Amicus Curiae Brief — Teck Cominco Metals, Ltd. v. Pakoototas (No. 06-1188)

FILED

No. 06-1188 MAY 0 2 2007

eee

IN THE OFFICE OF THE CLERK

SUPREME COURT, U.S.

Supreme Court of the United States

TECK COMINCO METALS, LTD.,

Petitioner,

Vv.

JOSEPH A. PAKOOTAS, DONALD R. MICHEL,

AND STATE OF WASHINGTON,

Respondents.

On Petition for a Writ of Certiorari

to the United States Court of Appeals

for the Ninth Circuit

BRIEF OF THE CHAMBER OF COMMERCE OF

THE UNITED STATES OF AMERICA AS

AMICUS CURIAE IN SUPPORT OF

PETITION FOR A WRIT OF CERTIORARI

Of Counsel: CARTER G. PHILLIPS*

ROBIN S. CONRAD MARINN F. CARLSON

AMAR DT). SARWAL SIDLEY AUSTIN LLP

NATIONAL CHAMBER 1501 K Street, N.W.

LITIGATION CENTER, INC. Washington, D.C. 20005

1615 H Street, N.W. (202) 736-8000

Washington, D.C. 20062

(202) 463-5337

Counsel for Amicus Curiae

May 2, 2007 * Counsel of Record

SRP RENN SR tn a AEN RRA ERE OS PAREN <I ROR

WitSON-EPES PRINTING CO., INC. -— (202) 789-0096 - VWaASHINGTON, D. C. 20002

TABLE OF CONTENTS

Page

EE PAE? B PERIUEE 8 BIEO cocevcecvevescecesevescsencssocecsscceooove il

INTEREST OF AMICUS CURIAL.....ccccccssesssossesvccesesesers l

BACKGROUND AND INTRODUCTION ........0........... 2

REASONS FOR GRANTING THE PETITION.............. 3

I. THE LOWER COURT’S DECISION THREAT-

ENS INTERNATIONAL DISCORD AND

INTERFERES WITH U.S. FOREIGN POLICY .. 6

Il. THE DECISION BELOW WILL HAVE

SUBSTANTIAL ADVERSE CONSE-

QUENCES FOR THE BUSINESS COM-

SIT ilsticcdsensonsveerdreosevesersévteeesserorersesoceceoes 12

TT a iaisuisdeideseceusevensoevaccesesesocorecoveseorsseorsers 15

(1)

TABLE OF AUTHORITIES

CASES Page

American Banana Co. v. United Fruit Co., 213

Fe RSI mE OD TT 3

Chicago & S. Air Lines v. Waterman S.S. Corp.,

Fe is Pe aviaciicaidaeetanieaanidetnitiiiaion 1]

Crosby v. National Foreign Trade Council, 530

Sse. Se aT ccecactseiessomsiessibpinsrbanaceetielealbagidibenentcDtch 11

EEOC vy. Arabian Am. Oil Co., 499 U.S. 244

(1991), superseded by statute on other grounds,

Civil Rights Act of 1991, Pub. L. No. 102-166,

105 Stat. 1074, as recognized in Landgraf v.

USI Film Prods., 511 U.S. 244 (1994) ..... 2, 3, 4, 5, 6

F. Hoffman-La Roche Ltd. v. Empagran S.A., 542

SF ie Ba a siehnidineaterastinneaniniaiiipdatiadiien 6

Foley Bros. Inc. v. Filardo, 336 U.S. 281 (1949)... 4

Hartford Fire Ins. Co. v. California, 509 U.S. 764

Cee ainsisstdaasieedinnieaisndenscleiiehbenihaadeaabanaanibsadaibeigaiaboaiie 5

McCulloch v. Sociedad Nacional de Marineros de

Honduras, 372 U.S. 10 (1963)...........ccceeceeeeeseeees 6

Microsoft Corp. v. AT&T Corp., No. 05-1056,

Sap Ge. CIB. ABE. Fey BOOT Perecnccersescecnceeretcereeates 2,4

N.L.R.B. v. Catholic Bishop of Chi., 440 U.S. 490

COSI y a iscceniavielesiesispieidapsssduntaagianblahanadheanpeininaliteiicsianndeien 6

Pakootas v. Teck Cominco Metals Lid., 452 F.3d

1066 (9th Cir. 2006), petition for cert. filed, 75

U.S.L.W. 3483 (U.S. Feb. 27, 2007) (No. 06-

Sa ckaissscatseisiceinilachisaneacicatataiaidiebdanmdedaamoncanamaanes 2,5

Sale v. Haitian Ctrs. Council, Inc., 509 U.S. 155

CIPI sansenistnnasienaeiediaibsssonssnibeteliaaiaesiaaminadadaelleliidenmaaet 5, 6

Smith v. United States, 507 U.S. 197 (1993)........... 4

Spector v. Norwegian Cruise Line Lid., 545 U.S.

