M. CHRISTINA ARMIJO, Chief Judge.
The Court considers the United States' Motion for Summary Judgment first (and ultimately grants the motion), and thus considers the facts in the light most favorable to CMI. Dreiling v. Peugeot Motors of Am., Inc., 850 F.2d 1373, 1377 (10th Cir. 1988). To the extent that either party contests a supported material fact solely because it is immaterial or incomplete, without submitting any record support, the Court concludes that the party has failed to dispute the facts pursuant to Federal Rule of Civil Procedure 56(c)(1), and thus, such facts are not contested for the purposes of the pending Motions.
At the time this Complaint was filed, CMI operated a molybdenum mine near the village of Questa, in Taos County, New Mexico (hereinafter referred to as "the Questa Site" or "the Questa mine"). The Questa Site is composed of two distinct areas: 1) the mine and waste rock disposal area, approximately four miles east of the
In 1957, at around the time that the molybdenum supply accessible through the first stage of underground mining was dwindling, the Defense Minerals Exploration Administration (DMEA) of the United States and CMI entered into an Exploration Project Contract. [Doc. 87, ¶ 8; Doc. 91, ¶ 8; Doc 28, ¶ 3] The DMEA contract was in part driven by the United States' domestic molybdenum production goal. [Doc. 28, ¶ 2; Doc. 88, ¶ 2] Under this Contract, CMI was responsible for performing exploration, drilling, and sampling, and creating geologic maps, while the United States agreed to loan CMI funds for half of the expenditures of the work up to $255,250. [Doc. 87, ¶ 8; Doc. 91, ¶ 8; Doc. 28, ¶ 4; Doc. 88, ¶ 4] The Contract contained a "Description of Work;" all exploration work under the contract was subject to Government approval; and CMI was required to submit monthly progress reports. [Doc. 28, ¶ 5; Doc. 88, ¶ 5] CMI conducted additional exploration outside of the DMEA contract and was not precluded by the Government from doing so. [Doc. 88, ¶ 5; Doc. 87, ¶ 7; Doc. 87-5, pp. 3-4 (U.S. Ex. 5); Doc. 91, ¶ 7] Under the DMEA contract, the Government ultimately provided $200,340 to CMI, but CMI independently spent over $4,000,000 in exploration by 1964. [Doc. 87, ¶¶ 12, 15; Doc. 87-4, pp. 3-4 (U.S. Ex. 4); Doc. 91, ¶¶ 12, 15; Doc. 87-3, p. 10 (U.S. Ex. 3)] Pursuant to the contract, some of the land on which the exploration took place was held by CMI in fee, but much of it was held by CMI via unpatented claims, with the United States retaining title to the land. [Doc. 28, ¶ 6; Doc. 88, ¶ 6]
The parties dispute whether the minerals ultimately found were found as a result of the exploration project or were "interconnected" with the exploration areas covered by the DMEA contract. [Doc. 28, ¶ 8; Doc. 88, ¶ 8; Doc. 87, ¶¶ 10-16; Doc. 91, ¶¶ 10-16] Nonetheless, the United States stated in a "Certification by the United States of America of a Discovery or Development Under an Exploration Project Contract" that "discovery or development" of "molybdenite-bearing areas" "resulted from the exploration work" of the contract. [Doc. 28-10 (CMI Ex. 10)] The DMEA Exploration Contract ended on June 30, 1960. [Doc. 87, ¶ 11; Doc. 91, ¶ 11] In 1966, CMI made its final royalty payment to the United States under the DMEA contract, which required repayment via royalties if minerals were discovered. [Doc. 28, ¶ 8; Doc. 88, ¶ 8; Doc. 87, ¶ 8; Doc. 91, ¶ 8] Also by 1966, CMI had removed over 71,000,000 tons of overburden and had begun full-scale operation of the open-pit mine. [Doc. 28, ¶ 8; Doc. 88, ¶ 8]
In 1961 CMI began efforts to obtain title to many parcels of land which it held via unpatented mining and mill site claims. [Doc. 28, ¶ 9; Doc. 88, ¶ 9] The United
In early 1969, CMI officials and personnel from the "Regional Office Lands" discussed the matter of either patenting additional tracts of land or engaging in a land exchange by which CMI would acquire 2,226.39 acres of National Forest lands adjacent to the open-pit which had, in part, already been used for waste rock disposal. [Doc. 28, ¶ 11; Doc. 88, ¶ 11; Doc. 28-17 (CMI Ex. 17); Doc. 28-18 (CMI Ex. 18)] CMI and various Government officials met, corresponded, and negotiated regarding the matter, which ended in the land exchange. [Doc. 28-18 (CMI Ex. 18); Doc. 29-1 (CMI Ex. 19)] During the process leading up to the land exchange, an Assistant Regional Forester indicated by letter that the property CMI wished to acquire was held by unpatented mining and mill site claims. With regard to the mining claims, he suggested that CMI had two options: either CMI relinquish the mining claims to the United States or the United States would have "to contest the claims through the usual Bureau of Land Management procedures." [Doc. 28-17, p. 1 (CMI Ex. 17)] The Forester stated: "Because of the time involved in these procedures, most exchange proponents prefer the first suggested means of clearing the claims." [Doc. 28-17, p. 1 (CMI Ex. 17)] With regard to the mill site claims, the Forester stated:
