Jurisdictional Statement — Exxon Corp. v. Hunt
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Supreme Com, & S.
rFILEO
8 4*978 DEC 17 1984
No.
= ALEXANDER L. STEWAS
IN THE CLERK
Supreme Court of the United States ~
OCTOBER 1984 TERM,
EXXON CORPORATION, THE BFGOODRICH COMPANY.
UNION CARBIDE CORPORATION, MONSANTO COMPANY
AND TENNECO CHEMICALS, INC.,
Appellants,
VS.
ROBERT HUNT, Administrator of New Jersey Spill
Compensation Fund; CLIFFORD A. GOLDMAN, Treasurer
of the State of New Jersey; SIDNEY GLASER, Director of
the Division of Taxation, JERRY F. ENGLISH, Commissioner of
Environmental Protection, and THE STATE OF NEW JERSEY,
Appellees.
Appeal from the Supreme Court of New Jersey
JURISDICTIONAL STATEMENT—STATE CIVIL CASE
JOHN J. CARLIN, JR..,
Counsel of Record for Appellants,
LISA J. POLLAK,
FARRELL, CURTIS, CARLIN & DAVIDSON
Attorneys for Appellants
Exxon Corporation, The BFGoodrich
Company, Union Carbide Corporation,
Monsanto Company and Tenneco
Chemicals, Inc.
Of Counsel: 43 Maple Avenue,
P.O. Box 145,
Morristown, New Jersey 07960
(201) 267-8130
Covington & Burling
Daniel M. Gribbon
1201 Pennsylvania
Avenue, N.W.
Washington, D.C. 20004
(202) 662-6000
i
PRELIMINARY MATTER
QUESTIONS PRESENTED
1. Whether the taxing provisions of the New Jersey Spill
Compensation and Control Act, N.J.S. 58:10-23.11 et seq. are
preempted by The Comprehensive Environmental Response
Compensation and Liability Act of 1980 (Superfund), 42 U.S.C.
§ 9601 et seq. and, therefore, the imposition of them is in viola-
tion of the Supremacy Clause of the United States Constitution?
2. Whether the Supreme Court of New Jersey disre-
garded the plain and recent mandate of this Court in Aloha
Airlines v. Director of Taxation of Hawaii, 104 S. Ct. 291
(1983), when it nullified an explicit preemption provision of
Superfund by formulating a contrary Congressional purpose
from legislative history? *
* The names of all of the parties to this proceeding in the Court
below are included in the caption of these pleadings. The list-
ing of parent companies, subsidiaries (except wholly owned)
and affiliates are set forth in the Appendix attached hereto at
page la.
2
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Jurisdiction in this Court
This suit challenges the constitutionality of the taxing pro-
visions of the New Jersey Spill Compensation and Control Act,
N.J.S. 58:10-23.11 et seq. on the basis that such provisions are
expressly preempted by § 114(c) of the Comprehensive Environ-
mental Response, Compensation and Liability Act of 1980, 42
U.S.C. § 9601 et seq. (Superfund), and, therefore, in violation of
the Supremacy Clause of the United States Constitution.
The federal constitutional question involved in this suit has
continuously been raised by appellants in all proceedings. The
New Jersey Tax Court entered a decision upholding the consti-
tutionality of the New Jersey Act on the basis that § 114(c) of
Superfund did not preempt the New Jersey Tax. This decision
was affirmed by the New Jersey Appellate Division and New
Jersey Supreme Court.
Notice of appeal to this Court was timely filed on Novem-
ber 19, 1984.
The jurisdiction of the United States Supreme Court to
review the decision of the Supreme Court of New Jersey on
appeal is conferred by 28 U.S.C. § 1257(2). Aloha Airlines, Inc.
v. Director of Taxation of Hawaii, 104 S. Ct. 291, 294 (1983);
and Arizona Public Service Co. v. Snead, 441 U.S. 141, 146
(1979) support the jurisdiction of the Supreme Court to review
the judgment on appeal in this case.
Constitutional and Statutory
Provisions Involved
The Supremacy Clause of the United States Constitution,
Article VI, C1. 2, provides as follows:
This Constitution and the Laws of the United Stat es 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 shail
be bound thereby, any Thing in the Constitution or Laws cf any
State to the Contrary notwithstanding.
3
The Comprehensive Environmental Response Compensa-
tion and Liability Act of 1980, 42 U.S.C. §9601, ef seq., is set
out in full in the Appendix hereto. Section 114(c) of Superfund,
42 U.S.C. §9614(c) provides as follows:
Except as provided in this chapter, no person may be
required to contribute to any fund, the purpose of which is to pay
compensation for claims for any costs of response or damages or
claims which may be compensated under this subchapter. Noth-
ing in this section shall preclude any State from using general
revenues for such a fund, or from imposing a tax or fee upon any
person or upon any substance in order to finance the purchase or
prepositioning of hazardous substance response equipment or
other preparation for the response to a release of hazardous sub-
stances which affects such State.
The New Jersey Spill Compensation and Control Act,
N.J.S. 58:10-23.11, et seqg., is set out in pertinent part in the
Appendix hereto.
Statement of the Case
On December 11, 1980, in response to an increasing
awareness of the damages caused by the release of hazardous
substances into the environment, Congress enacted “Super-
fund,” 42 U.S.C. §9601 et seg. The national response effort was
to be addressed by the federal government in cooperation with
the states. It was to be financed on the federal level by a $1.6
billion trust fund, eighty-seven and one-half percent of which
was to be raised by a feedstock tax imposed on crude oil and
petroleum products and on certain chemicals. It was understood
at the time that while a feedstock tax was not the most equitable
assessment available to fund hazardous waste identification and
clean-up, it was the easiest to administer since it involved collec-
tion from only approximately 1,000 taxpayers instead of an esti-
mated 260,000 if the fund were financed by a tax placed on gen-
erators of hazardous waste. S. Rep. No. 848, 96th Cong., 2d.
Sess. 20 (1980).
Under Superfund’s financing scheme, the States were
required to pay only a 10% matching share of clean-up costs for
4
remedial action (unless they were responsible for the waste site).
In return for the flow of funds collected under the federal taxing
scheme to the States, the States were expressly precluded by
§114(c) of Superfund, 42 U.S.C. §9614(c), from taxing any per-
son to cover claims, costs or damages which “may be compen-
sated” under the federal Act. Section 114(c) goes on to state,
however, that “[nJothing in this section shall preclude any State
from using general revenues for such a fund, or from imposing a
tax or fee upon any person or upon any substance in order to
finance the purchase or prepositioning of hazardous substance
response equipment or other preparation for the response to a
release of hazardous substances which affects such State.”
Since the mid-1970’s, the State of New Jersey has had in
effect a Spill Compensation and Control Act. N.J.S. 58:10-23.11
et seq. (New Jersey Act). The New Jersey Act prohibits the dis-
charge of petroleum and other hazardous substances in the State
of New Jersey and, in addition, provides for the clean-up and
removal of such discharges, the establishment of a Spill Com-
pensation Fund, and the raising of revenue therefor by the levy
upon each and every operator of a major facility in New Jersey
of a barrel tax involving chemical and petroleum products.
From the inception of the New Jersey Fund until June,
1981, 93% of the revenues collected totaling $31,000,000 was
spent on claims relating to clean-up and containment of hazard-
ous substances other than petroleum. Clean-up of petroleum-
related sites constituted less than 1% of expenditures.
Since the enactment of Superfund, clean-up of petroleum-
related spills has continued to constitute less than 1% of the
expenditures from the New Jersey fund. Expenditures for equip-
ment have constituted less than 2% of the fund. Expenditures by
the State on just two sites which are listed on the Superfund
National Priority List total $12,000,000 out of $18,000,000
expended. This information is contained in discovery material
furnished by New Jersey.
Thus, the statutory provisions at issue in this case require
operators of major facilities, including plaintiffs, to contribute to
a fund, the principal purpose of which is to pay compensation of
5
claims for the costs of response or damages or claims which
“may be compensated” under the federal law.
As early as 1976, the New Jersey legislature anticipated
that the New Jersey Act would have to be incorporated into a
federal scheme of hazardous substance clean-up and contain-
ment once a national plan was formulated. The legislature,
therefore, included the following provision in the New Jersey
Act:
If the United States Congress enacts legislation providing com-
pensation for the discharge of petroleum and hazardous products,
the Commissioner shall determine to what degree that legislation
provides the needed protection for our citizens, businesses and
environment and shall make the appropriate recommendation to
the legislature for amendments to this act. N.J.S. 58:10-23.11z.
To date, New Jersey has not complied with this directive. If
it chose, New Jersey could have amended the Spill Fund to cover
only non-preempted items and adjusted the tax rate accordingly.
A complaint in this suit was initially filed by plaintiffs in
the United States District Court, which dismissed plaintiffs’ suit
based on the Tax Injunction Act, 28 U.S.C. §1341. The Third
Circuit Court of Appeals affirmed the jurisdictional decision of
the District Court on the basis that plaintiffs’ claim did not
“arise under” federal law and the United States Supreme Court
denied plaintiffs’ Petition for Certiorari. Exxon Corp. v. Hunt,
683 F.2d69 (3d Cir. 1982), cert. denied, 439 U.S. 1104 (1983).
On August 10, 1981, plaintiffs filed a complaint in the Tax
Court of New Jersey. On cross motions for summary judgment,
the Tax Court, on April 23, 1982, granted the State defendants’
motion and dismissed all but two counts of plaintiffs’ complaint.
The remaining two counts, which do not involve any question of
the constitutionality of the State statute, were severed from the
rest of the case for purposes of appeal and the decision of the
Tax Court was appealed to the Appellate Division on May 7,
1982. This appeal was consolidated with an appeal by the
plaintiffs of the regulations of the New Jersey Department of
Treasury governing expenditures under the New Jersey Act. On
6
June 22, 1983, the Appellate Division rendered an opinion
affirming the judgment of the Tax Court below with regard to
the taxing provisions of the New Jersey Act, but invalidating the
Treasury Department regulations on procedural grounds.
Plaintiffs filed a Petition for Certification with the New Jersey
Supreme Court on July 2, 1983. On September 19, 1984, the
Supreme Court of New Jersey affirmed the judgment of the Tax
and Appellate Courts.
The conclusion of the Courts below was that “(t]he Spill
Fund tax imposed on plaintiffs is not preempted by section
114(c) of Superfund insofar as Spill Fund is used to compensate
hazardous waste cleanup costs and related claims that are either
not covered or not actually paid under Superfund. The underly-
ing intent of Superfund, as well as the legislative history, man-
dates a conclusion of no preemption.” Exxon Corp. v. Hunt, 97
N.J. 526, 544 (1984). (emphasis added) The crux of these opin-
ions is an interpretation of the pivotal language “may be com-
pensated” in §114(c) of Superfund, which the Courts below con-
cluded should be read as “has been compensated.” This
rewriting substitutes the concept of actual compensation for that
of compensability. It is justified by the Courts as required to
effectuate the true legislative intent behind §114(c) and thereby
avoid New Jersey’s dire predictions and speculations as to
shortfalls in Superfund’s coverage.
During the pendency of these lawsuits, plaintiffs have con-
tinued to pay into the New Jersey Spill Fund in accordance with
its terms. From January, 1981 through June, 1982, plaintiffs
paid approximately $5,759,000 into the New Jersey Fund. The
total of payments to date is in excess of $9,000,000. Refund
claims have been filed by the plaintiffs, but they have been
denied by New Jersey unless a court ruling invalidating the Spill
Fund Tax is obtained.
Substantiality of the Questions Presented
This appeal presents a substantial question of national pub-
lic importance, involving the application of the Supremacy
7
Clause of the United States Constitution to a direct conflict
between federal and state law.
The instant case has, as its context, one of the most
significant environmental issues today, the identification and
clean-up of hazardous waste. The specific issue on appeal
involves the critical question of the funding sources of such
identification and clean-up. Plaintiffs allege that the taxing pro-
visions of the New Jersey Spill Compensation and Control Act
violate the express taxing proscriptions of §114(c) of Superfund,
thereby thwarting the objectives of Congress in enacting the
federal statute.
This court has long recognized the principle that where a
state statute is in violation of a federal statute which has
preempted the field or stands as an obstacle to the accomplish-
ment and execution of the full purposes and objectives of Con-
gress, the Supremacy Clause of the United States Constitution,
Article VI, clause 2, mandates that the State statute must fall.
Aloha Airlines, Inc. v. Director of Taxation of Hawaii, 104 S.
Ct. 291, 294 (1983); Maryland v. Louisiana, 451 U.S. 725,
746-47 (1981); Arizona Public Service Co. v. Snead, 441 U.S.
141, 146 (1979). Preemption in a field has been compelled by
the Supreme Court “whether Congress’ command is explicitly
stated in the statute’s language or implicitly contained in its
structure and purposes.” Jones v. Rath Packing Co., 430 U.S.
519, 525 (1977). Even if Congress has not foreclosed the field,
state statutes have consistently been held to be void to the extent
of actual conflict with federal statutes. Ray v. Atlantic Richfield
Co., 435 U.S. 151, 158 (1978).
In the present case, all that is required to determine that
preemption exists is to compare the federal and state statutes.
Doing so, it is obvious that the New Jersey Spill Tax, as now
constituted, directly conflicts with the express terms of §114(c)
of Superfund, since it requires the plaintiff taxpayers to contrib-
ute to a fund, the essential and principal purpose of which is,
indisputably, to pay compensation for claims and costs which
may be compensated under Superfund. It follows, therefore, that
preemption doctrine as enunicated by this Court mandates that
the State statute must fall.
8
This conclusion is not avoided by citation to case law which
directs a narrow construction of preemption language Whe |
possible. When a federal statute expressly preempts St#te felts
lation and then authorizes narrow exceptions from stich
preemption, attempts at State regulation must fall within these
authorized exceptions. Exxon Corp. v. City of New w Ore Sak
F.2d 1088, 1094 n.10 (2d Cir. 1977); Donelon v. New €i rte ”
Terminal Co., 474 F.2d 1108, 1112 (Sth Cir.), cert. den am
U.S. 855 (1973). In this instance, New Jersey is restate axle |
taxing Superfund taxpayers only for those authorized ‘exe#
tions to preemption set forth in the second sentence of §| 1 #(c)
Instead of following the long-standing preemption 4dctritte
developed by this Court, recently set forth in Aloha Airlittes, the
New Jersey courts below have ignored legal mandates std
decided this case on policy grounds, narrowing the =» of
preemption under §114(c) of Superfund into liters! Me.
existence. In so doing, the State courts violated severs! ests
lished principles of statutory construction.
A fundamental rule of statutory construction looks to the
language of the statute itself, and requires that if the statwtery
language is plain, unambiguous and uncontrolled by otler poets
of the act or other acts upon the same subject, there is he iteWay
for judicial interpretation as to legislative intent. tn stich
instance, the court need only interpret the statute acovre:
its terms. Aloha Airlines, Inc. v. Director of Taxttier
Hawaii, 104 S. Ct. 291, 294 (1983); Ernst & #
Hochfelder, 425 U.S. 185, 197 (1976); Caminetti » t'
States, 242 U.S. 470, 485 (1917); Matala v. Consolidates |
Co., 647 F.2d 427, 429-30 (4th Cir. 1971).
In §114(c) of Superfund, Congress has expressly
preempted States from imposing special taxes on a limited ais
of persons for the purpose of covering any “claims which tttsy be
compensated under” Superfund and has limited States t “wvltie
general revenues for such a fund” or to “imposing a tar or -
. to finance the purchase or prepositioning of hazardews ¥
stance response equipment” and the like. The New Jer a
Supreme Court, pursuing the principle that “there is M Se
C PS iio th ee eas
pied by “ehhe pt
0
The New fersey Supreme Court has sim fairy | refused ti
fevipéct the plain meaning of an explicit preemption
feddrh! thw. This disregard ‘for Settled priticis s wl
resolv fig preemption issties, standin 8 revies
tower court's decision
This “plein tL rute further requires that the words
Of & Statute are th te fh their ‘Ordinary trea trite untes:
different ‘use is chearh ated. Only if there is Subseatittar!
rte ete eviderice supp ing a contrary interpretation f
necessary to look bevor
I the words of the stattte itself A
ctih Tobacco Co. 'v. Patterson. 4% t) 5.63, Oa 982); Matale v
CURE bh CBal Cd. 64 1 Pa a. woes. © 197")
The Hien tity Of 81 14¢c) Uf Superfu nd is cle:
is s di rected ward a doutte taxati sede ie the saftie per
fot eer to hi which ‘are. th pg
Fress insted of “has Heed |
for the Very reason that its
peanibility. See Benitets v1
1282 (DC. Cir, 1979), L6n F Hd
F 28 438, S41 (Ce. Chats ise), eer. ee, 977
ite ‘the above, the courts betow best he “f wes seein:
‘i 5 Ws the mr tse “ in fovea either? ray Py
« bap. ¥. “Wie. 3 14 5. Tan ait 29°, Cited With Uppal Ue, 97 S.
wit 5%, is Ye Wie authority for this conclusion regarding ti
burden ©» the wirtltie indtustry
tute shati bevy Gr Collect ‘s tak
” 108 % Cs. ‘bt 297. Peal
) fae feral statite Al read ite thie
cite nt projects 7 Td avd » Guutte t)
tie em atte a fe Lehee idea that "|
i
ainbiguous ‘nature Of the Word ‘may, the opinions below retied
upon . litte of cases involving the det fegation of tritisterial power
to a pubtic offictat £. >; K raft v, ‘Board uf Fite of Distr. of
CUhinibla, 247 'P Stpip. 2b, 74-25 (D.DC. 1969), ere. eile,
386 US. O58 (1 967), Stic iM f factual ‘context is entirely absent
from the instant matter, Which iVGlves tHe die GF the Words
“hihy be.” “May ‘te ” ih the Caihiteks Of Lae), Cantidtes ‘the
possibility Cas opp honed to the actuatity) ‘Of ‘Compensation ard
dies hot reach the car insideration ot ‘ipermiissiveriess at att
EVeh tdre GbVidusly, the interpretatior Of $1 1 a¢c) Adupted
by the Courts Heldw Vidtates a Mecdtd futdamental rule Of stato
tory construction. fequiring that effect tiust be given, if possible,
| tive Gr Metitetice ‘Of a Sthttite. That ‘is, ‘a Statute
: dd ‘MO ‘that ‘Ho ‘part Of ‘ht ‘is ‘trade inoperative,
ant Or Wuperflidtis. CUluutti v. Franklin, #79 US. 979,
10> (1979). United Stites v. Pulitéri, 6% P24 1 199 (Yd
Cir ORO. dpe, héhkeld, WO US. 967 (1981), al tented sub
hidin:, Cirtello'v. United States. as) 5 OB3 (1981)
The holding of the ae w fervey Supreme Court ds td the
scope of preem pticin ‘wid cr § 1¥4¢(c) Was thar “{r [he S pill 1 Tax
itnposed Gh pinintiffs ts fot preempted by Mectiin '114(c) Uf
Super tatid insofar as Spill Puri is uied to compensate hazard:
dus Waste Cheah-tp Costs atid related claims that are either not
| rly or not ‘ae tually Phas wn en’ ogg en ex XXOn Cc orp. V
scope af preemption tinier ht ee) velit 4 to neuen | tid
preemption at afl atid, therefdre, eles the provisicn trea ning.
feds, ‘a ‘cheairhy fmnprdper resuh: i ireiieppiees That Congress
enacted $1T4(c) to prechide sately the posxibitity that a State
Would pay Gh claiths atreddy compensated by Sujpierfiitd. This
would ‘ha rdhy require a ¥pecific and express statutory provi iston
1
i of
16
Superfund is very clear as to the scope of its preemption. It
expressly does not preempt States from exercising their power to
clean up hazardous waste left unaddressed by Superfund. The
sole effect of §114(c) is to remove one specific source of revenue
to finance state clean-up activities in return for Superfund
financing. Section 114(c) leaves to States the option to finance
Superfund-eligible, but not actually compensated, expenditures
out of general revenues, bonding programs or any other means.