Be ee iitsinaioctuisdehaciceedcideiuaniuenaabiuiadanmiadaadaed 6

Steele v. Bulova Watch Co., 344 U.S. 280

Petit snustavsdacannivcaicsamasiiiasutiicadaisaaiadiate aaa 5

ill

TABLE OF AUTHORITIES—continued

United States v. Mitchell, 553 F.2d 996 (Sth Cir.

TREATIES

1909 Boundary Waters With Canada Treaty,

U.S.-Gr. Brit., Jan. 11, 1919, 36 Stat. 2448.........

1972 Great Lakes Water Quality Agreement,

U.S.-Can., Apr. 15, 1972, 23 U.S.T. 301.............

1978 Great Lakes Water Quality Agreement,

U.S.-Can., Nov. 22, 1978, 30 U.S.T. 1383..........

Convention on Long-Range Transboundary Air

Pollution, Nov. 13, 1979, 34 U.S.T. 3043.00.00...

Memorandum of Intent Concerning Transboun-

dary Air Pollution, U.S.-Can., Aug. 5, 1980, 32

1k a. RGR Ene nO a ena a ae

SCHOLARLY AUTHORITIES

John E. Carroll, Environmental Diplomacy: An

Examination and a Prospective of Canadian-

U.S. Transboundary Environmental Relations

ari incighdllsacscieschiscesclealieebiipeiiccinnbipeicadiacmnabaeisaaiicaabiels

Arthur T. Downey, Extraterritorial Sanctions in

the Canada/U.S. Context, 24 Can-U.S. L.J. 215

Sertich titres bik nipseeipeinbaclnedscdascnaiabibuiaahasabdeseiposi

Sanford E. Gaines, NAFTA as a Symbol on the

Border, 51 UCLA L. Rev. 143 (2003).................

L.H. Legault, The Roles of Law and Diplomacy in

Dispute Resolution: The IJC as a Possible

Model, 26 Can.-U.S. L.J. 47 (2000)...

Page

1]

iV

TABLE OF AUTHORITIES—continued

Page

Michael S$. McMahon, Balancing the Interests:

An Essay on the Canadian-American Acid Rain

Debate, in International Environmental Diplo-

macy: The Management and Resolution of

Transfrontier Environmental Problems 147

fh TE | | 13

Austen L. Parrish, Trail Smelter Déja Vu:

Extraterritoriality, International Environmental

Law, and the Search for Solutions to Canadian-

U.S. Transboundary Water Pollution Disputes,

SS BA). ba. BBY: FOS CAO Ce) cevevesevercseceisinvesesvieraees 13

Elia V. Pirozzi, Resolution of Environmental

Disputes in the United States-Mexico Border

Region and the Departure from the Status Quo,

12 J. Eavtl. L.. & Litt. 371 CIGS7) ..ccccccccosecseseesss 9

Shawn M. Rosso, Acid Rain: The Use of

Diplomacy, Policy and the Courts to Solve a

Transboundary Pollution Problem, 8 J. Nat.

Resources & Envtl. L. 42] (1993) ........cceceeees 8,9

John D. Wirth, Smelter Smoke in North America:

The Politics of Transborder Pollution (2000) ..... 10

OTHER AUTHORITIES

Env’t Can., Comments on the U.S. EPA's

Proposed National Emission Standards for

Hazardous Air Pollutants (Mar. 30, 2004),

available at http://www.ec.gc.ca/mercury/en/

is sierrricnnadintirnsitcimssiescinnecltaeniinss 13

Memorandum from Marianne L._ Horinko,

Assistant Administrator, U.S. EPA, to

Superfund National Policy Managers, Regions

1-10 & RCRA Senior Policy Advisors, Regions

1-10 (Feb. 12, 2002)

Vv

TABLE OF AUTHORITIES—continued

Page

Int’! Joint Comm’n, Detroit River Area of

Concern: Status Assessment (1997), available

at http://www. ijc.org/php/publications/html]/

i iiiainccctatinintuiccuiacilidesunetiiniinsictoenssinneapiin 9

Nordic Council of Ministers, Cadmium Review —

RIE GRE ESAs cence er Ree ae 15

Nordic Council of Ministers, Lead Review

EEE iidiahincenvndsmstpineretesavouniiotsne Nad 15

Rebecca Renner, Science News: Asia Pumps Out

More Mercury than Previously Thought, Envtl.

