Federal Circuit Court Decision in Chester Environmental Racism Case

Contents

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June 1, 1998, Monday

SECTION: ENVIRONMENTAL LAW; Pg. S35

LENGTH: 2888 words

HEADLINE: A RACE-BASED WASTE CASE

BYLINE: GERALD H. YAMADA

BODY:

A recent 3rd Circuit decision would allow Title VI of the Civil Rights Act of
1964 to be used under the rubric of
“environmental justice” to challenge local land use decisions and private business activities that
otherwise could not be reviewed under state or federal laws. The Supreme Court
should grant
certiorari and reverse this potentially far-reaching precedent.
Seif v. Chester Residents Concerned for Quality Living, 132 F.3d 925, petition for cert. filed, No. 97-1620 (March 30, 1998).

The predominantly African-American residents of
Chester, PA, filed
an action under Title VI alleging that the Pennsylvania Department of
Environmental Protection (PADEP) discriminated against them when it issued a
waste permit to Soil Remediation Services Inc. to operate a contaminated soil
treatment facility in
Chester. They alleged that, since 1987, PADEP had granted
five waste facility permits for sites in
Chester (with a total capacity of 2.1 million tons of waste per year), while granting
only two permits (total capacity 1, 400 tons a year) for sites in the rest of
Delaware County.

Section 601 of Title VI provides that
“no person . . . shall, on the ground of race, color, or national origin, be
excluded from participation in, be denied the benefits of, or be subjected to
discrimination under any program or activity receiving Federal financial
assistance.” The Supreme Court has ruled that there is a private
right of action under Section 601, but a private plaintiff must show an intent
to discriminate. The element of intent has made it very difficult to bring a
successful action under Section 601.

Section 602 authorizes federal agencies to adopt regulations to implement
Section
601. The 3rd Circuit reads this as authorizing federal agencies to adopt
standards under which a federal agency does not have to prove intent for a
finding of noncompliance under Title VI. The Environmental Protection Agency
has promulgated such a standard, which provides in part that
“a recipient shall
not use criteria or methods of administering its program, which have the effect
of subjecting individuals to discrimination because of their race, color,
national origin, or sex.” 40 C.R.F. Section 7.35(b).

By ruling that an implied private right of action exists under Section 602,
the 3rd Circuit would allow private
plaintiffs to bring a private action under the EPA’s effect test without having
to show a discriminatory intent or to exhaust administrative remedies by filing
an administrative complaint with the EPA. This is the issue that PADEP is
asking the Supreme Court to review.

But there is a more far-reaching aspect to the
3rd Circuit decision which PADEP has not raised in its petition. The 3rd
Circuit’s decision impliedly expands the definition of a
“program or activity” covered by Title VI to include private facility siting and local land use
decisions made by a permit applicant and a
local land use authority. The only
“program or activity receiving federal financial assistance” in this case is PADEP, and PADEP’s only connection is its approval of a
pollution control permit to operate a waste facility. The local land use
decision at issue–the location of a soil
treatment facility–was made by the city of Chester. PADEP has no authority to
review this decision as a part of it approval or disapproval of the permit
application.

PADEP has authority to issue or deny applications for permits to operate waste
processing facilities under Pennsylvania’s Solid Waste Management Act (SWMA). PADEP receives federal funding from EPA to operate Pennsylvania’s waste
programs pursuant to the Resource Conservation and Recovery Act (RCRA),
42 U.S.C. Section 6901, et seq. Neither SWMA nor RCRA have land use restrictions or criteria.

PADEP’s permitting decisions are governed by regulations
promulgated under SWMA. These regulations do not include any racial criteria
for evaluating permit applications. RCRA and EPA regulations do not have any
racial criteria for evaluating permit applications.

PADEP does not play any role in determining the site of facilities for which
environmental
control permits are sought. The city of Chester is the local land use
authority. The complaint of the Chester residents recognizes that PADEP’s
“waste facility permit application review process does not take into
consideration the racial composition of the community or the environs of the
proposed waste facility locations.”

The Chester residents claim that, by
granting the permit, PADEP violated the EPA’s discriminatory effect regulations
promulgated pursuant to Section 602 of Title VI. The District Court dismissed
this claim by finding that there is no private right of action under the EPA’s
discriminatory effect regulations, but the 3rd Circuit reversed.

New Rule

The
3rd Circuit decision, while purporting to interpret Section 602 of Title VI,
actually creates a new federal common law rule. It would allow private parties
to challenge pollution control permits against land use or racial criteria that
are not enumerated in applicable
environmental statutes and for which no standards have been promulgated by
either PADEP or the EPA. And it would allow federal courts and private parties
to second-guess PADEP’s permit decisions, adopted pursuant to required state
and EPA procedures against undefined standards, and would have the District
Court fashion the appropriate remedies.

