Opposition Brief — Pennsylvania v. Union Gas Co.

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Supreme Court, U.S,

FILED

FEB 23 isee

F. SPAM, AR.

No. 87-1241

In the Supreme Court

of the Ginited States

OCTOBER TERM, 1987

COMMONWEALTH OF PENNSYLVANIA, Petitioner

UNION GAS COMPANY, Respondent

RESPONDENTS BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

Robert A. Swift

(Counsel of Record)

KOHN, SAVETT, KLEIN & GRAF, PC.

2400 One Reading Center

1101 Market Street

Philadelphia, PA 19107

(215) 238-1700

Lawrence Demase

ROSE, SCHMIDT, CHAPMAN.

DUFF & HASLEY

900 Oliver Building

Pittsburgh, PA 15222

(412) 434-8610

SMITH EOWARDS DUNLAP COMPANY 28067 £ ALLEGHENY AVENUE PHILADELPHIA PA 101346215) 425 8800

QUESTIONS PRESENTED

1. Whether the decision below correctly applies prior

decisions of this court?

2. Whether Congress is empowered by the U.S. Con-

stitution to abrogate state immunity in Article | enactments?

3. Whether retroactive liability under CERCLA pre-

sents an Eleventh Amendment issue?

PARTIES TO THE PROCEEDINGS

The parties to the proceeding in the United States Court of

Appeals for the Third Circuit were as follows:

Appellant: Union Gas Company

Appellee: Commonwealth of Pennsylvania

STATEMENT OF PARTIES

AFFILIATED WITH RESPONDENT

The following are parent, subsidiary or affiliate companies of

respondent Union Gas Company:

Penn Fuel System, Inc.

North Penn Gas Company

Penn Fuel Gas, Inc.

Gas Oil Products, Inc.

Gas Oil Products Inc. of Delaware

Allied Gas Company

Central Penn Gas Company

Counties Gas Company

Interborough Gas Company

Lewistown Gas Company

South Penn Gas Company

TABLE OF CONTENTS

Page

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CONSTITUTIONAL AND STATUTORY PROVISIONS

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STATEMENT OF THE CASE ...................055- 3

REASONS FOR DENYING THE WRIT .............. 5

EEE eee 10

TABLE OF CITATIONS

CASES Page

Andrus v. Charlestone Store Products Co., 436 U.S. 604

SE nvueeeuntdenescentheusucuss cece 10

Atascadero State Hospital v. Scanlon, 473 U.S. 234 (1985) 5, 7

County of Monroe v. Florida, 678 F.2d 1124 (2d Cir. 1982) 8

County of Oneida, New York, v. Oneida Indian Nation of

New York State, 470 U.S. 226 (1985) ..............

Hans v. Louisiana, 134 U.S. 1 (1980)... ee, 7

In re McVey Trucking, 812 F.2d 311 (7th Cir. 1987)... ... 8

Mills Music, Inc. v. Arizona, 591 F.2d 1278 (9th Cir. 1979) 8

Peel v. Florida Department of Transportation, 600 F.2d

SP CE oeccccw cea hedhesaeuledeuenes 8

Pennhurst State School & Hospital v. Halderman, 465 U.S.

GE. idcnsedducevdbiskehacacdeesanciectaese 5

Prout v. Starr, 188 U.S. 537 (1903) ........ Pree 8

Thorpe v. Housing Authority, 393 U.S. 268 (1969) ....... 10

U.S. v. Northeastern Pharmaceutical & Chemical Co..,

Inc., 810 F.2d 726 (8th Cir. 1986) ................. i)

U.S. v. Schooner Peggy, 5 U.S. (1 Cranch) 103 (1801) .... 10

Welch v. State Department of Highways and Public Trans-

portation, 107 S.Ct. 2941 (1987) ................ 5, 7,8

STATUTES

Comprehensive Environmental Response, Compensation

& Liability Act of 1980,

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a sb te

Superfund Amendment and Reauthorization Act of 1986,

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nd «ind ob buds eonee ee

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TABLE OF CITATIONS—(Continued )

STATUTES Page

Clean Water Act, 33 U.S.C. § 1321(b)\(3), 1321(f)(2) ...... 4

Clean Water Act, 33 U.S.C. § 7401, 7604 .............. 6

Federal Water Pollution Act, 33 U.S.C. § 1251, 1365 .... 6

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

Nene ee es eee cadnndnte ae 7

I eka aeeeecuuas 6

ns totteekedeure eT a PFE ane pepe 7

UNITED STATES CONSTITUTION

I ick inh ccnatpuecbsendescvedacnsns &

EERIE EC POET hr On rere: 9

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PA IID 6c Sicceccevnccdscveccdaes passim

OCTOBER TERM, 1987

No. 87-1241

COMMONWEALTH OF PENNSYLVANIA, Petitioner

VS.

