Fielding Chemical can now sue the federal
government for damages, for the extra costs it incurred in
disposing of PCB waste because of federal orders closing the US
border to PCB exports, and as a result of storing the PCB waste at
its facility for additional years while losing the opportunity to
use the land and equipment for other purposes. The orders were
issued in 1995 – 1997, purportedly for environmental
reasons, under the Canadian Environmental Protection Act. As a
result, Fielding was forced to use the Alberta Swan Hills facility
to destroy its PCB wastes, instead of the less expensive services
offered by US company SD Myers. Last month, Fielding had an
SD Myers successfully challenged the orders under Chapter 11 of
the North American Free Trade Agreement. In 2000, Canada was
ordered to pay SD Myers $6,050,000 as damages plus costs, on the
ground that the orders breached NAFTA and that "there was
no legitimate environmental reason for introducing the
ban". The Federal Court of Canada upheld the award,
"[t]here is no dispute that the Canadian ban on PCB
exports sought to protect the Canadian companies from U.S.
competition and was not for a legitimate environmental
purpose": Canada (Attorney General) v. S.D. Myers,
Inc., ,  3 F.C.R. 368 (T.D.), at paras. 18 and 73.
Fielding then launched its own lawsuit in the Ontario Superior
Court, alleging that the former Minister of the Environment, the
former Minister of Health, and/or officers and employees of
Environment Canada and the Ministry of Health engaged in
misfeasance in public office when authorizing, approving,
recommending or concurring with the issuance of the orders in the
purported exercise of public functions under CEPA.
The federal government tried to block the Fielding lawsuit,
arguing that they should have sought relief in the Federal Court
(where there is a 30 day time limit and where they could not obtain
damages.) The case was argued to the Ontario Court of Appeal with three
others in 2008; the court decided that all four claims could
proceed in the Superior Court.
The federal government obtained leave and appealed three of the cases
further to the Supreme Court of Canada: Fielding, Telezone and
McArthur. In January, Telezone and McArthur were argued, with four
other similar cases from around the country. (Presumably, the
parties sensibly agreed to be bound by the Telezone decision.) In
December, the Supreme Court rejected the Telezone and
McArthur appeals, and upheld the decision of the Ontario
Court of Appeal, allowing both plaintiffs to sue the government for
damages. Since the Fielding case involves the same principles,
Fielding must now be able to proceed with its lawsuit for damages
that it suffered because of the orders closing the border to
exports of PCB wastes. Many other companies suffered similar
damages, but may have missed the limitation period for commencing
claims of their own.
Fielding's position is perfectly understandable: its
pocket was picked for political reasons. Still, if Fielding
ultimately prevails, it could become even harder for environmental
regulators to make decisions against the interests of industry. And
the short lived PCB waste export ban of 15 years ago will become
even more expensive for today's taxpayers.
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