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Manor Care, Inc. v. Yaskin


filed: December 4, 1991.



Before: Mansmann and Alito, Circuit Judges and Diamond, District Judge*fn*

Author: Alito


ALITO, Circuit Judge :

This case presents the question whether the federal Comprehensive Environmental Resource, Compensation, and Liability Act ("CERCLA" or "Superfund"), 42 U.S.C. § 9601-9675, preempts the issuance of certain directives by the New Jersey Department of Environmental Protection under authority implicitly conferred by the New Jersey Spill Compensation and Control Act ("Spill Act"), N.J. Stat. Ann. § 58:10-23.11, 23.11(a)-(z). These directives required a responsible party to pay for the state's share of cleanup costs at a CERCLA site. The district court held that these directives were not preempted. We will affirm.


In 1982, the United States Environmental Protection Agency ("EPA") entered into contracts with the State of New Jersey to fund the removal of hazardous substances from two New Jersey sites, the Lipari Landfill in Gloucester County and the Florence Land Recontouring Landfill in Burlington County. In accordance with CERCLA, 42 U.S.C. § 9604(c)(3),*fn1 the contracts provided that the federal government would pay 90% of the cleanup cost and the state would pay the remaining 10%. Soon thereafter, the New Jersey Department of Environmental Protection ("DEP"), acting pursuant to the Spill Act, issued two directives ordering Manor Care and other responsible parties to pay to New Jersey the 10% of the cleanup cost that New Jersey was obligated to pay the federal government under the CERCLA contracts. The total sought by the two directives exceeded five million dollars.

The two directives were issued by the DEP under a provision of the Spill Act, N.J.S.A. 58:10-23.11f(a). This provision expressly authorizes the DEP to remove waste or direct a responsible party to remove the waste. The New Jersey Supreme Court, however, has held that this provision impliedly authorizes the DEP to issue administrative directives requiring the payment of money to compensate for cleanup of hazardous waste sites. Matter of Kimber Petroleum Corp., 110 N.J. 69, 539 A.2d 1181, appeal dismissed, 488 U.S. 935 (1988). Under N.J.S.A. 58:10-23.11f(a), a responsible party who does not comply with such a directive may be liable for treble damages. Id. In order to enforce such a directive, the DEP must initiate a cost recovery action in a court of competent jurisdiction. In such an action, a responsible party may assert a good cause defense based on an objectively reasonable belief that a directive was invalid in whole or in part. Matter of Kimber Petroleum Corp., 110 N.J. at 82-84, 539 A.2d at 1188-1189.

After receiving the directives, Manor Care brought suit against DEP officials in the United States District Court for the District of New Jersey under the citizen-suit provision of CERCLA, 42 U.S.C. § 9659.*fn2 Manor Care's complaint alleged that the issuance of the directives was "in conflict with the comprehensive federal statutory scheme for recovery of funds to remediate releases of hazardous substances into the environment." The complaint asserted that the DEP could recover its cleanup costs at the sites only through litigation in federal court under 42 U.S.C. § 9607(a)(4)(A) and 9613(f)(1). Manor Care sought declaratory and injunctive relief. The defendants moved under Fed. R. Civ. P. 12(b)(6) to dismiss the complaint for failure to state a claim upon which relief can be granted.

In an unpublished opinion, the district court found that nothing in the language of CERCLA or its legislative history indicates a congressional intent to preempt statutes such as the Spill Act and that there is no actual conflict between the two statutes. The court therefore granted the defendants' motion and dismissed the case. Manor Care appealed.

We have jurisdiction to hear this appeal from a final order of a district court pursuant to 28 U.S.C. § 1291. Since this appeal involves statutory construction, our standard of review is plenary. Cassidy Podell Lynch v. Synder General Corp., Nos. 90-5765, 90-5770, 1991 4 WL 181403 at *5 (3d Cir. Sept. 18, 1991); United States v. Barel, 939 F.2d 26, 31 (3d Cir. 1991). Because this appeal is from a dismissal of a complaint under Fed. R. Civ. P. 12(b)(6) for failure to state a claim, we will accept as true all facts alleged in the complaint and all reasonable inferences that can be drawn from them. Delaware Valley Citizens Council v. Davis, 932 F.2d 256, 267 (3d Cir. 1991); Markowitz v. Northeast Land Co., 906 F.2d 100, 103 (3d Cir. 1990).