[Doc. 28-17, pp. 1-2 (CMI Ex. 17)] CMI relinquished the unpatented mining and mill site claims, and the United States held them in "informal escrow" so that the land exchange could proceed. [Doc. 28-18, p. 2 (CMI Ex. 18)] The Regional Forest Service also indicated by letter that various governmental agencies disagreed whether "a large series of millsites can be patented for dumping purposes." [Doc. 28-18, p. 1 (CMI Ex. 18)] However, this letter indicates that, though "the court decisions and Land Department rulings applicable to this use are conflicting and inconclusive," the question was never answered because CMI elected to move forward with the land exchange. [Doc. 28-18, p. 2 (CMI Ex. 18)]
In 1972, the Forest Service conducted an environmental analysis of the land which was ultimately exchanged. [Doc. 29-2 (CMI Ex. 20)] This report stated that:
[Doc. 29-2, p. 3 (CMI Ex. 20)] This report also observed that there were naturally existing hydrothermal formations on some of the land CMI sought to acquire, which were causing mudflows, which in turn dumped sediment into the Red River and also crossed State Highway 38, requiring costly cleanup. [Doc. 29-2, pp. 4, 5 (CMI Ex. 20)] The report stated that CMI was dumping overburden onto these hydrothermal formations, and that a positive environmental effect would be that the sediment load into the Red River would likely be reduced by 30 to 40% and the overburden would prevent the mud flows onto the Highway, thereby saving taxpayers money. [Doc. 29-2, p. 5 (CMI Ex. 20)] This same report noted that the adverse environmental effects already occurring were "not the result of the exchange proposal, but from the mining activity, itself. The mining activities will still continue on the patented mining claims or on mill sites and are not dependent upon approval or disapproval of this land exchange proposal." [Doc. 29-2, p. 5 CMI Ex. 20)] This report reviewed alternatives to the proposed action. One proposal, which was "vigorously opposed by the Forest Service and ecologist groups," would have involved CMI dumping the waste rock at a different location, which would have required rerouting Highway 38, diverting Red River, and would have caused tremendous "impact on the environment and ecology of Red River Canyon." [Doc. 29-2, p. 6 (CMI Ex. 20)] Another option discussed was to "prohibit the dump on National Forest land," but the report recognized that CMI had "every right to use mill sites for waste disposal areas, and economics would force them to follow this route rather than transport the large volume of overburden 8-10 miles to a site outside the National Forest." [Doc. 29-2, p. 6 (CMI Ex. 20)] Ultimately, the report recommended approval of the land exchange. [Doc. 29-2, p. 7 (CMI Ex. 20)] The land was exchanged in 1974 pursuant to the United States discretionary authority under the General Exchange Act of March 20, 1922. [Doc. 29, ¶ 10]
CMI's former mine manager estimated that prior to the finalization of the 1974 Land Exchange, CMI had disposed of approximately 80% of the waste rock ultimately dumped into the piles on the exchanged land. [Doc. 87, ¶ 59] The Government concedes that it was aware that CMI had already disposed of waste rock on the exchanged land prior to the finalization of the Land Exchange in 1974. [Doc. 87, ¶ 60]
In 1965, CMI sought to purchase a 627 acre tract from the United States "for the purpose of constructing a dam across the arroyo it embraces to provide a tailings pond for their molybdenum mining operation." [Doc. 29-7, p. 2 (CMI Ex. 25); Doc. 29, ¶ 12] Milling, the process by which molybdenum is extracted from rock, produces "tailings," which included finely ground rock and water. [Doc. 87, ¶ 31; Doc. 91, ¶ 31] The United States conducted an appraisal, in which it stated that the lands were "greatly needed as a tailings pond. The existing mill site claims held by the applicant should be relinquished before notice of publication goes out from the Land Office." [Doc. 29-7, p. 4 (CMI Ex. 25)] In this appraisal report, the appraiser reported that CMI was already constructing a dam on an adjoining parcel of land, previously purchased from the United States, and when that tailings pond became full the intent was to use this 627 acre tract of land for a second tailings