UNION GAS COMPANY, Respondent

RESPONDENTS BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

CITATIONS TO OPINIONS

The Opinion of the United States Court of Appeals for

which Pennsylvania seeks review is reported at 832 F.2d 1343

(1987) (“Union Gas II”). The Opinion of the Court of Appeals

which was vacated by Order of this Court, 107 S.Ct. 865 (1987),

is reported at 792 F.2d 372 (1986) (“Union Gas I). The Opinion

of the United States District Court for the Eastern District of

Pennsylvania which originally dismissed the third party com-

plaint against Pennsylvania is reported at 575 F.Supp. 949

(1983).

JURISDICTION

The judgment of the Court of Appeals was entered on

November 3, 1987. Pennsylvania filed its Petition within 90 days

of the entry of judgment.

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED

1. United States Constitution, Amendment XI.

“The Judicial Power of the United States shall not be con-

strued to extend to any suit in law or equity, commenced or

prosecuted against one of the United States by Citizens of

another State, or by Citizens or subjects of any Foreign

State.”

2. United States Code, 42 U.S.C. §§9601(21) and 9607(a),

P.L. No. 96-510, 94 Stat. 2767 [Comprehensive Environmental

Response, Compensation and Liability (“Superfund”) Act of

1980 CERCLA )|:

9601(21) “‘person’ means an individual, firm, corporation,

association, partnership, consortium, joint ven-

ture, commercial entity, United States Govern-

ment, State, municipality, commission, political

subdivision of a State or any interstate body,”

9607(a) ~... any person who at the time of disposal of

any hazardous substance owned or operated any

facility at which such hazardous substances were

disposed of, . .. shall be liable for . . . any other

necessary costs of response incurred by any other

person consistent with the national contingency

3. United States Code, 42 U.S.C. §9601(20D) and

9620(a)(1), P.L. No. 99-499, 100 Stat. 1613 [Superfund Amend-

ments and Reauthorization Act of 1986 (“SARA’)|:

9601(20\D) The term “owner or operator’ does not include

a unit of State or local government which ac-

quired ownership or control involuntarily

through bankruptcy, tax delinquency, aban-

donment, or other circumstances in which the

government involuntarily acquires title by vir-

tue of its function as sovereign. The exclusion

provided under this paragraph shall not apply

to any State or local government which has

caused or contributed to the release or threat-

ened release of a hazardous substance from the

facility, and such a State or local government

shall be subject to the provisions of this Act in

the same manner and to the same extent, both

procedurally and substantively, as any non-

governmental entity, including liability under

section 107.

9620(a)1) In general.—Each department, agency, and

instrumentality of the United States (includ-

ing the executive, legislative, and judicial

branches of government) shall be subject to,

and comply with, this Act in the same manner

and to the same extent, both procedurally and

substantively, as any nongovernmental entity,

including liability under section 107 of this

Act. Nothing in this section shall be construed

to afiect the liability of any person or entity

under sections 106 and 107.

STATEMENT OF THE CASE

The sudden release of coal tar into Brodhead Creek in

Stroudsburg, Pennsylvania in October 1980 caused the United

States to declare the site the nation’s first emergency Superfund

site. Adjacent to the stream from 1890 to 1948 in an industrial

section of Stroudsburg had been a carburetted water gas plant

which produced coal gas as well as its by-product, coal tar. The

EPA regarded in-ground disposal of coal tar as state of the art

technology during the first part of this century (see EPA

Amended Fund Authorization Report). The company operating

the plant changed ownership several times before being merged

into respondent in 1978. The plant was dismantled in 1948 and

replaced successively by propane and natural gas distribution

systems.

Between 1960 and 1962 the State rechanneled, narrowed

and deepened Brodhead Creek and erected « dike on its sides.

