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U.S. Court Rejects GE Challenge To EPA Cleanup Orders

Date: 30-Jun-10
Country: USA
Author: James Vicini

A U.S. appeals court rejected on Tuesday a legal challenge by General Electric Co to the federal Environmental Protection Agency's (EPA) orders that direct companies to clean up hazardous waste.

The court rejected the company's argument that the law and the way EPA administers it violated constitutional due process rights because the agency issued the orders without a hearing before a neutral decision maker.

The ruling was a setback to GE's long-running effort to overturn a provision of Comprehensive Environmental Response, Compensation, and Liability Act, known as the Superfund law that seeks to ensure that polluters pay for the environmental hazards they created.

At issue were EPA's unilateral administrative orders that direct companies and others to clean up hazardous waste for which they are responsible if the sites pose an imminent and substantial threat to public safety.

Companies that fail to follow the orders can face large fines.

GE had argued that the mere issuance of an order could inflict immediate, serious, and irreparable damage by depressing a company's stock price and increasing its cost of financing.

But the three-judge panel unanimously rejected the company's arguments.

"Such 'consequential' injuries -- injuries resulting not from EPA's issuance of the" order "but from market reactions to it -- are insufficient to merit" constitutional due process protection, Judge David Tatel wrote in the ruling.

To the extent the regime implicated constitutionally protected property interests by imposing compliance costs and threatening fines and punitive damages, the system satisfied due process because recipients can obtain a hearing by refusing to comply and forcing EPA to sue in federal court, he said.

The appeals court upheld a federal judge's ruling in favor of EPA.

(Editing by Jonathan Leff)

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