United States District Court, D. Idaho
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For United States of America, Plaintiff: Amanda Shafer Berman, LEAD ATTORNEY, United States Department of Justice, Washington, DC; David L Dain, LEAD ATTORNEY, U.S. DEPT OF JUSTICE, Environmental Enforcement Section, Environment & Natural Resources Division, Washington, DC; Elizabeth Louise Loeb, LEAD ATTORNEY, U.S. DEPT OF JUSTICE, Environmental Enforcement Section, Washington, DC; Syrena Case Hargrove, LEAD ATTORNEY, U.S. Attorney's Office, Boise, ID; Amy S Howe, U.S. ATTORNEY'S OFFICE, Boise, ID; Katherine A Loyd, U.S. DEPARTMENT OF JUSTICE, Denver, CO; Paul Gormley, U.S. DEPT OF JUSTICE, Environment and Natural Resources, Denver, CO.
For Caldera Mineral Resources, LLC, Intervenor Plaintiff: Steven B Andersen, LEAD ATTORNEY, Andersen Banducci PLLC, Boise, ID.
For Blum Real Estate Trust, Bentley J Blum, Trustee of the Blum Real Estate Trust, Defendants: Gregg M Rosen, LEAD ATTORNEY, PRO HAC VICE, McGuire Woods LLP, Pittsburgh, PA; Michael E Ramsden, LEAD ATTORNEY, RAMSDEN & LYONS, Coeur d'Alene, ID.
For Minnie Moore Resources, Inc., Defendant: Thomas E Dvorak, LEAD ATTORNEY, GIVENS PURSLEY, Boise, ID.
For Camp Bird Colorado, Inc., Defendant: Michael E Ramsden, LEAD ATTORNEY, RAMSDEN & LYONS, Coeur d'Alene, ID.
For Federal Resources Corporation, Counter Claimant: Stanley J Tharp, LEAD ATTORNEY, EBERLE BERLIN KADING TURNBOW & MCKLVEEN, Boise, ID.
For United States of America, Counter Defendant: Amanda Shafer Berman, LEAD ATTORNEY, United States Department of Justice, Washington, DC; Syrena Case Hargrove, LEAD ATTORNEY, U.S. Attorney's Office, Boise, ID; Katherine A Loyd, U.S. DEPARTMENT OF JUSTICE, Denver, CO; Paul Gormley, U.S. DEPT OF JUSTICE, Environment and Natural Resources, Denver, CO.
For Chester Mining Company, Counter Claimant: Thomas M Vasseur, LEAD ATTORNEY, VASSEUR & SCHLOTTHAUER, PLLC, Coeur d'Alene, ID.
For United States of America, Counter Defendant: Syrena Case Hargrove, LEAD ATTORNEY, U.S. Attorney's Office, Boise, ID; Katherine A Loyd, U.S. DEPARTMENT OF JUSTICE, Denver, CO; Matthew B Henjum, U.S. Dept of Justice, Env. and Nat. Res. Div., Env. Def. Sec., Washington, DC; Paul Gormley, U.S. DEPT OF JUSTICE, Environment and Natural Resources, Denver, CO.
For The Coeur d'Alenes Company, ThirdParty Defendant: Kevin J Beaton, LEAD ATTORNEY, Stoel Rives LLP, Boise, ID; William C Pooser, LEAD ATTORNEY, STOEL RIVES, Boise, ID.
For United States of America, Counter Defendant: Syrena Case Hargrove, LEAD ATTORNEY, U.S. Attorney's Office, Boise, ID; Katherine A Loyd, U.S. DEPARTMENT OF JUSTICE, Denver, CO; Paul Gormley, U.S. DEPT OF JUSTICE, Environment and Natural Resources, Denver, CO.
ORDER ON PENDING MOTIONS
Richard C. Tallman, United States Circuit Judge.
The history of Idaho is heavily influenced by the discovery and mining of rich mineral deposits. Though vital to the development and settlement of the region, mining left behind significant waste. This case concerns who is responsible for the cleanup.
