Diamond X Ranch LLC v. Atl. Richfield Co.

• Decision Date: 29 September 2017
• Docket Number: Case No. 3:13-cv-00570-MMD-WGC
• Parties: DIAMOND X RANCH LLC, Plaintiff/Counterclaim Defendant, v. ATLANTIC RICHFIELD COMPANY, Defendant/Counterclaimant/Third-Party Plaintiff, v. PARK LIVESTOCK CO., Third-Party Defendant.
• Court: U.S. District Court — District of Nevada

DIAMOND X RANCH LLC, Plaintiff/Counterclaim Defendant, v. ATLANTIC RICHFIELD COMPANY, Defendant/Counterclaimant/Third-Party Plaintiff, v. PARK LIVESTOCK CO., Third-Party Defendant.

Case No. 3:13-cv-00570-MMD-WGC

UNITED STATES DISTRICT COURT DISTRICT OF NEVADA

September 29, 2017

ORDER

I. SUMMARY

This case concerns cleanup of acid mine drainage ("AMD") from a Superfund site and its surrounding areas. Pending before the Court are five motions: (1) Defendant Atlantic Richfield's ("ARCO") Motion for Summary Judgment on Diamond X Ranch LLC's ("Diamond X") Tort Claims as Barred by the Statute of Limitations ("SOL Motion") (ECF No. 228); (2) ARCO's Motion for Summary Judgment on Diamond X's Seventh and Eighth Claims under CERCLA ("CERCLA I Motion") (ECF No. 229); (3) ARCO's Motion for Summary Judgment to Limit or Dismiss Diamond X's Tort Claims ("Tort Motion") (ECF No. 230); (4) Diamond X's Motion for Partial Summary Judgment Concerning ARCO's Liability as to CERCLA and Certain Common Law Claims ("Liability Motion") (ECF No. 231); and (5) ARCO's Motion for Partial Summary Judgment on ARCO's CERCLA Claims against Diamond X and Park Livestock, Co. ("CERCLA II Motion") (ECF No. 248). The Court has reviewed Diamond X's responses (ECF Nos. 260, 261, 262) and reply (ECF No. 285), ARCO's response (ECF No. 258) and replies (ECF Nos. 282, 283, 284), as well as the accompanying exhibits. The Court also heard oral arguments on these pending motions on August 30, 2017. (ECF No. 296.)

For the reasons discussed below, the SOL Motion is granted in part and denied in part; the Tort Motion is granted in part and denied in part; the Liability Motion is denied; the CERCLA I Motion is granted in part and denied in part; and the CERCLA II Motion is granted.

II. BACKGROUND

Diamond X initiated this action on October 15, 2013, against ARCO. (ECF No. 1.) It filed its Third-Amended Complaint ("TAC") on March 18, 2016. (ECF No. 175.) ARCO then filed its Counterclaim against Diamond X and Third-Party Complaint against Park Livestock Co. ("Park Livestock") on March 30, 2016. (ECF No. 179.) The following facts are undisputed except as noted.

Diamond X currently owns the River Ranch property ("Property" or "River Ranch"), which is comprised of more than 1700 acres in Douglas County, Nevada, and Alpine County, California. (ECF No. 231 -1 at 11; ECF No. 175 at ¶ 7.) Park Livestock has leased the River Ranch since its incorporation in 1974 until at least 2007. (ECF No. 260 at 8.) The Property has been owned by the Park family for the last 100 years. (See ECF No. 175 at ¶ 26; ECF No. 227-39 at 15 ("Through an interview with Mr. David Park . . . we found that the Park family has owned the property since the 1890s.").) In 1974, the Property was owned by W. Brooks Park and Jeanne Park. (ECF No. 260 at 8.) The Property was then transferred to the W. Brooks Park Family Trust in 1985. (Id. at 9.) Diamond X obtained the Property via trust distribution in 2003. (Id.) Diamond X's two principals are David Park and W. Bruce Park and David Park is the current president and majority shareholder of Park Livestock. (ECF No. 225 at ¶ 5.)

/// In 1951, ARCO's predecessor, The Anaconda Company ("Anaconda"), acquired the Leviathan Mine ("Mine") where it conducted open-pit sulfur mining from approximately 1953 to 1962. (ECF No. 248 at 7; ECF No. 175 at ¶ 7.) Water that came in contact with waste rock at the Mine created AMD, which contains elevated concentrations of heavy metals such as arsenic. (ECF No. 248 at 7.)

In 1997, the U.S. Environmental Protection Agency ("EPA") began to take action at the Mine under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"). (ECF No. 248 at 7; ECF No. 175 at ¶ 15.) EPA listed the Mine on the National Priorities List in May 2000, and it identified ARCO and the State of California as potentially responsible parties ("PRPs"). (ECF No. 175 at ¶ 17.) EPA issued a Unilateral Administrative Order ("UAO") against ARCO in November 2000 and a second UAO against ARCO in June 2008 (collectively "UAOs"). (ECF No. 246-3 at 90-139 (Exhibit 148); ECF No. 227-1.)