In fact, New Jersey has done this by authorizing a $100 million
bond issue in 1981, specifically to provide for the costs of
clean-up and removal of hazardous discharge, either not eligible
for clean-up under the New Jersey Act or for which monies
available under the New Jersey Act are insufficient. None of
this money has yet been expended, however. Instead, New Jersey
has continued to expend Spill Fund revenues on Superfund sites.
It is evident that the real thrust of the New Jersey Courts’
consideration of the preemption issue was their fear that literal
compliance with Congress’ inandate in §114(c) would jeopardize
hazardous waste clean-up in the State. As discussed above, this
is an unwarranted conclusion. It is respectfully submitted, how-
ever, that it is also irrelevant to this case. The issue as to who
should fund hazaruous waste clean-up, and in what proportions,
was debated and resolved in the Congress of the United States.
It was the final determination of Congress that the responsibility
of the petro-chemical industry in regard to hazardous waste
clean-up efforts should be limited to contributing 87.5% of the
$1.6 billion federal Fund. Additional taxation of this specific
group of taxpayers for the same purposes by any other taxing
authority was specifically prohibited by §114(c) because Con-
gress determined that it would place too much of a burden on
the industry and interfere not only with interstate commerce,
but with the country’s balance of trade.
The New Jersey Courts considered the preemption issue
only as it related to New Jersey. In enacting Superfund, Con-
gress was concerned with the financing of clean-up activity in all
50 states, and how it would affect national corporations whose
facilities would now be paying spill taxes nationwide. This
ee
17
broader perspective on the problem, and concern for its national
ramifications, must be respected and upheld, not ignored. It is
not for a state court to rewrite a statute to comport with its judg-
ment of what the court might consider a wiser course.
The New Jersey courts may well have felt that federal and
state hazardous waste clean-ups were best integrated in a way
other than as set forth in §114(c) of Superfund. However, as
recently as Aloha Airlines, the Court has rejected such reason-
ing. 104 S. Ct. at 294, n.6. It is for Congress, not the courts, to
change the scope of preemption under Superfund. If evidence is
presented in the appropriate legislative forum of the need for
double taxation, Congress, as it reviews Superfund reauthcriza-
tion this year, can remove or modify preemption. Until then,
courts must interpret and enforce the legislature’s will as writ-
ten. /d. at 16, n.10.
New Jersey is the sole forum in which a determination is
being pursued. Given the national ramifications of the New Jer-
sey Supreme Court decision on the issue of preemption, this case
should be reviewed by this Court at a full plenary hearing.
18
CONCLUSION
The decision of the New Jersey Supreme Court below
upholding the taxing provisions of the New Jersey Superior
Court and Court of Appeals should be summarily reversed on
the basis of this Court’s holding in Aloha Airlines v. Director of
Taxation or, in the alternative, this Appeal should be accorded
plenary review.
Respectfully submitted,
FARRELL, CURTIS, CARLIN &
DAVIDSON
By
John J. Carlin, Jr.
Attorneys for Appellants,
Exxon Corporation,
The BFGoodrich Company,
Union Carbide Corporation,
Monsanto Company and
Tenneco Chemicals, Inc.
Of Counsel:
Covington & Burling
Daniel M. Gribbon
1201 Pennsylvania Avenue, N.W.
Washington, D.C. 20004
(202) 662-6000
APPENDIX
APPENDIX A
In accordance with the requirements of Rule 28.1 of the
United States Supreme Court Rules, the following is a listing
naming the parent companies, subsidiaries and affiliates of Peti-
tioner Corporations:
EXXON CORPORATION
The subsidiaries and affiliates (except wholly owned) of
Exxon Corporation are:
Abu Dhabi Petroleum Company Limited
Abu Dhabi Company for Onshore Oil Operations
Ace Polymer Co., Ltd.
Aditivos Orinoco, C.A.
Adria- Wien Pipeline Gesellschaft mit besohrankter Haftung
Aishin Sekiyu K.K.
Aktiebolaget Svensk Petroleumadministration
Alberta Products Pipe Line Ltd.
Al-Jubail Petrochemical Company
Altona Petrochemical Company Limited
Alyeska Pipeline Service Company
Andian National Corporation, Limited
Arabian American Oil Company
Aramco Overseas Company
Aramco Services Company
A/S Futurum
A/S Hydrantanlaegget Kobenhavns Lufthaven, Kastrup
Asakawa Sekiyu K.K.
Asociacion Civil “Academy La Castellana”
Assistance Services S.A.
Atlas Supply Company
Atlas Supply Company of Canada Limited
Australian Synthetic Rubber Company Limited
Aviation Services Saudi Arabia Limited
Awaji Gas Nenryo Kabushiki Kaisha
Bangkok Aviation Fuel Services Limited
Banshu Ekika Gas K.K.
Bayerische Erdgasleitung G.m.b.H.
la
BSB Gewerkschaften Brigitta und Elwerath
Betriebafuhrunggesellschaft m.b.H.
Bel-Air Entreposage S.A.
BTAS, Inc.
Building Products of Canada Limited
Byron Creek Collieries Limited
Byron Creek Collieries (1983) Limited
Canada Wide Mines Ltd.
Carnduff Gas Limited
Castle Peak Power Company Limited
Champlain Oil Products Limited
Changi Airport Fuel Hydrant Installation Pte. Ltd.
Chuo Sekiyu Hanbai K.K.
Cia Refinadora Petrola Santo Domingo, Inc.
Colmant Cuvelier Dodge S.A.
Colmar Suriname Oil Company, Ltd.
Compagnie d’Etancheite Africaine en Cote d'Ivoire S.A.
Compania Minera Disputada de Las Condeo S.A.
Comptoir Auxiliaire du Petrole
DFTG Deutsche Flussigerdgas Terminal GmbH
Daihatsu Sekiyu K.K.
Daiichi Kouyu K.K.
Daitsu Sangyo K.K.
Delta Hope & Twine Limited
Depot Petrolier du Grosivaudan
Depots de Petrole Cotiers
Depots Petrolier de la Corse
Det Gronlandske Olieaktieselskab
Deudan-Holding GmbH
Deutsche Erdgas Transport G.m.b.H.
Deutsche Transalpine Oelleitung G.m.b.H.
Devon Estates Limited
Dixie Pipeline Company
Dodge de Mexico S.A. de C.V.
Drivmedelecentralen Aktiebolag
Dukhan Service Company
86129 Canada Ltd.
ES F Limited
Eagle Kenso K.K.
East Japan Oil Development Company, Limited
East Texas Salt Water Disposal Company
Eiko Sekiyu K.K.
Ejendomsaktieselskebet ef 12. juni 1964
Eiwerath Erdol und Erdgas AG
Emirates Oilfield Chemicals Company
Emori Sekiyu K.K.
Emsland-Erdolleitung G.m.b.H.
Erdgas-Verkaufs-Gesellschaft m.b.H.
Escuela Las Morochas, C.A.
Esso Chimie
Esso Energie G.I.E.
Esso Exploration and Production Angola Inc.
Esso Italiana S.p.A.
Esso Malaysia Berhad
Esso of Canada Limited
Esso Resources Canada Limited
Esso Societe Anonyme Francaise
Esso Standard Tunisie S. A.
European Gas & Electric Company
Exact Reisebyra A/S
Excess and Treaty Reinsurance Corporation
446259 Ontario Limited
FPE South Africa (Proprietary) Limited
F.T. Giken Kabushiki Kaisha
Federal Pacific Electric de Mexico S.A. de C.V.
Federal Pioneer Limited
Ferngas Nordbayern G.m.b.H.
Ferngas Salzgitter GmbH
Forenade Svenska Oljeimportorers AB
Forjan de Colombia, S.A.
Fuji Kogyo K.K.
Fuji Uuyu K.K.
Fukui Sekiyu K.ix.
General Busaan K.K.
General Highway K.K.
General Petrochemical Industries Limited
General Sekiyu K.K.
General Sekiyu Okinawa Hanbai K.K.
General Shipping Co. Ltd.
General Unyu Kabushiki Kaisha:
Geobutane—Lavera
Gewerkschaft Brigitta
Gewerkschaft Elwerath
Gewerkschaft Elwerath & Co. GmbH.
Gewerkschaft Erdol-Raffinerie Deurag-Nerag
Gilbarro do Brasil S.A.—Equipamentos
Goroku Sekiyu K.K.
Grande Escaille Land Company, Inc.
Groupement Immobilier Petrolier
Groupement Petrolier Aviation
Groupement Petrolier du Finistere G.1.E.
Hankyu Ferry K.K.
Hannoversche Erdolleitung G.m.b.H.
Hanshin Kyowa Sekiyu K.K.
Hayakawa Sekiyu K.K.
Heinrich Schneider Spedition GmbH
Hiroshima General Gas Juten Kabushiki Kaisha
Hoei Sekiyu K.K.
Hokuyu Sekiyu K.K.
Houston Regional Monitoring Corporation
H ydranten-Betriebsgesellschaft
H ydrierwerke Poelitz Aktiengesellschaft
Imperial Oil Limited
Imperial Pipe Line Company, Limited, The
Inada Ekka Gas Kabushiki Kaisha
Industrias Reliance S.A. de C.V.
Intecom, Inc.
Interface Mechanisms Inc.
Internationale Gas Transport Maatschappij B.V.
Interprovincial Pipe Line (Alberta) Ltd.
Interprovincial Pipe Line Limited
Interprovincial Pipe Line (NW) Ltd.
Investment Promotion Enterprises Limited
Iranian Oil Participants Limited
4a
ee
Iranian Oil Services (Holdings) Limited
Iranian Oil Services Limited
Iraq Petroleum Company, Limited
Iraq Petroleum Pensions, Limited
Japan Butyl Company Limited
Japan Coal Liquefaction Development Company, Ltd.
Jersey Nuclear-Avco Isotopes, Inc.
K.K. Aizu General
K.K. Daimaru
K.K. General Sekiyu Hanbaisho
K.K. Heian Sekiyu
K.K. Kanagawa Sekiyu Shokai
K.K. Kyoei Shoshe
K.K. Kyowa Sekiyu Service
K.K. Marugo Izumasa Shoten
K.K. Niimi Kirun
K.K. Nippatsu
K.K. Standard Sekiyu Osaka Hatsubaisho
K.K. Toko
K.K. Toresen
K.K. Uwano Sekiyu Shokai
K /S ejendomsseiskebet af 8, oktober 1965
K/S Hoje Taastrup Storcenter 11
K/S Statfjord Transport A/S & Co.
Kabushiki Kaisha Sankyo Plastics
Kai Tak Refuellers Company Limited
Kanto Kygnus Sekiyu Hambai K.K.
Karlsruhe-Stuttgart Rohrleitung Gesellschaft mbH
Kawasaki Kyguna Sekiyu Hambai Kabushiki Kaisha
Kawasaki Naiko Kabushiki Kaisha
Keihin Kygnus Kabushiki Kaisha
Keiyo Sekiyu Hanbai K.K.
Kenya Petroleum Refineries Limited
Kepco Mfg. Inc.
Kibo Sekiyu Hanbai K.K.
Kiinteisto Oy Myllynksllio
Kinwa Sekiyu K.K.
Kobe Port Service Kabushiki Kaisha
Sa
Kobe Standard Sekiyu K.K.
Kowa Sekiyu K.K.
Kowloon Electricity Supply Company Limited
Kygnus Ekka Gas Kabushiki Kaisha
Kygnus Kosan Kabushiki Kaisha
Kygnus Sekiyu K.K.
Kyushu Eagle K.K.
LFL Investments, Inc.
La Compagnie Electrique Pioneer du Quebec, Inc.
Lakehead Pipe Line C »mpany, Inc.
LEAG Aktiengesellschaft fur luzerisches Erdol
Les Dooks des Petroles d’Ambes
Les Restaurants Le Voyageur Inc.
Long Beach Oil Development Company
Magota Sekiyu K.K.
Magyar Amerikai Olajipari Reszvenytarsasag
Mainline Pipelines Limited
Makoto Sekiyu Kabushiki Kaisha
Maortgaz Ertekesito R.T.
Maple Leaf Petroleum Limited
Maquinas de Coser y Border Sigma, S.A.
Mars-Alcatel, S.A.
Marugo Gas K.K.
MEGAL FINCO
MEGAL GmbH
Meiji Sekiyu K.K.
MESBIC Financial Corporation of Houston
Mikawa Bussan K.K.
Mittelrheinische Erdgas Transport Gesellschaft mit
beschrankter Haftung
Mongeau & Robert Cie Ltee
Montreal Pipe Line Limited/Les Pipe-Lines Montreal
Limitee
Moraine Properties Ltd.
95269 Canada Limited
Nakabayashi Sekiyu K.K.
Nansei Sekiyu Kabushiki Kaisha
Native Venture Capital Co. Ltd.
6a
_ i el»
EE en
Near East Development Corporation
Neptune Bulk Terminals (Canada) Ltd.
Nichimo Kabushiki Kaisha
Nichimo Oil (Bermuda) Co., Ltd.
Nichimo Sekiyu Seisei Kabushiki Kaisha
Nikko Sangyo K.K.
Nippon Unicar K.K.
Nisku Products Pipe Line Company Limited
Nissei Sekiyu Kabushiki Kaisha
Norddeutsche Erdgas-Aufbereitungs G.m.b.H.
Norddeutsche Mineraloelwerke Stettin G.m.b.H.
Norddeutsche Oelleitungs-gesellschaft m.b.H.
Nordrheinische Erdgas Transport Gesellschaft mit
beschrankter Haftung
Nord-West Oelleitung G.m.b.H.
Northward Developments Ltd.
Northwest Company, Limited
Nottingham Gas Limited
107580 Canada Inc.
Office Prive d’Assurances et de Courtages
Offshore Medical Support Limited
Oil Field Chemicals Company (Saudi Arabia) Lid.
Oil Service Company of !ran (Private Company)
Oil Transport Company (Saudi Arabia) Limited
Oldenburgische Erdol Gesellschaft m.b.H.
Osaka Propane Gas Hambai Kabushiki Kaisha
Osaka Sekiyu Gas Yuso K.K.
P.T. Stonvac Indonesia
Pars Investment Corporation
Peninsula Electric Power Company Limited
Petrole Assistance Lyon (S.A.R.L.)
Petrole Assistance Marseille (S.A.)
Petrole Assistance Orleans (S.A.R.L.)
Petrole Assistance Paris T.R. (SA)
Petroleum Refineries (Australia) Proprietary Limited
Petroleum Services (Middle East) Limited
Petroleum Tankship Company, Inc.
Petrosvibri S.A.
7a
Pipeline Service
Pipe Line Service Company, Inc.
Pipeline Service Iran
Pipeline Service U.K.
Pipe Line Services, Inc.
Plantation Pipe Line Company
Polder-Seehafen-Harburg GmbH
Polyolefins Product Co. Pty. Ltd.
Portland Pipe Line Corporation
Potencia Industrial S.A.
Productos Lorain de Mexico S.A. de C.V.
Progas A/S
Qatar Petroleum Company Limited
Qualbank, Inc.
Raffinerie du Midi S.A.R.L.
Rainbow Pipe Company, Ltd.
Redwater Water Disposal Company Limited
Refineria Petrolera Acajutla, S.A.
Reliance Electric & Engineering Company de Mexico
S.A. de C.V.
Reliance Electric Limited
Reliance Electric Ltd.
Reliance Electric S.A. (Spain)
Renix Co. Ltd.
Renown Building Materials Limited
Rheingas Erdgasleitungs-Gesellschaft m.b.H.
Rotterdam-Antwerpen Pijpleiding (Nederland) N.V.
Ruhrgas Aktiengesellschaft
S.A. du Pipeline a Produits Petroliers sur Territoire
Genevoia (SAPPRO)
S & M Pipeline Limited
S.O.P.—Societa Oleodotti Padani S.p.A.
Saitama Sekiyu Hanbai K.K.
Sakurajima Futo K.K.
Sanko Oil Kabushiki Kaisha
Sanwa Kasei Kogyo Kabushiki Kaisha
Sanyo Sekiyu K.K.
Saraco S.A.
Sa
Schubert KG
SEAG Aktiengesellschaft fur schweizerisches Erdol
Seibu Kygnus Sekiyu Hambai Kabushiki Kaisha
Seismic Industries A/S
Senpoku Oil Service K.K.
SERAM Societa per Azioni
Servacar Ltd.
Shehtah Drilling Limited
Shimoka Skiyu Kabushiki Kaisha
Shimoyama Sekiyu K.K.
Shin-Nihon Yukagaku Kogyo K.K.
Shinohara Oil K. K.
Shizuoka Kanesho Hambai Kabushiki Kaisha
Smiley Gas Conservation Limited
Sociedad Anonima “Escuela Campo Alegre”
Sociedad de Inversiones de Aviacion
Sociedad Nacional de Oleoductos Ltda.
Societa per Azioni Raffineria Padana Olii Minerali
SARPOM
Societe Anonyme de la Raffinerie des Antilles
Societe Anonyme des Hydrocarbures
Societe Anonyme “Produits Lubrifiants de Madagascar”
PROLUMAS.A.
Societe Civile de Mustapha Algerie
Societe Civile de Participation pour la Destruction des
Dechets Industriels (SOCDI)
Societe Civile Immobiliere “Courcelles-Etoile”
Societe Civile Immobiliere de la Croix au Chene
Societe Civile Immobiliere du 195 Avenue de Neuilly
Societe Civile Immobiliere Khariesse
Societe Civile Immobiliere “Kleber-Etoile”
Societe Civile Immobiliere “Les Casseaux-Bougainville”
Societe de la Raffinerie a’ Alger
Societe de la Raffinerie de Lorraine
Societe de Manutention de Carburants Aviation
Societe de Manutention de Carburants Aviation
DakarYoff, S.A.
9a
——————————_—
Societe de Promotion et de Financement Touristique
(CARTHACO)
Societe d’Entrepoisage de San-Pedro
Societe des Pipe-Lines de Strasbourg
Societe des Transports Petroliers par Pipe Line
Societe d’Exploitation & de Development d’Operations
Commerciales
Societe du Ceoutohouc Butyl (SOCABU)
Societe du Depot Petrolier d’ Hauconcourt
Societe du Parkings du Square Boucicaut
Societe du Pipe Line de la Raffinerie de Lorraine
Societe du Pipe-Line Mediterranee-Rhone
Societe Esso de Recherches et d’Exploitation Petrolieres
Esso Rep
Societe “Geomines-Caon”
Societe Harvaise de Manutention de Produits Petroliers
Societe Hoteliere de la Petite Compagne
Societe Immobiliere Paris- Niel
Societe Industrielle de Mecanique et d’Equipement
Petrolier S.1.M.E.P. (S.A.R.L.)
