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  • Reed Watson
  • Does the Clean Air Act prevent landowners from seeking private nuisance, negligence, or trespass remedies when an industrial plant emits noxious odors and chemicals that interfere with the use and enjoyment of nearby properties?

    That is the question pending before the Iowa Supreme Court in Freeman, et al. v. Grain Processing Corporation. This is an important question because it tests the security of private property rights in a world of ever-increasing environmental regulations.

    The facts of the case are simple. The defendant, Grain Processing Corporation (GPC), operates a corn milling plant in Muscatine, Iowa, that uses heat, acids, and numerous industrial chemicals to transform corn into ethanol and corn syrup. The process releases methanol, hydrochloric acid, sulfur dioxide, and other harmful chemicals into the air. Upon inspecting the plant, an expert witness for the plaintiffs found leaking valves, neglected or non-existent emissions controls, and a “blatant disregard for the environment and the community of Muscatine.”

    Eight Muscatine residents claiming injury from the plant’s operation filed nuisance, negligence, and trespass claims against GPC. The trial court dismissed those claims on summary judgment, ruling that those common law causes of action were preempted by the Clean Air Act, precluded by the state’s air quality regulations, and barred as political questions not appropriate for judicial resolution. The plaintiffs appealed the ruling to the Iowa Supreme Court.

    Several PERC scholars, joining other property law experts from around the country, filed an amicus or “friend of the court” brief in the case. We made several arguments for reversing the lower court’s decision.

    First, and as a foundational matter, we argued that common law nuisance, negligence, and trespass define the boundaries of private property rights. A central responsibility of the government is to enforce those boundaries, and a constitutional duty of the government is to respect those boundaries.

    A property right is, at the most fundamental level, the right to say “no.” When the government passes laws or regulations that preserve a property owner’s ability to say “no,” there is no taking. Indeed, laws and regulations often bolster property rights by increasing private landowners’ ability to say “no.” Zoning is one example.

    If laws or regulations change or ignore that right and diminish the ability of landowners to say “no,” there is a taking that requires payment of just compensation. When what is taken is a property right, as opposed to real property, just compensation does not need to be money. Instead, just compensation can be a substitute remedy that preserves a landowner’s underlying rights. Neither the Clean Air Act nor the state air quality law provides a substitute remedy.

    This fact raises our second argument: In determining whether the Clean Air Act or state air quality law preempt the plaintiffs’ common law remedies, it should be presumed that Congress and the Iowa legislature have not intentionally violated the constitutional rights of Iowa property owners. Because neither law explicitly preempts common law causes of action or provides substitute remedies, the Iowa Supreme Court can and should conclude that both legislatures intended their respective air quality laws and regulations to complement the property rights and common law remedies of private landowners, not preempt them unconstitutionally.

    The common law remedies asserted by the plaintiffs are fundamental private property rights that cannot be tossed aside by federal or state laws without the government providing just compensation to the affected parties. The right to be free from trespass and nuisance by others is a long vested property right protected by the federal and Iowa constitutions.

    If the trial court’s ruling is upheld and the Clean Air Act and state air quality law are found to preempt the plaintiffs’ common law causes of action without providing them with any substitute remedies, then these Iowa plaintiffs have effectively been deprived of the right to say “no.” As our brief explains, that is an uncompensated and dangerous precedent that the Iowa Supreme Court should avoid.

    Written By
    • Reed Watson

      Reed Watson is the director of the Hayek Center for the Business of Prosperity and a professor of practice in the John E. Walker Department of Economics at Clemson University.

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