Exxon Corporation v. Hunt

PETITIONER: Exxon Corporation
LOCATION: Dow Chemical

DOCKET NO.: 84-978
DECIDED BY: Burger Court (1981-1986)
LOWER COURT: New Jersey Supreme Court

CITATION: 475 US 355 (1986)
ARGUED: Dec 09, 1985
DECIDED: Mar 10, 1986

Daniel M. Gribbon - on behalf of the Appellants
Mary Carol Jacobson - on behalf of the Appellees

Facts of the case


Media for Exxon Corporation v. Hunt

Audio Transcription for Oral Argument - December 09, 1985 in Exxon Corporation v. Hunt

Warren E. Burger:

Mr. Gribbon, I think you may proceed whenever you are ready.

Daniel M. Gribbon:

Mr. Chief Justice, and may it please the Court:

The issue in this appeal is whether a tax on oil and chemicals imposed by New Jersey in order to finance a spill fund to be used for the cleanup of hazardous wastes is pre-empted by an Act of Congress.

As part of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, commonly referred to as CERCLA, Congress imposed a tax on oil and chemicals to finance a superfund to start cleaning up hazardous wastes nationwide.

Section 114-C of the federal Act pre-empts other funds whose purpose is to pay for response costs, damages and claims which may be compensated under CERCLA, the key words being "may be compensated".

This, then, is an express pre-emption case similar to the Aloha Airlines case that the Court decided two years ago, and unlike implied pre-emption cases such as that submitted to you just now, there is no need to inquire whether Congress intended pre-emption of state action.

Here it is undisputed that Congress has pre-empted some state taxation for cleanup purposes, and the question is whether the New Jersey spill fund escapes that pre-emption.

It is clear on the face of a New Jersey statute which was passed in 1977 that the purpose of the spill fund was to clean up hazardous wastes in accordance with the National Contingency Plan.

Three years later, Congress came along and passed CERCLA to accomplish the same cleanup purpose on a nationwide basis.

There can be no question, therefore, that a purpose of the spill fund was really to do the same thing as CERCLA, to pay claims that after 1980 might be compensated under CERCLA, in the sense that they are eligible for payment under CERCLA.

It is appellant's contention that spill fund is thus pre-empted because its purpose is to pay costs of response, damages and claims that qualify for compensation under CERCLA.

In holding that the spill fund is not pre-empted, the New Jersey Supreme Court read the statutory language, CERCLA> ["] to mean actually paid under CERCLA, rather than eligible or qualified for payment.

This interpretation as we understand it would serve only to pre-empt state funds that are established for the purpose of paying response cost damage claims actually paid by the federal government.

No state, we submit, would ever have any reason to impose taxes or to create a fund for the purpose of paying claims that are actually paid by the federal government.

On the other hand, the interpretation of [= 114-C], we urge, gives the pre-emption real meaning.

Certainly Congress intended that it was to have some real meaning.

Sandra Day O'Connor:

Mr. Gribbon, I think the Solicitor General in a brief filed with us takes the position that is neither yours nor the appellee's.

I'm not sure I understand the SG's position.

Do you, and would you... do you plan to comment on it?

Daniel M. Gribbon:

I will comment on it right now, Justice O'Connor.

The Solicitor General rejects New Jersey's view that the pre-emption is limited to claims actually paid.

He goes on to say that the New Jersey statute is partially pre-empted by the federal statute.

He arrives that way by distinguishing between claims that New Jersey would pay that are submitted by third parties as against payments made directly by the state, even for the same purpose, and therefore he says that the pre-emption is only to the extent that New Jersey honors claims that are submitted to it and it does not cover direct payments made by the state to accomplish exactly the same purpose.

And, it is that second part where we disagree with him and feel there is no basis in the statute or in its legislative history for making this arbitrary distinction between claims submitted to New Jersey and work done directly by New Jersey that accomplishes the same purpose.

Actually, the New Jersey statute is very clear that everything that it pays is put in terms of claims and compensation, and similarly CERCLA recognizes that a state--

Sandra Day O'Connor:

I don't understand that last statement.

Are you saying that under the New Jersey scheme all payments would be made to the state itself, in effect?

Daniel M. Gribbon:

--All payments made by the state itself are regarded as payment of claims, because there is a New Jersey Environmental Department that submits claims to the Treasurer's Department and the Treasurer then pays them, so that New Jersey does not recognize this distinction that the Solicitor General purports to see between paying claims for third parties and doing the work yourself.

That really doesn't make any sense.

Sandra Day O'Connor:

Well, I suppose it's also possible to argue that what the statute means is pre-empted.