Asarco, LLC v. Union Pac. R.R. Co.

• Decision Date: 27 August 2014
• Docket Number: No. 13–35356.,13–35356.
• Citation: 765 F.3d 999
• Parties: ASARCO, LLC, Plaintiff–Appellant, v. UNION PACIFIC RAILROAD COMPANY, a Utah corporation; Union Pacific Corporation, Defendants–Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

765 F.3d 999

ASARCO, LLC, Plaintiff–Appellant,

v.UNION PACIFIC RAILROAD COMPANY, a Utah corporation; Union Pacific Corporation, Defendants–Appellees.

No. 13–35356.

United States Court of Appeals,Ninth Circuit.

Argued and Submitted July 10, 2014.

Filed Aug. 27, 2014.

Gregory Evans (argued) and Laura G. Brys, Integer Law Corporation, Los Angeles, CA; Linda R. Larson, Russell C. Prugh, and Meline G. MacCurdy, Marten Law PLLC, Seattle, WA, for Plaintiff–Appellant.

Carolyn McIntosh (argued) and Maxine Martin, Patton Boggs LLP, Denver, CO; Ausey H. Robnett III, Paine Hamblen LLP, Coeur d'Alene, Id; Gail L. Wurtzler, Davis Graham & Stubbs LLP, Denver, CO, for Defendants–Appellees.

Appeal from the United States District Court for the District of Idaho, Edward J. Lodge, District Judge, Presiding. D.C. No. 2:12–cv–00283–EJL.

Before: A. WALLACE TASHIMA and MARY H. MURGUIA, Circuit Judges, and CORMAC J. CARNEY, District Judge.^*

OPINION

CARNEY, District Judge:

ASARCO, LLC (“Asarco”) appeals the district court's dismissal of its contribution action brought under § 113(f) of the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), 42 U.S.C. §§ 9601–9675. Asarco seeks to recover from Union Pacific Railroad Co. and Union Pacific Corp. (together, “Union Pacific”) a share of $482 million in cleanup costs Asarco paid for environmental harm at the Coeur d'Alene Superfund Site in Northern Idaho. The district court dismissed the action under Federal Rule of Civil Procedure 12(b)(6), concluding that although Asarco's claim was timely, it was barred by a 2008 settlement agreement between the parties that settled Union Pacific's claims against Asarco at the same site. We conclude that Asarco's claim was timely, but that the parties' 2008 settlement agreement did not unambiguously release Asarco's claim here. We therefore reverse the district court's judgment dismissing the case under Rule 12(b)(6).

Background

Asarco and Union Pacific both participated in nearly a century of mining operations in the Coeur d'Alene River watershed, a 1,500–square–mile area located in Idaho's northern panhandle. Asarco operated over 20 mines in the Coeur d'Alene site, and Union Pacific built rail lines and transported ore and other materials for the region's mining and smelting facilities. In 1983, the Environmental Protection Agency (“EPA”) listed the Coeur d'Alene site on the CERCLA National Priorities List. Since then the site has undergone over 30 years of cleanup efforts by the EPA, the State of Idaho, and potentially responsible parties, including Asarco and Union Pacific.

In the 1990s, the United States, the State of Idaho, and the Coeur d'Alene Tribe each filed various claims against Asarco and other mining companies for response costs and natural resource damages at the Coeur d'Alene site. These actions were consolidated in 2003 and, after a 78–day trial, Judge Lodge of the United States District Court for the District of Idaho issued an order apportioning liability based on the volume of mining waste released into the basin's waterways. Asarco was found at least 22 percent responsible. Coeur d'Alene Tribe v. Asarco, Inc., 280 F.Supp.2d 1094, 1121 (D.Idaho 2003).

In 2005, before the damages portion of the consolidated case was concluded, Asarco filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code. Through bankruptcy, Asarco sought to resolve approximately $6.5 billion in environmental liabilities at 53 sites throughout the country. Union Pacific and the United States both filed proofs of claim.

Union Pacific's proofs of claim sought a general unsecured claim for payment of freight charges and response costs at numerous sites, including $52 million in CERCLA response costs Union Pacific had paid at the Coeur d'Alene site. In 2008, the parties entered into a settlement agreement (the “UP Settlement”), which resolved “all the claims by UP or claims which UP could have filed against ASARCO,” and allowed Union Pacific a general unsecured claim of about $4 million. Upon the parties' joint motion, the bankruptcy court approved the settlement.

The UP Settlement contains a “mutual release” provision, which states in relevant part:

ASARCO agrees ... to hereby release, remise, and discharge UP ... from any and all damages, losses, expenses, costs, liabilities, claims, demands, suits, causes of action, and complaints, of any kind, character or description, in law or in equity, whether known or unknown, arising out of or in any way connected with ... Remaining Sites Costs. (Emphasis added.)

The UP Settlement defines “Remaining Sites Costs” to mean “costs of response under CERCLA incurred by UP at the Remaining Sites,” including the Coeur d'Alene site. (Emphasis added.)

