Atl. Richfield Co. v. NL Indus.

• Decision Date: 26 April 2023
• Docket Number: Civil Action 20-cv-00234-NYW-KLM
• Parties: ATLANTIC RICHFIELD COMPANY, Plaintiff and Counter Defendant, v. NL INDUSTRIES, INC., and NL ENVIRONMENTAL MANAGEMENT SERVICES, Defendants and Counter Claimants.
• Court: U.S. District Court — District of Colorado

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ATLANTIC RICHFIELD COMPANY, Plaintiff and Counter Defendant, v. NL INDUSTRIES, INC., and NL ENVIRONMENTAL MANAGEMENT SERVICES, Defendants and Counter Claimants.

Civil Action No. 20-cv-00234-NYW-KLM

United States District Court, D. Colorado

April 26, 2023

MEMORANDUM OPINION AND ORDER

Nina Y. Wang, United States District Judge.

This matter comes before the Court on Defendants NL Industries Inc. and NL Environmental Management Services' (collectively, “NL” or “Defendant”) Renewed Motion for Partial Summary Judgment (“Motion for Partial Summary Judgment” or “Motion”). [Doc. 202]. The Court finds that oral argument will not materially assist in the resolution of the Motion. Upon review of the record, and for the reasons set forth herein the Court respectfully GRANTS IN PART and DENIES IN PART the Motion for Partial Summary Judgment.

BACKGROUND^[1]

In approximately 1869, mining activities began in Rico Colorado. [Doc. 97-4 at 2; Doc. 97-5 at 3; Doc. 217-1 at ¶ 1]. ARCO alleges that over the subsequent years various mining companies, including Rico Mining and Reduction Company (“RMRC”) and St. Louis Smelting and Refining Co. (“St. Louis”), mined in Rico, Colorado. [Doc. 171 at ¶¶ 15-16]; see also [Doc. 97-4 at 2; Doc. 217-1 at ¶ 2]. Between 1930 and 1941, St. Louis constructed the approximately 6000-foot St. Louis Tunnel through which acid mine drainage (“AMD”) flowed into the Delores River. [Doc. 171 at ¶ 17]. NL is the alleged successor to St. Louis and RMRC, which conducted operations at the ARCO Site prior to 1943. [Id. at ¶¶ 7-8]. By 1943, all mining operations performed by the alleged predecessors of NL at the ARCO Site had ceased. [Doc. 217-1 at ¶ 5 (citing [Doc. 171 at ¶ 22])]. In the 1950s, a crosscut from the Argentine Mine on the Silver Creek to the St. Louis Tunnel on the Dolores River was completed. [Doc. 217-30 at 43; Doc. 217-1 at ¶ 8].^[2] This caused the water level in the Silver Creek area workings to drop 450 feet, reducing the impact of drainage at the St. Louis Tunnel and associated settling ponds in Rico, Colorado, but also increased the flow rate from the St. Louis Tunnel. [Doc. 217-30 at 43; Doc. 217-1 at ¶ 8]. Subsequently, numerous environmental hazards were discovered in an area that came to be known as the Rico-Argentine Site. [Doc. 217-30 at 43-44].

This case arises out of claims brought by Atlantic Richfield Company (“ARCO” or “Plaintiff”) against NL alleging that ARCO has incurred costs and will incur future costs in responding to releases and threatened releases of hazardous substances at certain facilities and locations within the Rico-Argentine Site, near Rico, Dolores County, Colorado. [Doc. 171 at ¶ 1]. In response to the release of hazardous substances within the Rico-Argentine Site, the United States Environmental Protection Agency (the “EPA” or “the Government”) issued a Unilateral Administrative Order (the “UAO”) effective March 23, 2011, against ARCO. See [Doc. 217-4].

The UAO directed ARCO to “conduct removal actions . . . to abate an imminent and substantial endangerment to the public health or welfare or the environment that may be presented by the actual or threatened release of hazardous substances at or from the Site.” [Id. at ¶ 2]. ARCO alleges that since March 2011, it has made substantial progress implementing the required response actions as outlined in the UAO, at a cost exceeding $63.7 million. [Doc. 171 at ¶¶ 3, 28].

On January 28, 2020, ARCO brought this civil action against NL pursuant to § 107(a) of the Comprehensive Environmental, Response, Compensation and Liability Act (“CERCLA”), 42 U.S.C. § 9607(a) (“Section 107(a)”), which provides for joint and several liability among potentially responsible parties (“PRP”). See [Doc. 1]; see also United States v. Atl. Rsch. Corp., 551 U.S. 128, 129 (2007) (noting that Section 107(a) claim imposes joint and several liability among PRPs). Originally, ARCO sought to recover “response costs under CERCLA [S]ection 107(a) . . . to implement the Removal Action required by the UAO” at the Site, on the basis that NL is a PRP. [Doc. 1 at 12]. On June 2, 2021, NL filed a motion for summary judgment arguing that ARCO's claims against it were barred by CERCLA's six-year statute of limitations for “remedial” response actions. [Doc. 97].