Societe Italiana per |‘Oleodotto Transalpino S.p.A.
Societe [voirienne d’Operations Petrolieres S.A.
Societe Malgache de Raffinage
Societe du Pipeline Sud-Europeen
Societe Reunionnaise d’Entreposage
Socony-Standard-Vacuum Oil Company
(Petroleum Maatschappij)
Southern Natural Gas Development Pty. Ltd.
Standard Kosan Kabushiki Kaisha
Standard Service K.K.
Statfjord Transport A/S
Stockage Geologque de Gaz de Lavora
Suddeutsche Erdgas Transport Gesellschaft mit
beschrankter Haftung
Suntech Company, Ltd.
Supertex, Inc.
Svensk Petroleumlagring Tre Aktiebolag
Syncrude Canada Ltd.
10a
Synergistics Chemicals Limited
305120 Alberta Ltd.
346877 Ontario Limited
TAR-Tankanlage Rumlang AG
TBN Tanklager-Betriebsgesellchaft Nurnberg mbH
Taihei Bussan K.K.
Taiko Skiyu K.K.
Taisei Kogyo Sekiyu Hanbai K.K.
Taketsuru Yugyo K.K.
Tanaka Sekiyu Hanbai K.K.
Tankanlage A.G., Mellingen
Tanklager Altishausen A.G.
Tanklager Gesellschaft
Tanklager-Gesellschaft Tegel
Tanklager Lechelles I.S.A.
Tanklager Taegersohen AG
Yecumseh Gas Storage Limited
THUMS Long Beach Company
Thyssengas G.m.b.H.
TIBA Speditions GmbH
Tos Nenryo Kogyo Kabushiki Kaisha
Tohko Plastics Company, Limited
Tokai General Sekiyu Hanbai K.K.
Toko Sekiyu K.K.
Toledo Scale Company de Mexico S.A. de C.V.
Toledo Werk GmbH
Tonen Energy International Corp.
Tonen Maintenance K.K.
Tonen Seikyuksgaku Kabushiki Kaisha
Tonen Tanker Kabushiki Kaisha
Tonen Technology K.K.
Towa Sekiyu K.K.
Toyoshina Film Company, Ltd.
Transalpine Finance Holdings S.A.
Transalpine Oelleitung in Oesterreich
Gesellschaft m.b.H.
Trans-Arabian Pipe Line Company
Transgaz Lavera
lla
Tsurumaru Unyu K.K.
Turkish Petroleum Company, Limited
UBAG—Unterflurbetankungsanlage Flughafen Zurich
Ulupna Estates Limited
Van Salt Water Disposal Company
W.A.G. Pipeline Pty. Ltd.
W.H. Adam, Ltee, Ltd.
Wako Jushi Kabushiki Kaisha
Wako Kaesi Kabushiki Kaisha
Westdeutche Erdolleitungs—G.m.b.H.
Westgas G.m.b.H.
Williamsport Properties Limited
Winnepeg Pipe Line Company Limited
Wohnungsbaugesellschaft, Steimbke-Rodewald G.m.b.H.
Worex Distribution
Wrenford Insurance Company Ltd.
Yasaka Sekiyu, K.K.
Yellowstone Pipe Line Company
Yoshimi Gas Kabushiki Kaisha
Yusi Sekiyu K.K.
Yugan Kaisha Nishi Kobe Dosai Center
BFGOODRICH
Consolidated subsidiary companies of BFGoodrich
Company with an ownership of less than 100%:
Bil Tech of California; BFGoodrich Australia Limited;
BFGoodrich Chemical Limited; Industria Colombiana de
Llantas, S.A.; E.P.P.C Polyplastic S.A.; BFGoodrich
Chemical de Venezuela, C.A.
UNION CARBIDE CORPORATION
Union Carbide Corporation states that the United States
subsidiaries, excluding wholly owned subsidiaries, and affiliates
of Union Carbide are: ACM Services, Inc., Arizona Welding
Equipment Co., Miami Welding Supply, Inc., United States
Welding, Inc., V.B. Anderson Co. and VBA Cryogenics Corp.
|2a
The following are Union Carbide’s foreign subsidiaries
(except wholly-owned subsidiaries) and affiliates: Union
Carbide Egypt S.A.E.; Union Carbide Ghana Limited; Union
Carbide Kenya Limited; Union Carbide Nigeria Limited; Union
Carbide Sudan Limited; Union Carbide Canada Limited;
Chemos Industries Pty. Limited (Australia); Union Carbide
Australia Limited; Union Carbide India Limited; P.T. Agrocarb
Indonesia; Nippon Unicar Company Limited (Japan); Union
Showa K.K. (Japan); Sony Eveready, Inc. (Japan); Union Gas
Company Limited (Korea); Union Carbide Malaysia Sdn. Bhd.;
Union Polymers Sdn. Bhd. (Malaysia); Union Carbide New
Zealand Limited; Union Carbide Ceylon Limited (Republic of
Sri Lanka); Indugas N.V. (Belgium); Calida Gas N.V.
(Belgium); La Littorale S.A. (France); Argon, S.A. (Spain);
Unifas Kemi A.B. (Sweden); Electro Manganes Ltda (Brazil);
S.A. White Martins (Brazil): S.A. White Martins Nordeste
(Brazil); Union Carbide Mexicana, S.A. de C.V. (Mexico);
Electrode Maatskappy Van Suid Afrika (Eiendoms) Beperk
(Republic of South Africa); Tubatse Ferrochrome (Proprietary)
Limited (Republic of South Africa).
MONSANTO
Domestic and foreign subsidiaries and affiliates of
Monsanto Company with an ownership of less than 100%:
Fisher Controls International, Inc.; Fisher Controls
Limited; Monsanto (Malaysia) Sdn. Berhad (Monaysia);
Nippon Fisher Company, Ltd.; Revertex Industries (N.Z.)
Ltd. ACM Services, Inc.; Agerquim, S.A. de C.V.;
Australian Fluorine Chemicals Pty. Limited (A.F.C.);
Collagen Corporation; Companhia Brasileira de Estireno
(CBE); Daishin Kogyo K.K.; Goyana, S.A. Industrias
Brasileiras de Materias Plasticas (GOYANA); Hydrocarbon
Products Pty. Ltd. (HPPL); Industrias Resistol, S.A. (IRSA);
K.K. Astro Gelande; Kirbi Kasei K.K.; Korag Company
Limited; Mitsubishi Monsanto Chemical Company (MMK);
Nippon Cooper Kabushiki Kaisha; Plagon S.A.—Plasticos
Goyana Do Nordeste (PLAGON); Plax Canada Limited
l3a
ee Oe ae
{now 102975 Canada Limited]; Polyamide Intermediates
Limited; Resimor Sinteticos do Nordeste S.A. (RESINOR);
Rezinex Australia Limited; Ryonichi Nohken K.K.; Sankyo
Kasei Sangyo K.K.; Soperton Gum Market, Inc.; Taiyo
Kouyo Kabushiki Kaisha.
TENNECO
Tenneco Chemicals, Inc.’s name has been changed to
Tenneco Resins, Inc. Tenneco Resins, Inc. is owned 100% by
Tenneco Polymers, Inc., which is owned 100% by Tenneco
Corporation, which is owned 100% by Tenneco Inc. which is
the ultimate holding company. All of these companies are
Delaware corporations. Tenneco Resins, Inc. has no
subsidiaries. It does, however, have two affiliate companies,
i.e., those which are also owned 100% by Tenneco Polymers,
Inc. These are Heyden Newport Chemical Corporation (a
Delaware corporation) and Tenneco Eastern Realty, Inc. (a
New Jersey corporation).
l4a
~~ ep@eamuse ea»
Aaa Any Po st
SUPREME COURT OF NEW JERSEY, 1984.
Exxon Corp. v. Hunt 97 NJ.
Cite as, 97 N.J. 526
EXXON CORPORATION, THE BF GOODRICH COM-
PANY, UNION CARBIDE CORPORATION,
MONSANTO COMPANY, AND TENNECO CHEM-
ICALS, INC., PLAINTIFFS-APPELLANTS, v. ROB-
ERT HUNT, ADMINISTRATOR OF NEW JERSEY
SPILL COMPENSATION FUND, CLIFFORD A.
GOLDMAN, TREASURER OF THE STATE OF NEW
JERSEY, SIDNEY GLASER, DIRECTOR OF THE
DIVISION OF TAXATION, AND THE STATE OF
NEW JERSEY, DEFENDANTS-RESPONDENTS.
EXXON CORPORATION, THE BF GOODRICH COM-
PANY, UNION CARBIDE CORPORATION,
MONSANTO COMPANY, AND TENNECO CHEM-
ICALS, INC., PLAINTIFFS-APPELLANTS, v. ROB-
ERT HUNT, ADMINISTRATOR OF NEW JERSEY
SPILL COMPENSATION FUND, CLIFFORD A.
GOLDMAN, TREASURER OF THE STATE OF NEW
JERSEY, SIDNEY GLASER, DIRECTOR OF THE
DIVISION OF TAXATION, JERRY F. ENGLISH,
COMMISSIONER OF ENVIRONMENTAL PROTEC-
TION, AND THE STATE OF NEW JERSEY,
DEFENDANTS-RESPONDENTS.
Argued January 23, 1984—Decided September 19, 1984
SYNOPSIS
Appeals were taken challenging declaratory judgment of
the Tax Court, 4 N.J.Tax 294, determining the extent to which
taxing provisions of the New Jersey Spill Fund and Compensa-
tion Act are preempted by federal law and the validity of certain
regulations promulgated by the state treasurer under the Spill
Fund Act. The Superior Court, Appellate Division, Antell,
lSa
SUPREME COURT OF NEW JERSEY, 1984.
97 NJ Exxon Corp. v. Hunt
Cite as, 97 N.J. 526
J.A.D., 190 N.J.Super. 131, 462 A.2d 193, affirmed, and
certification wasBranted. The Supreme Court, Clifford, J., held
that tax instituted by the state to establish Spill Fund is not
preempted by tax imposed by federal government to create
Superfund insofar as Spill Fund is used to compensate hazard-
ous waste cleanup costs and related claims that are either not
covered or not actually paid under the Superfund.
Affirmed.
1. States €=4.10
An allegation of preemption must be analyzed with
reference to whether federal statute expressly or by necessary
implication indicates exclusivity, whether federal scheme is so
pervasive that it precludes coexistence of state regulation, and
whether state program stands as an obstacle to accomplishment
and execution of full purposes and objectives of Congress.
2. Statutes 223.1
Courts faced with potentially conflicting state and federal
statutes must attempt to harmonize them whenever possible.
3. Statutes 223.1
In determining proper construction of allegedly conflicting
statutes, courts must perform essentially a two-step process of
first ascertaining construction of the two statutes and then deter-
mining constitutional question whether they are in conflict.
4. Statutes 217.4
Reference to legislative history is approfriate not only
where statutory language is ambiguous but also where literal
interpretation would thwart overall statutory scheme.
l6a
SUPREME COURT OF NEW JERSEY, 1984.
Exxon Corp. v. Hunt 97 NJ.
Cite as, 97 N.J. 526
5. States 4.10
The tax instituted by the State of New Jersey to establish a
Spill Fund to cover costs of environmental cleanup is not
preempted by the tax imposed by the federal government to cre-
ate the Superfund insofar as the Spill Fund is used to compen-
sate hazardous waste cleanup costs and related claims that are
either not covered or not actually paid under the Superfund.
N.J.S.A. 58:10-23.11 to 58:10—23.11z; Comprehensive Environ-
mental Response, Compensation, and Liability Act of 1980,
§§ 101-308, 114(c), 42 U.S.C.A. §§ 9601-9657, 9614(c).
John J. Carlin, Jr., argued the cause for appellants
(Farrell, Curtis, Carlin & Davidson, attorneys).
Mary C. Jacobson, Deputy Attorney General, argued the
cause for respondents (Jrwin J. Kimmelman, Attorney General
of New Jersey, attorney; Michael R. Cole, Assistant Attorney
General, of counsel).
The opinion of the Court was delivered by
CLIFFORD, J.
In this case we consider one aspect of the staggering prob-
lems associated with the release of hazardous substances into
our environment. Cleanup and removal efforts have been author-
ized by the State through the New Jersey Spill Compensation
and Control Act, N.J.S.A. 58:10-23.11 to —23.11z (Spill Fund),
and by the federal government pursuant to the Comprehensive
Environmental Response, Compensation, and Liability Act, 42
U.S.C.A. §§ 9601-9657 (Superfund). This appeal focuses on the
taxing structures established by each of the foregoing Acts.
More specifically, we address the issue of the constitutionality of
Spill Fund—that is, whether the tax imposed by the federal gov-
ernment to create Superfund effectively preempts the tax insti-
tuted by the State of New Jersey to establish Spill Fund.
17a
SUPREME COURT OF NEW JERSEY, 1984.
97 NJ. Exxon Corp. v. Hunt
Cite as, 97 N.J. 526
Plaintiffs are five petroleum and chemical companies that
are currently paying taxes into both Spill Fund and Superfund.
After several unsuccessful attempts to have the federal courts
determine the scope of section 114(c) of Superfund, 42 U.S.C.A.
§ 9614(c) (see Exxon Corp. v. Hunt, 4 N.J.Tax 294, 299 n. 4
(1982), for a synopsis of those efforts), plaintiffs filed these con-
solidated actions challenging the constitutionality of Spill Fund
in light of section 114(c) of Superfund. '
The parties filed cross-motions for summary judgment.
Plaintiffs argued that the Spill Fund tax was preempted by sec-
tion 114(c) of Superfund, which reads:
Except as provided in this chapter, no person may be
required to contribute to any fund, the purpose of which is to pay
compensation for claims for any costs of response or damages or
claims which may be compensated under this subchapter. Noth-
ing in this section shall preclude any State from using general
revenues for such a fund, or from imposing a tax or fee upon any
person or upon any substance in order to finance the purchase or
prepositioning of hazardous substance response equipment or
other preparations for the response to a release of hazardous sub-
stances which affects such State. [42 U.S.C.A. § 9614(c) (empha-
sis added). ]
Plaintiffs maintained that the principal purpose of the state tax
was to compensate hazardous-waste sites that might ultimately
be compensated by Superfund, thereby contravening the above-
emphasized language of section 114(c) of Superfund.
Plaintiffs filed two complaints, one in the Tax Court and one in the Chan-
cery Division. Both actions asserted that the tax imposed by Spill Fund was
preempted by the provisions of Superfund. The complaints differed only in that
the Chancery Division action sought additional relief that is not at issue here.
On defendant's motion the Chancery Division action was transferred to and
consolidated with the Tax Court action.
l8a
SUPREME COURT OF NEW JERSEY, 1984.
Exxon Corp. v. Hunt 97 N.J.
Cite as, 97 NJ. 526
Defendants, describing Spill Fund as a constitutionally-valid
supplement to Superfund, argued that Spill Fund was aimed at
providing compensation for those claims that were not receiving
Superfund coverage.
Judge Evers granted defendants’ motion for summary judg-
ment in the Tax Court. * 4 N./ Tax 294. Relying on the legisla-
tive history surrounding the enactment of Superfund, as well as
on the scope and purposes of both Superiund and Spill Fund,
Judge Evers concluded that the Spill lend tax was not
preempted by Superfund.
The court finds that Cone: 24 th adoption of
[Superfund], has not put an end to: cre | . of the states
for hazardous substance cleanup, conicianient and remedial pur-
poses by putting another tax in its place Rather, the court finds
that [Superfund] permits a state to continue fo avail itself of
industry tax funds with the obvious limitation that a double tax
could not be collected and expended on any one project. Such
would be the practicalities of government where both state and
nation have the same and yet separate, identifiable interests. [/d.
at 320.]
Moreover, Judge Evers alternatively held that even if Spill Fund
Tax monies could not be collected for general containment and
cleanup purposes, “the [S]pill [F]und law nevertheless encom-
passes many other areas to which such monies could be devoted
which are clearly outside the reach of § 114(c) and which may
very well be of sufficient magnitude to sustain the [S]pill [F]und
tax.” Jd. at 315. Thus, the court held that “even if § 114(c) of
[Superfund] could be construed to preempt part of [S]pill
All but two counts of plaintiffs’ consolidated complaints were dismissed. 4
N.J.Tax 294, 320 (1982). The remaining two counts were severed from the
rest of the case for purposes of appeal.
19a
SUPREME COURT OF NEW JERSEY, 1984.
97 NJ. Exxon Corp. v. Hunt
Cite as, 97 N.J. 526
[Fjund, * * * nonpreempted areas * are more than sufficient to
sustain its continued validity.” Jd. at 320 (footnote added).
On plaintiffs’ appeal the Appellate Division affirmed, “sub-
stantially for the reasons stated by Judge Evers in his written
opinion * * *.” 190 N.J.Super. 131, 132-33 (1983).* We
granted certification, 94 N.J. 607 (1983), to determine whether
“the plain language of § 114(c) of Superfund preempt(s] the
State of New Jersey from collecting taxes under the taxing pro-
vision of the [Spill Fund] as presently enacted”, and now affirm.
Spill Fund was enacted in 1977, L.1976, c. 141, with the
expressed legislative intent to
The areas that Judge Evers found to be “non-preempted,” and therefore
eligible for Spill Fund compensation, included the following: the purchase and
prepositioning of hazardous-response equipment; the cleanup of petroleum and
crude oil spills; payment of third-party damage claims; and the Superfund pro-
vision that a state contribute ten percent or more of the costs of remedial
action, including future maintenance, in order to qualify for federal funding
(42 U.S.C.A. § 9604(c)(3)). 4 N.J. Tax at 316-17.
‘ During the time between the oral argument before Judge Evers and the
rendering of his decision, the New Jersey Department of the Treasury pub-
lished proposed regulations governing expenditures under Spill Fund. Plaintiffs
submitted timely comments to these proposed regulations, but due to an error
within the Department of the Treasury those comments were deemed to be
“untimely and need not be considered.” The regulations were thereafter
adopted. Plaintiffs challeged the validity of the regulations by appeal to the
Appellate Division. That appeal was subsequently consolidated with the appeal
of Judge Evers’ decision; and although the Appellate Division concluded that
the Department of the Treasury had failed to comply with the Administrative
Procedure Act and that the regulations were invalid and without force and
effect, defendants have not sought review of that issue by the Court. We
therefore restrict our attention to the issue of preemption as considered by
Judge Evers.
20a
Ss
:
’
’
/
’
SUPREME COURT OF NEW JERSEY, i984.
Exxon Corp. v. Hunt 97 N.J.
Cite as, 97 N.J. 526
exercise the powers of this State to control the transfer and stor-
age of hazardous substances and to provide liability for damage
sustained within this State as a result of any discharge of said
substances, by requiring the prompt containment and removal of
such pollution and substances, and to provide a fund for swift and
adequate compensation to resort businesses and other persons
damaged by such discharge. [N.J.S.A. 58:10-23.11a.]