In 1977, CMI applied for patents for more than 100 additional acres of land in the tailings area, which CMI stated was "presently being occupied and used to receive tailings from the mill which processes ore from patented and unpatented lode mining claims." [Doc. 28, ¶ 12; Doc. 29-10 (CMI Ex. 28); Doc. 29-9, p. 2 (CMI Ex. 27)] The United States disputes that CMI dumped tailings onto this 100 acres of land prior to the United States patenting such land to CMI. [Doc. 88, ¶ 12] The United States asserts that CMI only produced evidence that it dumped tailings onto land in the tailings area which it already held in fee simple. [Doc. 88, ¶ 12] However, viewing the evidence in the light most favorable to CMI for purposes of summary judgment, there is evidence that CMI was dumping tailings onto land to which the United States held legal title prior to the United States issuing patents to CMI for such land. [Doc. 29-9, p. 2 (CMI Ex. 27); Doc. 29-10, p. 2 (CMI Ex. 28); Doc. 29-11, p. 2 (CMI Ex. 29); Doc. 91-14, p. 2 (CMI Ex. 52)] For example, in its patent application for the mill sites, CMI stated: "The mill site claims are being used for waste disposal from these [open-pit mining] operations." [Doc. 28, ¶ 12; Doc. 28-9, p. 2 (CMI Ex. 9); Doc. 29-11, p. 2 (CMI Ex. 29)] By 2014, over 100 million tons of tailings were deposited at the tailings area. [Doc. 87, ¶ 37; Doc. 87-2 (U.S. Ex. 2); Doc. 91, ¶ 37]
In the 1920's, some land near the Questa Mine had been withdrawn from mineral exploration and development so that it could be used for the development of a water power project. [Doc. 29, ¶ 4] In 1968, CMI applied to the Federal Power Commission to vacate that withdrawal so that CMI could obtain title to that land and use it for mining purposes. [Doc. 29, ¶ 4] The Federal Power Commission vacated the withdrawal, and indicated in a Geologic Survey that the "greater public benefit" would come from using the land for the mining operation than for the water power development. [Doc. 29, ¶ 4]
Finally, in 1965 the United States issued "Special Use Permits" allowing CMI to build pipelines to transport the tailings from the Questa Mine to the tailings disposal area. [Doc. 29, ¶ 15; Doc. 89, ¶ 15] These pipelines crossed 4.271 miles of National Forest land. [Doc. 29, ¶ 15; Doc. 89, ¶ 15]
The United States put the Questa Site on the National Priorities List. [Doc. 87-2, p. 1 (U.S. Ex. 2)] In September 2001 the EPA and CMI entered into an "Administrative Order on Consent for Remedial Investigation/Feasibility Study" ("2001 Administrative Order"). [Doc. 52-1] Therein, the parties agreed that the Site is a facility under CERCLA; CMI is a person and the current owner and operator under CERCLA; and that CMI "caused the release of hazardous substances into the air, soil, surface water, and ground water at the Site." [Doc. 28, ¶ 14; Doc. 52-1, p. 11, ¶¶ 27-32] CMI conducted the Remedial Investigation/Feasibility Study ("RI/FS") from 2001 to 2009 and also undertook certain removal and reclamation activities at the Questa Site. [See Doc. 32, ¶¶ 119-122] On December 20, 2010, the EPA issued a Record of Decision ("ROD") identifying the selected remedy for the Questa Site, based in part
Previously, the United States filed a Partial Motion to Dismiss, submitting that to the extent CMI brought its claims under Sections 107(a) and 113(f)(1) of CERCLA, the claims were precluded based on a September 2001 "Administrative Order on Consent for Remedial Investigation/Feasibility Study," and two 2012 Administrative Settlement Agreements and Orders on Consent for Removal Actions. [Doc. 40; Doc. 103, pp. 3-5] The Court denied the Motion with respect to the September 2001 Administrative Order but granted the Motion with respect to the two 2012 Administrative Settlement Agreements and Orders. [Doc. 103, pp. 22-23] The United States did not move to dismiss CMI's alternative action under CERCLA Section 113(f)(3)(B).
The case is now before the Court on cross motions for summary Judgment by CMI and the United States, which turn on whether the United States is liable for clean-up and remediation under CERCLA as an "owner" or "arranger" pursuant 42 U.S.C. § 9607(a).
"The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). "[A] party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] ... which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (internal quotation marks omitted). Once the movant meets this burden, the non-moving party is required to put in the record facts showing that there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Fed.R.Civ.P. 56(c).
"A fact is `material' if, under the governing law, it could have an effect on the outcome of the lawsuit. A dispute over a material fact is `genuine' if a rational jury could find in favor of the nonmoving party on the evidence presented." Adamson v. Multi Cmty. Diversified Servs., Inc., 514 F.3d 1136, 1145 (10th Cir.2008) (internal citations omitted).
Dreiling, 850 F.2d at 1377.
