Amicus Curiae Brief — International Paper Co. v. Ouellette

Supreme Court brief1987

Ask Donna

What actually matters in this document.

Text

Supreme Court, U.S.

FILED

MAY 19 1986

No. 85-1233 osePH F. SPANIOL, JR.

aa he

Iu the Supreme Court of the United States

OCTOBER TERM, 1985

INTERNATIONAL PAPER COMPANY, PETITIONER

Vv.

HARMEL OUELLETTE, ET AL.

ON WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE SECOND CIRCUIT

BRIEF FOR THE UNITED STATES AS AMICUS CURIAE

SUPPORTING AFFIRMANCE

CHARLES FRIED

Solicitor General

F. HENRY HABICHT II

Assistant Attorney General

LAWRENCE G. WALLACE

Deputy Solicitor General

RICHARD J. LAZARUS

Assistant to the Solicitor General

JACQUES B. GELIN

RAYMOND B. LUDWISZEWSKI

Attorneys

Department of Justice

Washington, D.C. 20530

(202) 633-2217

QUESTION PRESENTED

Whether federal law has preempted the availability

of a nuisance action by owners or lessees of private prop-

erty brought in the state in which the property is located

either to abate or to recover damages caused by an out-

of-state discharge into interstate waters.

TABLE OF CONTENTS

EE EEL TL oO OO

Introduction and summary of argument ........................

Argument:

Residents of Vermont may maintain a common law

nuisance action against a source of water pollution

located in New York under whichever nuisance law

applicable state choice of law principles designate,

except that federal law requires that any abatement

remedy or punitive damages be based on the state

law designated by New York law .................00000......

Federal law expressly preserves the common

law of the state in which the polluting source is

EEE Se REE SS Ce a

Federal law does not preclude courts (including

a federal district court) located in Vermont

from hearing a nuisance claim based on inter-

state pollution even if that claim must be based

on New York nuisance law ...............0......0...........

Federal law has preempted the availability of

abatement and punitive damage remedies under

Vermont nuisance law against a discharger lo-

cated in New ~ ork unless New York law would

itself call for app’ication of Vermont law, but

does not preem)t a claim for compensatory

damages under Vermont law ...............................

Applicable choice of law principles will deter-

mine which state law governs in a private ac-

tion for compensatory damages based on inter-

AOE ENS SEALE TET EO

TABLE OF AUTHORITIES

Cases : Page

Allstate Insurance Co. v. Hague, 449 U.S. 302.... 29

Chemical Manufacturers Ass’n Vv. Natural Re-

sources Defense Council, Inc., No. 83-1013 (Feb.

ee x 24

Chesapeake Bay Foundation v. Gwaltney, 611 F.

Supp. 1542, appeal pending, No. 85-1873 (4th

IAD cispcitnsittiinenbeeetuaitibiinisarinctandititithtinnnnniiniiatecanioaninn 28

City of Milwaukee Vv. Illinois:

GE We GE dccctccdcdvieasinen 10, 11, 12, 13, 20, 21, 23, 24

I i ia eins 5 aa ciisnaseinidunntinlaesiiiinis 10

County of Oneida vy. Oneida Indian Nation, No.

ey Ce, a _. -csepuniniodioneaennpieene 14, 24

Cousins Vv. Instrument Flyers, Inc., 44 N.Y.2d 698,

EI See ee ee eee a i OO oe 20

Davis Vv. Passman, 442 U.S. 228 ....................--.-...-.--- 22

E. I. du Pont de Nemours & Ce. v. Train, 430 U.S.

he INT RSS oA Rl Fa SS ERR eae er 15, 24

Electrical Workers v. Foust, 442 U.S. 42 -.............. 26-27

EPA vy. National Crushed Stone Ass’n, 449 U.S.

OO ach cerkdinciahstiliaheicsiliniceltiniajiiat Dhaitheaipaead iadlimdiscinidnintintindnintpeimen 15, 24

Ferebee vy. Chevron Chemical Co., 736 F.2d 1529,

cert. denied, 469 U.S. 1062 .................................-.. 15

Florida Lime & Avocado Growers, Inc. v. Paul,

RGAE PS See aa 20

Georgia Vv. Tennessee Copper Co., 206 U.S. 230... 23

Georgia Vv. Tennessee Copper Co.:

tS ER a0 ee ee Te ne 23

I al le 23

nee 23

Hines v. Davidowitz, 312 U.S. 52 ............................ 20

Hughes v. Fetter, 341 U.S. 609 ....................00...22..... 29

Illinois v. City of Milwaukee, 406 U.S. 91 .............. passim

Jackson Vv. Johns-Manville Sales Corp., 750 F.2d

a aaa a 24

Keeton v. Hustler Magazine, Inc., 465 U.S. 770.... 29

Klazxon Co. v. Stentor Elec. Mfg. Co., 313 U.S.

ee 6, 29

Cases—Continued : Page

Local 296, International Union of Operating En-

gineers V. Jones, 460 U.S. 669 -........................... 26

Michigan Canners & Freezers Ass’n V. Agricul-

tural Marketing & Bargaining Bd., 467 U.S.

ARETE SY Tee eT ke a ae ae Oe a ee TE 22

Middlesex County Sewerage Authority v. National

Sea Clammers Ass’n, 453 U.S. 1 -.........--.... 14, 15, 17, 23

Missouri V. Illinois, 200 U.S. 496 ............................ 23

Nader v. Allegheny Airlines, Inc., 426 U.S. 290... 26

New Jersey v. City of New York, 283 U.S. 473.... 15, 23

New York v. New Jersey, 256 U.S. 296 ............... 23

North Dakota v. Minnesota, 263 U.S. 365 ........... 23

Northeast Bancorp, Inc. v. Board of Governors,

No. 84-368 (June 10, 1965) ................................ 14

Ohio v. Wyandotte Chemicals Corp., 401 U.S.

TEE” Witicinesideatdihanstsheltsinsiatiiagnrtinnsbensiipeipitibinibinasagatiiceniansinapesimage 17, 24

Oklahoma ¥. Cook, 304 U.S. 387 .............................. 23

Pacific Gas & Electric Co. v. State Energy Re-

sources Conservation & Development Comm’n,

ee I BI Wabi hecstctitnticiimnnititngetigitiittinseytiibindtinccenen 25

Roginsky v. Richardson- Merrill, Inc., 378 F.2d

TURE tlnicitiiicitesninniidchnatttnstainaninnimnsinapuiibaitinedeatintilnaiiiiaaes 27

San Diego Building Trades Council v. Garmon,

Se I lnk abn inclatgiepeniinetlecltitdidiietal= tiltectinedbiindileibiaies 25, 26

Silkwood v. Kerr-McGee Corp., 464 U.S. 238......22, 24-25,

26, 27, 28

Tennessee V. Champion International Corp., No.

85-36-I (Tenn. Sup. Ct. filed Apr. 21, 1986)... 18, 27

Texas V. Pankey, 441 F.2d 236 .........000000 ee... 12

Texas Industries, Inc. Vv. Radcliff Materials, Inc.,

ETSI Re a Soe a 12, 23

Train v. City of New York, 420 U.S. 35 .............. 24

Vermont v. New York:

| STINE SSRI Sessiveancinctisailesitihliiiiniees 1,2

EEE TRS FL SE a 1

409 U.S. 1103 .......... POE GFE SEES Pe Oe 1

4 |S ESS egseiniibatiilieseapaialinicpiailinidecns 2,8

EE STE EG NR Pee 2

Cases—Continued :

Page

Zahn Vv. International Paper Co., 53 F.R.D. 430... 2

Zahn v. International Paper Co., 414 U.S. 291... 2

Constitution, statutes and regulation:

