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

June 30, 2011

NU-WEST MINING INC., 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 plaintiff Nu-West's motion for partial summary judgment regarding the Government's claim for attorney fees. The motion is fully briefed and at issue. For the reasons explained below, the Court will deny the motion.

LITIGATION BACKGROUND

In its complaint, plaintiff Nu-West seeks to impose on the Government the costs of cleaning up selenium contamination at four mine sites in the Caribou-Targhee National Forest. This Court granted partial summary judgment to Nu-West, holding that the Government is a potentially liable party (PRP) under CERCLA. See Memorandum Decision and Order (Dkt. 84).

The Government has filed a counterclaim alleging that Nu-West should be held liable for those same costs, and seeking attorney fees.In the motion now before the Court, Nu-West asks the Court to interpret CERCLA to restrict the Government's right to attorney fees because it has been found to be a PRP. Nu-West's motion presents a pure question of law requiring an interpretation of CERCLA.

ANALYSIS

CERCLA authorizes the Government to recover from PRPs its enforcement costs, including its reasonable attorney fees. U.S. v. Chapman, 146 F.3d 1166 (9th Cir. 1998). Private parties, including PRPs seeking contribution from other PRPs, can also recover attorney fees, but on a more limited basis: They can recover fees only if they are a "necessary" cost of response. Key Tronic Corp. v. U.S., 511 US 809, 820 (1994). That means that they cannot recover fees incurred in pursuing litigation, but can recover fees incurred that are "closely tied to the actual cleanup" of the site, and that "significantly benefitted the entire cleanup effort and served a statutory purpose apart from the reallocation of costs." Id. Nu-West argues that because the Government is also a PRP in this case, it has no more right to attorney fees than a private party.

The holdings of Chapman and Key Tronic rely on the language of CERCLA, specifically § 9607. Subsection (a)(4)(A) of § 9607 governs the Government's right of recovery, while subsection (a)(4)(B) governs a private party's right of recovery.

The Government's right to recovery, under subsection (a)(4)(A), includes "all costs of removal or remedial action . . . not inconsistent with the national contingency plan." See 42 U.S.C. § 9607(a)(4)(A). A private party's right to recover is stated in somewhat different language, and includes "any other necessary costs of response . . . consistent with the national contingency plan." See 42 U.S.C. § 9607(a)(4)(B).

While these two provisions use different wording, they appear at first glance to be quite similar. The Government can recover the costs of "removal or remedial action" while a private party can recover the costs of "response." Indeed, CERCLA defines all three terms -- removal, remedial and response -- to include "enforcement activities related thereto." See 42 U.S.C. § 9601(25). And if both the Government and private parties are entitled to recover the costs they incurred in "enforcement activities," both would seem to be entitled to attorney fees since attorneys play a central role in any enforcement activity.

But when a private party made that very claim, it was rejected by a majority of the Supreme Court. Key Tronic, 511 U.S. at 819. In that case, a private party PRP sued its fellow PRPs under CERCLA and sought contribution for clean-up expenses, including attorney fees, arguing that its fees were part of its "enforcement activity." The majority opinion in Key Tronic disagreed, holding that it would "stretch the plain terms of the phrase 'enforcement activities' too far to construe it as encompassing the kind of private cost recovery action at issue in this case." Id. While expressly declining to decide whether the Government would be entitled to attorney fees under the term "enforcement activities," Key Tronic implied in dicta that it agreed with district courts that allowed fees to the Government under that phrase. Id. at 817-18. The Supreme Court has not had occasion to directly address the Government's right to attorney fees under CERCLA since Key Tronic.

However, five years after Key Tronic, the Ninth Circuit did address the issue in Chapman. There, the Circuit noted Key Tronic's dicta implying that the Government could get fees under the "enforcement activities" language. Chapman, 146 F.3d at 1174. But purely as a matter of interpretation, what language in CERCLA warranted giving the Government more rights to attorney fees than a private party? The Circuit answered that question by citing § 9604(b). That provision applies only to the Government and allows it to "undertake such planning, legal, fiscal, . . . and other studies or investigations . . . to plan and direct response actions, to recover the costs thereof, and to enforce the provisions of this chapter." See 42 U.S.C. § 9604(b) (emphasis added).

Reading this provision together with ยง 9607(a)(4)(A), Chapman concluded that the Government is entitled to attorney fees for its enforcement activities. Id. at 1175. In the present case, the Government has represented that it will only be seeking the ...


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