North Shore Gas Co. v. E.P.A.

Citation930 F.2d 1239
Decision Date25 April 1991
Docket NumberNos. 91-1077,91-1383,s. 91-1077
Parties, 21 Envtl. L. Rep. 21,038 NORTH SHORE GAS COMPANY, Plaintiff-Appellant, v. ENVIRONMENTAL PROTECTION AGENCY, et al., Defendants-Appellees.
CourtU.S. Court of Appeals — Seventh Circuit

Nancy J. Rich, Atty. Gen., John J. Verscaj, Russell B. Selman, Bell, Boyd & Lloyd, Chicago, Ill., for North Shore Gas Co.

Gail C. Ginsberg, Thomas P. Walsh, Asst. U.S. Attys., Fred Foreman, U.S. Atty., Nancy K. Needles, Asst. U.S. Atty., Civ. Div., Appellate Section, Chicago, Ill., M. Alice Thurston, Dept. of Justice, Land & Natural Resources Div., Washington, D.C., for E.P.A., et al.

Douglas J. Rathe, Office of the Atty. Gen., Environmental Control Div., Chicago, Ill., M. Alice Thurston, Dept. of Justice, Land & Natural Resources Div., Washington, D.C., for Illinois E.P.A. and Bernard F. Killian.

Dale M. Cohen, Steven H. Frankel, Sonnenschein, Nath & Rosenthal, Jeffrey C. Fort, Gardner, Carton & Douglas, Chicago, Ill., M. Alice Thurston, Dept. of Justice, Land & Natural Resources Div., Washington, D.C., for Outboard Marine Corp.

Before POSNER, FLAUM, and MANION, Circuit Judges.

POSNER, Circuit Judge.

This is a needlessly complicated case; we shall prune it ruthlessly. The Environmental Protection Agency identified a portion of Waukegan Harbor, on Lake Michigan, as a "Superfund site," identified Outboard Marine Corporation as being responsible for the contamination of the site, and ordered Outboard to clean it up. Outboard resisted, the EPA sued, and a consent decree was entered containing a clean-up plan. One of the measures required by the plan was that Outboard convert a boat slip at the site into a facility for storing toxic wastes, thus making it unusable by the operator of the slip and his customers. To offset the inconvenience to them, the plan also required Outboard to construct a new slip elsewhere in the harbor, although within the boundaries of the Superfund site. Later the EPA identified another Superfund site in the harbor area. The two sites overlapped, and the new slip was in both. The EPA put the finger on North Shore Gas Company, a public utility, as a party potentially responsible for cleaning up the new Superfund site. North Shore believed that the construction of the new slip--which, as we said, was within the new site as well as within the old--would increase both the cost of cleaning up the new site, a cost that might come to rest upon North Shore as a potentially responsible party, and the (much lesser) cost of conducting a study that it had agreed with the EPA to undertake in order to determine the best way to clean up the new site. So North Shore asked the EPA to modify Outboard's "remediation" plan insofar as the construction of the new slip was concerned. The EPA made some modifications but not enough to satisfy North Shore, which brought this suit to enjoin the construction of the new slip. The principal grounds for the suit are the National Environmental Policy Act, 42 U.S.C. Secs. 4321 et seq., and the Resource Conservation Recovery Act, 42 U.S.C. Secs. 6901 et seq. North Shore argues that the construction of the new slip at the direction of the EPA is a major federal action significantly affecting the environment and therefore NEPA requires an environmental impact statement; also that the new slip requires a permit under RCRA. There are pendent state law claims as well but they do not require separate discussion.

The district judge dismissed the suit as barred by section 113(h) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA--this lawsuit is a symphony of acronyms), as amended by the "Superfund Amendments" to CERCLA, 42 U.S.C. Sec. 9613(h). 753 F.Supp. 1413. This section provides, with immaterial exceptions, that no federal court shall have jurisdiction "to review any challenges to removal or remedial action selected under" the Superfund Amendments. North Shore's appeal contends that the construction of the new slip is not "remedial action" (it surely is not "removal," Barnet Aluminum Corp. v. Reilly, 927 F.2d 289 (6th Cir.1991)). The EPA and the other defendants defend the district court's ground of dismissal and argue in addition that North Shore has no standing to complain about the violation of environmental statutes such as NEPA and RCRA.

