OPINION: Overregulation Strips Companies’ Due Process Rights

Current environmental laws give government too much prosecutorial power

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Following a recent change in water quality standards, the city of Cottage Grove says that 3M owes them a great deal of money. The change in water quality standards lowered the permissible levels of perfluorochemicals (PFCs) in drinking water, with Cottage Grove’s water now exceeding those limits.

At the time of dumping, 3M was well within the EPA’s national standard for perfluorochemicals disposed of in drinking water at 70 parts per trillion. Minnesota since changed the standards to 35 parts per trillion for PFOA and 27 parts per trillion for PFOS. Both of those chemicals are types of PFCs. The state’s ability to force 3M to pay for actions that were made before the new standards were put in place is in fact, quite legal. It’s allowed under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) also known as the ‘Superfund Law.’

CERCLA, passed in 1980, was one of the first major national pieces of legislation in the United States that dealt with the standards surrounding hazardous waste disposal. While reform was needed, CERCLA, and the state laws which followed it, gave unprecedented legal and prosecutorial powers to federal, state, and local government in matters of waste disposal. One of the original uses of CERCLA was in prosecuting the chemical company behind the “Love Canal” incident, which occurred in the upstate New York city of Niagara Falls. Reexamination of the facts surrounding Love Canal indicate how difficult it is for the private sector to get a fair hearing when it comes to hazardous waste disposal.

The public health disaster was the result of poor zoning on the part of the town, resulting in the town building both a neighborhood and school on the top of a hazardous waste dump site. Residents became dangerously ill, women had miscarriages, and there were birth defects amongst children. It was later determined that construction punctured a protective tarp, which the chemical company laid down following its disuse of the site back in the 1940s. The town’s actions put people in harm’s way.

However, mainstream belief on Love Canal has been to place blame entirely on the chemical company. Craig E. Colton and Peter E. Skinner perhaps perfectly reflect the mainstream view of Love Canal in their book, The Road to Love Canal: Managing Industrial Waste Before EPA with their claim that, “It is ironic that Hooker assigned the [school board] with a continuing duty to protect property buyers from chemicals when the company itself accepted no such moral obligation.” The duty that Colton and Skinner are referencing is in relation to the closing paragraph of the deed which transferred ownership of the property surrounding Love Canal from Hooker Chemicals to the school board. The final paragraph reads:

Prior to the delivery of this instrument of conveyance, the grantee herein has been advised by the grantor that the premises above described have been filled, in whole or in part, to the present grade level thereof with waste products resulting from the manufacturing of chemicals by the grantor at its plant in the City of Niagara Falls, New York, and the grantee assumes all risk and liability incident to the use thereof. It is therefore understood and agreed that, as a part of the consideration for this conveyance and as a condition thereof, no claim, suit, action or demand of any nature whatsoever shall ever be made by the grantee, its successors or assigns, against the grantor, its successors or assigns, for injury to a person or persons, including death resulting therefrom, or loss of or damage to property caused by, in connection with or by reason of the presence of said industrial wastes. It is further agreed as a condition hereof that each subsequent conveyance of the aforesaid lands shall be made subject to the foregoing provisions and conditions.”

In short, the final paragraph contractually freed Hooker Chemicals from the liability associated with the property.

Hooker Chemicals clearly provided evidence to the school board that hazardous chemicals were buried at the site. As indicated by Reason magazine, prior to selling the site, members of Hooker Chemicals, including the Vice President Bjarne Klaussen, had escorted members of the school board to the waste site and made eight test boring spots around the canal. At two of these boring spots, which were located directly above the chemical waste, chemicals were shown to be four feet down. The other six spots located around the canal came up with no chemicals, as these borings were made over locations where the chemicals were not buried at. This indicates not only that the school board was aware of the location of these chemicals, but also that the protective tarp which Hooker Chemicals had established over them was effective at containing the chemicals within. It was only through subsequent actions on the part of the town that the protective covering over the chemicals was breached, leading to the chemicals oozing out.

So, why did Hooker Chemicals sell the property to the school board? In the 1982 lawsuit by the EPA against Hooker, the EPA claimed that it was the sale itself that was negligent.

The school board had threatened Hooker Chemicals with condemnation of the property, and would have seized it regardless. Examination of the school board records by Reason Magazine shows this.