U.S. Const. Art. I, § 8, Cl. 3 (Commerce Clause) .. 14

Clean Water Act, 33 U.S.C. (& Supp. II) 1251

CE BOG. cncenwececeececcesesesnpenccccsseccsccapeceseressersecercccsconceccoss 6

Cn 21

TS ni 18

sit * Of ) ii 18

33 U.S.C. 1311(b) ......-. season aici eltiaaldetiaaci 18

ID nc scidenccassnnncemnacocnneennnscsosoqsess 19

i eee 18

nen 18

I © ss srceranntneneeneneeneineennnens 18

33 U.S.C. 1316 ...... ie enlateminatientin 18

I, os sceneeiermmninmaepemnnonndininonsens 13

a 18

III 0s certtdastisinatigbepinenngnetnenctngnn 13

i es 20

Se Rit neers 28

ES ee 14

a cneatintennalabaiinegns 18

ETD 04a crrscnmrinangquiodagennenintn 19

CS 19

I , 18

i cemninenseenanenanns 19

i | ean bbe huss 19

338 U.2.C. (@ Sapp. Ti) 1844 .............................. 18

LAS 19

ec anne 19

BL | Cen 19-20

eee 20

een nnae: 14, 15, 21

I i sent tnetincllalibiel 19, 28

I a caliesssmuidaninediincons 19

$8 U.S.C. 1865(c) (§ 505(c)) .......................... 16

33 U.S.C. 1365(e) (§ 505(e)) -........-222-2.... 21

RE EE ee 19

Vil

Constitution, statutes and regulation—Continued : Page

i setteetneencemonct 13, 21

Be Rs EID EDD mccivcccccrcecccccssnseses 21

Federal Water Pollution Control Act of 1948, 33

U.S.C. (1970 ed.) 1151 et seq.:

fe ee 21

33 U.S.C. (1970 ed.) 1160(b) (§ 10(b))-......... 13

ETT 3

EC 14

i SRE CEE a 14

i 14

ST Na I a 14

RAR A A aa ae ee TEN 15

Miscellaneous :

3 J. Elliot, Debates on the Federal Constitution

SETS RCE ee AE eo SE 17

Field, Sources of Law: The Scope of Federal

Common Law, 99 Harv. L. Rev. 881 (1986)... 18

Friendly, In Praise of Erie—And of the New Fed-

eral Common Law, 39 N.Y.U.L. Rev. 383

i lia ahi ld aceon 12

H.R. Rep. 92-911, 92d Cong., 2d Sess. (1972)... 14

Merrill, The Common Law Powers of Federal

Courts, 52 U. Chi. L. Rev. 1 (1985) 2... 18

Owen, Problems in Assessing Punitive Damages

Against Manufacturers of Defective Products,

25 % & * 5 2 | Seaceeeeee 27

Prosser & Keeton, The Law of Torts (5th ed.

Giclee tale lalalaliii iiansiibitncenptiiianatlipnii 26

S. Rep. 92-414, 92d Cong., ist Sess. (1971) .....14, 15, 19

Iu the Supreme Court of the United States

OCTOBER TERM, 1985

No. 85-1233

INTERNATIONAL PAPER COMPANY, PETITIONER

Vv.

HARMEL QUELLETTE, ET AL.

ON WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE SECOND CIRCUIT

BRIEF FOR THE UNITED STATES AS AMICUS CURIAE

SUPPORTING AFFIRMANCE

On March 24, 1986, the Court invited the Solicitor

General to express the views of the United States in

this case.

STATEMENT

1. This case is the third in a series to reach this Court

concerning the adverse effects on Vermont and its citizens

of effluent discharges into Lake Champlain from a paper

mill owned by petitioner International Paper Company

(IPC) and located in the State of New York. The con-

troversy was first before the Court in 1970, when the

State of Vermont brought an original action in this Court

against the State of New York and IPC based on IPC

discharges into Lake Champlain, seeking both injunctive

and monetary relief. The Court granted Vermont leave

to file its complaint and appointed a Special Master to

hear the matter, after which the United States inter-

vened as a party. Vermont v. New York, 406 U.S. 186

(1972), 408 U.S. 917 (1972), 409 U.S. 1103 (1973).

(1)

The Court rejected the Special Master’s Report (417

U.S. 270 (1974)), and ultimately dismissed the com-

plaint after the parties eatered into a settlement agree-

ment and jointly moved for dismissal (419 U.S. 955

(1974) ).

Subsequent to the filing of Vermont’s original action,

but prior to dismissal of that complaint, the Court con-

sidered related private claims against IPC in Zahn V.

International Paper Co., 414 U.S. 291 (1973). In Zahn,

the Court affirmed the lower courts’ dismissal of a class

action brought in federal district court (based on diver-

sity) by Vermont landowners and lessees of Lake Cham-

plain lakeshore property, who challenged the legality of

the IPC discharges into the lake. Members of the class

sought coripensatory and punitive damages. Because,

however, not every member of the class had suffered pol-

lution damage in excess of $10,000, this Court held that

the jurisdictional amount requirement had not been met

(id. at 292, 301).

The present action commenced in 1978, when respond-

ents, landowners or lessees of Lake Champlain lakeshore

property located in three towns in the State of Vermont,'

brought this class action in Vermont superior court

against IPC, based on its plant’s discharges of effluent

1 The plaintiff class in the current lawsuit differs from that defined

in the prior Zahn litigation only with respect to the towns covered.

Both actions included landowners and iessees in the Towns of

Shoreham and Bridport, but the current lawsuit substitutes such

persons in the Town of Addison for those in the Town of Orwell.

Compare J.A. 28 with Zahn v. International Paper Co., 53 F.R.D.

430, 480 (D. Vt. 1971). In addition, the IPC paper mill at issue is

not the same mill that was initially the subject of Vermont’s original

action and the Zahn litigation. The original IPC plant was closed

down in 1970 and replaced by a plant (the subject of this litigation)

located a few miles to the north. Vermont’s complaint in the original

action was amended to cover the new plant and the settlement agree-

ment applied to that plant. See Plaintiff’s Mot. for Leave to Inter-

pose Amended and Supp. Complaint, Exh. A, at 3, Vermont v. New

York, 406 U.S. 186 (1972); Agreement of Settlement between

Vermont and IPC (J.A. 113-116).

LO eee EE ————~—E~— ee S.,SETETESES-S:ti‘(

into Lake Champlain (Pet. App. A6; J.A. 27-37).? Re-

spondents allege the IPC discharges are “foul, unhealthy,

smelly, and aesthetically unpleasing,” “detrimental to

the Lake, and its fish and plant life,” and “interfere with

[respondents’] use and enjoyment of their property”

(J.A. 28-29). Respondents seek both injunctive relief

and money damages based on five separate counts aiieg-

ing that the discharges: (1) constitute “a continuing

auisance”; (2) violate IPC’s federal national pollution

discharge elimination system (NPDES) permit; (3) in-

terfere with respondents’ rights as riparian owners; (4)

negligently violate a “duty” IPC owes respondents; and

(5) “are malicious, willful, and undertaken with reckless

and wanton disregard of [respondents’] rights” (J.A. 27-

34). In particular, respondents request that IPC be or-

dered to relocate its water intake system closer to its dis-

charge outlets and that respondents be awarded $20,000,000

in actual damages (id. at 29, 30, 31, 32). In addition,

respondents seek an award of $100,000,000 in punitive

damages based on their allegations that IPC has engaged

in “malicious” and “willful” misconduct (id. at 38).

Soon after respondents filed their complaint, petitioner

removed the case to federal district court in Vermont,

based on diversity jurisdiction (28 U.S.C. 1332(a)). In

April 1980, the district court certified respondents’ plain-

tiff class (86 F.R.D. 476). The district court subse-

quently added the State of Vermont as a member of the

class based on its status as a riparian landowner (see

Pet. App. A18 n.5).

In June 1981, IPC moved to dismiss respondents’ com-

plaint on the ground that respondents’ interstate water

* Respondents’ complaint also includes a separate cause of action

(on behalf of a more broadly defined class) based on pc:itioner’s

emissions of pollutants into the ambient air (J.A. 34-87). Because

the petition for a writ of certiorari and the decisions below concern

only the cause of action alleging interstate water pollution, we do

not address the separate class action based on interstate air

pollution.

pollution claims are rooted in state law, which had been

preempted by federal law (Def. Memo in Support of

Mot. to Dis. 12-22; Def. Supp. Memo in Support of Mot.

to Dis. 6-9). Alternatively, IPC argued that even if some

potentially applicable state law remained viable, the only

state law surviving federal preemption would be the law

of the state in which the discharger is located (New

York iaw),* and that only courts located in New York

could entertain interstate vater pollution claims based

on New York law (Pet. App. A7; Reply Br. 5 n. *).

