Pakootas v. Teck Cominco Metals, Ltd., CV-04-0256-LRS

• Decision Date: 12 August 2016
• Docket Number: NO. CV-04-0256-LRS,CV-04-0256-LRS
• Court: U.S. District Court — District of Washington
• Parties: JOSEPH A. PAKOOTAS, an individual and enrolled member of the Confederated Tribes of the Colville Reservation; DONALD R. MICHEL, an individual and enrolled member of the Confederated Tribes of the Colville Reservation; and the CONFEDERATED TRIBES OF THE COLVILLE RESERVATION, Plaintiffs, and STATE OF WASHINGTON, Plaintiff-Intervenor, v. TECK COMINCO METALS, LTD., a Canadian corporation, Defendant.

JOSEPH A. PAKOOTAS, an
individual and enrolled member of the
Confederated Tribes of the Colville
Reservation; DONALD R. MICHEL,
an individual and enrolled member of
the Confederated Tribes of the Colville
Reservation; and the
CONFEDERATED TRIBES OF THE
COLVILLE RESERVATION, Plaintiffs,
and
STATE OF WASHINGTON, Plaintiff-Intervenor,
v.
TECK COMINCO METALS, LTD., a
Canadian corporation, Defendant.

NO. CV-04-0256-LRS

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WASHINGTON

August 12, 2016

PHASE II FINDINGS OF FACT AND CONCLUSIONS OF LAW

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I. Background

1. In Phase I of this case, the Court determined that pursuant to the Comprehensive Environmental Response and Liability Act (CERCLA), 42 U.S.C. § 9607 (a)(4)(A), Teck Metals Ltd., f/k/a Teck Cominco Metals, Ltd. (Teck), is liable to the Confederated Tribes of the Colville Reservation (the Tribes) and the State of Washington (the State) in any subsequent action or actions to recover past or future response costs. ECF No. 1955, p. 43.

2. The Court also determined that Teck is liable as an "arranger" under CERCLA, 42 U.S.C. § 9607(a)(3), and that the Tribes and State each incurred response costs which were necessary and not inconsistent with the National Contingency Plan (NCP). ECF No. 1955, p. 2.

3. In its Phase I Findings of Fact and Conclusions of Law, the Court determined that it had subject matter and personal jurisdiction and that venue was proper in this court. ECF No. 1955. That determination is incorporated herein.

II. Findings of Fact

A. History of Tribes' Efforts to Evaluate and Cause Cleanup of Hazardous Substances Disposed of in the Upper Columbia River.

4. The Tribes is a sovereign Indian Tribe whose government is recognized by the United States. The Tribes' Reservation borders the Upper Columbia River (UCR) Site, and includes a portion of the river bed. The Tribes also has reserved rights to off-Reservation resources located in the northern reach of the UCR and adjacent uplands. ECF No. 2345, Written Testimony of Passmore at ¶ 2.

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5. In 1999, the Tribes petitioned the federal government pursuant to 42 U.S.C. § 9605(d) of CERCLA to "conduct a preliminary assessment of potential hazards to public health and the environment associated with the release or threatened release of hazardous substances in the Upper Columbia River Basin from the Canadian border southward through Lake Roosevelt, to the Grand Coulee Dam (UCR site)." ECF No. 2345, Passmore Written Testimony, ¶ 2; ECF No. 2309, Joint Pretrial Order at 2. EPA completed preliminary assessments as of January, 2001. Exh. 5040, p. 2.

6. In 2001, the Tribes entered into an agreement with the U.S. Environmental Protection Agency (EPA) regarding government-to-government coordination of a site investigation to be conducted at the UCR Site. Exh. 5040. The Tribes and EPA also executed Amendment 1 to that agreement. Exh. 5039. Among other things, that amendment recognized the Tribes as "the appropriate non-federal party for making decisions and carrying out program responsibilities affecting the Reservation, the Reservation Environment and health and welfare of the Reservation Populace." It also provided the Tribes an important role in conducting site investigations under CERCLA, including, inter alia, work on "reconnaissance and sampling visits," scoping and sampling strategy development, reviewing and commenting on draft sampling and quality assurance plans, and reviewing and commenting on draft Site Investigation reports. Exh. 5040 at pp.2-3. Gary Passmore testified that the Tribes had in fact participated in this preliminary assessment work. Passmore Trial Testimony ("TT"), ECF No. 2368, at 115:9-12.

7. With this assistance from the Tribes, and based on its preliminary assessment, EPA determined that further action was warranted. In 2003, EPA issued a Unilateral Administrative Order (UAO) to Teck pursuant to 42 U.S.C. § 9606 of CERCLA "directing Teck to perform a Remedial Investigation and

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Feasibility Study (RI/FS) for the UCR site pursuant to an attached Statement of Work." ECF No. 2309, Joint Pretrial Order at 2; Exh. 7020, p. 2. The UAO contained EPA's findings that Teck had deposited hazardous substances at the UCR Site leading to release or threatened release into the environment sufficient to establish CERCLA liability. Exh. 7020 at pp. 3-7. Passmore TT at 118-119. Teck refused to comply, arguing that as it discharged its wastes in Trail, B.C., it was not subject to United States environmental law. See Edwards TT, ECF No. 2370, at 441-44; Exh, 7279. Teck rejected application of U.S. environmental law then and it continues to hold that view to the present day. Edwards TT at 443:10-11; 443:21-444:18. EPA did not commence an action to compel Teck to comply with the UAO and its RI/FS requirements. Passmore Written Testimony, ECF No. 2345, ¶ 4.

