Eastern Enterprises v. Apfel and the Retroactive Application of CERCLA

Lawrence A. Salibra II

Editors' Summary: In this Dialogue, counsel for Alcan Aluminum Corporation argues that the U.S. Supreme Court's decision in Eastern Enterprises v. Apfel has dramatic implications for CERCLA, particularly with regard to the imposition of liability for actions that occurred well before the statute was enacted. The Dialogue asserts that the retroactive impact of CERCLA upon "third-party generators"—those that arranged for the disposal of their wastes at regulated facilities—is inconsistent with both the plurality and dissenting opinions in Eastern Enterprises. It begins with an analysis of the distinction between "single-party" and "third-party" CERCLA sites. The Dialogue then examines the facts in a currently pending matter involving Alcan, and describes the rationales mentioned in earlier decisions that sustained CERCLA's retroactive application. After discussing the opinions in Eastern Enterprises, the author further contends that single-party generators satisfy the Court's criteria and should be insulated from retroactive CERCLA liability. Finally, the Dialogue surveys recent post-Eastern Enterprises decisions regarding CERCLA and describes why their holdings are incorrect.

The author is Senior Counsel, Alcan Aluminum Corporation. He has been trial counsel in both state and federal courts throughout the United States. He has substantial appellate experience and has appeared before state intermediate and supreme courts, most of the federal circuit courts of appeal, and the U.S. Supreme Court. Mr. Salibra expresses his appreciation to his colleagues, Elisa Pizzino, Esq. and Sandra Hutchinson, for their assistance in the preparation of this Dialogue.

[29 ELR 10695]

The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)¹ has staunch supporters and equally tenacious detractors. Its supporters assert that CERCLA is justified because it imposes the costs of remediation on those responsible for the creation of hazardous waste sites.² The statute's detractors complain that CERCLA imposes liability without fault and that liability is joint and several.³ However, perhaps the most offensive part of the liability scheme is its retroactive application⁴ years after the act of disposal took place. Courts have construed CERCLA to impose liability for conduct that was not only legal at the time,⁵ but often took place at the direction of the very government plaintiff-agencies seeking recovery of remediation costs.⁶ These agencies are typically [29 ELR 10696] immune from counterclaims pursuant to the doctrine of sovereign immunity.⁷

Early in CERCLA's history, defendants attacked the retroactive aspect of the liability scheme.⁸ While the U.S. Supreme Court has, somewhat surprisingly, failed to address the issue, a number of lower courts have consistently concluded that CERCLA is both properly construed to apply retroactively and constitutional (particularly with regard to the Takings⁹ and Due Process¹⁰ Clauses) when applied retroactively.¹¹ However, the recent decision in Eastern Enterprises v. Apfel¹² has fatally undercut the reasoning lower courts used to sustain the Act's retroactive application. In fact, when the Court ultimately reviews the liability scheme, it may well find that its failure to previously address this key legal issue surrounding the statute has resulted in one of the largest unconstitutional transfers of wealth in history.¹³

In United States v. Alcan Aluminum Corp.,¹⁴ a federal district court recently held that CERCLA's retroactive application is not unconstitutional. Based on the decision in Eastern Enterprises, Alcan moved to dismiss a federal complaint filed against it to recover response costs at a hazardous waste site. The court, in denying the motion, reasoned that although the plurality's takings analysis in Eastern Enterprises is not binding in CERCLA claims, application of the analysis led to the finding that CERCLA does not run afoul of the U.S. Constitution. The company's potential CERCLA liability of $ 5 million was judged to be far less than the estimated potential liability in Eastern Enterprises, and the court believed that the liability at issue was predicated upon past actions by Alcan that are linked to environmental harm. In addition, the court opined that Eastern Enterprises does not change the due process analysis. The court's assertions and conclusions were, in Alcan's opinion, erroneous, and the company is appealing the decision.¹⁵ [29 ELR 10697] This Dialogue describes the reasons why Eastern Enterprises, contrary to the district court's cursory conclusion, significantly changes the standard for judicial review of retroactive application under CERCLA.

Applying Eastern Enterprises to CERCLA

Distinguishing Between Single-Party and Third-Party Sites

In evaluating the application of a legal doctrine to a CERCLA recovery action, it is important to distinguish between single-party sites and third-party sites. A single-party site is a site at which remediation is directed toward one party who discharged waste on the site. Often the discharge was upon property owned by the generator, and although the discharge was often legal at the time, these situations seldom involved efforts to treat the waste. Since owners of these properties would have been subject to common-law nuisance claims, CERCLA is not a particularly novel introduction of liability. In addition, the notion of joint and several liability has no practical significance in these cases since the generator is simply being held liable for its own waste.

Third-party sites are significantly different. In these situations, the generator has often arranged for the disposition of its waste through an acknowledged waste management facility. The facility is often permitted by the appropriate state or federal environmental licensing agency and represents that it can safely and adequately dispose of the waste with which it is charged. In many cases the state or federal agency is the plaintiff in the action and in addition to permitting the operation of the site the agency actually recommended its use.

Likewise, it is in the context of third-party sites that the issue of joint and several liability arises, in that waste disposal operations routinely accept waste streams from numerous generators. The waste becomes commingled at the site, thus setting the stage for claims of joint and several liability.¹⁶ It is in thiscontext that CERCLA exposure can be most oppressive, because a generator can find itself subject to liability for response costs totally unrelated to the waste it actually discharged.

Finally, third-party sites generally involve consideration paid by the generator for the purpose of accomplishing the act of disposal. This adds a particularly significant feature to the constitutional analysis; prior decisions sustaining the legality of the retroactive application of CERCLA have largely been premised on the assumption that retroactive liability is nothing more than the imposition of a cost that had been avoided.¹⁷ If, however, it can be demonstrated that the generator had paid fair value in the past for proper waste disposal, the rationale is obviously not applicable. The presence of consideration also undercuts the oft-articulated justification that CERCLA makes the "polluter pay," since the site operator and, perhaps, the plaintiff government agency that licensed the operation actually caused the pollution.

The Facts of the Alcan Case

Alcan is currently seeking application of the Eastern Enterprises doctrine in a third-party context with highly favorable facts—facts that are common to many defendants in third-party site CERCLA proceedings. Alcan disposed of a rolling oil emulsion that was 95 percent water and 5 percent mineral oil. The allegation of liability was triggered by the presence of below background metal compounds at the Pollution Abatement Services (PAS) CERCLA site that were substantially less concentrated than those occurring naturally in soil and foods. Although the plaintiffs are attempting to recharacterize the emulsion to claim that it contained trichloro-ethylene (TCE) and polychlorinated biphenyls (PCBs), neither their tests nor studies conducted by Alcan support that conclusion. Moreover, the chemicals driving remediation were far more extensive than PCBs and TCE.¹⁸ Therefore, it is clear that the application of joint and several liability would impose upon Alcan liability for materials unrelated to its waste.

PAS was licensed by the New York State Department of Environmental Conservation (DEC), and the agency recommended that Alcan use the site to dispose of its emulsion. The state of New York, along with the federal government, are the plaintiffs. Both plaintiffs also have "generator" status. PAS operated an incinerator at the site that, if operated properly, would have destroyed the emulsion and many other wastes entrusted to the facility. The final relevant fact for a retroactivity analysis is that the oil emulsion could cause only minor environmental concerns if it were intentionally mishandled. It was not regulated as a hazardous waste and could be easily treated to avert any adverse environmental consequence. In fact, Alcan treated the emulsion, both before and after disposal at PAS, through alternative methods at considerably less expense on a comparable adjusted dollar basis without any negative impact.

