# Halliburton Energy Services, Inc. v. NL Industries

> District Court, S.D. Texas · August 18, 2009 · 648 F. Supp. 2d 840

URL: https://www.frixlaw.com/law-library/cases/2443806

## Case

- **Full name:** HALLIBURTON ENERGY SERVICES, INC., Et Al., Plaintiffs, v. NL INDUSTRIES, Et Al., Defendants; Tre Management Company, Plaintiffs, v. Georgia-Pacific Corporation, Et Al., Defendants
- **Court:** District Court, S.D. Texas
- **Decided:** August 18, 2009
- **Citations:** 648 F. Supp. 2d 840; 70 ERC (BNA) 1708; 2009 U.S. Dist. LEXIS 73026; 2009 WL 2568291
- **Precedential status:** Published
- **Opinion:** Opinion by Rosenthal
- **Judges:** Lee H. Rosenthal
- **Cited by:** 8 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/2443806

## How later opinions describe it (automated extraction)

- explaining that even inapplicable indemnification provisions can be considered to determine intent of parties to allocate contribution responsibility

## Opinion text

MEMORANDUM AND OPINION
LEE H. ROSENTHAL, District Judge.
This opinion addresses motions for partial summary judgment filed by Georgia-Pacific Corporation (“Georgia-Pacific”) and Milwhite Inc. (“Milwhite”). Georgia-Pacific and Milwhite assert that, as a matter of law, they are not liable to Halliburton Energy Services, Inc. (“HESI”) and DII Industries, LLC (“DU”) (together, “Halliburton”), or to each other, under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA),
1
or under the Arkansas Remedial Action Trust Fund Act (RATFA).
2
The parties filed lengthy briefs and a large record, and this court heard oral argument on the motions.
Based on the pleadings, the motions and briefs, the record, the arguments, and the applicable law, this court rules as follows:
• Georgia-Pacific’s motion for partial summary judgment, (Docket Entry No. 189), is denied.
• Milwhite’s motion for partial summary judgment, (Docket Entry No. 228), is denied.
• Halliburton’s related motion for leave to file supplemental evidence in opposition to Georgia-Pacific’s motion for
*843
summary judgment, (Docket Entry No. 332), is also denied.
■ Milwhite’s motion to supplement its summary judgment motion, (Docket Entry No. 363), is granted.
The reasons for these rulings are explained below. A scheduling conference is set for September 18, 2009, at 10:00 a.m., to set deadlines for the work needed to resolve this ease.
I. Factual and Procedural Background
This court’s July 2006 Memorandum and Opinion set out the relevant background in detail. Only a summary is provided here. Briefly, Halliburton filed this suit in 2005 against the Tremont Parties — NL Industries, Inc. (“NL”),
3
Tremont, LLC (“Tremont”), TRE Holding Corporation (“TRE Holding”), and TRE Management Company (“TRE Management”) — and against MI, L.L.C. (“M-I”), Milwhite, and Georgia-Pacific. Halliburton filed this suit after entering into an Administrative Settlement Agreement in 2000 (“Administrative Settlement”) and a Consent Administrative Order in 2003 (“Consent Order”) with the Arkansas Department of Environmental Quality (“ADEQ”). Halliburton seeks to recover the money it spent investigating and remediating environmental contamination near the towns of Magnet Cove and Malvern, Arkansas (the “Site”). The Site consists of approximately 600 acres located north of Magnet Cove, Arkansas, situated in Sections 10,11,14, and 15 of Township 3 South, Range 17 West in Hot Spring County.
4
The Site was used for barite ore mining and milling by the Baroid Sales Division of NL and by Magnet Cove Barium Corporation (“Magcobar”).
5
(See
Docket Entry No. 189, Ex. 2 at 1; id, Ex. 3 at ES-1). According to the Consent Order, “[n]o mining activity has been conducted at the Site since 1977.”
(Id.,
Ex. 2 at 1). A Site Investigation Report prepared for Halliburton and TRE Management states that “[a]ll mining or milling activity at the Site had ceased by 1982.” (Docket Entry No. 189, Ex. 3 at ES-1). The mining produced a large open pit, (id, Ex. 2 at 1), as well as “a number of piles of mining spoils of unknown acreage ...,” (id, Ex. 1 at 1). According to the Consent Order, “[s]ubsequent to the cessation of mining activities at the Site, the mine pit began to fill with water.”
(Id.,
Ex. 2 at 1). The pit “now
*844
forms a lake (‘Pit Lake’) that is approximately 90 acres in surface area and more than 400 feet deep at the deepest point.”
(Id.,
Ex. 2 at 1). Some of the water in the Pit Lake “may pass over or through certain of the mining spoil piles.”
(Id.,
Ex. 1 at 2). “The water in the Pit Lake has a low pH and contains dissolved metals and minerals.” (Docket Entry No. 189, Ex. 2 at 1). The Consent Order states that without remedial action, “the Pit Lake will overflow in the near future and release untreated water into Chamberlain Creek and subsequently into other downstream waters to which Chamberlain Creek is a tributary.”
(Id.,
Ex. 2 at 1).
In 1988, NL entered into a restructuring plan (the “1988 Plan”). The 1988 Plan stated that NL was a holding company that conducted it operations through its wholly owned subsidiaries NL Chemicals, Inc. (“NLC”) and Baroid Energy Services, Inc. (“Baroid Energy Services”). NLC owned and operated NL’s titanium and dioxide pigments and specialty chemicals businesses, principally through subsidiaries. Baroid Energy Services owned and operated NL’s petroleum services business, principally through subsidiaries. Through the 1988 Plan and related agreements, NL spun off Baroid Energy Services into a separate publicly traded company, first called NL Petroleum Services, Inc. (“NLPS”) and later called Baroid Corporation (“Old Baroid”). Through a related Amended and Restated Formation Agreement, NL agreed to transfer to Old Baroid all assets related to the petroleum services business or to Titanium Metals Corporation of America (“TMCA”), including the outstanding shares of TMCA capital stock and the subsidiaries engaged in NL’s petroleum services business.
Another restructuring followed in 1990. Under the 1990 Plan, Old Baroid split its titanium and bentonite business from its “Petroleum Services Business.” The 1990 Plan stated that “[NL] has heretofore indirectly owned and operated its petroleum services operations (the ‘Petroleum Services Business’) principally through its subsidiaries ....” Under the 1990 Plan, Old Baroid agreed to assign to a new entity called New Baroid Corporation (“New Baroid”) its properties and assets attributable to its Petroleum Services Business, defined as the “Petroleum Services Assets,” and its properties and assets attributable to its bentonite mining operations (the “Bentonite Business”), defined as the “Bentonite Assets.” New Baroid agreed to assume the liabilities and obligations of Old Baroid arising out of or attributable to the past, present, or future ownership or operations of the Petroleum Services Business, defined as “Petroleum Services Obligations.” Through a series of transactions, the Bentonite Business was transferred back to Old Baroid. Ultimately, Old Baroid retained both its titanium metals operations, defined as the “Titanium Business,” and its Bentonite Business. New Baroid retained the Petroleum Services Business. New Baroid is a predecessor of Halliburton. Old Baroid is a predecessor of the Tremont Parties.
Under the 2000 Administrative Settlement with the ADEQ, HESI, TRE Management, and M-I agreed to investigate the Site condition, submit a report to the ADEQ, and do a feasibility study on ways to remediate the environmental contamination.
(See
Docket Entry No. 189, Ex. 1). In the meantime, HESI, TRE Management, and M-I had to perform “Interim Remedial Measures” under the Administrative Settlement.
(Id.,
Ex. 1 at 2-4). Under the May 2003 Consent Order, TRE Management and HESI constructed and paid for a water-treatment system for the Pit Lake.
(See id.,
Ex. 2 at 1-2).
In April 2005, TRE Management and HESI entered into a Cost Sharing, Coop
*845
eration, and Final Allocation Process Agreement (the “2005 Cost Sharing Agreement”).
(Id.,
Ex. 6). This Agreement included a procedure to allow the parties to cooperate in continuing to fund the response and remediation costs for the Site, “allocating on an interim basis.”
(Id.,
Ex. 6 at 1-2, 13-14). The 2005 Cost Sharing Agreement also set out a procedure for the parties to reach a “Final Allocation” of “their and others’ respective shares of such past, present, and future costs, expenses, liabilities, settlements, recoveries, or unpaid shares relating to the Site .... ”
(Id.,
Ex. 6 at 2, 6-9). The 2005 Cost Sharing Agreement defined “Final Allocation” as a “full, final, and binding apportionment among the Parties to the Agreement,” by agreement or by arbitration, of defined categories of costs, including future costs. (Docket Entry No. 189, Ex. 6 at 6). Under the 2005 Cost Sharing Agreement, if mediation did not result in “Final Allocation,” the parties would participate in binding arbitration under the Commercial Arbitration Rules of the American Arbitration Association and the Federal Arbitration Act.
(Id.,
Ex. 6 at 7).
