Frey v. Environmental Protection Agency

• Decision Date: 06 November 2001
• Docket Number: No. 00-2748,00-2748
• Citation: 270 F.3d 1129
• Parties: (7th Cir. 2001) Sarah E. Frey, Kevin Enright, and Protect Our Woods, Inc., Plaintiffs-Appellants, v. Environmental Protection Agency, Christie Whitman, Administrator, and Viacom, Inc., Defendants-Appellees
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1129

270 F.3d 1129 (7th Cir. 2001)

Sarah E. Frey, Kevin Enright, and Protect Our Woods, Inc., Plaintiffs-Appellants, v. Environmental Protection Agency, Christie Whitman, Administrator, and Viacom, Inc., Defendants-Appellees.

No. 00-2748

United States Court of Appeals Seventh Circuit

Argued January 12, 2001

Decided November 6, 2001

Appeal from the United States District Court for the Southern District of Indiana, Indianapolis Division. No. IP-00-0660-C-D/F--S. Hugh Dillin, Judge.

Before Easterbrook, Diane P. Wood, and Williams, Circuit Judges.

Diane P. Wood, Circuit Judge.

This case involves efforts to clean up three old dumps in the Bloomington, Indiana, area, that became contaminated with polychlorinated biphenyls (PCBs), dioxin, and other toxic chemicals over the years. The federal Environmental Protection Agency (EPA) and CBS Corporation (formerly Westinghouse, and now Viacom-- but we will call it CBS as the parties have done) reached agreement on a remediation plan. The task of cleaning and restoring toxic waste sites is a complex one, and it is subject to numerous federal and state laws. Some Bloomington area residents, however, including plaintiffs Sarah Frey, Kevin Enright, and Protect Our Woods, Inc. (POW), believe that the current plan does not comply with federal or state law. They sued under a number of those statutes and Indiana common law, seeking declaratory and injunctive relief, and sought a temporary restraining order (TRO) to prevent CBS from initiating remediation work at one of the sites. After briefing and a hearing on the TRO, the district court issued an order dismissing the plaintiffs' complaint in its entirety for lack of subject matter jurisdiction. Plaintiffs appeal. For the reasons stated below, we reverse in part and affirm in part.

I

In 1983, the United States brought an enforcement action against CBS's predecessor, Westinghouse, under the Com prehensive Environmental Response Compensation and Liability Act (CERCLA), 42 U.S.C. § 9604 et seq., to force CBS to clean up two dump sites contaminated with PCBs. The State of Indiana intervened as a plaintiff. Two years earlier, the City of Bloomington, Indiana, had filed a separate suit in federal court against Westinghouse seeking cleanup of two other sites. The suits were consolidated, and the parties ultimately negotiated a consent decree that called for excavation and incineration of the toxic materials from the four named sites plus two more that were added later. Years later, in 1988, Frey sued in an effort to attack the earlier consent decree on a variety of procedural grounds, but with the ultimate goal (among others) of overturning the EPA's decision to use an incinerator to dispose of the waste. The district court dismissed the case for lack of subject matter jurisdiction and this court affirmed in Schalk v. Reilly, 900 F.2d 1091 (7th Cir. 1989).

In 1991, the Indiana State Legislature passed a law aimed at blocking the proposed incinerator. This obstacle pushed the formal parties--the EPA, the State of Indiana and its Department of Environmental Management, the City of Bloomington, the Bloomington Utilities Service Board, Monroe County, Indiana, and CBS--back to the negotiating table, where they began discussions to modify the consent decree. Under the direction of a special master appointed by the district court, and after a period of public comment, the EPA issued Record of Decision Amendments for the three dump sites that are now before us: Bennett's Dump, Neal's Landfill, and Lemon Lane Landfill. (The appellants discussed a fourth site, Neal's Dump, in their opening appellate brief, but that site was nowhere mentioned in their complaint and we thus agree with the appellees that any disputes with respect to Neal's Dump are not properly before us.) Unlike the earlier consent decree, the new cleanup plans called for digging up only areas of highly contaminated soil--so-called "hot spots"--and then centralizing the contaminated soil and capping it. The plans also called for a variety of measures designed to prevent seepage and groundwater contamination at the sites. Notably, the new plans did not require the construction of an incinerator at any site.

The Frey group filed suit on April 20, 2000, challenging the modified remedies at all three sites under both federal and state law. They asserted federal jurisdiction under the citizen suit provisions of CERCLA, the Resource Conservation and Recovery Act, 42 U.S.C. § 6972(a), the Toxic Substances Control Act, 15 U.S.C. § 2619(a), the Clean Water Act, 33 U.S.C. § 1365(a), the Administrative Procedure Act, 5 U.S.C. § § 701-706, as well as under 28 U.S.C. § 1331, and, with respect to their Indiana public nuisance and air pollution claims, diversity (28 U.S.C. § 1332) and supplemental jurisdiction (§ 1367).

