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ironic outcome under the bills now before Congress where noncompensability under the regulatory regime may depend on the existence of a common law nuisance.

Radio Signals in Michigan: Residents of Oak Park, Michigan sued in nuisance, complaining that the defendant radio station's signals were interfering with operation of their home electronic equipment. Their case was dismissed on the ground that the Federal Communications Act preempted state nuisance law in the area of radio frequency interference." The residents were able to get the FCC to intervene, and it ordered the station to take costly measures to eliminate the problem. Had S. 605 been law, the FCC action could have been compensable because the nuisance exception might not have been available.

Airport Noise in Chicago: Landowners near airports can't bring nuisance actions concerning the number of flights per hour, aircraft technology, or takeoff angle of planes because such subjects are the exclusive province of the FAA.2

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Preemption and Interstate Nuisance

Interstate pollution is peculiarly a subject for Federal law. Bills like S. 605 seem not to take account of this fact. For example, interstate water pollution was traditionally governed by a Federal common law of nuisance. The Supreme Court has now held that the Clean Water Act preempted the Federal common law of nuisance.??

While state nuisance law still exists, the Supreme Court has ruled that only the law of the state that is the source of the pollution is applicable." This ruling potentially presents a quite troublesome situation. For example, under the Clean Water Act, the EPA can (and perhaps must) refuse to issue a discharge permit if the discharge would violate a downstream state's water quality standards.25 Under section 204 (d) (1) of S. 605,

however, compensation may be required for such a refusal unless

21

Broyde v. Gotham Tower, Inc., 13 F.3d 994, 997-98 (6th Cir. 1994), cert. denied 114 S. Ct. 2137 (1994).

22 Bieneman v. City of Chicago, 864 F.2d 463, 473 (7th Cir., 1988), cert. denied 109 S.Ct. 2099, 2100 (1989).

23 Illinois v. Milwaukee, 101 S.Ct. 1784 (1981).

International Paper Co. v. Ouellette, 107 S.Ct. 805, 809,

812 (1987).

25 Arkansas v. Oklahoma, 112 S.Ct. 1046, 1056 (1992).

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the discharge constitutes a nuisance in the state "in which the property is situated" (the source state). In such circumstances, the discharger seeking a permit is unlikely to be violating its own (source) state's law. S. 605 could thus interfere with the administration of interstate pollution law under the Clean Water

Act.

Nuisance and the Background Principles of Nuisance

So far this memo has assumed that the nuisance exception in the
bills before Congress would require a showing that a regulated
activity meets all the technical standards of nuisance in order
for the exception to be triggered. That seems to be the standard
of H.R. 925; it is less certain as to S. 605 which refers to
the background principles of nuisance and property law. It is
possible that the bills (and particularly S. 605) intend to
impose a less technically rigorous standard, and that it would be
enough to show 'nuisance-like' conduct to avoid the compensation
requirement." If so, a problem of a quite different sort is
presented. The issue would no longer be whether conduct meets the
many technical requirements of nuisance, but rather the vague and
open-ended question: What is the scope of the phrase "a nuisance
as commonly understood and defined by background principles of
nuisance and property law?"

Should this be the question presented by the bill, all hope of a bright-line, simple, and straightforward compensation law will quickly evaporate. It would be hard to imagine a standard more prone to produce extensive litigation and uncertainty,

precisely the goal the proponents of the bills say they want to avoid.

Perhaps the best way to illustrate what is likely to be in store
is by looking back to the Supreme Court's decision in the 1987
case, Keystone Bituminous Coal Association v. DeBenedictis."
The case involved a state law regulating coal mining in order to
prevent surface subsidence. The Justices divided 5-4. In effect
the question before them was whether the state was engaged in

26 As noted above, whether a regulated activity falls within the limited section 5 (a) hazard or damage exceptions is a question that will have to be answered as well.

:- However, section 501 (6) speaks about compliance "with current nuisance laws," which seems more directed to technical nuisance.

107 S.Ct. 1232 (1987).

abating activity "akin to a public nuisance. "29 Justice Stevens and four of his colleagues found that Pennsylvania was merely restraining "uses of property that are tantamount to public nuisances and that it is not necessary to "weigh with nicety the question whether (the activity] constitute[s] a nuisance according to common law." Chief Justice Rehnquist and three of his colleagues insisted, on the contrary, that "[t]his statute is not the type of regulation that our precedents have held to be within the nuisance exception' to takings analysis. "32

If the Justices of the United States Supreme Court have to struggle so much to determine where to draw the line over the nuisance principle, one can only imagine what the claims process would look like under an enacted S. 605.

