ELR Citation: ELR 20438
No(s). 00-2170 et al (4th Cir. Dec 19, 2001)

The court affirms a district court decision denying a company's request for a preliminary injunction to prevent a state environmental agency from closing the company's commercial hazardous waste landfill. After it was issued a final permit to operate the facility, the company and the state environmental agency entered a nonbinding stipulated agreement to resolve their differences over permit terms, which included separate capacity limits for hazardous and nonhazardous waste. The state agency review board accepted most of the agreement's modifications and the issuance of the permit but rejected the separate allowance for nonhazardous waste, thereby limiting the facility's total capacity. A state court upheld the board's decision but concluded that the rejection of the separate cap for nonhazardous waste would operate retrospectively. As a result, the facility became immediately full under the permit, and the state agency ordered the facility to cease operations.

The court first holds that the injunction was properly denied. The state environmental agency's closure order does not violate the company's procedural or substantive due process rights because the company failed to prove that it has an entitlement to immediate additional capacity. Similarly, the closure order did not violate the Equal Protection Clause or the dormant U.S. Commerce Clause, and it is not preempted by the Resource Conservation and Recovery Act. Additionally, the public interest weighs in favor of denying an injunction against the state agency. The court, however, holds that the district court erred in determining that an automatic stay entered under 11 U.S.C. §362 due to the company's Chapter 11 bankrupty status bars the state agency's efforts to enforce financial assurance requirements. Financial assurance requirements are part of the state's regulatory and police powers and, thus, are exempt from the automatic stay.

The full text of this decision is available from ELR (37 pp., ELR Order No. L-430).

Counsel for Plaintiff
Stuart H. Newberger
Crowell & Moring
1001 Pennsylvania Ave., NW, Washington DC 20004
(202) 624-2500

Counsel for Defendants
Benjamin A. Hagood Jr.
Craver, Hagood & Kerr
171 Church St., Ste. 120, Charleston, SC 29401
(843) 577-7557