The United States brought this action against Federal Resources Corporation (FRC), the Blum Real Estate Trust (Blum Trust), Bentley J. Blum (Blum), and Camp Bird Colorado, Inc. (CBCI). At its core, the United States' Second Amended Complaint, Dkt. 204, seeks recovery of funds incurred by the United States, pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), for environmental cleanup efforts at the Conjecture Mine site in Bonner County, Idaho, and at the Minnie Moore Mine site in Blaine County, Idaho. FRC counterclaimed against the Government, alleging that the United States is contributorily liable for its share of response costs as an owner, operator, or arranger. Dkt. 223.
Pending before the Court are several motions, including: (1) the United States' Motion to Allow the Issue of Attorney Costs to be Tried Separately, Dkt. 207; (2) the United States' Motion for Summary Judgment regarding the Minnie Moore Mine Site, Dkt. 214; (3) FRC's Motion for Partial Summary Judgment regarding its defenses and counterclaims, Dkt. 225; (4) the United States' Motion for Summary Judgment on the Counterclaim, Dkt. 234; (5) the United States' Motion for Partial Summary Judgment Regarding the Conjecture Mine Site, Dkt. 235; (6) the United States' Motion for Summary Judgment on the United States' Claims Under Section 3304(a)(2) of the Fair Debt Collection Practices Act; and re: Veil Piercing, Dkt. 240; (7) the United States' Motions to File Under Seal, Dkts. 242, 280; and (8) FRC's Motion to Strike, Dkt. 260.
The Court has reviewed voluminous briefing from all interested parties, and heard lengthy argument on these motions on May 5, 2014, in Coeur d'Alene, Idaho. This Order is the memorandum decision ruling on all pending motions. In conformance with District of Idaho motions practice, the parties filed lengthy statements of uncontested facts from which the Court summarizes the relevant background for this decision.
I. Factual background
FRC, formerly Federal Uranium Corporation, is a Nevada company established around 1955. Dkts. 236, ¶ 1; 273, ¶ 1. It conducted mining operations at two mine sites relevant here: the Minnie Moore site and the Conjecture site. Dkts. 224, ¶ 7; 273, ¶ 7. Because FRC does not contest its liability for the United States' environmental cleanup costs at the Minnie Moore site, this fact section will focus on activities at the Conjecture site. See Dkt. 224.
A. Overview of the Conjecture site
The Conjecture site is a hardrock mining site, located partially on private land and partially on United States Forest Service (USFS) lands within the boundaries of the Idaho Panhandle National Forest north of Coeur d'Alene. Dkts. 236, ¶ 3; 273, ¶ 3. The USFS land contains a waste pile referred to by the parties as the North Dump. Dkts. 236, ¶ 4; 273, ¶ 4. The private land contains three additional waste piles referred to as the South Dumps. Id. There is no physical barrier or surface feature separating the two areas. Dkts. 236, ¶ 6; 273, ¶ 6. A small stream named Gold Creek flows south to north from the private land to the USFS land, and then eventually into Lake Pend Oreille. Id.
B. The United States' involvement at the Conjecture site
In 1951, the United States, through its Defense Minerals Exploration Administration (DMEA) program, began subsidizing mining operations for metals needed for strategic defense purposes. Dkts. 227, ¶ 2; 259, ¶ 2. That same year, the Funnell and Majer Mining Company (F& M) submitted an application to the DMEA to enter a lead-zinc mining exploration contract at the Conjecture site. Id. F& M had no prior mining experience. Dkts. 227, ¶ 1; 259, ¶ 1. F& M's application included a proposal to perform exploration work and to build a 50-ton per day concentrating mill. Dkt. 232-1, pg. 4. The parties agree that the DMEA did not accept F& M's initial proposal, but disagree on how much involvement the DMEA had in reworking the proposal. It is undisputed, however, that the DMEA did accept a revised proposal, which called for deeper exploration than F& M had initially proposed. Dkts. 227, ¶ 3; 259, ¶ 3. A Bureau of Mines engineer, H.T. Reno, reviewed the application for funding, and recommended that the DMEA sign an exploration contract with F& M. Dkts. 239, ¶ 24; 275, ¶ 24. Reno noted that, although F& M lacked mining experience, the two men running the company were competent businessmen and had hired a mining engineer who was given " complete charge of the mine." Id.