[29 ELR 10698]

CERCLA's Retroactive Application: Prior Rulings

Appellate courts that have reviewed CERCLA retroactivity challenges based on the Takings and Due Process Clauses have relied on two rationales in concluding that application of the legislation does not constitute a constitutional violation.¹⁹ The first theory is that in order for an impermissible taking to occur there must initially be an assumption of or imposition on a property interest in real property.²⁰ As the Eighth Circuit noted:

First, because appellants do not have a property interest in the Denney farm site, we question appellants' standing to raise a taking issue. Second, we hesitate to characterize the government's cleanup as a taking at all; the government's cleanup of the Denney farm site has not deprived the property owner of any property interest.²¹

The second argument relied upon by the appellate courts is the "rational legislative purpose" test first articulated in Usery v. Turner Elkhorn Mining Co.²² The courts assert that Congress' actions were rational because they simply imposed "the cost of cleaning up such sites upon those parties who created and profited from the sites and upon the chemical industry as a whole."²³ In addition, because the courts conclude that the cost of remediation is exclusively imposed on those who caused the problem and those who profited from improper disposal practices, they reason that CERCLA is not designed to punish parties that simply "inherit" historical problems. This logic is then used to reach the determination that the retroactive application of CERCLA does not offend due process.²⁴

In Alcan's case, the facts do not support the rationale that the cost of remediation is being assessed on a party that caused the problem or profited from the creation of the site. Simply stated, there is no evidence that Congress' alleged intent, as described by the cases predating Eastern Enterprises, would be advanced by a finding of liability.²⁵ PAS was a site licensed by the DEC, a plaintiff, operating in part under authority granted to it by the federal government, the other plaintiff. Put bluntly, both plaintiffs were responsible for the operation of the site. Second, Alcan's use of PAS was directly attributable to a recommendation made by the DEC. Finally, there is absolutely no evidence to dispute the fact that Alcan paid the fair market rate for the disposal, and that had the waste been incinerated it would have been a suitable method of disposing of the emulsion. There is not an iota of evidence that Alcan profited from any failure to incinerate its emulsion, if, in fact, such incineration did not take place.

In Eastern Enterprises the Court made clear that its earlier holding in Turner Elkhorn would not sustain the constitutionality of a statute simply because it possesses a rational policy objective.²⁶ Courts are, instead, obligated to undertake a specific analysis of the application of the legislation to the facts of the case before it. If the economic impact of the statute is severe, the imposition of a new obligation or liability unanticipated, and the economic burden disproportional to the harm caused or benefit received, the statute is unconstitutional as applied to those facts.²⁷

Not one court that has sustained CERCLA's constitutionality in response to a challenge on takings or due process grounds has conducted an Eastern Enterprises analysis.²⁸ Instead, the decisions have relied exclusively on the well-worn propositions that CERCLA is an economic cost spreading statute and all that must be shown is that the statute is itself justified "by a legitimate legislative purpose furthered by rational means."²⁹ Once this easily surmountable hurdle is cleared the wisdom of the legislation was simply deemed to be within the "exclusive province of the legislative and executive branches."³⁰ The First Circuit used precisely the same reasoning in its subsequently reversed ruling in the Eastern Enterprises litigation.³¹ It sustained the constitutionality of the Coal Industry Retiree Health Benefit Act of 1992 (Coal Act)³² by declaring that the legislation "is supported by a legitimate legislative purpose furthered by rational means,"³³ and that "judgments about the wisdom of such legislation remain within the exclusive province of the legislative and executive branches."³⁴

The Supreme Court reversed the First Circuit and rejected its overly simplistic reading of Turner Elkhorn and other earlier decisions. Instead, it pointed out that those rulings left open the possibility that legislation might be unconstitutional if it "imposes severe retroactive liability on a limited class of parties that could not have anticipated the liability, and the extent of the liability is substantially disproportionate [29 ELR 10699] to the parties experience."³⁵ Eastern Enterprises, accordingly, established a threefold test in determining the constitutionality of the retroactive application of a statute: "[1] if it imposes severe retroactive liability on a limited class of parties [2] that could not have anticipated the liability, and [3] the extent of that liability is substantially disproportionate to the parties' experience."³⁶

Eastern Enterprises and the Takings Clause

Eastern Enterprises is a coal mining company that ceased mining operations in 1965,³⁷ some years before the Coal Act, which imposed liability for retired employees' health benefits, was enacted.³⁸ While in the mining business the company entered into certain contracts to fund a trust that would provide limited health care benefits to its employees.³⁹ In accordance with its contractual agreements, the company discontinued payments to the trust after it ceased coal mining operations.⁴⁰ In 1974, the miners' union and the coal operators' bargaining association trust managers, in an effort to limit the number of wildcat strikes, specifically provided for the receipt of benefits by retirees.⁴¹ This action resulted in a dramatic increase in the number of eligible recipients,⁴² and there was a shortfall of funding.⁴³

As a result of the political consequences⁴⁴ resulting from the discovery by retirees (who believed they were entitled to post-retirement health benefits)⁴⁵ that the benefit plans were underfunded, Congress entered the debate.⁴⁶ Legislation was swiftly passed to provide additional funding.⁴⁷ As the Court noted, the Coal Act was designed to impose expanded financial obligations upon those firms that "were most responsible for [benefit plan] liabilities."⁴⁸

CERCLA likewise purports to identify the parties responsible for creating the problems at a site requiring a remedy.⁴⁹ Just as Congress intended, in passing the Coal Act, to assign responsibility for health care benefits to those who "benefited from [the] services" of the employees seeking coverage,⁵⁰ the unmistakable goal of the CERCLA legislation is to assess costs on those who profited from the act of disposal. Yet the justification for retroactive application of CERCLA is far more tenuous.

In evaluating the issue of whether the Coal Act was constitutional, the Court had to address the issue of whether a taking can occur when a public program "merely" adjusts economic burdens to achieve a public good.⁵¹ In the CERCLA context, the appellate courts have rejected application of the Takings Clause by claiming that the constitutional provision is inapplicable unless there is an appropriation of private (real) property for a public use.⁵² The Eastern Enterprises Court rejected this narrow reading of the Constitution, and held that governmental action in permanently denying a person financial assets is sufficient to trigger the takings restriction.⁵³ As the Court noted:

Although taking problems are more commonly presented when the interference with property can be characterized as a physical invasion by the government, then when interference arises from some public program adjusting the benefits and burdens of economic life to promote the common good, … economic regulation such as the Coal Act may nonetheless effect a taking. Thus, the notion that CERCLA does not interfere with interests in real estate but merely involves economic redistributions consistent with the Takings Clause was emphatically rejected in Eastern Enterprises.⁵⁴

The Court noted that the mining company's current financial obligation was $ 5 million, almost the same as Alcan's exposure.⁵⁵ In addition, under CERCLA, liability is undoubtedly "severe" because the statutory scheme makes a single person liable for remediation of the entire site regardless of whether or not his waste was technically related to the problems being corrected. Moreover, since liability for site cleanup appears to be without limit, there is simply no assurance that the amount currently at stake represents the limit of Alcan's potential financial exposure. The scope and nature of Alcan's statutory liability is, therefore, unequivocally the type of severe retroactive imposition criticized by the Court.

Anticipation of CERCLA Liability

Alcan and similarly situated parties could not reasonably have anticipated liability for the disposal of their waste at sites such as PAS, for a number of scientific, legal, and practical reasons. These justifications are far more compelling than those found sufficient by the Court to invalidate the Coal Act. In Eastern Enterprises the issue was not the imposition of a wholly new type of liability, but rather the extension of an existing form of liability to which the company had actually consented. While Eastern Enterprises was in the coal mining business it specifically agreed to be responsible for providing health benefits to its employees. The fundamental question in the litigation was merely the extent of coverage it had agreed to provide. The Coal Act, the Court concluded, afforded retirees coverage that the company did not agree to fund.

