Third Circuit Closes Second Door on Plaintiffs In South Camden Environmental Justice Case

The Third Circuit’s holding, in South Camden Citizens in Action v. New Jersey Department of Environmental Protection, 274 F.3d 771 (3d Cir. 2001), reh’g denied, 33 Env’t Rep. (BNA) (3d Cir. Jan. 15, 2002), represented the second time that an apparent victory by the plaintiffs in the district court had been snatched away by a subsequent opinion from a higher court. The controversy began in 1998, when the St. Lawrence Cement Company initiated plans to construct and operate a processing plant in the Waterfront South district of Camden, a predominantly African-American and Hispanic neighborhood that was already home to numerous contaminated sites and industrial facilities. The St. Lawrence plant required an air emission permit from the New Jersey Department of Environmental Protection (“NJDEP”), for which St. Lawrence applied in 1999 and which NJDEP issued in draft form in July 2000 and, after a public hearing, issued in final form in October 2000. The plaintiffs, South Camden Citizens in Action and ten residents of Waterfront South, sued NJDEP, alleging that NJDEP had intentionally discriminated against them in violation of Section 601 of Title VI and that the operation of the St. Lawrence plant in accordance with NJDEP’s permit would have an adverse disparate impact on them, in violation of Section 602. St. Lawrence intervened as a defendant.

District Judge Orlofsky handed the plaintiffs their first short-lived victory in April 2001, when he granted their request for a preliminary injunction and held that Section 602 (which authorizes regulations that implement Section 601) and EPA’s “disparate impact” regulations promulgated under Section 602 contained an implied private right of action. Finding that the plaintiffs were otherwise entitled to relief based on their disparate impact claim, Judge Orlofsky remanded the matter to NJDEP for a Title VI analysis. See South Camden Citizens in Action v. New Jersey Department of Environmental Protection, 145 F. Supp. 2d 446 (D.N.J. 2001).

Just five days later, the Supreme Court knocked out the legal underpinnings of the district court’s opinion. In Alexander v. Sandoval, 523 U.S. 275 (2001), the Court held that Title VI did not create a private right of action to enforce regulations promulgated under Section 602. Neither the plaintiffs in Sandoval nor the Court’s opinion, however, addressed the question whether Section 1983 provided an avenue for enforcing regulations promulgated under Section 602. Judge Orlofsky thus allowed the South Camden plaintiffs to amend their complaint to add a claim to enforce Section 602 under Section 1983, and ordered supplemental briefing. Shortly thereafter, the plaintiffs had their second apparent victory. In a supplemental opinion and order continuing the original injunction, Judge Orlofsky found that the plaintiffs’ amended complaint stated a claim against NJDEP under Section 1983 for violating Section 602 and EPA’s implementing regulations by failing to consider the potentially discriminatory adverse impact of its decision for permit operation of the St. Lawrence plant. See South Camden Citizens in Action v. New Jersey Department of Environmental Protection, 145 F. Supp. 2d 505 (D.N.J. 2001). St. Lawrence appealed to the Third Circuit, which granted St. Lawrence’s request for expedited review and suspended the district court’s preliminary injunction pending appeal.

On December 17, 2001, the Third Circuit closed the door that had been left open in Sandoval. Over a dissent from Circuit Judge McKee, Circuit Judges Ambro and Greenberg held that Judge Orlofsky had erred in finding that EPA’s regulations created a right enforceable via Section 1983.

The Third Circuit began its analysis by reviewing the Supreme Court’s decision in Sandoval, focusing on the Court’s conclusion that the text and structure of Section 602 did not evince an intent on the part of Congress to create private right of action and that the regulations at issue, alone, were insufficient to create a private right of action. It then turned to Section 1983 itself, which authorizes suits at law or in equity against any person who, under color of state law, deprives another person of “any rights… secured by the Constitution or laws” of the United States. Despite its broad language, the court noted, the remedy provided by Section 1983 is not available where the federal statute in question does not create enforceable rights, citing the Supreme Court’s decision in Wright v. City of Roanoke Redevelopment & Housing Authority, 479 U.S. 418 (1987).

The court distinguished a number of its previous opinions, especially Powell v. Ridge, 189 F.3d 387 (3d Cir.), cert. denied, 528 U.S. 1046 (1999), upon which Judge Orlofsky had relied. While Powell authorized a Section 1983 action based on Section 602 and regulations under it, said the court, it did not squarely address the issue whether the regulations themselves could create an enforceable right; instead, it seemed to assume that the regulations could create such a right, while rejecting a number of other arguments. The Third Circuit also noted three other appellate decisions addressing the question whether a regulation alone may create a right enforceable under Section 1983, two of which answered in the negative (Smith v. Kirk, 821 F.2d 980 (4th Cir. 1987); Harris v. James, 127 F.3d 993 (11th Circuit 1993)), and one of which answered in the affirmative (Loschiavo v. City of Dearborne, 33 F.3d 548 (6th Cir. 1994)).

Relying on the holding of Wright and the principles enunciated in Sandoval, and following the holdings of Smith and Harris, the Third Circuit concluded that EPA’s disparate impact regulations cannot create a federal right enforceable through Section 1983. Borrowing language from the Fourth Circuit’s opinion in Smith, the court stated that a regulation cannot create an interest enforceable under Section 1983 unless that interest already is implicit in the statute authorizing the regulations. After Sandoval, said the court, it cannot be argued that the right claimed by the plaintiffs in South Camden – to be free from disparate impact discrimination in the administration of programs receiving EPA assistance – can be found in either Section 601 or Section 602.

The court concluded by noting the sweeping effect of Judge Orlofsky’s reasoning. State and local licensing laws affect virtually every aspect of economic life, and Title VI is likely to be applicable to many of the agencies involved. (At least forty federal agencies have adopted disparate impact regulations under Section 602.) Thus, Judge Orlofsky’s reasoning, if followed elsewhere, would subject all manner of commercial activities to disparate impact analysis by the relevant agencies. Such a sweeping change in the effect of Title VI, the court said, should be made by Congress, not the courts.

This may not be the final chapter in the South Camden saga. Although the Third Circuit denied the plaintiffs’ request for an en banc rehearing on January 15, 2002, there is a clear split among the circuits on the pivotal question whether regulations themselves can create rights enforceable under Section 1983. Whether in this case or another, the Supreme Court will likely have to decide the question it left unresolved in Sandoval.

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Disclosure: Gibbons, Del Deo, through its John J. Gibbons Fellowship in Public Interest and Constitutional Law, filed an amicus curiae brief in support of the plaintiffs’ position on behalf of the American Civil Liberties Union Foundation and the American Civil Liberties Union of Pennsylvania.