Therefore, IPC contended, respondents’ claim should be

dismissed on the alternative ground that because their

suit-was brought in a court located in Vermont (includ-

ing a federal district court sitting in Vermont), respond-

ents could not rely on the only state tort law that might

remain (ibid.).

2. In February 1985, the district court denied peti-

tioner’s motion to dismiss, ruling that federal law does

not generally preclude courts located in Vermont from

hearing such claims under Vermont law (Pet. App. A4-

A25), and indicating that Vermont choice of law rules

would determine whether the nuisance law of Vermont

or New York applies in this case (id. at Al6, A24-A25).*

8. On interlocutory appeal, the court of appeals af-

firmed in a per curiam opinion, adopting the district

court’s opinion in “all respects” relevant to the nuisance

preemption claim at issue here (Pet. App. A2-A3).

3 For the purposes of this submission, we will refer to the state

in which the source of pollution is located as the “source state” and

the state adversely affected by the interstate pollution as the

“affected state.”

4The district court also rejected IPC’s claims that respondents’

riparian rights had been resolved in prior proceedings (the agree-

ment Vermont entered into with IPC settling Vermont’s original

action) and that respondents do not possess standing to maintain a

cause of action for nuisance (Pet. App. A7, A21-A25). These rul-

ings were affirmed by the court of appeals (id. at A2-A3). Because

IPC expressly limits its petition for a writ of certiorari to the

nuisance preemption claim, the validity of these other rulings is

not at issue here (Pet. i, 4 n.*).

INTRODUCTION AND SUMMARY OF ARGUMENT

Respendents’ complaint states a claim under the com-

mon law of nuisance based on IPC’s interstate discharges,

but nowhere suggests that the applicable source of nui-

sance law must be Vermont and not New York law. To

the contrary, respondents rely on whichever state’s nui-

sance law may apply under federal preemption principles

and state choice of law rules.° For this reason, IPC’s

motion to dismiss the nuisance cause of action requires

acceptance of one of two alternative legal arguments.

either (1) federal law has preempted both New York’s

and Vermont’s nuisance laws; or (2) only New York

nuisance law remains, but federal law precludes courts

in Vermont (including a federal district court located

in Vermont) from applying New York law. Neither of

these contentions is tenable, however, because the federal

Clean Water Act expressly preserves New York com-

mon law and Vermont courts, particularly a federal

district court sitting in Vermont, undoubtedly retain

jurisdiction to apply New York law. On this basis alone,

denial of IPC’s motion to dismiss was proper.

Because, however, the courts below did not so narrowly

confine their rejection of IPC’s motion, this case also

5 See, e.g., Plaintiffs’ Supp. Memo in Opp. to Def. Mot. to Dis. 4-5

(“Applying the principles of the [Seventh Circuit’s 1984 decision

in} [Uinois v. Milwaukee * * * to this case, it is clear that Plaintiffs

can maintain the action based on New York common law. The

Complaint in this matter does not specify the jurisdiction of the

common law it invokes or make a choice of law. * * * Therefore,

there is no basis for dismissing the present suit. * * * Plaintiffs

maintain their right to invoke Vermont common law and do not

waive any right to have it apply * * *. [S]hould[, however] this

Court choose to follow [the Seventh Circuit] it must allow the case

to go forward based upon New York law.’’); Appellees Br. 37 n.9

(“While Plaintiffs maintain their right to invoke Vermont common

law and do not waive any right to have it apply, should this Court

choose to follow the Seventh Circuit, it must allow the case to go

forward based upon New York common law, which is in all respects

nearly identical to that of Vermont.”).

presents the more difficult question whether federal law

has preempted the availability of any portion of Ver-

mont’s nuisance law. The district court’s opinion, adopted

by the court of appeals, was partially rooted in its con-

clusion that Vermont nuisance law was available in full

force. The court appeared to suggest that either New

York or Vermont law could govern all aspects of this

case, depending solely on Vertnont choice of law principles

(under Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S.

487 (1941)). This aspect of the court’s opinion, while

unnecessary to the result of rejecting IPC’s motion to

dismiss, is, in our view, erroneous in its broad and un-

limited scope. It is our submission that respondents may

not rely on Vermont nuisance law to support either an

abatement remedy or a punitive damages award, unless

New York law would itself call for application of Ver-

mont law. In the Clean Water Act, 33 U.S.C. (& Supp.

II) 1251 et seqg., Congress deliberately assigned the fed-

eral government and the source state (New York) the

preeminent roles in fashioning effluent limitations and

standards, including those applicable to sources of inter-

state pollution. Allowing respondents unilaterally to in-

voke the law of Vermont to abate IPC’s discharges either

directly through the award of injunctive relief or indirectly

through the award of punitive damages would conflict

with the federal scheme by allowing, in effect, the law

of the affected state to impose more stringent regulatory

requirements on the discharger, regardless of the desires

of the federal agency or source state.

A claim for compensatory relief based on Vermont

nuisance law is not, however, subject to the same federal

preemption ljmitations. Historic reasons for ousting ap-

plication of State law in the interstate pollution context

do not nroperly apply to such a private action for dam-

ages. And, specifically, the federal Clean Water Act and

its legislative history explicitly preserve any otherwise

applicable state common law damage remedies, even when

a discharger is in compliance with federal requirements.

Those requirements are based on considerations applicable

to industry and water quality on a categorical basis, and

do not purport to judge the reasonableness of harms

caused by a particular discharger.

We are not unaware of the problems presented to an

interstate discharger located in one state facing the pros-

pect of private damage actions for compensatory relief

in additional states under varying state laws. Of course,

almost any business endeavor that engages in substantial

interstate commerce and is exposed to significant tort

liability could express similar policy concerns. The rele-

vant policy choices, however, are for Congress to make

in the first instance and not, absent a constitutional basis

(and we perceive none), for the judiciary to impose.

For now, Congress has purposely left unfettered state

tort law private damage remedies for compensatory relief

for water pollution. Hence, applicable state choice of law

principles designate the state law to govern any particu-

lar controversy involving more than one state, as they

do in most areas of traditional tort law. IPC’s avenue of

redress must be with Congress and not this Court.

Finally, while our views rest upon our own analysis,

we note that the position IPC now takes appears to de-

part from the position it advanced to this Court on two

prior occasions in closely related litigation. First, in

Vermont v. New York, supra, the original action Ver-

mont brought in 1970, IPC resisted this Court’s jurisdic-

tiori essentially on the theory that it was amenable to

suit in Vermont state courts, as well as in New York

state courts.* Indeed, IPC maintained that Vermont law

* At oral argument, counsel for IPC left no doubt that the com-

pany could be sued in Vermont courts:

Q: Do you concede that International Paper is amenable to

service of process in Vermont?

A: We contend * * * that we are suable in Vermont, we’re

suable in New York, we’re ready to stand suit there, there’s

no question about that. This is the really available alter-

would govern the dispute whether it was litigated in

Vermont courts or New York courts, based on the notion

that the latter courts would likely apply the law of the

state in which the injury occurred.’ IPC distinguished a

private damage action from a sovereign abatement action

and suggested that the former should be a matter of state

law.

It could be suggested that IPC’s position at that time

was based on its understanding of the law just prior to

this Court’s decision in Illinois v. City of Milwaukee

(Milwaukee I), 406 U.S. 91 (1972) and congressional

passage of the Clean Water Act.* However, IPC basically

adhered to the same position before this Court in the

Zahn litigation, which occurred after both Milwaukee I

native that the State of Vermont has against us insofar as

remedy goes. There’s no doubt about that.

_ * * * *

[We are subject to suits in Vermont. We never have ques-

tioned it. Also in New York.

Tr. 39-40, 41. See also IPC Br. in Opp. 23 (“International Paper

Company is subject to suit in Vermont’).

7 Q: Let’s assume you’re sued in Vermont, what would be the

governing law?

A: I would think the State of Vermont law. * * *

Q: And the suit in New York the same?

* * - +

A: * * * If we’re sued in New York, I would think that the

New York Court would look to the Vermont law, because

that’s the place where the injury occurred.

Tr. 41-42.

