Court Bars State Toxic Cleanup Tax : Superfund Law Already Imposes Levy--Justices

The Supreme Court gave chemical and petroleum producers a tax break today, ruling 7 to 1 that they may not be taxed by both the federal government and the states to pay for cleaning up toxic wastes.

The decision threw out major portions of a 1977 New Jersey law, the Spill Compensation and Control Act, which taxes companies that deal with hazardous materials. New Jersey has more than 95 toxic waste sites, the most in the nation.

The high court ruled such a tax was already being levied on the companies under the federal Superfund law.

The court added, however, that New Jersey could tax the companies for the cost of any cleanup not eligible for Superfund money. The court ruled those portions include about 10% of the cost the state must pay for any cleanup, the cost of research, personnel, equipment and administration, and compensation to third parties for damages resulting from hazardous substance discharges.

Reimbursement Not Allowed

Not allowed were such major costs as the actual cleanup of a toxic waste site or reimbursement to third parties of cleanup costs.

The court rejected arguments by New Jersey that because Congress did not provide Superfund with enough money to clean up all toxic sites, the lawmakers meant for the states to be allowed to tax chemical companies to pay for the cleanup.

“That Congress has not chosen the most comprehensive or efficient method of attacking the problem of hazardous substance discharges . . . is not reason to depart from the language of the statute,” Justice Thurgood Marshall wrote for the majority.

Justice John Paul Stevens, the lone dissenter, criticized the ruling and noted that “because there exist several legitimate purposes for which New Jersey may expend funds” the state law and the tax should be valid.

Refunds Not Addressed

He also criticized the court for not addressing the prospect of a partial refund of the tax. He said the court should have advised the New Jersey courts on “how they should calculate the partial refund of taxes.” The companies have paid more than $9 million into the spill fund while the case has been on appeal.

The toxic waste case was brought to the court by Exxon Corp., Monsanto Co. and other major companies appealing a September, 1984, New Jersey Supreme Court ruling that Congress did not intend to bar states from levying taxes on chemical production when it passed the Superfund bill.

Superfund, passed by Congress in 1980, taxes chemical companies to pay for cleaning up toxic waste sites. The New Jersey law prohibits the discharge of petroleum and other hazardous substances in the state, and provides for the cleanup and removal of such discharges paid for by a per barrel tax on chemical and petroleum products.

In their challenge, Exxon, Monsanto, Tenneco Chemicals Inc., Union Carbide Corp. and BF Goodrich Co. argued that the state was taxing them for the same reason as the federal government, violating a supremacy provision of the Constitution requiring state laws to yield to competing federal laws.

In another decision today before beginning a two-week recess, the court on a 6-3 vote further limited the protections of its 1966 Miranda decision, finding that a confession from a suspect who waives his rights is valid, even if the suspect was not told of a lawyer’s attempt to speak with him.