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Idaho Conservation League v. Atlanta Gold Corporation

United States District Court, D. Idaho

September 15, 2017

IDAHO CONSERVATION LEAGUE and NORTHWEST ENVIR ONMENTAL DEFENSE CENTER Plaintiffs,
v.
ATLANTA GOLD CORPORATION, Defendant.

          MEMORANDUM DECISION AND ORDER ON MOTION FOR CIVIL CONTEMPT

          HONORABLE RONALD E. BUSH, CHIEF U.S. MAGISTRATE JUDGE.

         This decision resolves a Motion for Civil Contempt, filed by Plaintiffs Idaho Conservation League and Northwest Environmental Defense Center (collectively, “ICL”). (Dkt. 128). This is a re-opened Clean Water Act case, first filed in 2011. The case, and the pending motion, concern discharges of water containing arsenic and iron from a mining adit into Montezuma Creek, a tributary stream of the Middle Fork of the Boise River, located near Atlanta, Idaho.

         Previously, this case was presided over by U.S. Magistrate Judge Mikel L. Williams. In 2013, Judge Williams entered an injunction requiring the Defendant, Atlanta Gold Corporation (“Atlanta Gold”), to bring the arsenic and iron pollutants into compliance with the terms of the applicable Clean Water Act permit. ICL contends, however, that the waters flowing from the mining tunnel adit still contain levels of arsenic and iron in excess of the Clean Water Act permit that requires Atlanta Gold to treat the water coming from the adit. In the pending motion, ICL requests that Atlanta Gold be held in civil contempt under Rule 70(e) of the Federal Rules of Civil Procedure.[1] The Court has carefully reviewed the briefing and affidavits submitted in connection with this motion, as well as Judge Williams' prior orders. The Court also conducted an evidentiary hearing on April 25 and 26, 2017. Being fully advised, the Court now enters the following decision.

         I. SUMMARY OF DECISION

         In this second round of litigation, the Court must decide whether to impose additional penalties for continued violations of the Clean Water Act, whether to impose sanctions for contempt of court, and whether to issue a new injunction requiring Atlanta Gold to bring the adit waters into compliance with the terms of its Clean Water Act permit by a date certain. The situation at the adit has improved significantly compared to several years ago, in that Atlanta Gold has been able to treat the effluent water so that it meets all requirements of the permit about eighty percent of the time. Further, when violations do occur, levels of both arsenic and iron are often lower than they were when this lawsuit was initiated in 2011. Nevertheless, violations of the allowable arsenic and iron levels continue to occur with some regularity. Of those, large “spikes” in the amount of iron and arsenic passing out of the treatment system frequently occur during the spring and summer months, when the amount of water flowing out of the adit is particularly high. Violations in lesser amounts, but still exceeding permit limits, also have occurred on a regular basis over the last several years.

         In defending against the current contempt motion, Atlanta Gold argues that it has done everything it reasonably can do to remove arsenic and iron from the adit waters, and that the geographical and climate challenges of the site (e.g. its small footprint, its remoteness, sometimes unreliable power sources, and sometimes severe weather conditions) make further improvements impossible. In the context of a civil contempt motion, it is Atlanta Gold's burden to prove that further compliance is not reasonably possible.

         After hearing testimony on this issue, the Court is not persuaded by Atlanta Gold's assertions that it is unable to treat the contaminated water more effectively such that full compliance with the terms of the Permit could be achieved. The Court is mindful that there are logistical challenges and additional expense that will be incurred in improving the existing water treatment facilities. But the fact that such improvements may require site-specific engineering solutions and the associated expense needed to implement such solutions does not mean that such improvements are impossible, and does not mean that Atlanta Gold would be unable to accomplishment such improvements. Testimony at the evidentiary hearing established that there are reasonable means for Atlanta Gold both to expand the capacity of the current treatment system and to better control the flow of contaminated water into and through the treatment system. The Court also concludes that Atlanta Gold has not diligently and sufficiently pursued additional solutions that could bring the treatment system into full compliance with the terms of the Clean Water Act permit, despite the significant improvements that have occurred in recent years.

         The Court rules in this decision:

(1) that a new injunction will issue requiring that Atlanta Gold make improvements to its treatment system so as to bring the system into compliance with the Clean Water Act permit no later than August 30, 2018;
(2) that additional penalties for Clean Water Act violations are imposed upon Atlanta Gold in the amount of $251, 000; and
(3) that monetary sanctions in the amount of $251, 000 are imposed upon Atlanta Gold, in the form of a civil contempt order, for Atlanta Gold's failure to comply with Judge Williams' prior orders on these matters, with payment of that amount held in abeyance to allow Atlanta Gold the opportunity to fully comply with the Clean Water Act permit.