The 2005 Cost Sharing Agreement recognized that there could be both arbitration among the signatories to the 2005 Cost Sharing Agreement and litigation with nonsignatories to resolve contribution disputes. The 2005 Cost Sharing Agreement set out limits on the admissibility in arbitration of any “order, judgment, decree, or decision of any court in any contribution litigation under CERCLA or RAT-FA involving one or more Parties to this Agreement that allocates to the Parties responsibility, fair share, or liability relating to the Site .... ”
(Id.,
Ex. 6 at 10). Under the Agreement, the result of such contribution litigation
shall be ineffective, invalid, and of no force and effect as between the Parties and shall not be used or admissible as evidence in the Final Allocation Process by any Party or against any Party for any purpose other than establishing the amount of liability that has been finally allocated to non-Parties. All allocation of responsibility, fair share, or liability relating to the Site as between the Parties, and all issues or disputes between the Parties relating to whether a cost or expense is a Shared Cost, the reasonableness of any cost or expense to be allocated in the Final Allocation, and the allocability or collectibility of any cost or expenses under CERCLA or RATFA, shall be determined in the Final Allocation Process pursuant to this Agreement without reference to, or consideration of, any arguments made or conclusions reached in any such contribution litigation.
(Id.,
Ex. 6 at 10-11). Georgia-Pacific and Milwhite were not signatories to the 2005 Cost Sharing Agreement.
In late 2005, Halliburton filed this suit against the Tremont Parties as prior owners and operators of the Site when hazardous substances were released or as successors-in-interest to such owners or operators. Halliburton also sued Georgia-Pacific as a prior owner of property at the Site, and Milwhite as a prior owner and operator. Halliburton asserted cost-recovery and contribution claims under CERCLA, 42 U.S.C. §§ 9607 (a) and 9613(f)(3)(B), contribution claims under RATFA, ArkCode Ann. § 8-7-520, and a right to recover response and remediation costs under a state common-law unjust enrichment cause of action. Halliburton also sought a declaratory judgment that the defendants were liable for future response and remediation costs at the Site and that Tremont was obligated to indemnify Halliburton for these costs under the contracts used to restructure the corporate predecessors-in-interest. Georgia-Pacific and Milwhite counterclaimed against Halliburton and crossclaimed against each
*846
other and against their codefendants, the Tremont Parties, seeking contribution and indemnity.
On December 27, 2005, a few weeks after this lawsuit was filed, TRE Management — which was also a party to the 2000 Administrative Settlement Agreement and the 2003 Consent Order — sued Georgia-Pacific in the federal district court for the Western District of Arkansas, where the Site is located. In that suit, TRE Management sought contribution under CERCLA and RATFA for Georgia-Pacific’s “proportionate share of all costs and expenses TRE Management has incurred and will continue to incur in performing removal actions and remedial actions at the Site.” (Docket Entry No. 38, Ex. E at 7-8).
In March 2006, after this lawsuit and the Arkansas lawsuit had been filed, Halliburton and the Tremont Parties entered into an agreement expanding the entities consenting to arbitrate the allocation of response and remediation costs at the Site. In this 2006 Arbitration Agreement, the parties agreed to “resolve through binding arbitration all claims between them related to the allocation of response and remediation costs incurred or to be incurred at the Site including the claims that have been asserted in the Texas Case or such claims that may be asserted in the Arkansas Case.” (Docket Entry No. 189, Ex. 7 at 2). The arbitration was to be conducted in accordance with certain paragraphs of the 2005 Cost Sharing Agreement, including the provisions on related contribution litigation with nonsignatories.
(See id.,
Ex. 7 at 2). Georgia-Pacific and Milwhite were not parties to this Arbitration Agreement and did not participate in the arbitration.
The arbitration between Halliburton and the Tremont Parties was conducted in two phases and resulted in two awards. The panel allocated response costs between the parties to the arbitration, declining to “assess any liability to entities which are not signatories to the Cost Sharing Agreement,”
(id.,
Ex. 9 at 34), including Georgia-Pacific and Milwhite. The arbitration panel allocated all response costs at the Site to Halliburton. This court confirmed the arbitration awards on March 31, 2008, and later entered final judgment under Federal Rule of Civil Procedure 54(b) on the claims resolved in the arbitration. Halliburton appealed the order confirming the awards and the final judgment on the confirmation order. The Fifth Circuit affirmed.
Georgia-Pacific seeks partial summary judgment that it is not liable to reimburse Halliburton for any of the response costs associated with the Site, past or future. Georgia-Pacific argues that it did not conduct mining or mine-waste disposal activities at the Site and was fully indemnified for such activities conducted by others on its property under leases that it signed.
(See id.
at 3). For similar reasons, Georgia-Pacific also moves for summary judgment dismissing Milwhite’s cross-claim.
(Id.).
Georgia-Pacific also seeks summary judgment dismissing Halliburton’s unjust enrichment claim under Arkansas law.
(Id.
at 3-4). Halliburton has opposed the motion. (Docket Entry No. 218).
Milwhite responded to Georgia-Pacific’s motion by stating that the primary purpose of the crossclaim “is that if Milwhite is found liable in any degree and the possible circumstance in which Georgia Pacific is responsible for any of [Halliburton’s] damages, then Milwhite would be entitled to contribution and/or indemnity.” (Docket Entry No. 213 at 2). Milwhite argues that neither it nor Georgia-Pacific is liable to Halliburton. “Should the Court decide that Georgia-Pacific does not have any liability in this matter, then Milwhite in turn, would not be entitled to any indemnity or contribution from Georgia-Pacific.”
(Id.).
Georgia-Pacific has stipulated that
*847
it seeks no relief against the Tremont Parties in its motion for partial summary judgment and that the Tremont Parties need not respond. (Docket Entry No. 215).
Like Georgia-Pacific, Milwhite seeks summary judgment that it is not liable to reimburse Halliburton for past or future response costs associated with the Site, arguing that there is no evidence that Mil-white conducted mining or mine-waste disposal activities at the Site. (Docket Entry No. 228 at 3^4). For similar reasons, Milwhite moves for summary judgment denying Georgia-Pacific’s cross-claim and denying Halliburton’s claim for unjust enrichment.
(Id.
at 4). Halliburton has opposed the motion. (Docket Entry No. 233). Milwhite is not seeking relief against the Tremont Parties in its motion. (Docket Entry No. 232).
II. The Legal Standards
A. Summary Judgment
Summary judgment is appropriate if no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). “The movant bears the burden of identifying those portions of the record it believes demonstrate the absence of a genuine issue of material fact.”
Triple Tee Golf, Inc. v. Nike, Inc.,
485 F.3d 253, 261 (5th Cir.2007) (citing
Celotex Corp. v. Catrett,
477 U.S. 317, 322-25 , 106 S.Ct. 2548 , 91 L.Ed.2d 265 (1986)).
If the burden of proof at trial lies with the nonmoving party, the movant may satisfy its initial burden by “ ‘showing’ — that is, pointing out to the district court — that there is an absence of evidence to support the nonmoving party’s case.”
See Celotex,
477 U.S. at 325 , 106 S.Ct. 2548 . While the party moving for summary judgment must demonstrate the absence of a genuine issue of material fact, it does not need to negate the elements of the nonmovant’s case.
Boudreaux v. Swift Transp. Co.,
402 F.3d 536, 540 (5th Cir.2005) (citation omitted). “ ‘A fact is ‘material’ if its resolution in favor of one party might affect the outcome of the lawsuit under governing law.’ ”
Sossamon v. Lone Star State of Texas,
560 F.3d 316, 326 (5th Cir.2009) (quoting
Hamilton v. Segue Software, Inc.,
232 F.3d 473, 477 (5th Cir.2000) (per curiam)),
petition for cert. filed,
77 U.S.L.W. 3657 (U.S. May 22, 2009) (No. 08-1438). “ ‘If the moving party fails to meet [its] initial burden, the motion [for summary judgment] must be denied, regardless of the nonmovant’s response.’ ”
United States v. $92,203.00 in U.S. Currency,
537 F.3d 504, 507 (5th Cir.2008) (quoting
Little v. Liquid Air Corp.,
37 F.3d 1069, 1075 (5th Cir.1994) (en banc)).
When the moving party has met its Rule 56(c) burden, the nonmoving party cannot survive a summary judgment motion by resting on the mere allegations of its pleadings. The nonmovant must identify specific evidence in the record and articulate how that evidence supports that party’s claim.
See Baranowski v. Hart,
486 F.3d 112, 119 (5th Cir.2007) (citation omitted). “This burden will not be satisfied by ‘some metaphysical doubt as to the material facts, by conclusory allegations, by unsubstantiated assertions, or by only a scintilla of evidence.’ ”
Boudreaux,
402 F.3d at 540 (quoting
Little,
37 F.3d at 1075 ). In deciding a summary judgment motion, the court draws all reasonable inferences in the light most favorable to the nonmoving party.
Deville v. Marcantel,
567 F.3d 156, 163-64 (5th Cir.2009) (per curiam) (citing
Hockman v. Westward Commc’ns, LLC,
407 F.3d 317, 325 (5th Cir.2004)).
B. CERCLA Liability
Congress enacted CERCLA in 1980 in response to environmental and health dangers posed by property contamination from hazardous substances.
See United States v. Bestfoods,
524 U.S. 51, 55 ,
*848
118 S.Ct. 1876 , 141 L.Ed.2d 43 (1998) (citing
Exxon Corp. v. Hunt,
475 U.S. 355 , 106 S.Ct. 1103 , 89 L.Ed.2d 364 (1986)). The statute was amended by the Superfund Amendments and Reauthorization Act of 1986 (SARA), Pub.L. No. 99-499, 100 Stat. 1613. CERCLA’s “broad, remedial purpose is to facilitate the prompt cleanup of hazardous waste sites and to shift the cost of environmental response from the taxpayers to the parties who benefitted from the wastes that caused the harm.”
