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How Property Rights Address Pollution

  • Brian Yablonski,
  • Jonathan Wood
  • Photo courtesy of Mark Holloway.

    This article was originally published in The Hill

    At 585 feet, the Anaconda Smelter Stack looms large over rural western Montana. The Washington Monument-sized pillar stands as a reminder of the state’s mining history and, to neighboring landowners, of the tons of toxic pollutants dumped on them and their properties for decades. The smokestack is the center of a Supreme Court case heard this week, asking whether the neighbors can sue the polluter for the costs to clean up their properties. This case is an important reminder that, rather than property rights and the environment being at odds, property rights are our most important tool for protecting the environment.

    Historically, the primary protections against pollution were property-rights guarantees against unwanted trespass or interference with the enjoyment of private property. If someone dumped toxins in a river, downstream property owners could sue, demanding that he stop and pay for the damage he caused. This discouraged harmful pollution by forcing would-be polluters to internalize the costs they impose on others.

    Since the emergence of the environmental movement in the 1970s, this property-rights approach has been supplemented by federal and state regulations. But the basic property rules remained in place. Your neighbor could, perhaps, get a permit to dump motor oil, but that wouldn’t mean he could dump it in your garden.

    However, industry long has argued against this arrangement, claiming that federal environmental regulation creates a right to pollute that trumps private property rights. In 1987, the Supreme Court rejected a paper company’s argument that the Clean Water Act blocked downstream property owners for suing over the paper company’s pollution. More recently, federal courts rejected a whiskey distillery’s argument that the Clean Air Act prevented its neighbors from doing anything about the “whiskey fungus” the distillery dumped on them. The idea that federal environmental regulation voids property rights is a dangerous one that, fortunately, has gained little traction.

    In Atlantic Richfield Co. v. Christian, the Supreme Court again considers such an argument. Atlantic Richfield, a subsidiary of BP and the owner of the Anaconda Smelter, has asked the court to block its neighbors from suing it for money to clean up their properties. It argues that the federal Superfund program (the Comprehensive Environmental Response, Compensation and Liability Act) shields it from its neighbors’ claims, an argument which the Environmental Protection Agency (EPA) has disappointingly joined.

    Superfund authorizes the EPA to identify heavily polluted sites, clean them up and demand reimbursement from the polluter. In 1983, the EPA identified the Anaconda Smelter as a Superfund site. Because the smelter spewed pollution over great distances, the site encompasses 300 square miles of company property, public property and private property. The EPA ordered Atlantic Richfield to remove some of this pollution. And, to its credit, the company has spent $450 million on this work.

    But now the company argues that having performed the work ordered by the EPA, it cannot be forced to fund anything more. Of course, there’s nothing to indicate Congress wished for Superfund, which is meant to encourage environmental cleanups, to actually erect obstacles to such cleanups, as the company argues.

    Indeed, the statute states that “nothing” in it “shall affect or modify in any way” polluters’ obligations under state law, including state protections for property rights.

    The Montana Supreme Court rejected Atlantic Richfield’s argument, citing no evidence that “Congress’s objective was to condemn, in perpetuity, the private property of an individual property owner because that property happened to have been contaminated by a third party.” Indeed, were this Congress’s intent, the law would raise significant constitutional concerns.

    The Fifth Amendment forbids the federal government from taking property except for public use, and only then if it pays for the property. Here, neither condition would be satisfied. Atlantic Richfield’s argument would mean that Congress took countless people’s property for the private benefit of polluters without paying for it.

    If the polluter prevails in this case, property owners will not be the only ones paying the price. The environment will suffer, too. Property rights enable us to pursue our values, including environmental values. Atlantic Richfield’s argument would undermine this role by allowing the EPA and polluters to bargain away the rights and environmental values of property owners at any of the 1,300 Superfund sites.

    Fortunately, the Supreme Court long has disfavored arguments that federal statutes silently erode constitutionally protected rights or state authority. Therefore, there is a good reason to expect that the right to pollute argument will meet the same fate here that it has previously.

    Written By
    • Brian Yablonski
      • Chief Executive Officer

      Brian Yablonski is the chief executive officer of PERC and the former chairman of the Florida Fish and Wildlife Conservation Commission.

    • Jonathan Wood
      • Vice President of Law & Policy

      Jonathan Wood is vice president of law and policy at PERC, leading PERC’s Conservation Law and Policy Center.

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