Retroactive application of CERCLA does not violate constitutional rights

Law Reporter, Jun 2001

Franklin County Convention Facilities Auth. v. American Premier Underwriters, Inc., 240 EM 534 (6th Cir. 2001).

The Sixth Circuit Court of Appeals held that the retroactive application of the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA), 42 U.S.C. SecSec9601-9675, does not violate a party's substantive due process rights or the Takings Clause.

Here, a company sued the successor in interest to property owners under CERCLA for the costs of cleaning up hazardous waste allegedly dumped in 1901. Defendant appealed an award to plaintiff, arguing, among other things, that the court erred in retroactively applying CERCLA. Defendant contended that the retroactive application violated its substantive due process rights and amounted to an unconstitutional taking under the Fifth Amendment.

Affirming, the Sixth Circuit noted that due process is satisfied by showing that the retroactive application of a law is itself justified by a rational legislative purpose. Congress intended CERCLA to function retroactively, the court said. The act's chief liability provision uses the past tenseapplying to those who "owned" or "operated" a facility at the time of disposal of a hazardous substance-and it authorizes those who clean up waste sites to seek recovery of costs from those responsible for the waste. The court also noted that Congress, in spreading the cost of cleaning waste sites to those responsible, was furthering a rational legislative purpose. Consequently, retroactive application of CERCLA in this case does not violate due process.

Moreover, there has been no taking under the Fifth Amendment, the court found. The Takings Clause, the court explained, prevents the government from forcing some people alone to bear burdens that, in all fairness, should be home by the public. Factors to consider in a takings analysis are the economic impact of the regulation, its interference with investment-backed expectations, and the character of the governmental action. In evaluating these factors, the court agreed with the trial court's analysis that the potentially significant impact of liability on defendant did not interfere with defendant's reasonable investmentbacked expectations because CERCLA liability is tied directly to the past actions of responsible parties. The economic effect on defendant is directly proportional to its prior acts of pollution, the court explained. Also, there was nothing unusual in the character of the governmental action because Congress intended to spread the costs of present risks and liabilities to those who benefitted from them in the past, the court said.

Plaintiff's Counsel

Richard A. Frye, Columbus, Ohio

John A. Gleason, Columbus, Ohio

Louise F. Milkman, Washington, D.C.