Deal or no Deal? – Partial Dismissal of CERCLA Claims Against United States and Tribal Entities
Three companion decisions in Atlantic Richfield Co. v. U.S. et. al., Case No. 1:15-cv-00056, in the U.S. District Court for the District of New Mexico, provide insight on the CERCLA statute of limitations, potential pitfalls in pleading CERCLA claims, and the defense of sovereign immunity by an Indian Pueblo in the context of CERCLA and contract claims. The case remains pending.
In the 1940s, when the war was over, the federal government was in the market for uranium concentrate for bombs, and it encouraged private entities to mine and mill uranium for sale to the government at prices set by the government. Much of the country’s uranium reserves were in the Grants Uranium Belt in western New Mexico, an area that includes the Laguna Pueblo.
Uranium was discovered on Laguna Pueblo lands in 1952, and Anaconda Copper Mining Company entered into mining leases with Laguna, which were approved by the Bureau of Indian Affairs, acting pursuant to its trust responsibility to the Pueblo. Much uranium was mined there from the Jackpile Paguate mine beginning in 1952, and operations continued until 1982. In 1986, the Pueblo and Anaconda’s successor, Atlantic Richfield Co. (“ARCO”), entered into an agreement to terminate the leases and perform remediation. ARCO agreed to pay the Pueblo to perform remediation, and the Pueblo agreed to assume all liability and release ARCO regarding it. The Department of the Interior approved the agreement and, following the preparation of an EIS, BLM and BIA issued a ROD that established requirements for the remediation. ARCO paid $43.6 million to the Pueblo to perform the remediation and release ARCO.
All defendants were involved in varying degrees with the remediation. BIA had responsibility to determine the extent of remediation required and approve key remediation decisions according to a cooperative agreement with the Pueblo. But BIA and the Pueblo saw in ARCO’s $43.6 million payment an economic development opportunity. The Pueblo formed Laguna Construction Company (“LCC”) to conduct the remediation, and BIA ceded certain oversight to the relatively inexperienced LCC as well. Work on the initial remediation ended in 1985. Beginning in 2007 the Pueblo, and then EPA, investigated the adequacy of mine reclamation at the mine site and found problems. In 2012 EPA proposed listing on the NPL, and in 2014 it asserted that ARCO should fund the RI/FS, but EPA has brought no litigation.
ARCO claims that the remediation was mishandled and brought CERCLA claims against the United States, the Pueblo and LCC, seeking cost recovery, contribution, and declaratory relief. The United States moved to dismiss. In detailed decision by Senior United States District Judge, James A. Parker, all of ARCO’s claims against the United States were dismissed. In companion decisions, some claims against the Pueblo and LCC were dismissed and some survived motions to dismiss. Dismissals were based in part on the CERCLA statute of limitations, the court’s determination that the ARCO pleadings were deficient and sovereign immunity.
ARCO sought to recover two categories of response costs: (1) the $43.6 million it paid to the Pueblo in 1986 in exchange for the Pueblo’s agreeing to be responsible for the remediation and to release ARCO from all responsibility for it; and (2) the significant costs ARCO incurred in responding to EPA’s more recent efforts to shift responsibility to ARCO. The Court dismissed ARCO’s claims for cost recovery and contribution for the 1986 settlement payment as time barred. The Court dismissed ARCO’s claim to recover the costs in responding to EPA and associated investigation as inadequately pled to establish that the expenditure constitutes “necessary costs of response.” Claims for contribution under 113(f)(1) (referenced by the court as “post judgment contribution claim”) were dismissed as premature because ARCO had not been sued. Finally, the claims against the United States for declaratory judgement were dismissed; the court ruled that ARCO cannot bring a claim for declaratory relief because it has failed to establish a valid underlying contribution or cost recovery claim.
Claims against the Pueblo and LCC are somewhat more complicated as a result of sovereign immunity defenses they raised. The court considered the sovereign immunity defense asserted by both Laguna Pueblo and LLC, its federally-chartered Tribal Corporation. The Court concluded that both the Pueblo and LCC are entitled to assert sovereign immunity as a bar to ARCO’s CERCLA claims because the language of existing waivers of sovereign immunity was not unequivocal enough to cover CERCLA claims. The Court therefore dismissed those CERCLA claims. However, the court found that the Pueblo and LCC waived sovereign immunity with regard to ARCO’s breach of contract claims. The source of this waiver for the Pueblo is in the 1986 Agreement to Terminate Leases. The court found that this agreement served to waive sovereign immunity from claims brought under that contract. Regarding LCC, the source of the waiver of sovereign immunity for breach of contract claims was in the Articles of Merger associated with the merger of LCC from a New Mexico corporation to a federal LCC formed under 25 USC §477, which may assert sovereign immunity. A motion for reconsideration by LCC is pending.
Although the facts of Atlantic Richfield are unique, its lessons are broader. First, in pleading a CERCLA claim for cost recovery, care should be taken to allege in some detail facts which support all elements of the claim, including facts showing that necessary response costs within CERCLA were incurred. Second, without adequate waiver of sovereign immunity, the settlement and payment in exchange for a release and commitment by a tribe or tribal corporation to assume full responsibility for clean-up may leave the door open for CERCLA liability in the future without recourse through CERCLA-based contribution and cost recovery claims. Finally, although the court’s decision confirmed that the defense of sovereign immunity applies to CERCLA contribution and cost recovery claims brought by private parties against sovereign Indian tribes and their federally chartered corporations, the court’s analysis confirms that under the right circumstances, a tribe may waive its sovereign immunity protections.
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