8 See IPC Br. in Opp. 23; Tr. 34.

® We do not read this Court’s decision to grant Vermont leave

to file its complaint in the original action as a repudiation of IPC’s

arguments. In light of the exclusive nature of this Court’s original

jurisdiction in controversies between States, the Court’s action may

well have reflected the possibility that New York was a necessary

party to the litigation because of the location of a controversial

sludge bed within New York’s borders (see 417 U.S. at 270,

276-277 n.6).

and enactment of the Clean Water Act. IPC reiterated

then that it was amenable to suit in Vermont courts.’®

IPC also maintained that state law, and not federal com-

mon law, would govern, specifically resisting the notion

(it now appears to advance) that Milwaukee I bore on

the availability of a private action *- damages under

state law to redress interstate water pollution." Still,

10 See Tr. 32, 33 (“My client is sueable [sic] in the state courts

of Vermont. * * * We can be sued there.’’).

11Q: Have you considered our decision in /llinois and the City

of Milwaukee?

A: Ihave indeed, your Honor. I’d be glad to answer questions

about it.

* _ + * .

Q: Well, I was just wondering, though, after Jllinois and

Milwaukee, we said federal law governs, federal common

law. It had still to be developed. Would the district court

be free to apply state law? * * *

A: Your Honor, I see the difference between /llinois against

Milwaukee on the one hand and this case on the other.

Illinois-Milwaukee was an action to abate a public nuisance

of large measure. This is an action for money damages.

* * * They are not trying to abate. If they wanted to abate,

they have other remedies. Indeed, under the Federal Water

Pollution Control Act of 1972, citizen suits of large

measure—

+ = * * *

A: ** * Illinois against Milwaukee * * * says nothing about

actions brought by private people, actions brought by

estate [sic] to abate.

Q: Certainly if you take a case like Georgia against Tennessee

Copper, where the Court intimated that there would be a

kind of federal common law rule, there is no intimation

there that the same rule would govern action between pri-

vate parties, is there?

A: None, whatever, * * * the Court indicates tliat you would

be slow to apply this doctrine to private claims. J/llinois

against Milwaukee also * * * spoke of the state’s right, a

quasi-sovereign right in ecological purity. That is not this

case. This is a strict common law, border play for money

damages * * *.

Tr. 22-25. See also IPC Br. 20 n.7.

whatever inconsistencies may exist in IPC’s positions, res-

olution of the preemption issue now before the Court

must turn on the intent of Congress, the issue which we

address below.

ARGUMENT

RESIDENTS OF VERMONT MAY MAINTAIN A COM-

MON LAW NUISANCE ACTION AGAINST A SOURCE

OF WATER POLLUTION LOCATED IN NEW YORK

UNDER WHICHEVER NUISANCE LAW APPLICABLE

STATE CHOICE OF LAW PRINCIPLES DESIGNATE,

EXCEPT THAT FEDERAL LAW REQUIRES THAT

ANY ABATEMENT REMEDY OR PUNITIVE DAM-

AGES BE BASED ON THE STATE LAW DESIGNATED

BY NEW YORK LAW

This case raises the question left open by this Court’s

decision in City of Milwaukee v. Illinois (Milwaukee I1),

451 U.S. 304, 310 n.4 (1981): the extent to which a

plaintiiZ may rely on state common law in a suit brought

against an out-of-state source of water pollution.’ The

courts below held that a plaintiff in Vermont could rely

on Vermont nuisance law (or New York law if desig-

nated by Vermont choice-of-law rules) either to abate or

to seek money damages for interstate water pollution

caused by a discharger located in New York. IPC asks

this Court to reverse that ruling, arguing, in effect, that

the special problems faced by a source of interstate water

pollution--including the prospect of multiple suits in dif-

ferent states and under varying state laws—require a

special rule of federal preemption that would either totally

immunize the source from suit based on any state’s law

or, alternatively, at least remove it from the jurisdiction

of any court except for those located in the same state

12 Milwaukee II held that the federal common law remedy recog-

nized in Milwaukee I had been superseded by federal statute.

Milwaukee II did not address the possibility that Illinois could

maintain an action under Illinois law for the discharges in Wis-

consin; the Court denied Illinois’ cross-petition on that issue. See

451 U.S. 982 (1981); see also 451 U.S. at 310 n.4.

as the source. While we agree that the courts below

erred in holding that Vermont nuisance law is fully avail-

able, we also believe that IPC seeks a far too sweeping

and unsupported rule of federal preemption.

The role of federal law in this controversy is neither

as limited as the courts below suggest nor as broad as

IPC urges. The Clean Water Act limits the availability

of Vermont nuisance law because the unilateral imposi-

tion of Vermont law on a discharger located in New York

is inconsistent with that federal statute when, as in this

case, plaintiffs seek abatement and punitive damages.

The federal statute, however, leaves undisturbed both

New York nuisance law (the law of the source state)

and a remedy under Vermont nuisance law for compensa-

tory relief, leaving remaining choice of law questions to

the application of traditional rules. Moreover, except for

traditional due process limitations, federal law in no man-

ner dictates the judicial forum in which the suit must be

brought. Accordingly, while we do not agree with the

full breadth of the decision below, we submit that IPC’s

motion to dismiss was properly denied.

A. Federal Law Expressly Preserves The Common Law

Of The State In W.iich The Polluting Source Is Located

IPC’s threshold argument below was that federal rather

than state law governs interstate water pollution and,

consequently, respondents may not maintain a lawsuit

based on the nuisance law of either the source state (New

York) or the affected state (Vermont)."* This argument

relies on a seemingly straightforward, yet flawed, reading

of this Court’s decisions in Milwaukee I and Milwaukee

II, with the former standing for the proposition that fed-

eral (not state) law governs interstate water pollution

disputes and the latter simply holding that federal statu-

tory law has supplanted federal common law.

48 Pet. App. A7; see Def. Memo in Support of Mot. to Dis. 13-28 ;

Def. Reply Memo in Support of Mot. to Dis. 1-10; Def. Supp. Memo

in Support of Mot. to Dis. 6-9.

First, Milwaukee I did not limit the normal police

power of a state to impose more stringent effluent re-

quirements or more expansive tort liability on sources of

pollution within the state’s borders than might be sup-

plied by federal law, whether statutory or common law.

Although isolated statements in several of this Ccurt’s

opinions could be read as supporting that extreme re-

sult,* the rationale of Milwaukee I does not extend so

far. The “controlling principle’ for fashioning federal

common law in Milwaukee I was that “ ‘the ecological

rights of a State in the improper impairment of them

from sources outside the State’s own territory’” should

be a matter of federal law. 406 U.S. at 99-100 (quoting

Texas Vv. Pankey, 441 F.2d 236, 240 (10th Cir. 1971));

see also Milwaukee II, 451 U.S. at 335 (Blackmun, J.,

dissenting) (“[the] laws of one State cannot impose

upon the sovereign rights and interests of another”).

Such concerns are totally absent when a state seeks to

impose more stringent requirements on sources of pollu-

tion within its own borders. The only effect on the

neighboring state is beneficial: a decrease in pollution

from out-of-state sources. There is accordingly no rea-

son to assume that Milwaukee I intended to immunize

from state regulation pollution from in-state sources that

happens to contribute to interstate pollution, particularly

when, as the Milwaukee I Court itself recognized (406

U.S. at 104), the then applicable federal water pollution

control legislation expressly preserved “‘[s]tate and in-

terstate action to abate pollution of interstate or navi-

14 See, e.g., Milwaukee II, 451 U.S. at 313 n.7 (“[{il]f state law

can be applied, there is no need for federal common law: if federal

common law exists, it is because state law cannot be used’); id.

at 335 (Blackmun, J., dissenting) (“the Court has fashioned federal

law where the interstate nature of a controversy renders inappro-

priate the law of either State’); Texas Industries, Inc. v. Radcliff

Materials, Inc., 451 U.S. 630, 641 (1981) (“the interstate * * *

nature of the controversy makes it inappropriate for state law to

control”); see also Friendly, In Praise of Erie—And of the New

Federal Common Law, 39 N.Y.U. L. Rev. 383, 408 n.119 (1964).

gable waters’” (ibid., quoting Federal Water Pollution

Control Act of 1948, §10(b), 33 U.S.C. (1970 ed.)

1160(b) ).

