. The Court of Appeals’ Milwaukee I analysis uncon-

stitutionally discriminates against Illinois citizens. If footnote 6

of Milwaukee I (App. S at S-13) is a declaration that plaintiff

Scott, an Illinois citizen, is barred from seeking relief under

Indiana state tort law in Indiana courts for a tortious in‘ury

when an Indiana citizen can seek relief under Indiana tort law

for the same tortious conduct, then there is a conflict between

footnote 6 and the Privileges and Immunities Clause,'3 as well

as the equal protection guarantees embodied in the Fifth and

Fourteenth Ameadments. Cf. Bolling v. Sharpe, 347 U.S. 497

(1954).

4. The Court of Appeals’ analysis creates federal common

law and violates Milwaukee II. If the Court of Appeals is

Footnote continued from preceding page.

state law in a dispute between citizens of different states. Indeed, as

discussed supra, the Tenth Amendment as construed in Erie dictates

the application of state law. Moreover, over one hundred years of

state choice of law decisions have held that the transmission of

injurious material across state lines—be it fumes or fecal matter, rocks

or bullets—raises questions of state law addressed by state choice of

law doctrines.

13“The Citizens of each State shall be entitled to all the

Privileges and Immunities of Citizens in the several States.” US.

Constitution, art. IV, sec. 2, cl. 1.

22

‘

correct and footnote 6 of Milwaukee I (App. S at S-13) is

declarative of a permanent constitutional preemption of state

law which neither the courts nor the Congress can override,

then this Court has unwittingly ushered in an era of federal

“interstitial” common law of enormous breadth and uncer-

tainty. Since under footnote 6 of Milwaukee I the Constitution

bars state law, the state law of the tortfeasor must necessarily be

grounded in federal law, i.e., the Clean Water Act. Indeed the

only way the Court of Appeals’ construction of Milwaukee I

and its choice of Indiana substantive law can be reconciled with

Erie is to hold that the “state” law preserved by Congress to

address tortious injury is really federal law selectively in-

corporating the law of the tortfeasor’s state. Compare Erie and

its progeny with Del Costello v. IBT, US. , 103 S.Ct.

2281, 2287, n.13 (1983); United States v. Kimbell Foods, Inc.,

440 U.S. 715 1979); Rodrigue v. Aetna Casualty and Surety

Company, 395 U.S. 352 (1969); International Union, U.A.A. &

A.I.W. v. Hoosier Cardinal Corporation, 383 U.S. 696 (1966).

Thus, in this case, the “Indiana” “state” tort law which the

Court of Appeals found to be applicable would in reality be

federal law which selectively incorporates the tort law of the

tortfeasor state.

The Conflict Between the Court of Appeals’

Analysis and Milwaukee II

Such a construction—that the state tort law preserved by

Congress is really federal interstitial common law of torts, with

selected incorporation of state law—though superficially ad-

dressing some of the constitutional conundrums created by the

Court of Appeals, creates even more constitutional problems:

1. Congress clearly did not intend federal law to govern tort

remedies. A declaration that the “state” tort law preserved by

Congress is really interstitial federal common law selectively

23 \

incorporating state tort law principles is clearly contrary to the

intent of Congress’ allocation of federal and state power. When

Congress went out of its way to preserve other statutory and

common law remedies under state law, Congress certainly did

not contemplate “federal” tort law selectively incorporating

state law.

2. Milwaukee II held that there was no federal common law

in this area. A declaration that the “state” tort law preserved

by Congress is really interstitial federal common law selectively

incorporating state tort law principles is inconsistent with this

Court’s holding in Milwaukee I] that all federal common law of

tort liability had been ousted by the statutory framework

adopted by the Congress in 1972—which allocated tort re-

medies to state law.

3. The recognition of interstitial federal tort law would

create tremendous lawmaking burdens on the federal courts.

