Exxon Corp. v. Hunt
| Decision Date | 19 September 1984 |
| Citation | 97 N.J. 526,481 A.2d 271 |
| Parties | , 21 ERC 1794, 53 USLW 2173, 14 Envtl. L. Rep. [PG20,923 EXXON CORPORATION, The BF Goodrich Company, Union Carbide Corporation, Monsanto Company, and Tenneco Chemicals, Inc., Plaintiffs-Appellants, v. Robert HUNT, Administrator of New Jersey Spill Compensation Fund, Clifford A. Goldman, Treasurer of the State of New Jersey, Sidney Glaser, Director of the Division of Taxation, and the State of New Jersey, Defendants-Respondents. EXXON CORPORATION, The BF Goodrich Company, Union Carbide Corporation, Monsanto Company, and Tenneco Chemicals, Inc., Plaintiffs-Appellants, v. Robert HUNT, Administrator of New Jersey Spill Compensation Fund, Clifford A. Goldman, Treasurer of the State of New Jersey, Sidney Glaser, Director of the Division of Taxation, Jerry F. English, Commissioner of Environmental Protection, and The State of New Jersey, Defendants-Respondents. |
| Court | New Jersey Supreme Court |
John J. Carlin, Jr., Morristown, for plaintiffs-appellants (Farrell, Curtis, Carlin & Davidson, Morristown, attorneys).
Mary C. Jacobson, Deputy Atty. Gen., for defendants-respondents (Irwin I. Kimmelman, Atty. Gen., attorney; Michael R. Cole, Asst. Atty. Gen., of counsel).
The opinion of the Court was delivered by
In this case we consider one aspect of the staggering problems associated with the release of hazardous substances into our environment. Cleanup and removal efforts have been authorized by the State through the New Jersey Spill Compensation and Control Act, N.J.S.A. 58:10-23.11 to -23.11z (Spill Fund), and by the federal government pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C.A. §§ 9601-9657 (Superfund). This appeal focuses on the taxing structures established by each of the foregoing Acts. More specifically, we address the issue of the constitutionality of Spill Fund--that is, whether the tax imposed by the federal government to create Superfund effectively preempts the tax instituted by the State of New Jersey to establish Spill Fund.
Plaintiffs are five petroleum and chemical companies that are currently paying taxes into both Spill Fund and Superfund. After several unsuccessful attempts to have the federal courts determine the scope of section 114(c) of Superfund, 42 U.S.C.A. § 9614(c) (), plaintiffs filed these consolidated actions challenging the constitutionality of Spill Fund in light of section 114(c) of Superfund. 1
The parties filed cross-motions for summary judgment. Plaintiffs argued that the Spill Fund tax was preempted by section 114(c) of Superfund, which reads:
Except as provided in this chapter, no person may be required to contribute to any fund, the purpose of which is to pay compensation for claims for any costs of response or damages or claims which may be compensated under this subchapter. Nothing in this section shall preclude any State from using general revenues for such a fund, or from imposing a tax or fee upon any person or upon any substance in order to finance the purchase or prepositioning of hazardous substance response equipment or other preparations for the response to a release of hazardous substances which affects such State. [42 U.S.C.A. § 9614(c) (emphasis added).]
Plaintiffs maintained that the principal purpose of the state tax was to compensate hazardous-waste sites that might ultimately be compensated by Superfund, thereby contravening the above-emphasized language of section 114(c) of Superfund. Defendants, describing Spill Fund as a constitutionally-valid supplement to Superfund, argued that Spill Fund was aimed at providing compensation for those claims that were not receiving Superfund coverage.
Judge Evers granted defendants' motion for summary judgment in the Tax Court. 2 4 N.J.Tax 294. Relying on the legislative history surrounding the enactment of Superfund, as well as on the scope and purposes of both Superfund and Spill Fund, Judge Evers concluded that the Spill Fund tax was not preempted by Superfund.
The court finds that Congress, through the adoption of [Superfund], has not put an end to the taxing powers of the states for hazardous substance cleanup containment and remedial purposes by putting another tax in its place. Rather, the court finds that [Superfund] permits a state to continue to avail itself of industry tax funds with the obvious limitation that a double tax could not be collected and expended on any one project. Such would be the practicalities of government where both state and nation have the same and yet separate, identifiable interests. [Id. at 320.]
Moreover, Judge Evers alternatively held that even if Spill Fund tax monies could not be collected for general containment and cleanup purposes, "the [S]pill [F]und law nevertheless encompasses many other areas to which such monies could be devoted which are clearly outside the reach of § 114(c) and which may very well be of sufficient magnitude to sustain the [S]pill [F]und tax." Id. at 315. Thus, the court held that "even if § 114(c) of [Superfund] could be construed to preempt part of [S]pill [F]und, the * * * nonpreempted areas 3 are more than sufficient to sustain its continued validity." Id. at 320 (footnote added).
On plaintiffs' appeal the Appellate Division affirmed, "substantially for the reasons stated by Judge Evers in his written opinion * * *." 190 N.J.Super. 131, 132-33, 462 A.2d 193 (1983). 4 We granted certification, 94 N.J. 607, 468 A.2d 239 (1983), to determine whether "the plain language of § 114(c) of Superfund preempt[s] the State of New Jersey from collecting taxes under the taxing provision of the [Spill Fund] as presently enacted", and now affirm.
