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Court Finds Navajo Nation’s NRD Recovery Under CERCLA May Be Limited, But Not Its State Law Recovery

The Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), 42 U.S.C. 9601, et seq., is best known for setting forth a comprehensive mechanism to cleanup hazardous waste sites under a restoration-based approach and for imposing liability on potentially responsible parties. What is less well known, and what is at issue in the latest decision to come out of litigation surrounding the 2015 Gold King Mine release, is CERCLA’s provisions that allow certain governmental entities who act as environmental trustees to recover money damages known as Natural Resource Damages (“NRDs”) from responsible parties for injuries to natural resources caused, directly or indirectly, from the release of hazardous substances, above and beyond the costs to clean up the contamination.  In In re Gold King Mine Release in San Juan Cnty., Colorado, on Aug. 5, 2015, No. 16-CV-931-WJ-LF, 2023 WL 2914718 (D. N.M. Apr. 12, 2023) (“In Re Gold Mine”), the Court held that CERCLA limited the Navajo Nation’s use of NRDs but also that CERCLA did not preempt state tort claims seeking restorative damages. 

Members of the Navajo Nation live primarily along the San Juan River, which is a crucial source of their water for irrigation.  In August of 2015, approximately three million gallons of acid mine drainage was accidently released from the Gold King Mine, significantly contaminating the surrounding area, including the San Juan River – a major tributary of the Colorado River that provides the chief drainage for Colorado, New Mexico, Utah and Arizona.   This environmental disaster sparked a host of litigation among numerous parties, some of which have been discussed in prior posts on our blog.   Among other claims, the Navajo Nation sought NRDs under CERCLA for the contamination to the San Juan River, and restorative damages under state law, including long term monitoring of the San Juan River, an agricultural assessment plan, a reservoir for irrigation needs, and a continued health assessment program. The cost of the restorative actions totaled over $80 million.  Weston Solutions, Inc., one of the defendants, moved to limit the NRDs that the Navajo Nation could recover and for a ruling that CERCLA preempted the state law claims for restorative damages.

In In Re Gold Mine, the United States District Court for the District of New Mexico first addressed a fine point of CERCLA’s NRD recovery scheme.  CERCLA Section 107(f) as originally enacted allowed a State or the United States to recover NRDs in order to restore, rehabilitate or replace affected natural resources, but did not allow Tribes to recover NRDs.  In 1986, as part of the Superfund Amendments and Re-Authorization Act of 1986 (“SARA”), Section 107(f) was amended in two ways.  First, it permitted Tribes for the first time to recover NRDs for the same limited uses allowed for States and the United States. Second, it restated and clarified the language restricting the uses of NRDs.  However, in the codification of the amendments, which involved a complicated dance of amending, striking and adding language, the limitation on the uses a Tribe could make of NRDs was lost.  Thus, the Navajo Nation argued that those limitations did not apply to it.   

The Court rejected the Navajo Nation’s contention, finding that “[t]he codified statute is only prima facie evidence of the law” and that because the United States Statutes at Large,[1] which contained the actual amendments, provided that sums recovered by Tribes were to be “available for use to restore, rehabilitate, or acquire the equivalent of such natural resources by the appropriate agencies of the Federal Government or the State government or the Indian tribe,” the limitation was also applicable to any NRDs awarded to the Navajo Nation despite the more specific language that ended up in the codified version referencing only the States and the United States. 

The Court next turned to the issue of whether the Navajo Nation’s state law claims for restorative damages, which went beyond restoration, rehabilitation or replacement damages, were preempted by CERCLA’s NRD scheme.  Weston argued that precisely because the Navajo Nation was seeking damages beyond what CERCLA allowed, CERCLA preempted state law on the issue.  The Court did not find Weston’s arguments persuasive and denied its Motion.  The Court determined that Congress did not intend to completely preempt state law claims related to hazardous waste contamination and that CERCLA did not completely preempt state tort theories of recovery, like the restorative damages claim here, for injuries that were separate and apart from an injury to natural resources. The Court concluded that Weston had not established that the restorative damages sought by the Navajo Nation were natural resource damages that would otherwise be preempted by CERCLA, including its restriction that they be used only to restore, replace or acquire the equivalent of the damaged resources.

[1] The U.S. Statutes at Large contains all laws enacted by Congress in chronological order while the U.S. Code is the updated versions of enacted laws arranged by subject matter.