OHM Remediation Servs. v. Evans Cooperage Co.,
116 F.3d 1574 , 1578 (5th Cir.1997) (citing
Matter of Bell Petroleum Servs., Inc.,
3 F.3d 889, 894 (5th Cir.1993)). Section 107(a)(4) states that “covered persons” are liable for costs incurred by the federal or state government or Indian tribes in responding to the contamination and for response costs incurred by “any other person.” 42 U.S.C. § 9607 (a)(4)(A)-(B). Two contribution provisions, sections 113(f)(1) and 113(f)(3)(B), were added later, as part of SARA. Because CERCLA imposes strict liability, plaintiffs generally do not need to prove that the defendant caused the contamination, only that the defendant is a “covered person.”
OHM Remediation Servs.,
116 F.3d at 1578 (citing
United States v. Alcan Aluminum Corp.,
990 F.2d 711, 721 (2d Cir.1993)). If the harm is indivisible, liability is joint and several.
Id.
at 1579 (citing
Bell Petroleum,
3 F.3d at 903 ).
Section 107(a) identifies four categories of “covered persons” who may be liable for cleanup costs associated with the release or threatened release of hazardous substances.
See
42 U.S.C. § 9607 (a). “Covered persons” are: (1) owners and operators of facilities at which hazardous substances are located; (2) past owners and operators of such facilities at the time that disposal of hazardous substances occurred; (3) persons who arranged for disposal or treatment of hazardous substances; and (4) certain transporters of hazardous substances.
See
42 U.S.C. § 9607 (a)(l)-(4). “Covered persons” are also referred to as “potentially responsible parties” or “PRPs.”
See
Alfred R. Light, Cercla Law and Procedure 94 (BNA Books 1991) (“Under CERCLA, a person becomes a potentially responsible party by becoming an owner or operator at the time of disposal or the time of a response action, by arranging for treatment or disposal of substances that are sent to a facility, or transporting substances to the site that it selected for disposal.”). Unless a statutory defense or exclusion applies, covered persons are liable for “all costs of removal or remedial action incurred by the United States Government or a State or an Indian tribe not inconsistent with the national contingency plan,” “any other necessary costs of response incurred by any other person consistent with the national contingency plan,” “damages for injury to, destruction of, or loss of natural resources, including the reasonable costs of assessing such injury, destruction, or loss resulting from such a release,” and “the costs of any health assessment or health effects study carried out under section 9604© ....” 42 U.S.C. § 9607 (a).
Section 113, added in 1986 as part of SARA, contains the following subsection entitled “Contribution”:
Any person may seek contribution from any other person who is liable or potentially liable under [section 107(a) ], during or following any civil action under [sections 106 or 107(a) ] .... In resolving contribution claims, the court may allocate response costs among liable parties using such equitable factors as the court determines are appropriate. Nothing in this subsection shall diminish the right of any person to bring an action for contribution in the absence of a civil action under [sections 106 or 107].
42 U.S.C. § 9613 (f)(1). “ ‘[I]n enacting the contribution section, Congress also con
*849
templated the 100% shifting of responsibility, by way of indemnification, should the facts so warrant.’ Section 113(f)(1) thus permits a court to deny contribution based on ‘equitable factors.’ ” Light,
supra,
at 147 (footnotes omitted).
III. Georgia-Pacific’s Motion for Partial Summary Judgment
Georgia-Pacific contends that it should not be held responsible for response costs at the Site because: it no longer owns property at the Site; it never owned property at the Site on which Magcobar or its successors conducted mining, ore-processing, or waste-disposal activities; and there is no evidence that it released any pollutant that necessitated the remediation and response efforts at the Site. (Docket Entry No. 208 at 2). Georgia-Pacific or its predecessor, Malvern Lumber Company (“Malvern Lumber”), leased property to NL or its predecessor.
(Id.).
According to Georgia-Pacific, all the leases contained indemnity clauses requiring NL to assume liability arising from activities that the leases permitted NL to conduct on the leased property.
(Id.).
Georgia-Pacific argues that “[t]aken together, (1) the indemnity provisions of the leases and (2) the absence of any physical connection between Georgia-Pacific and the contamination being remediated at the Site are dispositive equitable factors that should preclude statutory recovery against Georgia-Pacific.”
(Id.
at 3). Georgia-Pacific also argues that Halliburton’s unjust enrichment claim is precluded because the leases explicitly allocated responsibility for aetivities on property Georgia-Pacific owned at the Site and because Georgia-Pacific will not receive anything of value as a result of the environmental response.
(Id.).
A. Factual Background Relevant to Georgia-Pacific’s Motion
The following lease agreements are central to Georgia-Pacific’s motion:
• The Mining Lease. Malvern Lumber, a predecessor of Georgia-Pacific, leased the southwest 1/4 of the northeast 1/4 of Section 15 to H.A. Neustaedter in December 1939, for purposes of mining and waste disposal.
(See
Docket Entry No. 189, Ex. 10). Neustaedter assigned the lessee’s rights and obligations under this lease to NL in 1940.
(Id.,
Ex. 11 at 1). This lease was subsequently amended several times.
(See id.,
Exs. 12, 13, 14, and 15). In 1969, Georgia-Pacific acquired all of the stock of Malvern Lumber, and all of Malvern Lumber’s real estate within the Site was conveyed to Georgia-Pacific.
(See id.,
Exs. 16, 17). Georgia-Pacific and NL executed another amendment to this lease on March 10, 1972, which included an indemnity provision providing that “Lessee [NL] agrees that it will indemnify, defend, protect, hold and save harmless the Lessor [Georgia-Pacific] from and against any claims, loss, liability, attorney’s fees, costs or any other expense arising out of or resulting from any injury, loss or damage to persons or property in, on or about the demised premises.”
6
(Id.,
Ex. 18 at 3). Geor
*850
gia-Pacifie states that under this lease, “NL dug the southwest corner of the mining pit deep into this tract, piled mining spoils around the pit, and constructed tailings ponds to dispose of mining wastes.” (Docket Entry No. 208 at 6 (citing Docket Entry No. 189, Exs. 3, 5)).
• The 1946 Waste Disposal Lease. Malvern Lumber leased, among other tracts, the north 1/2 and the southeast 1/4 of the southwest 1/4 (except for three acres in the southeast corner previously acquired for a Powder House site) of Section 11 to NL for “the sole purpose of disposal of refuse and waste from [NL’s] mining operations ...” in July 1946. (Docket Entry No. 189, Ex. 19 at 1). The lease had a term of twenty-five years, with NL retaining the option to renew for five additional terms of five years each, and provided for the payment by NL of annual rental fees.
(Id.,
Ex. 19 at 1, 2). The lease contained an indemnity provision stating that “Lessee covenants and agrees that it will indemnify and save harmless Lessor against any claims for damage either to person or property that may be asserted by third parties on account of Lessor’s occupancy or operations on said Lands.”
(Id.,
Ex. 19 at 2). As with the Mining Lease, Malvern Lumber conveyed the 1946 Waste Disposal Lease to Georgia-Pacific in 1969.
(Id.,
Ex. 17). NL extended this lease through at least June 1991.
(Id.,
Ex. 20). Based on an exhibit attached to the expert report of Dr. Daniel B. Stephens, one of Halliburton’s experts in the arbitration, some piles of mining spoils deposited by NL on the adjacent tract within Section 11 — the southwest 1/4 of the southwest 1/4 of Section 11 — ■ may have extended into the tract described in the 1946 Waste Disposal Lease.
7
(See id.,
Ex. 5 at 1).
• The 1947 Waste Disposal Lease. In January 1947, Malvern Lumber leased the northwest ten acres of the southeast 1/4 of the northeast 1/4 of Section 15 to NL for “the sole purpose of disposal of refuse and waste from [NL’s] mining operations .... ” (Docket Entry No. 189, Ex. 21 at 1). This lease contained similar terms to those in the 1946 Waste Disposal Lease, and included a similar indemnity provision, stating: “Lessee covenants and agrees that it will indemnify and save harmless Lessor against any claims for damage either to person or property that may be asserted by third parties on account of Lessee’s occupancy or operations on said lands.”
(Id.,
Ex. 21 at 1). As with the 1946 Waste Disposal Lease, the lease had a term of twenty-five years,
*851
renewable for five five-year periods.
(Id.,
Ex. 21 at 1, 2). The lease was conveyed to Georgia-Pacific in 1969.
(Id.,
Ex. 17). Georgia-Pacific contends that the lease was extended until at least July 1990.
8
(Docket Entry No. 208 at 7 (citing Docket Entry No. 189, Ex. 22)). Based on the map attached to Stephens’s expert report, it appears that NL deposited piles of mining spoils on this leased tract. (Docket Entry No. 189, Ex. 5 at 1).
• The Tailings Pond Lease. In November 1954, Malvern Lumber leased the northeast 1/4 of the southeast 1/4 of Section 15 to NL “for the sole purpose of disposal of mill tailings and waste from [NL’s] mining and milling operations. ...” (Docket Entry No. 189, Ex. 23 at 1). As with the Waste Disposal Leases, the Tailings Pond Lease contained an indemnity clause stating: “Lessee covenants and agrees that it will indemnify and hold harmless Lessor against any claims for damage either to person or property that may be asserted by third parties on account of Lessee’s occupancy or operations on said lands.”