Moreover, the second half of IPC’s argument—that

Milwaukee II simply held that federal statutory law has

since supplanted federal common law—misapprehends

the full import of the congressional enactment. For,

under the very terms of the comprehensive federal water

regulatory program established by the Clean Water Act,

it is clear that Congress did not intend to preempt, in

any fashion, the authority of a state to impose more

stringent regulatory requirements or more expansive tort

liability on in-state sources, regardless of the ultimate

location of any harm resulting from the pollution. Sec-

tion 510 (33 U.S.C. 1370), in particular, provides “that

States may adopt more stringent limitations through

state administrative processes, or even that States may

establish such limitations through state nuisance laws

and apply them to in-state dischargers” (Milwaukee II,

451 U.S. at 328 (emphasis added)).** Notably, when

Congress has determined that overriding federal inter-

ests require preemption of more stringent state law re-

15 Section 510 provides:

[N]Jothing in this [Act] shall (1) preclude or deny the right

of any State * * * to adopt or enforce [any effluent limitation

or standard] * * * except that * * * [a] State * * * may not

adopt or enforce any effluent limitation, or * * * standard * * *

[that] is less stringent than [one adopted] * * * under this

[Act]; 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.

383 U.S.C. 1370. See also 33 U.S.C. 1816(c) (emphasis added)

(“Each State may develop and submit to the Administrator a

procedure under State law for applying and enforcing standards of

performance for new sources located in such State.”); 33 U.S.C.

1318(c) (emphasis added) (“Each State may develop and submit

to the Administrator procedures under State law for inspection,

monitoring, and entry with respect to point sources located in

such State.”’).

quirements on a source of pollution, Congress has ex-

plicitly so provided. See, ¢.g., 33 U.S.C. 13822(f) (limit-

ing more stringent state regulation of marine sanitation

devices); see also 42 U.S.C. 7416, 75438, 7545(c) (4),

7573 (preempting certain state air pollution regulation

of moving sources). Here, however, Congress has specif-

ically chosen to preserve, rather than preempt, the au-

thority of the source state to impose more stringent

standards on dischargers of interstate pollution within

its own borders, and the courts must defer to that legis-

lative judgment.*®

Congress did not, moreover, evince any intent to pre-

empt the authority of the source state to impose tort

liability for damages on dischargers located within its

borders. Indeed, Congress deliberately eschewed any

effort to touch on the issue of private damages for water

pollution in the Clean Water Act. See Middlesex County

Sewerage Authority v. National Sea Clammmers Ass’n,

453 U.S. 1, 13-18 & n.27 (1981). The Act’s cittzen suit

provision is confined to injunctive reiief to enforce efflu-

ent standards or limitations established by the Act (33

U.S.C. 1365; Sea Clammers, 453 U.S. at 14), or the im-

position of civil penalties for violation of those regula-

tory requirements, with any penalties recovered going

to the United States Treasury."* Neither the statutory

language nor the legislative history of the Clean Water

Act suggests Congress intended to immunize from state

common law damage remedies even those parties com-

16 There is, of course, no occasion to utilize the negative implica-

tions of the dormant Commerce Clause to prohibit state action that

Congress has authorized. Cf. Northeast Bancorp, Inc. v. Board of

Governors, No. 84-363 (June 19, 1985).

17 The statement in this Court’s recent opinion in County of

Oneida v. Oneida Indian Nation, No. 83-1065 (Mar. 4, 1985), slip

op. 9 (as revised), that the Water Act “made available civil penalties

for violations of the Act” should not be read as intending that

private parties themselves retain the penalties, in light of the clear

legislative history to the contrary. See H.R. Rep. 92-911, 92d Cong.,

2d Sess. 183 (1972); S. Rep. 92-414, 92d Cong., Ist Sess. 79 (1971).

plying with the Clean Water Act’s strict regulatory re-

quirements. The effluent limitations and standards es-

tablished by the Act are based on certain statutorily pre-

scribed cost and technological considerations applicable

to industry on a categorical basis, and not on the reason-

ableness of the harm caused by a particular discharger.

See generally FE. I. du Pont de Nemours & Co. v. Train,

430 U.S. 112 (1977); EPA v. National Crushed Stone

Ass’n, 449 U.S. 64 (1980); see also 40 C.F.R. 122.5(c)

(“The issuance of a permit does not authorize any in-

jury to persons or property or invasion of other private

rights, or any infringement of State or local law or

regulations.”). The Senate report on the bill speaks di-

rectly to the issue, specifically noting that damage rem-

edies under state law would remain available:

[I]f damages could be shown, other remedies would

remain available. Compliance with requirements

under this Act would not be a defense to a common

law action for pollution damages.

S. Rep. 92-414, 92d Cong., Ist Sess. 81 (1971); see Sea

Clammers, 453 U.S. at 16 n.26; see also New Jersey Vv.

City of New York, 283 U.S. 478, 482-483 (1931).

B. Federal Law Does Not Preclude Courts (Including A

Federal District Court) Located In Vermont From

Hearing A Nuisance Claim Based On Interstate Pollu-

tion Even If That Claim Must Be Based On New York

Nuisance Law

We have shown that federal law has not preempted the

law of New York (the source state). It follows that

IPC’s motion to dismiss was properly denied unless fed-

eral law nevertheless precludes courts in Vermont from

hearing a nuisance claim based on New York law.

See Ferebee v. Chevron Chemical Co., 736 F.2¢ 1529, 1540

(D.C. Cir.), cert. denied, 469 U.S. 1062 (1984) (“The fact that

EPA has determined that [the practice] is adequate for purposes of

{the federal regulatory statute] does not compel a jury to find that

the [practice] is also adequate for purposes of state tort law as

well” (emphasis omitted) ).

IPC argues (Pet. App. A7; Reply Br. 5 n.*, 7) that

federal law precludes courts located in Vermont (includ-

ing a federal district court) from hearing a New York-

based nuisance law claim on essentially the same ground

that IPC argues that Vermont law has been preempted.

IPC, in effect, equates legislative jurisdiction with judi-

cial jurisdiction..° See Reply Br. 7. Notably, IPC’s

theory extends (id. at 5 n.*), as it must in this case,

to a federal district court located in Vermont sitting in

diversity jurisdiction. The only legal authority IPC cites

in support of its novel argument is an analogy to Section

505(c) of the Clean Water Act, which provides that

citizen suits to enforce effluent limitations and standards

established by the Act can be brought “only in the judi-

cial district in which such source is located” (33 U.S.C.

1365 (c) ).

Whatever weight IPC’s contention might have as a

matter of policy, its legal argument is wholly insubstan-

tiai. It is simply too late in the day to argue that courts

in one jurisdiction may not, in th? absence of a specific

legislative or constitutional prohibition, apply the law of

another state. Section 505 of the Clean Water Act, more-

over, does not aid IPC’s cause. Section 505 concerns

citizens suits brought under the Clean Water Act to en-

force that Act’s requirements. This case does not involve

such a suit, but a private action brought under state

nuisance law.” Manifestly, a congressional decision to

19TPC does not claim that the Vermont courts, including the

Vermont federal district court, lacked personal jurisdiction over

it in this case. Instead, IPC advances a general federal rule of venue

or subject matter jurisdiction applicable to private nuisance suits

based on interstate pollution.

20 Respondents’ complaint does include one count based on an al-

leged violation of IPC’s NPDES permit. The validity of that count,

however, was not addressed in the opinions below, nor is it discussed

in the petition for a writ of certiorari. In all events, there is no

suggestion in the complaint that respondents intend to maintain a

citizen suit based on the Clean Water Act. Instead, the claim

appears to assert a private right of action for damages under that

establish venue requirements for the enforcement of a

particular federal statute cannot justify a judicial exten-

sion of those requirements beyond the Act’s terms.”

C. Federal Law Has Preempted The Availability Of

Abatement And Punitive Damage Remedies Under

Vermont Nuisance Law Against A Discharger Located

In New York Unless New York Law Would Itself Call

For Application Of Vermont Law, But Does Not Pre-

empt A Claim For Compensatory Damages Under Ver-

mont Law

1. While not strictly necessary to the proper disposi-

tion of IPC’s motion to dismiss, the courts below also

addressed the more difficult question whether federal law

has preempted the nuisance law of the state adversely

affected by interstate pollution, here Vermont. The lower

courts concluded that federal law has left Vermont law

undisturbed. We disagree. In our view, federal law clearly

preempts Vermont nuisance law as a legal basis for

abating a source of pollution located in New York, unless

New York law would itself call for application of Ver-

mont law. Absent such “consent” to an interstate ap-

plication of state law by New York, the imposition of

Vermont law to abate a discharger in New York would

be inconsistent with the rationale of Milwaukee I and

would, in any event, conflict squarely with the compre-

hensive statutory scheme for water pollution abatement

Congress established in the Clean Water Act.”