         II. BACKGROUND

         This case centers around discharges of arsenic and iron-contaminated water issuing from a historic mining tunnel known as the 900 Level Adit (“the 900 Adit” or “the Adit”). Atlanta Gold is a mining company in the business of mineral exploration and development and has ownership interests in a mining site near Atlanta, Idaho, of which the 900 Adit is a part. First drilled as a haulage tunnel in 1917, the 900 Adit is part of the historic Talache Mine. (Id. at ¶¶ 6 & 7, Dkt. 20-5). Next to the 900 Adit is Montezuma Creek, a stream which flows through the town of Atlanta approximately a mile downstream, and then into the Middle Fork of the Boise River. (Complaint at ¶ 33, Dkt. 1). The Middle Fork of the Boise River combines with other tributaries to form the main Boise River, which is itself a tributary of the Snake River.

         Historically, the Adit waters have contained very high levels of pollutants, specifically arsenic and iron. Other sources of pollution exist in the same vicinity. Testing of waters upstream of the Adit have routinely shown elevated levels of arsenic, and a Superfund site tied to the old Talache Mine is located nearby.

         Atlanta Gold obtained its ownership interests in the mining claims and mine operations that include the Adit site in 1985. Atlanta Gold has never processed or produced gold ore at the Adit site, but it has conducted exploratory activities. For a portion of the period that Atlanta Gold has conducted activities at the site, it treated water flowing from the Adit either by piping the water into a single settling pond to filter out suspended solids (including arsenic and iron), or by using a land-application system of waste disposal.

         The water flowing from the Adit was the subject of a lawsuit brought in 2005 by the ICL against Atlanta Gold under the Clean Water Act. That lawsuit ended in a Consent Decree in which Atlanta Gold agreed to construct a Pilot Water Treatment Facility (the “PWTF”) to treat the waters coming from the Adit. Further, Atlanta Gold agreed to apply for a discharge permit under the National Pollutant Discharge Elimination System (NPDES) provisions of the Clean Water Act, that would authorize discharges of certain levels of pollutants into Montezuma Creek. An NPDES permit issued on August 6, 2009 with an effective date of July 1, 2007 (the “Permit”), which is implicated by the present litigation. The Permit puts a ceiling on arsenic levels at 10 micrograms/liter and iron levels at 1, 000 microgram/liter.[2]

         Atlanta Gold constructed two additional settling ponds in an effort to bring the 900 Adit discharges into compliance with Permit limits. However, operation of the PWTF did not result in full compliance with the Permit limits; hence, in 2011, the Idaho Conservation League brought suit again, along with the Northwest Environmental Defense Center.

         In the 2011 lawsuit, Judge Williams first considered a motion for summary judgment on standing issues, and ruled in favor of ICL. Judge Williams then ruled upon a Motion for Remedies. On July 19, 2012, Judge Williams granted injunctive relief requiring Atlanta Gold to take the necessary actions to bring the 900 Adit discharge waters into compliance with the terms of the Permit. He imposed upon the company a $2, 000, 000 penalty for violations of the Clean Water Act. In his decision, Judge Williams also said he would consider imposing additional penalties if Atlanta Gold did not bring the Adit discharge waters within applicable effluent limitations.

         The injunction issued on July 27, 2012. (Dkt. 88). It required that Atlanta Gold bring the Adit site into compliance with the applicable Permit standards by October 31, 2012. The Court did not specify how Atlanta Gold was to achieve compliance, intending to leave the method by which compliance would be obtained to the decisions and actions of Atlanta Gold.

         Following Judge Williams' decision, Atlanta Gold began to undertake steps to comply with the court's decision and order. Those efforts ran into impediments, however. In the late summer and early fall of 2012, a large forest fire known as the “Trinity Ridge Fire” was burning near Atlanta, making access to the Adit site extremely difficult if not impossible. Atlanta Gold asked for additional time in which to comply with the terms of Judge Williams's injunction, and this additional time was granted by the court. The deadline for compliance was extended to December 15, 2012. (Dkt. 97). The deadline for payment of the monetary penalty was also extended to July 31, 2013. (Dkts. 101, 110).