“A map, dated March 1951 [meaning before the sale] and labeled “School Site Study Plan A” […..]This map not only shows the projected school being built right over the very center of the Canal itself but also shows the assessed condemnation values for the Canal property and each of the properties bordering it. Then there are two letters from the School Board’s attorney, Ralph Boniello—one dated September 4, 1952, informing the Board’s business manager, Frank Lang, that procedures were under way to purchase four lots abutting the Canal; the other dated September 19, 1952, addressed to Mr. Carmen J. Caggiano and sent registered mail, return receipt requested, informing Mr. Caggiano that since he had refused the Board’s “price offered of $10 per front foot” for the strip of 10 lots he owned along the east side of the Canal, “The purpose of this letter is to apprise you of the institution of an action in condemnation to acquire the above–escribed property for educational purposes.”

Had the school board acquired the property via eminent domain, Hooker would not have been able to warn future owners of the property that there were dangerous chemicals buried underneath. While this decision was from a legal perspective, short sighted, it was certainly the morally just decision.

The school board went on to sell the land to other developers, but unlike Hooker Chemicals, the board never disclosed to that dangerous chemicals were buried on the site.

If anything, the school board was the party that had acted negligently. In fact, Love Canal was not the only property that the school board acquired that had environmental risks attached. Reason magazine points out;

“The 99th Street School, which was built beside Love Canal, was being planned by the School Board simultaneously with the planning for another, the 66th Street School; and the Niagara Gazette reported on September 13, 1978, that high radiation had been found at that other location.”

So why was the school board able to get off and Hooker forced to pay the bill?

CERCLA, and the prosecutorial power that it gives the government, clearly lopsides any waste disposal case against the chemical companies. If a chemical company like Hooker Chemicals argued that its disposal standards exceeded the common practices of the 1950s, CERCLA states that the company is subject to retroactive liability. This means that the companies disposal practices were held to the standards of the 1980s, even if they hadn’t owned the property since the 1950s. It is this same clause that allows Cottage Grove to hold 3M liable for their disposal of PFCs.  

If a chemical company argued that it had not been negligent in its actions (as Hooker could have), CERCLA’s response was that a possibly responsible party (PRP), “cannot simply say that it was not negligent or that it was operating according to industry standards. If a PRP sent some amount of the hazardous waste found at the site, that party is liable.”

The final kicker is that CERCLA also stipulates that state and local government cannot be sued for cleanup. This let the school board completely off the hook from prosecution for its negligent actions which resulted in the release of hazardous chemicals. Even in many of the cases brought by the residents of Love Canal against Niagara Falls and New York state, as well as against Occidental Chemicals (the company that later acquired Hooker Chemicals), was the one that ended up paying most of the damages, due to the bankruptcy of both the town and state at this time.

The strict policies contained within CERCLA make it impossible for almost any company that has disposed of chemicals to be able to legally defend themselves. However, if these rules were repealed, how would situations where relief is needed be handled?

“If cleanup is needed someone will have to pay–either the company, taxpayers or other affected landowners or parties,” George Washington Law School’s Associate Dean for Environmental Law Studies, LeRoy Paddock told Alpha News.

Paddock pointed out some of the alternatives that could stand independently of “polluter (companies) pays all” court cases. One alternative is “the creation of a cleanup fund which would pay the cost of cleanups.” While this mechanism is sometimes used, it still requires funding to come from somewhere, and to be effective it would need to pull from either taxpayers or fees paid by companies. One possibility of where the money would come from would be through a “chemical feedstock tax” which could be levied on companies as a way to build up a reserve and to pay for the cleanup in which all the involved parties were unable to fund cleanup. This policy used to be in place, though was allowed to lapse during the Clinton administration in 1996.

Both this option and making taxpayers foot part of the cost may seem odious, but it is probably the best option, as it allows flexibility and injunctive relief in the case of emergencies. In essence it works as a type of insurance for the chemical industry as a whole, which mitigates the financial risk for individual companies in the face of changing standards.

Changing standards are a problem in themselves, and are an aspect prevalent in the conflict between Cottage Grove and 3M. As indicated by Dr. Carol Ley, 3M’s vice president and corporate medical director, in an interview with the Star Tribune,the advisory levels announced by MDH are overly conservative. We believe that PFOS and PFOA do not present health risks at levels they are typically found in the environment or in human blood.”

Questionably high environmental regulations that seem to serve no public or even environmental health purpose should not be pursued, and a conservative EPA should look to find democratic ways to limit the effects of these kinds of state and local government regulations.

The policies currently in place severely limit the 14th Amendment rights of corporations to due process. This right to due process was found by the Supreme Court 1886 case, Santa Clara v. Southern Pacific.

The EPA under Scott Pruitt would do well to look into ways by which to significantly limit or remove the language within CERCLA which gives the government unwarranted prosecutorial power when it comes to waste disposal, and infringes upon the due process allowed to corporations. Such actions would truly be considered to be draining the swamp.

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