[29 ELR 10700]

Should, then, a party such as Alcan be held responsible for the mismanagement of independently owned and operated sites by third parties and the shoddy licensing practices and bad advice given by one of the plaintiffs? Liability under such circumstances arguably has no parallel. Alcan can hardly be deemed culpable in the classic common-law sense for its disposal practices. There is no evidence that it knew of, or in fact received, reduced fee disposal fees because of the improper practices at the PAS site.⁵⁶ Alcan depended upon the permitting agency to assure environmentally responsible conduct by its permittee. Indeed, in addition to its logical reliance upon the permitted status of the facility, Alcan received and acted upon an explicit recommendation of the plaintiff state agency regarding use of the facility.⁵⁷

Some courts have attempted to justify CERCLA's strict liability regime as merely a statutory codification of strict liability for ultrahazardous activity, citing Rylands v. Fletcher.⁵⁸ However, this logic cannot be extended to solve the constitutional deficiency in this case for a number of reasons. First, the disposal of a water mineral oil emulsion that has been approved for spray irrigation and is utilized as fertilizer around flower beds is hardly an "ultrahazardous" activity. Second, coal mining is without question more hazardous than the disposal of Alcan's waste,⁵⁹ yet the health care consequences of mining upon workers was not a component of the constitutional analysis performed in Eastern Enterprises. Third, strict liability under Rylands still requires a showing of legal causation,⁶⁰ which CERCLA does not mandate.⁶¹ Finally, even if causation were shown, as Rylands requires, the chain of causation may be broken by the intentional act of a third party.⁶² In other words, there is no inherent hazard in the disposal of the rolling emulsion, in contrast to the building of a dam. To extend the ultra hazardous doctrine to such mundane disposal activities would logically require courts to conclude that a person that disposes of newspapers should expect to be held strictly liable for the fire damage caused if the materials ignite while in the possession and control of his waste hauler. Such a result would, of course, be absurd.

In addition, Alcan and similar parties had no concomitant expectation of gain, arguably unlike Eastern Enterprises. The coal company stood to realize the benefits of a reliable workforce while it was in business if, in fact, its employees had a realistic expectation of receiving health benefits upon retirement.⁶³ What, on the other hand, did Alcan hope to obtain if PAS properly processed the waste it handled? It certainly was not going to share in PAS' profits.

Moreover, third-party site liability under CERCLA is even more onerous than the economic costs resulting from the Coal Act, since the joint and several liability scheme can make one responsible for problems wholly unrelated to one's waste stream. There is otherwise no practical common-law expectation that a generator would be liable for the waste streams generated by other, unknown parties.⁶⁴ In addition, since it is now assumed that virtually anything in the universe can trigger CERCLA liability, since essentially everything is a hazardous substance, liability can be triggered for even the most innocuous substance. Therefore, there is no scientifically plausible basis upon which one could reasonably anticipate liability.

Clearly, noone could have ever anticipated the monumental liability exposure that currently exists at third-party sites, particularly when the responsibility for the problems rests with unrelated, government-licensed parties. Thus, CERCLA does not satisfy the second prong of the Eastern Enterprises test.

Liability Is Disproportionate to Experience

The Coal Act was deliberately intended to provide benefits to miners that had previously worked for Eastern Enterprises. As the Court pointed out, a subsidiary of the company continued to operate after 1974. The Court acknowledged that imposition of the statutorily extended liability on the subsidiary might well have been appropriate because it would have been a signatory to the post-1974 trust agreements. However, the Act's provisions imposed liability beyond the subsidiary to the parent company itself, although it was no longer in the mining business. The Court thus concluded that the Coal Act's liability provisions were not "proportional" because the legislation extended liability beyond that to which the parent was exposed before the Act's passage:

Eastern could not have contemplated liability for the provision of lifetime benefits to the widows of deceased miners, … a beneficiary class that is likely to be substantial…. Although Eastern at one time employed the Combined Fund Beneficiaries that it has been assigned under the Coal Act, the correlation between Eastern and its liability to the Combined Fund is tenuous, and the amount assessed against Eastern resembles a calculation "made in a vacuum." The company's obligations under the Act [29 ELR 10701] depend solely on its roster of employees some 30 to 50 years before the statute's enactment, without any regard to responsibility that Eastern accepted under any benefit plan the company itself adopted.⁶⁵

Alcan's case presents a far more compelling case for a finding of an absolute lack of proportionality. First, there has been no demonstration that Alcan would have been liable for remediations such as those at issue before the advent of CERCLA. Second, there is no showing that Alcan knew that the technology for disposal was not feasible, or that it paid a disproportionately low price for the service. There has been no showing it knew that state licensing was inherently sloppy or that the agency's disposal advice was unreliable. Alcan did not in fact anticipate that it might be held liable for the mismanagement practices of the regulatory agency and another party. Moreover, the idea that Alcan could be held liable for problems wholly unrelated to its wastes—environmental risks caused by the actions (or inaction) of others, including the state of New York, over which it had no control and received no benefit—demonstrates far less "proportionality" than existed in Eastern Enterprises. The fact that any waste generator (whether private, industrial, or public) can be liable under CERCLA has no basis in any known scientific doctrine and defies common sense. Clearly CERCLA'S liability scheme, as applied to Alcan and similarly situated parties, is so extreme that is has no proportionality.

Eastern Enterprises Dissent's Criteria

Even the dissenting position in Eastern Enterprises, as articulated by Justice Breyer,⁶⁶ could not properly be utilized to sustain the constitutionality of retroactive CERCLA application to generator defendants at third-party sites. First, the dissent pointed out that the company's liability related "exclusively to miners whom Eastern itself employed."⁶⁷ Alcan, however, is not being held "exclusively" liable for the consequences of either its own waste or its own actions. The rolling oil emulsion could not have created the environmental conditions at the PAS site; otherwise, the same or substantially similar conditions would have occurred at Alcan-operated locations at which the same material was spray irrigated. More importantly, CERCLA's joint and several liability scheme necessarily makes Alcan liable for the consequences of the waste of others, improper conduct by the operator of the facility, and negligent supervision by the DEC.

Second, the dissent noted that Eastern Enterprises was merely being asked to compensate miners whose "labor benefited Eastern when they were younger and healthier. Insofar as working conditions created the risk of future health problems for those miners, Eastern created those conditions."⁶⁸ Clearly, Alcan neither benefited from nor did it create the conditions at PAS. Those conditions were not a necessary result of the disposal of Alcan's waste—they instead were the result of materials disposed of by parties wholly unrelated to Alcan, mismanagement by the site operators and the oversight, or lack thereof, by the regulatory agency.

Nor can a "benefit" argument be made in Alcan's situation or in the typical third-party site generator case. Alcan paid for the disposal of its waste, and there has been no showing that it would not have paid precisely the same amount had the incineration facility been properly managed and created no environmental problem. The dissent also argued that the Coal Act satisfies the "fairness test" for governmental takings because before 1965 Eastern Enterprises "contributed" to making an "enforceable" promise to the coal miners that consequently led to their reasonable expectation of the future receipt of medical benefits.⁶⁹ To meet that criterion in Alcan's case, one would have to make the showing that 30 years ago the company created the expectation that it would be responsible for third-party mismanagement, the malfeasance of New York State's improper over-sight of waste disposal facilities, and the likely environmental impact of the management of unknown waste streams generated by unrelated parties. That would, at best, be a difficult task.