Public and Private Nuisance

Public and private nuisance are two quite different legal wrongs. Neither H.R. 925 nor S. 605 distinguishes between them, and presumably the use of the term nuisance in both bills is meant to embrace both public and private nuisance. While most of the discussion above is directed to private nuisance, the same basic point applies to both public and private nuisance. That is, both have certain technical requirements that have to be met, or a nuisance claim will be dismissed by a court.

Public nuisance interferes with the exercise of public rights (rather than private property rights). Widely disseminated water and air pollution can be public nuisances, and classic public nuisances are keeping a house of prostitution, storing explosives in the midst of a city, making loud and disturbing noises, and blocking public thoroughfares.

This distinction means that pollution making water unusable for many downstream landowners in the use of their land is not a public nuisance because it only interferes with private rights. But pollution that interferes with the public right to fish in a river, or the public right of navigation, is a public nuisance. Thus, many harms--even widespread ones--are not public nuisances because they don't interfere with rights one has as a member of the general public. There has, however, been a resurgent and sometimes successful modern application of public nuisance

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actions by state prosecutors, especially in hazardous waste

cases.

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Federal Law Encroachment on State Jurisdiction

While nothing in either H.R. 925 or S. 605 directly preempts state authority to define state nuisance law, one potentially undesirable consequence of the bills, if enacted, would be to engage Federal agencies and courts in an ongoing process of defining the boundaries and rationale of nuisance law in all 50 states. It seems inevitable that this process will bring a significant Federal influence to bear on the interpretation and content of an area of state law that has always been the special domain of the states. The Federal influence could be especially strong in influencing nuisance law, where state-law development has not been extensive in recent years, having been largely displaced by extensive regulatory statutes.

-end

Sevinsky, Public Nuisance: A Common Law Remedy Among the Statutes, 5 Natural Resources and Environment 29 (1990).

[The prepared statements of Alice Rivlin, Michael Davis, Gary S. Guzy and John R. Schmidt are located in the appendix of October 18, 1995.]

Senator THURMOND. Thank you very much.
Mr. Adler?

STATEMENT OF JONATHAN H. ADLER

Mr. ADLER. Thank you, Mr. Chairman, for the opportunity to present testimony before this Committee on this very important issue. My name is Jonathan Adler. I am director of Environmental Studies at the Competitive Enterprise Institute, a nonprofit, nonpartisan public policy institute here in Washington, DC.

Mr. Chairman, Americans believe very deeply in their right to private property. While polls consistently show that Americans care about environmental protection and want to see the environment protected, those very same polls show that a majority of Americans support compensation for landowners, when their land is devalued due to environmental regulations.

Public good should be provided at public, not private, expense. This is the rule for most nonenvironmental public goods such as military bases and highways. On the other hand, public goods, like wetland preserves and wildlife refuges, are created by bureaucratic edicts that deny property owners the use of their land.

If the public wants to protect species habitat or an ancient stand of trees for some broad environmental value, it should be able to, but the public should be willing to pay for it. The costs should not be imposed on whomever is unfortunate enough to hold title to a coveted piece of land.

As the Supreme Court held in Armstrong v. The United States, the takings clause, “*** was designed to bar government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole." I believe that 605 would go a long way in invigorating that principle, particularly in ways that the Supreme Court has not.

More importantly, arguments over the potential costs of takings compensation requirement obscure the more fundamental issue. Land use regulations inevitably entail costs. The real issue is who should bear those costs. Costs of excessive land use controls are borne by the Federal regulatory agencies themselves, as is called for under S. 605. Agencies will have a tremendous new incentive to consider the costs of their regulatory edicts, as well as more costeffective alternatives to command and control regulation.

Nonregulatory approaches to wetlands protection, for example, can be less than one one-hundredth of the cost of Federal regulations in protecting wetlands. Enactment of S. 605 would encourage the EPA and the Army Corps of Engineers to consider such alternative approaches.

Earlier today there was mention of the recent Nobel prize winners in science. I think it is important to also remember the Nobel prize winners in economics, which is Professor James Buchanan at George Mason University, who pointed out that incentives to public agencies matter in their behavior. If the public agencies are not given incentives to consider the cost of their rules, they will not do so. This bill would force them to consider those incentives, and that

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