The
3rd Circuit decision would deny facility owners or operators fair notice as to
the requirements with which they are expected to comply. It could impose
potentially retroactive liability on facility owners and operators who have
relied in good faith on permit terms and conditions in conducting their
operations and making business
decisions. It would extend the permit authority of PADEP and the EPA to reach
local land use decisions that neither agency has any statutory authority to
review.

In sum, the 3rd Circuit impliedly made a policy choice that state
environmental laws should include land use and racial criteria to
evaluate permit applications. A federal court is not authorized to make this
policy choice. The Supreme Court has spoken clearly on the lack of authority of
the federal courts to impose more stringent standards than is required by
federal or state law. See
City of Milwaukee v. Illinois, 451 U.S. 304 (1981);
Arkansas v. Oklahoma, 503 U.S. 91, 113 (1992). The 3rd Circuit decision threatens to erode the comprehensive regulatory
scheme enacted by Congress and the Pennsylvania legislature by allowing federal
courts to substitute its judgments for those of the EPA and PADEP by second-guessing pollution control permit decisions with the use of criteria not
enumerated in environmental laws. The 3rd Circuit cannot to use Section 602
regulations as a means to add new criteria to federal and state environmental
laws. See
American Forest and Paper Association v. EPA, 137 F.3d 291 (5th Cir. 1998).

Moreover, the 3rd Circuit decision misapplies the law for determining when it
is appropriate to imply a private right of action. The 3rd Circuit used a
three-prong test it established in
Polaroid Corp. v. Disney, 862 F.2d 987 (1988), requiring a court to inquire: (1) whether the agency rule is properly within
the scope of the enabling statute, (2) whether the statute under which the rule
was promulgated properly permits the implication of a private right of action,
and (3) whether implying a private right of
action will further the purpose of the enabling statute.

The 3rd Circuit concluded that there is no question that the EPA’s
discriminatory effect regulations satisfies the first prong. In addressing the
second and third factors, the court considered the factors set out by the
Supreme Court in
Cort v. Ash, 422 U.S. 66 (1975). The Cort factors are: (1) Is the plaintiff
“one of the class for whose especial benefit the statute was enacted,
“–that is, does the statute create a federal right in favor of the plaintiff?
(2) Is there any indication of legislative intent, explicit or implicit, either
to create such a remedy or to deny
one? (3) Is it consistent with the underlying purposes of the legislative
scheme to imply such a remedy for the plaintiff? And (4) Is the cause of action
one traditionally relegated to state law, in an area basically the concern of
the states, so that it would be inappropriate to infer a cause of action based
solely on federal law?

As to the first factor–whether Chester residents are one of the class for
whose especial benefit the statute was enacted–the 3rd Circuit summarily
concluded that the Chester residents satisfied this factor. No explanation is
given, and the finding is not contested by PADEP. The court failed to
distinguish between
activities of PADEP — which is a
“program or activity receiving Federal financial assistance” — and those of a local land use authority or the applicant for the permit. The
latter are not recipients of the RCRA financial assistance received by PADEP
and, as such, are not subject to the EPA regulation forbidding activities that
have the effect of racial discrimination.
PADEP is subject to the regulation, but PADEP does not play any role in
determining the site location of the facilities for which permits are sought;
that decision was made by the city before the permit application was submitted
to PADEP, and cannot be second-guessed by PADEP. Hence, the allegedly
discriminatory siting decision that the
Chester residents are challenging cannot be fairly attributed to PADEP’s
programs or activities.

The mere fact that PADEP approved a waste permit does not sufficiently
implicate the state in any purported discriminatory effects that may be
attributed to the city’s land use policies. See
Moose Lodge No. 107 v. Irvis, 407 U.S. 163 (1972). If the alleged discrimination was not caused by an entity covered under Title
VI, the 3rd Circuit should have explained why those claiming to have suffered
that discrimination are within the class of especial benefit for which Title VI
was enacted.

The 3rd Circuit also summarily
accepted the fourth Cort factor — whether the cause of action is one
traditionally relegated to state law in an area basically the concern of the
states. The court found this factor
“irrelevant because Title VI is federal law.” The 3rd Circuit failed, however, to recognize that what is at issue is a
challenge to a local
land use policy. Land use is a local concern and is not regulated by SWMA or
RCRA.

