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United States v. Union Gas Co.

June 10, 1986


On Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. Civ. No. 83-2456)

Author: Becker

Before: WEIS, HIGGINBOTHAM, BECKER, Circuit Judges

BECKER, Circuit Judge.

This appeal presents a single question: whether the eleventh amendment bars defendant-third party plaintiff Union Gas Company from suing the state of Pennsylvania for monetary damages in an action arising under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA, or Superfund), 42 U.S.C. § 9601 et seq. (1982). The district court held that the eleventh amendment was a bar to suit and dismissed Union Gas' claim against the state. We affirm.


The relevant facts can be summarized quite briefly. Predecessors of Union Gas Company owned and operated a carburetted water gas plant proximate to Brodhead Creek in Stroudsburg, Pennsylvania, between 1890 and 1948, after which the plant was dismantled. In 1953 and 1970, Union Gas sold part of its land near the creek to Pennsylvania Power and Light Company, which in turn granted easements over the land to the Borough of Stroudsburg. In 1955, due to flooding, the state and the borough, together with the Army Corps of Engineers, dug levees, erected dikes, narrowed and deepened the creek, and redirected its flow. In early 1980, the borough assigned its easements to the state.

On October 7, 1980, the state was excavating at the creek when it struck a large deposit of coal tar that began to seep into Brodhead Creek. Alerted to the coal tar seepage, the Environmental Protection Agency (EPA) asserted that the coal tar was a hazardous substance and ordered the site be cleaned up.*fn1 The state of Pennsylvania jointly with the federal government undertook, inter alia, to dredge the back of the channel of Brodhead Creek, install a slurry wall to prevent further coal tar seepage, and clean up the coal tar that had already seeped into the water. The federal government reimbursed the state for all its costs, expending approximately $720,000 in total.


The United States brought suit in the district court for the Eastern District of Pennsylvania against Union Gas under CERCLA §§ 104, 107 (42 U.S.C. §§ 9604, 9607) for recoupment of costs of $450,000 incurred in cleaning up the spill at Brodhead Creek.*fn2 The United States claimed that the coal tar had been deposited into the ground near Brodhead Creek by Union Gas and its predecessors, as a by-product of their carburetted water gas processing, and that Union Gas was consequently liable for the clean up costs. Union Gas answered the complaint, denying any liability, and filed a third-party complaint pursuant to Fed. R. Civ. P. 14, naming Pennsylvania and the Borough of Stroudsburg as third-party defendants. Union Gas alleged that the state and its political subdivision had "negligently caused, or contributed to, the discharge of coal tar into Brodhead Creek" by their recent excavation and earlier construction of dikes and levees, and therefore that they should pay for the clean up.

The state, believing that the eleventh amendment barred Union Gas' suit against it, responded with motions to dismiss pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6).*fn3 The district court granted the state's motion. United States v. Union Gas Co., 575 F. Supp. 949 (E.D. Pa. 1983). Shortly thereafter, the United States filed an amended complaint, virtually identical to its original complaint but with revised damage figures alleging that the United States had spent $1,400,000 on the clean-up, of which $720,000 was collectible from Union Gas under CERCLA. Union Gas answered and filed an amended third-party claim against the state and borough. The state again moved to dismiss, and the court granted the state's motion "for the reasons set forth in [575 F. supp. 949]."

Approximately five months after the court's dismissal of Union Gas' amended third-party claim, the court dismissed the federal government's action against Union Gas pursuant to Rule 23(b) of the Local Rules of Civil Procedure of the Eastern District of Pennsylvania on the understanding that the United States and Union Gas had reached a settlement. Union Gas then appealed, citing as error the district court's denial of its motion to join the state as a party.

The issue before us involves a question of law, and therefore our review is plenary.


The eleventh amendment states that:

The Judicial Power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.