Sci. & Tech. Online (American Chemical

Society), Jan. 5, 2005, available at http://pubs.

acs.org/subscribe/journals/esthag-w/2005/jan/

I BI BIN cicoicccincecaicnenienisieniniinitistinonmen 14

U.S. EPA, Contaminated Sediment Remediation ,

Guidance for Hazardous Waste Sites (2005),

available at http://www.epa.gov/superfund/

resources/sediment/pdfs/guidance.pdf................. 12

INTEREST OF AMICUS CURIAE'

The Chamber of Commerce of the United States of

America (the “Chamber’”) is the world’s largest business

federation, representing an underlying membership of more

than three million U.S. businesses and organizations from

every region of the country. An important function of the

Chamber is to advocate its members’ interests in matters of

national concern before all branches and at all levels of

government. In this role, the Chamber has often filed briefs

as amicus curiae before federal and state courts, including

before this Court.

The Chamber seeks to highlight in this brief the importance

of the present case to the U.S. business community and the

negative consequences—both diplomatic and economic—that

would flow from allowing the Ninth Circuit’s flawed and

expansive interpretation of the Comprehensive Environmental

Response, Compensation and Liability Act (“CERCLA”) to

stand.

The complex problem of transboundary pollution has

historically been addressed through a variety of bilateral and

multilateral diplomatic mechanisms. By displacing these

cooperative arrangements in favor of piecemeal litigation that

projects U.S. environmental regulations abroad, the Ninth

Circuit’s ruling, if allowed to stand, not only would interfere

with the foreign affairs prerogatives of the political branches

of government, but also would disrupt the settled expectations

of the business community.

''No person other than the amicus curiae, its members, or its counsel

has made any monetary contribution to the preparation or submission of

this brief. Further, no counsel for any Petitioner or Respondent authored

this brief in whole or in part. Counsel of record for both parties have

consented to the filing of this brief amicus curiae, and the letters of

consent have been filed with the Clerk.

2

Further, by extending CERCLA’s statutory reach to

activities carried out by a foreign company on foreign soil,

the Ninth Circuit’s decision risks provoking foreign

governments to attempt to impose similar liability on U.S.

companies for activities those companies undertake within the

United States’ borders. Such retaliation would seriously

damage the interests of the Chamber’s members doing

business in the border regions of the United States and would

inject uncertainty and unpredictability into the regulatory

framework within which they operate.

The Chamber has a vital interest in promoting a predictable

legal environment for its members—something that is

seriously threatened by the Ninth Circuit’s unprecedented

expansion of CERCLA liability in this case.

BACKGROUND AND INTRODUCTION

This case raises an issue of critical importance to this

nation’s business community: the applicability of U.S.

environmental laws to the conduct of foreign persons that

takes place wholly within the sovereign territory of a foreign

nation. This Court has long recognized — and reaffirmed just

days ago — that acts of Congress are presumed “to apply only

within the territorial jurisdiction of the United States,” unless

a “clearly expressed” contrary intention is apparent from the

legislation. EEOC v. Arabian Am. Oil Co. (“Aramco”), 499

U.S. 244, 248 (1991) (quoting Foley Bros. Inc. v. Filardo,

336 U.S. 281, 285 (1949) and Benz v. Compania Naviera

Hidalgo, S.A., 353, U.S. 138, 147 (1957)); Microsoft Corp. v.

AT&T Corp., No. 05-1056, slip op. at 15-16 (U.S. Apr. 30,

2007). Instead of confronting directly the issue of whether

Congress intended liability under CERCLA to apply to |

conduct that takes place exclusively outside the United States,

the Ninth Circuit sidestepped the presumption against

extraterritoriality altogether. See Pakootas v. Teck Cominco

Metals Lid, 452 F.3d 1066, 1078 (9th Cir. 2006)

(determining that the presumption against extraterritoriality

3

did not apply because the passive “release” of heavy metals

from slag occurred domestically). That decision is not only

inconsistent with existing law but also gives rise to serious

diplomatic and economic implications; it requires this Court’s

review.