(Id.,
Ex. 23 at 3). This lease also had an initial term of twenty-five years, with the option to renew for five additional five-year periods.
(Id.,
Ex. 23 at 1-2). The lease was conveyed from Malvern Lumber to Georgia-Pacific in 1969.
(Id.,
Ex. 17). According to the map attached to Stephens’s expert report, it appears that NL constructed a tailings pond and may have deposited mining spoils on this leased tract.
(Id.,
Ex. 5 at 1).
• The Settling Pond Lease. In October 1971, Georgia-Pacific leased ten acres of the north side of the northwest 1/4 of the southwest 1/4 of Section 15 to NL “for the purpose of backing up waters and settling mine waters and waste from Lessee’s mining operations ....” (Docket Entry No. 189, Ex. 24 at 1). The lease had an initial term of ten years, with NL retaining the option to extend the lease for two additional terms of five years each.
(Id.,
Ex. 24 at 1). NL extended the lease until September 30, 1986.
(Id.,
Ex. 26). This lease also contained an indemnity clause stating: “Lessee agrees that it will indemnify, defend, protect, hold and save harmless Lessor from and against any claims, loss, liability, attorney’s fees, costs or any other expense for any injury, loss or damage to persons or property arising out of or resulting from Lessee’s operations hereunder or use of the leased premises.”
(Id.,
Ex. 24 at 3). Based on the map attached to Stephens’s expert report, it appears that NL constructed a settling pond on this leased tract.
(Id.,
Ex. 5 at 1, 2). Georgia-Pacific points out that before allowing the lease to terminate, NL discontinued use of the pond and poured cement to prevent water from reaching the mining sludge at the bot
*852
tom of the dried out ponds.
{Id.,
Ex. 27).
Georgia-Pacific argues that the only activities at the Site that matter for environmental response costs are the mining activities. (Docket Entry No. 208 at 8). Georgia-Pacific points to the Administrative Settlement, which states that mining operations at the Site resulted in the Pit Lake and piles of mining spoils.
{See
Docket Entry No. 189, Ex. 1 at 1-2). Georgia-Pacific argues that the only evidence Halliburton submitted connecting Georgia-Pacific to mining activities or contamination at the Site are the leases and Site Investigation Report.
9
{See
Docket Entry No. 189, Ex. 28 at 4-8 (Responses
*853
to Interrogatories 3 and 6)). Georgia-Pacific argues that it is not mentioned in the Site Investigation Report and that no document shows that Georgia-Pacific physically conducted any activity at the Site that would have contributed to the environmental degradation caused by the mining activities. (Docket Entry No. 208 at 10). Georgia Pacific points out that Halliburton has formally admitted that Georgia-Pacific: “did not physically conduct or direct the excavation and removal of overburden or barite ore at the Site”; “did not physically conduct or direct the milling of overburden or barite ore at the Site”; and “did not physically conduct the transport of mine and mill wastes disposed of on Georgia-Pacific property on the Site.” (Docket Entry No. 189, Ex. 28 at 4).
Georgia-Pacific has presented evidence that NL and Magcobar were aware that mining activities were polluting adjacent waters, and that NL “planned, but consciously declined to implement, the very environmental remediation solutions that have been and will ultimately be pursued under the ADEQ Settlement and the ADEQ Order.” (Docket Entry No. 208 at 11). Georgia-Pacific presents the following chronology through a series of exhibits:
• In 1946, the Arkansas Fish and Game Commission accused NL and Magcobar of polluting Ouachita River with mine runoff and discharges.
(See
Docket Entry No. 189, Ex. 29). NL began monitoring the pH level in Chamberlain Creek, and the water samples showed low pH levels (acidic water).
(See id.,
Ex. 30).
• In April 1962, state regulators inspected the mine. NL concluded that there was nothing further to do to prepare for additional surveys, “except continue our present program of watching the Ouachita, continue to lime water pumped from the pit, and continue to slow down erosion from our strip dumps as much as possible.”
(Id.,
Ex. 31 at 2). In June 1970, NL met with state regulators and was directed to submit a “letter of intent for more efficiently neutralizing, precipitating and removing the iron concentration of the mine and run off water presently being discharged from the Magnet Cove Mine into Chamberlain Creek.”
(Id.,
Ex. 32 at 1). What appears to be a draft letter from the superintendent of the plant and mine to the Arkansas Pollution Control Commission describes plans for preventing further environmental effects from the mine. The plans included designing a complete automated system for treating discharge water, for continually monitoring discharge water, and for implementing clarification methods using settling ponds. The plans would require purchasing additional land, leasing additional land, or obtaining the right-of-way for routing water from settling ponds back to Chamberlain Creek.
(See id.,
Ex. 32).
In November 1976, the Arkansas Department of Pollution Control and Ecology approved of a plan by NL for treating and discharging waste water, subject to compliance with several additional requirements.
(Id.,
Ex. 33). In January 1977, NL sent a confidential letter to the U.S. Environmental Protection Agency (EPA), stating that “[t]he significant capital required for the Magnet Cove water treatment facilities and the rather large annual expense incurred in water treatment and discharge has prompted our management to review the economics of maintaining production from the Magnet Cove underground mines beyond May 1977.” (Docket Entry No. 189, Ex. 34). This letter explained that “[i]f the decision is to cease the current mining
*854
operation then there will be no need to pump water and, therefore, no discharge from the property,” and stated that “construction of the treatment facilities has been suspended for a period of 30 days until a decision is reached.”
(Id.,
Ex. 34).
• In February 1977, state regulators advised NL that “Cove Creek was essentially ‘sterile’ from the junction of Cove-Chamberlain to the Ouachita River,” and that “[n]o fish or aquatic species were found except for a mutated plankton.”
(Id.,
Ex. 35 at 1). An internal, confidential NL memorandum discussing the February 1977 communication from the state regulators indicated that NL had told the regulators of its decision to stop pumping water from the mine in the summer of 1977.
(Id.,
Ex. 35 at 1). In July 1977, NL advised the EPA that it would terminate the mine drainage and rain runoff discharge, and that no further discharges from the mine would be made until a future time when a new mining program was initiated.
(Id.,
Ex. 36 at 1).
Georgia-Pacific has submitted the April 1978 notes of F.R. Baser. F.R. Baser appears to have been an NL employee.
10
Georgia-Pacific argues that the notes support the argument that NL supplied regulators with water samples knowing that Chamberlain Creek upstream from the samples was contaminated.
(See
Docket Entry No. 208 at 12). It is not clear from these notes that NL provided samples of water knowing that a different area of the Chamberlain Creek was more contaminated. The notes suggest that NL wanted to take samples from a different area of Chamberlain Creek because the area the regulators originally tested was not “indicative of discharge to the stream.” The notes, in relevant part, state:
The State of Arkansas tested not only the discharge from the site to the Chamberlain River but also the Chamberlain River itself and found very high concentrations of heavy metals and suspended solids. It was pointed out by NL that this was not indicative of the discharge to the stream and that the State should, in fact, measure up-stream from NL’s discharge point. The State requested NL sample which NL has done knowing full well that the Chamberlain Creek upstream was quite contaminated. This contamination is the result of leachate from the waste piles. The leachate contains heavy metals, sulfate, and is low in pH. During the years of operation of the mine, in excess of 30, over-burden was removed and piled in the area surrounding the pit covering many hundreds of acres. Dresser Industries, who operated a mine adjacent to NL’s, also participated in the accumulation of waste piles [and] therefore has some liability.
(Docket Entry No. 189, Ex. 37 at 2-3).
In May 1978, NL advised Arkansas regulators that it intended to reopen the pit mine and build a comprehensive treatment plant.
(Id.,
Ex. 38). In May 1979, NL informed the regulators that in reactivating the mine, it intended to implement measures to protect nearby waters.
(Id.,
Ex. 39 at 2). These measures included reclaiming existing overburden piles and installing a multimillion dollar plant to treat water pumped from the open pit before discharge into Chamberlain Creek.
(Id.,
Ex. 39 at 2). The plant would first treat water that had been impounded in
*855
the pit since the mining operations ended in 1977 and then continue to treat water during normal mine operation.
(Id.,
Ex. 39 at 2). In connection with its proposed water treatment plan, NL asked state regulators to revise the water quality standards. NL stated that “without a change in the existing Water Quality Standards for sulfate and total dissolved solids (TDS) in the affected streams, limits would be written into a new NPDES Permit that could not be met,” and that “there is no practicable technology for removal of sulfates from effluent streams in this instance.”
(Id.,
Ex. 39 at 2). In November 1979, an NL consultant issued a “Conceptual Plan for Reclamation of Abandoned Mine Spoils Dump, Disposal of Mine Pit Water Treatment Sludge, and Disposal of Open-Cut Overburden.” (Docket Entry No. 189, Ex. 40).
In October 1981, NL stated in an internal memorandum that it had plans to close the barite plant.
(Id.,
Ex. 41). NL sought internal opinions about “responsibilities and possible liabilities as to reclaimation [sic] if [sic] any of the waste dumps; open pit and tailings ponds.”