Thereafter, on December 6, 2021, ARCO entered into an Administrative Settlement Agreement and Order on Consent for Removal Action (the “AOC”) with the EPA, which “settled [ARCO's] liability to the United States for the matters addressed in the AOC.” [Doc. 171 at ¶ 4]. The AOC continues the removal action that ARCO began under the UAO. [Id.]; see generally [Doc. 217-30 at 2-40]. ARCO subsequently moved to amend the operative pleading, arguing that, as a result of its settlement with the United States, it could only pursue a claim for contribution under CERCLA § 113, 42 U.S.C. § 9613 (“Section 113”), rather than cost recovery under Section 107, as a matter of law. [Doc. 153 at 4]. In response, NL agreed that ARCO could no longer pursue a Section 107(a) claim, but could only pursue a Section 113 claim. [Doc. 158 at 3]. Nevertheless, NL opposed the amendment, arguing that ARCO should not be permitted to convert a long-stale Section 107 claim into a contribution claim under Section 113, and that CERCLA could not be applied retroactively to NL. [Id. at 2]. Over NL's objection, the Court^[3] granted ARCO leave to amend the Complaint. See [Doc. 164 at 12; Doc. 170 at 4]. The Court also denied the pending motion for summary judgment without prejudice to refiling. [Doc. 170 at 5].

On May 2, 2022, ARCO filed the operative First Amended Complaint, wherein it asserts two claims against NL. See [Doc. 171]. In the first claim, ARCO seeks contribution from NL for its equitably allocated response costs incurred by ARCO as required by the UAO and the AOC pursuant to CERCLA Section 113(f), 42 U.S.C. § 9613(f) (“Count I”). In the second claim, ARCO seeks declaratory relief in the form of “a judicial determination of the rights, duties, and obligations of the parties to this action with respect to the past, present, and future response costs and other related costs” under CERCLA Section 113(g)(2), 42 U.S.C. § 9613(g)(2), and the Declaratory Judgment Act, 28 U.S.C. § 2201 (“Count II”). [Id. at 10-14].

NL filed its Answer on May 16, 2022. [Doc. 172]. In conjunction with its Answer to the First Amended Complaint, NL filed a Second Amended Third-Party Complaint against the United States of America (“United States”); El Paso Remediation Company (“El Paso”); Redpath USA Corporation (“Redpath”); Outlook Resources, Inc. (“Outlook Resources”); Disposition Properties, LLC (“Disposition Properties”); Chemetall Foote (“Chemetall Foote”); and Boyles Bros. Drilling Company (“Boyles Bros.”) (collectively, “Third-Party Defendants”), seeking contribution for their respective equitable share of response costs or damages should NL be found liable to ARCO. [Id.]. Ultimately, the claims against each of these Third-Party Defendants have been dismissed, and the only remaining causes of action in this case are between ARCO and NL. See [Doc. 236; Doc. 242].

NL filed the instant Motion for Partial Summary Judgment on August 2, 2022. [Doc. 202]. In the Motion, NL renews its arguments with respect to the application of CERCLA's statute of limitations and seeks partial summary judgment against ARCO on the grounds that its claims, “with the exception of a $400,000 payment made to reimburse the United States” under the AOC, are time-barred. [Id. at 4]. ARCO responded on September 6, 2022, [Doc. 217], and NL replied on October 4, 2022, [Doc. 221]. The Motion for Partial Summary Judgment is thus ripe for disposition.

LEGAL STANDARD

Summary judgment is warranted “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “A dispute is genuine if there is sufficient evidence so that a rational trier of fact could resolve the issue either way. A fact is material if under the substantive law it is essential to the proper disposition of the claim.” Crowe v. ADT Sec. Servs., Inc. 649 F.3d 1189, 1194 (10th Cir. 2011) (internal citations and quotation marks omitted). It is the movant's burden to demonstrate that no genuine dispute of material fact exists for trial, whereas the nonmovant must set forth specific facts establishing a genuine issue for trial. See Nahno-Lopez v. Houser, 625 F.3d 1279, 1283 (10th Cir. 2010). At all times, the Court will “view the factual record and draw all reasonable inferences therefrom most favorably to the nonmovant.” Zia Shadows, L.L.C. v. City of Las Cruces, 829 F.3d 1232, 1236 (10th Cir. 2016).

To satisfy its burden at summary judgment, the nonmovant must point to competent summary judgment evidence creating a genuine dispute of material fact; conclusory statements based on speculation, conjecture, or subjective belief are insufficient. See Bones v. Honeywell Int'l Inc., 366 F.3d 869, 875 (10th Cir. 2004); see also 10B Charles Alan Wright et al., Federal Practice and Procedure § 2738 (4th ed. 2022) (explaining that the nonmovant cannot rely on “mere reargument of a party's case or a denial of an opponent's allegation” to defeat summary judgment). In considering the nonmovant's evidence, the Court cannot and does not weigh the evidence or determine the credibility of witnesses. See Fogarty v. Gallegos, 523 F.3d 1147, 1165 (10th Cir. 2008). Further, the Court may consider only admissible evidence, see Gross v. Burggraf Const. Co., 53 F.3d 1531, 1541 (10th Cir. 1995), though the evidence need not be in a form that is admissible at trial-only the substance must be admissible at trial. See Brown v. Perez, 835 F.3d 1223,...