Act, an avenue subsequently foreclosed by this Court in Middlesex

County Sewerage Authority v. National Sea Clammers Ass’n, 453

U.S. 1 (1981).

21 TPC’s claim that Vermont courts may possibly be biased is, of

course, equally true of New York courts (see, e.g., Ohio v. Wyandotte

Chemicals Corp., 401 U.S. 493, 500 (1971)), which is why federal

diversity jurisdiction potentially exists in a case such as this one.

See 3 J. Elliot, Debates on the Federal Constitution 487 (1836)

(remarks of James Madison).

22 The Tennessee Supreme Court recently came to this conclusion,

dismissing an abatement action brought by Tennessee against a

As we have discussed (pages 12-13, supra), Milwau-

kee I was premised on the notion that application of the

law of one state to abate interstate pollution caused by

a source located in another state is generally inconsistent

with the sovereign rights of states to control sources of

pollution within their own borders (subject, of course,

to supervening exercise of congressional power). The

courts below did not dispute the correctness of this basic

premise (Pet. App. Al0), but reasoned that subsequent

developments—specifically the enactment of the Clean

Water Act in 1972—had somehow “authorized” the ap-

plication of previously preempted Vermont law (Pet.

App. All). We agree that the Clean Water Act is the

appropriate touchstone for preemption analysis,” but

submit that the Act’s terms leave no doubt that Ver-

mont’s nuisance abatement remedy is preempted, unless

New York law itself required application of Vermont

law.

The linchpin of the Clean Water Act is the national

pollution discharge elimination system (NPDES) permit

program, which the federal government either adminis-

ters itself or, if certain conditions are met, delegates to

the source state for administration. 33 U.S.C. 1311, 1312,

1316, 1317, 1328, 1342 and 33 U.S.C. (& Supp. IT) 1344.

Without a NPDES permit, any discharge into navigable

waters is unlawful (33 U.S.C. 1311(a)). Effluent limita-

tions and standards imposed by the permits are generally

derived from two primary sources: technological require-

ments established by the federal government (33 U.S.C.

1311(b), 1814(a) and (b), 1816, 1317) and water qual-

discharger located in North Carolina on the ground that interstate

application of Tennessee law was preempted by the Clean Water

Act. See Tennessee Vv. Champion International Corp., No. 85-36-I

(filed Apr. 21, 1986).

23 As in any preemption case, the question here is basically one

of federal statutory interpretation. See Merrill, The Common Law

Powers of Federal Courts, 52 U. Chi. L. Rev. 1, 38 (1985) ; see also

Field, Sources of Law: The Scope of Federal Common Law, 99

Harv. L. Rev. 881, 958 (1986).

ity standards the states may develop in the first instance

for waters within their respective jurisdictions. These

effluent requirements may be increased, as previously

noted (pages 13-14, supra), should the source state wish

to impose more stringent abatement requirements on dis-

chargers located within its borders. In short, the un-

ambiguous focus of the Clean Water Act. is on establish-

ing a partnership between the federal and state govern-

ments for the abatement of discharges originating within

each state’s borders, with the latter being allowed both to

administer the permit program and to impose more

stringent requirements.”

Congress, moreover, deliberately chose to assign a pre-

eminent position to the source state in the interstate

pollution context, conferring upon the affected neighbor-

ing state only an advisory role in the formulation of

applicable effluent standards or limitations.** The af-

fected state may try to persuade the federal government

or the source state to increase effluent requirements, but

ultimately possesses no statutory authority to compel that

result, even when its waters are adversely affected by

out-of-state pollution. See 33 U.S.C. 1841(a) (2), 1342

(b)(3) and (5), 1844(g)(1), (h)(1)(C) and (E);

24 See, e.g., 33 U.S.C. 1311(m) (providing for modification of

certain effluent limitations with concurrence of state for “discharges

by an industrial discharger in such State”) ; 33 U.S.C. 1341 (a) (1)

(prior to receipt of federal NPDES permit, discharger must first

obtain certification “from the State in which the discharge

originates”).

25 To be sure, the Clean Water Act provides both citizens and the

governor of an affected state with specific enforcement thority,

but those suits are limited to enforcement of the effluent limitations

and standards established by the Act, which, as just described, are

determined by EPA and supplemented only by the source state. See

33 U.S.C. 1365(a), (b) and (h); see also S. Rep. 92-414, 92d

Cong., Ist Sess. 79 (1971) (“Section 505 [does] not substitute a

‘common ‘aw’ or court-developed definition of water quality. [The

applicable; effluent control limitation or standard, would * * * have

been settled in the administrative procedure leading to the estab-

lishment of such effluent control provision.”’).

Milwaukee II, 451 U.S. at 325-326; see also 33 U.S.C.

1319(a), 1844(s) (2).**

Allowing respondents to invoke the law of Vermont to

abate IPC’s discharges would squarely conflict with the

federal scheme because the !2w of the affected state would

thereby be enabled to impose more string ot regulatory re-

quirements on the discharger, regardless of the desires of

the federal agency or source state. Such a result would

both significantly “impair[] the federal superintendence

of the field” Congress clearly envisioned in the Clean

Water Act (see Florida Lime & Avocado Growers, Inc.

v. Paul, 373 U.S. 182, 142 (1963)) and conflict with the

“full purposes and objectives of Congress” in providing

the source state with sole authority to supplement fed-

eral requirements (see Hines v. Davidowitz, 312 U.S. 52,

67 (1941) (footnote omitted)). For this reason, we dis-

agree with the lower courts’ conclusion that respondents’

request for injunctive relief can necessarily be maintained

under Vermont nuisance law. To the extent that respond-

ents seek abatement of IPC’s discharges through forced

technological modifications of IPC’s facility, they can

look only to federal law or New York law, including the

latter’s nuisance law—unless, of course, New York law

would itself require application of Vermont law, since,

then, the conflict presented by unilateral imposition of

Vermont law on a New York discharger would be elimi-

nated.””

The courts below reached a contrary conclusion based,

first, on an overly generous reading of the Clean Water

26 Indeed, the record suggests that Vermont exercised its advisory

function in this case and succeeded in convincing the permitting

agency to impose more stringent abatement requirements on IPC

(see J.A. 65-68).

27 We note that IPC has previously suggested to this Court that

New York law would call for application of Vermont law. See

pages 7-8 note 7, supra. See also Cousins v. Instrument Flyers, Inc.,

44 N.Y.2d 698, 699, 376 N.E.2d 914, 915 (1978) (“lex loci delicti

remains the general rule in tort cases to be displaced only in

extraordinary circumstances”).

Act’s two non-preemption provisions (Pet. App. A11-

A17) and, second, on an underestimation of the incon-

sistency between the statutory structure of the Act and

allowing application of an abatement remedy based on

Vermont law (id. at A17-A20). We do not question that

the Clean Water Act expressly preserves state law to a

specified extent, but, contrary to the rulings below, the

Act does not “authorize” the availability of state law to

abate a discharge in another state. As discussed above,

Section 510 of the Act, 33 U.S.C. 1370, expressly permits

a state to set pollution standards more restrictive than

the federal standard. This Court has recognized, however,

that this authority is limited to discharges occurring

within the borders of that state. Milwaukee II, 451 U.S.

at 327-328. Indeed, Section 510(2), 33 U.S.C. 1370(2),

was adopted from an almost identical provision of the

1948 Act, as amended, 33 U.S.C. (1970 ed.) 1151(c),

which the Court in Milwaukee I found insufficient to es-

tablish an intent by Congress not to preempt the law

of the non-source state in this regard. See 406 U.S. at

102. Section 505(e), 33 U.S.C. 1365(e), similarly does

not “authorize” a state law remedy to abate out-of-state

discharges. As this Court noted in Milwaukee II, 451

U.S. at 328-329, Section 505(e) addresses only the pre-

emptive scope of the citizen suit provision of Section 505

and “means only that the provision of such suit does not

revoke other remedies.” It does not address the broader

issue of the preemptive scope of “the Act as a whole”

(see 451 U.S. at 329).

