United States v. Olin Corp. 107 F.3d 1506 (11th Cir. 1997)
Olin owned a site called OU-1 that was designated a
hazardous waste area under the Comprehensive Environmental Response,
Compensation, and Recovery Act (CERCLA) (aka Superfund). They
admitted liability and consented to pay the cleanup costs.
When the EPA and Olin went to the Trial Court with their
consent decree, the trial judge ordered them sua sponte to address
the impact of the US Supreme Court's decision in United States v. Lopez.
Olin asserted that the decision in United States v.
Lopez precluded constitutional application of CERCLA.
In Lopez, the US Supreme Court basically narrowed
the interpretation of the Commerce Clause, and said that there are
limits to the Federal government's ability to intrude into State issues.
In the Trial Court's opinion, Lopez should be interpreted as
requiring "interstate activities which substantially affect
commerce" to actually be economic activities themselves.
The Trial Court found that enforcement of CERCLA
violated the Commerce Clause as interpreted by the US Supreme Court
in Lopez. EPA appealed.
The Appellate Court reversed.
The Appellate Court found that Lopez did not alter
the constitutional standard for Federal Statutes regulating interstate
activities. It just requires an analysis of whether the regulated
activity substantially affects interstate commerce.
Defined as "activities that arise out of or are
connected with a commercial transaction, which viewed in the aggregate,
substantially affect interstate commerce."
In Lopez, the US Supreme Court found that there
are two ways that a law can be in compliance with the Commerce Clause.
Congress includes a jurisdictional element in the law
which ensures that the regulated activity affects interstate commerce.
The courts determine independently that the Statute
regulates activities that substantially affect interstate commerce.
Olin had argued that there was no jurisdictional element
in CERCLA, so it was not constitutional, but the Appellate Court
found that the jurisdictional element is not an absolute requirement.
Olin argued that disposal activities are not inherently
"economic in nature." However, the Appellate Court found that
didn't matter, as long as the activities affected interstate commerce.
In this case, companies that improperly dispose of
wastes will have an economic advantage over companies that dispose of
wastes properly. In the Appellate Court's opinion, that was enough to
constitute a permissible exercise of Congress' authority under the Commerce
After this case was decided, the US Supreme Court decided United
States v. Morrison (529 U.S. 598 (2000)). In that case, the Supreme
Court appears to agree with the idea that the Commerce Clause can only
be used to regulate "economic activities." In theory, the
decision in Morrison may effectively overturn the Appellate Court's
decision in this case.