The Borough of Stroudsburg and later the State obtained a

permanent easement or fee title to much of the site. The rechan-

nelization of this fast flowing stream started a process of dow,

cutting of the stream bank and erosion of the toe of the dike that

led to the release of coal tar. It was during repairs to the toe of

the dike that coal tar was first discovered. Between April 1951

and January 1982, the United States did a cleanup of the site at

an alleged expense of $967,000.00.

The United States commen:ed this lawsuit on May 23, 1983

in the United States District Court for the Eastern District of

Pennsylvania to recover its cleanup costs pursuant to CERCLA

and the Clean Water Act, 33 U.S.C. §§$1321(b\(3) and (#2),

naming respondent as the sole defendant. Respondent filed a

third-party complaint naming the Commonwealth of Pennsylva-

nia and the Borough of Stroudsburg as third party defendants

alleging that they were owners and operators of a facility at the

site within the meaning of CERCLA, 42 U.S.C. §9601(20)A),

and, together with others, negligently caused or contributed to

the release of coal tar.

The State moved to dismiss the third-party complaint under

Fed. R. Civ. P. 12:b\1) and 12(b\(6) alleging that it was immune

to suit under CERCLA pursuant to the Eleventh Amendment to

the Constitution. The district court granted the State's motion

(Pet. App., 139a). Thereafter, the United States filed an

amended complaint revising its damage claim, and respondent

filed an amended third-party complaint. The State again moved

to dismiss, and the district court granted the motion for the

reasons set forth in its earlier opinion.

As a result of a settlement reached among the United

States. respondent and the Borough of Stroudsburg whereby

respondent paid a major portion of the cost of cleanup, the

district Court dismissed the action. Respondent then appealed

the district court's dismissal of Pennsylvania as a defendant to

the United States Court of Appeals for the Third Circuit. A two

member majority of the Third Circuit affirmed the district

courts order. with the Honorable A. Leon Higginbotham filing a

vigorous dissent concluding that CERCLA clearly abrogated

states Eleventh Amendment immunity. (Pet. App. 74a)

On October 17, 1986, shortly after respondent filed a peti-

tion for certiorari with this Court, the President signed into law

SARA, which amended CERCLA. At the urging of respondent

herein and the United States, which as amicus contended SARA

“authorizes suits against states or local governments for liability

or contribution when such entries caused or contributed to the

release or threatened release of a hazardous substance,” (Amicus

Br. at 5-6) this Court granted certiorari, vacated the court of

appeals opinion, and remanded for consideration in light of

SARA.

On remand, the court of appeals unanimously reversed the

district court holding that the Eleventh Amendment does not

bar suit against Pennsylvania. (Pet. App. la) The court of appeals

further held that (1) the language of CERCLA, as amended by

SARA, clearly and explicitly abrogated state immunity, (2) Con-

gress may, consistent with the Constitution, abrogate state im-

munity in an Article | enactment, and (3) CERCLA, as amended

by SARA, applies retroactively to respondent's cause of action.

REASONS FOR DENYING THE WRIT

The issues raised by Pennsylvania are not appropriate for

review because a unanimous Third Circuit Court of Appeals

correctly resolved them, and its opinion is not in conflict with

decisions of this or other courts.

THE DECISION BELOW CORRECTLY

APPLIES PRIOR DECISIONS OF THIS COURT

The court of appeals correctly applied the clear statement

rule which this Court has articulated in numerous decisions. The

clear statement rule requires that Congress “express its inten-

tion to abrogate the Eleventh Amendment in unmistakable lan-

guage in the statute itself” Atascadero State Hospital v. Scanlon,

473 U.S. 234, 243 (19585). See also Welch v. State Department of

Highways and Public Transportation, 107 S.Ct. 2941 (1987).

Pennhurst State School & Hospital v. Halderman, 465 U.S. 89

(1954). Far from simply paving “lip-service’ to this rule, the

court of appeals thoroughly and conscientiously applied it in

interpreting CERCLA, as amended by SARA.

The court of appeals correctly concluded that states, like the

federal government, are subject to liability to private parties

under section 107(a) of CERCLA. In Union Gas I, Pet. App.