Notwithstanding the Ninth Circuit’s attempt to avoid the

question whether CERCLA can be applied extraterritorially,

its decision implicates the very concerns that the presumption

against extraterritorial statutory application was designed to

guard against—namely, the “unintended clashes between our

laws and those of other nations which could result in

international discord.” Aramco, 499 U.S. at 248. The

question of whether to apply the presumption is more than

simply an academic exercise. The Ninth Circuit’s ruling

extends CERCLA liability to a Canadian corporation whose

conduct took place exclusively in the territory of Canada in

compliance with Canadian law. This is a development with

serious consequences for diplomatic relations between

Canada and the United States, as well as for businesses on

both sides of the border. And the potential consequences of

the decision below extend well beyond the United States’

relationship with its closest neighbor. The importance of the

scope of the presumption against extraterritoriality, and the

ramifications of the Ninth Circuit’s failure to apply that

presumption, make the need for this Court’s review

particularly evident.

REASONS FOR GRANTING THE PETITION

Almost a century ago, in American Banana Co. v. United

Fruit Co., 213 U.S. 347, 356 (1909), Justice Holmes

articulated the basic premise upon which the presumption

against the extraterritorial application of U.S. law is based:

“{T]he general and almost universal! rule is that the character

of an act as lawful or unlawful must be determined wholly by

the law of the country where the act is done.” /d. Since that

time, this Court has consistently reaffirmed that the

4

presumption is directly implicated whenever . a litigant

attempts to apply U.S. law to conduct that takes place outside

of the United States. See Aramco, 499 U.S. at 249-51 (Title

VII of the Civil Rights Act of 1964 does not regulate the

employment-related conduct of American firms employing

American citizens abroad);? Foley Bros. v. Filardo, 336 U.S.

281, 285-86 (1949) (federal labor statute does not apply to

impose liability on a private contractor for conduct that took

place in a foreign country); Smith v. United States, 507 U.S.

197, 204 (1993) (Federal Tort Claims Act does not apply to

tort claims based on acts or omissions occurring abroad).

This Court recently emphasized the importance of this

principle. Observing that “United States law applies

domestically but does not rule the world,” Microsoft, slip op.

at 15, and that “foreign conduct is [generally] the domain of

foreign law,” id. (quoting Brief for the United States as

Amicus Curiae at 28, Microsoft, No. 05-1056), this Court held

that §271(f) of the Patent Act does not apply to activity

occurring abroad. In so holding, the Court reiterated the

presumption that “legislators take account of the legitimate

sovereign interests of other nations when they write American

laws.” Jd. at 15 (quoting F. Hoffman-La Roche Lid. v.

Empagran S.A., 542 U.S. 155, 164 (2004)).

Despite the undisputed fact that the conduct for which

Petitioner, a Canadian company, is allegedly liable under

CERCLA took place exclusively on foreign soil, the Ninth

Circuit concluded that the presumption against

extraterritoriality was not implicated at all here. The court

reasoned that because the “release” of hazardous substances

occurred in the United States, this case involved a purely

? The Court's interpretation of Title VII in Aramco was superseded by

Congress’s enactment of the Civil Rights Act of 1991, Pub. 2, No. 102-

166, 105 Stat. 1074, as recognized in Landgraf v. USI Film Prods., 5\1

U.S. 244, 251 (1994). That statutory revision, however, does not

undermine the presumption against extraterritoriality as invoked in

Aramco.

5

domestic application of CERCLA. Pakootas, 452 F.3d at

1078. That reasoning, however, took no account of the

critical question of whether Congress intended CERCLA to

impose liability for Petitioner’s wholly extraterritorial

conduct. Instead, the panel simply side-stepped this issue by

defining the application of CERCLA in this case as

“domestic.” |

The ascertainment of affirmative congressional intent is a

necessary prerequisite for a U.S. court to apply U.S. statutory

liability to conduct that occurs entirely outside the United

States. See Aramco, 499 U.S. at 248 (holding that the

presumption applies “unless there is ‘the affirmative intention

of the Congress clearly expressed’”) (quoting Benz, 353 U.S.

at 147)); Sale v. Haitian Ctrs. Council, Inc., 509 U.S. 155,

176 (1993) (affirming that the: presumption requires

“affirmative evidence of intended _ extraterritorial

application”). Even in those instances in which this Court has

determined that the presumption against extraterritoriality has

been overcome, it has done so because it concluded that there

existed an affirmative congressional decision to allow such an

extraterritorial application. See, e.g., Hartford Fire Ins. Co.

v. California, 509 U.S. 764, 796 & n.22 (1993) (recognizing

that Congress intended the Sherman Act to apply “to foreign

conduct that was meant to produce and did in fact produce

some substantial effect in the United States”); Steele v.

Bulova Watch Co., 344 US. 280, 285, 287 (1952)

(concluding that “Congress intended to make the [the Lanham

Act] applicable to the facts of this case.”) (internal quotation

mark omitted)). In this case, the Ninth Circuit conducted no

such inquiry into congressional intent to apply CERCLA

liability to wholly foreign conduct.