This statute provides for the establishment of “a nonlapsing,
revolving fund in the Department of the Treasury to carry out
the purposes of this act.” N.J.S.A. 58:10—23.11i. The fund’s rev-
enues are supplied by a tax “levied upon each owner or operator
of one or more major facilities® * * * to insure compensation
for cleanup costs and damages associated with any discharge of
hazardous substances * * *.” N.J.S.A. 58:10—23-11h(a)
(footnote added).
In December 1980 Superfund was enacted in response to
escalating national hazardous-waste problems. Congress pro-
vided for the establishment of a $1.6 billion fund over a five-year
period * for the cleanup and removal of pollution caused by the
release of hazardous substances into the environment. Superfund
imposes a tax to finance the federal fund, taxing chemical indus-
A “major facility” is defined by the statute as including “any refinery, stor-
age or transfer terminal, pipeline, deep water port, drilling platform or any
appurtenance related to any of the preceding that is used or is capable of being
used to refine, produce, store, handle, transfer, process or transport hazardous
substances.” N.J.S.A. 58:10-23.11b(/). It is undisputed that each plaintiff
operates a major facility. 4 N.J.Tax at 301 n. 5.
* Superfund is scheduled to expire in 1985. However, on August 10, 1984 the
House of Representatives passed H.R. 5640, “Superfund Expansion and Pro-
tection Act of 1984,” which provides for additional funding of $10.2 billion
between 1985 and 1990. The bill, authored by Rep. James Florio of New Jer-
sey, passed by a vote of 323 to 23. While the legislation must still face the
scrutiny of the Senate, and ultimately the President, it appears likely that some
form of Superfund legislation will be extended beyond 1985. See infra at
539-541 & notes 8, 9.
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SUPREME COURT OF NEW JERSEY, 1984.
97 NJ. Exxon Corp. v. Hunt
Cite as. 97 N.J. 526
tries to acquire 87.5% of the funds necessary for cleanup efforts
and relying on eeneral federal revenues to account for the
remaining }2.> + © (hc ‘und. 126 Cong.Reg. S14967-68 (daily
ed. Nov. 24. 1980} (statement of Sen. Stafford).
The focal point of plainuffs’ preemption argument is that
language of section | 14(c) of Superfund that excludes contribu-
tion to any fund whose purpose is to pay compensation for
claims “for any costs of response or damages or claims which
may be compensated under this subchapter.” 42 U.S.C.A.
§ 9614(c) (emphasis added). Plaintiffs maintain that through
this section of Superfund, read in conjunction with Article V1,
clause 2 of the United States Constitution’, Congress expressly
preempted New Jersey’s Spill Fund taxation scheme.
[1,2] As Judge Evers noted,
{i]t is fundamental that where a state statute conflicts with a
federal siaiute which has preempted the field and stands as an
obstacle to the accomplishment and execution of the full purposes
and objectives of Congress, the Supremacy Clause of the United
States Constitution mandates that the state statute must fail. [4
N.J.Tax at 304 |
An allegation of preemption must be analyzed with reference to
several general guidelines: “Does the federal statute expressly
or by necessary implication indicate exclusivity? * * * Is the
federal scheme so pervasive tiat it precludes coexistence of state
regulation? * * * [and] Does the state program stand ‘as an
obstacle to the accomplishment and execution of the full pur-
This clause of the United States Constitution, more commonly referred to
as the supremacy clause, provides:
This Constitution, and the Laws of the United States which shall 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.
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SUPREME COURT OF NEW JERSEY, 1984.
Exxon Corp. v. Hunt 97 N.J.
Cite as, 97 N.J. 526
poses and objectives of Congress’?”. U.S.A. Chamber of Com-
merce v. State, 89 N.J. 131, 142 (1982) (citations omitted); see
also Feldman v. Lederle Laboratories, 97 N.J. 429, 458 (1984)
(discussing question of preemption in products liability field).
However, courts faced with potentially conflicting state and
federal statutes must attempt to harmonize them whenever pos-
sible. Florida Lime & Avocado Growers v. Paul, 373 U.S. 132,
83 S.Ct. 1210, 10 L.Ed.2d 248 (1963); Huron Cement Co. v.
Detroit, 362 U.S. 440, 80 S.Ct. 813, 4 L.Ed.2d 852 (1960).
‘“Pre-emption of state law by federal statute is not favored ‘in
the absence of persuasive reasons—either that the nature of the
regulated subject matter permits no other conclusion, or that
Congress has unmistakenly so ordained.” Chicago & N.W.
Transp. Co. v. Kalo Brick & Tile Co., 450 U.S. 311, 317, 101
S.Ct. 1124, 1130, 67 L.Ed.2d 258, 264-65 (1981) (quoting
Florida Lime & Avocado Growers, supra, 373 U.S. at 142, 83
S.Ct. at 1217, 10 L.Ed.2d at 257).
[3] Thus, in determining the proper construction of alleg-
edly conflicting statutes, courts must perform “essentially a two-
step process of first ascertaining the construction of the two stat-
utes and then determining the constitutional question whether
they are in conflict.” Chicago & N.W. Transp. Co., supra, 450
U.S. at 317, 101 S.Ct. at 1130, 67 L.Ed.2d at 265 (quoting
Perez v. Campbell, 402 U.S. 637, 644, 91 S.Ct. 1704, 1708. 29
L.Ed.2d 233, 239 (1971)).
Moreover, as the Courts in Florida Lime & Avocado Grow-
ers, supra, 373 U.S. 132, 83 S.Ct. 1210, 10 L.Ed.2d 248,
explained, it is not a question of “whether the purposes of the
two laws are parallel or divergent,” but rather a court must
determine “whether both regulations can be enforced without
impairing the federal superintendence of the field * * *.” /d. at
142, 83 S.Cr. at 1217, 10 L.Ed.2d at 156-57 (emphasis in
original).
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SUPREME COURT OF NEW JERSEY, 1984.
Exxon Corp. V. Hunt 97 N.J.
Cite as, 97 N.J. 526
Although plaintiffs argue in favor of the “plain meaning”
rule of statutory construction, see 2A Sutherland Statutory
Construction § 46.01 (C.Sands 4th ed. 1973), we conclude, as
did the Supreme Court in Jones v. Rath Packing Co., 430 US.
519, 97 S. Ct. 1305, 51 L.Ed.2d 604 (1977), that “[t]his inquiry
requires us to consider the relationship between state and federal
laws as they are interpreted and applied, not merely as they are
written.” Jd. at 526, 97 S. Ct. at 1310, 51 L.Ed.2d. at 614. The
pertinent language of section 114(c), that “no person may be
required to contribute to any fund, the purpose of which is to
pay compensation for claims for any costs of response or dam-
ages or claims which may be compensated under this
subchapter” (emphasis added), may appear to be clear /anguage
at first glance, but we can hardly conclude that it conveys a clear
and unambiguous meaning in light of the purpose and spirit of
Superfund as a whole. We are reminded of Judge Learned
Hand’s ubiquitous observation of some forty years ago:
There is no surer way to misread any document than to read it
literally * * *.
* * * As nearly as we can, we must put ourselves in the place of
those who uttered the words, and try to divine how they would
have dealt with the unforeseen situation; and although their
words are by far the most decisive evidence of what they would
have done, they are by no means final. [Guiseppi v. Walling, 144
F.2d. 608, 624 (2d. Cir. 1944) (L. Hand, Jr., concurring), affd.
sub nom. Gemsco, Inc. v. Walling, 324 U.S. 244, 65 S.Ct. 605, 89
L.Ed. 921 (1945).]
As plaintiffs read “may be compensated”, the phrase impli-
cates only a permissive meaning. In other words, plaintiffs claim
that if New Jersey’s Spill Fund has as its purpose to pay com-
pensation for claims that “might conceivably be compensated”
by Superfund, then plaintiffs cannot be required to pay into Spill
Fund. Thus, plaintiffs maintain that the Court’s function is to
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SUPREME COURT OF NEW JERSEY, 1984.
97 N.J. Exxon Corp. V. Hunt
Cite as, 97 N.J. 526
apply the statute according to its stated terms without the aid of
legislative history or extrinsic evidence.
However, as Judge Evers pointed out, “[t]he seemingly sim-
ple, but often misused and misapplied word ‘may’ is anything
but unambiguous.” 4 N.J. Tax at 307. The standard-dictionary
definition of the word “may” ranges from “have the ability or
competence to,” Webster's Third New International Dictionary
1396 (1971), and “be in some degree likely to,” id., to “shall,
must—used esp[ecially] in deeds, contracts, and statutes,” id.,
and “shall, must—used in law where the sense, purpose, or pol-
icy requires this interpretation,” Webster’s New Collegiate Dic-
tionary 711 (1976). A legal-dictionary definition of the word
“may” states that “[r]egardless of the instrument, however,
whether constitution, statute, deed, contract or whatever, courts
not infrequently construe ‘may’ as ‘shall’ or ‘must’ to the end
that justice may not be the slave of grammar.” Black’s Law Dic-
tionary 883 (rev. Sth ed. 1979). One court discussed this
dilemma in Kraft v. Board of Educ. for D.C., 247 F.Supp. 21
(D.D.C.1965), cert. denied, 386 U.S. 958, 87 S.Ct. 1026, 18
L.Ed.2d 106 (1967):
It is well established, however, that the word “may” can be con-
strued to be “shall’’, just as the word “shall” may be construed to
mean “may”. The interpretation of those words depends upon the
context in which they are used and the intention of the legislative
body as is shown by the statute and as may be gleaned from
committee reports and similar authoritative sources. [/d. at
24-25.]
Accord Bell vy. Western Employer's Ins. Co., 173 N.J.Super. 60,
65 (App.Div.1980) (in dictum, noting that “may” and “shall”
“may be deemed interchangeable when necessary to execute the
clear intent of the Legislature”); MacNeil v. Ann Klein, 141
N.J.Super. 394, 402 (App.Div.1976) (in dictum, “the word
‘may’ should be given the meaning which conforms to the legis-
lative intent’’).
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Exxon Corp. V. Hunt 97 N.J.
Cite as, 97 N.J. 526
[4] Thus, plaintiffs’ reliance on any notion of a “plain
meaning” rule in this situation must fail. Moreover, as Judge
Evers stated, “[rJeference to legislative history is appropriate not
only where the statutory language is ambiguous but also where a
literal interpretation would thwart the overall statutory
scheme.” 4 N.J.Tax at 307-08 (citing International T & T
Corp. v. Generali T. & E. Corp., 518 F.2d 913, 921 (9th
Cir.1975)). We therefore direct our attention to the meaning of
section 114(c) in the context of the supportive provisions of
Superfund and the legislative background of the whole of
Superfund.
Although it may be true that many of the purposes to which
Superfund moneys are put overlap with the purposes of Spill
Fund, this fact alone does not require a conclusion of
preemption. In Florida Line & Avocado Growers, supra, 373
U.S. 132, 83 S.Ct. 1210, 10 L.Ed.2d 248, the Court stated that
the contention that such a situation compels preemption tends to
“obscure more than aid in the solution of the problem. * * *
This Court has, on one hand, sustained state statutes having
objectives virtually identical to those of federal regulations * * *
and has, on the other hand, struck down state statutes where the
respective purposes were quite dissimilar * * *.” Jd. at 141-42,
83 S.Ct. at 1217, 10 L.Ed.2d at 256 (citations omitted). Hence,
it is far more useful to examine a challenge of preemption in the
light of what Congress intended the relationship to be between
Superfund and state statutes such as Spill Fund.
Whereas plaintiffs contend that the language used in sec-
tion 114(c) of Superfund demonstrates an intent on the part of
Congress to repose in the federal government exclusively the
power to maintain a fund for the cleanup and removal of hazard-
ous substances, it is clear from the surrounding provisions of
Superfund and its legislative history that Congress actually envi-
sioned a cooperative arrangement between the federal and state
26a
SUPREME COURT OF NEW JERSEY, 1984.
97 N.J. Exxon Corp. V. Hunt
Cite as, 97 N.J. 526
governments. Superfund recognizes its limits and in fact pro-
vides for active state financial and technical cooperation in
hazardous-waste cleanup activities. See, e.g., 42 U.S.C.A.
§ 9604(c)(2) (requires consultation by President with affected
states prior to determination of any appropriate remedial
action); 42 U.S.C.A. § 9604(c)(3) (mandates a minimum level
of state financial and technical (contract or cooperative agree-
ment) participation as a prerequisite to receiving federal cleanup
funds); 42 U.S.C.A. § 9604(d)(1) (encourages states with the
capability to carry out cleanup actions to do so with reimburse-
ment from Superfund); 42 U.S.C.A. § 9605(4) (requires adop-
tion of National Contingency Plan setting forth, among other
things, “appropriate roles and responsibilities for the Federal,
State, and local government * * * in effectuating the plan”); and
42 U.S.C.A. § 9614(a) (“Nothing in this chapter shall be con-
strued or interpreted as preempting any State from imposing
any additional liability or requirements with respect to the
release of hazardous substance within such State.”) These provi-
sions exemplify the intended interdependence between
Superfund and state programs.
Courts frequently refer to events occurring immediately
prior to the time of enactment as an extrinsic aid in fathoming
legislative intent. See 2A Sutherland Statutory Construction,
supra, at § 48.04. Of persuasive significance, therefore, is the
colloquy between Senator Bradley of New Jersey and Senator
Randolph of West Virginia that preceded the enactment of
Superfund. Because Senator Randolph was the chairman of the
Committee on Environment and Public Works, which reported
the Superfund bill to the Senate, as well as floor manager and
cosponsor of the measure, his explanations and comments with
respect to the interpretation of Superfund provisions deserve
particular deference. See 126 Cong.Rec. $14941—15008 (daily
ed. Nov. 24, 1980); see also F.E.A. v. Algonquin SNG, Inc., 426
U.S. 548, 564, 96 S.Ct. 2295, 2304, 49 L.Ed.2d 49, 60 (1976)
27a
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Exxon Corp. V. Hunt 97 N.J.
Cite as, 97 N.J. 526
(relying on Senate floor debates for support in statutory con-
struction, the Court pointed out that “as a statement of one of
the legislation’s sponsors, this explanation deserves to be
accorded substantial weight in interpreting the statute”);
Brennan v. Corning Glass Works, 480 F.2d 1254, 1260 (3d
Cir.1973) (recognizing that “a sponsor’s views are entitled to
great weight”); 2A Sutherland Statutory Construction, supra,
at § 48.15 (noting “reality of legislative practice” that legislators
look to sponsors as sources of information corcerning a bill’s pur-
pose, meaning, and intended effect).
Senator Bradley set the tenor of his dialogue with Senator
Randolph by expressing the following concerns and identifying
the issves that their comments would attempt to clarify:
New Jersey and several of the other States with successful
State spill funds (including Michigan, Florida, California,
Maryland, and New York) have on repeated occasions expressed
grave concerns that the preemption language contained in this bill
may work to slow down governmental response to spills of oils and
hazardous wastes by creating questions as to the availability of
State and [/]or Federal funds to provide operating, up front dol-
lars to finance emergency cleanup and containment actions. |
understand the concern debated over the years in conjunction
with superfund that industry not be forced to suffer a double tax
for the same functions carried out by different levels of
government.
Mr. President, in order to clarify the remaining questions
concerning allowable State activity under this bill’s preemption
language, | wonder if the Senator [Randolph] from West
Virginia would consent to a few questions on this issue? [126
Cong. Rec. S$14981 (daily ed. Nov. 24, 1980).]
The colloquy that followed these introductory remarks leaves lit-
tle doubt that section 114(c) was not intended as a total
preemption of state involvement in hazardous-waste cleanup
28a
SUPREME COURT OF NEW JERSEY, 1984.
97 N.J. Exxon Corp. V. Hunt
Cite as, 97 N.J. 526
efforts. First, the remarks of Senator Randolph lend strong sup-
port to that conclusion:
{[Mr. BRADLEY.] Am I correct in understanding that it is the
purpose of this legislation to prohibit States from requiring any
person to contribute to a fund for the purpose of reimbursing
claims already provided for in this legislation?
Mr. RANDOLPH. Yes, that is the clear intent. The purpose is
to prohibit States from creating duplicate funds to pay damage
compensable under this bill.
Mr. BRADLEY. However, there is no such preemption of a
State’s ability to collect such taxes or fees for other costs associa-
ted with releases that are not compensable damages as defined in
this legislation.
Mr. RANDOLPH. The Senator is correct. [/d.]
Should any doubt remain, the following excerpts establish that
the interrelationship between Superfund and state cleanup funds
allows for state funds to fill in the gaps left by Superfund:
Mr. RANDOLPH. * * * What this bill does is prohibit a State
from requiring any person to contribute to any fund if the purpose
of that fund is to compensate for a claim paid for under the provi-
sions of this bill.
* * * * * * * *
Putting it simply, this is a prohibition against double taxation
for the same purposes. It is not a prohibition on the uses that a
State may make of its money, nor does it prohibit a State from
imposing fees or taxes for other purposes connected with cleanup
or restoration activities such as the purchase of pollution abate-
ment equipment or the hiring or training of personnel for pollu-
tion prevention programs.
In summary, Mr. President, this preemption provision is nar-
row in scope and limited to the particular purpose of preventing
double taxation.
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Exxon Corp. V. Hunt 97 N.J.
Cite as, 97 N.J. 526
Mr. BRADLEY. Am I correct in assuming that moneys
expended by State funds can be used to provide the requircu
10 percent State match?
Mr. RANDOLPH. That is correct.
Mr. BRADLEY. And am | also correct in noting that State
funds are preempted only for efforts which are in fact paid for by
the Federal fund and that there would be no preemption for
efforts which are eligible for Federal funds but for which there is
no reimbursement?
Mr. RANDOLPH. That is correct.
Mr. BRADLEY. Finally, if the Federal Government deter-
mines that the needs at other sites require that Federal efforts be
terminated at the first site before that site is completed, may a
State fund complete the effort?
Mr. RANDOLPH. This legislation would permit that to hap-
pen. [/d.]
As the Tax Court noted, “[t]he Randolph interpretation, which
would enable states to tax for remedial actions not actually com-
pensated under super fund, comports with a prohibition against
double taxation in that states are still prevented from taxing to
pay for cleanups actually financed by the Federal Government.”
4 N.J.Tax at 310.
This conclusion, that Superfund preempts state taxation
only when the state fund thereby created is used to compensate
cleanup activities already compensated by Superfund, finds sup-
port also in the recent comments of the House of Representa-
tives Committee on Energy and Commerce. * In its Report dated
In this connection we are reminded that “while the views of subsequent
Congresses cannot override the unmistakable intent of the enacting
one, * * * such views are entitled to significant weight * * * and particularly so
when the precise intent of the enacting Congress is obscure.” Seatrain Ship-
building Corp. v. Shell Oil Co., 444 U.S. 572, 596, 100 S.Ct. 800, 814, 63
L.Ed2d 36, 54 (1980) (citations omitted); accord Bell v. New Jersey &
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SUPREME COURT OF NEW JERSEY, 1984.