The United States also filed proofs of claim in Asarco's bankruptcy case, asserting that Asarco was jointly and severally liable for more than $2 billion in cleanup costs at the Coeur d'Alene site. The bankruptcy court held a hearing to estimate the United States' claims against Asarco, but before the court ruled, Asarco and the United States executed an agreement settling the United States' Coeur d'Alene claims (“US CDA Settlement”).

The U.S. CDA Settlement resolved Asarco's liability for all remaining response costs and natural resource damages associated with the Coeur d'Alene site. Under the settlement, Asarco agreed that the United States would be entitled to general unsecured claims totaling about $482 million. For its part, the United States covenanted not to sue Asarco for further CERCLA costs “[w]ith respect to the Coeur d'Alene Site.” The bankruptcy court approved the proposed settlement on June 5, 2009.

On June 5, 2012, Asarco filed the underlying contribution action, seeking to recoup from Union Pacific a share of the $482 million it paid under the U.S. CDA Settlement. Asarco alleged that it had paid more than its allocable share of costs at the Coeur d'Alene site and demanded that Union Pacific pay “its equitable share of any overpayment of costs by Asarco.” Asarco's original complaint defined the Coeur d'Alene site as “a 1,500–square mile area located in northern Idaho and eastern Washington,” including “a 21–square mile area around [the Bunker Hill mining] complex” and the upper and lower basins of the Coeur d'Alene River. The original complaint provided that “[f]or purposes of this action, the Coeur d'Alene Basin ... excludes the drainage of the North Fork of the Coeur d'Alene River.” Less than two months later, however, Asarco filed a First Amended Complaint (“FAC”) as of right under Rule 15(a)(1), and amended the definition of “Coeur d'Alene Basin” to include the North Fork drainage area that was originally excluded.

Union Pacific filed a motion to dismiss Asarco's FAC under Rule 12(b)(6), arguing that Asarco's claim was barred by the statute of limitations, the UP Settlement, res judicata, judicial estoppel, Union Pacific's contribution protection, and Asarco's lack of any contribution rights. The district court rejected Union Pacific's statute of limitations arguments, but nevertheless granted the motion because it concluded that the action was barred by the UP Settlement's release provisions.

The district court acknowledged Asarco's argument that the defined term “Remaining Sites Costs” limited Asarco's release to claims for costs “incurred by UP,” but reasoned that if it read the agreement as “limiting the releases to only Union Pacific's claims” the releases would then “be anything but mutual.” ASARCO, LLC v. Union Pac. R.R., 936 F.Supp.2d 1197, 1204 (D.Idaho 2013). The district court concluded that “[g]iven the scope of the definitions used in the FAC and the plain language of the [UP] Settlement, it is clear that the claim raised in the FAC is precluded by the mutual release language of the [UP] Settlement.” Id. at 1204–05. The district court therefore dismissed Asarco's action and declined to rule on Union Pacific's remaining defenses. Id. at 1206.

Standard of Review

We review de novo the district court's dismissal for failure to state a claim under Rule 12(b)(6). Hartmann v. Cal. Dep't of Corr. & Rehab., 707 F.3d 1114, 1121 (9th Cir.2013). We may affirm the district court's dismissal on any ground supported by the record. Id. (citing Tahoe–Sierra Pres. Council, Inc. v. Tahoe Reg'l Planning Agency, 322 F.3d 1064, 1076–77 (9th Cir.2003)).

Dismissal under Rule 12(b)(6) on the basis of an affirmative defense is proper only if the defendant shows some obvious bar to securing relief on the face of the complaint. See Sams v. Yahoo! Inc., 713 F.3d 1175, 1179 (9th Cir.2013) (“[T]he assertion of an affirmative defense may be considered properly on a motion to dismiss where the ‘allegations in the complaint suffice to establish’ the defense.” (quoting Jones v. Bock, 549 U.S. 199, 215, 127 S.Ct. 910, 166 L.Ed.2d 798 (2007))); 5B Charles Alan Wright et al., Federal Practice and Procedure § 1357 (3d ed.1998) (“[A] dismissal under Rule 12(b)(6) is likely to be granted by the district court only in the relatively unusual case in which the plaintiff includes allegations that show on the face of the complaint that there is some insuperable bar to securing relief....”). If, from the allegations of the complaint as well as any judicially noticeable materials, an asserted defense raises disputed issues of fact, dismissal under Rule 12(b)(6) is improper. Scott v. Kuhlmann, 746 F.2d 1377, 1378 (9th Cir.1984) (per curiam).

Analysis

I

We first consider whether Asarco's FAC is barred by CERCLA's three-year statute of limitations for claims seeking contribution after entry of a judicially approved settlement. See42 U.S.C. § 9613(g)(3). Union Pacific contends that Asarco's FAC was untimely because (1) it did not relate back to the date of the original complaint under Rule 15(c)(1)(B), and (2) even if it did, the original complaint was filed one day too late. We review de novo both the question whether an amended pleading...