Any such congressionally created federal law of tort liability

selectively incorporating state law would ultimately be gov-

erned by federal, not state law principles. Thus, questions of

statutes of limitation, contribution, indemnity, third party liabi-

lity, joint and several liability and choice of law would all have

to be resolved by federal courts fashioning what is essentially

interstitial federal common law to flesh out Congressional

intent. While state law would be available, the federal courts

would be burdened with the task of shaping selective state

doctrines to fit federal goals. (See, e.g. Del Costello v. IBT,

—___._ U.S. —___, 103 S.Ct. 2281 (1983), and other cases cited at

p. 22 supra).

4. Federal interstitial tort law would confer federal question

subject matter jurisdiction in the federal courts. Such a theory

would create new subject matter jurisdiction for the federal

courts. If state tort law really has its basis in the federal statute,

then there is no reason why a citizen of Illinois cannot sue

another Illinois citizen in federal court under federal question

jurisdiction for the federal/state tort of polluting Lake Michi-

24

gan and seek damages and injunctive relief in federal court. —

Similarly, there is no reason under such a theory why an

Indiana resident could not sue Hammond under this feder-

al/state common law tort in federal court for damages and

injunctive relief under Section 1331 jurisdiction. Surely, if the

state law claim really has its source of power in the act of

Congress rather than in the power of the State of Indiana, the

case arises under the laws of the United States, and thus within

the federal question jurisdiction of the federal courts.

5. Such federalized “state” tort law would conflict with true

state tort law. Any such congressionally created federal law of

tort liability selectively incorporating state law would create

imajor potential for conflict with parallel state law remedies.

For example, what would be the law applied under the Court of

Appeal’s theory in two parallel suits under Indiana law—one

brought by an injured Indiana plaintiff and the other by the

injured Illinois plaintiff? Under the Indiana plaintiffs suit,

presumedly Indiana’s actual state law would apply while under

the Illinois plaintiff's suit, the court would apply the federal

statutory interstitial tort law selectively applying state law.

Potential conflicts would arise when federal courts devel-

oped interstitial federal common law doctrines of statutes of

limitations, comparative negligence, strict liability, third party

liability, assumption of risk, contributory negligence, special

damage standing, and similar issues which are attendant to all

tort litigation.

6. The Court of Appeals created a federal common law of

venue and in personam jurisdiction. Even if the Congress has

authorized the federalized state law of the tortfeasor—and thus

a federal question cause of action under Section 1331, the

question remains whether the Court of Appeals can disregard

the venue statute passed by Congress governing actions not

based on diversity and the Federal Rules of Civil Procedure

governing the exercise of in personam jurisdiction. As noted

25

above, venue is proper in the Northern District of Illinois, and

that court has in personam jurisdiction over Defendants in this

case.

Ses

Adoption of a Federal Interstitial Common Law of Tort Law

Selectively Incorporating State Tort Law Principles in This

Case Will Apply with Equal Force to Similar Statutory

Schemes

The precedent set by the Court of Appeals’ decision will

have far ranging and negative implications. In numerous

statutes, Congress has affirmatively preserved state statutory

and common law tort remedies on the understanding that the

state tort law remedies preserved would be grounded in state

law and not some federalized interstitial tort law based upon

the regulatory statute. Thus Congress has preserved state law

tort remedies for manufacture and distribution of hazardous or

injurious products even though those same products may be

regulated by a federal consumer product safety standard under

a comprehensive program for regulating product safety. '4 In air

pollution, the federal government has engaged in a com-

prehensive program to regulate air, 42 U.S.C. Section 7401 er

seq., but has explicitly preserved state tort remedies for air

pollution. '5 In addressing toxic wastes, Congress has adopted a

comprehensive “cradle to grave” regulatory program under the

Resource Conservation and Recovery Act, 42 U.S.C. Sections

6901, et seg., but has taken pains to preserve common law and

statutory remedies under state tort law.’ In each of these

14 Consumer Product Safety Act, 15 U.S.C. Section 2051, et seg.

The provision preserving state tort remedies is 15 U.S.C. Section 2074.