97 N.J. Exxon Corp. V. Hunt
Cite as, 97 N.J. 526
July 16, 1984, the Committee on Energy and Commerce, to
which H.R. 5640 (“Superfund Expansion and Protection Act of
1984”) was referred, addressed Superfund’s relationship to other
law and, in particular, the pending bill’s repeal of Superfund’s
preemption provision:
The section repeals the provision of current law which
preempts state taxing authority in certain circumstances. The
Committee is aware that the current law’s preemption of state
taxing authority has been interpreted by some to constitute a total
elimination of state authority in this area. The Committee
believes that the proper interpretation of current law is that its
preemption provision was intended only to preclude states from
imposing taxes or otherwise requiring contributions to funds
which would pay costs or damages that would be actually com-
pensated by Superfund. To avoid any possible misinterpretation
of the law which could further restrict the states’ efforts to raise
the funds necessary to meet their matching share obligations
under the program, the legislation repeals the current law’s
Pennsylvania, 461 U.S. 773,—-, 103 S.Ct. 2187, 2194, 76 L.Ed.2d 312, 323,
(1983) (“[T]he view of a later Congress does not establish definitively the
meaning of an earlier enactment, but it does have persuasive value.”) Edwards
v. Mayor and Council of Moonachie, 3 N.J. 17, 24 (1949) (“[WyJhile entitled
to due consideration, the subsequent legislative construction of a statute is not
conclusive of the significance of the prior act.”). Bur cf. Garden State Farms,
Inc. v. Bay, 77 N.J. 439, 453 (1978) (“We believe that ** * * caution must be
exercised in using the action of the legislature on proposed amendments as an
interpretative aid’ in discerning legislative intent. 2A Sutherland, Statutory
Construction, § 48.18 at 225 (Sands ed. 1973).”).
On May 10, 1984, H.R. 5640 was referred jointly to the Committees
on Energy and Commerce and Public Works and Transportation for a
period ending not later than July 24, 1984, as well as to the Committee on
Ways and Means. On August 10, 1984 the House of Representatives
passed H.R. 5640. See supra note 6, at 531-532. Thus, although we real-
ize that this legislation is pending senatorial and presidential approval, we
find that the relevancy of the statements contained in the Committee
report should not be overlooked.
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Exxon Corp. V. Hunt 97 N.J.
Cite as, 97 N.J. 526
preemption provision in its entirety. ° [H.R.Rep.No. 890, Part |,
98th Cong., 2d Sess. 58-59 (1984) (footnote and emphasis
added).]
Thus, not only does the colloquy between Senators Bradley and
Randolph support the conclusion that total preemption was not
intended, but Congress itself is now trying to clarify what it
views as a misinterpretation of the enacting Congress’ intent.
We note too that when enacted, Superfund was recognized
by various members of Congress as providing for an insufficient
funding level to tackle the cleanup and removal of hazardous-
waste sites that existed at that time. See 4 N.J.Tax at 312-13.
See generally 126 Cong.Rec. $15007 (daily ed. Nov. 24, 1980)
(remarks of Sen. Stafford); S.Rep.No. 848, 96th Cong., 2d Sess.
17, 71 (1980); H.R.Rep.No. 1016, 96th Cong., 2d Sess. 20
(1980), reprinted in 1980 U.S. Code Cong. & Ad. News 6119,
6123. This feature—the inadequacy of Superfund to meet
cleanup needs—empahsizes Congress’ probable intent to allow
states to continue their own efforts to assist in cleanup activities.
Another source of interpretive information is the comments
made by the federal administrative agency charged with the
authority to implement the statute in question. “It is a
fundamental maxim that the opinion as to the construction of a
regulatory statute of the expert administrative agency charged
with the enforcement of that statute is entitled to great weight
and is a ‘substantial factor to be considered in construing the
statute.’ New Jersey Guild of Hearing Aid Dispensers v. Long,
75 N.J. 544, 575 (1978) (citing Youakim v. Miller, 425 U.S.
* If enacted, section 118 of the legislation would amend section 114(c) of
Superfund to read as follows:
(c) Notwithstanding any provision of this or any other law, a State
may require any person to contribute to any fund the purpose of which is
to pay compensation for claims for any costs of response or damages
which may be compensated under this Act. [H.R.Rep.No. 890, Part 1,
98th Cong., 2d Sess. 12 (1984).]
32a
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97 N.J. Exxon Corp. V. Hunt
Cite as, 97 N.J. 526
231, 235, 96 S.Ct. 1399, 1402, 47 L.Ed.2d 701, 706 (1976)). In
this case that agency is the Environmental Protection Agency.
In an Executive Summary memorandum, the Administrator of
the EPA discussed the preemption issue and stated that section
114(c) of Superfund “does not apply to State funds which are
used * * * ;: * * * To compensate damage claims and to remove
or remedy releases of hazardous substances eligible to be
financed by [Superfund] but for which no federal reimburse-
ment is provided.” Office of Emergency and Remedial
Response, U.S. Environmental Protection Agency, Guidance:
Cooperative Agreements and Contracts with States Under the
Compehensive Environmental Response, Compensation and
Liability Act of 1980 (P.L. 96-510) ix-x (March 1982). This
interpretation is consistent with both the legislative history and
with the broad remedial goals of Superfund.
In San-Lan Builders, Inc. v. Baxendale, 28 NJ. 148
(1958), this Court recognized the need to look to the general
tenor of the law:
{I]n this quest for the true intention of the law, the letter gives
way to the obvious reason and spirit of the expression, and to this
end the evident policy and purpose of the act constitute an
implied limitation on the sense of general terms and a touchstone
for the expansion of narrower terms. * * * Scholastic strictness
is to be avoided in the search for the legislative intention. The
particular terms are to be made responsive to the essential princi-
ple of the law. It is not the words but the internal sense of the act
that controls. Reason is the soul of law. Wright v. Vogt, 7 N.J. |
(1951). [/d. at 155.]
Thus, as Judge Evers reasoned,
[iJf § 114(c) is read to preempt a// state taxation for hazardous
waste cleanups, the clause would undermine the salutary statu-
tory goals of [Superfund] and would result in actually limiting
the number of cleanups which could otherwise be initiated by the
33a
SUPREME COURT OF NEW JERSEY, 1984.
Exxon Corp. V. Hunt 97 N.J.
Cite as, 97 N.J. 526
state in spite of the fact that [Superfund] was intended to expand
cleanup efforts. {4 N.J. Tax at 311 (emphasis added).]
In fact, the National Contingency Plan, prepared in accor-
dance with section 105 of Superfund, 42 U.S.C.A. § 9605, pro-
vides for the listing of “at least four hundred of the highest pri-
ority facilities”. 42 U.S.C.A. § 9605(8)(B). '° However, the
National Contingency Plan also recognizes the inability of
Superfund to compensate all sites and therefore requires “crite-
ria for determining priorities among releases or threatened
releases throughout the United States for the purpose of taking
remedial action * * *.” 42 U.S.C.A. § 9605(8){A). Thus, some
sites in need will not make the priority list and will therefore not
be eligible for Superfund compensation. See 40 C.F.R.
§ 300.68(a). Hence, there will no doubt be sites that are
excluded from the section 114(c) test of “may be compensated
under this subchapter.” 42 U.S.C.A. § 9614(c); see also 4 N.J.
Tax at 312 n.9 (stating that at that time only twelve of New
Jersey’s 235 sites were qualified for priority treatment). Given
the national interest in cleaning up and removing hazardous
waste from our environment, we would be hard pressed to inter-
pret the legislation as prohibiting states from supplementing the
federal movement to combat this problem. As the Tax Court
stated, “[i]t simply strains credulity to say that hazardous waste
sites or spills not meeting the [priority list] criteria are claims
which ‘may be compensated’ under [Superfund].” 4 N.J.Tax at
313.
"42 U.S.C.A. § 9605(8)(B) provides that the President shall list national pri-
orities among known or threatened releases throughout the United States and
shall revise the list “no less often than annually © In performing this function
the President “shail consider any priorities established by the States.”
34a
SUPREME COURT OF NEW JERSEY, 1984.
97 NJ. Exxon Corp. V. Hunt
Cite as, 97 N.J. 526
[5] The Tax Court emphasized that the underlying
scheme of Superfund is one that “allows, but does not require,
cooperation of the federal and state regimes.” /d. at 315. A thor-
ough understanding of this cooperative relationship leads us to
the natural conclusion that section 114(c) of Superfund does not
preempt Spill Fund in respect of funds that are used to compen-
sate hazardous-waste cleanup costs and claims not covered or
not in fact compensated by Superfund moneys. While we are
mindful of “the obvious limitation that a double tax could not be
collected and expended on any one project,” id. at 320, we have
no doubt that Congress’ enactment of Superfund was aimed at
providing a federal framework to supervise the revitalization of
our environment. Surely Congress did not intend for the states
just to sit back and wait for hazardous-waste compensation that
might never be awarded.
The more logical conclusion, based particularly on the legis-
lative history surrounding the enactment of Superfund, is that
Congress contemplated that the federal government would
attempt to deal with the problems of the most seriously affected
sites (those listed in accordance with the National Priority Plan)
and to allow states to maintain a compensation fund, or to use
general revenues should they choose, to conduct their own
cleanup efforts on those sites not receiving Superfund compensa-
tion and to provide for their cooperative program components
including their 10% share of cleanup costs, related acministra-
tive costs for equipment and personnel, and other program
features not covered by Superfund such as containment and
indemnity.
35a
SUPREME COURT OF NEW JERSEY, 1984.
Exxon Corp. V. Hunt 97 N.J.
Cite as, 97 N.J. 526
We therefore hold that the Spill Fund tax imposed on
plaintiffs is not preempted by section 114(c) of Superfund
insofar as Spill Fund is used to compensate hazardous-waste
cleanup costs and related claims that are either not covered or
not actually paid under Superfund. The underlying intent of
Superfund, as well as the legislative history, mandates a conclu-
sion of no preemption.
Affirmed.
For affirmance—Chief Justice WILENTZ, Justices CLIF-
FORD, SCHREIBER, HANDLER and POLLOCK, and
Judge FRITZ—S.
For reversal—None.
36a
ain ————— =
A es Ay AT I Nip le ae
APPELLATE DIVISION.
190 N.J. Super. Exxon Corp. V. Hunt
Cite as, 190 N.J. Super. 131
EXXON CORPORATION, ET AL., PLAINTIFFS-
APPELLANTS, v. ROBERT HUNT, ADMINISTRATOR
OF N.J. SPILL COMPENSATION FUND, ET AL.,
DEFENDANTS-RESPONDENTS.
and
EXXON CORPORATION, ET AL., PLAINTIFFS-
APPELLANTS, v. ROBERT HUNT, ADMINISTRATOR
OF N.J. SPILL COMPENSATION FUND, ET AL.,
DEFENDANTS-RESPONDENTS.
EXXON CORPORATION, ET AL., APPELLANTS, v.
KENNETH R. BIEDERMAN, TREASURER OF THE
STATE OF N.J., AND THE N.J. DEPARTMENT OF THE
TREASURY, RESPONDENTS.
Superior Court of New Jersey
Appellate Division
Argued May 17, 1983—Decided June 22, 1983.
SYNOPSIS
Appeals were taken challenging a declaratory judgment of
the Tax Court, 4 N.J. Tax 294, determining the extent to which
the taxing provisions of the New Jersey Spill Fund and Compen-
sation Act are preempted by federal law and the validity of cer-
tain regulations promulgated by the State Treasurer under the
Spill Fund Act. The Superior Court, Appellate Division, Antell,
J.A.D., held that failure to comply with clearly stated require-
ments of Administrative Procedure Act rendered regulations
promulgated by the State Treasurer invalid.
37a
APPELLATE DIVISION.
Exxon Corp. V. Hunt 190 N.J. Super.
Cite as, 190 N.J. Super. 131
Affirmed.
Matthews, P.J.A.D., filed a concurring opinion.
1. Health and Environment @= 25.7(23)
Adoption of regulations governing expenditures under New
Jersey Spill Fund and Compensation Act, after erroneously
treating plaintiffs’ hand-delivered written comments as
untimely, did not comply with Administrative Procedure Act
and thus regulations were invalid, despite Department of Treas-
ury’s contention that it had “become familiar” with plaintiffs’
position before proposing regulations. N.J.S.A. 52:14B—1 et seq.,
52:14B—4(a)(1), (d), 58:10—23.11t.
2. Administrative Law and Procedure @= 395
Substantial compliance with Administrative Procedure Act
cannot be found where prescribed system of notice and written
comments has been sidestepped. N.J.S.A. 52:14B-—1 et seq.
Before Judges MATTHEWS, ANTELL and FRANCIS.
John J. Carlin, Jr., argued the cause for appellants,
(Farrell, Curtis, Carlin & Davidson, attorneys; John J. Carlin
and Lisa J. Pollack on the brief).
Mary C. Jacobson, Deputy Attorney General, argued the
cause for respondents (/rwin I. Kimmelman, Attorney General
of New Jersey, attorney; Michael R. Cole, Assistant Attorney
General, of counsel and Mary C. Jacobson on the brief).
The majority opinion of the court was delivered by
ANTELL, J.A.D.
38a
APPELLATE DIVISION.
190 N.J. Super. Exxon Corp. V. Hunt
Cite as, 190 N.J. Super. 131
These are consolidated appeals challenging (1) a declara-
tory judgment of the Tax Court determining the extent to which
the taxing provisions of the New Jersey Spill Fund and Compen-
sation Act, N.J.S.A. 58:10-23.11h are preempted by section
114(c) ' of the Federal Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (Superfund), 42
U.S.C.A. § 9601 et seq. and (2) the validity of certain regula-
tions promulgated by the State Treasurer under the Spill Fund
Act. We affirm the judgment of the Tax Court substantially for
the reasons stated by Judge Evers in his written opinion pub-
lished at 4 N.J. Tax 294 (Tax Ct. 1982).
Pursuant to N.J.S.A. 58:10—23.11t the State Treasurer and
the spill fund director are authorized to adopt such rules and
regulations pursuant to the Administrative Procedure Act as
they may deem necessary to accomplish their purposes and
responsibilities under the Spill Fund Act. WN.J.S.A.
52:14B—4(2)(1) of the Administrative Procedure Act requires
the agency to give 30 days public notice prior to the adoption,
amendment or repeal of any rule. Subsection (3) requires the
agency to
Afford all interested persons reasonable opportunity to submit
data, views, or arguments, orally or in writing. The agency shall
consider fully all written and oral submissions respecting the pro-
posed rule.
{1} On January 4, 1982 the Department of Treasury pub-
lished its proposed regulations governing expenditures under the
Act in the New Jersey Register, 14 N.J.R. 36, inviting interested
parties to submit their comments on or before February 13,
1982. Plaintiffs hand delivered their written comments on Feb-
ruary 11, 1982, but the department erroneously determined that
they were “untimely and need not be considered,” and on March
' 42U.S.C.A. § 9614(c)
39a
APPELLATE DIVISION.
Exxon Corp. V. Hunt 190 N.J. Super.
Cite as, 190 N.J. Super. 131
15, 1982 published a Notice of Adoption of the Regulations in
the New Jersey Register, 14 N.J.R. 285. On March 29, 1982
plaintiffs submitted their written request that the department
correct its error by rescinding its regulations and re-proposing
them with provision for a “meaningful comment period.” Their
request was denied by letter from the Assistant State Treasurer
dated April 7, 1982.
The State’s position with respect to this issue is that the
omission was only “a technical error which does not justify the
invalidation of the regulations.” It points out that although
plaintiffs’ comments were treated as untimely received for pur-
poses of entitlement to consideration before adoption of the reg-
ulations the Department had nevertheless “hecome familiar”
with plaintiffs’ position before proposing the regulations.
Relying upon N.J.S.A. 52:14B—4(d), it maintains that the valid-
ity of the regulations should be sustained on the basis of its “sub-
stantial compliance” with the provisions of the Administrative
Procedure Act.
[2] The explanations offered by the State fail to justify its
non-compliance with the clearly stated requirements of the
Administrative Procedure Act. Although its disregard of the Act
is not as complete as that considered in Glaser v. Downes, 126
N.J. Super. 10 (App. Div. 1973), certif. den. 64 N.J. 573
(1974), the denial of due process of law resulting to plaintiffs is
no less. Substantial compliance with the Administrative Proce-
dure Act cannot be found where the prescribed system of notice
and written comments, called “the mainstay of modern rulemak-
ing procedure,” Davis, Administrative Law of the Seventies, at
169 (1976), has been sidestepped.
We conclude that the regulations under review adopted by
notice published March 15, 1982 are invalid and without force
and effect.
40a
APPELLATE DIVISION.
190 N.J. Super. Exxon Corp. V. Hunt
Cite as, 190 N.J. Super. 131
MATTHEWS, P.J.A.D. (concurring).
I agree with the conclusion reached by Judge Evers in the
Tax Court which we now affirm. I also agree that plaintiffs were
denied due process of law in the rule-making process. I am con-
strained to file this concurring opinion, however, because there
appears to be a general assumption in the majority opinion that
the Congress could preempt New Jersey’s taxation provision if it
so intended. I think that such an assumption is erroneous.
The Supremacy Clause of the United States Constitution
provides in pertinent part:
This Constitution, and the Laws of the United States which shall
be made in Pursuance thereof . . . shall be the supreme Law of the
Land....[{U.S. Const., Art. VI, cl. 2]
I question whether a statute passed by Congress which denies to
the states the right to tax for the purposes of the Spill Fund is
“made in Pursuance” of the Constitution. A state may not tax
imports or exports, federal property, or interstate commerce
discriminatorily, or in any fashion that could obstruct a legiti-
mate exercise of Congressional power. Beyond those limitations,
the states have broad powers to structure revenue raising taxes
as they see fit. As Judge Evers found, “plaintiffs neither raised
nor attempted to support any argument that the taxing provi-
sions of spill fund were violative of any other constitutional
rights.” 4 N.J. Tax at 316. He also noted that “plaintiffs do not
\ggest that there is an actual conflict between the limited pur-
poses of super fund and the overall policy enunciated by New
Jersey in spill fund.” /d. Plaintiffs do not contest these state-
ments on appeal. Thus, the underlying premise of both plaintiffs’
argument here and of Judge Evers’ opinion is that if Congress
implicitly or explicitly intended to preclude the states from
taxing for any purpose which is otherwise constitutional it has
the power to do so under the Supremacy Clause.
4la
APPELLATE DIVISION.
Exxon Corp. V. Hunt 190 N.J. Super.
Cite as, 190 N.J. Super. 131
The most basic premise of our constitutional form of gov-
ernment is that in the Constitution the sovereign states relin-
quished certain of their sovereign powers to the federal govern-
ment for its exclusive exercise. See Goldstein v. California, 412
U.S. 546, 552, 93 S. Ct. 2303, 2307, 37 L.Ed.2d 163, reh. den.
414 U.S. 883, 94 S.Ct. 27, 38 L.Ed.2d 131 (1973). “But... the
State governments would clearly retain all the rights of sover-
eignty which they before had, and which were not, by that act,
exclusively delegated to the United States.” Jd. 412 U.S. at
552-553, 93 S.Ct. at 2308, quoting from Number 32 of The
Federalist by Alexander Hamilton (emphasis in original).'
Hamilton went on to specify the three instances when state sov-
ereignty would be deemed alienated: “. . . where the Constitution
in express terms granted an exclusive authority to the Union;
where it granted in one instance an authority to the Union, and
in another prohibited the States from exercising the like author-
ity, and where it granted an authority to the Union, to which a
similar authority in the States would be absolutely and totally
contradictory and repugnant.” Id.; emphasis in original.
