U.S. v. Asarco Inc.

• Citation: 430 F.3d 972
• Decision Date: 05 December 2005
• Docket Number: No. 04-35479.,No. 04-35052.,No. 04-35106.,04-35052.,04-35479.,04-35106.
• Parties: UNITED STATES of America, Plaintiff-Appellant, and State Of Idaho, Plaintiff, v. ASARCO INCORPORATED; Hecla Mining Company, Defendants-Appellees, and Coeur D'Alene Mines Corporation; Callahan Mining Corporation; Sunshine Precious Metals, Inc.; Sunshine Mining Company, Inc., Defendants. United States Of America, Plaintiff-Appellant, and State Of Idaho, Plaintiff, v. Coeur D'Alene Mines Corporation; Callahan Mining Corporation; Hecla Mining Company; Sunshine Precious Metals, Inc.; Sunshine Mining Company, Inc., Defendants-Appellees. United States Of America, Plaintiff, and State Of Idaho, Plaintiff-Appellant, v. Asarco Incorporated; Hecla Mining Company, Defendants-Appellees, and Coeur D'Alene Mines Corporation; Callahan Mining Corporation; Sunshine Precious Metals, Inc.; Sunshine Mining Company, Inc., Defendants.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

430 F.3d 972

UNITED STATES of America, Plaintiff-Appellant, and State Of Idaho, Plaintiff, v. ASARCO INCORPORATED; Hecla Mining Company, Defendants-Appellees, and Coeur D'Alene Mines Corporation; Callahan Mining Corporation; Sunshine Precious Metals, Inc.; Sunshine Mining Company, Inc., Defendants.

United States Of America, Plaintiff-Appellant, and State Of Idaho, Plaintiff, v. Coeur D'Alene Mines Corporation; Callahan Mining Corporation; Hecla Mining Company; Sunshine Precious Metals, Inc.; Sunshine Mining Company, Inc., Defendants-Appellees.

United States Of America, Plaintiff, and State Of Idaho, Plaintiff-Appellant, v. Asarco Incorporated; Hecla Mining Company, Defendants-Appellees, and Coeur D'Alene Mines Corporation; Callahan Mining Corporation; Sunshine Precious Metals, Inc.; Sunshine Mining Company, Inc., Defendants.

No. 04-35052.

No. 04-35479.

No. 04-35106.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted June 7, 2005.

Filed December 5, 2005.

COPYRIGHT MATERIAL OMITTED

Ronald M. Spritzer (briefed and argued) and Greer S. Goldman (briefed), Environmental and Natural Resources Division, U.S. Department of Justice, Washington, D.C., for plaintiff-appellant United States.

Curt A. Fransen, Deputy Attorney General, Coeur d'Alene, Idaho, for plaintiff-appellant State of Idaho.

Elizabeth H. Temkin, Denver, Colorado, for defendant-appellee Hecla Mining Company.

Appeal from the United States District Court for the District of Idaho, Edward J. Lodge, District Judge, Presiding. D.C. No.CV-94-00206-EJL.

Before: FERGUSON, BEEZER, and McKEOWN, Circuit Judges.

FERGUSON, Circuit Judge:

In 1994, the United States and the State of Idaho (together, "Plaintiffs") entered into a consent decree with various mining companies, including Hecla Mining Company and Asarco, Inc. (together, "Defendants"), requiring the latter to perform certain cleanup actions in exchange for specific liability releases in the seriously contaminated Bunker Hill Superfund Site. The site, also known as "the Box," is a twenty-one square mile area surrounded by the Coeur d'Alene River Basin ("the Basin") in northern Idaho. In 2001, the District Court modified the consent decree for the Box ("the Box Decree" or "the decree") because it found that Defendants faced unanticipated liability outside the Box that made compliance with the decree substantially more onerous.

In 1996, the United States had filed an action under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)¹ to recover from Defendants costs incurred in cleaning up environmental contamination in the heavily mined 1500 square mile Basin. In 2003, after the Environmental Protection Agency (EPA) had completed a remedial investigation and feasibility study of, as well as a record of decision (ROD) for, the Basin, the District Court reduced Defendants' cleanup obligation under the Box decree by $7 million.

Plaintiffs presently contend that the District Court abused its discretion when it relied on extrinsic evidence, rather than the plain terms of the decree, to find that Defendants did not anticipate the EPA's contested action outside the Box. Because the decree in fact expressly reserved the United States' authority to take such action, we reverse the Court's modification order. In so doing, we hold that in modifying a consent decree under Rule 60(b)(5) of the Federal Rules of Civil Procedure, a court must first interpret the terms and provisions of the decree as it would a contract to determine if the moving party anticipated a significant change in factual conditions, thereby making modification improper.