We begin with standing. North Shore has standing in the Article III sense--it would derive a benefit if it won the suit, mainly because the construction of the new slip may increase the cost of cleaning up the new Superfund site and North Shore may be socked with that cost. True, that benefit would be probabilistic rather than certain, because North Shore's responsibility for the clean up has not yet been determined. But a probabilistic benefit from winning a suit is enough "injury in fact" (Air Courier Conference v. American Postal Workers Union, --- U.S. ----, 111 S.Ct. 913, 917-18, 112 L.Ed.2d 1125 (1991); Allen v. Wright, 468 U.S. 737, 751, 104 S.Ct. 3315, 3324, 82 L.Ed.2d 556 (1984)) to confer standing in the undemanding Article III sense. Mount Wilson FM Broadcasters, Inc. v. FCC, 884 F.2d 1462, 1465 (D.C.Cir.1989). Moreover, there would be a bit of certain benefit too if North Shore won; North Shore argues without contradiction that the survey of the new site that it is committed to conduct will cost more if the new slip is constructed at the site, as the remediation plan requires Outboard Marine to do.

However, two other concepts of "standing" may apply here. The first, perhaps ill-named but well established in antitrust and other legal contexts and deeply rooted in the common law, is the idea that not everyone injured by the violation of a statute will be permitted to sue to redress the violation. Suppose Corporation A incurs a loss in sales as a result of a violation of the antitrust laws by B, and Mr. C, an employee of A, loses a bonus as a result of his employer's sales loss. The law has been violated and C has been hurt as a result, but he will not be allowed to sue. In re Industrial Gas Litigation, 681 F.2d 514 (7th Cir.1982); see also Associated General Contractors of California, Inc. v. California State Council of Carpenters, 459 U.S. 519, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983); cf. O'Bannon v. Town Court Nursing Center, 447 U.S. 773, 788-89, 100 S.Ct. 2467, 2476-77, 65 L.Ed.2d 506 (1980). It just is too difficult to trace out all the ramifications of a violation of law to justify allowing every person conceivably injured by eddies of illegal conduct to bring suit. Pollution can cause all manner of indirect injury. Manufacturers of brass fittings for yachts may incur business losses because sales of yachts decline in northern Illinois as a consequence of pollution in Waukegan Harbor, but it would be absurd to allow them to invoke the environmental laws in an effort to enjoin a measure that they think might aggravate that pollution. Plaintiffs would be tripping over each other on the way to the courthouse if everyone remotely injured by a violation of law could sue to redress it. An important purpose of rules of standing is to identify the best-placed plaintiff and give him a clear shot at suit--and by doing so to cut down on the number of suits, which is no trivial consideration in this age of swollen federal caseloads. On both points see People Organized for Welfare & Employment Rights (P.O.W.E.R.) v. Thompson, 727 F.2d 167, 172-73 (7th Cir.1984).

An additional consideration is that derivative losers tend to be offset by derivative gainers, who to prevent overdeterrence would have to be forced to make restitution to the violator--which of course is infeasible. Grip-Pak, Inc. v. Illinois Tool Works, Inc., 694 F.2d 466, 473-74 (7th Cir.1982). In our hypothetical case, the loss to the manufacturers of brass fittings would be offset by gains to suppliers of the inputs into the clean up. What we are calling derivative losers and gainers are persons linked financially to the immediate injurers and victims, and such financial ramifications of an accident or other disaster tend to be offsetting and can therefore safely be ignored.

The linkage between the parties is a good deal more direct in this case than in the hypothetical case, as our recent decision in Indiana Harbor Belt R.R. v. American Cyanamid Co., 916 F.2d 1174, 1175 (7th Cir.1990), helps show. The defendant caused a chemical spill that endangered people in the vicinity of the plaintiff's marshaling yard. The plaintiff itself was not endangered, but it was required by state law to clean up the spill, and it sued the defendant for the cost of the clean up. It was the principal entity actually hurt by the spill. No question was or could have been raised about its standing to maintain such a suit. North Shore's situation is similar.

But we are not done with standing. A third principle, closely related to the second, is that in general the only people who may sue to enforce a law are people who belong to the class that the law was designed to protect. This principle is applied in common law tort suits alleging the violation of a statutory duty of care, such as Gorris v. Scott, L.R. 9 Ex. 125 (1874); see generally Prosser and Keeton on the Law of Torts Sec. 36, at pp. 225-27 (W. Page Keeton et al. eds. 1984). In the regulatory arena it goes by the name "zone of interests," Clarke v. Securities Industry Ass'n, 479 U.S. 388, 396, 107 S.Ct. 750, 755, 93 L.Ed.2d 757 (1987); Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150, 153, 90 S.Ct. 827, 829, 25 L.Ed.2d 184 (1970), meaning simply that only intended beneficiaries of a statute can seek relief under it. The principle is as applicable to the environmental laws as it is to any other regulatory laws. Lujan v. National Wildlife Federation, --- U.S. ----, 110 S.Ct. 3177, 3185-86, 111 L.Ed.2d 695 (1990). As those laws are intended for the protection of the...

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