In addition, the district court erroneously concluded

that the application of a Vermont abatement remedy was

not preempted because it would not “interfere with the

objectives of the Act[,]” which the court characterized as

the “elimination of the discharge of pollutants” (Pet.

App. Al7, Al8). The preemptive scope of the Clean

Water Act, however, is not limited simply to conflicts

with the Act’s ultimate goals (see 33 U.S.C. 1251(a)),

but extends to state laws that conflict with the statutory

mechanisms the Act establishes to reach those goals. See

Michigan Canners & Freezers Ass’n V. Agricultural Mar-

keting & Bargaining Bd., 467 U.S. 461, 477 (1984).

Here, unilateral application of Vermont nuisance law to

abate a source in New York would, as we have explained,

conflict with the federal statutory scheme. That the in-

trusion is created by the application of Vermont common

law instead of Vermont statutory law is of no legal con-

sequence. The object of federal preemption is the inter-

state application of the abatement remedy, whatever the

source of that remedy in the affected state’s law.

2. Whether federal law has similarly preempted any

damage remedy respondents might look to under Vermont

nuisance law presents a closer and more difficult question.

There is considerable force to the view that federal law

should generally be read as preempting (or not preemp-

ting) state law “cause[s] of action” rather than only par-

ticular remedies for their violation. Cf. Davis v. Pass-

man, 442 U.S. 228, 239 (1979). Hence, the conclusion

that federal law preempts Vermont nuisance law in the

interstate pollution abatement context strongly suggests

that, so too, respondents cannot seek a damage remedy

under Vermont nuisance law. As this Court has recog-

nized, however, preemption analysis may, in some cir-

cumstances, turn on the remedy being sought, particu-

larly on the distinction between injunctive relief (includ-

ing abatement) and money damages. See Silkwood Vv.

Kerr-McGee Corp., 464 U.S. 238 (1984). Although nei-

ther the courts below nor the parties focused directly on

that possibility here, we believe such a distinction is ap-

propriate to the extent that respondents seek compensa-

vry damages.

Simply put, the principal factors that supported this

Court’s decision in Milwaukee I to oust the affected

state’s law and to fashion a federal common law of

nuisance for interstate water pollution are not present in

a case involving a private action for damages. Milwaukee

I and the precedent on which it relied were all cases

concerning the right of a state, as sovereign, to vrotect

its natural environment from interstate pollution. Spe-

cifically, the cases all involved (and endorsed) the right

of the affected state in its sovereign capacity to maintain

an action under federal law to abate out-of-state pollu-

tion.** In each case, “quasi-sovereign” interests of the

states in their respective natural environments were at

stake, particularly the right of a state not to be forced

to give up the quality of its natural environment “for

pay.” Georgia v. Tennessee Copper Co., 206 U.S. 230,

237 (1907).*° Such sovereign rights are not at issue in

a lawsuit, such as this one, in which private citizens seek

money damages for harm caused to them by pollution

originating out-of-state. See id. at 238 (remarking on

“hesitation that we might feel if the suit were between

private parties, and the doubt whether for the injuries

which they might be suffering to their property they

should not be left to an action at law”).* In sum, to

28 Milwaukee I, 406 U.S. at 104; Georgia v. Tennessee Copper Co.,

206 U.S. 230, 237 (1907); New York v. New Jersey, 256 U.S. 296

(1921); New Jersey v. City of New York, 283 U.S. 478, 476-477

(1931) ; Missouri v. Illinois, 200 U.S. 496 (1906) ; see also Georgia

v. Tennessee Copper Co., 237 U.S. 474 (1915) ; 237 U.S. 678 (1915) ;

240 U.S. 650 (1916).

29 See, e.g., Milwaukee I, 406 U.S. at 99, 104-105; Georgia v.

Tennessee Copper Co., 206 U.S. at 237; North Dakota v. Minnesota,

263 U.S. 365, 373 (1923); Oklahoma v. Cook, 304 U.S. 387, 393

(1938) ; see also Texas Industries, Inc., 451 U.S. at 641; Milwaukee

II, 451 U.S. at 335 (Blackmun, J., dissenting) ; Missouri v. Illinois,

200 U.S. at 518.

Clammers Ass’n, 453 U.S. 1, 11 n.17 (1981) this Court did not reach

the question whether private parties could maintain an action for

damages based on interstate water pollution under the federal com-

mon law of nuisance, having concluded that the federal common law

of nuisance was itself preempted by the Clean Water Act. The

Court did, however, note that the request went “considerably

beyond” the cause of action recognized in Milwaukee I (453 U.S.

at 10). In our view, the appropriateness of extending federal com-

mon law to a private damage action should depend on the nature

of the interests providing the impetus for the applicability of fed-

eral common law in the first instance. Where those interests do not

depend at all on the nature of the relief being sought (unlike here),

the extent that Milwaukee I may be considered to provide

still-authoritative perspective for determination of the

preemption question here, we do not believe the principle

of that decision properly extends to preemption of a pri-

vate action for compensatory damages.”

In all events, as we have explained (page 18 note 23,

supra), the touchstone for preemption analysis here is

the relevant congressional enactment, the Clean Water

Act. That Act provides no sufficient basis for federal

preemption of a private action for compensatory relief

under the nuisance law of the affected state. Most funda-

mentally, the Clean Water Act provides a “comprehen-

sive regulatory program” for the abatement of water

pollution. Milwaukee II, 451 U.S. at 317 (emphasis

added); Train v. City of New York, 420 U.S. 35, 37

(1975); see generally Chemical Manufacturers Ass’n V.

Natural Resources Defense Council, Inc., No. 83-1013

(Feb. 27, 1985), slip op. 2-3; EPA v. National Crushed

Stone Ass’n, 449 U.S. 64, 69-72 (1980); EJ. du Pont de

Nemours & Co. v. Train, 480 U.S. 112, 116-121 (1977).

A comprehensive regulatory presence is not enough, how-

ever, to establish congressional intent to preempt related

state damage remedies. For example, in Silkwood Vv.

there would be no basis for a distinction. See, e.g., County of Oneida

v. Oneida Indian Nation, No. 83-1065 (Mar. 4, 1985), slip op. 7

(finding federal common law damage action where “Indian relations

* * * the exclusive province of federal law’’).

31 While the Court in Milwaukee I tersely repudiated (406 U.S. at

102 n.3) the prior suggestion in Ohio v. Wyandotte Chemicals Corp.,

401 U.S. 493, 498 n.3 (1971), that an action for damages and injunc-

tive relief could be brought under the affected state’s common law,

the only remedy at issue in Milwaukee I was abatement. Wyandotte

itself was an action brought by a sovereign and not a private dam-

age action. See also Jackson Vv. Johns-Manville Sales Corp., 750 F.2d

1314, 1324 (5th Cir. 1985) (“Clearly, if federal courts are to remain

courts of limited powers * * * a dispute * * * cannot become ‘inter-

state,’ in the sense of requiring the application of federal common

law, merely because the conflict is not confined within the boundaries

of a single state.”’).

Kerr-McGee Corp., 464 U.S. 238 (1984), the Court unani-

mously agreed that while the federal government had

unquestionably occupied the field of nuclear power safety

regulation, the states remained free to provide compensa-

tory remedies for those suffering radiation injuries. See

id. at 256; id. at 263-264 (Blackmun, J., dissenting) ; id.

at 275-276 (Powell, J., dissenting); cf. Pacific Gas &

Electric Co. v. State Energy Resources Conservation &

Development Comm’n, 461 U.S. 190, 205, 207-208, 216,

223 (1983) (state safety regulation of nuclear power

preempted, but not traditional state economic regulatory

authority).

Indeed, as we have explained (pages 14-15, supra), Con-

gress completely refra*’ ed from addressing the issue of

the availability of priva » dam~ .es for water pollution in

the Clean Water Act. That would ordinarily indicate that

Congress intended to preserve, rather than prohibit, any

common law damage remedy for compensatory relief that

might otherwise apply. See Silkwood, 464 U.S. at 263-

264 n.7 (Blackmun, J., dissenting) (“The absence of fed-

eral regulation governing the compensation of victims

* * * is strong evidence that Congress intended the mat-

ter to be left to the States.”) ; cf. Pacific Gas & Electric

Co., 461 U.S. at 207-208. And, we perceive no basis in

the statutory language or legislative history of the Clean

Water Act for a different preemption rule in the inter-

state water pollution context. Unlike the abatement rem-

edy, the interstate application of a compensatory damage

remedy does not upset the partnership the Clean Water

Act establishes between the federal government and the

source state to regulate pollution. The discharger re-

mains free to continue to act within applicable effluent

limitations and standards, while paying for any actual

injury that unreasonably results. The principal effect of

the state law compensation remedy is economic: to re-

quire a discharger to bear a social cost of the discharge.

