Thank you for this opportunity to join you. I suspect that you asked me here primarily for two reasons: first, I am the Chairman of the Senate Committee on Environment and Public Works, which does have jurisdiction over legislation dealing with victim compensation for environmental pollution. Second, I have been an advocate of victim compensation for five years. For the first time there seems to be a chance that legislation in this field will be enacted.

I would like to discuss the prospects of the Congress enacting a victim compensation law this session. Those of you who follow the issue of victim compensation are well aware that it is not a new issue. It first attracted widespread attention when the Japanese government established a compensation system for mercury-poison victims. Few people know that the research establishing the link between organic mercury and brittle bone disease was funded not by the Japanese government but by the U.S. Public Health Service. Our task now is to achieve a comparable compensation system in the United States.

Milwaukee v. Illinois and Its Progency

First, however, I would like to discuss two Supreme Court decisions: Milwaukee v. Illinois¹ and Middlesex County Sewerage Authority v. National Sea Clammers Association.² Some of you may consider these decisions irrelevant to the issue of victim compensation; it is my view, however, that the decisions are directly and intimately connected with it.

There are actually two Milwaukee decisions, each with the same set of facts. The State of Illinois sued the City of Milwaukee because of the city's pollution of Lake Michigan. Illinois alleged that this pollution was a violation of the federal common law of nuisance.

To the surprise of some, the Supreme Court agreed, in its first decision in 1972.³ On remand, the case went through a trial and subsequent appeals, only to return to the doors of the Supreme Court nearly a decade later.⁴ In the intervening years, Congress had adopted the 1972 amendments to the Clean Water Act. In the second review of Milwaukee, the Supreme Court noted this congressional action and held that, although federal common law exists, where there was a comprehensive scheme of federal regulation the statutory law supplanted the common law.

Milwaukee II was quickly followed by what is almost a companion decision, Middlesex County Sewerage Authority v. National Sea Clammers Association. In the Sea Clammers case, it was held that the federal ocean dumping law was also a comprehensive scheme of federal regulation and thus also supplanted the federal common law.

Frankly, on the facts in the Milwaukee case, the outcome may have been proper. Illinois was suing Milwaukee for equitable relief for polluting Lake Michigan, even though the city was in compliance with a permit issued under the Clean Water Act. The State of Illinois had not participated in the permit issuance, although it could have done so. Despite this, the U.S. District Court held that Milwaukee was violating the federal common law of nuisance and required the city to install additional pollution control equipment at the cost of several hundred million dollars.

I can understand, in those circumstances, how an appellate court might conclude that the trial court made the wrong decision. But, the Supreme Court, I suggest, went well beyond such a limited holding. Although seemingly similar, the holding in Sea Clammers is even more extensive because of two important distinctions between the two cases. First, Sea Clammers was a suit for damages, not for equitable relief. Second, the defendant in Sea Clammers was violating its discharge permit, whereas the City of Milwaukee was in compliance with its permit. Despite these very important factual differences, the Court had held that both the Clean Water Act and the Marine Protection, Research and Sanctuaries Act supplanted the federal common law.

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The Milwaukee and Sea Clammers decisions have since been extended by trial courts to several other areas of substantive law, including the Clean Air Act and the Resource Conservation and Recovery Act. Attempts have been made to extend these decisions to the regulation of federal credit unions and to employee benefit programs. These attempts thus far have been rejected. It is clear, however, that the decisions' influence is spreading.

I have been surprised to learn that a substantial number of business groups support the Milwaukee decision and its progeny. Clearly, if these interest groups were to think the decisions through to their logical and inevitable consequences, they might be considerably less happy with them, to say the least. There are certain specific aspects and consequences of the Milwaukee and Sea Clammers decisions that trouble me.

Comprehensiveness of Pollution Control Laws

The supposition that the Clean Water Act is, in fact, a comprehensive scheme of regulation is troubling. It is not, as I believe most people in this room will agree. We do not adequately or completely regulate non-point source pollution, toxic pollutants, or ocean discharges.