The Ninth Circuit’s determination that the presumption

against extraterritoriality was inapplicable in this case is

directly contrary to this Court’s established precedent. That

flaw is responsible for more than simply a wrong result or a

legal inconsistency—it carries with it significant real-world

6

consequences for U.S. foreign policy (and the ability of the

Executive branch to effectively conduct such policy) as well

as for the U.S. business community. These consequences

present compelling reasons for this Court to grant certiorari in

this case.

I. THE LOWER COURT’S DECISION THREATENS

INTERNATIONAL DISCORD AND INTERFERES

WITH U.S. FOREIGN POLICY.

The presumption against the extraterritorial application of

U.S. law is designed largely to prevent “unintended clashes

between our laws and those of other nations which could

result in international discord.” Aramco, 499 U.S. at 248; see

also Spector v. Norwegian Cruise Line Lid., 545 U.S. 119,

143 (2005) (Ginsburg, J. concurring in part and concurring in

the judgment) (“[BJefore reading our law ‘to run interference

in such a delicate field of international relations,’ ‘where the

possibilities of international discord are so evident and

retaliative action so certain’ the Court should await Congress’

clearly expressed instruction.”) (quoting Benz, 353 U.S. at

147)). This rationale has roots in the twin concerns of

international comity, see F. Hoffman-La Roche Lid. v.

Empagran S.A., 542 U.S. 155, 164 (2004) (“[T]his Court

ordinarily construes ambiguous statutes to avoid unreasonable

interference with the sovereign authority of other nations.”),

and the separation of powers, see Sale, 509 U.S. at 188

(“[The] presumption has special force when we are construing

treaty and statutory provisions that may involve foreign and

military affairs for which the President has unique

sesponsibility.”). In the “presence of highly charged

international circumstances,” McCulloch v. Sociedad

Nacional de Marineros de Honduras, 372 U.S. 10, 21 (1963),

the presumption serves tO prevent a court from reading a

Statute “so as to give rise to a serious question of separation of

powers which in turn would . . . implicate[] sensitive issues of

the authority of the Executive over relations with foreign

nations,” N.L.R.B. v. Catholic Bishop of Chicago, 440 U.S.

J

490, 500 (1979). These twin concerns are directly implicated

in this case and compellingly support certiorari.

The Ninth Circuit’s disregard of the presumption against

extraterritorial statutory reach risks triggering serious

diplomatic consequences. The Canadian government has

already protested on international comity grounds the

extension of CERCLA liability to Petitioner’s exclusively

Canadian operations. See Gov’t of Canada’s Amicus Curiae

Brief in Support of Appellant and Reversal of the Order of the

District Court, Pakootas v. Teck Cominco Metals Ltd., 452

F.3d 1066 (9th Cir. 2006) (No. 05-35153). The reason for

Canada’s protest is clear: by projecting CERCLA’s standards

onto the sovereign territory of Canada, the panel’s decision

disrupts the integrity of a foreign country’s environmental

scheme by imposing upon it a potentially inimical set of

priorities. This can only serve to harm relations between the

United States and one of its most important allies. Cf. Arthur

T. Downey, Extraterritorial Sanctions in the Canada/U.S.

Context, 24 Can-US. LJ. 215, 215 (1998)

(“[E]xtraterritoriality is an unwanted intrusion into a

country’s sovereignty, and Canada sometimes suffers

nightmares about the firmness and durability of its own

sovereignty. It naturally bristles when the ugly head of

extraterritoriality appears, especially if it is an American

head.”).

The extraterritorial application of CERCLA also needlessly

interferes with the foreign affairs prerogatives of the political

branches of the U.S. government. Current U.S. foreign policy

has recognized that the problem of cross-border pollution is

best addressed through bilateral or multilateral diplomatic

mechanisms. The reciprocal nature of the problem makes it

inappropriate for resolution by the unilateral projection of the

country’s domestic laws onto its neighbors’ territory. Instead,

the United States and other countries have found it preferable,

and very often successful, to pursue joint measures to reduce

the overall output of pollutants into the shared natural

8

environment. The United States and Canada are parties to

many regional and global agreements that address

transboundary pollution through such cooperative efforts.