1§ 42 U.S.C. Sections 7416 and 7604(e). In air pollution, this

Court declared a federal common law remedy on the same day as

Milwaukee I. Washington v. General Motors Corporation, 406 US.

109 (1972).

16 42 U.S.C. Sections 6929 and 6972(f). Indeed, under RCRA,

generators in one state often transport hazardous or toxic wastes by

Footnote continued on following page.

26

instances, tortious conduct may originate in the state of the

tortfeasor and produce injury in the state of the victim. '7

If the Court of Appeals’ adoption of federalized common

law principles of choice of law and venue are permitted in this

case, there is no logical reason why a similar “interstitial”

federal common law requirement cannot be imposed in other

cases where Congress has sought to preserve state tort law in

the face of a concurrent federal regulatory program.

Il.

RECONCILING MILWAUKEE !, MILWAUKEE II,

THE CLEAN WATER ACT, AND ERIE

As described above, the problem faced by the Court of

Appeals was reconciling the footnote law of Milwaukee I and

Milwaukee II with the clear intent of the Congress to preserve

state law and the constitutional mandates of Erie (the Tenth

Amendment). This Court could reconcile footnote 6 of Mil-

Footnote continued from preceding page.

truck or rail under federal license to treatment, storage, and disposal

sites in other states. Under the theory espoused by the Court of

Appeals in its federalized law of the tortfeasor state approach ( with

common law venue only in the tortfeasor’s state), a citizen damaged

by contaminated groundwater in the state where the waste was

disposed of could not sue the generator of that waste under the law of

the victim’s state, nor could the victim even sue the generator in the

place of the injury. Similar arguments would be raised where the

contamination of a groundwater aquifer moved from the disposal area

in One state into the groundwater of another state. Moreover, many of

the interstate generators and shippers of toxic materials are municipal-

ities, and many municipalities are also owners and operators of

disposal sites.

17 For example, a large number of, product liability cases in-

volving failure of a component necesSarily include out of state

manufacturers or component assemblers.

en

27

waukee I with congressional preservation of state law by simply

overruling any arguable application of Milwaukee I to a

diversity case based on state tort law.'®

Alternatively, this Court could construe the holding in

Milwaukee I to have preempted state law only while federal

common law was in existence. Once Congress preempted

federal common law, the ban on state law was gone and

Congress was free to arrange the federal state relationship as it

saw fit. Congress’ action in recognizing the role of state law in

effect restored the temporarily suspended state law. See Butner

v. United States, 440 U.S. 48 n.9 (1979).

18 If one listened to the hyperbole of the Hammond defendants,

Milwaukee I prohibits application of the victim’s state law against a

state or a political subdivision on the theory that state militia will

march if the victim’s state law is applied against a sovereign state or

its political subdivision. But the law is clear that even sovereign states

may be subjcct to application of the victim’s state law. See e.g.,

Nevada v. Hail, 440 U.S. 410 (1979); Maroon v. State Dept. of

Mental Health, 411 N.E.2d 404 (Ind. App. 1980).

28

CONCLUSION

— It is imperative that this Court declare that the state tort

law preserved by the Congress is grounded in state not federal .

law and that in a diversity case founded on such state tort law

the federal Courts are bound by the constitutional doctrine

announced in Erie v. Tompkins and set forth in the Rules of

Decision Act that they must follow the choice of law rules of the

state in which the district court sits.

This Court should grant the petition for certiorari.

Respectfully submitted,

JOSEPH V. KARAGANIS*

A. BRUCE WHITE

KATHLEEN M. DONAHUE |

KARAGANIS, GAIL & WHITE LTD.

150 North Wacker Drive

Suite 2500

Chicago, Illinois 60606

(312) 782-1905

Attorneys for Petitioner

* Counsel of Record