The next point that the dissent made is even more compelling. It stressed that the only difference between the benefits Eastern Enterprises expressly agreed to and those that the Coal Act obligated it to provide were in degree, i.e., the Coal Act made the benefits more generous.⁷⁰ A similar argument simply cannot be made in the CERCLA context. Alcan would have no liability for any of the consequences of the conduct of the PAS operation absent CERCLA. The dissent also argued that the miners had essentially volunteered economic benefits to the coal companies in exchange for obtaining strengthened health care benefits.⁷¹ In particular,the dissent noted that the miners accepted greater mechanization of the mining process.⁷² There is, however, certainly no similar quid pro quo for CERCLA's transferring to innocent parties complete responsibility for the mismanagement of third parties or the impact of waste streams of others, without the plaintiff ever having to show causation.

Finally, the dissent argued that the government's actions "played a significant role in developing" the miner's expectations.⁷³ Justice Breyer noted that the government intervened in a strike in 1946 (by seizing the mines), years before the Coal Act was enacted.⁷⁴ Thereafter, it established certain benefits pursuant to a negotiated agreement that, according to the dissent, created "the basic health benefits frame-work."⁷⁵ It is unclear precisely how the government's actions could create obligations on the coal companies for application of a takings analysis, but assuming, arguendo, they could, entirely different expectations were created in the CERCLA arena. In particular, the actions of state authorities in licensing and actively promoting the use of certain facilities would seemingly carry an implication of responsible management by the owners or operators of those supervised and authorized facilities.

Simply stated, the circumstances of Alcan's case—facts that are common to many others in the role of generators at [29 ELR 10702] third-party disposal sites—would not meet any of the Eastern Enterprises dissent's criteria for retroactive application.

Clear Implications of Congressional Intent

CERCLA is typically generally justified as a "polluter pays" statute.⁷⁶ The phrase has been extrapolated to suggest that those who used and benefited from the environmental harm should pay the costs of remediation.⁷⁷ However, beyond paying lip service to these terms, the courts have paid scant attention to examining whether the real beneficiary of the conduct was actually paying for the cleanup. Recently, however, the Court in United States v. Bestfoods⁷⁸ shed important light on the limits of how far liability may be extended to those who may have benefited from the creation of an environmental problem. Bestfoods was the parent of a wholly owned subsidiary that operated a CERCLA site. There is no doubt that the parent of a wholly owned subsidiary receives 100 percent of the benefits of its subsidiary's action. In economic terms, the two entities are indistinguishable. The Court confronted conflicting lower court rulings concerning a parent's CERCLA liability for the actions of its subsidiaries. Some courts had imposed CERCLA liability on parents based on their status as an "owner."⁷⁹ Other decisions concluded that the traditional limitation of liability of a shareholder also protected against CERCLA exposure unless the parent had itself engaged in activity with respect to the site sufficient to pierce the corporate veil.⁸⁰

The Court held that it would not construe CERCLA so as to "banish traditional standards and expectations of the law."⁸¹ This logic simply presages the Court's ruling in Eastern Enterprises, in that the dispute between the dissent and the plurality did not concern the principle of whether the retroactive application of liability is limited by the Constitution, but whether under the facts Eastern Enterprises could have expected liability.

In Eastern Enterprises, the Court clearly held that the imposition of new retroactive requirements, when the resulting economic exposure is severe and disproportionate, is impermissible.⁸² The Court's standard is applicable even if the legislation in question expressly provides for retroactivity.⁸³ Holding the retroactive application of CERCLA unconstitutional in such instances would not require invalidation of the statute; the legislation would continue to operate in those areas in which the law does not contradict traditional standards or expectations. Accordingly, and following the guidance of the Court in Bestfoods, retroactive generator liability would likely be acceptable in situations consistent with those in which a corporate parent is liable. Likewise, a finding that the application of CERCLA is unconstitutional in Alcan's case would not necessarily relieve an owner or operator from liability.

In light of the Court's reasoning in Bestfoods that it could discern no congressional intent to impose CERCLA liability on a corporate parent of a subsidiary site operator,⁸⁴ it is hard to imagine why Congress would have intended to impose draconian liability on the mere customer of an operator. The parent, at least, reaped an economic windfall if its subsidiary shortchanged its customers by cheapening disposal practices. Given the long time frames involved in retroactive application of the statute, those savings would have long ago repatriated to the parent as dividends. By insulating the parent, the beneficiary of the improper act is sheltered and the victim punished. That can hardly be a logical consequence of Congress' intent that the "polluter pay."

In addition, the parent in Bestfoods had a direct and uncontroverted ability to control its subsidiary's action. By turning a blind eye to thoseactions, it would have ensured that it would be insulated from ever having to account for its subsidiary's malfeasance. It is difficult to imagine what policy objective Congress had in mind if it intended to insulate the parent under such circumstances, yet transfer responsibility to an innocent customer. Such an intention is even harder to imagine when the customer was using the CERCLA site at the government's recommendation.

Post-Eastern Enterprises Decisions

Few courts have faced the Eastern Enterprises test in the context of CERCLA third-party sites.⁸⁵ Nothing in those opinions detracts from the compelling logic of the proposition that the retroactive application of CERCLA in such cases offends the fundamental bias against retroactive application of statutory liability.⁸⁶ The two decisions worthy of comment are United States v. Stringfellow⁸⁷ and the decision of the district court in Alcan's case.⁸⁸ In Stringfellow, the matter arose in the waning days of trial. The judge denied requested extensions of time to permit a comprehensive briefing on the issue and also denied the motion, adopting verbatim the government's position. He then promptly retired from the bench. The absence of a thoughtfully reasoned opinion makes the decision rather unpersuasive precedent. In addition, the fact that the same court had already held the state of California responsible for 100 percent of the liability that had been imposed on the defendants suggests that the court simply did not see the retroactivity claim as a serious economic issue that deserved much attention.

[29 ELR 10703]

The Alcan court wrote a more detailed opinion; however, it failed to address many serious issues raised by both parties and did not confront the standard clearly enunciated by the Court in Eastern Enterprises. The court advanced four justifications for dismissing the retroactivity challenge. First, it surmised that the plurality decision in Eastern Enterprises lacks precedential value.⁸⁹ Second, it said that Alcan argued that its waste did not cause the problem at the PAS site and, if so, the company would ultimately have little or no liability for the remediation costs.⁹⁰ Third, it contended that an economic exposure of $ 5 million is not sufficiently large to justify a constitutional concern.⁹¹ Finally, the court reasoned that CERCLA does not deprive parties such as Alcan of their reasonable and settled expectations, because liability is not random but rather results from the disposal of waste in which "hazardous substances" have been found.⁹²

The most notable aspect of the court's analysis was its failure to address the economic benefit that Alcan purportedly received from the act of disposal. This was surely not an oversight, in that the largest portions of the government's responsive brief and Alcan's reply memorandum addressed that issue. The focal point of the government's document echoed the "polluter pay" theme.⁹³ It is undisputed, however, that Alcan utilized the PAS site at the direction of the plaintiffs and paid far more to access it compared to other equally available nonadverse methods of disposal of the emulsion. The relevant question is who is actually responsible for the harm. Both common sense and the common law clearly point in only one direction, toward the plaintiffs. Yet the district court never addressed this issue or these facts. The closest the district court came to addressing the matter was its oblique reference to culpability. It asserted that the CERCLA liability scheme had not breached established contractual expectations because hazardous substances were found in Alcan's waste.⁹⁴ Yet in light of the expansive definition of "hazardous substances"⁹⁵ the court's remarks are probably no less true for the disposal of milk or water. Moreover, the court's reasoning merely begs the question. Alcan had paid a fair price for the proper disposal of the emulsion. Under no prior statute or the common law would a private party be liable for the improper practices of a government-licensed third-party contractor.