"Congress enacted CERCLA to facilitate the expeditious cleanup of environmental contamination caused by hazardous waste releases ... and to establish a financing mechanism to abate and control the vast problems associated with
Morrison Enters. v. McShares, Inc., 302 F.3d 1127, 1135-36 (10th Cir.2002) (italics omitted). The only element in dispute in this case is whether the United States is a covered person under Section 9607(a), which imposes liability for the cleanup of facilities on four categories of persons:
42 U.S.C. § 9607(a).
CMI alleged and argues that the United States is liable as a party who owned the facility when the hazardous substances were disposed under Section 9607(a)(2) and as an arranger under Section 9607(a)(3). The United States disputes that it fits into either category of covered persons.
The seminal case considering whether the United States is an owner under CERCLA of land on which another party holds unpatented mining claims is United States v. Friedland, 152 F.Supp.2d 1234, 1239 (D.Colo.2001). In the present case, the parties' arguments focus largely on whether the analysis in Friedland was sound, and, if so, whether this case is distinguishable. Friedland's analysis merits review here.
The Friedland Court attempted to determine whether Congress intended the United States to be an owner under CERCLA when the United States holds title to land and another party holds an unpatented mining claim. Id. Because CERCLA unhelpfully defines an owner as "any person ... owning" a facility, the Friedland Court began by "`giv[ing] the term its ordinary or natural meaning.'" Id. at 1242 (quoting United States v. Bestfoods, 524 U.S. 51, 66, 118 S.Ct. 1876, 141 L.Ed.2d 43 (1998)). However, this canon of construction failed to be of much use given broad, equivocal, and at times inconsistent definitions of ownership. Id. (pointing out that while Webster's dictionary defines owner as "`one that has the legal or rightful title whether the possessor or not,'" Black's Law Dictionary defines
The Court thus turned to the nature of the United States' ownership of land on which a third party holds an unpatented mining claim. The Friedland Court described this interest as "bare legal title." Id. The Court recognized that, in other contexts, courts have held that the holder of bare legal title could be held liable if there were "adequate indicia of ownership over and above bare legal title." Id. at 1242-43 (collecting cases). Thus, the Court examined the relationship between the United States and "those entities utilizing the property subject to the unpatented mining claim" in order to "determine whether the United States possessed indicia of ownership sufficient" to be considered an owner under CERCLA. Id. at 1244. To make this determination, the Court reviewed various United States Supreme Court cases describing the nature of the United States' interest in an unpatented mining claim.
As Friedland discusses, mining claims find their legal basis in the Mining Act of 1872. Id. at 1244-45. One seeking a mining claim could "go onto unappropriated, unreserved public land," discover a mineral deposit, follow "the minimal procedures required to formally `locate' the deposit," and thereby gain "the right of exclusive possession of the land for mining purposes." United States v. Locke, 471 U.S. 84, 86, 105 S.Ct. 1785, 85 L.Ed.2d 64 (1985) (quoting 30 U.S.C. § 26); see Friedland, 152 F.Supp.2d at 1245. Under the Mining Act:
Friedland, 152 F.Supp.2d at 1245 (quoting 30 U.S.C. § 26).
Id. at 1245-46 (quoting Wilbur v. United States ex rel. Krushnic, 280 U.S. 306, 316-17, 50 S.Ct. 103, 74 L.Ed. 445 (1930)). Thus, though "the United States maintains broad powers over the terms and conditions upon which the public lands can be used, leased, and acquired, the claimant nevertheless enjoys a valid, equitable, possessory title, subject to taxation, transferrable by deed or devise and otherwise possessing the incidents of real property."
This Court agrees with Friedland's focus on who owns which strands of the bundle of property rights in determining whether the United States is an owner. See id. at 1244-46 (applying an indicia of ownership test); Commander Oil Corp. v. Barlo Equip. Corp., 215 F.3d 321, 331-32 (2nd Cir.2000) (applying the bundle of ownership rights analysis to determine whether party met the definition of an owner); see also John F. Seymour, Hardrock Mining and the Environment: Issues of Federal Enforcement and Liability, 31 Ecology L.Q. 795, 898-900 (2004) (describing Friedland's analysis and noting that most courts have shown "marked and consistent reluctance to impose owner liability on the United States for environmental contamination arising from mining activities where the United States was required by law to make the land available for mining, derived no royalties or other revenue from the use of the land, and had limited regulatory authority over the mining claims themselves.") This Court is not persuaded by CMI's argument that "legal title conclusively establishes owner liability under CERCLA," [Doc. 28, p. 25] because the right to use the property as a facility is held only by CMI and not the United States.
Pursuant to Section 9607(a), the Court must focus on ownership of the facility rather than ownership of the land. 42 U.S.C. § 9607(a)(2) (stating that "any person who at the time of disposal of any hazardous substance owned or operated any facility at which such hazardous substances were disposed of" is liable under CERCLA (emphasis added)). CERCLA defines a facility as
42 U.S.C. § 9601(9). Here, CMI's disposal of waste rock on the unpatented mining claims both created the "facilities" under CERCLA, and, with respect to the land that became a facility, divested the United States of the use of the property under the Multiple Use Act. 30 U.S.C. §§ 611-612.
