October 01, 2017

Border Wars: No Court for Claims between States?

Thomas J. Grever

It is Environmental Law 101: When one party causes environmental contamination that damages another party, the damaged party has a straightforward claim under several federal environmental laws to force the polluting party to clean up the problem and to reimburse the innocent party for costs it incurred addressing the contamination. Congress crafted remedial, strict-liability statutes such as the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) and the Resource Conservation and Recovery Act (RCRA) to promote swift cleanups and to ensure that the “polluter pays” for costs incurred by others, leaving little room for the responsible party to avoid liability. Even states and the federal government can be held liable under the wide net these laws cast.

But when the party allegedly responsible for the pollution is a state government and the damaged party is a neighboring state, these principles may fall into a black hole at the intersection of environmental law and federal court jurisdiction, potentially leaving the damaged state without redress. This was recently demonstrated in the ongoing litigation over the 2015 Gold King Mine spill in southwestern Colorado.

In August 2015, an EPA contractor working on remediation at the Gold King Mine breached a wall in an abandoned mine holding back millions of gallons of acid mine drainage wastewater, causing over three million gallons to reach the Animas and San Juan rivers in New Mexico. EPA claimed responsibility for the spill, and has since added the mining areas and area affected by the spill to the National Priorities List, to help expedite state and federal government-led cleanup of the aftermath pursuant to CERCLA.

Numerous downstream parties, public and private, have asserted claims for impacts by the spill. The State of New Mexico and the Navajo Nation each filed lawsuits in federal district court in New Mexico against EPA, its contractors, and mining companies connected to the Gold King Mine, to recoup cleanup costs and economic damages and to compel further investigation and cleanup of their affected waterways. The suits assert claims for cost recovery and declaratory judgment under CERCLA against all defendants and claims for negligence, gross negligence, trespass, and nuisance against the private companies. EPA has sought to dismiss the claims against it, arguing that EPA is protected by sovereign immunity. EPA further argues that it would not be liable in any event because its involvement at the Gold King Mine did not meet the definition of a liable party under CERCLA.

New Mexico also sought recovery from the state of Colorado under CERCLA, RCRA, and common law nuisance and negligence theories. Because the claims pitted one state against another, New Mexico brought its claims as an original action in the United States Supreme Court. In June 2016, New Mexico petitioned the U.S. Supreme Court for leave to file a bill of complaint against Colorado, asserting the exclusive jurisdiction of the Court under 28 U.S.C. § 1251(a), which provides that “[t]he Supreme Court shall have original and exclusive jurisdiction of all controversies between two or more States.”

According to New Mexico, the wastewater released by EPA’s contractors would not have accumulated in the Gold King Mine but for Colorado’s earlier regulatory decisions closing off a tunnel at an adjacent mine. New Mexico also alleged that Colorado had a hand in directing EPA’s contractor activity that led to the spill. New Mexico further alleged that years of administrative decisions by Colorado’s regulatory agencies with respect to discharges from numerous former mining operations in the area have led to contamination of New Mexico rivers. This case appears to be the first known attempt by one state to hold another state liable for cost recovery and cleanup under CERCLA and RCRA.

In June 2017, the Supreme Court denied New Mexico’s petition to sue Colorado. As is often the case when the Court declines to take a case, the justices did not issue an opinion. Although the decision may not be encouraging to aggrieved states, the lack of an opinion leaves open the question of whether one state might ever have redress against another state under CERCLA, RCRA, or other environmental statutes. As the current federal administration seeks to shift greater responsibility for environmental protection to the states, this question may arise more often in coming years.

Without speaking to the validity of New Mexico’s underlying claims against Colorado, it is plausible that a state could incur costs responding to an environmental disaster emanating from another state. And it is plausible that the other state’s government could be responsible in some fashion for that disaster. If the responsible party were a private entity, not a state government, a state could simply bring its case in federal district court (as New Mexico has done). But should a state in New Mexico’s position be foreclosed from seeking recovery just because the defendant is another state, based solely on the discretion of the Supreme Court to allow the claim?

The U.S. Constitution and Congress provide little opportunity for aggrieved states. The Eleventh Amendment to the Constitution generally provides sovereign immunity to state governments from any cause of action in any federal court brought by citizens of another state but does not provide for states’ immunity in state-versus-state actions. Rather, Article III of the Constitution provides original jurisdiction—power to hear the case for the first time—in the Supreme Court: “In all [Federal] Cases . . . in which a State shall be Party, the Supreme Court shall have original Jurisdiction.” Art. III, § 2, cl. 2. Supreme Court jurisdiction is also exclusive of any other court, by act of Congress. 28 U.S.C. § 1251(a). In vesting exclusive jurisdiction in the Supreme Court, Congress sought to provide a neutral, impartial forum for resolving lawsuits among states.