Current regulatory laws reflect political compromises that have been accepted because of the commonly held belief that injured parties would have a judicial remedy available to them. Such concessions may now be politically unacceptable, and the pressure for truly comprehensive and rigorous regulatory regimes increases very sharply.

This is particularly the case, I suggest, with toxic pollutants because of the severe potential for harm which they pose. The pressure to create a federal cause of action also increases in part because the plaintiffs thrown out of court by the Milwaukee decisions constitute an identifiable group of people left without any remedy.

Thus, those who favor strict environmental controls but have been willing to accept some risk because of the common law safety net may be left with no choice. They must press for either a federal cause of action or regulatory schemes that, in fact, approach the zero risk strategy that industry is constantly condemning; or they may seek both.

As a legislator I am uncomfortable with the suggestion that our regulatory laws cover overy possibility. They simply do not and they simply cannot unless we are to place an absolutely tremendous burden on this country's industries. The types of pollution and polluters left uncovered or underregulated are simply too numerous to mention. This is quite aside from the fact that, under Sea Clammers, a permit holder can be violating each and every provision of its permit and still not be held liable for damages. Yet, I am sensitive to the situation that a company may have invested significant money in pollution control equipment and may still be exposed to liability for pollution damage.

Effect on Federal Common Law

Second, if the rationale of the Milwaukee and the Sea Clammers decisions is correct, then federal common law must be preempted in other areas where there are regulatory schemes. These include not only obvious fields, such as hazardous wastes and air pollution, but also water resources, automobile safety, securities fraud, and worker protection. During the period that the reach of these decisions is explored there will be extensive litigation and uncertainty.

State Common Law

Third, I am concerned with the confusion and conflict to which these decisions lead. The attorney who represented the city of Milwaukee, Richard Cutler, testified before the Committee on Environment and Public Works on this subject. I think he is well situated to explain at least one lawyer's view of the decision and one that I believe is enlightening. Mr. Cutler was asked whether he believed that the state common law would apply in cases of interstate water pollution. He replied, "The only law is federal law and that law is now the statute alone." No sooner had Mr. Cutler expressed his view when another panelist, George Freeman, remarked, "I think there is doubt." I would observe that whether Mr. Cutler or Mr. Freeman is right, it is, in and of itself, damaging.

Certainly, whether or not each of the fifty states' courts accepts or rejects the Milwaukee rationale, it seems to me that each of them will be required to decide the issue. If state common law for interstate pollution survives Milwaukee II, the question still remains whose state common law is to be followed — the polluter's or the victim's.

Such a situation encourages industries to locate in states with friendly pollution laws or subjects upstream polluters to suits in distant and predictably unfriendly courtrooms. In every situation at least one of the litigants will feel it may be treated unfairly. It was this multiplicity of laws that led to the passage of the federal laws in the first place, largely, in those days, I might note, at the request of industry.

We have now, I suggest, come full circle. A Senator who knows that his state has no right to sue under the federal common law will seek to create a federal right of action and/or increase the federal regulations. That, I suggest, is exactly what we are now seeing in the field of victim compensation.

A Current Victim Compensation Legislative Proposal

The decade of the 1970s was characterized by intermittent congressional and public attention to victim compensation. We enacted the Black Lung program for coal miners and considered a proposal to compensate Michigan dairly farmers for the losses caused by PBB contamination. But most activity centered around one specific substance: oil.

Proposals to compensate the victims of oil spills were introduced in the 93rd, 94th and 95th Congresses. It was in the 95th Congress that Senator Muskie and I drafted a bill that would have expanded the oil spill compensation proposals to include spills of hazardous substances. That bill died when the House Public Works Committee declined to cover chemical spills.

