Story updated at 2:10 EDT to include comment from General Electric.
The Supreme Court decided today not to take up General Electric Co.'s legal campaign over how U.S. EPA exercises its authority to order companies to clean up hazardous waste sites.
GE, backed by the U.S. Chamber of Commerce, has fought a lengthy battle against the agency's authority under the Superfund statute, formally known as the Comprehensive Environmental Response, Compensation and Liability Act, to issue so-called unilateral administrative orders.
If companies refuse, they can face treble damages and daily fines of up to $37,500.
GE says the law creates an uneven playing field that gives EPA too much leverage in negotiating settlements with companies.
But courts have rebuffed GE every step of the way and the Supreme Court's refusal to intervene in the case, General Electric v. EPA, means the legal issue is decisively resolved in EPA's favor.
GE had previously lost both in the U.S. District Court for the District of Columbia and the U.S. Circuit Court of Appeals for the District of Columbia (E&ENews PM, June 29).
The company's lawyers, led by Kathleen Sullivan of the Quinn Emanuel Urquhart & Sullivan firm, had argued that the orders violate the due process clause of the Fifth Amendment.
The process deprives companies of due process because any judicial review is conditioned on the threat of treble damages and fines, Sullivan wrote in GE's brief.
Furthermore, the imposition of cleanup costs reduces a company's stock price and credit rating, which could be viewed as a "deprivation of property" under the due process clause, she added.
The Obama administration responded by arguing that no federal court of appeals has ever found that the issuance of an order violates due process rights, meaning there is no split between different circuits that would have required the Supreme Court to intervene.
The Superfund statute provides companies with "ample procedural safeguards," including the ability to challenge an order at multiple stages, acting Solicitor General Neal Katyal wrote in the government's brief.
Furthermore, if EPA wants to compel a company to comply, it is required to file an enforcement action in federal court, he added.
Companies can also comply with an order while disputing it and then claim their expenses back, Katyal noted.
Theodore Garrett, co-chairman of the environmental practice group at Covington & Burling in Washington, D.C., said he was "not surprised" the court had not taken the case and predicted that industry could turn to Congress in the hope that the law can be changed.
The current process is "quite troublesome" for the business community because "EPA does issue these orders without any process at all," Garrett added.
A GE spokesman said the company's challenge "was based on our firm belief that the provision of the federal Superfund law that denies companies and individuals the right to a timely day in court to challenge government orders raised an issue of fundamental fairness and violates the due process protections provided by the Constitution."
The petition "was both meritorious and based on sound legal principles," he added.
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