Focusing the inquiry on whether the United States was an owner of the facility, rather than an owner of the land where the facility exists, correctly employs Congress's definition of a facility. This approach is consistent with the broader intent of CERCLA, which is to "ensure that the costs of [environmental] cleanup efforts [are] borne by those responsible for the contamination." Burlington Northern & Santa Fe Ry. Co. v. United States, 556 U.S. 599, 602, 129 S.Ct. 1870, 173 L.Ed.2d 812 (2009); see also Commander Oil, 215 F.3d at 330 (pointing out that, in the legislative history of CERCLA, Congress cited a case which stands for the proposition that "[w]hen one enters into a business or activity for his own benefit, and that benefit results in harm to others, the party should bear the responsibility for that harm" (internal quotation marks and citations omitted)). Thus, while the Court considers and discusses the parties' arguments relating to the application of Friedland to the United States' property interests here, the Court will do so through the lens of answering the question of who owned the facility, not who owned the land.
CMI asks this Court to depart from Friedland and hold that "fee simple ownership, standing alone, establishes `owner' liability." [Doc. 28, p. 22] CMI argues that Friedland was wrongly decided because it "ignored the long line of precedent recognizing that the United States holds title to and has significant property interests in and control over lands underlying unpatented mining claims." [Doc. 28, p. 26] It points to language in various cases, including Commander Oil, 215 F.3d 321. Commander Oil, however, is not particularly helpful for CMI. Friedland adopted large sections of its analysis, and reached the conclusion that the United States was not an owner under CERCLA. See Friedland, 152 F.Supp.2d at 1242-44 (referring to Commander Oil as Barlo). Moreover, Commander Oil points out that "[o]wnership exists vis-à-vis someone else; it represents a priority of rights and claims and not a concrete status." Commander Oil, 215 F.3d at 329. Commander Oil considered the relational property rights as between an owner, lessee/sublessor, and sublessee, and held, based on the contract at issue and the facts of the case, that the lessee/sublessor did not have the indicia of ownership, including "deriv[ing] benefit from the activities conducted on their property," necessary to be considered an owner under CERCLA. Id. at 330-32. Contrary to CMI's argument, applying Commander Oil to the facts here requires the holding that the United States was not an owner of the facilities in question. See id.
CMI also relies on United States v. Weiss, 642 F.2d 296 (9th Cir.1981), United States v. Etcheverry, 230 F.2d 193 (10th
Availing itself to the provisions of the mining laws, CMI was able to freely enter onto federal lands, stake numerous claims, mine without interference from the United States or the public, and enjoy substantial economic benefits from its mining claims. Friedland, 152 F.Supp.2d at 1246; see also Locke, 471 U.S. at 104-05, 105 S.Ct. 1785. The United States could not exclude CMI from the land, prevent it from staking its claims, or interfere with CMI's reasonable mining activities, including dumping the waste rock and tailings (though it could regulate those activities). See Friedland, 152 F.Supp.2d at 1246. Given that the United States' ownership interests in land on which another holds unpatented mining claims are unique, there is no comparable ownership interests of private parties in other contexts. See Locke, 471 U.S. at 104, 105 S.Ct. 1785. After careful consideration of the parties' arguments, the Court concludes that Congress did not intend for the United States to be an owner of a facility created by a miner on unpatented land under CERCLA under the circumstances of this case. It would be at odds with the purpose of the statute and the weight of persuasive authority to conclude that the United States was an owner because of the nature of the property interests created by the Mining Act. It would be further at odds with the purpose of CERCLA and the weight of the case law to determine that the United States subjected itself to liability by, in the 1970s, enacting regulations and statutes designed to give the United States knowledge about which mining claims were in existence and to begin to prevent or limit further environmental damage on the land it had made available to miners. Cf. United States v. New Castle Cnty., 727 F.Supp. 854, 869-70 (D.De.1989) (concluding that the state of Delaware was not liable as an operator where it required landfill operator to submit plans for approval to receive a permit and conducted various inspections to ensure compliance with state Solid Waste Disposal Code).