The DMEA gave F& M $26,614--50 percent of the project cost--for exploration activities, and F& M agreed to pay royalties on its net smelter returns for 10 years or until the DMEA's contribution had been repaid, whichever came first. Dkts. 239, ¶ 26; 275, ¶ 26; 239-1, Ex. B. The DMEA contract explained that " [t]he work shall be performed by [F& M], under [its] sole direction and control." Dkt. 239-1, Ex. B. It also gave the Government " the right to enter and observe and inspect the work at all reasonable times," and it allowed the Government to " consult
with and advise [F& M] on all phases of the work." Id.
The DMEA exercised its contractual rights provided by those latter provisions. It sent mining engineers from the Bureau of Mines and the United States Geological Survey to inspect the Conjecture site periodically, typically once or twice a month. Dkts. 239, ¶ 29; 275, ¶ 29. In 1953, after F& M had been unsuccessful in locating ore at the Conjecture site, F& M sought assistance from the DMEA. Dkts. 227, ¶ 5; 259, ¶ 5. During a February 13, 1953, visit, DMEA personnel determined that F& M's mining crew had dug in the wrong direction. Id. One of the DMEA agents suggested that the miners dig in a different direction. Id. The miners did not follow that advice. Id.
F& M requested another inspection two weeks later, having still failed to find a vein of ore. Dkts. 227, ¶ 6; 259, ¶ 6. In a memorandum following that inspection, Raymond Robinson, a U.S. Geologist, wrote, " Since the time of the last inspection (February 13) the foreman had been driving too far in the footwall of the ore-bearing structure. Recently, he was instructed to turn back to the main structure and the ore shoot was found on it." Dkt. 263-3. For reasons that will become clear later, the parties dispute who " instructed" the F& M foreman to change course--the DMEA or someone at F& M.
As indicated in its original DMEA proposal, F& M constructed a flotation mill at the Conjecture site to process ore from the Conjecture mine and other local mines. Dkts. 227, ¶ ¶ 7-8; 259,¶ ¶ 7-8. The parties dispute whether the DMEA encouraged F& M to build the mill. Either way, contemporaneous documents show that government officials knew the flotation mill produced tailings and that the tailings were dumped in an on-site tailings pond. Dkts. 227, ¶ 9; 259, ¶ 9. The parties dispute how many tons of tailings F& M disposed of at the Conjecture site, how the tailings were apportioned between the South Dumps and the North Dump, and whether the tailings had been removed before the United States' recent cleanup efforts.
C. FRC's involvement at the Conjecture site
FRC (then Federal Uranium Corporation) began conducting mining exploration activities at the Conjecture site in 1956 when it entered a lease and operation agreement with Conjecture Mines, Inc., which owned the mine at that time. Dkts. 227, ¶ 15; 259, ¶ 15. FRC deepened the existing inclined shaft (Shaft No. 1) by 200 feet and sunk a new three-compartment vertical shaft (Shaft No. 2). Dkts. 236, ¶ 10; 273, ¶ 10. By the time FRC finished with Shaft No. 2, the shaft extended 2,000 feet with extensive drifting, drilling, and cross-cutting off of it. Id.
Most of FRC's exploration activities produced waste rock, which is economically valueless material removed to gain access to ore deposits in the mine. Dkts. 236, ¶ 11; 273, ¶ 11. FRC left waste rock from its work on Shaft No. 1 somewhere within the South Dumps at the site. Dkts. 236, ¶ 13; 273, ¶ 13. It deposited its waste rock from Shaft No. 2 in the North Dump. Id. Most of FRC's waste rock from the Conjecture site was left in the North Dump. Dkts. 227, ¶ 16; 259, ¶ 16. FRC ended its mining activities at the Conjecture site in 1964. Dkts. 236, ¶ 14; 273, ¶ 14.
