ELR Citation: ELR 20348
No(s). s. 3-85-473, 4-80-469 (D. Minn. Apr 5, 1985)

The court upholds the constitutionality of punitive damages provisions of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and the Minnesota Environmental Response and Liability Act (MERLA). After several years of litigation in which plaintiffs have sought to have the court require defendant to clean up its former creosote plant site, plaintiffs issued administrative orders directing defendant to install filters on a local drinking water system and perform other remedial actions. Failure to comply with the orders exposes defendant to heavy punitive damages or fines under both statutes and there is no provision for preenforcement review of the orders.

The court holds that the punitive damages provision in CERCLA §107(c)(3) does not violate due process. It first notes that the language of the section does not make punitive damages mandatory and allows them only when refusal to comply with the order was without "sufficient cause." The court rejects the ruling of another court that "sufficient cause" is too narrow to make a good faith defense to the remedial action a bar to imposition of punitive damages. That court unnecessarily chose an interpretation of a statute presenting constitutional problems. The legislative history supports treating a good faith challenge to the cost-effectiveness of the ordered remedy as sufficient cause. Since this interpretation ensures that recipients of CERCLA abatement orders will have an opportunity to challenge the validity of those orders without risking enormous sanctions, the provision is constitutional.

Turning to MERLA, the court also upholds the constitutionality of its penalties for noncompliance with an administrative "request for response action." The statute is best read to leave to the courts the question of when penalties are appropriate.The court adopts the reasoning of another court, which interpreted similar language in a Minnesota water pollution control statute to bar imposition of penalties where the recipient of the request posed a good faith challenge to its validity. Finally, the court allows the state to amend its complaint to set forth a cause of action under MERLA.

Counsel for Plaintiff
David Hird, Donald Hornstein
Land and Natural Resources Division
Department of Justice, Washington DC 20530
(202) 633-2771

Francis X. Heremann, Ass't U.S. Attorney
234 U.S. Courthouse, 111 S. 4th St., Minneapolis MN 55401
(612) 332-8961

Counsel for Defendant
Edward J. Schwartzbauer, Michael J. Wahoske, James R. Dorsey, Rebecca A. Comstock
Dorsey & Whitney
2200 First Bank Place East, Minneapolis MN 55402
(612) 340-2600