Flawed History

In analyzing the second Cort factor–whether there is any indication of
legislative intent to create a private right of action–the 3rd Circuit
improperly used statements made
by members of Congress, a House committee report, and congressional hearing
testimony as legislative history to support a private right of action. These
purported legislative history references were made more than 20 years after
Section 602 was enacted. They relate to Congress’ consideration of a bill to
broaden the
definition of the term
“program or activity” as used in Title VI in response to the Court’s decision in
Grove City College v. Bell, 465 U.S. 555 (1984), which narrowly construed the term. The legislative history of Section 602 of
Title VI is void of explanatory statements contemporaneous with its
passage. Since the congressional materials examined by the 3rd Circuit were
produced after Section 602 was enacted, the court should not have accepted them
as an accurate expression of Congress’ intent to create an implied private
right of action.

As to the third Cort factor–whether it is consistent with the underlying
purposes of the legislative
scheme to imply a private right of action–the 3rd Circuit decision did not
consider all the requirements in Section 602, and, to the extent it considered
them, the court misconstrued them. Section 602 specifies only two remedies that
may be imposed on noncompliance with any Section 602 requirement: (1) terminating federal funds or (2) any other means authorized by law. Section
602 goes on to provide that no such action shall be taken until the federal
agency has attempted to secure compliance by voluntary means and that no funds
shall be terminated until the federal
agency files a written report with the appropriate committees of the House and
Senate. No such action shall become effective until 30 days have elapsed after
the filing of such report.

The 3rd Circuit considered the purpose that the Section 602 requirements serve
is not as significant in private lawsuits, where the potential
remedy does not include the result (i.e., termination of funding) at which
Congress directed the requirements. Hence, in reaching this conclusion, the
court has read out of Section 602 the procedural safeguards that have been
statutorily created for the benefit of recipients of federal assistance.

As PADEP rightly points out in its petition, only a
federal agency can carry out the safeguards specified in Section 602. Hence,
implying a private right of action would be inconsistent with the legislative
scheme of providing the procedural safeguards that only a federal agency can
provide to recipients of federal assistance.

Finally, in addressing the third prong of its
test–whether implying a private right of action will further the purpose of
the enabling statute–the 3rd Circuit concluded that this prong is satisfied by
agreeing with the United States’ amicus position that a private right of action
will increase enforcement because the
“EPA itself lacks sufficient resources to achieve
adequate enforcement.” A better principle, however, is enunciated in
Davis v. United Air Lines Inc., 662 F.2d 120 (2d Cir. 1981), where the 2nd Circuit reasoned that while lack of executive resources to
enforce an act of Congress is regrettable, it is hardly the judiciary’s role to
redress that lack by inferring a private right of action as a judicial remedy.
The 2nd Circuit found no private right of action under Section 503 of the
Rehabilitation Act.

The 3rd Circuit also should have considered whether Congress has waived the
states’ sovereign immunity under the 11th Amendment to the extent of
allowing a private right of action under Section 602. In Section 1003 of the
Civil Rights Act, Congress waived sovereign immunity for suits against the
states for civil rights violations under enumerated civil rights laws,
including Title VI, as well as
against the federal government. Section 1003 also provides that in a suit
against a state remedies are available
“to the same extent as such remedies are available for such a violation in the
suit against any public or private entity other than a State.”

Yet in
Lane v. Pena, 518 U.S. 187 (1996), the Supreme Court limited Section 1003. As a part of its reasoning, the Court
noted that a waiver of the federal government’s sovereign immunity must be
unequivocally expressed in statutory text and will not be implied. This
reasoning should be equally applicable to Congress’ waiver of the
states’ sovereign immunity. Based on the Court’s opinion in Lane v. Pena,
Section 1003 may have limitations as to Congress’ waiver of the states’
sovereign immunity.

Moreover, Section 602 provides only two remedies, either of which can be
pursued only by the federal government. The limited
remedies authorized by Section 602 lend further support that Congress intended
only for federal agencies to bring suit under Section 602 and, therefore, did
not intend to waive the states’ sovereign immunity to allow for private rights
of action to enforce a federal agency’s discriminatory
effect regulations. The 3rd Circuit should have been asked to consider this
constitutional question.

The 3rd Circuit seriously misapplied the Cort factors and its own three-prong
test. The 3rd Circuit decision creates a private right of action based on rules
of construction and the exercise of judicial authority that are inconsistent
with the Supreme
Court’s decisions and those of other U.S. Courts of Appeals. By finding a
private right of action on the facts before it, the 3rd Circuit has impliedly
expanded Title VI to allow PADEP, the EPA, and the federal courts to review
local land use decisions and to fashion remedies for which they have
no authority. The Supreme Court should grant PADEP’s petition so that the Court
can review this far-reaching aspect of the 3rd Circuit decision.

Gerald H. Yamada is of counsel to the D.C. office of Paul, Hastings, Janofsky
& Walker. He was principal deputy general counsel of the Environmental
Protection Agency from 1982 to
1995, serving as acting general counsel for extended periods in 1985, 1989, and
1993.

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