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PENNSYLVANIA v. USPS

December 30, 1992

COMMONWEALTH OF PENNSYLVANIA, DEPARTMENT OF ENVIRONMENTAL RESOURCES, Plaintiff
v.
UNITED STATES POSTAL SERVICE, Defendant



The opinion of the court was delivered by: JAMES F. MCCLURE, JR.

 December 30, 1992

 BACKGROUND

 This action was initiated with a complaint filed August 5, 1991 by the Commonwealth of Pennsylvania, Department of Environmental Resources ("DER") with the Pennsylvania Environmental Hearing Board ("EHB") seeking civil penalties from the United States Postal Service ("USPS" or "Postal Service") for alleged state statutory, regulatory and permit violations. The USPS removed the case from the EHB to this court.

 The alleged violations occurred during construction of a new postal distribution facility near Harrisburg, Pennsylvania (the "site"). The USPS submitted an erosion and sedimentation control plan to DER for work to be performed at the site. DER approved the plan and issued Earth Disturbance Permit Number 2289802 to the USPS on November 29, 1989. DER approved a revised plan for the site on June 25, 1990.

 In this action, DER seeks to recover civil penalties for USPS' alleged non-compliance with permit requirements, the Pennsylvania Clean Streams Law ("CSL"), 35 Pa. Stat. Ann. §§ 691.1-691.1003, and state environmental regulations, 25 Pa. Code § 102.4. DER alleges that USPS discharged sediment into Paxton Creek and an unnamed tributary of that creek in violation of its state-issued permit. Work on the project has been completed. Both parties agree that there are no ongoing violations. The penalties which DER seeks are solely for past violations.

 Two motions are before the court: 1) a motion (Record document No. 14) for partial summary judgment on the sovereign immunity issue filed by DER; and 2) a motion (Record Document No. 23) for judgment on the pleadings filed by USPS. Both parties agree that there are no material issues of fact with respect to the issues raised by the pending motions. *fn1"

 The parties' motions raise a single legal issue: whether the USPS is amenable to suit by a state agency for civil penalties for past violations (non-coercive, as opposed to coercive fines) of state environmental law, or whether such actions are barred by sovereign immunity. DER contends that the sue-and-be-sued clause *fn2" in the Postal Reorganization Act of 1970, ("1970 Postal Act"), 39 U.S.C. §§ 101-5605, operates as a waiver of sovereign immunity from civil penalties.

 This is an issue of first impression. No reported decision has considered whether the Postal Service's sue-and-be-sued clause, or that of any other federal instrumentality, operates as a waiver of sovereign immunity from state-imposed civil penalties. Supreme Court precedent makes it clear that the Service's sue-and-be-sued clause operates as a broad waiver of sovereign immunity upon which few restrictions can be implied absent some clear indication of congressional intent that the waiver be circumscribed. We find such an indication in Congress' inclusion of the Postal Service in the waiver provision of the federal Clean Water Act, which the Supreme Court has held does not operate as a waiver of sovereign immunity. The Postal Service is not, therefore, amenable to suit by DER for civil penalties. We will grant the USPS' motion for judgment on the pleadings. DER's motion for partial summary judgment will be denied.

 DISCUSSION

 Motion for judgment on the pleadings

 Federal Rule of Civil Procedure 12(c) provides that "after the pleadings are closed but within such time as not to delay the trial, any party may move for judgment on the pleadings." *fn3" Judgment on the pleadings may be granted if "'no set of facts could be adduced to support the plaintiff's claim for relief.'" Institute for Scientific Info., Inc. v. Gordon and Breach, Science Publishers, Inc., 931 F.2d 1002, 1005 (3d Cir.), cert. denied, 122 S. Ct. 302 (1991), quoting Bryson v. Brand Insulations, Inc., 621 F.2d 556, 559 (3d Cir. 1980). "Granting a Rule 12(c) motion results in a determination on the merits at an early stage in the litigation, and thus . . . [the law] requires 'the movant [to] clearly establish [] that no material issue of fact remains to be resolved and that he is entitled to judgment as a matter of law.'" Id., quoting Jablonski v. Pan American World Airways, Inc., 863 F.2d 289, 290-91 (3d Cir. 1988). In considering the motion, the court must view the facts presented in the pleadings in the light most favorable to the nonmoving party. Id., at 1004.

 Waiver of sovereign immunity

 As a federal entity, the Postal Service is immune from suit absent a waiver of sovereign immunity. The sue-and-be-sued clause in its charter, the 1970 Postal Act, unquestionably operates as such a waiver, which renders the Postal Service amenable to civil proceedings. Loeffler v. Frank, 486 U.S. 549, 554, 100 L. Ed. 2d 549, 108 S. Ct. 1965 (1988). Less clear is whether that waiver extends to the imposition of civil penalties by a state regulatory agency.

 Waivers of federal sovereign immunity are traditionally construed narrowly in favor of the sovereign. However, in the case of waivers conferred by a sue-and-be-sued clause, there is an exception to the traditional rule. *fn4" Consistent with established Supreme Court doctrine dating back to 1940, Federal Housing Authority v. Burr, 309 U.S. 242, 84 L. Ed. 724, 60 S. Ct. 488 (1940), such waivers are construed liberally. Restrictions should not be implied readily and exceptions are construed narrowly. Exceptions to the waiver should be found only if: 1) the claim asserted is inconsistent with a statutory or constitutional scheme; 2) an implied restriction is necessary to avoid "grave interference" with a governmental function; or 3) for other reason it was plainly congress' intent that such actions not be permitted. Burr; Loeffler, supra, 486 U.S. at 554-55 and Franchise Tax Board v. USPS, 467 U.S. 512, 517-118, 81 L. Ed. 2d 446, 104 S. Ct. 2549 (1984).

 Loeffler and Franchise Tax Board

 Two post-1970 Supreme Court decisions, Loeffler, supra and Franchise Tax, supra, have construed the Postal Service's waiver broadly, placing great emphasis on the Service's quasi-commercial status. The 1970 Act converted the Postal Service from a department of the United States government to "an independent establishment of the executive branch", 39 U.S.C. § 201. Stressing that it was Congress' intent to place the Postal Service on the same footing as private business, the Court viewed the sue-and-be-sued clause as "part of Congress' general design that the Postal Service 'be run more like a business than had its predecessor, the Post Office Department.'" Franchise Tax, supra, 467 U.S. at 521. By emphasizing the Service's independence, and by adopting a sue-and-be-sued clause as part of its charter, the Court held, Congress had "cast off the Service's 'cloak of sovereignty'". Loeffler, supra, 436 U.S. at 555.

 The scope of the waiver is construed according to the "usual and ordinary sense" of the words used, absent some indication that Congress intended otherwise. So construed, the Court held, the clause renders the Postal Service amenable to "all civil process incident to the commencement or continuance of legal proceedings". ...


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