State of Idaho v. MA Hanna Co.

• Decision Date: 23 May 1993
• Docket Number: No. 83-4179-E-EJL.,83-4179-E-EJL.
• Citation: 819 F. Supp. 1464
• Parties: The STATE OF IDAHO and Governor Cecil D. Andrus in his capacity as Trustee of Natural Resources, Plaintiffs, v. The M.A. HANNA COMPANY, formerly The Hanna Mining Company; Hanna Services Company; Noranda Mining Inc., and Noranda Exploration, Inc., Defendants. The M.A. HANNA COMPANY, formerly The Hanna Mining Company; Hanna Services Company; Noranda Mining, Inc., and Noranda Exploration, Inc., Third-Party Plaintiffs, v. ALUMET CORPORATION; Alumet Holding Corporation; Calera Mining Company; Alumax, Inc.; Misco P.C., Inc.; Howe Sound Company; Pechiney Corporation; Union Carbide Chemicals and Plastics Corporation; The United States of America; The United States Geological Survey; The United States Bureau of Mines; The United States Forest Service; United States Department of Agriculture; United States General Services Administration; Defense Minerals Exploration Administration; Office of Mineral Exploration; Defense Minerals Administration; Defense Materials Procurement Agency; Clayton F. Yeutter, Secretary of Agriculture; F. Dale Robertson, Chief of the United States Forest Service; The United States Department of Interior; Dallas Lynn Peck, Director of the United States Geological Survey; T.S. Ary, Director of the United States Bureau of Mines; and Richard G. Austin, Director of the General Services Administration, Third-Party Defendants.
• Court: U.S. District Court — District of Idaho

819 F. Supp. 1464

The STATE OF IDAHO and Governor Cecil D. Andrus in his capacity as Trustee of Natural Resources, Plaintiffs, v. The M.A. HANNA COMPANY, formerly The Hanna Mining Company; Hanna Services Company; Noranda Mining Inc., and Noranda Exploration, Inc., Defendants.

The M.A. HANNA COMPANY, formerly The Hanna Mining Company; Hanna Services Company; Noranda Mining, Inc., and Noranda Exploration, Inc., Third-Party Plaintiffs, v. ALUMET CORPORATION; Alumet Holding Corporation; Calera Mining Company; Alumax, Inc.; Misco P.C., Inc.; Howe Sound Company; Pechiney Corporation; Union Carbide Chemicals and Plastics Corporation; The United States of America; The United States Geological Survey; The United States Bureau of Mines; The United States Forest Service; United States Department of Agriculture; United States General Services Administration; Defense Minerals Exploration Administration; Office of Mineral Exploration; Defense Minerals Administration; Defense Materials Procurement Agency; Clayton F. Yeutter, Secretary of Agriculture; F. Dale Robertson, Chief of the United States Forest Service; The United States Department

of Interior; Dallas Lynn Peck, Director of the United States Geological Survey; T.S. Ary, Director of the United States Bureau of Mines; and Richard G. Austin, Director of the General Services Administration, Third-Party Defendants.

No. 83-4179-E-EJL.

United States District Court, D. Idaho.

March 19, 1993.

Order Denying Reconsideration May 23, 1993.

Don Olowinski, Richard Burleigh, Hawley, Troxell, Ennis & Hawley, Boise, ID, for Hanna Min. Co.

Thomas W. Stoeyer, Jr., Theodore Garrett, Covington & Burling, Washington, DC, for Howmet Corp.

Richie D. Haddock, L.R. Curtis, Jr., Brent Manning, Holme, Roberts & Owen, Salt Lake City, UT, Jeffrey Fereday, Givens, Pursley, Webb & Huntley, Boise, ID, for Union Carbide C & P Co.

Carl Burke, William Russell, Elam, Burke & Boyd, Boise, ID, for Pechiney Corp. and Howmet Corp.

Scott D. Hess, Warren E. Jones, Eberle, Berlin, Kading, Turnbow & McKiveen, Boise, ID, for Howe Sound Co., Alumax, Inc., Misco P.C., Inc., Calera Mining Co., and Howmet Corp.

Maurice Ellsworth, U.S. Atty., Boise, ID, for the U.S.

Larry Echohawk, Clive Strong, Atty. Gen., Boise, ID, for the State of Idaho.

Anthony O. Garvin, Brobeck, Phleger & Harrison, Bruce W. Laidlaw, Landels, Ripley & Diamond, San Francisco, CA, Roy L. Eiguren, Gary Allen, Hugh O'Riordan, Davis, Wright & Tremaine, Boise, ID, for Noranda Mining, Inc. and Noranda Exploration, Inc.

Wesley Merrill, N. Randy Smith, Merrill & Merrill, Pocatello, ID, for Hanna Mining Co.

ORDER

LODGE, Chief Judge.

On September 28, 1992, United States Magistrate Judge Larry M. Boyle issued his report and recommendation in this matter. Pursuant to 28 U.S.C. § 636(b)(1), the parties had ten days in which to file written objections to the report and recommendation. Objections to the report and recommendation were filed by third party plaintiffs and defendants. Therefore, this court must conduct a de novo review of the record, and under 28 U.S.C. § 636(b)(1), may accept, reject, or modify, in whole or in part, the findings and recommendations made by the magistrate judge.

