People of State of Ill. v. Outboard Marine Corp., Inc.

• Decision Date: 29 April 1980
• Docket Number: Nos. 79-1341,79-1725,s. 79-1341
• Citation: 619 F.2d 623
• Parties: , 10 Envtl. L. Rep. 20,323 PEOPLE OF the STATE OF ILLINOIS, Plaintiff-Appellant, v. OUTBOARD MARINE CORPORATION, INC., a Delaware Corporation, Defendant-Appellee. UNITED STATES of America, Plaintiff, v. OUTBOARD MARINE CORPORATION, Defendant and Third Party Plaintiff-Appellee, and Monsanto Company, Third Party Defendant. Appeal of PEOPLE OF the STATE OF ILLINOIS, Proposed Intervenor.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 623

619 F.2d 623

14 ERC 1281, 10 Envtl. L. Rep. 20,323

PEOPLE OF the STATE OF ILLINOIS, Plaintiff-Appellant, v. OUTBOARD MARINE CORPORATION, INC., a Delaware Corporation,

Defendant-Appellee.

UNITED STATES of America, Plaintiff, v. OUTBOARD MARINE CORPORATION, Defendant and Third Party

Plaintiff-Appellee, and

Monsanto Company, Third Party Defendant.

Appeal of PEOPLE OF the STATE OF ILLINOIS, Proposed Intervenor.

Nos. 79-1341, 79-1725.

United States Court of Appeals Seventh Circuit.

Argued Nov. 26, 1979.

Decided March 28, 1980.

As Amended on Denial of Rehearing and Rehearing En Banc

April 29, 1980.

Bruce A. Featherstone, Kirkland & Ellis, Chicago, Ill., for third party defendant.

Jeffrey C. Fort, Chicago, Ill., for defendant and third party plaintiff-appellee.

John Van Vranken, Asst. Atty. Gen., Chicago, Ill., for proposed intervenor.

Before SWYGERT, Circuit Judge, WISDOM, Senior Circuit Judge, ^* and TONE, Circuit Judge.

WISDOM, Senior Circuit Judge.

The first of these two consolidated appeals involves a question of federal common law: Does a state have a federal common law cause of action for nuisance against an in-state pollution source? We hold that it does have such a cause of action to prevent pollution of interstate or navigable waters. The second appeal concerns an attempt by the state to intervene in a suit by the federal government against the offending company. We hold that in the interest of the people of Illinois the State has the right to intervene in the federal suit.

On August 10, 1978, the Attorney General of the State of Illinois brought this action on behalf of the People of Illinois in federal district court against Outboard Marine Corporation (OMC), alleging that at least since January 1, 1959, OMC had discharged highly toxic polychlorinated biphenyls (PCBs) ¹ from its Waukegan, Illinois manufacturing facility ² into the North Ditch (a tributary of Lake Michigan), Waukegan Harbor, and Lake Michigan. The State alleged that the PCBs had accumulated in the bottom sediments of the receiving waters, causing contamination at levels that damaged aquatic life, bird life, and water quality, threatened the health and welfare of residents of Illinois, and impaired the usefulness of the Lake as a public water supply and place of recreation. ³ The State sued under the federal common law of nuisance and the Federal Water Pollution Control Act (FWPCA), 33 U.S.C. § 1251 et seq. For good measure, the State added several pendent claims based on Illinois law. ⁴ The complaint asked for an injunction restraining OMC from further discharging PCBs from OMC's Waukegan facility; a mandatory injunction directing OMC to study removal and disposal methods for the accumulated PCB-contaminated sediments; a mandatory injunction directing OMC to remove and dispose of the PCB-contaminated sediments in the North Ditch, Waukegan Harbor, and Lake Michigan; and a similar injunction requiring removal of PCB-contaminated soil. The complaint also asked for civil penalties.

On October 2, 1978, OMC filed a motion to dismiss the complaint. The court granted the motion on February 2, 1979. The district judge recognized that "there is indeed federal jurisdiction over a claim based on the federal common law of nuisance". Taking an unnecessarily narrow view of Illinois v. Milwaukee, 1972, 406 U.S. 91, 92 S.Ct. 1385, 31 L.Ed.2d 712, however, the court held that the federal common law count failed to state a claim upon which relief could be granted because this case "involves a controversy between two Illinois residents". There was "no allegation of injury to or from another state". The court ruled that it had no jurisdiction over the FWPCA claim because Illinois had not given the required 60 days notice to the Administrator or to the defendant. The State did not appeal this ruling. Finally, because the federal claims had been dismissed, the court rejected pendent jurisdiction.

