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

• Decision Date: 16 February 2017
• Docket Number: Case No. 2:12-CV-00283-EJL-REB
• Parties: ASARCO, LLC, Plaintiff, v. UNION PACIFIC RAILROAD COMPANY and UNION PACIFIC CORPORATION, Defendants.
• Court: U.S. District Court — District of Idaho

ASARCO, LLC, Plaintiff, v. UNION PACIFIC RAILROAD COMPANY and UNION PACIFIC CORPORATION, Defendants.

Case No. 2:12-CV-00283-EJL-REB

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF IDAHO

February 16, 2017

MEMORANDUM DECISION AND ORDER

INTRODUCTION

Before the Court in the above entitled matter are the parties' Cross-Motions for Summary Judgment and related filings. Having fully reviewed the record herein, the Court finds that the facts and legal arguments are adequately presented in the briefs and record. Accordingly, in the interest of avoiding further delay, and because the Court conclusively finds that the decisional process would not be significantly aided by oral argument, the Motions are decided on the record without oral argument.

FACTUAL AND PROCEDURAL BACKGROUND

1. Underlying Proceedings

Plaintiff in this case, Asarco LLC, was the subject of two prior lawsuits brought against it, and other defendants, under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. § 9601, et seq., seeking remediation for damages caused by historical mining activities in northern Idaho. The first case, Coeur d'Alene Tribe v. Asarco Inc., et al., Case No. 3:91-cv-00342-EJL ("CDA Tribe v. Asarco"), was brought in 1991 by the Coeur d'Alene Tribe ("CDA Tribe") to recover natural resource damages ("NRD") caused by the release of mine tailings and other hazardous substances in the Coeur d'Alene River Basin ("CDA Basin"). (Dkt. 24 at ¶ 30.)¹ The second action, United States, et al. v. Asarco Inc., et al., Case No. 3:96-cv-00122-EJL ("United States v. Asarco"), was filed in 1996 by the United States for recovery of response costs and NRD in connection with the Bunker Hill Mining and Metallurgical Complex Superfund Site. (Dkt. 24 at ¶ 31.) The cases were consolidated and, in 2003, this Court issued an Order finding Asarco responsible for contributing twenty-two percent of the mining tailings containing hazardous substances in the CDA Basin.² See CDA Tribe v. Asarco Inc., 280 F.Supp.2d 1094, 1105 (D. Idaho 2003).

Thereafter, on August 9, 2005, Asarco filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code. See In re Asarco LLC, et al., Bankr. No. 05-21207, 2009 WL 8176641, at *2 (S.D. Tex. June 5, 2009). Through the bankruptcy proceeding, Asarco sought to resolve approximately $6.5 billion in environmentalliabilities at 53 sites throughout the country - including the CDA Site. The United States and the Defendants in this action, Union Pacific Railroad Company and Union Pacific Corporation (collectively "Union Pacific"), among numerous other claimants, filed proofs of claim ("POC") in the bankruptcy case. Union Pacific's POCs sought a general and 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 CDA Site ("the Site" or "CDA Site").³ In 2008, Union Pacific and Asarco entered into a settlement agreement ("Bankruptcy Settlement") which was approved by the Bankruptcy Court on October 14, 2008. (Dkt. 130-4, Ex. 1) (Dkt. 130-28, Ex. 16) (Dkt. 130-39, Ex. 22.)

The United States' POCs asserted Asarco was jointly and severally liable for more than $2 billion in cleanup costs at OU3 of the CDA Site. On March 13, 2009, Asarco and the United States entered into a settlement ("CDA Settlement") whereby Asarco agreed to pay approximately $482 million to resolve its CERCLA liability at the CDA Site. (Dkt. 24 at ¶ 37) (Dkt. 130-6, Ex. 3.) On June 5, 2009, the Bankruptcy Court approved the CDA Settlement. On November 13, 2009, the Bankruptcy Court approved Asarco's Confirmed Plan of Reorganization ("Confirmed Plan"), effective December 9, 2009, which providedthe funding for the CDA Settlement payout. (Dkt. 24 at ¶¶ 38, 39) (Dkt. 130-40, Ex. 23.) Thereafter, ASARCO made $482.143 million in payments under the CDA Settlement to resolve its environmental liabilities at the CDA Site. (Dkt. 24 at ¶¶ 37, 39.)

