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Nu-West Mining Inc., and Nu-West Industries v. United States of America

March 4, 2011

NU-WEST MINING INC., AND NU-WEST INDUSTRIES INC. PLAINTIFFS,
v.
UNITED STATES OF AMERICA DEFENDANT.



The opinion of the court was delivered by: Honorable B. Lynn Winmill Chief U. S. District Judge

MEMORANDUM DECISION AND ORDER

INTRODUCTION

The Court has before it a motion for partial summary judgment filed by plaintiffs Nu-West Mining Inc. and Nu-West Industries Inc. (hereinafter Nu-West). The Court heard oral argument on January 25, 2011, and took the motion under advisement. For the reasons expressed below, the Court will grant the motion.

FACTUAL BACKGROUND

Plaintiff Nu-West seeks to impose on the defendant Government the costs of cleaning up selenium contamination at four mine sites in the Caribou-Targhee National Forest. This suit is brought under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. §§ 9601-9675. Nu-West's motion for partial summary asks the Court to find the Government liable under certain provisions of CERCLA, but leaves issues of the Government's defenses and damages to later litigation.

In 1949, after determining that lands in the Caribou National Forest had phosphate deposits large enough to warrant mining, the Government began awarding mining leases through a competitive bidding process. Through these leases, the Government authorized the Lessees to mine phosphate ore at the Mine Sites. The four mines that arose from these leases -- and are the focus of this lawsuit -- are the South Maybe Canyon Mine, the North Maybe Mine, the Champ Mine and Champ Mine Extension, and the Mountain Fuel Mine.

The leases ran for twenty years, and the Government retained the authority to terminate the leases "whenever the lessee fails to comply with any of the provisions of this chapter, of the lease, or of the general regulations promulgated under this chapter and in force at the date of the lease." See 30 U.S.C. § 188(a). In addition to the lands covered by mining leases, the United States issued to the Mine Site Lessees a number of Special Use Permits ("SUPs") so that waste rock dumps could be constructed on National Forest lands adjacent to the leased lands.

From at least 1965 to the present, the Government has monitored environmental conditions at the Mine Sites, including water quality sampling and other hydrology studies. The Government also required the Lessees to allow mine inspections to ensure, among other things, that the Lessee was properly disposing of mining waste and paying a full royalty to the Government. The Government reserved for itself all of its property rights in the Mine Sites, except that it granted to the Lessees the limited right to mine for phosphate, phosphate rock, and related minerals. The Government required the Lessees to prospect diligently and to meet certain ore production requirements, and also to pay a royalty fee.

Before any mining could begin, the Government required the Lessees to obtain its approval of plans for mining, waste disposal, and reclamation. The United States conditioned its approval of mine plans on requiring the Lessees to perform specific reclamation activities at the Mine Sites, including locating, designing, and shaping waste rock dumps, covering waste dumps with a layer of middle waste shale as a growth medium, and planting specific seed mixtures on the waste dumps.

The four mines operated from roughly the 1960s to the 1990s. Each of the mine sites is contaminated with a hazardous substance known as selenium. A naturally occurring chemical element, selenium is found in a rock layer between phosphate ore zones. This rock layer is known as "middle waste shale," and it was hauled out of the mines in the process of digging through the first phosphate ore zone to get to the second.

The middle waste shale was placed on top of every waste rock dump constructed at all four of the mine sites. It was intended to promote revegetation on the dumps, but the selenium leached into the environment. Waste dumps associated with the South Maybe Canyon Mine and North Maybe Mine were placed over water sources. These dumps were known as cross valley fill (CVF) dumps because they filled the valley side-to-side and covered stream beds at the valley bottom. The CVF dumps had a rock drain -- known as a french drain -- that allowed water to flow underneath the dump, and were covered with middle waste shale. The selenium leached from the middle waste shale down through the french drain and into the flowing water beneath.

The four mines are all currently leased to Nu-West. When the selenium contamination was discovered in the late 1990s, Nu-West entered into Administrative Orders of Consent with the Government to remediate the sites. Nu-West claims to have spent $10 million to date on those remediation efforts, and seeks to recoup those costs in this CERCLA action.

Nu-West's motion for partial summary asks the Court to find that the Government is an owner, arranger, and operator of the waste disposal sites as those terms are defined by CERCLA and its associated case law. The motion does not seek to resolve issues about the Government's defenses listed under CERCLA or any damage ...


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