International Paper Company v. Ouellette, No. 85-1233

• Court: United States Supreme Court
• Writing for the Court: POWELL, J., delivered the opinion of the Court, in which REHNQUIST, C.J., and WHITE, O'CONNOR, and SCALIA, JJ., joined. BRENNAN
• Citation: 93 L.Ed.2d 883,479 U.S. 481,107 S.Ct. 805
• Decision Date: 21 January 1987
• Docket Number: No. 85-1233
• Parties: INTERNATIONAL PAPER COMPANY, Petitioner v. Harmel OUELLETTE et al

479 U.S. 481 107 S.Ct. 805 93 L.Ed.2d 883 INTERNATIONAL PAPER COMPANY, Petitioner

v.

Harmel OUELLETTE et al.

No. 85-1233. Argued Nov. 4, 1986. Decided Jan. 21, 1987. Syllabus

The Clean Water Act (Act) prohibits the discharge of effluents into navigable waters unless the point source has obtained a permit from the Environmental Protection Agency (EPA). The Act also allows the State in which the point source is located (the "source State") to impose more stringent discharge limitations than the federal ones, and even to administer its own permit program if certain requirements are met. In contrast, "affected" States that are subject to pollution originating in source States have only the right to notice and to comment before the issuance of a federal or source State permit. The Act also contains a "saving clause" consisting of § 510, which provides that ". . . nothing in this chapter shall . . . be construed as impairing . . . any right . . . of the States with respect to the waters (including boundary waters) of such States," and § 505(e), which states that "[n]othing in this section shall restrict any right which any person . . . may have under any statute or common law to seek enforcement of any effluent standard or limitation or to seek any other relief. . . ." Petitioner operates a paper mill on the New York side of Lake Champlain and, in the course of its business, discharged effluents into the lake through a diffusion pipe that ended shortly before the New York-Vermont border that divided the lake. Respondents, property owners on the Vermont shore, filed a class action against petitioner in Vermont state court under the Vermont common law of nuisance. The action was later removed to Federal District Court. Petitioner moved for summary judgment and judgment on the pleadings on the ground that the Act pre-empted respondents' state-law suit, but the District Court denied the motion, holding that the Act's saving clause preserves actions to redress interstate water pollution under the law of the State in which the injury occurred. The Court of Appeals affirmed.

Held:

1. The Act pre-empts the common law of an affected State to the extent that that law seeks to impose liability on a point source in another State. Pp. 487-497.

(a) Since the Act applies to all point sources and virtually all bodies of water, sets forth detailed procedures for obtaining a permit, and provides an elaborate set of remedies for its violation, it is sufficiently com-

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prehensive to raise a presumption that Congress intended to pre-empt all state-law suits except those specifically preserved by the Act's terms. Pp. 491-492.

(b) The Act's saving clause cannot be read broadly to preserve the right to bring suit under the law of an affected State. Section 505(e) merely protects state-law suits from pre-emption by the Act's citizen-suit provisions, and does not purport to preclude pre-emption by other provisions. Furthermore, § 510 can be read to preserve a State's authority only with respect to effluent discharges within that State. Pp. 492-493.

(c) The application of an affected State's nuisance law to a point source in another State would constitute a serious interference with the implementation of the Act. It would effectively override the EPA's permit requirements and the policy choices made by source States in adopting their own standards, and would engender confusion by subjecting point sources to a variety of often vague and indeterminate common-law rules established by different States along the interstate waterways. Pp. 494-497.

2. The District Court correctly denied petitioner's motion for summary judgment and judgment on the pleadings. Pp. 497-500.

(a) The Court's pre-emption holding does not leave respondents without a remedy. Since the Act precludes only those suits that require effluent control standards incompatible with those established by the Act's procedures, and since the Act's saving clause specifically preserves other state actions, aggrieved parties can bring a nuisance claim under the law of the source State, here, New York. Pp. 497-500.

(b) The Act pre-empts laws, not courts, and nothing in its provisions prevents a court sitting in an affected State from hearing a common-law nuisance suit, provided that jurisdiction otherwise is proper. A district court sitting in diversity is competent to apply the law of a foreign State, and, therefore, Vermont was a proper forum in this case. P. 500.

776 F.2d 55, affirmed in part, reversed in part, and remanded.

POWELL, J., delivered the opinion of the Court, in which REHNQUIST, C.J., and WHITE, O'CONNOR, and SCALIA, JJ., joined. BRENNAN, J., filed an opinion concurring in part and dissenting in part, in which MARSHALL and BLACKMUN, JJ., joined, post, p. 500. STEVENS, J., filed an opinion concurring in part and dissenting in part, in which BLACKMUN, J., joined, post, p. 508.

