Kerr-McGee Chemical Corp. v. Illinois

1982-11-29

Headline: Court refuses review and leaves in place ruling that a federal preemption defense alone does not let companies move state environmental suits to federal court.

Holding: The Court declined to hear the case and left intact the Seventh Circuit’s view that a federal-law defense, like preemption, does not allow removal to federal court when the complaint alleges only state-law claims.

Real World Impact:

Makes it harder for defendants to remove state suits based solely on a federal preemption defense.
Leaves Illinois environmental lawsuit in state court while federal preemption defense is decided there.
Affirms that a plaintiff’s state-law claim alone normally prevents removal to federal court.

Topics: removal to federal court, federal preemption, state environmental law, nuclear facility regulation

Summary

Background

A chemical company that owns a former radioactive-materials plant near West Chicago has been licensed by the Nuclear Regulatory Commission since 1956 and still stores some nuclear materials. In 1980 the State of Illinois sued the company in state court, saying the plant’s operation and waste handling violated the Illinois Environmental Protection Act and other state hazardous-waste laws. The company argued the Atomic Energy Act (a federal law) preempts state regulation and asked to move the case into federal court.

Reasoning

Lower federal courts first treated the complaint differently: a District Court found the suit necessarily involved federal law, kept the case in federal court, and dismissed it on preemption grounds. The Seventh Circuit reversed, saying the State’s complaint pleaded only state-law claims and that a federal-law defense (like preemption) is just a defense and does not by itself allow removal to federal court. Justice Blackmun, writing about the denial of review, relied on an older rule that federal-question jurisdiction exists only when the plaintiff’s own claim is based on federal law, and he saw no conflict with other cases. Justice White (joined by Justice Marshall) dissented from the denial and argued a conflicting Second Circuit decision examines the substance of the allegations and that the Court should resolve the disagreement.

Real world impact

Because the Court declined review, the Seventh Circuit’s view stands: a defendant’s federal preemption defense does not automatically move state suits into federal court when the complaint alleges only state-law claims. The decision leaves the Illinois environmental suit in state court for now and is not a final, nationwide ruling on preemption; the Supreme Court could address the question in a future case.

Dissents or concurrances

Justice White’s dissent stresses a substantive test from the Second Circuit and urges the Court to clarify when a federal defense becomes a federal question. His view was joined by Justice Marshall.