But original plus exclusive does not equal mandatory. The Court applies “substantial discretion to make case-by-case judgments as to the practical necessity of an original forum in this Court.” Texas v. New Mexico, 462 U.S. 554, 570 (1983). The Court has described itself as exercising original jurisdiction “sparingly,” Wyoming v. Oklahoma, 502 U.S. 437, 475 (1992), and its exercise of exclusive jurisdiction as “obligatory only in appropriate cases.” Mississippi v. Louisiana, 506 U.S. 73, 76 (1992).

The Court’s usual discretionary approach focuses on “the seriousness and dignity of the claim.” Illinois v. City of Milwaukee, 406 U.S. 91, 93 (1972). “The model case for invocation of this Court’s original jurisdiction is a dispute between States of such seriousness that it would amount to casus belli if the States were fully sovereign.” Texas, 462 U.S. at 571, n. 18. The Court also considers the availability of an alternative forum in which the issues can be resolved.

A state action causing pollution in another state may indeed be such a “case for war”:

It may be imagined that a nuisance might be created by a State upon a navigable river like the Danube, which would amount to a casus belli for a State lower down, unless removed. If such a nuisance were created by a State upon the Mississippi, the controversy would be resolved by the more peaceful means of a suit in this court.

Missouri v. Illinois, 200 U. S. 496, 520–521 (1906). But the Court has rejected states’ attempts to litigate interstate pollution matters in more recent years on the basis that the cases involve technical and complex factual questions not suitable for resolution at the Court’s level. See, e.g., Ohio v. Wyandotte Chemicals Corp., 401 U.S. 493 (1971).

Not all current justices agree that the Court’s jurisdiction is discretionary. Justices Thomas and Alito recently dissented from the Court’s denial of certain states’ attempts to challenge Colorado’s marijuana legalization, arguing that the clear language of the Constitution and original jurisdiction statute mandate the Court’s jurisdiction over all interstate disputes, “whatever the merits.” Nebraska v. Colorado, 577 U.S. ____ (2016) (Thomas, J. dissenting). Justice Thomas acknowledged in his Nebraska dissent that he had relied in the past on the Court’s practice of exercising discretion to deny cases between states but now sees that practice as inconsistent with the express mandate of Congress. Id. (Justices Thomas and Alito also dissented from the Court’s decision not to take up the New Mexico case, citing their opinion in Nebraska.)

As is customary, the Court asked the United States solicitor general to weigh in with an opinion on whether the Court should entertain jurisdiction over New Mexico’s claim. The solicitor general sided with Colorado and recommended against jurisdiction, while acknowledging that this might leave New Mexico without any redress against Colorado: “With some possible exceptions, Colorado’s liability for New Mexico’s claims cannot be resolved in the district court action because this Court has exclusive jurisdiction over suits between States (citation omitted).” Brief for United States as Amicus Curiae at 22, New Mexico v. Colorado, No. 22O147 (U.S. Sup. Ct. May 23, 2017), www.justice.gov/sites/default/files/briefs/2017/05/30/no._147_orig._new_mexico_ac_pet.pdf.

The fact that New Mexico already had claims pending in district court against other parties may have impacted the Court’s decision. Both Colorado and the United States asserted that New Mexico’s district court litigation against EPA and private parties is sufficient to provide relief to New Mexico. The United States also posited that there are extra-judicial means by which New Mexico could obtain relief, such as through commenting to the agencies during Clean Water Act permitting procedures and the ongoing CERCLA investigation and remedial activity review. New Mexico disputed that these avenues are sufficient to protect its interests, arguing that they provide no means for any recovery of costs or losses.

The United States also suggested that Colorado might still be ordered to contribute to New Mexico’s costs, if (1) EPA is found jointly and severally liable under CERCLA in the New Mexico district court litigation, and (2) EPA in turn seeks to hold Colorado liable in contribution, for which jurisdiction in the district court would not be barred. Id. This likely presented little comfort for New Mexico, given the United States’ own arguments in the district court action that EPA is immune from liability and should be dismissed.

Perhaps the Court’s decision turned on the fact that New Mexico already had pending claims against other potentially liable parties in another court. But it begs the question: if EPA is ultimately dismissed, and if there are no other viable parties, should New Mexico not have an opportunity to try to recover its costs from the last remaining potentially liable party, even if that party is another state?

The Court’s rejection of New Mexico’s petition displays an unresolved tension between Congress’ dual priorities of promoting environmental protection and quick cleanups through the prospect of cost recovery against liable parties and providing states a neutral forum for litigation of claims between themselves. At some point, it may be up to Congress to address this tension.

Thomas J. Grever

Mr. Grever is a partner at Shook Hardy & Bacon LLP in Kansas City, Missouri, and is a member of the editorial board of Natural Resources & Environment. He may be reached at tgrever@shb.com.