2. This Case

On June 5, 2012, Asarco filed the Complaint in this matter seeking contribution under § 113(f) of CERCLA to recoup from Union Pacific a portion of the $482 million it paid under the CDA Settlement. (Dkt. 1.) The claim alleges Asarco overpaid its share of the costs for remediation under the CDA Settlement and that Union Pacific should pay "its equitable share of any overpayment of costs by Asarco at the Site." (Dkt. 24 at ¶ 75.) Asarco alleges five separate bases for Union Pacific's liability under CERCLA for the costs to remediate the environmental harm Union Pacific, and its predecessors, caused within the CDA Site. (Dkt. 24 at ¶¶ 44-50.) In particular, Asarco's claim alleges Union Pacific, or its predecessors, constructed rail beds out of mining wastes - "jig tailings" - that contained hazardous substances which were released into the environment and contaminated the CDA Site and the CDA Water System.⁴ (Dkt. 24 at ¶ 45) (Dkt. 131 at 1-3.) Asarco further alleges Union Pacific is responsible for hazardous releases within the Site as a result of its arranging, use, transportation, spills, and/or other discharges of ore and ore slurry. (Dkt. 24 at ¶¶ 46-50.)

On July 23, 2012, Asarco filed its First Amended Complaint ("FAC") amending its allegations relating to and the definition of the "CDA Basin" to include the drainage of the North Fork of the CDA River (the "North Fork"). (Dkt. 24.)⁵ Union Pacific filed a Motion to Dismiss which this Court granted. (Dkt. 31 50.) Asarco appealed that decision and the Ninth Circuit reversed the dismissal. See Asarco, LLC v. Union Pacific R. Co., 765 F.3d 999 (9th Cir. 2014). The case was reopened and the parties filed their Cross-Motions for Summary Judgment and related submissions which the Court takes up in this Order.

STANDARD OF LAW

Motions for summary judgment are governed by Rule 56 of the Federal Rules of Civil Procedure which provides, in pertinent part, that judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). An issue is "material" if it affects the outcome of the litigation and may be considered "genuine" if it is established by "sufficient evidence supporting the claimed factual dispute...to require a jury or judge to resolve the parties' differing versions of the truth at trial." Hahn v. Sargent, 523 F.3d 461, 464 (1st Cir. 1975) (quoting First Nat'l Bank v. Cities Serv. Co. Inc., 391 U.S. 253, 289 (1968)); see also British Motor Car Distrib. v.San Francisco Auto. Indus. Welfare Fund, 882 F.2d 371 (9th Cir. 1989). In order to withstand a motion for summary judgment, a party

(1) must make a showing sufficient to establish a genuine issue of fact with respect to any element for which it bears the burden of proof; (2) must show that there is an issue that may reasonably be resolved in favor of either party; and (3) must come forward with more persuasive evidence than would otherwise be necessary when the factual context makes the non-moving party's claim implausible.

British Motor Car, 882 F.2d at 374 (citation omitted). When applying this standard, the court views all of the evidence in the light most favorable to the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986); Hughes v. United States, 953 F.2d 531, 541 (9th Cir. 1992).

DISCUSSION

1. Motions to Strike

A. Motion to Strike Expert Declaration of Paul Cunningham.

Asarco filed Paul Cunningham's Declaration in support of its position that Union Pacific is the successor to certain rail lines located in the CDA Basin and, therefore, subject to its contribution claim. (Dkt. 135.) Union Pacific seeks to exclude the Declaration arguing it is unsupported by facts or evidence, improperly expresses legal conclusions, and fails to meet the standards for admissible expert testimony. (Dkt. 145, 181.) Asarco maintains the Declaration is reliable, useful, and satisfies the requirements for expert testimony. (Dkt. 175.)

The Court may consider expert opinion testimony in ruling on a summary judgment motion so long as it contains facts that would be admissible at trial and the opinion is basedon the expert's personal knowledge. In considering expert testimony, the Court has a "gatekeeping responsibility" to objectively screen such testimony to ensure that it "is not only relevant, but reliable." Daubert v. Merrell Dow Pharms., 509 U.S. 579, 589 (1993); Kumho Tire Co. v. Carmichael, 526 U.S. 137, 141-42 (1999). This obligation "applies not only to testimony based on 'scientific knowledge,' but also to testimony based on 'technical' and 'other specialized' knowledge." United States v. Hankey, 203 F.3d 1160, 1167 (9th Cir. 2000) (quoting Kumho Tire supra). Prior to considering proffered expert testimony, a trial court "must merely make a determination as to the proposed expert's qualifications" as well as the relevance and reliability of the testimony. Hopkins v. Dow Corning Corp., 33 F.3d 1116, 1124 (9th Cir. 1994). A court is not to attempt to determine whether an expert's conclusions are correct, but rather examine only "the soundness of his methodology." Daubert v. Merrell Dow Pharms., Inc., 43 F.3d 1311, 1318 (9th Cir. 1995) ("Daubert II"). On a motion for summary judgment, the Court does not weigh the persuasiveness or credibility of an expert but, instead, only determines whether there is a genuine issue for trial.

i) Expert Qualifications

Rule 702 requires that a testifying expert be "qualified as an expert by knowledge, skill, experience, training, or education." Fed. R. Evid. 702. Rule 702 "contemplates a broad conception of expert qualifications" and is "intended to embrace more than a narrow definition of qualified expert." Thomas v. Newton Int'l Enters., 42 F.3d 1266, 1269 (9th Cir. 1994); ...