Are Dems Relying on Unconstitutional Superfund Statute to Raise BP Liability Cap?

With oil giant British Petroleum barely starting to get a handle on containing its massive oil spill in the Gulf of Mexico, the issue of corporate responsibility for pollution has come front and center. BP has so far gone out of its way to avoid any culpability for the disaster, but has said it won't fall for the misdirection.

Lawmakers introduced a bill last week -- dubbed the "Big Oil Bailout Prevention Act" -- which would raise the corporate liability cap from $75 million to $10 billion. Needless to say, the oil and chemical industries have strenuously opposed the measure, fearing it would disproportionately impact their businesses. But proponents, including New Jersey Rep. Rush Holt, it is BP's responsibility to pay "not just for cleanup costs, but the economic damages resulting from the mess they caused."

Democrats have also said they will try to make the fines retroactive, which would effectively force BP to reimburse the government for it's cleanup efforts so far. For precedent, these congressmen point to the Superfund statute, which set aside funds restore areas polluted by corporations and required polluters to repay the government for clean up already completed.

But due to a series of recent challenges to Superfund, which was established in 1980 and expired in 1995, these legislators may want to reconsider their line of attack. A decade ago, General Electric challenged a provision of Superfund, saying it was unconstitutional for inappropriately demanding payment from companies. The provision in question empowers the Environmental Protection Agency to require a company to clean up a site if it poses an "imminent and substantial" pollutant threat. Denying the order guarantees steep fines.

At a hearing before the DC Circuit Court of Appeals Tuesday, Carter Phillips, GE's lawyer in the matter, criticized the EPA for violating the due process rights of polluters by "engaging in a specific adjudicative process without an independent adjudicator presiding over it." The court was mostly luke warm on Phillips' reasoning. Thomas Griffith, one of the panel's judges, pointed out that GE would only have to pay if the company was presented with a court order. "GE doesn't have to pay a dime until an Article III court tells them to," he said.

Democrats also have to be careful not to come off as if they are imposing the heightened fines to punish BP. As law professor Katrina Kuh writes, it would be unconstitutional for Congress to impose fines retroactively if they were meant primarily to punish a single company.

So when it comes to lifting the fines for companies responsible for major pollution, legislatures must tread carefully to avoid constitutional issues that would negate the beneficial impact of their bill, and hope that doesn't mean retroactive retribution is impossible.

Photo credit: KenLund