' E.g., the first paragraph of The Federalist 32 reads:
Although | am of opinion that there would be no real danger of the
consequences which seem to be apprehended to the State governments
from a power in the Union to control them in the levies of money, because
| am persuaded that the sense of the people, the extreme hazard of provok-
ing the resentments of the State governments, and a conviction of the util-
ity and necessity of local administrations for local purposes, would be a
complete barrier against the oppressive use of such a power; yet | am will-
ing here to allow, in its full extent, the justness of the reasoning which
requires that the individual States should possess an independent and
uncontrollable authority to raise their own revenues for the supply by their
own wants. And making this concession, | affirm that (with the sole
exception of duties on imports and exports) they would, under the plan of
the convention, retain that authority in the most absolute and unqualified
sense; and that an attempt on the part of the national government to
abridge them in the exercise of it, would be a violent assumption of power,
unwarranted by any article or clause of its Constitution.
42a
APPELLATE DIVISION.
190 N.J. Super. Exxon Corp. V. Hunt
Cite as, 190 N.J. Super. 131
As in Jones v. Rath Packing Co., 430 U.S. 519, 524-525,
97 S.Ct. 1305, 1309, 51 L.Ed.2d 604, reh. den. 431 U.S. 925, 97
S.Ct. 2201, 53 L.Ed.2d 240 (1977), this case “contains no claim
that the Constitution alone denies [New Jersey] power to enact
the challenged provisions.” In fact “the breadth of concurrent
taxing powers of state and nation” have long been recognized.
Hines v. Davidowitz, 312 U.S. 52, 68, n. 21, 61 S.Ct. 399, 404,
n. 21, 85 L.Ed. 581 (1940), citing No. 32, The Federalist. Over
one hundred years ago the Court found “nothing in the Consti-
tution which contemplates or authorizes any direct abridgement
of [the concurrent powers to tax] by national legislation.” Lane
County v. Oregon, 7 Wall. 71, 74 U.S. 71, 77, 19 L.Ed. 101, 105
(1868). “The extent to which [a State’s power to tax] shall be
exercised, the subjects upon which it shall be exercised, and the
mode in which it shall be exercised, are all equally within the
discretion of the Legislatures to which the States commit the
exercise of the power.” Jd. The only limits to a State’s power to
tax outside of those explicitly stated in the Constitution is that a
tax “must not be used as to burden or embarrass the operations
of the National Government.” /d.
The idea that a state has “the freedom of a sovereign both
as to objects and methods” of taxation has been frequently
repeated. Shaffer v. Carter, 252 U.S. 37, 51-52, 40 S.Ct. 221,
225, 64 L.Ed. 445 (1919), quoting Michigan C.R. Co. v. Powers,
201 U.S. 245, 292, 26 S.Ct. 459, 462, 50 L.Fd. 744 (1906). This
freedom extends without interference “even if the effect... is
akin to double taxation . . . since it is settled that nothing in [the
Federal Constitution] or in the 14th [sic] Amendment prevents
the states from imposing double taxation.” 252 U.S. at 58, 40
S.Ct. at 227. As long as there is “some adequate or reasonable
basis” for the taxation classifications double taxation is not
forbidden. Swiss Oil Corp. v. Shanks, 273 U.S. 407, 413, 47
S.Ct. 393, 395, 71 L.Ed. 709 (1926).
43a
APPELLATE DIVISION.
Exxon Corp. V. Hunt 190 N.J. Super.
Cite as, 190 N.J. Super. 131
Close federal supervision of states’ taxing power would be
“intolerable” and “hostile to the basic principles of our Govern-
ment... .” Allied Stores of Ohio v. Bowers, 358 U.S. 522, 527,
79 S.Ct. 437,441,3 L.Ed.2d 480 (1959), quoting Ohio Oil Co. v.
Conway, 281 U.S. 146, 159, 50 S.Ct. 310, 314, 74 L.Ed. 775
(1929). Some limits to a state’s power to tax are found in the
Equal Protection Clause, but “that clause imposes no iron rule
of equality,” 358 U.S. at 526, 79 S.Ct. at 440. The tax must
have a rational basis and may not be “palpably arbitrary.” Id. at
527, 79 S.Ct. at 441. It is also well established that the Suprem-
acy Clause prohibits states from taxing the United States or its
property directly. Washington v. United States, U.S. ,
, 103, S.Ct. 1344, 1348, 75 L.Ed.2d 264, 268 (1983). But
even that prohibition has been very narrowly construed and “the
States’ power to tax can be denied only under ‘the clearest con-
stitutional mandate,’” Jd. at , 103 S.Ct. at 1351, 75
L.Ed.2d at 273, quoting Michelin Tire Corp. v. Wages, 423 U.S.
276, 293, 96 S.Ct. 535, 544, 46 L.Ed.2d 495 (1976), as cited in
United States v. New Mexico, 455, U.S. 720, 737-738, 102
S.Ct. 1373, 1384, 71 L.Ed.2d 580 (1982). State taxes which
affect interstate commerce must have a reasonable nexus
between the taxing state and activities being taxed and must not
discriminate against interstate commerce in favor of intrastate
commerce or unduly infringe upon Congress’ right to regulate
interstate commerce. See generally, Tribe, American Constitu-
tional Law, § 6-14, 15. The Constitution explicitly prohibits
states from laying “any Imposts or Duties on Imports or
Exports... .”” U.S. Const., Art. 1, § 10, cl. 2. See also Michelii:
Tire Corp. v. Wages, supra, 423 U.S. 276, 96 S.Ct. 535, 46
L.Ed.2d 495.
Plaintiffs in this case make no allegations that the State has
transgressed any of these limits on its spill fund tax. Their argu-
ment is based on an interpretation that §114(c) of the
Superfund precludes states from taxing for the same purpose as
44a
APPELLATE DIVISION.
190 N.J. Super. Exxon Corp. V. Hunt
Cite as, 190 N.J. Super. 131
the Superfund. In light of the strong history of the states’
freedom as to the “modes and subjects” of their taxation
schemes, and the Supreme Court’s approval of double taxation,
there must be some demonstration that New Jersey’s tax some-
how stands as an obstacle to the accomplishment of any of the
permissible goals of the Superfund. I know of no authority which
would permit Congress to prohibit a state from imposing an oth-
erwise constitutional tax simply because it had determined that
the taxpayer should not be taxed by both the federal and state
governments. Presumably Congress could impose such a prohibi-
tion if it determined the state tax unduly interfered with its reg-
ulation of interstate commerce but, again, no such allegations
have been presented here. The Supreme Court has admonished
and repeated “[w]e must also be careful to distinguish those
situations in which the concurrent exercise of a power by the
Federal Government and the States or by the States alone may
possibly lead to conflicts and those situations where conflicts
will necessarily arise.” Goldstein v. California, 412 U.S. at 554,
93 S.Ct. at 2309. No allegation of any conflict has been made.
The Supreme Court has stated in numerous cases that when
the federal government has not been given exclusive control over
a given matter “[c]onsideration under the Supremacy Clause
starts with the basic assumption that Congress did not intend to
displace state law.” Maryland v. Louisiana, 451 U.S. 725, 746,
101 S.Ct. 2114, 2129, 68 L.Ed.2d 576 (1981). Certainly there
should be no finding that congressional action precludes the
states from exercising their powers to tax without some clear
indication that Congress has a constitutional basis for so doing.
We should bear in mind that private parties have chosen to
litigate this issue. This case does not represent a direct conflict
between state and federal authorities. Perhaps the issue would
be better framed as “Does New Jersey have the power to impose
the Spill Fund Tax on these plaintiffs?” Such a reformulation
45a
APPELLATE DIVISION.
Exxon Corp. V. Hunt 190 N.J. Super.
Cite as, 190 N.J. Super. 131
recognizes that this case clearly is one arising under the state
law. It also emphasizes that this is a matter betweeen the private
plaintiffs and the State of New Jersey. As Exxon has attempted
to structure its arguments, it is attempting to assert a power of
the federal government which that government may or may not
even believe it possesses.
46a
TAX COURT OF NEW JERSEY, 1982.
Exxon Corp. v. Hunt 4N.J. Tax
Cite as, 4 N.J. Tax 294
EXXON CORPORATION, THE B.F. GOODRICH COM-
PANY, UNION CARBIDE CORPORATION,
MONSANTO COMPANY AND TENNECO CHEMI-
CALS, INC., PLAINTIFFS, v. ROBERT HUNT,
ADMINISTRATOR OF NEW JERSEY SPILL COM-
PENSATION FUND; CLIFFORD A. GOLDMAN,
TREASURER OF THE STATE OF NEW JERSEY;
SIDNEY GLASER, DIRECTOR OF THE DIVISION
OF TAXATION; AND THE STATE OF NEW JERSEY,
DEFENDANTS.
EXXON CORPORATION, THE B.F. GOODRICH COM-
PANY, UNION CARBIDE CORPORATION,
MONSANTO COMPANY AND TENNECO CHEMI-
CALS, INC., PLAINTIFFS, v. ROBERT HUNT,
ADMINISTRATOR OF NEW JERSEY SPILL COM-
PENSATION FUND; CLIFFORD A. GOLDMAN,
TREASURER OF THE STATE OF NEW JERSEY;
SIDNEY GLASER, DIRECTOR OF THE DIVISION
OF TAXATION; JERRY F. ENGLISH, COMMIS-
SIONER OF ENVIRONMENTAL PROTECTION;
AND THE STATE OF NEW JERSEY, DEFENDANTS.
Tax Court of New Jersey
April 23, 1982.
SYNOPSIS
In a case involving constitutionality of state Spill Compen-
sation and Control Act, the Tax Court, Evers, J. T. C., on cross
motions for summary judgment, held that such state statute has
not been preempted by the federal Comprehensive Environmen-
tal Response, Compensation and Liability Act of 1980.
47a
TAX COURT OF NEW JERSEY, 1982.
4N.J. Tax Exxon Corp. v. Hunt
Cite as, 4 N.J. 294
Plaintiffs’ motion denied, and defendants’ motion granted.
1. States €=4.13
Where state statute conflicts with federal statute which has
preempted field and stands as obstacle to accomplishment and
execution of full purposes and objectives of Congress, supremacy
clause of United States Constitution mandates that state statute
fail. U.S.C.A.Const.Art. 6, cl. 2; Comprehensive Environ-
mental Response, Compensation, and Liability Act of 1980,
§§ 104(d)(1), 105, L11(f), 112, 114(a), 42 US.C.A.
§§ 9604(d)(1), 9605, 9611(f), 9612, 9614(a).
2. States €—4.13
Where Congress has not foreclosed field, state statute is
nevertheless void to the extent of actual conflict with federal
statute. U.S.C.A.Const.Art. 6, cl. 2.
3. States €=4.13
Court must attempt to harmonize state and federal laws
whenever possible, particularly in areas traditionally reserved to
states and relating to vital interests of state citizens. N.J.S.A.
58:10—23.11 et seq.; Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, §§ 101 et seq., 114(c),
42 US.C.A. §§ 9601 et seq., 9614(c); U.S.C.A.Const.Art. 6,
cl. 2.
4. Health and Environment @= 25.7(3)
Section of Comprehensive Environmental Response, Com-
pensation and Liability Act of 1980 providing that no person
may be required to “contribute to any fund, purpose of which is
to pay compensation for claims for any costs of response for
damages or claims which may be compensated under this title”
is ambiguous, and court must look to extrinsic aids to clarify
48a
TAX COURT OF NEW JERSEY, 1982.
Exxon Corp. v. Hunt 4N.J. Tax
Cite as, 4 N.J. Tax 294
legislative scheme, and inquiry requires consideration of rela-
tionship between federal and state laws as they ought to be
applied, and not merely as written. N.J.S.A. 58:10—23.11 et seq.;
Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, §§ 101 et seq., 114(b,c), 42 U.S.C.A.
§§ 9601 et seq., 9614(b, c); U.S.C.A.Const.Art. 6, cl. 2.
5. Statutes 217.4
No rule of statutory construction should be permitted to
block consideration of any legislative history which could be of
aid to court where statutory language is ambiguous or where lit-
eral interpretation would thwart overall statutory scheme.
6. States 4.10
Section of Comprehensive Environmental Response, Com-
pensation and Liability Act providing that no person “may be
required to contribute to any fund, the purpose of which is to
pay compensation for claims for any costs of response or dam-
ages or claims which may be compensated under this title” is not
really preemption clause as term is classically used, and, in
addressing “taxing” and not “participation,” does not preempt
field from state participation. Comprehensive Environmental
Response, Compensation and Liability Act of 1980, § 114(b,c),
42 U.S.C.A. § 9614(b, c).
7. Taxation €=24
Under Comprehensive Environmental Response, Compen-
sation and Liability Act of 1980, state can tax local industries to
support fund dedicated to purpose of compensation claims and
costs not actually paid by super fund. Comprehensive Environ-
mental Response, Compensation, and Liability Act of 1980,
§§ 104, 104(c)(2,3), 111, 112, 114(c), 221, 42 US.C.A.
$§ 9604, 9604(c)(2, 3), 9611, 9612, 9614(c), 9631; §§ 201, 211,
94 Stat. 2767; 28 U.S.C.A. § 1341; R. 4:46-1; R. 4:46-2;
49a
TAX COURT OF NEW JERSEY, 1982.
4NJ Tax Exxon Corp. v. Hunt
Cite as, 4 N.J. 294
R. 8:7(a); N.J.S.A. 58:10-23.11f, 58:10—23.11h, 58:10—23i,
58:10—23.1 10; 26 U.S.C.A. § 4611 et seq.
8. Taxation C24
Under Comprehensive Environmental Response, Compen-
sation and Liability Act of 1980, spill fund, as presently consti-
tuted, does protect industry from any threat that New Jersey
would stockpile spill tax revenues. N.J.S.A. 58:10—23.11h,
subd. b.
9. States 4.10
With respect to dependency, Congress, in adoption of super
fund, implicitly acknowledged that direct state action is neces-
sary to assure adequate response action to spills. Comprehensive
Environmental Response, Compensation and Liability Act of
1980, §§ 104(c)(2, 3), (d)(1), L1I(f), 112, 114(a), 42 U.S.C.A.
§§ 9604(c)(2, 3), (d)(1), 9611(f), 9612, 9614(a).
10. States 4.19
Congressional scheme of super fund is one which allows,
but does not require, cooperation of federal and staie regimes.
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, §§ 105, i05(8)(A, B), 114(c), 42
U.S.C.A. §§ 9605, 9605(8)(A, B), 9614(c).
ll. Taxation G24
Under Comprehensive Environmental Response, Compen-
sation and Liability Act section explicitly exempting state tax on
petrochemical industries in order to finance purchase of hazard-
ous response equipment, prepositioning of such response equip-
ment and other preparations for response to release of hazardous
substances, spill fund tax is valid insofar as such monies are used
to satisfy such purposes. N.J.S.A. 58:10—23.110(4); Comprehen-
50a
qAx COURT OF NEW JERSEY, 1982.
Exxon Corp. v. Hunt 4N.J. Tax
Cite as, 4 N.J. Tax 294
sive Environmental Response, Compensation and Liability Act
of 1980, §§ 101, \14(c), 42 U.S.C.A. §§ 9601, 9614(c).
Claims for diredt and indirect damages caused by discharge
of hazardous substat\ces are within scope of proper spill fund
spending under Comprehensive Environmental Response, Com-
pensation and Liability Act explicitly exempting from its provi-
sions state tax on petrochemical industries in order to finance
certain measures, and spill fund tax may also be collected and
used to pay for petroleum spills, income or property value losses
caused by damage resulting from discharge of hazardous sub-
stances and cost of restoration or replacement of natural
resources damaged or destroyed by discharge. N.J.S.A.
58:10—23.-11b, subd. k, 58:10—23.11g, subds. a, a(1); Compre-
hensive Environmental Response, Compensation and Liability
Act of 1980, §§ 104(c)(3), 107(a)(4)(A), (f), 111(c)(2), (d)(1),
114(c), 42 US.C.A. §§ 9604(c)(3), 9607(a}(4)(A), (f),
9611(c)(2), (d)(1), 9614(c).
13. States 4.10
State fund administrative expenses and administrative costs
relating to petroleum spills, reimbursement of third-party dam-
age claims and other claims not compensable under Comprehen-
sive Environmental Response, Compensation and Liability Act
of 1980 are proper objects of spill fund spending, and same is
true of state’s contribution of ten percent of more of costs of
remedial action to qualify for federal funding and financing of
remedial activities on temporary basis pending super fund reim-
bursement. N.J.S.A. 58:10—23.11b, subd. k, 58:10—23.11g,
subds. a, a(1); Comprehensive Environmental Response,
Compensation and Liability Act of 1980, §§ 104(c)(3),
107(a)(4)(A), (f), 111(c)(2), (d)(1), 114(ce), 42 U.S.C.A.
§$§ 9604(c)(3), 9607(a)(4)(A), (f), 961 1(c)(2), (d)(1), 9614(c).
Sla
Lea
TAX COURT OF NEW JERSEY, 1982.
4N.J. Tax Exxon Corp. v. Hunt
Cite as, 4 N.J. 294
14. States 4.10
Legislature envisioned that spill act would be enforced
in conjunction with federal law and with any other applicable
law, and even if federal legislation could be construed to pre-
empt part of spill fund, nonpreempted areas would sustain its
continued validity. N.J.S.A. 58:10-23.1 1a, 58:10—23.1 lv,
§8:10-23.11w, 58:10-23.11z; Comprehensive Environmental
Response, Compensation and Liability Act of 1980, § 114(c), 42
U.S.C.A. § 9614(c).
——
John J. Carlin, Jr., for plaintiffs (Farrell, Curtis, Carlin &
Davidson, attorneys).
Mary C. Jacobson, for defendant (Irwin I. Kimmelman,
Attorney General of New Jersey, attorney); Michael Cole &
Herbert Glickman, of counsel.
EVERS, J. T.C.
The issue presented on cross-motions for summary judg-
ment involves the constitutionality of the New Jersey Spill Com-
pensation And Control (spill fund) Act, N.J.S.A. 58:10-23.11 et
seq. Its resolution requires a determination of whether that stat-
ute has been preempted by § 114(c)' of the Comprehensive
Environmental Response, Compensation and Liability (super
fund) Act of 1980, P. L. 96-510, 94 Stat. 2767, codified as 42
U.S.C.A. § 9601 et seq., in which event it must fall, as mandated
by the Supremacy Clause of the United States Constitution. *
42U.S.C. § 9614(c).
- The United States Constitution, Art. VI, cl. 2, provides: “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
52a
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Exxon Corp. v. Hunt 4NJ. Tax
Cite as, 4 N.J. Tax 294
For the reasons hereafter set forth plaintiffs’ motion is denied
and defendants’ motion is granted. °
Plaintiffs also seek a return of all monies paid to New Jer-
sey pursuant to the spill fund since December 11, 1980, the
effective date of super fund.‘ Purely legal questions are pre-
sented which make the action appropriate for summary judg-
ment. Tyson v. Groze, 172 N.J.Super. 314, 319, 411 A.2d 1170
(App.Div.1980); Felbrant v. Able, 80 N.J.Super. 587, 590, 194
State shall be bound thereby, any Thing in the Constitution or Laws of any
State to the Contrary notwithstanding.”