CMI argues that Friedland is distinguishable from the facts at hand for several reasons. First, it argues that with regard to many of the mining claims at issue for the land exchange, the United States stated in a mineral report that the land CMI exchanged was non-mineral in character. [Doc. 28, p. 28 & ¶ 11(d); Doc. 29-6, p. 3 (CMI Ex. 24)] Thus, CMI argues
CMI also argues that, with regard to the land exchange, the United States set the boundaries of the conveyance and established the terms of the sale, and thus, Friedland's analysis is inapplicable. [Doc. 28, p. 28] The Court is not persuaded by this argument for two reasons. First, as previously stated, it is ownership of the facility at the time the hazardous material is disposed there that is the controlling inquiry. At the time that waste rock was placed on the land, creating the facilities at issue, CMI held the land via unpatented mining claims and the United States maintained legal title and a reversionary interest in the land. Without the additional property interests such as possession, control, and the ability to exclude CMI from using the land for the disposal of the hazardous materials, the boundaries of the exchange are immaterial to the ultimate question of whether Congress intended the United States to be an owner. Second, and alternatively, if consideration of setting the boundaries is appropriate, the proper focus is on the United States' inability to set the boundaries of the unpatented mining claim, rather than the final conveyance. It is the claimant's unpatented mining claim that gives the claimant the right to use the land for mining purposes, including the disposal of waste rock. 30 U.S.C. § 612(b) ("[A]ny use of the surface of any such mining claim by the United States, its permittees or licensees, shall be such as not to endanger or materially interfere with prospecting, mining or processing operations or uses reasonably incident thereto.").
Finally, to establish ownership, CMI argues that the United States "carried out multiple affirmative acts to facilitate mining with contemporaneous knowledge of [CMI's] waste disposal activities." [Doc. 28, p. 25] CMI points to the following acts by the United States: the United States entered in to the Exploration Contract with CMI in 1957; the United States "[d]irect[ed] successful mineral exploration at the Mine from 1957 to 1960" under the DMEA Contract; the United States received "molybdenum production `royalties' as repayment for the DMEA contract"; the United States made the discretionary conveyance of 2,226 acres to CMI; the United States conveyed federal lands to CMI for tailings disposal; and the United States "[p]rioritiz[ed], examin[ed], and approv[ed] land title applications ... while mine waste rock was being generated and disposed of on federal lands." [Doc. 28, pp. 25-26] With regard to the loan and royalties, these facts have generally been considered (and, without more, determined to be insufficient) with regard to arguments that the United States should be liable as an operator or an arranger, not as an owner. See, e.g. United States v. Iron Mountain Mines, Inc., 881 F.Supp. 1432, 1449-52 (E.D.Cal.1995). The Court concludes that these facts are not material to the question of ownership of the facility. While the United States received royalties,
Finally, the United States entered into land transactions with CMI knowing that CMI intended to use the land for waste rock disposal. Not only is this fact not pertinent to the question of whether the United States should be liable as an owner, as discussed in detail below, it is insufficient to create arranger liability, which is generally the theory argued for liability on similar facts. Cf. Burlington Northern, 556 U.S. at 612, 129 S.Ct. 1870 (holding that a company's knowledge that its hazardous product would be spilled, without more, was insufficient to create arranger liability); Pakootas v. Teck Cominco Metals, Ltd., 832 F.Supp.2d 1268, 1272 (E.D.Wash.2011) ("While actions taken with intent to dispose of a hazardous substance are sufficient for arranger liability, actions taken with mere knowledge of such future disposal are not." (internal quotation marks and citation omitted)), clarified on denial of rehearing by 2012 WL 370105 (E.D.Wash., Feb. 3, 2012). The Court concludes that the United States was not an owner of the facilities for purposes of CERCLA in this case.
Arranger liability is "intended to deter and, if necessary, to sanction parties seeking to evade liability by `contracting away' responsibility." United States v. Gen. Elec. Co., 670 F.3d 377, 382 (1st Cir.2012). CERCLA liability for removal and remediation attaches to:
42 U.S.C. § 9607(a)(3). Considering arranger liability, our Tenth Circuit stated:
Raytheon Constructors, Inc. v. Asarco, Inc., 368 F.3d 1214, 1219 (10th Cir.2003).
The Supreme Court observed that arranger liability is clear when "an
In Nu-West Mining, Inc. v. United States, 768 F.Supp.2d 1082, 1089, 1091 (D.Idaho 2011), the Court granted summary judgment for the plaintiff mining company against the United States on the grounds that the United States acted both as an arranger and an operator for purposes of CERCLA. In Nu-West, the United States owned both the land and the waste, called middle waste shale. Id. at 1088. The United States awarded mining leases for phosphate ore. Id. at 1085.
Id. at 1086. The middle waste shale contained selenium, a hazardous substance, which leached into the environment and the water flowing through the valley where the United States had required the waste dumps to be located. Id. at 1086, 1089-90. Considering these facts, the District Court of Idaho applied Burlington Northern's requirement that the arranger have taken "`intentional steps to dispose of a hazardous substance.'" Id. at 1088 (quoting Burlington Northern, 556 U.S. at 611, 129 S.Ct. 1870). The Court also applied the Ninth Circuit's test considering whether the purported arranger "(1) owns the hazardous substance; (2) had the authority to control the disposal of that substance; and (3) exercised some actual control over the disposal of that substance." Id. (citing U.S. v. Shell Oil Co., 294 F.3d 1045, 1055 (9th Cir.2002)). The District Court of Idaho concluded that there were no questions of fact and that all of these factors were met: the United States owned the middle waste shale; the United states had the authority to and did control the disposal of the shale through the leasing requirements; and the United States took intentional steps to dispose of the shale, "by requiring its lessees to cover the outer surface of the waste dumps with a layer of middle waste shale." Id. at 1088. The Court thus concluded that the United States was an arranger and subject to liability under CERCLA. Id. at 1059.
