OIL RECOVERY SITE SLIPS ON ATTEMPT TO ATTACH SUPPLEMENTAL STATE CLAIM: THE ROLE OF STATE SOVEREIGNTY UNDER CERCLA
United States Oil Recovery Site Potentially Responsible Parties Grp. v. R.R. Comm’n of Tex., No. 17-20361, 2018 U.S. App. LEXIS 21375 (5th Cir. 2018).
By: Meredith Bro
Plaintiff-Appellee United States Oil Recovery Potentially Responsible Parties Group (“PRP”)—an association of over 100 entities working in cooperation with the Environmental Protection Agency (“EPA”) to pay the costs associated with cleanup of a superfund site in Pasadena, Texas—sued nearly 1,200 parties believed to be responsible for part of the environmental remediation costs, including several Texas state agencies and universities. PRP asserted claims both under the Comprehensive Environmental Response Compensation and Liability Act of 1980 (“CERCLA”) and its state law counterpart, the Texas Solid Waste Disposal Act (“TSWDA”).The state agency and university defendants filed a motion to dismiss in district court under Federal Rule of Civil Procedure (“FRCP”) 12(b)(1), contending that they were immune from suit in federal court because of state sovereign immunity. The district court denied the defendant’s FRCP 12(b)(1) motion without analysis under FRCP 12(b)(6). The court subsequently corrected its order to deny the motion under FRCP 12(b)(1) and the defendant’s appeal followed.CERCLA does not abrogate sovereign immunity. Based on the jurisdictional boundaries of the federal statute, the court first addressed the pivotal issue of whether the state agencies and universities were entitled to sovereign immunity. This depended on whether the state agencies and universities were arms of the state. The court reasoned that based on past precedent and the test set out in Clark v. Tarrant County, 798 F.2d 736, 744-45 (5th Cir. 1986), state sovereignty applied.In its determination that state agencies and universities are arms of the state, the court concluded that the appellants were entitled to sovereign immunity. PRP sought to avoid this straightforward conclusion by presenting two arguments that were unsupported by the court’s jurisprudence. First, PRP contended that sovereign immunity does not protect an arm of the state when it engages in “proprietary functions.” Here, the court determined that it had never held that an arm of the state is able to assert sovereign immunity as to some claims but not others, and therefore declined to do so in this case. Second, PRP contended that the Texas Commission on Environmental Quality had waived sovereign immunity by participating in CERCLA cleanup with EPA at the Pasadena superfund site. In explaining that an arm of the state waives state sovereign immunity only if it “voluntarily invokes federal court jurisdiction or makes a clear declaration that it intends to submit itself to federal court jurisdiction,” the court clarified that no clear declaration existed or was contended to exist in this case. Thus, the Court determined that the district court erred when it concluded that state sovereign immunity did not bar PRP’s CERCLA claims.Finally, the court explained that a district court may only exercise supplemental jurisdiction over prudent state law claims under 28 U.S.C. § 1367 where it has original jurisdiction over the federal claims at issue. Based on the court’s decision that the district court erred in denying the state agencies and universities’ FRCP 12(b)(1) motion, the court concluded that subject matter jurisdiction lacked in the first place, and therefore prohibited PRP from asserting its state law claim under TSWDA pursuant to supplemental jurisdiction.