I. BACKGROUND

This federal action commenced in 1983 when the state of Idaho brought suit against M.A. Hanna Co. and Noranda Mining, Inc. raising claims under the Comprehensive Environmental Response Compensation and Liability Act, 42 U.S.C. § 9601 (CERCLA) and Idaho statutes and common law. The complaint alleged environmental damage from mining activities at the Blackbird Mine in Lemhi County, Idaho. The damage is alleged to include three million tons of tailings and waste rock and ten miles of underground workings.

In 1990, Hanna and Noranda filed third party complaints against three other defendants: (1) Alumet Corporation, (2) Alumax, Inc., and (3) Pechiney Corporation, seeking monetary relief including contribution for the recovery of response costs under CERCLA. At issue before Magistrate Judge Boyle were motions to dismiss by these third party defendants — Alumet, Alumax, and Pechiney — all nonresident corporations which assert lack of personal jurisdiction and inadequate service.

In a lengthy and very well researched report and recommendation, Judge Boyle determined that for a federal court to properly exercise personal jurisdiction over these out of state defendants, Idaho's long arm statute must be satisfied. Additionally, the exercise of personal jurisdiction must also comply with due process.

After an extensive review of the facts and law, Judge Boyle recommended that Alumet's motion to dismiss should be denied because the business transactions of Alumet's predecessor corporation, Howmet (previously Howe Sound), should be imputed to Alumet, thus bringing Alumet within the personal jurisdiction of the state. Judge Boyle determined that a corporation such as Alumet could anticipate being called upon to litigate in a forum from which its predecessor derived significant benefits.

As to Alumax, Judge Boyle determined that its motion to dismiss should be granted. Judge Boyle considered that the holding company which is Alumax was not sufficiently connected to Alumet for jurisdiction to be imputed. Judge Boyle also concluded that the business activities in Idaho of an Alumax subsidiary, Alumax Fabricated Products, are not substantially connected to the cause of action in this case and thus do not justify asserting personal jurisdiction over Alumax in this action.

Finally, Judge Boyle also determined that Pechiney's motion to dismiss should be granted because the sole connection Pechiney (who has never maintained an office in Idaho, never manufactured nor sold any products in Idaho, never solicited any business in Idaho nor had any Idaho employees or agents) has to this case stems from a 1983 assumption agreement between Pechiney and Howmet, the successor to Howe Sound. Judge Boyle noted that at the time of this assumption agreement, all of Howe Sound's Blackbird Mine assets had been disposed of, and the agreement made no mention of the Blackbird Mine nor any residual liability. Judge Boyle therefore concluded that Pechiney had not purposely established the requisite minimum contacts with Idaho to justify the court exercising jurisdiction over this defendant.

Hanna and Noranda and Alumet have filed objections to Judge Boyle's findings and recommendations. Before considering these objections, however, the court will first consider an additional motion filed by Hanna and Noranda shortly after the report and recommendation was issued.

II. MOTION TO STAY

As noted above, the issue raised by the motions considered by Judge Boyle involved this court's exercise of personal jurisdiction over out of state defendants. On October 9, 1992, shortly after Judge Boyle's recommendation was issued, Hanna and Noranda filed a motion to stay the jurisdictional proceedings in this action, contending that material new facts had arisen which would compel a stay. Specifically, Hanna and Noranda asserted that a Notice of Intent to File Suit by the United States Government had been filed in this action. Hanna and Noranda state that the United States will sue Hanna, Noranda, Alumax, Alumet and Pechiney under CERCLA. Hanna and Noranda contend that because claims by the United States under CERCLA are allowed nationwide service of process, this court will have a new and independent basis for personal jurisdiction over all defendants, without needing to consider the law presented to Judge Boyle.

Pechiney and Alumet have opposed the request for a stay. First, they note that a notice of intent to file suit is not the same as a suit, and there is no indication when the United States may file its action in this matter. Second, they contend that while actions initiated by the United States may be allowed nationwide service of process under CERCLA, this action was not filed by the United States, and nowhere does the statute indicate that Noranda and Hanna may take advantage of this provision.

The record before the court indicates that Hanna and Noranda's assertion that the United States government's notice of intent to sue is a material new fact not available to Judge Boyle is not very well taken. In the court record are notices to Hanna and Noranda, dated June 8, 1992, informing them that the United States shortly intended to file suit regarding the Blackbird Mine. (This was followed by the notice to the court filed on September 28, 1992.) If Hanna and Noranda thought the United States government's statement of intent to sue so jurisdictionally significant, they could have brought this information to the attention of Judge Boyle any time after they received the statements from the United States, rather than waiting until his report and recommendation had been issued.

Further, the United States has been a third party defendant to this action for a number of years, and it strains credulity to believe that Hanna and Noranda were surprised by the notice of intent filed in this action.

Finally, the court cannot agree that the additional service provisions allowed to the United States under CERCLA should replace Judge Boyle's analysis. The basic objective of CERCLA is the prompt, thorough, and cost effective cleanup of the nation's hazardous waste sites. Perhaps Congress' primary objective in the 1986 amendments to CERCLA was to significantly accelerate the cleanup of the nation's hazardous waste sites.

However, basic constitutional and civil procedure principles govern the scope of personal jurisdiction in a section 107 action under CERCLA. See State of Idaho v. Bunker Hill Co., 635 F.Supp. 665, 670 (D.Idaho 1986) ("The court must find that in relying upon the established contacts, traditional notions of fair play and substantial justice would not be offended by subjecting the nonresident defendant to the forum court's jurisdiction."). Nothing in the amended section 113 changes...