* Portions of an action instituted by plaintiffs in the Superior Court of New
Jersey, Chancery Division—Mercer County (Docket C 4530-80) which was
transferred to the Tax Court (Docket SC 319A-81 TC) and consolidated here-
with, survive this motion.
' A similar action, brought by plaintiffs in the United States District Court
for the District of New Jersey, Civil Action 71—-1458M, was dismissed on the
basis that the Tax Anti-injunction Act, 28 U.S.C.A. § 1341, compelled that the
matter be determined in a state court. Plaintiffs have appealed that decision to
the United States Court of Appeals for the Third Circuit (No. 81-2514). The
preemption issue was also raised by the State in a declaratory judgment action
brought against the United States (State of New Jersey et al. v. United States
of America et al., United States District Court for the District of Columbia,
Civil Action No. 81-0945), by which a definitive interpretation of the scope
and meaning of the preemption clause of super fund was sought. That action
did not involve a review of the New Jersey taxing scheme pursuant to the spill
act. It was dismissed. Similar declaratory judgment actions were brought in
Lesniak et al. v. United States of America et al. (No. 81-977) and Merlino et
al. v. United States of America et al. (No. 81-1914) in the United States Dis-
trict Court for the District of New Jersey. These matters were settled by stipu-
lation. The State’s motion to make the provisions of those settlements part of
the record of this controversy for consideration by the court was denied by
separate opinion. Lastly, in State of New Jersey et al. v. Gorsuch et al., United
States District Court for the District of Columbia, Civil Action No. 81—2269
the court entered an order directing the Environmental Protection Association
to have a “National Contingency Plan” in place by May 11, 1982.
During the pendency of this action plaintiffs have continued to pay the spill
fund tax according to its terms.
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TAX COURT OF NEW JERSEY, 1982.
4N.J. Tax Exxon Corp. v. Hunt
Cite as, 4 N.J. 294
A.2d 491 (App.Div.1963). See, also, Judson v. Peoples Bank
and Trust Co. of Westfield, 17 N.J. 67, 110 A.2d 24 (1954);
R. 8:7(a); R. 4:46-1; R. 4:46-2.
Section 114(c) of super fund states:
Except as provided in this Act, no person may be required to
contribute to any fund, the purpose of which is to pay compensa-
tion for claims for any costs of response or damages or claims
which may be compensated under this title. Nothing in this sec-
tion shall preclude any State from using general revenues for such
a fund, or from imposing a tax or fee upon any persons or upon
any substance in order to finance the purchase or prepositioning
of hazardous substance response equipment or other preparations
for the response to a release of hazardous substances which
affects such State.
Plaintiffs, five major corporations whose operations involve
the use of recognized hazardous substances, including petro-
leum, are taxed under both acts. On the basis that both acts have
as their principal purposes the payment of claims and costs
relating to the cleanup, removal and containment of hazardous
substance spills, plaintiffs interpret this provision as precluding
New Jersey from collecting any tax that is earmarked for such
purposes. Plaintiffs seemingly argue that New Jersey can only
gain the use of industry tax monies for cleanup purposes by
requesting and obtaining Federal Government participation ina
specific project. In the event Federal Government participation
is withheld, only general revenues are available for state action,
according to plaintiffs. Any areas which may be compensated
under spill fund but which may not be compensated under super
fund are peripheral, according to plaintiffs, and are so
insignificant as to be unable to sustain the state tax. Accord-
ingly, plaintiffs contend that the entire state act must be
nullified.
Defendants deny that the spill fund tax is preempted unless
there is a precise coincidence of tax money expenditures. In its
S4a
TAX COURT OF NEW JERSEY, 1982.
Exxon Corp. v. Hunt 4N.J. Tax
Cite as, 4 N.J. Tax 294
more narrow interpretation the State contends that only those
spill fund tax monies which are used for identical purposes and
which are actually covered by super fund expenditures can be
preempted. Furthermore, defendants contend that the statutory
scheme designed by Congress in super fund emphasizes the need
for a combined federal and state response to toxic contamina-
tion. Super fund, according to defendants, provides a framework
for a cooperative federalism in which the Federal Government
would work with the states to effectuate the broad statutory
goals of protecting the citizens and the environment of the coun-
try from the deleterious effects of pollution caused by hazardous
substances. In short, it is defendants’ position that not only can
super fund and spill fund, as presently constituted, co-exist but
that they are intended to co-exist. Alternatively, the State argues
that, if preemption does exist, it is not total and the taxes col-
lected as to the non-preempted areas are permissible. In order to
place these contentions in proper perspective a review of the pur-
poses and pertinent provisions of both statutes is necessary.
Spill fund, which become effective in 1977, in its general
terms prohibits the discharge of petroleum and other hazardous
substances in the State of New Jersey. Pertinent to this contro-
versy are its specific provisions which provide for the removal
and cleanup of such discharges, N.J.S.A. 58:10—23.11f, the
establishment of a spill compensation fund, JN.J.S.A.
58:10—23.11i, and the raising of revenue therefor pursuant to
N.J.S.A. 58:10—23.11h, which states: “There is hereby levied
upon each owner or operator of one or more major facilities a
tax to insure compensation for cleanup costs and damages asso-
ciated with any discharge of hazardous substances to be paid by
the transferee. ..."° The administrator of the fund is directed,
That each plaintiff is a major facility as defined in the spill fund act 1s not
disputed.
5Sa
a, Ne a
TAX COURT OF NEW JERSEY, 1982.
4N.J. Tax Exxon Corp. v. Hunt
Cite as, 4 N.J. 294
pursuant to N.J.S.A. 58:10-23.11o0, to disburse monies from the
fund for the following purposes:
1. All costs incurred by the State in connection with the
removal and cleanup of hazardous substance discharges.
2. All direct and indirect damages no matter by whom
sustained, including but not limited to:
a. The cost of restoring, repairing or replacing any real or
personal property damaged or destroyed by a discharge; any
income lost as a result of damage to or destruction of such prop-
erty; any reduction in value of such property as a result thereof.
b. The cost of restoration and replacement of damaged or
destroyed natural resources.
c. Loss of income or impairment of earning capacity due
to damage to real or personal property.
d. Loss of tax revenues by the state or local governments
resulting from damage to such property for a period of one year.
e. Interest on loans obtained or other obligations incurred
by a claimant for the purpose of ameliorating the effects of a
discharge pending payment of the claim.
N.J.S.A. 58:10-23.11o also provides for the disbursement
of sums, as may be appropriated by the Legislature, for research
on the prevention and effects of spills, for the development of
improved cleanup and removal operations, for demonstration
programs and for administration, personnel and equipment
costs. °
While it may not be an eligible cost under the spill fund act as presently
constituted, it is apparent that super fund contemplated that seed money,
including at least a 10% matching fund, will be contributed by those states
which seek to qualify for federal funding.
S6a
TAX COURT OF NEW JERSEY, 1982.
Exxon Corp. V. Hunt. 4N.J. Tax
Cite as, 4 N.J.Tax 294
During the latter 1970s the Congress undertook the task of
developing a program to deal with national hazardous waste
problems. At one point in its deliberations Congress debated
establishing a fund of $4.1 billion for that purpose. On Decem-
ber 11, 1980 these federal legislative efforts culminated in the
enactment of super fund which provides $1.6 billion over a five-
year period for the cleanup and removal of pollution caused by
the release of hazardous substances into the environment. To
finance this program Congress levied a tax against the chemical
and petroleum industries designed to provide 87.5% of the funds
needed to support the federally-approved cleanup efforts. The
remaining 12.5% is supplied through general federal revenues.
§§ 111, 112, 201, 211 and 221.
Section 104 of super fund provides generally that whenever
there is a release or substantial threat of release into the environ-
ment of any pollutant or contaminant which may present an
imminent and substantial danger to the public health or welfare,
the President is authorized to remove or arrange for the removal
of, and to provide for remedial action relating to such hazardous
substance, pollutant or contaminant. Section 211 provides for
the amendment of chapter 38 of the Internal Revenue Code to
impose a tax on crude oil and petroleum products and on certain
chemicals. This amendment became effective April 1, 1981.
Pursuant to § 111 of super fund the President is authorized to
use the money in the fund for, among other things, payment of
costs of government response to hazardous waste discharges and
costs incurred in compensating certain losses resulting from such
discharges.
Recognizing that some states had already occupied the field
and, in an implicit acknowledgement that such state involvement
was necessary to assure more complete responsive action to haz-
ardous waste spills, Congress provided in § 104(c)(2) that the
Federal Government must consult with an affected state before
S7a
TAX COURT OF NEW JERSEY, 1982.
4 NJ. Tax Exxon Corp. V. Hunt.
Cite as, 4 N.J.Tax 294
determining appropriate remedial action. And, in § 104(c)(3),
Congress mandated a minimum level of state participation as a
prerequisite to receiving federal funds. To qualify for federal
cleanup doliars states must formally guarantee, by contract or
cooperative agreement, to provide (1) all future maintenance of
removal and remedial! actions; (2) the availability of a hazardous
waste disposal facility for the off-site storage or treatment of
hazardous substances, and (3) payment of 10% or more of the
total cost of remedial operations. The state share of cleanup
expenses can escalate to 50% or more if the site of the release is
owned by the state itself or a political subdivision thereof. /d.
Moreover, § 104(d)(1) encourages states to become official
response authorities when they can demonstrate that they have
the technical capability necessary to effect the purposes of the
act. Under this section states undertake the initiation and
upfront financing of remedial work and then apply to super fund
for reimbursement of “reasonable response costs.” Jd. See, also,
§ 105 (directs the Federal Government to adopt a National Con-
tingency Plan setting forth federal and state responsibilities
under super fund and establishing criteria for determining prior-
ities [with state input] among hazardous substance releases
throughout the United States); § 111(f) (Federal Government
permitted to delegate authority to state officials to obligate
super fund monies where a state has replaced the Federal Gov-
ernment as a response authority); § 112 (Federal Government
authorized to use state agencies to implement super fund claims
procedure), and § 114(a) (states permitted to impose any liabil-
ity in addition to that contained in super fund with respect to the
release of hazardous substances within its borders).
[1, 2] It is fundamental that where a state statute
conflicts with a federal statute which has preempted the field
and stands as an obstacle to the accomplishment and execution
of the full purposes and objectives of Congress, the Supremacy
Clause of the United States Constitution mandates that the state
58a
TAX COURT OF NEW JERSEY, 1982.
Exxon Corp. V. Hunt. NJ. Tax
Cite as, 4 N.J.Tax 294
statute must fail. Maryland v. Louisiana, 451 U.S. 725, 101
S.Ct. 2114, 68 L.Ed.2d 576 (1981); Chicago and North Western
Transp. Co. v Kalo Brick & Tile Co., 450 U.S. 311, 101 S.Ct.
1124, 67 L.Ed.2d 258 (1981); Arizona v. Snead, 441 U.S. 141,
146, 99 S.Ct. 1629, 1632, 60 L.Ed.2d 106, 111 (1979); Mobil
Oil Corp. v. Tully, 653 F.2d 497 (Emerg.Ct.App.1981);
Tennessee v. Louisville & N. R. Co., 478 F.Supp. 199, 209
(M.D.Tenn.1979); National Carriers’ Conf. Comm. v.
Heffernan, 454 F.Supp. 914, 915 (D.Conn.1978). Where Con-
gress has not foreclosed the field, a state statute is nevertheless
void to the extent of actual conflict with a federal statute. Ray v.
Atlantic Richfield Co., 435 U.S. 151, 158, 98 S.Ct. 988, 994, 55
L.Ed.2d 179, 188-189 (1978).
[3] The court is mindful, however, that legislative enact-
ments are presumed to be valid, and the burden on plaintiffs of
demonstrating unconstitutionality is a heavy one. Velmohos v.
Maren Engineering Corp., 83 N.J. 282, 295, 416 A.2d 372
(1980); North Jersey Suburbanite Co., Inc. v. State, 154
N.J.Super. 126, 129, 381 A.2d 34 (App.Div.1977); English v.
Newark Housing Auth., 138 N.J. Super. 425, 431, 351 A.2d 368
(App.Div.1976). Furthermore, the court is conscious of its duty
to construe a statute to render it constitutional if the enactment
is reasonably susceptible to such interpretation, even though the
statute may also be open to a construction which would render it
unconstitutional or permit its unconstitutional application. State
v. Profaci, 56 N.J. 346, 349, 266, A.2d 579 (1970); State v.
Negron, 118 N.J.Super. 320, 323, 287 A.2d 461
(App.Div.1972). See, also, N.J. Chamber of Commerce v. N.J.
Election Law Enforce. Comm'n, 82 N.J. 57, 75, 411 A.2d 168
(1980). Additionally, with reference to preemption, the court
recognizes that it must attempt to harmonize state and federal
laws whenever possible, particularly in areas traditionally
reserved to the states and which relate to the vital interests of
state citizens. Florida Lime and Avocado Growers v. Paul, 373
59a
TAX COURT OF NEW JERSEY, 1982.
4 NJ. Tax Exxon Corp. V. Hunt.
Cite as, 4 N.J.Tax 294
U.S. 132, 83 S.Ct. 1210, 10 L.Ed.2d 248 (1963); Huron Cement
Co. v. Detroit, 362 U.S. 440, 443, 80 S.Ct. 813, 815, 4 L.Ed.2d
852 (1960); Swift & Co. v. Wickham, 364 F.2d 241 (2 Cir.
1966), cert. den., 385 U.S. 1036, 87 S.Ct. 776, 17 L.Ed.2d 683
(1967); Katharine Gibbs Sch. Inc. v. F. T. C., 612 F.2d 658, 667
(2 Cir. 1979). Thus, the state act should not be set aside unless
the court finds that § 114(c) permits no other conclusion; that
the Congress has unmistakably ordained that super fund be the
sole recipient of industry tax dollars where the purposes of the
two acts are identical.
[4] The specific subject of inquiry is that portion of
§ 114(c) which states:
... [N]o person may be required to contribute to any fund,
the purpose of which is to pay compensation for claims for any
costs of response or damages or claims which may be compen-
sated under this title.
‘ The pivotal language is “may be compensated” and particularly
the word “may”. Plaintiffs contend that the phrase is clear and
unambiguous and that under the “plain meaning” rule of statu-
tory construction “may” must be employed in its usual literal
permissive sense. Accordingly, plaintiffs argue that the sole
function of a court is to interpret the statute according to its
terms without the aid of extrinsic evidence. The State maintains
that § 114(c) is unclear in certain respects, particularly when
viewed in the light of the spirit of federal-state cooperation as
evidenced by the language of super fund itself, and the impact
that a strict and literal interpretation (as contended for by
plaintiffs) would have on spill fund which contains far broader
substantive coverage and liability provisions than does super
fund. In short, the State argues that Congress intended that
“may” whould be interpreted in a mandatory sense—an inter-
pretation that, in effect, would substitute “shall be compen-
sated” or “shall have been compensated” for “may be compen-
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Exxon Corp. V. liunt. 4 NJ. Tax
Cite as, 4 N.J.Tax 294
sated.” To ascertain that Congressional intent, the State claims
that resort must be had to extrinsic aids.
Plaintiffs further argue that the State’s interpretation
would violate a second fundamental rule of construction which
requires that, if possible, effect must be given to every word,
clause or sentence of a statute; that a statute must be construed
so that no part is made inoperative, redundant or superfluous.
Colautti v. Franklin, 439 U.S. 379, 392, 99 S.Ct. 675, 684, 58
L.Ed.2d 596, 607 (1979); U.S. v. Palmeri, 630 F.2d 192, 199 (3
Cir. 1980); Abbotts Dairies v. Armstrong, 14 N.J. 319, 327, 102
A.2d 372 (1954); Peper v. Princeton Univ. Bd. of Trustees, 77
N.J. 55, 68, 389 A.2d 465 (1978); 2A Sutherland, Statutory
Construction (3 ed. 1973), § 46.06. The State’s interpretation,
according to plaintiffs, amounts to a prohibition against double
compensation and thus would be redundant of § 114(b) which
states:
Any person who receives compensation for removal costs or
damages or claims pursuant to this Act shall be precluded from
recovering compensation for the same removal costs or damages
or claims pursuant to any other State or Federal law. Any person
who receives compensation for removal costs or damages or
claims pursuant to any other Federal or State law shall be pre-
cluded from receiving compensation for the same removal costs or
damages or claims as provided in this Act.
Next, taxpayers claim that such interpretation would
nullify the Congressional intent found in the latter portion of
§ 114(c) which provides that the clause does not preclude a state
from using general revenue for duplicate spending or from using
taxpayers’ contributions for the additional purposes set forth
therein. If the State could continue to collect an industry tax for
any and all purposes, with the only limitation being payments on
claims paid by super fund, plaintiffs assert that the provision
concerning the use of general revenue would be purposeless. The
6la
TAX COURT OF NEW JERSEY, 1982.
4 NJ. Tax Exxon Corp. V. Hunt.
Cite as, 4 N.J.Tax 294
court disagrees with the foregoing and finds that, when read and
understood in proper context, the State’s interpretation does not
render the questioned provisions of super fund inconsistent,
redundant, superfluous or meaningless.
The court finds that the pertinent language of § 114(c),
does not, by itself, convey that clear, unambiguous meaning
attributed to it by plaintiffs—a conclusion that is highlighted
when it is read in conjunction with the balance of the super fund
act. The seemingly simple, but often misused and misapplied
word “may,” is anything but unambiguous. The word “may” is
often subject to differing meanings when used in statutory con-
struction. Supporting the dual function of the word are the com-
ments of the court in Kraft v. Board of Ed. for Dist. of Colum-
bia, 247 F.Supp. 21, 24-25 (D.C.D.C.1965), cert. den., 386 U.S.
958, 87 S.Ct. 1026, 18 L.Ed.2d 106 (1967), where it was stated:
It is well established, however, that the word “may” can be
at times contrued to mean “shall’’, just as the word “shall” may
be construed to mean “may”. The interpretation of those words
dependes upon the context in which they are used and the inten-
tion of the legislative body as is shown by the statute as may be
gleaned from committee reports and similar authoritative sources.
[247 F.Supp. at 24-25]
Accord, Beli v. Western Employer's Ins. Co., 173 N.J.Super. 60,
65, 413 A.2d 363 (App.Div.1980); MacNeil v. Klein, 141
N.J.Super. 394, 358 A.2d 488 (App.Div.1976). In light of the
ambiguity of the meaning of “may”, and in view of the contra-
dictory interpretations which have been voiced as to the interpre-
tation of § 114(c) by both parties, it is essential that this court
look to extrinsic aids to clarify the legislative scheme underlying
the statutory language. Furthermore, this inquiry requires a con-
sideration of the relationship between the federal and state laws
as they are to be applied, not merely as they are written.
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Exxon Corp. V. Hunt. 4NJ. Tax
Cite as, 4 N.J.Tax 294
[5] Reference to legislative history is appropriate not only
where the statutory language is ambiguous but also where a lit-
eral interpretation would thwart the overall statutory scheme.
International T & T Corp. v. General T. & E. Corp., 518 F.2d
913, 921 (9 Cir. 1975). It is to determine that overall statutory
scheme that not only must the legislative history of the statute
be examined but attention must also be given to the practical
effects of each proffered interpretation. In such a circumstance
the New Jersey Supreme Court, in N.J. Pharmaceutical Ass'n.
v. Furman, 33 N.J. 121, 162 A.2d 839 (1960), stated:
Courts may, or course, freely refer to legislative history and
contemporaneous construction for whatever aid they may furnish
in ascertaining the true intent of the legislation. [at 130, 162 4.2d
839.]
