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U.S. Supreme Court Refuses to Hear Attack on CERCLA's Constitutionality

On June 6, 2011, the Supreme Court of the United States ended a decade of litigation when it denied a writ of certiorari (i.e., refused to review) a 2010 decision of the D.C. Circuit Court of Appeal which affirmed the trial court's decision deny General Electric's ("GE") attack on the constitutionality of the U.S. Environmental Protection Agency's ("EPA") authority to issue Unilateral Administrative Orders ("UAOs") under section 106 of the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA").

Originally brought in 2000, GE's claims equated to a "systemic" challenge to the constitutionality of CERCLA since it did not challenge any particular cleanup or order but, instead, challenged the CERCLA statute and program as a whole. Specifically, GE challenged the constitutionality of CERCLA's statutory scheme that authorizes the EPA to issue UAOs directing companies and others - known as potentially responsible parties or "PRPs" - to clean up hazardous substances for which they are responsible. GE argued that the statute (i.e., a "facial" challenge), as well as the way in which EPA administers it (i.e., a challenge to EPA's "pattern and practice" in the implementation of it), violate the Due Process Clause of the U.S. Constitution because EPA issues UAOs without a prior hearing before a neutral decisionmaker.

This case has an extensive procedural history. In the most recent phase, after depositions of a number of EPA officials on the "pattern and practice" claim (the facial constitutionality claim having been dismissed), and extensive document discovery over two years, the parties cross-moved for summary judgment. The district court granted summary judgment to EPA (for a second time). See General Elec. Co. v. Jackson, 595 F. Supp. 2d 8 (D.D.C. 2009). It found that while the UAO process may result in pre-hearing deprivations of protected property rights (depending on whether the PRP complies with the UAO or not), "GE has not shown that EPA's pattern and practice of administering section 106 of CERCLA violated due process." Id., 595 F. Supp. 2d at 39.

It is this decision that generated the latest appeal to the D.C. Circuit, in which the court upheld the district court's determination that the UAO process under CERCLA passes constitutional muster, both facially and as applied through EPA's "pattern and practice." See General Electric Co. v. Jackson, 610 F.3d 110 (D.C. Cir. 2010). Specifically, the court held:

To the extent the UAO regime implicates constitutionally protected property interests by imposing compliance costs and threatening fines and punitive damages, it satisfies due process because UAO recipients may obtain a pre-deprivation hearing by refusing to comply and forcing EPA to sue in federal court. [GE] insists that the UAO scheme and EPA's implementation of it nonetheless violate due process because the mere issuance of a UAO can inflict immediate, serious, and irreparable damage by depressing the recipient's stock price, harming its brand value, and increasing its cost of financing. But such "consequential" injuries-injuries resulting not from EPA's issuance of the UAO, but from market reactions to it-are insufficient to merit Due Process Clause protection.

Id., 610 F.3d at 113-14. GE sought to have this decision denying summary judgment in GE's favor reviewed by the U.S. Supreme Court; but the Supreme Court denied to hear the case.

By refusing to hear the case, the Supreme Court let stand EPA's power to issue UAOs directing PRPs to clean up hazardous waste sites that pose an imminent and substantial threat to public health.

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