In contrast, in Coeur d'Alene Tribe v. Asarco Inc., 280 F.Supp.2d 1094, 1132 (D.Idaho 2003), the Court concluded that the federal government was not liable as
Id. at 1127. The Court determined that Bestfoods, 524 U.S. at 66-67, 118 S.Ct. 1876, required "active involvement in the arrangements of disposal of hazardous substances," and that "control," while informative, was not a necessary factor in every case. Id. at 1131. The Court concluded that the facts above did not establish arranger liability because "the United States did not own or possess waste or arrange for its disposal during World War II and the United States did not exercise actual control over the disposal of mining tailings."
In Pakootas, the Court concluded that the State of Washington was not liable as an arranger where the State leased land to the miners, received a royalty from the mining profits, and knew that
Pakootas, 832 F.Supp.2d at 1270. The Court stated: "`While actions taken with intent to dispose of a hazardous substance are sufficient for arranger liability, actions taken with mere knowledge of such future disposal are not.'" Id. at 1272 (quoting Team Enters., LLC v. W. Inv. Real Estate Trust, 647 F.3d 901, 908 (9th Cir.2011)). The Pakootas Court reiterated that Team Enterprises held that indifference to the foreseeable possibility of disposal is insufficient, and, rather, applied the standard that "the probable purpose for entering
Here, CMI relies on certain facts to argue that the United States arranged for the disposal of the waste rock and tailings. It submits that the United States "facilitated mine development and arranged for the disposal of mine waste rock on lands then owned by the United States... by conveying those lands to Molycorp for use as a waste rock disposal site." [Doc. 29, pp. 5, 17, 19] CMI also argues that that the United States "facilitated mine development" and operations, "which necessarily included extensive waste rock generation and disposal." [Doc. 29, p. 5] CMI argues that the United States "determined that the disposal of waste rock on the Selected Lands was the best option for the Questa Mine." [Doc. 29, p. 19] It submits that the United States took the position that it would benefit from a land exchange, in that it "would obtain higher-value land as consideration for the conveyance." [Doc. 29, p. 19] CMI points out that the United States determined that utilizing the land exchange process rather than the patenting process would "minimize the burden on the United States." [Doc. 29, p. 19] CMI submits that the United States also stated in documentation pertaining to the land exchange that it was in the "public interest" for the land exchange to occur, in part based on the use of the land for waste rock disposal. [Doc. 29, p. 19; Doc. 29-5, p. 2 (CMI Ex. 23)] Finally, the crux of CMI's argument is that the "United States' knowledge of this ongoing waste rock disposal while processing the land conveyance demonstrates that the United States approved of the waste rock disposal and intended disposal to occur there." [Doc. 29, p. 20]
CMI's argument conflates knowledge of disposal of a hazardous substance with performance of affirmative "intentional steps" to dispose of a hazardous substance as required by Burlington Northern. Burlington Northern, 556 U.S. at 611, 129 S.Ct. 1870. Applying Burlington Northern, none of the acts here establish that the United States took intentional steps to arrange for the disposal of the hazardous substances. First, CMI had been disposing of the waste rock without input or directive from the United States, since well before the land transfer. [See, e.g., Doc. 29-2, p. 5 (CMI Ex. 20); Doc. 29-4, p. 2 (CMI Ex. 22)] The actions to which CMI points, including the United States' agreement to the DMEA loan and the land exchange and conveyances, do not amount to intentional steps to dispose of the waste rock. Rather, the United States took action which allowed CMI to continue to conduct its business as it had been, but it did not undertake "intentional steps to dispose of a hazardous substance." Id. Furthermore, CMI produced no evidence that
CMI relies on documents the United States created in terms of the various patents, land exchanges and conveyances, to show that the United States intended for CMI to dispose of the waste rock as it did. [See Doc. 29, ¶¶ 4-14] For example CMI points to the United States' "Environmental Analysis" of the land exchange, in which the United States expressed a preference for the disposal of the waste rock on the Selected Lands, because it would reduce mud flows into the Red River and across State Highway 38, as against disposal in an area that would require diversion of the Red River and a tunnel for State Highway 38. [Doc. 29-2, pp. 5-6 (CMI Ex. 20)] Again, however, this document does not establish that the United States arranged for CMI to dispose of the waste rock where it did via the land exchange. CMI made the decision to dump the waste rock in this particular location, and the United States merely acquiesced. As the United States pointed out in the Environmental Report: "Adverse environmental effects are not the result of the exchange proposal but, from the mining activity, itself. The mining activities will still continue on the patented mining claims or on millsites and are not dependent upon approval or disapproval of this land exchange proposal." [Doc. 29-2, p. 5 (CMI Ex. 20)] By contrast, in Nu-West, the United States told the mining company: "you'll do it our way or not at all." Nu-West, 768 F.Supp.2d at 1089. The United States did not take an intentional step to dispose of the hazardous substances in this case.