The court attempted to buttress its rationale by implying that Alcan's $ 5 million exposure does not rise to the level of constitutional significance.⁹⁶ It did not, of course, directly make such a claim; instead, it attempted to distinguish Alcan's case from Eastern Enterprises by pointing out that estimates of the coal company's future liability could be within a range of $ 50 to $ 100 million.⁹⁷ What the court neglected to mention is the fact that Eastern Enterprises' existing exposure, at the time the lawsuit was heard, was precisely the same as Alcan's. The court's next justification is a classic "straw man." The court asserted that Alcan's argument for unconstitutionality was based on the notion that its waste was technically unrelated to the environmental problems at the site.⁹⁸ The company had, instead, asked the court to assume, for purposes of the motion, that its waste contributed to the environmental risks posed by the PAS site.

The court then opined that in the divisibility phase of the litigation Alcan could either limit its liability or avoid responsibility under CERCLA altogether.⁹⁹ The court sought to strengthen its position by arguing that CERCLA retroactive liability is supported by the reasoning of the Court in Turner Elkhorn¹⁰⁰

Furthermore, in the same way that [Turner Elkhorn] upheld retroactive liability against Coal operators for black lung disease, retroactive liability under CERCLA is appropriate because it concerns environmental harms connected to the actions of parties like Alcan. Just as it was reasonable in [Turner Elkhorn] to impose retroactive liability for unforseen [sic] diseases relating to mining, it is reasonable here to impose retroactive liability for possibly unforseen [sic] costs for responding to environmental harms resulting from a party's disposal of waste.¹⁰¹

The emphasized portions of the court's opinion demonstrate the strained nature of the court's analogy. There were no "unforeseen costs" associated with PAS, unless the court is suggesting that no one should be surprised at the costs resulting from the chronically improper operation of a regulated waste treatment facility. Alcan paid the price for properly handling its waste. Consider the consequences if Turner Elkhorn had paid the medical expenses for the treatment of black lung disease, and the government subsequently attempted to hold the company liable for the malpractice of treating physicians to whom the government directed the miners for care. That is the analogy, or lack thereof, between Alcan's case and Turner Elkhorn.

The final prong of the district court's decision was its summary conclusion that the plurality opinion in Eastern Enterprises lacks precedential value. The court's reasoning is flawed in two major respects. First, the argument misreads the Court's statements on the effect of plurality decisions. Whereas the district court believed that a plurality decision is the substantive equivalent of no decision at all, the Court in Seminole Tribe of Florida v. Florida¹⁰² merely reckoned that plurality decisions make the willingness to follow "stare decisis" less compelling.¹⁰³ But the Court also noted it has never found that doctrine to be absolutely binding, even in instances in which prior decisions are unanimous.¹⁰⁴ Thus, the Court was simply expressing its view that [29 ELR 10704] it pays less difference to "stare decisis" in considering whether or not to overrule its decisions when the precedent consists of a prior plurality decision. This is quite different from the district court's view that it may simply ignore a plurality decision.

Second, the district court's reasoning that no Due Process Clause violation exists resulted from the fact that it did not appropriately compare the Alcan third-party site situation to the liability faced by Eastern Enterprises. Instead, the court mechanically concluded that Eastern Enterprises was inapplicable by relying upon the reasoning of the court in Association of Bituminous Contractors v. Apfel,¹⁰⁵ a post-Eastern Enterprises case dealing with a Due Process Clause challenge to the Coal Act. The court's characterization of Bituminous Contractors as suggesting that Eastern Enterprises essentially has no binding effect is incorrect, as is illustrated by a more recent decision of the Third Circuit.

In Unity Real Estate Co. v. Hudson et al.,¹⁰⁶ the majority noted that Bituminous Contractors acknowledged that the rationale of Eastern Enterprises controls if a court is confronted with a party in a comparable position.¹⁰⁷ Circuit Judge Aldisert, in a concurring opinion citing Eastern Enterprises, emphasized the importance of comparability of position, instead of focusing on the fact that the Court's decision was a plurality opinion. In concluding that Eastern Enterprises did not control Judge Aldisert noted that "the decisive material facts of the cases bear no similarity."¹⁰⁸ He reasoned that the challenged legislation was constitutionally permissible for "one reason only"—Congress had a rational basis to believe that "a promise for lifetime benefits had been made."¹⁰⁹ No comparable commitment exists in the CERCLA third-party site context.

The district court in Alcan failed to undertake a comprehensive evaluation to determine whether the company stood in a different position than Eastern Enterprises relative to the applicable constitutional principles described by the plurality (or, for that matter, the dissent). Yet to the extent the dissenting justices in Eastern Enterprises apply their analysis to the facts in Alcan, the result should be a unanimous holding that retroactive application of CERCLA is unconstitutional.

Conclusion

Eastern Enterprises presents the opportunity for a successful challenge to one of the most controversial elements of the CERCLA liability scheme at third-party sites—its retroactive application. The district courts that have sustained CERCLA's constitutionality have had considerable difficulty in developing persuasive arguments. Their struggle in light of the Court's detailed explanation as to what is required in order to sustain the retroactive application of CERCLA demonstrates the fragile foundation upon which the present liability scheme rests.

1. 42 U.S.C. §§ 9601-9675, ELR STAT. CERCLA §§ 101-405.

2. See Adam Babich, Dodging a Bullet: Lessons From the Failed Hazardous Substance Recycling Rider to the Omnibus Appropriations Bill, 29 ELR 10139, 10141 (Mar. 1999) ("CERCLA's liability system is based on—and largely consistent with—long-standing common-law rules regarding strict liability for abnormally dangerous activities and landowner liability for abatable public nuisance conditions on private property."). See also John M. Hyson, "Fairness" and Joint and Several Liability in Government Cost Recovery Actions Under CERCLA, 21 HARV. ENVTL. L. REV. 137 (1997); Developments in the Law—Toxic Waste Litigation, 99 HARV. L. REV. 1458, 1477-84 (1986) (discussing alternative approaches); Lois J. Schiffer, Keep Superfund Liability Intact, ENVTL. F., Sept./Oct. 1995, at 24.

3. See, e.g., KATHERINE N. PROBST ET AL., FOOTING THE BILL FOR SUPERFUND CLEANUPS: WHO PAYS AND HOW? 26 (1995); John Copeland Nagle, CERCLA, Causation and Responsibility, 78 MINN. L. REV. 1493 (1994). See also KATHERINE N. PROBST & PAUL R. PORTNEY, RESOURCES FOR THE FUTURE, ASSIGNING LIABILITY FOR SUPERFUND CLEANUPS: AN ANALYSIS OF POLICY OPTIONS 37 (1992).

4. But see Rena I. Steinzor & Linda E. Greer, In Defense of the Superfund Liability System: Matching the Diagnosis and the Cure, 27 ELR 10286, 10294 (June 1997) (no better alternative exists); Charles de Saillan, Superfund Reauthorization: A More Modest Proposal, 27 ELR 10201, 10221 (May 1997) (elimination of retroactivity would "create unfairness to parties that have already resolved their liability, through settlements or otherwise, and spent large sums of money to clean up Superfund sites").

5. See, e.g., United States v. South Carolina Recycling & Disposal, Inc., 653 F. Supp. 984, 14 ELR 20272, aff'd sub nom. United States v. Monsanto Co., 858 F.2d 160, 19 ELR 20085 (4th Cir. 1988), cert. denied, 490 U.S. 1106 (1989).

6. See, e.g., United States v. New Castle County, 727 F. Supp. 854, 20 ELR 20499 (D. Del. 1989) (regulators that lack a commercial interest in the disposal operation may not be held liable); New York v. City of Johnstown, 701 F. Supp. 33, 19 ELR 20578 (N.D.N.Y. 1988) (a state that never owned or possessed the hazardous substances cannot be deemed "in the class of liable parties" simply because it acted in a regulatory capacity to license or permit the facility). See also CPC Int'l, Inc. v. Aerojet-General Corp., 731 F. Supp. 783, 20 ELR 20712 (W.D. Mich. 1989) ("mere regulatory activities will not subject a state agency to liability") (citing United States v. Dart Indus., Inc., 847 F.2d 144, 18 ELR 21084 (4th Cir. 1988)); Hassayampa Steering Comm. v. Arizona, 21 ELR 20549 (D. Ariz. Oct. 30, 1990) (state agency assistance in the development of landfill design, in determining the nature of the wastes to be disposed of, and periodic on-site inspections insufficient to impose liability).