         Atlanta Gold described its compliance efforts in a status report filed in December of 2012. The report indicated that compliance with the Permit effluent limits was achieved in the prior month (November 2012) - for the first time. Because there had only been one month of compliance in that time span, Judge Williams ordered that the compliance efforts would be monitored for several more months to see if there would be a record of consistent and steady compliance. Atlanta Gold's second status report, made in June of 2013, showed some permit violations. However, the report also showed dramatic improvement from the fall of 2012 to the spring of 2013 in treatment results and a steady downward trend in both arsenic and iron levels. The last month of records provided to the Court also showed no violations for either arsenic or iron.

         Judge Williams then issued a final judgment on September 12, 2013. (Dkt. 125). The case was administratively terminated, but the Court retained jurisdiction for purposes of enforcing the injunction.

         Since that time, Atlanta Gold's compliance record has been uneven. The company has made progress in treating the Adit waters since the case was first filed and the overall situation has improved. Even so, there have been 567 violations of the injunction requirements and the Permit since December of 2012. (Exhibit 1008).[3] Many of these violations have been caused by arsenic concentrations of 11 or 12 parts per billion - just over the allowable limits of 10 µ/L. But many other violations were much higher. For example, during the months of July through September of 2013, weekly measurements of arsenic were recorded at 24, 57, 41, and 31 µ/ liter.[4] Much higher arsenic levels were measured during certain parts of 2014, 2015, and 2016. Such high measurements occurred with regularity during the spring and early summer months, when Atlanta Gold said (and common sense would suggest) that water reaching the Adit from snow melt and rain was at its most plentiful. The Discharge Monitoring Reports (“DMRs”) for May and June of 2014 showed arsenic levels at 659 and 1216 µ/ liter - 65 and 120 times the allowable amount. Dramatically high arsenic levels also occurred at other times in the period of 2014 through 2016. For example, other DMRs reflect that the arsenic levels of 310, 342, and 179-also much higher than then 10 µ/L allowed under the Permit. The DMRs also reflect similar spikes in iron levels around these times.[5]

         When ICL filed its Motion to Reopen, it filed a Motion for Civil Contempt the same day. The Court set an evidentiary hearing, which took place on April 25, 2017 and at which testimony of multiple witnesses was presented upon a variety of subjects, including the number and relative seriousness of the violations that have occurred since the July 27, 2012 injunction was imposed, the work already undertaken by Atlanta Gold to treat the water coming from the Adit, and the nature and practicality of possible additional steps that could be undertaken to bring the company's operations into compliance with the Permit. Testimony included discussion of whether additional treatment capacity could be added to the existing treatment facility, and whether a literal “plug” could be placed into the tunnel at some distance from the Adit entrance, which would either stop or lessen the passage of contaminated water out of the mine through the Adit.

         III. LEGAL STANDARDS

         Civil contempt consists of a “party's disobedience to a specific and definite court order by failure to take all reasonable steps within the party's power to comply.” In re Dual Deck Video Cassette Recorder Antitrust Litigation, 10 F.3d 693, 695 (9th Cir. 1993). The party seeking the contempt order has the burden of showing by clear and convincing evidence that the opposing party violated a prior order of the Court. Once the moving party makes this demonstration, the burden then shifts to the opposing party to demonstrate why it was unable to comply. See, e.g. FTC v. Affordable Media, 179 F.3d 1228 (9th Cir. 1999). Impossibility, or an inability to comply with a court's prior order is an affirmative defense to a contempt action. Id. (quoting United States v. Rylander, 460 U.S. 752, 757 (1983)). Technical or minor violations of an order may fall short of contempt where perfect compliance is not necessary to achieve the goals of the order. However, technical violations are not excused unless the party has taken “all reasonable steps” to achieve compliance. Id.

         IV. ANALYSIS AND RULINGS

         A. AGC Has Violated Both the Injunction and the Terms of the Permit

         That Atlanta Gold has violated the terms of the Permit and the Court's prior injunction, is established by clear and convincing evidence. The DMRs show that concentrations of arsenic and iron exceeded allowable levels on multiple occasions. Atlanta Gold admits to such violations, as it is their own record keeping (required of them under the terms of the Permit) that evidences such violations in the period dating back to the December 15, 2012 compliance deadline imposed by Judge Williams.

         However, the Court also considers Atlanta Gold's explanations as to why it allegedly was unable to comply, and the company's assertion that nothing more can reasonably be done to improve the situation. In essence, Atlanta Gold contends that it has substantially complied with Judge ...


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