Town of Superior v. Asarco, Inc.

• Decision Date: 27 September 2004
• Docket Number: No. CV 01–147–M–DWM.,CV 01–147–M–DWM.
• Citation: 874 F.Supp.2d 937
• Parties: The TOWN OF SUPERIOR, MONTANA, a municipality, Mineral County, a body politic, and Superior School District No. 3, Plaintiffs, v. ASARCO, INCORPORATED, a foreign Corporation, Defendant.
• Court: U.S. District Court — District of Montana

874 F.Supp.2d 937

The TOWN OF SUPERIOR, MONTANA, a municipality, Mineral County, a body politic, and Superior School District No. 3, Plaintiffs,

v.ASARCO, INCORPORATED, a foreign Corporation, Defendant.

No. CV 01–147–M–DWM.

United States District Court,

D. Montana,

Missoula Division.

Sept. 27, 2004.

A. Clifford Edwards, Roger W. Frickle, Edwards Frickle & Culver, Roberta L. Anner–Hughes, Anner–Hughes Law Firm, Billings, MT, for Plaintiffs.

ORDER

DONALD W. MOLLOY, Chief Judge.

I. INTRODUCTION

The Town of Superior, Mineral County, and the Superior School District allege three claims for each of two distinct factual scenarios. They allege nuisance/trespass, negligence, and violation of the right to a clean and healthful environment under the Montana Constitution for high levels of antimony in Flat Creek spring, which was Superior's primary drinking water supply until the contamination was discovered in 1997, and for contaminated tailings that were taken from the Iron Mill site, trucked into Superior and used as underlay for roads, driveways, and the track at Superior High School. The Town purchased the Superior water system, which includes the Flat Creek spring, from Mountain Water Company in 2000.

The majority of Plaintiffs' trespass/nuisance allegations are directed at the contamination of Flat Creek spring; however, the last paragraph of that count alleges that Defendants allowed and encouraged the Plaintiffs “to take and use” the tailings throughout the town and the county, thereby creating a nuisance for which Defendants are liable. Am. Complt. ¶ 26. The negligence claim is directed at both the contamination of the spring and the Defendants' “allowing and encouraging the citizens of the Town of Superior, the County, and the School District to take and use the hazardous tailings throughout their communities.” Am. Complt. ¶ 29.¹ Finally, Plaintiffs allege that Defendants violated the Plaintiffs' right to a clean and healthful environment based upon the acts and omissions described above. Am. Complt. ¶ 30.

In their prayer for relief, Plaintiffs request compensatory and punitive damages. They do not request injunctive relief.

Defendants have moved for summary judgment on the grounds that: 1) Plaintiffs have not suffered any compensatory damages, and 2) Plaintiffs' claims are barred by statutes of limitation. Plaintiffs filed their original complaint on August 21, 2001.

The parties have briefed the motions. I find that there are no material facts in dispute, and that Asarco is entitled to judgment as a matter of law on Plaintiffs' negligence and nuisance/trespass claims arising from the contamination of Flat Creek spring. I find there are material issues of fact preventing judgment on Plaintiffs' negligence and nuisance/trespass claims arising from the tailings contamination, and am therefore denying summary judgment on those claims.

Plaintiffs' final claim is that the contamination of the spring and the use of contaminated tailings gives rise to a constitutional tort. The Montana Supreme Court has never recognized the existence of a tort based upon the right to a clean and healthful environment in the Montana constitution. Because this is an issue unique to Montana law, I am certifying questions regarding that claim to the Montana Supreme Court in a separate order.

II. SUMMARY JUDGMENT STANDARDS

Summary judgment is proper if the movant demonstrates there is no genuine issue as to any material fact and that it is entitled to a judgment as a matter of law. Fed.R.Civ.P. 56(c). In applying this standard, all reasonable inferences must be drawn from the factual record in a light most favorable to the nonmovant. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

An issue is genuine if there is sufficient evidence on each side so that a rational trier of fact could resolve the issue either way. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). An issue of fact is material if under the substantive law it is essential to the proper disposition of the claim. Id. Because the Court sits in diversity jurisdiction, the substantive law of the forum state applies. Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). Montana law therefore governs.

The party moving for summary judgment bears the initial burden of making a prima facie demonstration of the absence of a genuine issue of material fact and entitlement to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322–23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once this has been achieved, the burden shifts to the non-moving party to prove, by more than mere denial and speculation, that a genuine issue of fact does exist. Fed.R.Civ.P. 56(e).

