Shan Davis & Associates and Lawson & Weitzen Challenge Constututionality of CERCLA in Toxic Tort Case

On May 4, 2009, the Nevada Department of Environmental Protection (“NDEP”) filed suit in the United States District Court, District of Nevada against several defendants who own or owned property located at what is known as the Maryland Square PCE Site. From 1968 to 2000, the site was used as a dry cleaner. During this time, tetrachloroethene (“PCE”), a common chemical solvent used in dry cleaning, was released into the ground water, and migrated east forming a plume under a residential neighborhood. The NDEP filed a complaint seeking recovery of the clean-up and monitoring costs under the Comprehensive Environmental Response Compensatin and Liability Act (“CERCLA”), 42 U.S.C. 1906.

On January 10, 2012, the law firms Lawson & Weitzen and Shan Davis & Associates, acting as co-counsel on behalf of one of the defendants, filed a cross-motion for summary judgment against the NDEP seeking to declare the application of CERCLA unconstitutional as it applies to the facts of the case. In 1980 Congress passed CERCLA to provide for liability, compensation, cleanup, and emergency response for hazardous substances released into the environment and the cleanup of inactive hazardous waste disposal sites. In their motion, Lawson & Weitzen and Shan Davis & Associates argue that Congress’ power to enact CERCLA arises under the Commerce Clause of the United States Constutution, which allows Congress to regulate interstate and foreign commerce. In the Maryland Squre PCE case, in order for CERCLA to apply, the PCE disposal must stubstantially affect interstate commerce. In their motion, Lawson & Weitzen and Shan Davis & Associates argue that depositing PCE into the local watertable does not affect interstate commerce because the activity does not cross state lines, and the disposal of PCE into the local watertable is not a commercial activity that affects an interstate market (the United State Supreme Court has held that Congress can regulate a farmer’s wheat growing activities because the wheat is part of an existing interstate wheat market).

CERCLA and its counterpart, the Resource Conservation and Recovery Act (“RCRA”), have been used as powerful tools by the government since their enactment to hold business and property owners responsible for environmental clean-up costs. These clean-up costs can reach tens of millions of dollars, and are generally overseen and administered almost exclusively by the government. Under CERCLA and RCRA, the business or property owner is held strictly liable for the clean-up cost because they owned or operated the property. Thus, the burden of proof literally shifts to the business or property owner to prove their innocence. Few defendants have ever challenged the constitutionality of these statutes.

The federal government does not have unfettered discretion to regulate local activities. A recent episode of 60 Minutes featured a Texas ranch owner who raises North African Antelopes that can be hunted for a price. The ranch owner was worried about the future of his business because the United States Department of Fish and Wildlife Service is going to enact regulations that make it impossible to obtain permits to hunt North African Anetlope in the United States. The United States Government’s power to regulate local activities comes through the United States Constitution’s Commerce Clause. In order to regulate a local activity, it must affect interstate commerce. If the antelope hunters come from other states, the United States Department of Fish and Wildlife might have the power to regulate the hunting. If not, it is hard to fathom how the United States Government can regulate this activity.

Business owners need to second guess federal regulations that restrict local activities. The United States Constitution expressly reserves to the states the right to regulate local activities that do not affect interstate commerce, or where Congress has not expressed an intent to regulate that activity. If the federal judge agrees with the argument made by Lawson & Weitzen and Shan Davis & Associates, business and landowners may have a new tool to fend off attacks launched government and other parties under CERCLA and RCRA.

If you have any questions about toxic torts or environmental contamination, please contact us to discuss your legal rights.

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