Consequently, no rule of statutory construction should be
permitted to block consideration of any legislative history which
could be of aid to the court. See id.; in Re Meadowlands Com-
munication Systems, Inc., 175 N.J.Super. 53, 65, 417 A.2d 575
(App.Div.1980), certif. den., 85 N.J. 455, 427 A.2d 556 (1980);
Marsh y. Finley, 160 N.J.Super. 193, 197, 389 A.2d 490
(App.Div.1978), certif. den., 78 N.J. 396, 396 A.2d 583 (1978);
State v. Moody, 169 N.J.Super. 177, 404 A.2d 370 (Law Div.
1978). See, also, San-Lan Builders, Inc. v. Baxendale, 28 N.J.
148, 155, 145 A.2d 457 (1958), where the court counseled that
“Scholastic strictness is to be avoided in the search for the legis-
lative intention.”
[6] At the outset it is readily apparent that § 114(c) does
not preempt the field from state participation. By its history and
very terms super fund seeks and provides for state participation
as partners in the fight against pollution. As such, § 114(c) is
not really a preemption clause as that term is classically used.
The clause addresses “taxing” and not “participation.”
Therefore, the initial determination to be made is whether spill
63a
TAX COURT OF NEW JERSEY, 1982.
4 NJ. Tax Exxon Corp. V. Hunt.
Cite as, 4 N.J.Tax 294
fund imposes a double tax on plaintiffs in light of §114(c) of
super fund.’
The enactment of super fund in 1980 was a compromise
and was preceded by extensive studies and hearings by the
Committee on Environment and Public Works concerning
various predecessor measures (never adopted) and was accompa-
nied by extensive floor debate. Particularly enlightening are the
remarks of Senator Randolph concerning preemption during the
Senate floor debate on super fund.”
Mr. President, let me state categorically that there is nothing
in this bill that affects the uses to which a state may put the
existing cleanup fund. This bill is silent on the subject. Thus a
state may, after enactment of this bill, continue to spend its
existing funds for any purpose that is lawful under state law.
If, after enactment of this bill, a state continued to pay
claims from a state fund, that would not be contrary to any provi-
Preemption aside, neither party addressed the question of whether the spill
fund taxing scheme is constitutionally prohibited. Plaintiffs relied on the provi-
sions of § 114(c) as the sole support for their position.
The Randolph remarks in particular are entitled to great weight in inter-
preting the preemption provision because Senator Randolph was the chairman
of the Committee on Environment and Public Works which reported the super
fund bill to the Senate, was floor manager and a cosponsor of the measur e, and
was clearly involved in the last-minute negotiations leadiing up to the passage
of the act. See, generally, 126 Cong. Rec. S. 14941-S. 15008 (daily ed.
November 24, 1980). In FEA v. Algonquin SNG, Inc., 426 U. S. 548, 564, 96
S.Ct. 2295, 2304, 49 L.Ed.2d 49 (1976), the Supreme Court relied upon Sen-
ate floor debates for support in statutory construction and cbserved in relation
to a particular excerpt from a debate that, “as 2 statement of one of the legisla-
iion’s sponsors, this explanation deserves to be accorded substantial weight in
interpreting the statute.” Accord. Schwegmann Bros. v. Calvert Corp., 341
U.S. 384, 394, 71 S.Ct. 745, 750, 95 L.Ed. 1035 (1951); United States v.
Oates, 560 F.2d 45 (2 Cir. 1977); International T & T Corp. v. General T. &
E. Corp., 518 F.2d 913, 921 (9 Cir. 1975); 2A Sutherland, Statutory Con-
struction, op. cit. § 48.04 at 197-198 and § 48.14 at 217-220.
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sion of this bill. What this bill does is prohibit a state from
requiring any person to contribute to any fund if the purpose of
that fund is to compensate for a claim paid for under the provi-
sions of this bill...
Putting it simply, this is a prohibition against double taxation
for the same purposes. It is not a prohibition on the uses that a
state may make of its money, nor does it prohibit a state from
* imposing fees or taxes for other purposes connected with cleanup
or restoration activities such as the purchase of pollution abate-
ment equipment or the hiring or training of personnel for pollu-
tion prevention programs.
In summary, Mr. President, this preemption provision is nar-
row in scope and limited to the particular purpose of preventing
double taxation. [126 Cong.Rec. S. 14981 (daily ed., November
24, 1980); emphasis supplied]
Moreover, at the end of the colloquy, the following question by
Senator Bradley (of New Jersey) elucidated Senator Randolph's
position:
Mr. Bradley: Finally, if the federal government determines
that the needs at other sites require that federal efforts be termi-
nated at the first site before that site is completed, may a state
fund complete the effort?
Mr. Randolph: This legislation would permit that to happen.
[Id.]
[7] These remarks can only have been intended to mean
that a state can tax local industries to support a fund dedicated
to the purpose of compensating claims and costs not actually
paid by super fund. Furthermore, any attempt to limit Senator
Randolph’s remarks to the use of state-collected taxes prior to
the effective date of super fund is unfounded in view of the
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following statements which clearly were directed to the use of
state funds obtained after super fund implementation:
Mr. Bradley: Am I correct in assuming that monies
expended by state funds can be used to provide the required 10
percent state match?
Mr. Randolph: That is correct.
Mr. Bradley: And am I also correct in noting that state
funds are preempted only for efforts which are in fact paid for by
the federal fund and that there would be no preemption for
efforts which are eligible for federal funds but for which there is
no reimbursement?
Mr. Randolph: That is correct. [126 Cong. Rec. S. 14981
(daily ed. November 24, 1980); emphasis supplied]
The Randolph interpretation, which would enable states to
tax for remedial actions not actually compensated under super
fund, comports with a prohibition against double taxation in that
states are still prevented from taxing to pay for cleanups actually
financed by the Federal Government. Consequently, plaintiffs
would not be put in the position of paying twice for the same
activity. Based on this interpretation, New Jersey’s tax covering
hazardous waste cleanups could simply by adjusted to reflect the
infusion of federal funds pursuant to super fund. If super fund
monies result in a reduction of the state’s spending requirements,
that reduction can simply be reflected in a decrease in the impo-
sition of state taxes.
In that regard the additional comments of Senator
Randolph in response to a question from Senator Bradley are
pertinent:
Mr. Bradley: In the event I have described, where a state or
a contractor of the state is the respondent to the release and
incurs economic loss normally compensable under the provisions
of this bill, does this legislation intend that a state that has contin-
ued to collect taxes or fees to finance a state fund designed to
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cover expenses and economic loss not covered under the provision
of this bill have the right to use those state fund monies to provide
intermediate, up front capital to pay for these activities and seek
reimbursement from the fund established under this bill?
Mr. Randolph: Nothing in the language or intent of this
bill would prohibit a state from using its fund for the purposes
you have inquired about. The purpose of this legislation is simply
to preempt double taxation of the substances enumerated in the
bill for the purposes of compensation of the covered damages. The
situation described in your inquiry is a question of bookkeeping
rather than a subject or preemption. The expenditures by a state
from its fund are temporary in nature and would be reimbursed
and therefore ultimately paid from the fund established in this
legislation. [126 Cong. Rec. S. 14981 (daily ed., November 24,
1980), emphasis supplied]
{8] It is important to note that spill fund, as presently
constituted, does protect industry from any threat that New Jer-
sey would stockpile spill tax revenues. Spill fund limits the
annual amount of revenue that can be collected, N.J.S.A.
58:10-23.11h(b), and also provides that the tax will be sus-
pended in the event that the balance in spill fund equals or
exceeds $50,000,000. /d.
The court also endorses the Randolph interpretation of
preemption because that interpretation coincides with the
overriding remediai purpose of super fund. See San-Lan Build-
ers, Inc. v. Baxendale, supra, which stands for the proposition
that the policy and purpose of enactment as a whole is to be used
in interpreting specific statutory language in accord with legisla-
tive intent. Accord, N.J. Builders, Owners and Managers Ass'n
v. Blair, 60 N.J. 330, 338, 288 A.2d 855 (1972). If § 114(c) is
read to preempt all state taxation for hazardous waste cleanups,
the clause would undermine the salutary statutory goals of super
fund and would result in actually limiting the number of clean-
ups which could otherwise be initiated by the state in spite of the
fact that super fund was intended to expand cleanup efforts.
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A permissive construction of the word “may” would also do
violence to the Congressional intent in light of the practicalities
of the overall problem and the conditions existing at the time of
the passage of super fund. The word “may” is often used simi-
larly to “can,” “could,” “to be able.” It is further used in the
sense of “implying power or ability or possibility with a contin-
gency.” See Webster's New Collegiate Dictionary (1979). In
attributing any of these meanings to the term the obvious con-
clusion is that a state cannot collect a tax if its purpose is to pay
a claim or cost which can, could or may possibly be paid by the
Federal Government (assuming approval is given). This inter-
pretation defies logic and common sense when viewed in light of
super fund’s dependency on state participation to accomplish its
goals, its own limitations and the purposes of both acts.
[9] With respect to dependency it has already been noted
that, in the adoption of super fund, Congress implicitly acknow!l-
edged that direct state action is necessary to assure adequate
response action to spills. See §§ 104(c)(2), 104(c)(3), 104(d)(1),
111(f), 112, 114(a). Clearly, therefore, Congress envisioned
active state financial, technical and administrative support as an
integral part of the overall effort to combat the pollution prob-
lem. Under these circumstances it is unrealistic to assume that it
was the intent of Congress to prohibit states from collecting and
using industry contributions simply because a state may expend
those funds on a cleanup program which may be a target for
super fund expenditures. If a state is prohibited from collecting
such funds from a source found by the State Legislature to be
the most equitable—a finding which was shared by Congress in
enacting super fund—for use in response actions which may also
be eligible but which may never be declared eligible or paid
under super fund, a state is faced with either abandoning many
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containment, cleanup and remedial programs or transferring a
tremendous burden to its citizens.’
Concerning its limitations it was also recognized by mem-
bers of Congress that the funding level established in super fund
is insufficient to address the magnitude of the problem. See 126
Cong. Rec. S. 15007 (daily ed. November 24, 1980) (remarks of
Senator Stafford); S. Rep. No. 848, 96th Cong.2d Sess. at 17
and 71. Since super fund allocates only $1.6 billion over a five-
year period to remedy hazardous waste sites and spills through-
out the 50 states, it is clear that only a small part of the overall
cleanup problem can be addressed through the federal legisla-
tion. This is especially true when the $1.6 billion is compared to
the $4.1 billion originally proposed and the 1979 EPA estimate
that it could cost as much as $22.1 billion to clean up all known
abandoned hazardous waste sites, to say nothing of emergency
spills. See S. Rep. No. 848, 96th Cong., 2d Sess. at 17; H. R.
Rep. No. 96-1016, 96th Cong. 2d. Sess. at 20, reprinted in
[1980] U.S. Code Cong. & Ad. News 6119, 6123.
In further recognition of these funding limits Congress
directed the Federal Government to promulgate a National Con-
tingency Plan within 180 days after the enactment of super fund
to institute a priority system to govern federal funding. The act
directs that the National Contingency Plan contain “criteria for
determining priorities among releases or threatened releases
throughout the United States for the purpose of taking remedial
action and, to the extent practicable, taking into account the
potential urgency of such action, for the purpose of taking
removal action.” § 105(8)(A). This section also provides that
* Senator Bradley noted that in New Jersey there are at least 235 known
hazardous waste sites requiring attention. 126 Cong. Rec. S. 14971 (daily ed.
November 24, 1980). The Environmental! Protection Association has published
a list of priority hazardous waste sites throughout the nation; only 12 of New
Jersey's 235 sites qualified for priority treatment under that list.
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such criteria be based upon relative risk or danger to the public
health and such other factors. /d.; see also, § 105(8)(B). This
direction and criteria clearly indicate that Congress was aware
that super fund, as designed and funded, can reach only “top
priority” sites.
Where sites or spills do not satisfy either the general prior-
ity criteria set forth in § 105 or the specific priority criteria yet
to be adopted in the National Contingency Plan, a state must be
permitted to rely on its own industry supported fund to remedy
the situation. It simply strains credulity to say that hazardous
waste sites or spills not meeting the criteria are claims which
“may be compensated” under super fund. Only the future will
tell whether such unqualified sites are large or small, many or
few. but what is certain is that the adoption of plaintiffs’ inter-
pretation of § 114(c) will leave untouched, at the very least,
some problem areas—a result which is clearly contrary to the
scope and purpose of both super fund and spill fund.
The mere possibility that the tax paid to two governmental
entities will be used for identical purposes must be distinguished
from those situations wherein identical expenditure must neces-
sarily arise. Neither the express language of super fund nor its
criteria (in the absence of a National Contingency Plan it cannot
be said that any specific criteria exist) demands the conclusion
that there ever will be such a head-on collision of identical
expenditures of the tax monies. A mere possibility of double tax-
ation should not be deemed sufficient to extinguish a state’s
right to collect a tax such as is in question here. Plaintiffs’ reli-
ance on an argument that there could be—not that there must
be—expenditures for identical purposes misapprehends the
nature of the doctrine of preemption. A mere potential expendi-
ture which may be made in the future will not invalidate state
authority. More than mere generalizations or speculative
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expenditures is required for a court to stifle a state’s right to
collect this tax.
There is also force to this position when one recognizes that
the Environmental Protection Agency’s cost estimates do not
include the cost of cleaning up hazardous substance pollution
from sources other than dump sites, such as accidental spills or
discharges. See H.R.Rep.No.96-1016, 96th Cong., 2d Sess.,
reprinted in [1980] U.S. Code Cong. & Ad.News 6139 (com-
ments of Representative Gore to the effect that $600 million
would cover the cleanup on only approximately 70 sites out of
the thousands that urgently need attention). See, generally, 126
Cong.Rec. S. 15007 (daily ed., November 24, 1980) (remarks of
Senator Stafford); id. at S. 14972 (remarks of Senator
Tsongas). Obviously, in the case of emergency, where accidental
spills are not within the effective exercise or active range of
federal administration, the Congress must content itself to allow
the states to use industry tax funds. The ability to use such funds
to make such expenditures is critical to a state which must be
able to move without delay when volatile situations arise. To
forbid a state from raising tax money altogether for hazardous
substance cleanups and to depend strictly on general revenues
for funding would effectively disable a state from responding to
emergency situations. It cannot be said the Congress would
deprive the states of a primary source of funds for the purposes
of combating situations over which the Federal Government nei-
ther chooses to nor, as a practical matter, could control. A con-
trary conclusion would be inconsistent with a proper regard for
the interplay of state and national interests.
[10] The scheme of super fund is one which allows, but
does not require, cooperation of the federal and state regimes. If
a state chooses, or if the Federal Government through disap-
proval of a state request requires it, to take either the lead or the
entire financial responsibility of cleaning up a specific spill prob-
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4N.J. Tax Exxon Corp. V. Hunt.
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lem, it should be free to use an industry supported fund to do so.
In such instances the possiblity that the financial burden on a
state is greater than it may have been had the Federal Govern-
ment done the cleanup work can afford plaintiffs no comfort in
their arguments against the constutionality of the state tax.
Additionally, it is noted that the question is not before this court.
Against this background the court finds that § 114(c) of
super fund does not preempt the State of New Jersey from col-
lecting a spill tax to be used to pay hazardous waste cleanup
costs and related claims not covered or actually compensated
under super fund.
While this finding effectively disposes of plaintiffs’ claim,
the court finds that there exists another, and equally compelling,
reason why plaintiffs’ motion must be denied. Even if it were
found that industry-supported tax monies could not be collected
for general containment, cleanup and remedial purposes, the
spill fund law nevertheless encompasses many other areas to
which such monies could be devoted which are clearly outside
the reach of § 114(c) and which may very well be of sufficient
magnitude to sustain the spill fund tax. As noted earlier,
plaintiffs’ sole attack against spill fund is based on the
preemption provisions of § 114(c). Except for the federal
Supremacy Clause argument based on § 114(c), plaintiffs nei-
ther raised nor attempted to support any argument that the
taxing provisions of spill fund were violative of any other consti-
tutional rights. Thus, plaintiffs do not suggest that there is an
actual conflict between the limited purposes of super fund and
the overall policy enunciated by New Jersey in spill fund.
Indeed, it may be said that the complete enforcement of the
state act might well effectuate the policy of the federal statute.
[11] It is noted first that § 114(c) explicitly exempts from
its provisions a state tax on the petrochemical industries in order
to finance (1) the purchase of hazardous response equipment,
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(2) the prepositioning of such response equipment and (3) other
preparations for the. response to a release of hazardous sub-
stances. Spill fund specifically authorizes such use of its fund
monies. N.J.S.A. 58:10—23.110(4). Clearly, the spill fund tax is
valid in so far as such monies are used to satisfy these purposes.
That these categories do not represent the exclusive pur-
poses to which spill fund tax monies may be devoted is disclosed
by a comparison of the coverage of the two acts. It is first noted
that super fund, by its very definition of hazardous substance
and pollutant and/or contaminant, excludes petroleum and
crude oil. § 101. Compare N.J.S.A. 58:10—23.11b(k). Petroleum
spills, not being compensable under super fund, it is clear that
the spill fund tax may be collected and used to pay such
claims—an additional nonpreempted use of tax revenues which
is authorized by the New Jersey Act.
[12, 13] Similarly, super fund makes no provision for the
compensation of nongovernmental, third-party damage claims.
N.J.S.A. 58:10—23.11g(a)(1) makes spill fund liable for all such
direct and indirect damages caused by a discharge of hazardous
substances. Accordingly, such claims are within the scope of
proper spill fund spending under § 114(c).
Additionally, spill fund authorizes payments for income or
property value losses caused by damage resulting from a dis-
charge of hazardous substances. Furthermore, spill fund covers
the cost of restoration or replacement of natural resources dam-
aged or destroyed by a discharge. Conversely, super fund pro-
vides limited damage coverage in relation to natural resources
and authorizes such compensation only if the release occurred
after December 11, 1980 and only if the claimants are the
United States or a state. Compare §§ 107(a)(4)(A), 107(f), .
111(c)(2), and 111(d)(1) with N.J.S.A. 58:10-23.11g(a). Fur-
thermore, super fund does not explicitly cover state fund admin-
istrative expenses and clearly does not support spill fund admin-
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istrative costs relating to petroleum spills, the reimbursement of
third-party damzge claims, and other claims not compensable
under the federal act. Accordingly, these expenditures are also
proper objects of spill fund spending.
Additionally, § 104(c)(3) of super fund specifically provides
that a state must contribute 10% or more “of the costs of reme-
dial action including all future maintenance,” in order to qualify
for federal funding. This expenditure obviously represents a cost
or claim which cannot be compensated by super fund and
accordingly is beyond the preemptive scope of § 114(c) and thus
a proper object of state taxation and spill fund spending. Addi-
tionally, a state is free to provide up-front operating dollars from
its industry-supported spill fund to finance remedial activities on
a temporary basis pending super fund reimbursement.
Clearly, it is evident that the foregoing areas ar
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