B. Tribes Fund Suit to Force Teck to Comply With UAO.

8. In 2004, the Chairman of the Tribes' Business Council, Joseph A. Pakootas, and the Chair of its Natural Resources Committee, Donald R. Michel, brought a citizen suit pursuant to 42 U.S.C. §9659(d)(1) to enforce the UAO against Teck. This suit was funded by the Tribes. Joint Pretrial Order at 8; Passmore Written Testimony, ECF No. 2345, ¶ 4.

9. Teck moved to dismiss the citizen suit, denying that it was subject to CERCLA because it discharged its wastes in Canada. ECF No. 2309, Joint Pretrial Order at 3. This court denied Teck's motion to dismiss, finding that CERCLA applied to Teck's UCR disposals alleged in this suit. Id. Teck appealed this decision and lost in the court of appeals, Pakootas v. Teck Cominco Metals, Ltd., 452 F.3d 1066 (9th Cir. 2006), cert. denied, 522 U.S. 1095 (Pakootas I). Teck sought en banc review (ECF Nos. 115, 133) and ultimately a writ of certiorari from

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the Supreme Court. These efforts failed, and the outcome was that CERCLA was determined to apply to Plaintiffs' allegations that Teck disposed of its hazardous substances at the UCR site. Pakootas I, 452 F.3d at 1082.

10. In June 2006, during pendency of the appeal, Teck's U.S. subsidiary, Teck American, Inc. ("TCAI"), and EPA executed a Settlement Agreement providing for a remedial investigation and feasibility study patterned after CERCLA. RI/FS Agreement, Exhibit 7112; ¶¶ 3, 6.¹ In this agreement, Teck denied that it had liability under CERCLA. Id. at ¶ 2. The RI/FS Agreement provided that EPA would withdraw its UAO, but expressly stated that the agreement did not release any claim the United States or any "entity other than a Party" may have against TCAI [or Teck]." Exhibit 7112, ¶ 70. Thus, Teck's CERCLA liability remained an issue for adjudication.

11. Pursuant to the Settlement Agreement, Teck agreed to fund and conduct the RI/FS under EPA oversight consistent with the National Contingency Plan (NCP) and EPA guidance, and to fund participation of the Department of the Interior, State of Washington, Colville Tribes and Spokane Tribes in the same. Exh. 7112, XIII. Costs; ECF No. 2222 at ¶¶ 73-76 (K. McCaig) (TCAI has funded RI/FS costs in excess of $74 million as of September 2015, including participation costs for the Colville Tribes and others). EPA is the Lead Agency for the RI/FS at the UCR Site. Passmore TT 115:9-10; ECF No. 2222 at ¶23 (K. McCaig).

12. Upon entry into the Settlement Agreement, EPA withdrew the UAO. Exh. 7019 (EPA letter confirming withdrawal of the UAO); ECF No. 2280 at 18 (Passmore Dep. at 51:2-4).

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13. The RI/FS Agreement provided that TCAI would conduct an RI/FS at the UCR Site that, "while not carried out under an administrative or judicial order issued pursuant to the provisions of CERCLA, will be consistent with the [NCP]." Exh. 7112, ¶ 3. The RI/FS Agreement obligated TCAI to "perform a RI/FS for the Site as outlined in the Statement of Work ('SOW)." Exh. 7112, ¶ 3. Although the RI/FS Agreement provided that EPA would withdraw its UAO, Teck continued with its appeal of this court's decision denying its motion to dismiss the UAO enforcement action, and specifically told the Ninth Circuit that the appeal was not moot. Passmore Written Testimony, ECF 2345, at ¶ 6; Exh. 7019; Pakootas I, 452 F.3d at 1071-1072, at n.10.

C. Tribes and State Sue to Determine Teck's Liability for Investigation and Cleanup Under CERCLA (Phase I).

14. In 2008, the State and Tribes filed Second Amended Complaints alleging Teck's liability under CERCLA and seeking declaratory relief establishing its responsibility for their response costs. Exh. 7032, Tribes' Second Amended Complaint. In defense of this litigation, Teck persisted in its claim that it was not subject to U.S. environmental law. In answer to the Second Amended Complaints filed by the State and the Tribes, Teck denied that its slag and effluent had released hazardous substances to the UCR environment. See Exh. 7032 at ¶ 4.3, and Exh. 5176, Teck's Answer to Second Amended Complaint, at ¶¶ 16-17; see also Teck's Memorandum of Law in Support of Motion to Stay, ECF No. 211, at 14 ("Teck Cominco's position is that its slag is not a hazardous substance."). In addition, Teck denied that it was a liable party under § 9607(a) of CERCLA. See Exh. 7032 at ¶¶ 6.1-6.3, and Exh. 5176 at ¶¶ 48-50. As well, Teck asserted a defense of apportionment/divisibility, arguing that all or virtually all of the

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hazardous substances found in the UCR Site were deposited by others and it was financially responsible for only a miniscule amount. ECF No. 1127 at 22-25; ECF No. 1872 at 22-28.

15. Teck then moved for stay of all proceedings pending completion of the RI/FS it was performing under agreement with EPA. ECF Nos. 210, 211. It argued that litigation was unnecessary as the ongoing RI/FS would adequately address conditions at the Site. ECF No. 211 at 15. EPA rejected Teck's claim in a letter to Teck in which it stated that it would "welcome expeditious resolution of the liability portion of the litigation so that the parties can focus more clearly on studies...