See, e.g., Memorandum of Intent Concerning Transboundary

Air Pollution, U.S.-Can., Aug. 5, 1980, 32 U.S.T. 2521;

Convention on Long-Range Transboundary Air Pollution,

Nov. 13, 1979; 1978 Great Lakes Water Quality Agreement,

U.S.-Can., Nov. 22, 1978, 30 U.S.T. 1383; 1972 Great Lakes

Water Quality Agreement, Apr. 15, 1972, United States-

Canada, 23 U.S.T. 301; 1909 Boundary Waters Treaty With

Canada, U.S.-Gr. Brit., Jan. 11, 1909, 36 Stat. 2448. The

United States has also been involved in numerous

negotiations addressing environmental problems in specific

border areas. See generally John E. Carroll, Environmental

Diplomacy. An Examination and a Prospective of Canadian-

U.S. Transboundary Environmental Relations (1983)

(describing the history of U.S.-Canadian cross-border

environmental diplomacy).

As a result of these agreements and negotiations, there

exists a robust network of inter-governmental mechanisms

dealing with the problem of cross-border contamination.

Most prominently, the 1909 Boundary Waters Treaty between

the United States and Canada established a_ bilateral

International Joint Commission that is charged with resolving

disputes concerning the control of boundary water quality,

including transboundary pollution, and is vested with quasi-

judicial, investigative and arbitral functions. The subsequent

Great Lakes Water Quality Agreements have expanded the

powers of the Commission, and over the years the

Commission has successfully resolved a number of disputes

between the two countries. See L.H. Legault, The Roles of

Law and Diplomacy in Dispute Resolution: The JC as a

Possible Model, 26 Can.-U.S. L.J. 47, 49-54 (2000); Shawn

M. Rosso, Acid Rain: The Use of Diplomacy, Policy and the

Courts to Solve a Transboundary Pollution Problem, 8 J. Nat.

Resources & Envtl. L. 421, 424-25 (1993) (“The IJC has been

9

an innovative approach to dealing with common problems

arising on the border. In effect, it has institutionalized an

acknowledgement of the importance of cooperation in

addressing common environmental issues.”’).

Characteristic of this successful cooperative approach to

transboundary pollution is the Commission’s investigation,

upon a joint request by the United States and Canada, of the

issue of air pollution in the Detroit river area, which

encompasses the metropolitan areas of Detroit, in the State of

Michigan, and Windsor, in the Province of Ontario. Having

concluded that the responsibility for the pollution was shared

by both sides, the Commission recommended, and the United

States and Canada subsequently created, a joint institution to

address the problem. See Int’! Joint Comm’n, Detroit River

Area of Concern: Status Assessment (1997), available at

http://www.ijc.org/php/publications/html/detroit.html; Rosso,

supra, at 424.

A similarly extensive diplomatic system of dispute

resolution has been established to address pollution on the

U.S. and Mexican border. See Elia V. Pirozzi, Resolution of

Environmental Disputes in the United States-Mexico Border

Region and the Departure from the Status Quo, 12 J. Envtl. L.

& Litig. 371, 373-86 (1997) (discussing dispute resolution

under NAFTA, North American Agreement’ on

Environmental Cooperation and Environmental Dispute

Resolution, “La Paz” Agreement Between the U.S. and

Mexico on Cooperation for the Protection and Improvement

of the Environment in the Border Area, and Integrated

Environmental Border Plan for the Mexican-United States

Border Area). These agreements have allowed the two

countries to solve a number of significant environmental

problems in the border area. Under the “La Paz” agreement,

for instance, a collaborative effort by the U.S. and Mexico has

dramatically improved air quality in the E] Paso-Ciudad

Juarez border region, and has substantially reduced pollution

from copper smelters in Arizona in the United States and

10

Sonora in Mexico. See Sanford E. Gaines, NAFTA as a

Symbol on the Border, 51 UCLA L. Rev. 143, 161 (2003);

John D. Wirth, Smelter Smoke in North America: The Politics

of Transborder Pollution 175-99 (2000).

The Ninth Circuit’s extension of CERCLA liability to

Petitioner’s wholly foreign conduct risks disrupting these and

other well-functioning diplomatic schemes. It places a matter

traditionally handled through diplomacy by the Executive

into the hands of individual private litigants who: can

unilaterally pursue CERCLA suits without any regard for the

foreign policy and international environmental consequences

for the nation as a whole. The firmly established presumption

against extraterritorial application of federal legislation,

which the Ninth Circuit refused to apply, is designed to

prevent precisely this dangerous and counterproductive

exercise.

Absent a clear showing of congressional intent to apply

’ federal law abroad, the authority to resolve the sensitive

problem of cross-border environmental relations is vested in

the federal Executive acting through its diplomatic

representatives. Such authority is an element of the

President’s broader power to, in the words of the Solicitor

General, “promote the effective conduct of foreign relations,

and underscore the United States’ commitment in the

international community to the rule of law.” Brief for the

United States as Amicus Curiae Supporting Petition for

Certiorari at 8, Medellin v. Texas, No. 06-984.