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Roy L. Reardon, New York City, for petitioner.

Peter F. Langrock, Middlebury, Vt., for respondents.

Lawrence G. Wallace, Washington, D.C., for the U.S., as amicus curiae, by special leave of Court.

Justice POWELL delivered the opinion of the Court.

This case involves the pre-emptive scope of the Clean Water Act, 86 Stat. 816, as amended, 33 U.S.C. § 1251 et seq. (CWA or Act).¹ The question presented is whether the Act pre-empts a common-law nuisance suit filed in a Vermont court under Vermont law, when the source of the alleged injury is located in New York.

I

Lake Champlain forms part of the border between the States of New York and Vermont. Petitioner International

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Paper Company (IPC) operates a pulp and paper mill on the New York side of the lake. In the course of its business, IPC discharges a variety of effluents into the lake through a diffusion pipe. The pipe runs from the mill through the water toward Vermont, ending a short distance before the state boundary line that divides the lake.

Respondents are a group of property owners who reside or lease land on the Vermont shore. In 1978 the owners filed a class action suit against IPC, claiming, inter alia, that the discharge of effluents constituted a "continuing nuisance" under Vermont common law. Respondents alleged that the pollutants made the water "foul, unhealthy, smelly, and . . . unfit for recreational use," thereby diminishing the value of their property. App. 29. The owners asked for $20 million in compensatory damages, $100 million in punitive damages, and injunctive relief that would require IPC to restructure part of its water treatment system.² The action was filed in State Superior Court, and then later removed to Federal District Court for the District of Vermont.

IPC moved for summary judgment and judgment on the pleadings, claiming that the CWA pre-empted respondents' state-law suit. With the parties' consent, the District Judge deferred a ruling on the motion pending the decision by the Court of Appeals for the Seventh Circuit in a similar case involving Illinois and the city of Milwaukee. In that dispute, Illinois filed a nuisance action against the city under Illinois statutory and common law, seeking to abate the alleged pollution of Lake Michigan. Illinois v. Milwaukee, 731 F.2d 403 (1984) (Milwaukee III ), cert. denieD, 469 U.S. 1196, 105 S.Ct. 979, 83 L.Ed.2d 981 (1985).³ The Court of Appeals ultimately remanded the case

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for dismissal of Illinois' claim, finding that the CWA precluded the application of one State's law against a pollution source located in a different State. The decision was based in part on the court's conclusion that the application of different state laws to a single "point source" ⁴ would interfere with the carefully devised regulatory system established by the CWA. 731 F.2d, at 414. The court also concluded that the only suits that were not pre-empted were those alleging violations of the laws of the polluting, or "source," State. Id., at 413-414.

IPC argued that the holding in Milwaukee III was dispositive in this case. The Vermont District Court disagreed and denied the motion to dismiss. 602 F.Supp. 264 (1985). The court acknowledged that federal law normally governs interstate water pollution. It found, however, that two sections of the CWA explicitly preserve state-law rights of action. First, § 510 of the Act provides:

"Except as expressly provided . . ., nothing in this chapter shall . . . be construed as impairing or in any manner affecting any right or jurisdiction of the States with respect to the waters (including boundary waters) of such States." 33 U.S.C. § 1370.

In addition, § 505(e) states:

"Nothing in this section shall restrict any right which any person (or class of persons) may have under any statute or common law to seek enforcement of any effluent standard or limitation or to seek any other relief. . . ." 33 U.S.C. § 1365(e).

The District Court held that these two provisions (together, "the saving clause") made it clear that federal law did not pre-empt entirely the rights of States to control pollution.

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Therefore the question presented, said the court, was which types of state suits Congress intended to preserve. It considered three possibilities: ⁵ first, the saving clause could be construed to preserve state law only as it applied to waters not covered by the CWA. But since the Act applies to virtually all surface water in the country,⁶ the District Court rejected this possibility. Second, the saving clause might preserve state nuisance law only as it applies to discharges occurring within the source State; under this view a claim could be filed against IPC under New York common law, but not under Vermont law. This was the position adopted by the Court of Appeals for the Seventh Circuit in Milwaukee III. The District Court nevertheless rejected this option, finding that "there is simply nothing in the Act which suggests that Congress intended to impose such...