The parties vigorously dispute whether FRC's waste rock at the Conjecture site contained hazardous substances--or a sufficient concentration of hazardous substances--to justify the United States' cleanup efforts.
D. The United States' cleanup efforts at the Conjecture site
According to the United States, a number of hazardous substances were released at the Conjecture site, including arsenic, lead, and manganese in waste rock piles and soil; cadmium, lead, and zinc in Gold Creek's surface water; and arsenic in Gold Creek's sediment. Dkt. 236, ¶ 16. For its part, FRC says that sampling data shows that metals concentrations in the North Dump--where it deposited most of its waste rock--did not exceed site cleanup standards. Dkt. 273, ¶ 16.
But the United States did clean up the site. Because the Conjecture site spanned private and USFS land, the U.S. Environmental Protection Agency (EPA) and USFS coordinated under CERCLA to plan the site cleanup. Dkts. 236, ¶ 18; 273, ¶ 18. The United States completed a Site Investigation in June 2002, which covered the entire Conjecture site. Dkts. 236, ¶ 20; 273, ¶ 20. The report estimated that the North Dump contained 77,570 cubic yards of waste rock. Id.
The Government then hired an outside contractor, Maxim Technologies, to perform an Engineering Evaluation / Cost Analysis (EE/CA) report. Dkts. 236, ¶ 21; 273, ¶ 21. The EE/CA concluded that " [m]ine wastes located on the site present potential human health and environmental impacts to forest users," including " elevated levels of heavy metal contaminants present in the four waste rock dumps." Dkt. 229-2, pg. E-1. The EE/CA analyzed several cleanup alternatives, and recommended cleanup " Alternative 3," which involved removing mine waste material from the South Dumps and constructing a stream corridor through the North Dump. Dkts. 236, ¶ 23; 273, ¶ 23. Alternative 3 called for regrading the North Dump's waste rock, so that its slopes would be less susceptible to erosion by stream water and the elements, but not removing it. See Dkt. 229-2, pg. 79.
In its April 27, 2006, Action Memorandum, the USFS determined that a removal action was necessary for the North Dump. Dkt. 229-4. The Action Memorandum called for removal of " approximately 3,000 cubic yards of mine waste, contaminated native material, and contaminated stream sediments[.]" Id. " Another approximately 37,000 cubic yards of mine waste would be moved and re-contoured to a stable condition to establish a clean corridor for Gold Creek," and " Gold Greek would be relocated to its approximate pre-mining location and gradient." Id.
The EPA and the USFS entered into a Memorandum of Understanding for the combined performance of a single removal action. The USFS provided funding, and EPA performed the removal action. Dkts. 236, ¶ 30; 273, ¶ 30. The EPA conducted the cleanup from June to September of 2007. Dkts. 236, ¶ 32; 273, ¶ 32.
II. Legal standards
A. Summary judgment
Summary judgment is appropriate " 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 fact is " material" when, under the governing substantive law, it could affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A " genuine" issue of material fact arises " if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. " The mere existence of a scintilla of evidence . . . will be insufficient; there must be evidence on which the jury could reasonably find for [the non-moving party]." Id. at 252. In considering a
motion for summary judgment, a court may not weigh the evidence or make credibility determinations, and must draw all inferences in the light most favorable to the non-moving party. Id. at 255. To the extent there are disputes over non-material facts, the Court has considered them in the light most favorable to the opposing party.
B. Motions to strike
Affidavits and declarations are acceptable forms in which to present evidence in support of summary judgment. Fed.R.Civ.P. 56(c)(1)(A). However, " [a] party may object that the material cited to support or dispute a fact cannot be presented in a form that would be admissible in evidence." Fed.R.Civ.P. 56(c)(2). " An affidavit or declaration used to support or oppose a motion must be made on personal knowledge, set out facts that would be admissible in evidence, and ...