As the Fifth Circuit has observed in an analogous situation,

when considering whether to give extraterritorial application

to the Marine Mammal Protection Act of 1972:

When Congress considers environmental legislation, it

presumably recognizes the authority of other sovereigns

to protect and exploit their own resources. Other states

may strike balances of interests that differ substantially

from those struck by Congress. The traditional method

1]

of resolving such differences in the international

community is through negotiation and agreement rather

than through the imposition of one particular choice by a

state imposing its law extraterritorially.

United States v. Mitchell, 553 F.2d 996, 1002 (Sth Cir. 1977).

These mechanisms allow the Executive Branch to evaluate

the nation’s environmental priorities, to take account of the

diplomatic sensitivities involved, and to respond in a manner

that appropriately combines the determination and the

flexibility necessary to solve the complex issues surrounding

transboundary pollution. That responsibility, moreover, is

particularly appropriate because “the President is uniquely

positioned both to evaluate and resolve sensitive foreign

policy issues and to act with dispatch.” Brief for the United

States as Amicus Curiae Supporting Petition for Certiorari at

12, Medellin, No. 06-984.

By contrast, this Court has emphasized the limited capacity

of the Judicial Branch to “determin[e] precisely when foreign

nations will be offended by particular acts” and has

“consistently acknowledged that the nuances of the foreign

policy of the United States ... are much more the province of

the Executive Branch and Congress” than of the courts.

Crosby v. National Foreign Trade Council, 530 U.S. 363, 386

(2000) (quoting Container Corp. of Am. v. Franchise Tax Bd.,

463 U.S. 159, 194, 196 (1983)) (internal quotation marks

omitted) (alteration and omission in original).

The Ninth Circuit’s failure even to consider, much less to

apply the presumption against extraterritoriality in this case

fosters not only unnecessary tension between governments

but also inappropriate conflict between the U.S. branches of

government, as the judiciary attempts to tread where it “has

neither aptitude, facilities nor responsibility.” Chicago & S.

Air Lines v. Waterman S.S. Corp., 333 U.S. 103, 111 (1948).

12

II. THE DECISION BELOW WILL HAVE SUBSTAN-

TIAL ADVERSE CONSEQUENCES FOR THE

BUSINESS COMMUNITY.

Regardless of whether the application of CERCLA in this

case is labeled as “domestic” or “extraterritorial,” by

attaching liability to conduct that occurred wholly outside the

~ United States, the Ninth Circuit’s decision will detrimentally

affect many of the Chamber’s members and affiliates, as well

as the U.S. business community in general. United States

companies and individuals are actively engaged in business

operations in the regions bordering Canada. These companies

will be exposed to substantial risk if, in response to this and

similar suits against its nationals, Canada retaliates by

extending its own environmental laws to U.S. companies

operating on the U.S. side of the border and by opening its

courts to similar types of lawsuits.

The Ninth Circuit’s projection of CERCLA abroad

effectively subjects foreign companies operating outside the

United States to the U.S. environmental regulatory regime.

There is no way to escape that consequence of the Ninth

Circuit’s decision, given that CERCLA relies on regulating

conduct that gives rise to releases of pollution. See

Memorandum from Marianne L. Horinko, Assistant

Administrator, U.S. EPA, to Superfund Nat’] Policy

Managers, Regions 1-10 & RCRA Senior Policy Advisors,

Regions 1-10, at 2-3 (Feb. 12, 2002) (“Principles for

Managing Contaminated Sediment Risks at Hazardous Waste

Site”); U.S. EPA, Contaminated Sediment Remediation

Guidance for Hazardous Waste Sites § 2.6 (2005), available

at __ http://www.epa.gov/superfund/resources/sediment/pdfs/

guidance.pdf (“Identifying and controlling contaminant

sources typically is critical to the effectiveness of any

Superfund sediment cleanup.”).

If private litigants are permitted to use CERCLA lawsuits

to target foreign companies’ operations outside of the United

States, these companies will find themselves forced to

13

conform their conduct to U.S. environmental requirements for

fear of liability. They will have to do so even if those U.S.

requirements find no correlation in the domestic legislation of

the country in which they operate.

