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 Clause.
  • 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.