(Id.,
Ex. 41). An internal memorandum dated a few months later evaluated the potential for environmental liability associated with the mining operations, stating that “Chamberlin [sic] Creek originates in the vicinity of the plant and also receives significant non-point drainage of acidic leachate from the waste piles, including those on NL Industries’ property.”
(Id.,
Ex. 42 at 1). The memorandum noted that “[t]he cessation of mining activities precedes the enactment of [the Resource Conservation and Recovery Act (RCRA) ] and corresponding State regulations,” but that “clean-up requirements could be mandated under RCRA if the site were to be determined a ‘substantial hazard’ to human health or the environment.”
(Id.,
Ex. 42 at 2). The memorandum concluded that “[s]uch a determination is not anticipated as other disposal sites may be more likely candidates for attention; the site has not yet been targeted for action under the ‘Superfund’ legislation.”
(Id.,
Ex. 42 at 2). As to Closure/Post-Closure environmental requirements, the memorandum concluded that “[t]he only known requirement would be to comply with the terms of the NPDES permit if discharges were to continue from Tailings Pond No. 4.” (Docket Entry No. 189, Ex. 42 at 3). The memorandum noted that “NL’s prior discussion of a reclamation plan for the abandoned mine spoils dump, that was to be associated with the possible renewal of open pit mining operations, might have excessively kindled State interest in the existing acidic mine drainage,” and that “[t]his could possibly precipitate some additional closure requirements or threats to list the site in accordance with the ‘Superfund’ legislation.”
(Id.,
Ex. 42 at 3).
In February 1986, an internal NL memorandum with an “[u]pdated [o]pinion of [potential [environmental [r]equirements/[e]xposures” for Magnet Cove Barite Operations concluded as follows:
The retention of leased property is not recommended unless it could be anticipated to be required for the siting of possible treatment facilities. If the leases were to be discontinued, their renegotiation under such circumstances might not be possible under terms that were favorable to NL Baroid. However,
if outrageous terms were to be required by a property owner, this might constitute a denial of access that, until resolved, would protect us from requirement to undertake related remedial action.
It has been Environmental Controlas] experience that this regional office of the USEPA may not be aggressive in forcing non-consenting property owners to grant access.
*856
(Id.,
Ex. 43 at 8 (emphasis added)). Georgia-Pacific uses this memorandum to argue that NL concluded that terminating the leases might help forestall any required environmental response. (Docket Entry No. 208 at 13).
On December
15, 1986, NL
submitted notice terminating the 1939 Mining Lease.
(See
Docket Entry No. 189, Ex. 45 at 1). In an internal memorandum discussing the reasons, NL noted that even after lease termination, it should be granted “reasonable access for reclamation or environmental clean-up projects, if required.”
(Id.,
Ex. 44 at 1).
In June 1981, Georgia-Pacific conveyed certain Arkansas property, including property it owned at the Site, to its subsidiary Rex Timber Inc.
(See id.,
Ex. 46). Rex Timber conveyed certain property at the Site to the Taylor family in 1987.
(See id.,
Ex. 47). Rex Timber was merged into Georgia-Pacific in 1988.
(See id.,
Ex. 48). In 1990, Georgia-Pacific conveyed its remaining interests at the Site to two individuals, W.R. Ward and Dorsey D. Glover.
11
(See id,
Ex. 49).
The EPA eventually investigated the Site.
(See
Docket Entry No. 189, Ex. 50 (Expanded Site Inspection Report for Magcobar Mine, Malvern, Hot Spring County, AR, dated December 1996)). The Administrative Settlement and the Consent Order followed, and interim remedial procedures were implemented.
Georgia-Pacific contends that the environmental problems at the Site were caused by the mining activities conducted there. (Docket Entry No. 208 at 14). Georgia-Pacific points to parts of the Site Investigation Report prepared for Halliburton and TRE Management, which state:
A natural phenomenon known as ARD occurs when air and water reach exposed rocks containing pyrite.
This phenomenon generally occurs as the result of mining
and other activities that disturbed the surface of the earth, but natural occurrences of ARD are also documented .... Where ARD is the result of manmade activities, it generally is the result of the acceleration of natural weathering processes, which occur when disturbed rocks containing sulfides, such as pyrite, are exposed to air and water.
The primary adverse environmental effect caused by the DIM Mine Site (as named by the EPA) involves formation of low pH water that exits the Site in surface pathways and lowers pH in off-Site surface waters.
The low pH water formed at the Site results from accelerated weathering processes that generate acidity and increase solubility of metals naturally present in some of the rock that was disturbed by mining.
*857
The mine spoil and pit lake are the most environmentally significant features at the Site
because most of the ARD is produced in the spoil and enters the pit lake by seepage and runoff. The pit lake serves as a storage reservoir for ARD historically produced on the Site.
Mine spoil present at the Site will produce ARD for decades,
though at a continually decreasing rate.
Surficial runoff from the spoil piles produces ARD, but more concentrated ARD is produced by infiltration through the spoil piles.
In its present condition the pit lake acts as a storage reservoir for ARD.
Mine spoil is the primary ongoing source of ARD to the pit lake
(very small amounts of ARD may also originate from the small amount of exposed pit wall on the west side of the pit that is comprised primarily of Stanley Formation rocks).
Runoff from the floatation tailings results in ARD that is transported to pooled areas on the tailings impoundments. Water quality in the tailings ponds reflects this source and is acidic with elevated concentrations of metals and sulfate, consistent with ARD that has been diluted by precipitation.
(Docket Entry No. 189, Ex. 3 at 2-13, 8-1, 8-2, 8-3, 8-5, 8-7 (emphasis added)). Georgia-Pacific points out that “[t]he Report attributes no environmental issue to any activity other than mining,” and that “[a]t least in this respect, ADEQ has approved the Report.” (Docket Entry No. 208 at 15).
Georgia-Pacific also points out that Halliburton’s experts in the arbitration found that mining had caused the environmental problems.
(See
Docket Entry No. 189, Ex. 51 at 10 (“The primary environmental impacts at Magnet Cove are the result of mining rocks of the Mississippian Stanley Formation .... The process of stripping the Stanley Formation to access ore and placing it in piles where it is exposed to the atmosphere and precipitation results in increased production of ARD.”);
id.,
Ex. 52 at 8 (“[T]he contamination at issue stems from mining operations conducted by NL and Magcobar.”)). Halliburton’s counsel told the arbitrators that a “critical and important fact which I would suggest is not contested and has been recognized by all the parties and reflected in the SI report is that the production of acid rock drainage, ARD, and its migration compromises [sic] the primary environment[al] concern at this site.”
(Id.,
Ex. 53 at 565). Georgia-Pacific asserts that it is undisputed that the mining activity caused the Site contamination and that Georgia-Pacific did not conduct the mining operations. (Docket Entry No. 208 at 15). Georgia-Pacific argues that based on these uncontested facts, it is entitled to judgment that it is not liable, as a matter of law.
(Id.).
Except as noted below, Halliburton does not contest, for purposes of this motion, the facts Georgia-Pacific recited about the Site history, the Site characteristics, and regulatory response actions. (Docket Entry No. 218 at 4). Halliburton argues, however, that Georgia-Pacific is not entitled to the relief it seeks.
B. The Contribution Analysis
1. Georgia-Pacific’s Status as a Potentially Responsible Party Under Section 107(a) of CERCLA
Under section 107(a)(4) of CERCLA, “the owner and operator of a ... facility ... shall be liable for ... (B) any ... necessary costs of response incurred by any ... person ... consistent with the national contingency plan.” 42 U.S.C. § 9607 (a)(4)(B). For the purpose of its
*858
motion, Georgia-Pacific concedes: “(a) that Plaintiffs and Georgia-Pacific were owners or operators of the Site as a ‘facility;’ (b) that the costs incurred and to be incurred by Plaintiffs with respect to the Site were ‘necessary’ and ‘consistent with the national contingency plan;’ and (c) that Georgia-Pacific does not assert any defense to liability under CERCLA § 107(b).” (Docket Entry No. 208 at 16). “In other words, Georgia-Pacific is willing to assume that it, Plaintiffs and Milwhite are all potentially liable under section 107(a).”
(Id.).
Georgia-Pacific focuses its arguments on section 113(f)(1), which provides in relevant part:
Any person may seek contribution from any other person who is liable or potentially liable under section [107(a) ], during or following any civil action under ... section [107(a) ]. Such claims shall be brought in accordance with this section and the Federal Rules
of
Civil Procedure, and shall be governed by Federal law. In resolving contribution claims, the court may allocate response costs among liable parties using such equitable factors as the court determines are appropriate.
42 U.S.C. § 9613 (f)(1). The relevant provisions of RATFA are similar. RATFA’s contribution provisions state:
(a) Any person who has undertaken or is undertaking remedial action at a hazardous substance site in response to an administrative or judicial order initiated against such person ... may obtain contribution from any other person who is liable for such hazardous substance site.
(b) Any person who has resolved all or a portion of his liability for a hazardous substance site by undertaking remedial action pursuant to an administrative ... settlement may obtain contribution from any person who is liable for such hazardous substance site and is not a party to the settlement.
(d) ... In resolving contribution claims, the court shall allocate the costs and expenses incurred or to be incurred by the contribution claimant or claimants for undertaking remedial action among all persons liable for the hazardous substance site, using such equitable factors as the court determines are appropriate.