As a result, Canadian companies faced with the unexpected

requirement to comply not only with their country’s domestic

regulation but also with CERCLA (and, potentially, other

U.S. environmental statutes) when acting solely on Canadian

soil will have every incentive to pressure their government to

respond. See Austen L. Parrish, Trail Smelter Déja Vu:

Extraterritoriality, International Environmental Law, and the

Search for Solutions to Canadian-U.S. Transboundary Water

Pollution Disputes, 85 B.U. L. Rev. 363, 414 (2005) (“Little

reason exists to believe that Canada would not ultimately

respond similarly if the U.S. CERCLA laws are read to apply

extraterritorially to Canadian companies doing business solely

in Canada.”). The Ninth Circuit’s insistence that this case

involves only a “domestic” application of CERCLA is cold

comfort to Canadian companies and is unlikely to alleviate

this cross-border tension, given that under that court’s

approach CERCLA liability can attach to conduct exclusively

outside the United States.

In response, Canada could very well try to “level the

playing field” between companies on either side of the border

by imposing corresponding liability on companies operating

within U.S. territory whenever their operations produce

pollution that later ends up in Canada. Canada already

contends that pollutants released by some U.S. companies

migrate across national boundaries and account for air and

water pollution in certain regions of Canada. See Env’t Can.,

Comments on the U.S. EPA’s Proposed National Emission

Standards for Hazardous Air Pollutants (Mar. 30, 2004),

available at http://www.ec.gc.ca/mercury/en/mcepa.cfm#

ECC (reporting that 10 percent of the mercury deposited in

Canada each year comes from U.S. sources}; Michael S.

McMahon, Balancing the Interests: An Essay on _ the

14

Canadian-American Acid Rain Debate, in {International

Environmental Diplomacy: The Management and Resolution

of Transfrontier Environmental Problems 147, 147 (John E.

Carroll ed., 1988) (“The issue [of acid rain] has been

identified by Canada’s minister of the environment as the

‘single most important irritant in US-Canadian relations.’”).

If Canada wishes to retaliate for the Ninth Circuit’s

unwarranted intrusion into its sovereignty, it will find an easy

basis under that court’s reasoning for imposing liability upon

U.S. businesses. The risk that Canada would open the door to

proceedings against U.S. companies, premised on the U.S.

companies’ failure to comply with Canadian environmental

standards in their domestic U.S. activities, will severely

undermine business confidence.

The resulting instability in the governing regulatory

framework likely will disrupt existing projects in the border

regions and deter companies from undertaking new ones. The

need to become familiar with foreign laws and regulations,

and to conform domestic company activities to these

requirements, would impose a significant informational and

operational cost on all businesses in the border regions.

Likewise, the prospect of inconsistent lawsuits and liability

verdicts would inflict considerable damage on the economic

cooperation between the United States and Canada and

decrease the prospects for bilateral investment.

Furthermore, the Ninth Circuit’s extraterritorial application

of CERCLA is potentially unbounded. If CERCLA liability

can attach any time pollution eventually ends up in the United

States regardless of its source, it could be easily extended to

cover air and water pollution emanating from non-border

countries. Cf. Rebecca Renner, Science News: Asia Pumps

Out More Mercury than Previously Thought, Envtl. Sci. &

Tech. Online (American Chemical Society), Jan. 5, 2005,

available at http://pubs.acs.org/subscribe/journals/esthag-

w/2005/jan/science/rr_asia.html (discussing scientific

investigation of long-range transport of atmospheric

15

pollutants from Asia); Nordic Council of Ministers, Lead

Review 11 (2003) (reporting to the United Nations

Environment Programme on the long-range air transport of

lead emissions); Nordic Council of Ministers, Cadmium

Review 9 (2003) (reporting on the long-range air transport of

cadmium). Given the sweeping nature of cross-border

contamination, a limitless range of foreign companies

operating solely on foreign soil could be captured by the

Ninth Circuit’s expansive interpretation of our domestic laws.

Correspondingly, the Ninth Circuit’s rationale would permit

any foreign nation that can trace at least some of its

environmental pollution to economic activity occurring in the

United States to subject the alleged polluter to protracted

litigation and potential liability in that country. The risk of

retaliation against U.S. companies thus extends well beyond

the United States’ closest neighbors.

CONCLUSION

For the foregoing reasons, the petition for a writ of

certiorari should be granted.

Respectfully submitted,

Of Counsel: CARTER G. PHILLIPS*

ROBIN S. CONRAD MARINN F. CARLSON

AMAR D. SARWAL SIDLEY AUSTIN LLP

NATIONAL CHAMBER 1501 K Street, N.W.

LITIGATION CENTER, INC. Washington, D.C. 20005

1615 H Street, N.W. (202) 736-8000

Washington, D.C. 20062

(202) 463-5337

Counsel for Amicus Curiae

May 2, 2007 * Counsel of Record