U.S. Const. amend. XI. Although not apparent on its face, the eleventh amendment has been interpreted as a grant of sovereign immunity to the states in federal court.*fn4 Pennhurst State School & Hospital v. Halderman, 465 U.S. 89, 79 L. Ed. 2d 67, 104 S. Ct. 900 (1984); Edelman v. Jordan, 415 U.S. 651, 39 L. Ed. 2d 662, 94 S. Ct. 1347 (1974); Hans v. Louisiana, 134 U.S. 1, 33 L. Ed. 842, 10 S. Ct. 504 (1890). But see Green v. Mansour, 474 U.S. 64, 106 S. Ct. 423, 431, 88 L. Ed. 2d 371 (1985) (Brennan, J., dissenting) ("the Amendment was intended simply to remove federal court jurisdiction over suits against a State where the basis for jurisdiction was that the plaintiff was a citizen of another State or an alien"); Atascadero State Hospital v. Scanlon, 473 U.S. 234, 105 S. Ct. 3142, 3156-78, 87 L. Ed. 2d 171 (1985) (Brennan, J., dissenting) (detailing history of the amendment to support the same conclusion); Gibbons, The Eleventh Amendment and State Sovereign Immunity: A Reinterpretation, 83 Colum. L. Rev. 1889 (1983) (same); Shapiro, Wrong Turns: The Eleventh Amendment and the Pennhurst Case, 98 Harv. L. Rev. 61, 67-71 (1984). The immunity can be avoided in only two ways: (a) Congress can abrogate it by providing through statute for suits against states, or (b) states can waive their sovereign immunity and consent to be sued. We are concerned here only with whether CERCLA abrogated Pennsylvania's immunity.*fn5

The Supreme Court has noted the eleventh amendment's importance in maintaining the balance of power between state and federal interests. See, e.g., Atascadero, supra, 105 S. Ct. at 3147-48; Pennhurst, supra, 465 U.S. at 99. Because this balance is central to our system of federalism, the Court has been reluctant to infer abrogation of the eleventh amendment by a federal statute that could be otherwise interpreted. In Pennhurst, for example, the Court required "an unequivocal expression of congressional intent to 'overturn the constitutionally guaranteed immunity of the several States.'" 465 U.S. at 99 (quoting Quern v. Jordan, 440 U.S. 332, 342, 59 L. Ed. 2d 358, 99 S. Ct. 1139 (1979)). In the recent Atascadero case, the Court held that "Congress must express its intention to abrogate the Eleventh Amendment in unmistakable language in the statute itself." 105 S. Ct. at 3148 (footnote omitted). See also Edelman v. Jordan, 415 U.S. 651, 39 L. Ed. 2d 662, 94 S. Ct. 1347 (1974).

Even a statute whose natural reading would allow for suits against the state -- indeed a statute for which any other reading may be awkward -- may not suffice. The Court has insisted that the statute, when read literally, not merely allow suits against the state, but that it do so with such specificity that it is clear that Congress consciously and directly focused on the issue of state sovereign immunity and chose to abrogate it.*fn6 Cf. Hutto v. Finney, 437 U.S. 678, 706, 57 L. Ed. 2d 522, 98 S. Ct. 2565 (1978) (Powell, J., concurring in part and dissenting in part) ("The Court should be 'hesitant to presume congressional awareness' of Eleventh Amendment consequences of a statute that does not make express provision for monetary recovery against the States.") (quoting SEC v. Sloan, 436 U.S. 103, 121, 56 L. Ed. 2d 148, 98 S. Ct. 1702 (1978)).*fn7

Two cases in particular illustrate the Court's insistence on overwhelming evidence of congressional intent. In Employees of Dept. of Pub. Health & Welfare, 411 U.S. 279, 36 L. Ed. 2d 251, 93 S. Ct. 1614 (1972), employees of a state hospital sued for overtime pay that they claimed they were entitled to under the Fair Labor Standards Act (FLSA). One section of the FLSA gave employees whose employers were covered by the FLSA a right of action against the employers to enforce the FLSA's terms. Another section had recently been amended explicitly to include state hospitals in the class of employers regulated by the FLSA. Although these two section appeared to allow for a suit against state governments in federal court, the Court found no abrogation of the State's immunity because there was no evidence of congressional intent on the specific issue of sovereign immunity. Id. at 284-85. It was also significant, the Court noted, that there was plausible interpretation of the amended section that did not require abrogation of the eleventh amendment, according to which the section empowered the Secretary of Labor to sue the state on the workers' behalf. Id. at 285-86.

The second illustrative case, Atascadero, supra, involved § 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794 (1982), which conferred a right of action upon handicapped people who were discriminated against by "any recipient of federal assistance." A plaintiff sought damages from a state hospital that received federal financial assistance, but the Court held that the inclusive language of the Rehabilitation Act notwithstanding, the eleventh amendment barred the suit:

The statute thus provides remedies for violations of § 504 by " any recipient of federal assistance." There is no claim here that the State of California is not a recipient of federal aid under the statute. but given their constitutional role, the States are not like any other class of recipients of federal aid. A general authorization for suit in federal court is not the kind of unequivocal statutory language sufficient to abrogate the ...

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