Spill Fund was enacted in 1977, L.1976, c. 141, with the expressed legislative intent to
exercise the powers of this State to control the transfer and storage of hazardous substances and to provide liability for damage sustained within this State as a result of any discharge of said substances, by requiring the prompt containment and removal of such pollution and substances, and to provide a fund for swift and adequate compensation to resort businesses and other persons damaged by such discharge. [ N.J.S.A. 58:10-23.11a.]
This statute provides for the establishment of "a nonlapsing, revolving fund in the Department of the Treasury to carry out the purposes of this act." N.J.S.A. 58:10-23.11i. The fund's revenues are supplied by a tax "levied upon each owner or operator of one or more major facilities 5 * * * to insure compensation for cleanup costs and damages associated with any discharge of hazardous substances * * *." N.J.S.A. 58:10-23.11h(a) (footnote added).
In December 1980 Superfund was enacted in response to escalating national hazardous-waste problems. Congress provided for the establishment of a $1.6 billion fund over a five-year period 6 for the cleanup and removal of pollution caused by the release of hazardous substances into the environment. Superfund imposes a tax to finance the federal fund, taxing chemical industries to acquire 87.5% of the funds necessary for cleanup efforts and relying on general federal revenues to account for the remaining 12.5% of the fund. 126 Cong.Rec. S14967-68 (daily ed. Nov. 24, 1980) (statement of Sen. Stafford).
The focal point of plaintiffs' preemption argument is that language of section 114(c) of Superfund that excludes contribution to any fund whose purpose is to pay compensation for claims "for any costs of response or damages or claims which may be compensated under this subchapter." 42 U.S.C.A. § 9614(c) (emphasis added). Plaintiffs maintain that through this section of Superfund, read in conjunction with Article VI, clause 2 of the United States Constitution 7, Congress expressly preempted New Jersey's Spill Fund taxation scheme.
As Judge Evers noted,
[i]t is fundamental that where a state statute conflicts with a federal statute which has preempted the field and stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress, the Supremacy Clause of the United States Constitution mandates that the state statute must fail.
An allegation of preemption must be analyzed with reference to several general guidelines: . U.S.A. Chamber of Commerce v. State, 89 N.J. 131, 142, 445 A.2d 353 (1982) (citations omitted); see also Feldman v. Lederle Laboratories, 97 N.J. 429, 458, 479 A.2d 374 (1984) (). However, courts faced with potentially conflicting state and federal statutes must attempt to harmonize them whenever possible. Florida Lime & Avocado Growers v. Paul, 373 U.S. 132, 83 S.Ct. 1210, 10 L.Ed.2d 248 (1963); Huron Cement Co. v. Detroit, 362 U.S. 440, 80 S.Ct. 813, 4 L.Ed.2d 852 (1960). "Pre-emption of state law by federal statute is not favored 'in the absence of persuasive reasons--either that the nature of the regulated subject matter permits no other conclusion, or that Congress has unmistakenly so ordained.' " Chicago & N.W. Transp. Co. v. Kalo Brick & Tile Co., 450 U.S. 311, 317, 101 S.Ct. 1124, 1130, 67 L.Ed.2d 258, 264-65 (1981) (quoting Florida Lime & Avocado Growers, supra, 373 U.S. at 142, 83 S.Ct. at 1217, 10 L.Ed.2d at 257).
Thus, in determining the proper construction of allegedly conflicting statutes, courts must perform "essentially a two-step process of first ascertaining the construction of the two statutes and then determining the constitutional question whether they are in...
To continue reading
Request your trial
-
Dewey v. R.J. Reynolds Tobacco Co.
...by federal law and the character of the obligations imposed by it may reveal the same purpose." Ibid.; see Exxon Corp. v. Hunt, 97 N.J. 526, 532-33, 481 A.2d 271 (1984). And even in the absence of express language or implied congressional intent to occupy the field, state law may be preempt......
-
Hunter v. Greenwood Trust Co.
...faced with potentially conflicting state and federal statutes must attempt to harmonize them whenever possible. Exxon Corp. v. Hunt, 97 N.J. 526, 533, 481 A.2d 271 (1984) (citing Florida Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132, 83 S.Ct. 1210, 10 L.Ed.2d 248 (1963); Huron Cement C......
-
State Farm Mut. Auto. Ins. Co. v. State, Dept. of Public Advocate
... ... the words, and try to divine how they would have dealt with the unforeseen situation * * *." Exxon Corp. v ... Page 352 ... Hunt, 97 N.J. 526, 534, 481 A.2d 271 (1984) (quoting Judge Learned ... ...
-
Coba v. Ford Motor Co.
...1204 (2015) ; Highland Lakes Country Club & Cmty. Ass’n v. Franzino , 186 N.J. 99, 892 A.2d 646, 657 (2006) ; Exxon Corp. v. Hunt , 97 N.J. 526, 481 A.2d 271, 275 (1984), rev’d on other grounds , 475 U.S. 355, 106 S.Ct. 1103, 89 L.Ed.2d 364 (1986).5 While "workmanship," "materials," and "de......