AricCode Ann. § 8-7-520. With respect to the RATFA claims, Georgia-Pacific concedes, for the purpose of its motion only, that:
(1) the Site is a “hazardous substance site” within the meaning of sections 8-7-520(a) and (b); (2) the Halliburton Plaintiffs and TRE Management have standing under subsections (a) and (b); (3) Georgia-Pacific is a “person who is liable” for the Site within the meaning of subsections (a) and (b); and (4) [Georgia-Pacific] is not a party to the settlement giving Plaintiffs standing under subsection (b).
(Docket Entry No. 208 at 18).
As Georgia-Pacific points out, “CERCLA prevents double recovery. If Plaintiffs recover under CERCLA, they cannot recover under RATFA; if they recover under RATFA, they cannot recover under CERCLA.”
(Id.
(citing 42 U.S.C. § 9614 (b))). Because the contribution provisions are similar under both CERCLA and RATFA, Georgia-Pacific does not separately address RATFA contribution. This court focuses on contribution under CERCLA as well.
Halliburton responds that it has not argued that Georgia-Pacific is an “owner or operator” of the Site liable for costs under section 107(a)(1) of CERCLA. (Docket Entry No. 218 at 6). Instead, Halliburton argues that Georgia-Pacific is liable under sections 107(a)(2) and (3) of CERCLA (and
*859
the comparable sections of RATFA).
(Id.).
These sections cover persons who owned or operated a facility, where hazardous substances were disposed, at the time of disposal (“prior owners and operators”), and persons who arranged for disposal of hazardous substances (“arrangers”).
The interplay between section 107(a) and section 113(f) is important to the pending motion. In
Cooper Industries, Inc. v. Aviall Services, Inc.,
543 U.S. 157 , 125 S.Ct. 577 , 160 L.Ed.2d 548 (2004), the Supreme Court “concluded that CERCLA provided for a right of cost recovery in certain circumstances, referring to 42 U.S.C.A. § 9607 (a), and separate rights to contribution in other circumstances, referring to 42 U.S.C.A. § 9613 (f)(1) and 42 U.S.C.A. § 9613 (f)(3)(B).” John J. Dvorske, Annotation,
Right of Private Party to Seek Cost Recovery Under CERCLA § 107(a), 42 U.S.C.A. § 9607 (a), or Contribution Under CERCLA § 113(f)(1), 42 U.S.C.A. § 9613 (f)(1), in Connection with Environmental Response
— Post-Cooper
Industries, Inc. v. Aviall Services, Inc., 543 U.S. 157 , 125 S.Ct. 577 , 160 L.Ed.2d 548 (2004),
22 A.L.R. Fed.2d 233 at § 2 (2007). One commentator has explained:
Under a § 107(a) “cost recovery” action, a party, such as a private party landowner or the United States government, who has incurred cleanup and remediation costs at a hazardous waste site, may seek to recover its full response costs from a party or parties who may be potentially responsible for the contamination. The apportionment of liability under § 107(a) is strict, joint, and several — without regard to fault or willfulness, and thus, once liability is demonstrated, a defendant potentially responsible party may be held liable for the entire cost of cleanup, even if multiple potentially responsible parties are involved. Under a § 113(f)(1) “contribution” action, a potentially responsible party is granted the right to recoup from other potentially responsible parties the portion of its cleanup and remediation costs which exceeds its fair share of the overall liability. In other words, under § 113(f)(1), an individual potentially responsible party which has been left with the entire cleanup cost may seek contribution from, and attempt to apportion liability to, other potentially responsible parties. In contrast to a § 107(a) action in which liability is joint and several, under § 113(f)(1), a court is called upon to allocate the response costs among the potentially responsible parties based upon each potentially responsible party’s percentage of fault and, to do so, may use such equitable factors as the court determines are appropriate.
Id.
at § 3 (footnote omitted).
The Supreme Court addressed the interplay between sections 107(a) and 113(f) in
United States v. Atlantic Research Corp.,
551 U.S. 128 , 127 S.Ct. 2331 , 168 L.Ed.2d 28 (2007). In
Atlantic Research,
the Court held that section 107(a) provides PRPs with a cause of action to recover costs from other PRPs. 551 U.S. at 131 , 127 S.Ct. 2331 . The Court noted that it had previously held in
Cooper Industries
that “a private party could seek contribution from other liable parties only after having been sued under § 106 or § 107(a).”
Id.
at 133, 127 S.Ct. 2331 . Atlantic Research leased property operated by the Department of Defense.
Id.
After cleaning up environmental damage at the relevant site at its own expense, Atlantic Research sought to recover some of its costs by suing the United States under both section 107(a) and section 113(f).
Id.
After the Court’s
Cooper Industries
decision, the section 113(f) claim could not proceed.
Id.
Atlantic Research amended its complaint
*860
to seek relief only under section 107(a) and federal common law.
Id.
The
Atlantic Research
Court pointed out that in
Cooper Industries,
it had “recognized that §§ 107(a) and 113(f) provide two ‘clearly distinct’ remedies.”
Atlantic Research,
551 U.S. at 138 , 127 S.Ct. 2331 (citing
Cooper Industries,
543 U.S. at 163 n. 3, 125 S.Ct. 577 ).
12
The
Atlantic Research
Court noted:
Section 113(f) explicitly grants PRPs a right to contribution. Contribution is defined as the “tortfeasor’s right to collect from others responsible for the same tort after the tortfeasor has paid more than his or her proportionate share, the shares being determined as a percentage of fault.” Black’s Law Dictionary 353 (8th ed.1999). Nothing in § 113(f) suggests that Congress used the term “contribution” in anything other than this traditional sense. The statute authorizes a PRP to seek contribution ‘during or following’ a suit under § 106 or § 107(a). 42 U.S.C. § 9613 (f)(1). Thus, § 113(f)(1) permits suit before or after the establishment of common liability. In either case, a PRP’s right to contribution under § 113(f)(1) is contingent upon an inequitable distribution of common liability among liable parties.
Id. at 138-39, 127 S.Ct. 2331 (footnote omitted). The Court distinguished section 113(f) liability from liability under section 107(a):
By contrast, § 107(a) permits recovery of cleanup costs but does not create a right to contribution. A private party may recover under § 107(a) without any establishment of liability to a third party. Moreover, § 107(a) permits a PRP to recover only the costs it has “ineurred” in cleaning up the Site. 42 U.S.C. § 9607 (a)(4)(B). When a party pays to satisfy a settlement agreement or a court judgment, it does not incur its own costs of response. Rather, it reimburses other parties for costs that those parties incurred.
Id.
at 139 , 127 S.Ct. 2331 .
The
Atlantic Research
Court emphasized that while sections 107(a) and 113(f)(1) could overlap, the remedies are generally distinct and “complement each other by providing causes of action ‘to persons in different procedural circumstances.’ ”
See id. &
n. 6 (quoting
Consol. Edison Co. of N.Y. v. UGI Utils., Inc.,
423 F.3d 90, 99 (2d Cir.2005)) (additional citation omitted). The Court explained:
Section 113(f)(1) authorizes a contribution action to PRPs with common liability stemming from an action instituted under § 106 or § 107(a). And § 107(a) permits cost recovery (as distinct from contribution) by a private party that has itself incurred cleanup costs. Hence, a PRP that pays money to satisfy a settlement agreement or a court judgment may pursue § 113(f) contribution. But by reimbursing response costs paid by other parties, the PRP has not incurred its own costs of response and therefore cannot recover under § 107(a). As a result, though eligible to seek contribution under § 113(f)(1), the PRP cannot simultaneously seek to recover the same expenses under § 107(a).
Id.
The Court noted that at least in the case of reimbursement, a PRP does not have the option to choose the longer statute of limitations for cost-recovery claims over the shorter limitations period for section 113(f) claims.
Id.
(footnote omitted).
*861
Moreover, “a PRP could not avoid § 113(f)’s equitable distribution of reimbursement costs among PRPs by instead choosing to impose joint and several liability on another PRP in an action under § 107(a).”
13
Atlantic Research, 551 U.S. at 140 , 127 S.Ct. 2331 . The Court also noted that “a defendant PRP in such a § 107(a) suit could blunt any inequitable distribution of costs by filing a § 113(f) counterclaim,” and that “[rjesolution of a § 113(f) counter-claim would necessitate the equitable apportionment of costs among the liable parties, including the PRP that filed the § 107(a) action.”
Id.
(citations omitted).
14
Atlantic Research
makes clear that cost recovery under section 107(a) is a separate inquiry from equitable allocation in a contribution claim under section 113(f). Georgia-Pacific’s motion asks this court to determine whether it is entitled to a judgment of zero liability, based on section 113(f)’s equitable allocation principles. Halliburton argues that the undisputed facts establish that Georgia-Pacific is liable for response costs under CERCLA sections 107(a)(2) and (3). Halliburton points to contracts between Georgia-Pacific and NL that allowed NL to dispose of mining wastes on property Georgia-Pacific owned at the Site,
15
and to a contract between Georgia-Pacific and NL that allowed the removal and disposal of overburden and waste rock from other property Georgia-Pacific owned at the Site.