Shortly after filing suit, the Frey parties moved for a temporary restraining order that would forbid initiation of cleanup activities at Lemon Lane Landfill. They asserted that the safeguards in place were inadequate to prevent large quantities of PCBs from being "volatilized" during the excavation process and deposited in surrounding residential areas, at great risk to the health of local citizens. The parties filed memoranda in support of and in opposition to the TRO, and the district court heard arguments that touched on the court's "subject matter jurisdiction" to hear the plaintiffs' Lemon Lane claims, among other subjects. No other site was included in the motion, and no other site was formally before the court. Two days after the hearing, on May 18, 2000, the district court issued its order denying the TRO and, without further briefing or argument, it dismissed plaintiffs' complaint in its entirety.

It is clear from the court's order that it entered a final judgment in the case for purposes of 28 U.S.C. § 1291. The judgment of dismissal talks only about Lemon Lane, however, even though it discusses other procedural flaws without specifying to which sites they apply. The order concludes with the statement "[i]n sum, the Court dismisses this cause for lack of subject matter jurisdiction."

II

We review de novo the district court's dismissal for lack of subject matter jurisdiction. Sapperstein v. Hager, 188 F.3d 852, 855 (7th Cir. 1999). The first problem we encounter is a consequence of the manner in which the court addressed this issue. Not only did it raise the point on its own (perfectly permissible, in itself, for a true jurisdictional problem, see Wellness Community-Nat'l v. Wellness House, 70 F.3d 46, 51 (7th Cir. 1995)), but it also went forward with its ruling and dismissal without giving any notice to the plaintiffs that it was considering doing so. We have warned that "sua sponte dismissals without prior notice or opportunity to be heard are hazardous" and that "unless the defect is clearly incurable a district court should grant the plaintiff leave to amend, allow the parties to argue the jurisdictional issue, or provide the plaintiff with the opportunity to discover the facts necessary to establish jurisdiction." Joyce v. Joyce, 975 F.2d 379, 386 (7th Cir. 1992); see also Shockley v. Jones, 823 F.2d 1068 (7th Cir. 1987). Unless our review of the plaintiffs' complaint reveals incurable defects, we therefore must remand to the district court for further proceedings.

A. Federal Claims

Although the Frey group relied on a number of federal statutes for their federal claims, they concede that plaintiffs challenging activities covered by CERCLA's removal or remedial action provisions, see 42 U.S.C. § 9601(25), must satisfy the requirements of CERCLA § 113(h), 42 U.S.C. § 9613(h), before a court can entertain the case. Schalk, 900 F.2d at 1097. This is not, strictly speaking, a problem of "subject matter jurisdiction" in the sense of the federal court's competence under Article III. See United States v. Tarkowski, 248 F.3d 596 (7th Cir. 2001). It is instead a question about the prerequisites that the plaintiffs must satisfy to obtain relief. A person who does not comply with § 113(h) will not prevail, but the court's power to adjudicate the case is clear, and a dismissal should be predicated on Federal Rule of Civil Procedure 12(b)(6), not on 12(b)(1). "A standard rule in considering jurisdictional challenges is that when the court's jurisdiction and the claim for relief are predicated on the same federal statute but the basis for relief is subsequently found to be inapplicable, the district court should not dismiss the case under Rule 12(b)(1), but rather proceed as if jurisdiction exists and determine the merits of the claim under Rule 12(b)(6)." Central States, Southeast and Southwest Areas Health and Welfare Fund v. Neurobehavioral Associates, 53 F.3d 172, 174 (7th Cir. 1995). This distinction matters not only because a dismissal for want of jurisdiction does not preclude a suit from being refiled in a proper court, but also because the district court finds jurisdictional facts in connection with a proper motion under Rule 12(b)(1), while disputed facts are treated quite differently for purposes of Rule 12(b)(6), for which the court indulges every reasonable presumption in favor of the complainant.

In our view, what we have here is the same kind of problem as the one the Supreme Court considered in Steel Co. v. Citizens for a Better Environment, 523 U.S. 83 (1998), where the Court observed that jurisdiction is "a word of many, too many meanings," id. at 90 (citation omitted), and concluded that the elements of the cause of action in the statute before it went to the merits of the claim, not to jurisdiction. We note as well that § 113(h) itself does not speak of "subject matter" jurisdiction; it merely uses the term "jurisdiction" in one of the more limited senses to which the Supreme Court was alluding in Steel Co. See also Hughes Aircraft Co. v. United States ex rel. Schumer, 520 U.S. 939, 950-51 (1997) (amendment to qui tam statute...