Federal law may preempt state law by express provision or by provisions that evidence a congressional intent to occupy a field and leave no room for supplementary state regulation. See Fidelity Federal Savings & Loan Ass'n v. De La Cuesta, 458 U.S. 141, 153 (1982); Jones v. Rath Packing Co., 430 U.S. 519, 525 (1977). Congressional intent determines whether state action is preempted by federal law. Ingersoll-Rand Co. v. McClendon, 111 S. Ct. 478, 482 (1990); Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 208, 105 S. Ct. 1904, 1909-1910 (1985). We ascertain congressional intent by examining the statutory language and the structure and purpose of the statute. Ingersoll-Rand Co., 111 S. Ct. at 482; FMC Corp. v. Holliday, 111 S. Ct. 403, 407 (1990).

As the district court noted, CERCLA does not on its face preempt state laws such as the Spill Act. On the contrary, CERCLA § 114(a), 42 U.S.C. § 9614(a), unambiguously states: "Nothing in this chapter shall be construed or interpreted as preempting any State from imposing any additional liability or requirements with respect to the release of hazardous substances within such State."*fn3 Thus, "CERCLA expressly does not pre-empt State law." New York v. Shore Realty, 759 F.2d 1032, 1041 (2d Cir. 1985).

Congress' response to the Supreme Court's decision in Exxon v. Hunt, 475 U.S. 355 (1986), further illustrates that Congress did not intend for CERCLA to occupy the field of hazardous waste cleanup. In Exxon v. Hunt, supra, the Supreme Court held that a subsequently repealed provision of CERCLA, Section 114(c), 42 U.S.C. § 9614(c) (repealed 1986),*fn4 preempted the Spill Act insofar as that Act imposed a tax to fund cleanup costs that "might be compensated under CERCLA." This holding would not affect the present case, even if Section 114(c) had not been repealed, since the Supreme Court held that "the 10% state share is not a cost that 'may be compensated' by Superfund." 475 U.S. at 375. Nevertheless, Congress' response to the Supreme Court's decision is instructive.

Shortly after the Supreme Court's decision, Congress amended CERCLA and completely repealed the language in § 114(c) on which the holding in Exxon had been based. Pub. L. No. 99-499, 100 Stat. 1613 (1986). The Senate Report, which was written prior to the Supreme Court's decision, observed:

The reported bill strikes section 114(c) of the Act to clarify that States are not preempted from imposing taxes for purposes already covered by CERCLA. . . .

The primary effect of the amendment will be to remove a potential barrier to the creation of State superfund programs. The amendment may result in an increase in the number and pace of hazardous substance response actions undertaken or partially funded by States, since States will be able to raise funds to assist such hazardous substance response.

S. Rep. No. 11, 99th Cong., 1st Sess. at 59-60 (1985). See also H.R. Rep. No. 253, 99th Cong., 1st Sess., pt. 1 at 65 (1985) (Congressional Budget Office Cost Estimate), reprinted in 1986 U.S.C.C.A.N. 2835, 2847; H.R. Rep. No. 253, 99th Cong., 1st Sess., pt. 1 at 83-84 (1985) (Energy and Commerce Committee), reprinted in 1986 U.S.C.C.A.N. 2835, 2865-2866; Statement of Lee M. Thomas, Environmental Protection Agency, H.R. Rep. No. 253, 99th Cong., 1st Sess., pt. 1 at 123, 125 (1985), reprinted in 1986 U.S.C.C.A.N. 2835, 2905, 2907; Separate and Dissenting Views-Superfund Amendments of 1985, H.R. Rep. No. 253, 99th Cong., 1st Sess. pt. 1 at 257, 267 (1985), reprinted in 1986 U.S.C.C.A.N. 2835, 2931, 2942; H. R. Rep. No. 253, 99th Cong., 1st Sess., pt. 5 at 27 (1985) (Public Works and Transportation Committee), reprinted in 1986 U.S.C.C.A.N. 3124, 3150; H.R. Conf. Rep. No. 962, 99th Cong., 1st Sess., pt. 5 at 183, 225 (1985), reprinted in 1986 U.S.C.C.A.N. 3276, 3318.

Thus, the language of § 114(a), the repeal of the original language of § 114(c), and the legislative history of that repeal demonstrate clearly that Congress did not intend for CERCLA to occupy the field or to prevent the states from enacting laws to supplement federal measures relating to the cleanup of hazardous wastes.