7. See Victoria L. Peters, Yes, We Do Need a Clarification of the CERCLA Sovereign Immunity Waiver, 29 ELR 10602 (Oct. 1999) (a statutory change is necessary to ensure the elimination of federal sovereign immunity under CERCLA). See generally Rodolphe J.A. deSeife, The King Is Dead, Long Live the King! The Court-Created American Concept of Immunity: The Negation of Equality and Accountability Under the Law, 24 HOFSTRA L. REV. 981 (1996) (discussion of the evolution of the doctrine). In United States v. String-fellow, 661 F. Supp. 1053, 17 ELR 21134 (C.D. Cal. 1987), however, the state of California, which had directed industrial waste to the Stringfellow site, had also been responsible for the defective design of the site and its improper maintenance. As a consequence, the trial court found that the doctrine of sovereign immunity was not applicable, and the state was held liable as an "operator," "generator," and "owner." See 42 U.S.C. § 9607(a), ELR STAT. CERCLA § 107(a). See also Pennsylvania v. Union Gas Co., 491 U.S. 1, 19 ELR 20974 (1989) (CERCLA authorizes private parties to sue states for monetary damages). For perspectives regarding the origins of the sovereign immunity doctrine, particularly with regard to the federal government, see Walter Gellhorn & C. Newton Schenck, Tort Actions Against the Federal Government, 47 COLUM. L. REV. 722 (1947); David E. Engdahl, Immunity and Accountability for Positive Government Wrongs, 44 U. COLO. L. REV. 1 (1972). See also Adam Babich, Circumventing Environmental Laws: Does the Sovereign Have a License to Pollute?, NAT. RESOURCES & ENV'T, Summer 1991, at 28; Richard E. Lotz, Federal Facility Provisions of Federal Environmental Statutes: Waiver of Sovereign Immunity for "Requirements" and Fines and Penalties, 31 A.F.L. REV. 7 (1989); Donald W. Stever, Perspectives on the Problem of Federal Facility Liability for Environmental Contamination, 17 ELR 10114 (Apr. 1987).

8. See George C. Freeman Jr., A Public Policy Essay: Superfund Retroactivity Revisited, 50 BUS. LAW. 663 (1995) (discussing cases).

9. U.S. CONST. amend. V.

10. Id. at amend. XIV.

11. See, e.g., United States v. Olin Corp., 107 F.3d 1506, 27 ELR 20778 (11th Cir. 1997) (U.S. Commerce Clause-based challenge); United States v. Monsanto Co, 858 F.2d 160, 173-74, 19 ELR 20085 (4th Cir. 1988), cert. denied, 490 U.S. 1106 (1989); United States v. Northeastern Pharm. & Chem. Co., 810 F.2d 726, 17 ELR 20603 (8th Cir. 1986), cert. denied, 484 U.S. 848 (1987) [hereinafter cited as NEPACCO] (retroactive application of CERCLA achieves a legitimate purpose in a rational manner, and accordingly does not violate due process or takings constitutional restraints); Jones v. Inmont Corp., 584 F. Supp. 1425, 14 ELR 20485 (S.D. Ohio 1984); Ohio ex rel. Brown v. Georgeoff, 562 F. Supp. 1300, 13 ELR 20457 (N.D. Ohio 1983). Other decisions reaching the same conclusion include United States v. Hooker Chems. & Plastics Corp., 680 F. Supp. 546, 18 ELR 20580 (W.D.N.Y. 1988); O'Neil v. Picillo, 682 F. Supp. 706, 18 ELR 20893 (D.R.I. 1988), aff'd, 883 F.2d 176, 20 ELR 20115 (1st Cir. 1989), cert. denied sub nom. American Cyanamid Co. v. O'Neil, 110 S. Ct. 1115 (1990); United States v. Tyson, 17 ELR 20527 (E.D. Pa. Aug. 21, 1986); Missouri v. Syntex (U.S.A.), Inc., 17 ELR 21013 (E.D. Mo. Mar. 20, 1987) (citing NEPACCO); United States v. Bliss, 17 ELR 21217 (E.D. Mo. June 15, 1987) (citing NEPACCO). See also Franklin Co. Convention Facilities Auth. v. American Premier Underwriters Inc., No. C2-94-1050 (S.D. Ohio Aug. 6, 1999); Combined Properties/Greenbrier Ltd. Partnership v. Morrow, No. CIV.A. 98-1584-A (E.D. Va. July 30, 1999) (Brinkema, J.), 29 ELR UPDATE No. 24 (Aug. 16, 1999) (retroactive application of CERCLA is not unconstitutional); United States v. Alcan Aluminum Corp., 49 F. Supp. 2d 96, 29 ELR 21379 (N.D.N.Y. 1999) (same); United States v. Vertac Chem. Corp., 33 F. Supp. 2d 769, 29 ELR 21060 (E.D. Ark. 1998). For a discussion of the application of retroactivity to environmental standards, specifically air emission controls imposed upon solid waste landfills, see John H. Turner, The Retroactive Application of New Source Performance Standards, J. ENVTL. L. & PRAC., July/Aug. 1997, at 3.

12. 118 S. Ct. 2131 (1998). For the discussion of the decision and its potential application to CERCLA, see Robert H. Freilich et al., A Comprehensive Review of 1997-1998 U.S. Supreme Court Cases and Important Legislation Affecting State and Local Government, 30 URB. LAW. 785, 904-09 (1998).

13. CERCLA is under attack on numerous fronts; while historically courts have sustained the statute's vitality, there are some well-deserved cracks in the foundation. For example, the tendency to extend the definition of "hazardous substances" to include seemingly everything in the universe seems likely to founder when subjected to judicial scrutiny. See, e.g., United States v. Alcan Aluminum Corp., 964 F.2d 252, 22 ELR 21124 (3d Cir. 1992). Limits on joint and several liability seem inevitable where a governmental agency is both the plaintiff and a potentially responsible party (PRP). See Newcastle County v. Halliburton Nus Corp., 111 F.3d 1116, 27 ELR 21159 (3d Cir. 1997); New Jersey Turnpike Auth. v. PPG Indus., Inc., 16 F. Supp. 2d 460 (D.N.J. 1998). The corollary that the federal government or a state may seek immunity for its contribution to sites by settling with itself also seems unlikely to survive. Some courts have found that this conclusion is permissible in light of statutory intent. The more reasoned result is that courts have no jurisdiction to entertain such settlements because there is no case or controversy when single juridical entities are involved. This issue is presently being litigated in Alcan v. Butler Aviation-Boston, No. 98-11062 (D. Mass. filed June 2, 1998). There, Alcan intends to demonstrate that the United States has used the Superfund Amendments and Reauthorization Act (SARA), Pub. L. No. 99-499, 100 Stat. 1613, provisions to avoid responsibility for its own egregious conduct and transfer federal obligations to innocent private parties.

14. 49 F. Supp. 2d 96, 29 ELR 21379 (N.D.N.Y. 1999).