To be sure, compensatory damages potentially may have

an incidental regulatory effect. See San Diego Building

Trades Council v. Garmon, 359 U.S. 236, 246-247

(1959) .** Preemption of state law turns, however, on

irreconcilable conflicts and not on incidental possibilities.

See Nader v. Allegheny Airlines, Inc., 426 U.S. 290, 299

(1976); see also Local 296, International Union of Op-

erating Engineers Vv. Jones, 460 U.S. 669, 676 (1983).

An award of compensatory damages presents no such con-

flict so long as the measure of damages is confined to

actual damages.

3. Respondents’ claim for punitive damages (J.A. 33-

34, 36), however, does not similarly survive preemption

analysis. The primary purpose of punitive awards is to

coerce the discharger into changing its behavior and, con-

sequently, such awards are more akin in effect and de-

sign to an abatement remedy. See Silkwoo. 464 U.S. at

263-265 (Blackmun, J., dissenting) ; see generally Prosser

& Keeton, The Law of Torts 9 (5th ed. 1984) (footnote

omitted) (‘“[Punitive] damages are given to the plaintiff

over and above the full compensation for the injuries,

for the purpose of punishing the defendant, of teaching

the defendant not to do it again, and of deterring others

from following the defendant’s example.”). Although in

certain contexts, the additional regulatory effect may not

call for a different preemption result from that reached

for compensatory relief (see Silkwocd v. Kerr-McGee

Corp., supra), a distinction is warranted here. As previ-

ously discussed, the Clean Water Act assigns the task of

abatement exclusively to the federal government and the

source state, while providing in a specifically limited

fashion for accommodation of the interests of the affected

state. Punitive damage awards, at the behest of the law

of the affected state, would therefore frustrate the fed-

eral statutory scheme by changing the terms of the ac-

commodation struck by Congress. Cf. Electrical Workers

82 Because of the extent to which Garmon and its progeny have

interpreted the federal labor law as intended to occupy the field

(see, e.g., 359 U.S. at 248), there is a more comprehensive basis

for finding conflict with (and thus preemption of) state law in that

field than is generally the case. The labor preemption cases, accord-

ingly, do not provide appropriate guidance here.

v. Foust, 442 U.S. 42, 50-52 (1979). The power of one

state unilaterally to apply its laws either itself or through

lawsuits filed by its citizeng to penalize discharges in

another state is tantamount to the power to shut down

the discharges entirely, regardless of the abatement levels

established by the federal statutory scheme. See Tennes-

see V. Champion International Paper Corp., No. 85-36-I

(Tenn. Sup. Ct. filed Apr. 21, 1986) (app)ication of civil

penalties to out-of-state discharges preempted by Clean

Water Act). It follows, here, that punitive awards

under Vermont nuisance law would conflict with the

Clean Water Act and, like the Vermont abatement rem-

edy previously discussed, should be preempted.”

This Court’s decision in Silkwood does not call for a

different result. There, punitive damages survived pre-

emption because the legislative history of a relevant fed-

eral statute as well as pertinent federal agency regula-

tions provided strong evidence that Congress intended

that traditional remedies of “state tort law would apply

with full force unless they were expressly supplanted”

(464 U.S. at 255 (emphasis added)). The Court ac-

knowledged that absent such evidence, preemption of

punitive awards might be in order (id. at 250-251).

There is no comparable evidence here of congressional

acquiescence to the direct regulatory effect of the inter-

state imposition of punitive awards. To the contrary, the

33 Recent experience has confirmed the unbounded reach of puni-

tive awards. See generally Owen, Problems in Assessing Punitive

Damages Against Manufacturers of Defective Products, 49 U. Chi.

L. Rev. 1, 59 (1982). And courts have recognized the special prob-

lems posed by their imposition in cases involving multiple plaintiffs.

See, e.g., Roginsky v. Richardson-Merrill, Inc., 378 F.2d 832 (2d

Cir. 1967) (Friendly, J.).

* The courts below virtually ignored respondents’ request for

punitive damages. The district court did not include a description

of the claim in its summary of respondents’ complaint (Pet. App.

A6) and when discussing preemption twice referred to how “com-

pensatory damage awards * * * merely supplement the standards

and limitations imposed by the [Clean Water] Act” (id. at A17,

A18 (emphasis in original) ).

unilateral application of punitive awards across state

boundaries would effectively redesign the regulatory

scheme by overriding the secondary role Congress ex-

pressly assigned the affected states in the Clean Water

Act. This case therefore falls within the Court’s admoni-

tion in Silkwood that preemption of punitive damage

awards is appropriate where such awards present “an

irreconcilable conflict” with the federal statutory scheme

or “frustrate any purpose of the federal remedial scheme”

(464 U.S. at 256-257).

Finally, in contrast to the situation in Silkwood, other

avenues are available to private plaintiffs for imposition

of monetary penalties on the discharger for flagrant vio-

lation, of the law. Under the Clean Water Act, a private

citizen, not just the responsible federal agency, may ask

a court to impose substantial civil penalties on a dis-

charger that violates effluent standards and limitations

the Act imposes. See 33 U.S.C. 1365(a), 1319(d) (up

to $10,000 per day of violation).* In addition, because

the Clean Water Act does not preempt at all the au-

thority of the source state to impose more stringent re-

quirements, citizens (such as respondents here) are al-

ways free to seek punitive awards under that state’s

law, should they be available—or even under the affected

state’s law, should the source state call for its applica-

tion.

D. Applicable Choice Of Law Principles Will Determine

Which State Law Governs In A Private Action For

Compensatory Damages Based On Interstate Water

Pollution

We are not unaware or unappreciative of the practical

problems presented to an interstate discharger of water

pollutants facing the prospect of private damage actions

85 At the behest of a citizen it, a court recently imposed a civil

penalty of $1,285,000 on a discharger based on violations of the

Clean Water Act. See Chesapeake Bay Foundation v. Gwaltney, 611

F. Supp. 1542 (E.D.Va. 1985), appeal pending, No. 85-1873 (4th

Cir.).

for compensatory relief in more than one state and pos-

sibly under varying state laws. There is, however, no

sound legal basis for the sweeping rules of federal pre-

emption of state legislative jurisdiction and judicial au-

thority IPC has advanced in this litigation—and, spe-

cifically, no basis for believing that Congress intended to

supersede the longstanding and familiar feature of our

jurisprudence that compensatory damages for tortious

conduct are recoverable in the courts of the place of in-

jury. IPC’s concerns are, at bottom, not significantly

different from those faced by any business enterprise

that engages in substantial interstate commerce and is

exposed to significant tort liability: the potential for un-

favorable state law and unfavorable judicial forums.

These concerns have not, without more, historically de-

feated the power of the courts either to hear claims for

injuries occurring in their jurisdictions or to determine,

in the event more than one state law is potentially avail-

able, which state law will govern. See Klaxon Co. Vv.

Stentor Elec. Mfg. Co., 313 U.S. 487 (1941); Young v.

Masci, 289 U.S. 253, 258-259 (1933). So long as the

forum state satisfies applicable constitutional limitations

(e.g., due process, equal protection, and full faith and

credit) both as to the exercise of its jurisdiction and its

choice of law,** and Congress has not adopted a special

rule for the occasion, this Court’s role is limited. Since

IPC can point neither to a specific congressional enact-

ment nor to a particular constitutional provision to sup-

port its broad preemption claim, it must look to Congress,

and not to this Court, for relief—if any relief is appro-

priate.

36 See, e¢.g., Keeton v. Hustler Magazine, Inc., 465 U.S. 77yu

(1984); Allstate Insurance Co. v. Hague, 449 U.S. 302 (1981);

Hughes v. Fetter, 341 U.S. 609 (1951).

CONCLUSION

The judgment of the court of appeals should be affirmed.

Respectfully submitted.