In the 96th Congress, Senator Muskie and I renewed our efforts, joined by Senators Chafee, Randolph and Culver, and introduced the bill that bore the number S. 1480. As some of you may recall, it became what is now popularly known as the Superfund law. Unfortunately, the price of getting the Superfund law through Congress was elimination of the victim compensation provisions. In return, however, a section was added to CERCLA requiring a study, the 301(e) Study. The report of that study group concluded, I am pleased to say, that we — Muskie, Culver, Chafee, Randolph and I — were correct five years ago. Encouraged by this new support, I have introduced a new victim compensation bill, Senator George Mitchell of Maine has introduced two, and Senator Randolph of West Virginia has co-sponsored all three proposals.

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The millions of potential injuries from toxic substances are the driving force behind victim compensation, just as other injuries are the driving force behind the restoration of the federal common law. For the latter cases, it may be sufficient merely to restore the common law or to strengthen the regulations. But for the former, the victims of toxic pollution, the current system presents fundamental inadequacies and therefore we must make some fundamental changes.

Some critics of victim compensation assert that it is an attempt to create a zero risk society. My reply is that the risk will remain, but its costs will be shifted to those who create it, rather than remaining with the men, women, and children whose only connection to a waste is that they have been exposed to and harmed by it. The risk created by hazardous wastes and chemicals properly falls on those who create them. My proposal is an attempt to ensure that the risk is properly placed and that the victims are adequately compensated.

The four most significant features of the bill are (1) creation of a federal cause of action: the bill creates a right of action under federal law for persons injured by hazardous substances and wastes; (2) a no-fault compensation system: the bill expands the type of claim allowed under Superfund so that the Fund can be used to compensate victims for their economic losses; (3) a liberalized statute of limitations: in some states the statute of limitations begins to run on the date a person is exposed to a toxic substance, not on the date the injury occurs or becomes apparent. The bill proposes to establish a six-year statute of limitations that begins to run at the time the injury is discovered rather than at the time of exposure; (4) expansion and extension of the Fund: the bill proposes to establish the termination date for the tax that supports the Fund as 1990 rather than 1985, and to double the size of the Superfund over the next four years to $3.2 billion, from taxes on the same feedstocks.

Some of the lesser provisions include proposed changes relating to the admission of evidence of animal tests, epidemiological studies, and other information relating to the toxicity of chemicals, and a shift in the burden of going forward in courtroom trials but not in the burden of persuasion.

Another significant change may be proposed later, that is, to create an independent agency to administer Superfund. Good arguments exist on both sides of this proposal. Such an agency may minimize the possibility that program administration would be tainted by politics, and may provide better assurances that some of the Superfund provisions, such as those requiring the Department of Health and Human Services to establish a toxics agency, would be implemented. On the other hand, there is much to be said for having the administration of Superfund integrated with that of the other pollution statutes at the Environmental Protection Agency. At this point, I have mixed feelings about the proposal, but it is certain that this alternative should be carefully examined because many of the current provisions have been poorly implemented, if at all, up to the present time.

With the coming two years, expectations are uncertain. It may well be that our Senate Committee will be too preoccupied with other matters (air, water, and RCRA, for example) in the environmental field to take up the subject of victim compensation. However, the demand for a victim compensation program, in my perception, is steadily increasing. It seems inevitable, therefore, that the Congress will ultimately adopt some remedy.

In the meantime, those who insist upon preserving a system where injured or innocent persons are denied their day in court, I suggest, jeopardize their own interests. Those who are too long denied justice ultimately seek not fairness, but revenge. Therefore, for their sakes and ours, I hope the Congress can and will act soon.

1. 451 U.S. 304, 11 ELR 20406 (1981).

2. 453 U.S. 1, 11 ELR 20684 (1981).

3. 406 U.S. 91, 2 ELR 20201 (1972).

4. On remand, 3 ELR 20331 (N.D.Ill. 1972); denying motion to dismiss, 366 F. Supp. 298, 4 ELR 20045 (N.D. Ill. 1973), aff'd, 599 F.2d 151, 9 ELR 20347 (7th Cir. 1979), rev'd, 451 U.S. 304, 11 ELR 20406 (1981).

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