III. FLAT CREEK SPRING

The Town of Superior purchased the right to the Flat Creek spring water when it purchased the water system from Mountain Water Company in 2000. Although there is passing reference to a record from DNRC showing the Town having a water right in the spring as of 1890, the sale documents for the water system in 2000 clearly show that Mountain Water Company conveyed a water right in the Flat Creek Spring for 400 miner's inches to the Town. Montana Power previously owned those rights and conveyed them to Mountain Water in 1980.

When the Town bought the water system the spring had already been taken out of production for drinking water, although it remains available for fire protection. The three wells currently serving the Town were conveyed from Montana Power to Mountain Water in 1979, and were converted to the primary drinking water source in 1997 by Mountain Water. All of the capital improvements referred to in the Complaint were developed by Mountain Water, and paid for by the Town when it bought the water system.

MSE–HKM, Inc., a consultant hired by the Town prior to the purchase of the water system, described Superior's water system in a plan it prepared to assist the Town in deciding whether to buy the system from Mountain Water, and for how much:

Until the mid–1990's, the Superior water system had a dual source of water supply. According to company produced documents, the source of first choice was an underground collection gallery in the Flat Creek drainage, and the secondary source were three wells located on the south side of the river on the valley floor. The first source collected water by means of a buried perforated pipe and the water collected at this point was transported via pipe to a screening chamber, then to a 25,000 gallon storage tank, and from there to the Town, That system involved no pumping whatsoever and provided a variable amount of water to its customers throughout the entire year ...

... In order to improve the efficiency of the system, MWC has extensively upgraded the distribution system in recent years, which resulted in substantial rate increases to consumers.

Exh. P, Facility Plan, at 5–1.

During routine testing required by the EPA in September 1997, Mountain Water Company learned that the level of antimony in the Flat Creek spring was .31 milligrams per liter, which exceeded the maximum contaminant level (MCL). Defendants' Exhibit I (lab report); Hiller Depo. 57:3–58:16. As soon as Mountain Water learned of the high antimony, it discontinued Flat Creek as a source of water for Superior. Hiller Depo. 58:17–23. Mountain Water notified the Town of Superior of the high antimony levels. Hiller Depo. 58:24–59:1.

Mountain Water did not acquire or develop new sources of water in response to the elevated antimony; it switched over to the existing well system entirely. Hiller Depo. 83:24–84:10. However, the costs of using the wells is higher than the cost of using the spring because the well water has to be pumped uphill. Hiller Depo. 158:11–17. Mountain Water hoped to find a way to remediate the antimony contamination and bring the spring back as a primary water source for Superior. Hiller Depo. 158:25–159:12.

In April 1998, Mountain Water approached the town of Superior about selling the water system to the town. Defendants' Exhibit J (Minutes, Town Council meeting, Apr. 13, 1998); Hiller Depo. 94:15–96:19. It did this because it had recently raised water rates significantly, and was preparing to request permission from the Public Service Commission to raise them again, 65–75 percent. Mountain Water estimates that about 5–10 percent of the requested increase in rates was attributable to the shutdown of the spring. Hiller Depo. 98:23–99:13.

When Superior bought the water system, it hired MSE–HKM, Inc. to develop a facility plan for the water system and determine whether purchase of the system was feasible for the town. MSE–HKM determined that the current rate base would pay for the cost of purchasing and maintaining the system, and that the 65 percent increase proposed by Mountain Water would be unnecessary. MSE–HKM Plan at 1–1, 1–2 (August 1999). MSE–HKM valued the water system using a cash flow analysis and a valuation of the net cost of the utility plant. Defendants' Facts ¶ 11. MSE–HKM valued Mountain Water's recent capital improvements at $1.5 million and the remainder of the facilities at $100,000. Thus, under the net cost analysis the value was no greater than $1.6 million. Under the cash flow analysis the suggested value was no greater than $1.5 million. Defendants' Facts ¶ 11; MSE–HKM Plan at 5–1–5–6.

In a letter to Mountain Water in 1999, MSE–HKM outlined several engineering deficiencies it believed should be taken into account in determining a price for the system. Defendants' Exhibit K (letter from Swanson & Rowe, MSE–HKM, to Kappes, Mtn. Water, Nov. 4, 1999). Those deficiencies were the lack of fire protection in certain areas of town, poor fire flows in certain areas of town, the need for an additional hydrants and transmission main to protect the hospital and extended care facility, and the need to convert all unmetered...