Manor Care argues that whatever Congress' general intention might have been with respect to state hazardous waste cleanup schemes that supplement and complement CERCLA, certain CERCLA provisions conflict directly with the application of the Spill Act in the instant case. Of course, any state law that actually conflicts with federal law is preempted. Michigan Canners & Freezers Ass'n, Inc. v. Agricultural Marketing & Bargaining Board, 467 U.S. 461, 469 (1984). Here, however, the challenged DEP directives do not conflict with, but instead supplement, the CERCLA provisions on which Manor Care relies.

First, Manor Care contends that the DEP directives conflict with CERCLA § 116(a), 42 U.S.C. § 9606(a), which authorizes the Attorney General to seek relief in federal court to abate imminent and substantial damage resulting from an actual or threatened release of a hazardous substance from a facility.*fn5 Manor Care urges that under this Section only the federal government may obtain orders compelling hazardous waste cleanups and that therefore the DEP directives usurped exclusively federal authority.

Manor Care's argument misconstrues Section 106(a). While Section 106(a) does not authorize a state to seek relief in federal court to abate a covered release of a hazardous substance, Section 106(a) does not limit state remedies under state law. Nor does Section 106(a) apply to state efforts to recover cleanup costs. Thus, Section 106(a) does not preclude state orders seeking payment for cleanup costs under state law.

The present case is clearly distinguishable from Colorado v. Idarado Mining Co., 916 F.2d 1486 (10th Cir. 1990), cert. denied, 111 S. Ct. 1584 (1991), on which Manor Care relies. In that case, the Tenth Circuit held that CERCLA Section 121(e)(2), 42 U.S.C. § 9621(e)(2), did not authorize a state to obtain an injunction requiring compliance with a remedial plan proposed by the state. Instead, the court held (916 F.2d at 1494) that Section 121(e)(2) "allows states to enforce requirements of remedial actions embodied in consent decrees under CERCLA. . ." The court also observed (916 F.2d at 1493) that the injunctive remedy provided by CERCLA Section 106 was not available to a state. Thus, the Tenth Circuit's decision simply shows that CERCLA does not confer upon states the authority to obtain certain injunctive relief. The decision says nothing whatsoever about the states' ability to obtain cleanup costs under their own laws.

Second, Manor Care argues that the DEP directives conflict with CERCLA Sections 107 and 113, 42 U.S.C. § 9607 and 9613. Section 107 imposes liability upon certain parties for federal or state cleanup costs that are "not inconsistent with the national contingency plan."*fn6 Section 113 grants the United States district courts exclusive jurisdiction for civil suits arising under CERCLA. Manor Care contends that if New Jersey is to recover the 10% it must pay the federal government under the CERCLA contracts, it must do so pursuant to these CERCLA liability and remedy provisions, not pursuant to the Spill Act.

Manor Care's argument is inconsistent with Congress' clear and strong intent. As discussed above, Congress did not intend for CERCLA remedies to preempt complementary state remedies. Moreover, Manor Care's argument neglects to consider Section 114(b), 42 U.S.C. § 9614(b), which prohibits a person from receiving compensation for the same removal costs, damages, or claims under both CERCLA and another state or federal law.*fn7 Such a provision would be unnecessary and inexplicable if, as Manor Care maintains, costs that may be recovered under CERCLA may not be recovered under state law. In other words, if CERCLA's remedies preempted state remedies for recovering costs of hazardous waste cleanups, § 114(b) would make no sense at all. Accordingly, we find no actual conflict between the DEP directives at issue in this case and the CERCLA provisions on which Manor Care relies.*fn8


Finally, Manor Care argues that the district court considered matters outside of the pleading, i.e., the language of the CERCLA contracts for the two sites in question, and therefore erred by not treating the motion to dismiss under Fed. R. Civ. P. 12(b)(6) as a motion for summary judgment. See Fed. R. Civ. P. 12(b). We disagree. While it is true that the district court referred in a single footnote to language from the CERCLA contracts as "further support" for its finding that CERCLA does not preempt the Spill Act, the court's decision is not in any way dependent on that supporting language. Furthermore, a state's obligations under a CERCLA contract are largely determined by statute. 42 U.S.C. § 9604(c)(3). The district court opinion turned, as it should have, on the express language and legislative history of CERCLA and on the application of CERCLA and the Spill Act to the facts alleged in the complaint. If the district court's passing reference to the contractual language was mistaken, it was certainly harmless.


In summary, we hold that the district court properly interpreted CERCLA as not preempting the Spill Act. We will therefore affirm the order of the district court.

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