74a, the court of appeals acknowledged that Congress had mde

a person’ liable for environmental cleanup costs and “person”

was defined to include a state, but held this language did not

satisfy the clear statement rule. On remand from this Court, the

court of appeals discerned Congress’ unmistakable intent in

SARA’ Amendment to section 101(20)\D) of CERCLA, to wit:

a state or local government shall be subject to the provisions

of the Act in the same manner and to the same extent, both

procedurally and substantively, as any nongovernmental en-

tity, including liability under section 107.

This provision, the court of appeals observed, ~ replicates”

CERCLAS waiver of federal government immunity. Union Gas

II, Pet. App. 24a. Indeed, the Congressional conference com-

mittee that inserted the above quoted clause stated that its

purpose was “to clarify that if the unit of government caused or

contributed to the release or threatened release in question,

then such unit is subject to the provisions of CERCLA both

procedurally and substantively, as any non-governmental entity,

including liability under section 107 and contribution under

section 113° (emphasis added) H.R. Conf. Rep. No. 962, 99th

Cong., 2d Sess. 185-86, reprinted in 1986 U.S. Code Cong. &

Admin. News 3276, 3278-79.

SARA provides other evidence of Congress unmistakable

intent to abrogate Eleventh Amendment immunity in section

107 actions. First, SARA preserves states immunity to suit from

citizen suits filed pursuant to section 159. 42 U.S.C. $9659. The

citizen suit provision makes persons subject to suit only “to the

extent permitted by the Eleventh Amendment to the Constitu-

tion. This phrase was the same language used by Congress in

prior environmental legislation to preserve states Eleventh

Amendment immunity. See, Clean Air Act, 42 U.S.C. 7401,

7604, Federal Water Pollution Control Act, 33 U.S.C. 1251,

1365, Resource Conservation and Recovery Act, 42 U.S.C.

3251, 6967. By contrast, there is no similar statutory limitation

on section 107 actions under CERCLA.

Second, Union Gas !'s analysis relied heavily on the absence

in CERCLA of an explicit waiver of state immunity similar to the

federal waiver of immunity in section 107(g). 42 U.S.C. 9607(g).!

In SARA, Congress not only replicated the federal waiver in

section 101(20\(D), but it amended the federal waiver of immu-

nity clause to provide that “nothing in this section shall be

construed to affect the liability of any person or entity under

sections 106 and 107°. 42 U.S.C. §9620(a\(1). Thus, Congress

explicitly precluded the analysis used in Union Gas 1.

Pennsylvania’ interpretation of section 101(20)\D) enlisted

no adherents on the court of appeals and lacks all credibility. If,

as Pennsylvania contends, this provision was intended to insu-

late states from liability just to the federal government, it could

have been worded to so provide. It was not. Rather, Congress

made sure there was no such implication by expressly equating

states liability to that of nongovernmental entities.

The United States own abandonment of sovereign immu-

nity in a statute imposing strict liability is testament to the

extent of the Congressional commitment that no one should be

immune. By holding that states immunity to suit under section

107 is abrogated, Union Gas II conscientiously applies the clear

statement rule and closes the yawning gap in CERCLA’ reg-

ulatory scheme that Union Gas I had left.

; TT

IT IS NOW WIDELY RECOGNIZED THAT

CONGRESS IS EMPOWERED TO ABROGATE STATE

IMMUNITY IN ARTICLE | ENACTMENTS®

1. Section 1O7(g) was recodified by SARA as section 120(a\1) of

CERCLA. Section 120(a)1) is quoted in its entirety supra

2. Should this Court grant certiorari, Union Gas will contend in its briet

on the merits that Hans v. Lowisiana, 14 US. 1 (1890), and its progeny should

be overruled since the Eleventh Amendment only precludes federal courts

from asserting jurisdiction in diversity of citizenship cases between a state and

a citizen of a diflerent state. Atascadero State Hospital v Scanlon, 473. U.S. at

238 (1985) Brennan, dissenting), Welch cv State Department of Highways

and Public Transportation, WT S. Ct. at 2955 (|. Brennan, dissenting)

Pennsylvania seeks to augment state immunity and under-

mine Congressional power through its contention that Congress

may only abrogate state immunity when acting pursuant to the

Fourteenth and later Amendments to the Constitution. This

proposition has never been accepted by this Court, Welch v.