16
Georgia-Pacific concedes for purposes of this motion that it is a PRP under section 107(a) of CERCLA. (Docket Entry No. 208 at 16). This court need not determine
*862
whether Georgia-Pacific is in fact liable under section 107(a), and if so, under which subsection. Georgia-Pacific has “blunted” Halliburton’s claim for cost recovery under section 107(a) with a counterclaim under section 113(f), and Halliburton has also asserted a claim for contribution under section 113(f). Assuming, for the purpose of this motion, that Georgia-Pacific is a PRP under section 107(a), the issue to be resolved is whether Georgia-Pacific is entitled to judgment of zero liability based on equitable allocation under section 113(f).
Cf. Kalamazoo,
274 F.3d at 1047 (“A holding of potential liability does not preclude a zero allocation of response costs.”);
Acushnet Co. v. Mohasco Corp.,
191 F.3d 69, 77-78 (1st Cir.1999) (“We therefore hold that a defendant may avoid joint and several liability for response costs in a contribution action under § 9613(f) if it demonstrates that its share of hazardous waste deposited at the site constitutes no more than background amounts of such substances in the environment and cannot concentrate with other wastes to produce higher amounts. This rule is not based on CERCLA’s causation requirement, but is logically derived from § 9613(f)’s express authorization that a court take equity into account when fixing each defendant’s fair share of response costs.”) (footnote omitted).
2. Equitable Allocation Under Section 113(f) of CERCLA
a. The Factors to be Considered
Georgia-Pacific points out that before
Atlantic Research ,
“it was generally accepted that the equitable ‘[f]actors which may be considered include the relative fault of the parties, ...; relevant ‘Gore factors,’ ...; and any contracts between the parties bearing on the allocation of cleanup costs.’ ” (Docket Entry No. 208 at 19 (quoting
Kerr-McGee Chem. Corp. v. Lefton Iron & Metal Co.,
14 F.3d 321 , 326 (7th Cir.1994) (citations omitted))). In
Atlantic Research ,
the Court commented that “[njothing in § 113(f) suggests that Congress used the term ‘contribution’ in anything other than [the] traditional sense.”
Atlantic Research,
551 U.S. at 138 , 127 S.Ct. 2331 . The Court stated that “Contribution is ... the ‘tortfeasor’s right to collect from others responsible for the same tort after the tortfeasor has paid more than his or her proportionate share, the shares being determined as a percentage of fault.’”
Id.
(quoting Black’s Law Dictionary 353 (8th ed.1999)). Georgia-Pacific argues that these statements establish that “Comparative fault is ... the key consideration in equitable allocation under section 113(f).” (Docket Entry No. 208 at 19).
As Georgia-Pacific recognizes, the other factors discussed in
Korr-McGee,
including the “Gore Factors”
17
and contracts between the parties bearing on allocation, should also be considered. The Gore Factors include:
(1) the ability of the parties to demonstrate that their contribution to a discharge, release or disposal of a hazardous waste can be distinguished;
(2) the amount of the hazardous waste involved;
(3) the degree of toxicity of the hazardous waste involved;
*863
(4) the degree of involvement by the parties in the generation, transportation, treatment, storage, or disposal of the hazardous waste;
(5) the degree of care exercised by the parties with respect to the hazardous waste concerned, taking into account the characteristics of such hazardous waste; and
(6) the degree of cooperation by the parties with Federal, State, or local officials to prevent any harm to the public health or the environment.
Kerr-McGee,
14 F.3d at 326 n. 4. This list is not exclusive. Nor is a court required to analyze every factor in every case. As one court has explained:
[T]he language of section 9613(f) clearly indicates Congress’s intent to allow courts to determine what factors should be considered in their own discretion without requiring a court to consider any particular list of factors____ [I]n any given case, a court may consider several factors, a few factors, or only one determining factor ..., depending on the totality of the circumstances presented to the court.
Envtl. Transp. Sys.,
969 F.2d at 509.
18
Comparative fault and the parties’ intent to allocate liability among themselves are the most important of the equitable factors here.
b. Cooperation with Authorities and Ability to Distinguish Contribution
Georgia-Pacific argues that the first Gore Factor — the parties’ ability to demonstrate that their contribution to a discharge, release or disposal of a hazardous waste can be distinguished' — is immaterial because CERCLA authorizes contribution without regard to the divisibility of the harm. (Docket Entry No. 208 at 20). This court agrees that whether the parties can distinguish their contribution to the hazardous waste is not particularly relevant to the equitable analysis here. The divisibility inquiry is part of the section 107(a) analysis, which, as discussed earlier, is not central to analyzing Georgia-Paeific’s motion.
Georgia-Pacific points out that the last Gore Factor — the degree of cooperation by the parties with federal, state, or local officials to prevent any harm to the public health or the environment — is “meaningless” because “neither EPA nor ADEQ ever asked Georgia-Pacific to contribute to environmental response while Georgia-Pacific owned property at the Site.”
(Id.
at 23). Halliburton responds that Georgia-Pacific has not cooperated with government officials in remediation despite the “substantial financial benefit from its involvement in the activities that led to the contamination of the Site.” (Docket Entry No. 218 at 13). But there is no evidence that any government agency asked Georgia-Pacific to become involved in the cleanup process. Georgia-Pacific did not voluntarily offer assistance to the authorities in remediating a site where it previously owned property. But Georgia-Pacific did not itself participate in the activities necessitating the cleanup, believed itself
*864
indemnified for any potential liability, and was not asked by authorities to participate. The lack of cooperation is not a strong factor for allocating responsibility to Georgia-Pacific.
c. Comparative Fault
i. The Parties’ Contentions
Gore Factors two through five relate to the comparative fault inquiry. Georgia-Pacific argues that the pollution and remedial response at the Site are the direct result of mining activities conducted by others, specifically NL and Magcobar, the predecessors of Halliburton and TRE Management. (Docket Entry No. 208 at 22). Georgia-Pacific also argues that NL was aware of the environmental problems at the Site, devised remedial plans, and then chose to abandon the polluted Site.
(Id.).
Georgia-Pacific contends that under fundamental contribution principles, the facts that it did not participate in any mining and did not generate any mining spoils or any pollutants at the Site warrants allocating it zero responsibility for response costs.
(See id.).
Halliburton responds that CERCLA and the case law do not support allocating zero responsibility based on the fact that a PRP did not conduct mining or generate mine spoils. (Docket Entry No. 218 at 7). Halliburton emphasizes cases holding a lessor responsible for cleanup costs.
(Id.
at 8-9 (citing
United States v. R.W. Meyer, Inc.,
982 F.2d 568 , 571 (6th Cir.1991);
Weyerhaeuser Co. v. Koppers Co.,
771 F.Supp. 1420 (D.Md.1991))). Halliburton also argues that the cases Georgia-Pacific cites in which no response costs were allocated to a particular party involved exceedingly small amounts of contaminants linked to that party.
(Id.
at 9). In this case, Halliburton asserts that more than 25% of the total mine wastes were disposed of on Site property owned by Georgia-Pacific.
(Id.
(citing
id.,
Ex. BB)). Halliburton further argues, without citing evidence, that “an additional (as of yet unquantified) volume of mine wastes was excavated from Georgia-Pacific’s property and disposed of elsewhere at the Site.”
(Id.).
Halliburton also asserts that even if Georgia-Pacific did not conduct mining activities at the Site, its degree of involvement in the mining activities, its lack of care with respect to hazardous wastes disposed of on its property, and the economic benefit it received from the mining activities all support allocating some response costs to Georgia-Pacific.
(Id.
at 12).
19
In reply, Georgia-Pacific contends that the case law permits allocating zero responsibility to a PRP in appropriate circumstances. (Docket Entry No. 222 at 4-7). Georgia-Pacific argues that undisputed record evidence shows that it: did not conduct or direct the excavation and removal of overburden or barite at the Site; did not physically conduct or direct milling of overburden at the Site; and did not transport mine and mill wastes disposed of on its property at the Site.
(Id.
at 7-8). Georgia-Pacific contends that Halliburton’s attempt to create a fact issue fails because the document that Halliburton relies on to show the volume of waste disposed of on Georgia-Pacific’s property, which is a document prepared by one of
*865
Halliburton’s experts in the arbitration, is hearsay.
(Id.
at 8). Georgia-Pacific argues that the property transactions alone do not show that it was involved in the mining activities.
(Id.).
Georgia-Pacific also asserts that because of the admissions that it was not directly involved in the mining activities and because it was to be fully indemnified, its property transactions are not material.
(Id.).
ii. Analysis
It is permissible in certain circumstances to allocate zero response costs to a PRP.
See Kalamazoo,
274 F.3d at 1049 (“The district court’s decision not to allocate any costs for the [Remedial Investigation and Feasibility Study] to Rockwell was based upon its finding that the KRSG was responsible for more than 99.9% of the PCBs in the River. Although the KRSG challenges this finding ..., it fails to show that the district court abused its discretion in looking to the relative quantities of PCBs released by the parties in allocating costs for the RI/FS.”);
Acushnet,
191 F.3d at 78 (“In an appropriate set of circumstances, a tortfeasor’s fair share of the response costs may even be zero.”) (citations omitted);
PMC,
151 F.3d at 616 (“PMC’s spills may have been too inconsequential to affect the cost of cleaning up significantly, and in that event a zero allocation to PMC would be appropriate. That was the district judge’s judgment, and we cannot say that it was unreasonable.”) (internal citations omitted).