15. Subsequently, another federal district court similarly held that Eastern Enterprises does not undercut the constitutionality of retroactive liability under CERCLA. Combined Properties, at 29 ELR UPDATE No. 24 (Aug. 16, 1999). A shopping center brought a CERCLA suit against the former owners of a dry cleaning business for allegedly contaminating the shopping center's property. One of the companies that owned the business before CERCLA was enacted claimed that Eastern Enterprises required a reexamination of Monsanto. The court, as in Alcan, reasoned that because there was no majority decision in Eastern Enterprises the Supreme Court's plurality opinion was not controlling. Moreover, the Combined Properties court duplicated Alcan's conclusion that even if Eastern Enterprises had controlling weight, it would not be applicable in the instant case because the company created the harm that CERCLA was designed to remedy. Further, the potential economic impact upon the company was neither severe nor disproportionate, the court reasoned, and the retroactive application of CERCLA would not interfere with the company's investment-backed expectations. Combined Enterprises dealt with a single-party site; accordingly, it has little relevance to the kind of third-party sites at which Alcan now faces liability. See infra notes 16-17 and accompanying text.

16. Rationalizing their decision to trigger liability as consistent with statutory intent, courts have held that metals detected at below background levels, i.e., essentially everything in the universe, may trigger CERCLA liability. Some courts have tempered that extreme position by adopting the notion of "divisibility." See, e.g., Acushnet Co. v. Mohasco Corp., No. 97-2128 (1st Cir. Sept. 15, 1999); United States v. Township of Brighton, 153 F.3d 307, 29 ELR 20045 (6th Cir. 1998); In re Bell Petroleum Servs., Inc., 3 F.3d 889, 23 ELR 21474 (5th Cir. 1993); Alcan Aluminum, 964 F.2d at 252, 22 ELR at 21124; Richard H. Mays, U.S. v. Alcan; Infusing Fairness Into the Statutory Scheme, 24 Chem. Waste Litig. Rep. 309 (1992) (Alcan "feeds the eternal hope of PRPs that reason may yet be forced into the CERCLA program by the courts which interpret it.") But see Linda L. Rockwood & James L. Harrison, The Alcan Decisions: Causation Through the Back Door, 23 ELR 10542, 10548 (Sept. 1993) ("The Alcan opinions provide limited guidance on how to prove a divisibility defense, except with respect to generators whose waste contains only levels of inorganics below background concentrations"); David M. Moore, The Divisibility of Harm Defense to Joint and Several Liability Under CERCLA, 23 ELR 10529 (Sept. 1993). Moreover, not-withstanding the decision of the Third Circuit in Alcan, certain district courts have refused to apply the doctrine and have been sustained by specific panels of the appellate court. See, e.g., United States v. Alcan Aluminum Corp., 892 F. Supp. 648, 25 ELR 21556 (M.D. Pa. 1995). By adopting a scientifically invalid notion requiring the treatment of a chemically distinct mixture as though it was a single, chemically homogenous substance, these courts have effectively ruled that commingling is equivalent to indivisibility, contrary to the Third Circuit's explicit holding. Nonetheless, a few courts have applied the divisibility ruling in a rational and scientifically valid manner. See Acushnet Co. v. Coaters, Inc., 937 F. Supp. 988, 27 ELR 20311 (D. Mass. 1996).

17. Supra note 11.

18. The following substances found at the PAS site required remediation: phenol, bis 2-(ethylhexyl) phthalate, di-n-octly phthalate, PCB-1248, methylene chloride, toluene, 1,2-dischloroethane, benzene, 1,2-trans-dichloroethylene, xylenes, 2,4-dimethylphenol, nickel, cyanide.

19. See, e.g., United States v. Monsanto, 858 F 2d. 160, 19 ELR 20085 (4th Cir. 1988); NEPACCO, 810 F.2d 726, 17 ELR 20603 (8th Cir. 1986), cert. denied, 484 U.S. 848 (1987). See also supra note 11.

20. A Contracts Clause [U.S. CONST. art. I, § 10] argument was rejected in United States v. Stringfellow, 14 ELR 20388 (C.D. Cal. Apr. 9, 1984) and in United States v. South Carolina Recycling & Disposal, Inc., 653 F. Supp. 984, 14 ELR 20272 (D.S.C. 1984).

21. NEPACCO, 810 F.2d at 734, 17 ELR at 20607.

22. 428 U.S. 1 (1976).

23. NEPACCO, 810 F.2d at 734, 17 ELR at 20607.

24. At the risk of repetition, it is important to again note that as a third party Alcan neither caused the problem at the site nor derived any profit from its use. There is no fair basis upon which to assign Alcan liability. It simply "inherited" a civil penalty. This may very well be the civil case that Justice Thomas alluded to that would cause the Court to apply the ex post facto doctrine in the civil arena. Justice Thomas stated in Eastern Enterprises that:

This Court has considered the Ex Post Facto Clause [U.S. CONST. art. I, § 9, cl. 3] to apply only in the criminal context…. In an appropriate case … I would be willing to reconsider Calder [Calder v. Bull, 3 Dall. 386. 1 L. Ed. 648 (1798)] and its progeny to determine whether a retroactive civil law that passes muster under our current Takings Clause jurisprudence is nonetheless unconstitutional under the Ex Post Facto Clause.

Eastern Enterprises v. Apfel, 118 S. Ct. 2131, 2154 (Thomas, J., concurring).

25. Similarly, in City of New York v. Exxon Corp., 697 F. Supp. 677, 19 ELR 20332 (S.D.N.Y. 1988), New York City brought an action for disposal that resulted not from improper conduct by waste generators but because a city official was bribed by a state licensed recycler to allow him to dispose of waste rather than use the money he was paid to recycle the oil. In such cases, it makes little sense to impose liability upon entirely innocent parties.

26. Eastern Enterprises, 118 S. Ct. at 2149.

27. Id.

28. Supra note 11.

29. NEPACCO, 810 F.2d 726, 733, 17 ELR 20603, 20606 (8th Cir. 1986), cert. denied, 484 U.S. 848 (1987).

30. Id., 810 F.2d at 734, 17 ELR at 20606-07.

31. Eastern Enterprises v. Chater, 110 F.3d 150 (1st Cir. 1997), rev'd sub nom. Eastern Enterprises v. Apfel, 118 S. Ct. 2131 (1998).

32. 26 U.S.C. §§ 9701-9722.

33. Chater, 110 F.3d at 156.

34. Id.

35. Eastern Enterprises, 118 S. Ct. at 2149.

36. Id.

37. Id. at 2143.

38. Eastern Enterprises continued its coal mining operation indirectly through a subsidiary. Id.

39. Id.

40. Id.

41. Id. at 2139-40.

42. Id. at 2140.

43. Id. The Court noted that "the increase in benefits, combined with various other circumstances—such as a decline in the amount of coal produced, the retirement of a generation of miners, and rapid escalation of health costs—quickly resulted in financial problems for the [benefit plans]."

44. Id. (describing the creation of the Coal Commission).

45. Id. at 2141.

46. Id. at 2141-42.

47. Id.

48. Id.

49. Key Tronic Corp. v. United States, 114 S. Ct. 1960, 24 ELR 20955 (1994).

50. Eastern Enterprises. 118 S. Ct. at 2142.

51. For a short summary of the breadth of the Takings Clause, including its applicability to "regulatory takings," see, e.g., John H. Turner, Off to a Good Start: The RCRA Subtitle D Program for Municipal Solid Waste Landfills, 15 TEMP. ENVTL. L. & TECH. J. 1, 49 n.161 (1996).

52. Supra note 19.

53. Eastern Enterprises, 118 S. Ct. at 2146.

54. Id. (citations omitted).

55. Id. at 2143.

56. Indeed, it is undisputed that Alcan paid more than was reasonably necessary in order to dispose of its waste in an environmentally responsible manner.

57. See, e.g., South Central Bell Tel. Co. v. Louisiana Pub. Serv. Comm'n, 570 F. Supp. 227, 231 (1983) (a "'presumption of correctness … attaches to the acts of government officials'") (citing FCC v. Schreiber, 381 U.S. 279 (1965)).