Meanwhile on March 17, 1978, the United States filed a complaint in federal district court against OMC, also alleging PCB-contaminated discharges into the three bodies of water. The action was brought under the Refuse Act, 33 U.S.C. § 407, the FWPCA, and the federal common law of nuisance. The court was asked to enjoin further contamination by requiring OMC to dredge and safely dispose of the PCB-contaminated sediments and to pay civil penalties. This suit was assigned to the district judge who was handling the other suit. ⁵

On March 23, 1979, the Attorney General of Illinois filed a motion for leave to intervene in the federal suit, giving three reasons for intervention. (1) The State had a statutory right to intervene under § 505(b)(1)(B) of the Clean Water Act of 1977, 33 U.S.C. § 1365(b)(1)(B). See Fed.R.Civ.P. 24(a)(1). (2) It had the right to intervene because of its special interest in the litigation and the inability of the United States to represent adequately that interest. See Fed.R.Civ.P. 24(a)(2). (3) The State should be permitted to intervene because its claim had questions of law and fact in common with the federal government's contentions. See Fed.R.Civ.P. 24(b). On May 29, 1979, the district judge denied the motion for leave to intervene. ⁶

The Attorney General appeals in both suits. The United States filed an amicus brief in favor of the intervention.

I.

Erie R. R. Co. v. Tompkins, 1938, 304 U.S. 64, 78, 58 S.Ct. 817, 822, 82 L.Ed. 1188, held that there is no general federal common law. The same day the Supreme Court decided Erie it laid the groundwork for a "specialized common law". ⁷ See Hinderlider v. La Plata River & Cherry Creek Ditch Co., 1938, 304 U.S. 92, 58 S.Ct. 803, 82 L.Ed. 1202. Since that time courts have fashioned federal common law "when there is an overriding federal interest in the need for a uniform rule of decision or where the controversy touches basic interests of federalism". Illinois v. Milwaukee, 406 U.S. 91, 105 n.6, 92 S.Ct. 1385, 1393, 1394 n.6, 31 L.Ed.2d 712. The doctrine has been applied to areas of the law as diverse as obligations by or to the United States, ⁸ suits on labor contracts affecting commerce, ⁹ unfair competition in or affecting interstate commerce, ¹⁰ and regulation of the activities of interstate carriers. ¹¹ In 1972 the Court formulated a federal common law of nuisance. ¹² Illinois v. Milwaukee, 406 U.S. 91, 92 S.Ct. 1385, 31 L.Ed.2d 712. The decision in the instant case turns on the broad policy considerations expressed in Illinois v. Milwaukee.

The nation has a basic overriding federal interest in interstate and navigable waters and in developing a uniform program of protecting these national resources from pollution. The Federal Water Pollution Control Act made this interest explicit. The federal common law of nuisance fills the interstices in the Act. ¹³

There is nothing in the Supreme Court's reasoning in Illinois v. Milwaukee to indicate that it attached any weight to the fact that the pollution came from an out-of-state source. The Court declined to take original jurisdiction but held that the district court had jurisdiction because, under 28 U.S.C. § 1331, the case was one that "arises under the Constitution, laws, or treaties of the United States". The Court phrased the question:

The question is whether pollution of interstate or navigable waters creates actions arising under the "laws" of the United States within the meaning of § 1331(a). We hold that it does; and we also hold that § 1331(a) includes suits brought by a State.

406 U.S. at 99, 92 S.Ct. at 1390. "s 1331 jurisdiction will support claims founded upon federal common law as well as those of a statutory origin." Id. at 100, 92 S.Ct. at 1391. Writing for a unanimous Court, Mr. Justice Douglas stated, "When we deal with air and water in their ambient or interstate aspects, there is a federal common law . . . ." Id. at 103, 92 S.Ct. at 1392. Furthermore, the Supreme Court repeatedly expressed its intention to extend the application of federal common law to public nuisances caused by the pollution of either "interstate or navigable waters". Id. at 99, 102, 104, 92 S.Ct. at 1390, 1392, 1393.

In view of the obvious interstate character of Lake Michigan, we are not so bold as to assume that Mr. Justice Douglas might have been careless in his choice of words and that other members of the Court failed to notice implications of the term "navigable waters". In addition, so the Court stated, federal common law would apply regardless of the jurisdictional amount, id. at 98, 92 S.Ct. at 1390, or of the "character" of the parties, id. at 105 n.6, 92 S.Ct. at 1393, 1394 n.6. "(W)here there is an overriding federal interest in the need for a uniform rule of decision or where the controversy touches basic interests of federalism, we have fashioned federal common law." Id. The Court noted the existence of the Federal Water Pollution Control Act and was aware of the interstices and deficiencies in federal statutes.

It may happen that new federal laws and new federal regulations may in time pre-empt the field of federal common law of nuisance. But until that comes to pass, federal courts will be empowered to appraise the equities of the suits alleging creation of a public nuisance by water pollution . . . There are no fixed rules that govern; these will be equity suits in which the informed judgment of the chancellor will largely govern.

Id. at 107, 92 S.Ct. at 1395.

The Court's use of the term "navigable waters" significantly suggests the breadth of the holding, ¹⁴ for that term includes both the territorial seas and purely intrastate waters having no necessary interstate impact. The Federal Water Pollution Control Act applies to "interstate or navigable waters", and this Court has recently noted that "(i)n applying the federal common law of nuisance in a water pollution case, a court should not ignore the Act but should look to its policies and principles for guidance". Illinois v. Milwaukee, 7 Cir. 1979, 599 F.2d...