General Electric Company v. U.S. EPA

Jun 29: In the U.S. Court of Appeals, D.C. Circuit, Case No. 09-5092. In this case, which included amicus briefs from the U.S. Chamber of Commerce (for GE) and Natural Resources Defense Council (NRDC, for EPA), the appellant, General Electric challenges the constitutionality of a statutory scheme that authorizes U.S. EPA to issue orders, known as "unilateral administrative orders" (UAOs), directing companies and others to clean up hazardous waste for which they are responsible.

 

    General Electric argues that the statute, as well as the way in which EPA administers it, violates the Due Process Clause because EPA issues UAOs without a hearing before a neutral decisionmaker. The Appeals Court said, "We disagree. To the extent the UAO regime implicates constitutionally protected property interests by imposing compliance costs and threatening fines and punitive damages, it satisfies due process because UAO recipients may obtain a pre-deprivation hearing by refusing to comply and forcing EPA to sue in federal court."  The Appeals Court indicates that General Electric insists that the UAO scheme and EPA's implementation of it nonetheless violate due process because the mere issuance of a UAO can inflict immediate, serious, and irreparable damage by depressing the recipient's stock price, harming its brand value, and increasing its cost of financing.

 

    But, the Appeals Court answers, ". . .such -- 'consequential' injuries -- injuries resulting not from EPA's issuance of the UAO, but from market reactions to it -- are insufficient to merit Due Process Clause protection. We therefore affirm the district court's grant of summary judgment to EPA.

 

    In final summary, the Appeals Court says further, "We fully understand, as GE argues, that the financial consequences of UAOs can be substantial. We also understand that other administrative enforcement schemes that address matters of public health and safety may provide greater process than does CERCLA." The Appeals Court refers to sections of the Appellant's brief and the Chamber's amicus brief; but counters with a referral to the NRDC amicus brief which it says argues that "numerous environmental statutes other than CERCLA establish regimes in which an agency orders an entity to comply with a statute without prior . . . trial-type hearings."

 

    However, the Appeals Court says such concerns ". . .do not implicate the constitutionality of CERCLA or of the policies and practices by which EPA implements it. Even if  -- '[i]n the best of all worlds,' greater process -- 'might be desirable, . . . Congress . . . struck a different balance' in designing CERCLA's UAO regime. . . Because our judicial task is limited to determining whether CERCLA's UAO provisions violate the Fifth Amendment either on their face or as administered by EPA, we affirm the decisions of the district court [in favor of EPA]."

 

    Access the complete opinion (click here).