State Department of Highways and Public Transportation, 107

S. Ct. 2941, 2946 (1987), County of Oneida, New York v. Oneida

Indian Nation of New York State, 470 U.S. 226, 252 (1985), and

has been expressly rejected by five courts of appeals. Union Gas

Il, Pet. App. 64-65a; In re McVey Trucking, 812 F.2d 311, 328

(7th Cir. 1987) cert. denied 108 $.Ct. 227 (1987), County of

Monroe v. Florida, 678 F 2d 1124, 1128-35 (2d Cir. 1982) cert.

denied, 459 U.S. 1104 (1983); Peel v. Florida Department of

Transportation, 600 F.2d 1070, 1074-82 (Sth Cir. 1979), Mills

Music, Inc. v. Arizona, 591 F.2d 1278, 1285 (9th Cir. 1979).

Indeed, no court has ever accepted Pennsylvania's proposi-

tion for very fundamental reasons. Pennsylvania would have this

Court interpret the Constitution on a “time-line” See Union

Gas Il, Pet. App. at 40a. Thus, in Pennsylvanias view, the

Fourteenth Amendment is a watershed, and Congress may only

abrogate state immunity as to enactments which draw their

constitutional authority from the Fourteenth and later Amend-

ments, not from the preceding text of the Constitution. Not only

does this proposition violate this Court's admonition that the

Constitution must be interpreted as a single instrument, all of

whose parts are equal, Prout v. Starr, 188 U.S. 537, 543 (1903),

but it would measurably diminish Congress power to protect

citizens through the exercise of its Article | powers.

Surely the Eleventh Amendment, which by its own lan-

guage restricts the judiciary, not Congress, was never intended

to limit Congress Article | powers. Article 1, Section 8, of the

Constitution, by far the most frequent source of power for con-

gressional enactments, has an eflectuating clause similar to that

of the Fourteenth Amendment. Clause 18 of Section 8 em-

powers Congress:

To make all Laws which shall be necessary and proper for

carrying into Execution the foregoing Powers, and all other

Powers vested by this Constitution in the Government of

the United States, or in any Department or Officer thereof

By comparison section 5 of the Fourteenth Amendment de-

clares:

Congress shall have power to enforce, by appropriate legis-

lation, the provisions of this article.

In both clauses the states ceded to Congress the authority to

carry out its enumerated powers, including the abrogation of

state immunity. The Eleventh Amendment simply does not, and

was not intended to, limit the enabling clause of Article L.

As the court of appeals pointed out, the Constitution itself

provides a system of checks and balances so that Congress does

not exercise Eleventh Amendment abrogation recklessly. Union

Gas Il, Pet. App. 56a. Congress consists of senators and repre-

sentatives elected in each state. It is they who determine, in

unmistakable language. which federal statutory schemes are so

important as to require that states participate and be liable in

private party actions. Should Congress perceive that the burden

on states of being subjected to suit in federal court has become

too onerous, Congress can amend the law to create state immu-

nity from suit.

RETROACTIVE LIABILITY UNDER CERCLA DOES

NOT PRESENT AN ELEVENTH AMENDMENT ISSUE

CERCLAsS retroactive liability does not implicate Eleventh

Amendment concerns. Since Congress has the power to abro-

gate Eleventh Amendment sovereign immunity, it matters not

whether Congress utilizes that power in a statute with a prospec-

tive or retrospective scope. Issues of the constitutionality of

abrogation under the Eleventh Amendment and the constitu-

tionality of retroactive liability under the Fifth Amendment's

due process clause are distinct. CERCLA’ imposition of retroac-

tive liability has been held to be constitutional under the Fifth

Amendment, see, e.g., U.S. v. Northeastern Pharmaceutical &

Chemical Co., Inc., 810 F.2d 726, 732-34 (Sth Cir. 1986) and

cases cited therein. and Pennsylvania does not contend to the

tional, and the court of appeals properly followed this Court's

precedents in applying the law in effect at the time the appeal

was decided. Union Gas Hl. Pet. App. 67-72a; Andrus vw.

Charlestone Store Products Co. 496 U.S. 604, 607-08. n. 6

(1978). Thorpe vc. Housing Authority, 393 U.S. 268, 281-82

(1969). US. vc. Schooner Peggy. 5 U.S. 1 Cranch

(TSOL).

CONCLI SION

For all the foregomg reasons respondent respectfully urges

this Court to deny Pennsyh anias petition for writ of certiorari.