The UAOs identified ARCO as a PRP¹ and required ARCO to initiate a Remedial Investigation and Feasibility Study ("RI/FS") of contamination from the Mine and to prepare and perform an RI/FS based on a Statement of Work ("SOW"). The purposes of the UAOs were (1) to determine the nature and scope of contamination from the Mine and its threat to public health and the environment, and (2) to determine and evaluate alternatives to effectively remediate the contamination through a feasibility study. (ECF No. 249-5 at 6; ECF No. 246-3 at 92; ECF No. 227-3 at 16.) Under the SOW, ARCO was required to conduct a "phased" evaluation to determine the available remedial approaches and to then compile this information into a report. (ECF No. 227-1 at 47.) The River Ranch became included in the study area of ARCO's remedial investigation in 2012. (ECF No. 227-3 at 19 (including portions of the River Ranch in the supplemental studyarea); ECF No. 227-7 at 15 (including irrigated portions of the River Ranch in the supplemental study area).)

III. LEGAL STANDARD

"The purpose of summary judgment is to avoid unnecessary trials when there is no dispute as to the facts before the court." Nw. Motorcycle Ass'n v. U.S. Dep't of Agric., 18 F.3d 1468, 1471 (9th Cir. 1994) (internal citation omitted). Summary judgment is appropriate when the pleadings, the discovery and disclosure materials on file, and any affidavits show "there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 330 (1986). An issue is "genuine" if there is a sufficient evidentiary basis on which a reasonable fact-finder could find for the nonmoving party and a dispute is "material" if it could affect the outcome of the suit under the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49 (1986). Where reasonable minds could differ on the material facts at issue, however, summary judgment is not appropriate. See id. at 250-51. "The amount of evidence necessary to raise a genuine issue of material fact is enough 'to require a jury or judge to resolve the parties' differing versions of the truth at trial.'" Aydin Corp. v. Loral Corp., 718 F.2d 897, 902 (9th Cir. 1983) (quoting First Nat'l Bank v. Cities Serv. Co., 391 U.S. 253, 288-89 (1968)). In evaluating a summary judgment motion, a court views all facts and draws all inferences in the light most favorable to the nonmoving party. Kaiser Cement Corp. v. Fishbach & Moore, Inc., 793 F.2d 1100, 1103 (9th Cir. 1986).

The moving party bears the burden of showing that there are no genuine issues of material fact. Zoslaw v. MCA Distrib. Corp., 693 F.2d 870, 883 (9th Cir. 1982). "In order to carry its burden of production, the moving party must either produce evidence negating an essential element of the nonmoving party's claim or defense or show that the nonmoving party does not have enough evidence of an essential element to carry its ultimate burden of persuasion at trial." Nissan Fire & Marine Ins. Co., Ltd v. Fritz Cos., Inc., 210 F.3d 1099, 1102 (9th Cir. 2000) (internal citation omitted). Once the movingparty satisfies Rule 56's requirements, the burden shifts to the party resisting the motion to "set forth specific facts showing that there is a genuine issue for trial." Anderson, 477 U.S. at 256. The nonmoving party "may not rely on denials in the pleadings but must produce specific evidence, through affidavits or admissible discovery material, to show that the dispute exists," Bhan v. NME Hosps., Inc., 929 F.2d 1404, 1409 (9th Cir. 1991), and "must do more than simply show that there is some metaphysical doubt as to the material facts." Orr v. Bank of Am., NT & SA, 285 F.3d 764, 783 (9th Cir. 2002) (internal citations omitted). "The mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient." Anderson, 477 U.S. at 252.

A party is also permitted to seek partial summary judgment as to any claim or defense in a case. Fed. R. Civ. P. 56(a); see also First Nat'l Ins. Co. v. Fed. Deposit Ins. Corp., 977 F. Supp. 1051, 1055 (S.D. Cal. 1997) (a court may grant summary adjudication as to specific issues if it will narrow the issues for trial). A district court may award a partial summary judgment that decides only the issue of liability. White v. Lee, 227 F.3d 1214, 1240 (9th Cir. 2000).

Further, "when parties submit cross-motions for summary judgment, '[e]ach motion must be considered on its own merits.'" Fair Hous. Council of Riverside Cty., Inc. v. Riverside Two, 249 F.3d 1132, 1136 (9th Cir. 2001) (quoting William W. Schwarzer, et al., The Analysis and Decision of Summary Judgment Motions, 139 F.R.D. 441, 499 (Feb. 1992) (citations omitted)). "In fulfilling its duty to review each cross-motion separately, the court must review the evidence submitted in support of each cross-motion." Id.

IV. CHOICE OF LAW

As a preliminary matter, the parties dispute whether California or Nevada law controls Diamond X's tort claims. (See ECF No. 231-1 at 24-25; see also ECF No. 258 at 20-24.) The Court finds that Nevada law applies to these claims.

A federal district court applies the choice-of-law rules of the forum state when exercising jurisdiction over state law claims. Love v. Associated Newspapers, Ltd., 611 F.3d 601, 610 (9th Cir. 2010); Paracor Fin., Inc. v. Gen. Elec. Capital Corp., 96 F.3d 1151,1164 (9th Cir. 1996). In Nevada, the Second Restatement's most significant relationship standard generally governs choice-of-law issues in tort actions. Gen. Motors Corp. v. Eighth Judicial Dist. Court of State of Nev. ex rel. Cty. of Clark, 134 P.3d 111, 116 (Nev. 2006). Pursuant to the Second Restatement, the place where the injury occurred determines the law to be applied, unless some other state has a more significant relationship to...