CMI further argues that the United States arranged for the disposal of hazardous waste by entering into the DMEA loan with CMI. [Doc. 29, p. 22] A similar argument was rejected by United States v. Federal Resources Corporation, 30 F.Supp.3d 979, 995 (D.Idaho 2014), appeal docketed, No. 15-35259 (9th Cir. April 7, 2015). In Federal Resources Corporation, as here, the United States entered into a DMEA contract to pay for 50% of the exploration costs for mining to find metals which were needed for strategic purposes. Id. at 985. The mining company "infer[red] that the United States intentionally disposed of hazardous tailings because it (1) controlled F & M's [the mining company's] mining activities, (2) encouraged F & M to construct a flotation mill, and (3) knew that F & M was dumping tailings on site." Id. at 995. Though the mining company introduced evidence that the United States instructed the mining foreman to change course with regard to drilling, the Court held that, from such evidence, "no reasonable juror could find that the United States intended F & M to dispose of hazardous waste on site." Id. at 996. As to the mill, the Court held that the mining company's "[s]howing that the Government liked the prospect of a mill at the Conjecture site does not raise a genuine issue of material fact on the question whether the Government intended that
Likewise, the Eastern District of Washington rejected an argument that the State was an arranger for the disposal of hazardous substances where the State leased lands to the mining company for exploration, mining, and milling of valuable minerals, and thus knew that tailings would inevitably be disposed to the environment. Pakootas, 832 F.Supp.2d at 1270. The Pakootas Court looked to the United States Supreme Court's decision in Burlington Northern, concluding that therein the Court "reversed the Ninth Circuit's decision ... that arranger liability may `attach when disposal of hazardous wastes is a foreseeable byproduct of, but not the purpose of, the transaction.'" Id. at 1273 (quoting United States v. Burlington Northern & Santa Fe Railway Co., 520 F.3d 918, 948 (9th Cir.2008), rev'd, 556 U.S. 599, 129 S.Ct. 1870, 173 L.Ed.2d 812 (2009)). Applying this reasoning, the Pakootas Court held that "[d]isposal of hazardous wastes must be a purpose of the transaction, not merely a foreseeably byproduct of the transaction." Pakootas, 832 F.Supp.2d at 1274. CMI has not articulated a reason for this Court to depart from the analysis in Federal Resources Corp. or Pakootas, particularly given the analysis in Burlington Northern. Burlington Northern, 556 U.S. at 612, 129 S.Ct. 1870 (rejecting the argument that CERCLA creates arranger liability for the seller of a useful product where the seller knows that it will eventually become hazardous waste and that hazardous waste will be disposed).
Finally, CMI argues that the United States is liable as an arranger for issuing permits for CMI's pipeline from the mine to the tailings area over BLM land. [Doc. 29, pp. 27-28] CMI cites no case law as authority that a government issuing a permit allowing the transportation of a hazardous substance is liable as an arranger, and this Court has found none. [Doc. 29, pp. 27-28; Doc. 93] CMI's argument fails the Burlington Northern test. Burlington Northern, 556 U.S. at 612, 129 S.Ct. 1870 (knowledge that a discharge of a hazardous substance will occur is insufficient). It fails to meet the requirements set forth in Raytheon Constructors, Inc. Raytheon Constructors, Inc., 368 F.3d at 1219 (stating that to be liable as an arranger one must be a person, must own or possess the hazardous substances, and must by contract or otherwise "arrange for the transport or disposal of such hazardous substances"). And it fails the Coeur d'Alene Tribe and Nu-West tests. Coeur d'Alene Tribe, 280 F.Supp.2d at 1132 (requiring possession of the waste and the exercise of "actual control over the disposal of mining tailings"); Nu-West Min., 768 F.Supp.2d at 1088 (considering "whether the entity (1) owns the hazardous substance; (2) had the authority to control the disposal of that substance; and (3) exercised some actual control over the disposal of that substance"). The Court concludes that the pipeline permits do not establish a question of fact that the United States arranged for the disposal of hazardous substances in this case.
CMI has failed to establish that the United States "by contract, agreement or otherwise, arrange[d] for the transport or disposal of such hazardous substances." Raytheon Constructors, Inc., 368 F.3d at 1219. Because CMI failed to establish an element essential to show arranger liability, the United States is entitled to summary judgment.
There is no genuine dispute as to any material fact in this case. Based on the