58. 3 H.C. 774, 159 Eng. Rep. 737 (Ex. 1865), rev'd, 1 L.R.-Ex. 23 (1866), aff'd, 3 L.R.-E. & I. App. 330 (H.L. 1868). See William D. Evans Jr., Turn Out the Lights, the Party's Over: The Emerging Consensus on CERCLA Salvage Litigation Issues, 29 ELR 10203, 10204 (Apr. 1999) (CERCLA is a codification of the common-law doctrine of strict liability for ultrahazardous activities).

59. Eastern Enterprises, 118 S. Ct. at 2165 (Breyer, J., dissenting).

60. See, e.g., Sterling v. Velsicol Chem. Corp., 647 F. Supp. 303, 17 ELR 20081 (W.D. Tenn. 1986), aff'd in part, rev'd in part, 855 F.2d 1188, 19 ELR 20404 (6th Cir. 1988); New Jersey Dep't of Envtl. Protection v. Ventron Corp., 94 N.J. 473, 463 A.2d 893, 13 ELR 20837 (N.J. 1983); Branch v. Western Petroleum, Inc., 657 P.2d 267, 13 ELR 20362 (Utah 1982); Ashland Oil, Inc. v. Miller Oil Purchasing Co., 678 F.2d 1283, 12 ELR 20845 (5th Cir. 1982). See generally Rolf R. von Oppenfeld et al., The Common-Law Impetus for Advanced Control of Air Toxics, 29 ELR 10003, 10011 (Jan. 1999) (regulatory compliance provides no defense if ultrahazardous activity involved).

61. See, e.g., California v. Verticare Inc., No. 92-9531, 1993 U.S. Dist. LEXIS 3062, at * 14 (N.D. Cal. Mar. 2, 1993) (citing United States v. Monsanto Co., 858 F.2d 160, 19 ELR 20085 (4th Cir. 1988)); Ascon Properties, Inc. v. Mobil Oil Co., 866 F.2d 1149, 19 ELR 20374 (9th Cir. 1989); United States v. Cauffman, 15 ELR 20161 (C.D. Cal. Oct. 23, 1984). See generally Lynda J. Oswald, New Directions in Joint and Several Liability Under CERCLA?, 28 U.C. DAVIS L. REV. 299 (1995); Lewis M. Barr, CERCLA Made Simple: An Analysis of the Cases Under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 45 BUS. LAW. 923 (1990).

62. See, e.g., Mowrer v. Ashland Oil & Ref. Co., 518 F.2d 659 (7th Cir. 1975).

63. Eastern Enterprises, 118 S. Ct. at 2165 (Breyer, J., dissenting).

64. No causal relationship would exist between the generator's activity and the environmental harm.

65. Eastern Enterprises, 118 S. Ct. at 2150 (citation omitted).

66. Id. at 2161 (Breyer, J., dissenting).

67. Id. at 2164.

68. Id.

69. Id. at 2165.

70. Id. at 2166.

71. Id.

72. Id.

73. Id.

74. Id.

75. Id.

76. See, e.g., Control Data Corp. v. S.C.S.C. Corp., 53 F.3d 930, 935-36, 25 ELR 21378, 21380 (8th Cir. 1995).

77. See, e.g., Key Tronic Corp. v. United States, 114 S. Ct. 1960, 1967, 24 ELR 20955, 20957 (1994). See generally Jerome M. Organ, Superfund and the Settlement Decision: Reflections on the Relationship Between Equity and Efficiency, 62 GEO. WASH. L. REV. 1043 (1994).

78. 118 S. Ct. 1876, 28 ELR 21225 (1998). For an analysis of the decision, see George C. Hopkins, United States v. Bestfoods: The U.S. Supreme Court Sets New Limits on the Direct Liability of Parent Corporations for Polluting Acts of Subsidiaries, 29 ELR 10545 (Sept. 1999).

79. Bestfoods, at 1884 n.8, 28 ELR at 21227 n.8.

80. Id.

81. Id. at 1889, 28 ELR at 21229.

82. Eastern Enterprises v. Apfel, 118 S. Ct. 2131, 2149 (1998).

83. Id.

84. Bestfoods, 118 S. Ct. at 1885.

85. Supra note 11.

86. That such a bias exists was clear well before Eastern Enterprises. See, e.g., Bowen v. Georgetown Univ. Hosp., 488 U.S. 204 (1988); Greene v. United States, 376 U.S. 149 (1964). See also 2 SUTHERLAND STATUTORY CONSTRUCTION § 41.04 (4th ed. 1986).

87. 14 ELR 20388 (C.D. Cal. Apr. 9, 1984).

88. United States v. Alcan Aluminum Corp., 49 F. Supp. 2d 96, 29 ELR 21379 (N.D.N.Y. 1999). The district court in Combined Properties/Greenbrier Ltd. Partnership v. Morrow, No. CIV.A. 98-1584-A (E.D. Va. July 30, 1999) (Brinkema, J.), 29 ELR UPDATE NO. 24 (Aug. 16, 1999), relied heavily upon the Alcan ruling in concluding that the retroactive application of CERCLA is constitutional.

89. 49 F. Supp. 2d at 99, 29 ELR at 21380.

90. Id.

91. Id. at 100, 29 ELR at 21380-81.

92. Id.

93. Brief of United States as Respondent, Alcan, at 12.

94. 49 F. Supp. 2d at 99, 29 ELR at 21380.

95. United States v. Alcan Aluminum Co., 964 F.2d 252, 22 ELR 21124 (3d Cir. 1992).

96. 49 F. Supp. 2d at 100, 29 ELR at 21380-81.

97. Id.

98. Id. at 99, 29 ELR at 21380.

99. Id. The court's optimistic view as to the outcome of a "divisibility" hearing certainly exceeds Alcan's experience; in an earlier matter, the company was deemed to be jointly and severally liable even though it was undisputed that none of the chemicals that were the object of the remediation were present in Alcan's waste. See United States v. Alcan Aluminum Corp., 892 F. Supp. 648, 25 ELR 21556 (M.D. Pa. 1995).

100. 428 U.S. 1 (1976).

101. 49 F. Supp. 2d at 100, 29 ELR 21380 (emphasis added; citation deleted).

102. 517 U.S. 44 (1996).

103. Id. at 66.

104. Id. at 67.

105. 156 F.3d 1246, 1254-55 (D.C. Cir. 1998). There, the court dealt with one issue, "whether the Coal Act as applied to the Association's members violates the Due Process Clause." Id. Because "the plurality opinion in Eastern Enterprises expressly declined to rule on the petitioner's due process challenge, reasoning that resolution of the takings question made such a ruling unnecessary," the court deduced that "the plurality's conclusion that the Coal Act effected an unconstitutional taking therefore does not answer the question whether the Act, as applied in analogous circumstances, also violates the Due Process Clause." Id. The court did, however, note that "if the Association's members were in substantially similar factual circumstances to Eastern, we would be compelled to resolve the difficult question, left open by the Eastern Enterprises plurality, whether the quality and quantity of retroactive liability identified in Eastern Enterprises also violates the Due Process Clause." Id. at 1256.

106. 178 F.3d 649 (3d Cir. 1999).

107. Id. at 659. See Bituminous Contractors, 156 F.3d at 1256.

108. 178 F.3d at 678.

109. Id. See also Anker Energy Corp. v. Consolidation Coal Co., 177 F.3d 161, 172 (3d Cir. 1999):

(Thus, analysis of the decisions in Eastern Enterprises leads us to the conclusion that a majority of the Court would find the Act unconstitutional when applied to an employer that did not agree to the 1974 or subsequent NBCWAs, while application of the Act to a signatory to the 1974 or a subsequent wage agreement would be an entirely different matter.).