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Court Grants Contractor’s Partial Summary Judgement Motion in King Gold Mine Case

In an opinion and order released on November 21, 2022, the United States District Court for the District of New Mexico overseeing litigation arising from the Gold King Mine spill granted a defendant-contractor’s partial summary judgement motion seeking dismissal of claims that it was liable under CERCLA as a transporter, operator, or arranger. In re Gold King Mine Release, No. 1:18-md-02824-WJ, 2022 WL 17093503, at *1 (D. N.M. Nov. 21, 2022).  The court held that one of the contractor defendants, Weston Solutions, Inc. (“Weston”), was not subject to CERCLA liability because it only assisted with operating the water management system rather than controlling any operations related to the release of contaminant from the King Gold Mine (“Mine”). Id. This decision follows the court’s earlier denial of a Motion to Dismiss in which the court held that the plaintiffs adequately pled operator, arranger, and transporter liability. In re Gold King Mine Release, No. 1:18-md-02824-WJ, 2019 WL 1282997, at *2-4 (D. N.M. Mar. 20, 2019) (slip opn.). Our blog post discussing the court’s first holding on this issue can be found here.

The November decision is part of ongoing litigation related to a wastewater spill in 2015 from the Mine. The spill, which was triggered by EPA employees working at the Mine, sent more than three million gallons of contaminated wastewater into rivers in Colorado, New Mexico, and Utah. Shortly after, the State of Utah, the State of New Mexico, the Navajo Nation, individual members of the Navajo Nation, and residents of four states filed suit against the Mine’s owner, the federal government, EPA, and EPA’s Response Contractors Weston and Environmental Restoration, LLC asserting claims for cost recovery, declaratory judgment, and injunctive relief under CERCLA, the Federal Tort Claims Act, and other federal environmental statutes. See In re Gold King Mine Release, No. 1:18-md-02824-WJ, 2019 WL 999016 (D. N.M. Feb. 28, 2019) (slip opn.). Our blog post summarizing the claims can be found here.  In this decision, Weston sought dismissal of the CERCLA claims asserted by the State of New Mexico and the Navajo Nation (“plaintiffs”).

Transporter Liability

The court first reviewed the definition of a transporter under CERCLA, which states liability arises when “any person accepts. . . any hazardous substances for transport to disposal or treatment facilities, . . ., from which there is a release, or a threatened release which causes the incurrence of response costs, of a hazardous substance.” In re Gold King Mine Release, 2022 WL 17093503 at *2. Weston claimed it was not a transporter because it never accepted the impounded water released from the Mine and did not select a treatment location for the impounded water. Id. Weston cited testimony that it was only tasked with assisting the development and operation of the water management system to treat water from the Mine rather than installing any portion of the system. Id. Additionally, Weston argued that it did not have the discretion to select the treatment site for the water from the Mine to subject the company to transporter liability. Id. at *3. Weston cited portions of the record indicating that the EPA On Screne Coordinator (“OSC”) had final decision-making authority for all aspects of work at the Mine, including excavation and design of the water management system. Id. The plaintiffs disagreed with both arguments, and cited OSC testimony that requested Weston’s input for the construction and engineering of the water management system. Id. However, the court held that the plaintiffs’ evidence was not enough. Id. Although Weston provided input to the OSC on the water management system, the plaintiffs failed to show that Weston, and not the EPA, selected the disposal and treatment location of the impounded water. Id. Therefore, there was no genuine issue of material fact as to whether Weston accepted, took, or held water from the Mine to subject the business to transporter liability. Id.

Operator Liability

Next, the court turned to the plaintiffs’ arguments of operator liability. Id. The court noted the circularity of CERCLA’s definition of an operator as “any person . . . operating the facility.” Id. The court instead relied on Supreme Court precedent, United States v. Bestfoods, which defines an operator, as “someone who manages, directs, or conducts operations specifically related to the leakage or disposal of hazardous waste, . . . .” Id. The court agreed with the definition asserting that Congress likely intended “to operate” to mean the exercise of direction over the facility’s activities. Id. Absent Tenth Circuit case law on the degree of control required to be an operator, the court briefly explored other circuit court case law decided after Bestfoods. Id. Specifically, the court noted that the Second, Third, Fifth, Sixth, Eighth and Ninth Circuits held that operator liability requires authority to control the activities causing contamination. Id.

The court ultimately returned to the language of Bestfoods, before holding that the language required the plaintiffs to demonstrate Weston exercised direction over the facility’s activities. Id. at *5. The plaintiffs presented evidence that Weston was involved in the project planning of the water treatment system. Id. at *5-6. Weston rejected this argument citing OSC testimony that it was not in a supervisory capacity, did not direct those at the Mine on the days of release and merely served as technical support for operations at the site. Id. The court granted summary judgement in favor of Weston holding that Weston’s evidence proved that the OSC was the sole-decision maker at the Mine, and Weston only provided technical support for operations. Id. at *6. Therefore, the plaintiffs’ mere assertion that Weston was involved in the planning for the water treatment system was not enough to establish a genuine issue of material fact for operator liability. Id.

Arranger Liability

Finally, the court assessed Weston’s arranger liability. Id. Since CERCLA fails to define what it means to “arrange for [the] disposal of a hazardous substance,” the court applied the Supreme Court’s ordinary meaning of the word. Id.  The Supreme Court holds that an entity is an arranger when it takes intentional steps to dispose of a hazardous substance. Id. The court also relied on Tenth Circuit precedent, which holds that an arranger (1) must be a “person” as defined in CERCLA; (2) must “own” or “possess” the hazardous substance prior to the disposal; and (3) must, “by contract, agreement or otherwise,” arrange for the transport or disposal of such hazardous substances. Id. Weston argued that it was not an arranger because it never possessed, owned, or controlled the water impounded in the Mine. Id. at *7. Weston presented evidence that the release occurred before waste entered the system it designed, and that Weston only provided technical support for excavation activities rather than controlling the operations of the work. Id. In response, the plaintiffs argued that the EPA tasked Weston with overseeing the water treatment operations and setting up the water system prior to construction. Id. The court rejected this argument holding that the plaintiffs failed to present evidence that Weston controlled the water released from the Mine rather than just the water management system. Therefore, there was no genuine issue of material fact regarding whether Weston possessed, owned, or controlled the water impounded in the Mine to subject it to arranger liability. Id.

Epilogue

On December 6, 2022, no doubt facilitated by this ruling, New Mexico agreed to settle the lawsuit against both federal contractors ending over six years of litigation.