I. BACKGROUND

A. Bunker Hill Superfund Site

The EPA listed the Bunker Hill Superfund Site (hereinafter "the Box"), a twenty-one square mile area in Shoshone County, Idaho, on its National Priorities List in 1983 as one of the country's most contaminated sites. Over one hundred years of mining and sixty-five years of smelting activity, as well as various natural and man-made events, had caused widespread contamination in the area. The EPA's record of decision for the Box explained that, in particular, "[s]oils, surface water, ground water, and air throughout the[s]ite have been contaminated by heavy metals, to varying degrees, through a combination of airborne particulate deposition, alluvial deposition of tailings dumped into the river by mining activity, past waste disposal practices, and contaminant migration from onsite sources."

Section 104 of CERCLA permits the President to respond directly to releases or threatened releases of hazardous substances, such as those existing in the Box, by undertaking "response actions" consistent with the National Oil and Hazardous Substances Pollution Contingency Plan ("NCP"). See 40 C.F.R. § 300.1-.86 (1985). Before selecting a response action, however, the NCP requires that the EPA first conduct a remedial investigation and feasibility study, which is designed to "assess site conditions and evaluate alternatives to the extent necessary to select a remedy" that will "eliminate, reduce, or control risks to human health and the environment." 40 C.F.R. § 300.430(a)(1)-(2). Potential response actions include a "remedial action," which is a cost-effective, long-term plan for a permanent remedy, and a "removal action," which is generally a short-term action intended to address only emergency situations. 42 U.S.C. § 9601(24), (23); see ROGER W. FINDLEY & DANIEL A. FARBER, ENVIRONMENTAL LAW 18687 (5th ed.2000).

For purposes of the remedial investigation and feasibility study of the Box, the EPA divided the twenty-one square miles into populated and non-populated areas. The agency eventually issued a ROD for the populated areas in 1991 and a ROD for the non-populated areas in 1992. Taken together, the records of decision supported a remedial action in the Box targeting widespread heavy metal contamination in soils, surface water, and ground water and seeking to reduce associated risks to human health, particularly children's exposure to lead.

Between 1992 and 1994, Plaintiffs engaged in settlement negotiations with potentially responsible parties ("PRPs"), including Defendants, after filing a complaint against them to recover costs for the EPA's remedial action in the Box.² The parties agree that at the time of their negotiations the EPA expressed its intent not to use CERCLA remedial authority to clean up contamination (or "superfund" the area) outside the Box. Instead, it planned to address the environmental contamination in that area through the Coeur d'Alene Basin Restoration Project ("the Basin Restoration Project"), a cost-effective, long-term approach, not a "response action," that was designed to be a public and private venture among local, state, and federal agencies, the Coeur d'Alene Tribe, and private property owners in the Basin (including Defendants).

In 1994, the District Court entered the parties' settlement as a consent decree in which Defendants, among other PRPs, agreed to perform certain cleanup actions in the Box's populated areas and Plaintiffs assumed primary responsibility for the Box's non-populated areas. The parties agree that the United States explicitly reserved in the decree the right to pursue PRPs for "liability arising from the past, present, or future disposal, release, or threat of release of Waste Materials outside the Site." Consent Decree (CD) ¶ 90(2). In addition, no party disputes that, under the decree, the United States "retain[ed] all authority and reserve[d] all rights to take any and all response actions authorized by law." CD ¶ 93 (emphasis added). Moreover, the parties recognize that the decree limited the United States' covenant not to sue the PRPs strictly to the Box. CD ¶ 84a.

B. Modification of Consent Decree

In March 1996, nearly two years after the District Court had approved the consent decree for the Box, the United States, at the request of the EPA, the Department of the Interior, and the Department of Agriculture, filed an action to recover from PRPs, among other things, damages under CERCLA for injury to natural resources in the heavily mined Basin, that is, the area outside the Box.³ In early 1998, the EPA publicly announced that it would be conducting a remedial investigation and feasibility study of the Basin. Three years later, in January 2001, Defendants filed a motion in the District Court of Idaho to modify the consent decree, contending that the EPA's decision to superfund the Basin constituted an unanticipated change in factual circumstances that made compliance with the Box decree substantially more onerous.

In particular, Defendants alleged that the EPA had repeatedly assured them that it would not expand the Superfund site from the Box to the Basin.⁴ Despite recognizing that the decree specifically reserved the United States' right to superfund the Basin, the District Court relied on oral and written assurances that the EPA had allegedly given Defendants prior to and after entering the decree to find that the latter did not anticipate the contested action. The Court found that between 1991 and early 1998, the EPA consistently stated "that actions outside the Box would be coordinated with the broader objectives of the Coeur d'Alene Restoration Project ... and regulatory tools other than remedial authority under CERCLA." The Court explained that "[t]his finding[was] based on repeated representations and references to the `multimedia approach' in letters, in the 1991 and 1992 RODs ... in conversations with EPA management, in the [Basin Restoration Project] Framework document and in Department of Justice pleadings to the Court in this case and in United States v. Asarco, et al., 96-122-N-EJL." On September 30, 2001, the Court held that modification of the decree was appropriate because enforcement of the decree as it stood would drive "the mining industry out of business" and "bleed[ ] the companies to death."

The...