Halliburton has not identified or presented evidence showing that Georgia-Pacific conducted mining activities at the Site. Instead, Halliburton points out that NL contracted with Georgia-Pacific to use property Georgia-Pacific owned at the Site to dispose of mining wastes and that NL disposed of more than a minimal amount of waste on that property. Halliburton cites
Weyerhaeuser
to argue that courts may allocate CERCLA responsibility to landowners/lessors even if the lessee/operator’s activities were “ ‘the sole cause of the environmental damage.’ ”
(See
Docket Entry No. 218 at 8 (quoting
Weyerhaeuser,
771 F.Supp. at 1427 )).
In
Weyerhaeuser,
the court had previously found that “Weyerhaeuser owned the site at issue, that a release of hazardous materials had occurred on that site, that it was attributable to Koppers’s wood treatment operations on the site, and that each party had incurred recoverable costs in response to the release.” 771 F.Supp. at 1421 n. 1. Koppers Company manufactured treatment preservatives and operated wood-treatment plants on property it leased from Weyerhaeuser.
Id.
at 1422 . The original lease between Weyerhaeuser and American Lumber and Treating Company (“AL & T”), a Koppers predecessor, was “for the purpose of erecting a wood treatment plant.”
Id.
When they executed the original lease, Weyerhaeuser and AL & T entered into another agreement. AL & T promised to build a treatment plant and to treat lumber and forest products delivered by Weyerhaeuser, and Weyerhaeuser promised to send AL & T all lumber shipped from Baltimore that needed treatment and to use its best efforts to promote the sale of lumber AL
&
T treated.
Id.
at 1423 .
The court concluded that the environmental contamination at the site was attributable to the wood treatment plant operated first by AL & T and later by Koppers.
Id.
(footnote omitted). Although the court attributed the contamination to plant operation, the case was “not [one] involving reckless or wanton contamination,” and that AL & T and Koppers were not “unduly sloppy in their work.”
Id.
The court stated that “Koppers was aware of the negative effects of the chemicals it used” because “[t]hese toxic properties, of course, were why these chemicals were used to preserve
*866
lumber.”
Weyerhaeuser,
771 F.Supp. at 1424 n. 7. But the court concluded that “the containment methods used by Koppers, though maybe insufficient in these environmentally conscious times, were in accordance with common practices in those earlier times.”
Id.
The court pointed out that Weyerhaeuser was not involved in the plant operation:
Weyerhaeuser did not operate the wood treatment plant. Koppers managed the delivery, unloading, storage, and use of the chemical preservatives used at the facility; Koppers controlled the daily operation of personnel at the facility; Koppers determined how much lumber to treat at any time and where and how to store the treated lumber; and Koppers maintained the treatment cylinders.
Id.
at 1424 . But Weyerhaeuser was aware of the activities at the plant:
Weyerhaeuser, however, was not ignorant of wood treatment processes. Indeed, at the time that the parties contemplated the original Lease and Agreement, Weyerhaeuser expressed concern with committing itself to promoting AL
&
T’s processes when it was anticipating possible development of its own. Weyerhaeuser understood that the chemicals used were not benign and also accepted a certain amount of mess as intrinsic to the wood treatment process and not particularly remarkable.
Id.
The court pointed to facts showing that the relationship between Weyerhaeuser and AL
&
T was more than lessor/lessee. Although the volume was not great, Weyerhaeuser did sell some treated lumber and maintained a sales force at a terminal operated by Atlantic Terminal (a wholly owned subsidiary of Weyerhaeuser) at the site; Weyerhaeuser used Koppers’s brochures in its own merchandising; Weyerhaeuser took personnel on field trips to the Koppers plant; early on, AL
&
T had used some of Atlantic Terminal’s equipment and personnel; the Atlantic Terminal/Weyerhaeuser and the AL & T/Koppers properties were adjacent and personnel at both properties were in fairly regular contact; and “Atlantic and Weyerhaeuser were generally aware of what was happening at the [AL & T/Koppers] facility.”
Id.
The court pointed out, however, that “neither Weyerhaeuser nor Atlantic personnel controlled or concerned themselves with Koppers’s general safety practices or, more specifically, the safety practices regarding the treatment chemicals.”
Id.
When the lease ended, Weyerhaeuser visually inspected the property, observed creosote staining on the ground, and approved the property’s condition, but did not conduct any environmental tests.
Weyerhaeuser,
771 F.Supp. at 1424-25 . The court noted that “[i]n 1977 [when the lease ended], it was not common business practice to look for possible environmental ramifications.”
Id.
at 1425 .
In examining CERCLA liability, the
Weyerhaeuser
court concluded that the environmental harm was single and indivisible. The court stated:
Obviously, the hazardous substances were released because of Koppers’s operation of its plant, but to hold Weyerhaeuser harmless based on a shallow cause-in-fact analysis is to completely undermine the provisions of CERCLA which impose strict liability on both the owner of the facility and the operator of the facility ‘without reference to whether they caused or contributed to the release or threat of release.’ Accordingly, this Court must hold that Weyerhaeuser and Koppers are jointly and severally liable for the environmental damage.
20
*867
Id.
at 1425-26 (footnote and internal citation omitted). While the court found that the single and indivisible injury required joint and several liability, the court explained that “[hjolding plaintiff and defendant jointly liable under CERCLA does not end the analysis.”
Id.
at 1426 . “In the statute, at 42 U.S.C. § 9613 (f)(1), Congress specifically provided for actions for contribution in which equitable factors should be considered by the court.”
Id.
at 1426 . In analyzing the equities, the court found that because “Koppers’s operations were the sole cause of the environmental damage[,] ... Koppers must be allocated the lion’s share of the responsibility,” but that Weyerhaeuser should also be allocated some responsibility.
Id.
at 1427 . The court explained:
Weyerhaeuser not only knew of and acquiesced in Koppers’s wood treatment activities but in fact required them as a condition of the Lease and Agreement: if the facility had not been built as anticipated or if treatment had not been undertaken, Weyerhaeuser would have been able to terminate the lease upon short notice. Weyerhaeuser may not have benefitted so much as had been originally anticipated, but Weyerhaeuser did obtain some benefit from the proximity of Koppers[’s] operations totally aside from the rent paid under the lease.
Weyerhaeuser,
771 F.Supp. at 1427 (footnote omitted). The court continued:
Weyerhaeuser was not duped by Koppers, [and] was not an innocent[], unsuspecting landlord. Both Weyerhaeuser and Koppers, in good faith, were content with Koppers’s maintenance and use of the property. As it happens, that maintenance was not sufficient to prevent the release of hazardous materials, but this was an event equally unanticipated by both sides.
Id.
The court allocated 60 percent of the responsibility to Koppers and 40 percent to Weyerhaeuser.
Id.
Halliburton also cites
R.W. Meyer,
932 F.2d 568 , in which the court allocated one-third of the cleanup cost to the owner/lessor. In
R.W. Meyer ,
“[a]ll of the hazardous substances found at the site were chemicals and by-products of metal electro-plating operations,” which were conducted by a lessee of the property at the site. 932 F.2d at 569 . The Sixth Circuit had previously affirmed the trial court’s finding that the site damage was indivisible as well as the trial court’s imposition of joint and several liability for removal costs.
21
Id.
at 570 . Although Halliburton
*868
presents this case as an example of a situation in which the “owner/lessor bore significant responsibility ‘simply by virtue of being a landowner,’ ”
22
(Docket Entry No. 218 at 9 (quoting
R.W. Meyer,
932 F.2d at 571 )), the court relied on factors beyond ownership in allocating responsibility to the landowner.
See R.W. Meyer,
932 F.2d at 573 (“[T]he trial court quite properly considered here not only the
appellant’s contribution to the toxic slough
described above in a technical causative sense, but also its moral contribution as the owner of the site.”) (emphasis added). A concurring opinion explained that owner status could be considered in the equitable analysis, noting that the owner had made other contributions to the contamination:
Insofar as the court considered Meyer’s landowner status as bearing on its relative contribution to the events necessitating the removal action, such consideration does not represent an abuse of discretion when the court viewed the landowner status
in combination with other relevant factors.
The district court’s decision was not guided solely by Meyer’s landowner status but, rather, by the actions he took or failed to take as the landowner. Landowner status provided Meyer with the opportunity to solicit Northernaire to conduct business on the site — business which involved the use of highly corrosive and caustic substances. Knowing the business to be conducted on its property, Meyer then built and leased to Northernaire a sewer line inadequately designed and constructed for the disposal of the waste generated by Northernaire’s electroplating operations. Meyer’s status as landowner,
when viewed in combination with actions taken by Meyer that determined the manner in which its property would be used,
is a permissible consideration in determining Meyer’s degree of involvement in the events precipitating the removal action.
R.W. Meyer,
932 F.2d at 577 (Guy, J., concurring) (emphasis added). The concurrence explained that the landowner “was instrumental in efforts to bring Northernaire to Cadillac, was fully aware of the nature of the manufacturing to be conducted on the site, built the building that housed the facility, and failed to construct or maintain an adequate sewer line.”
Id.
at 578 (Guy, J., concurring).
The facts in the
Weyerhaeuser
and
R.W. Meyer
cases are different in several respects from the facts shown in the summary judgment record here. In both
Weyerhaeuser
and
R.W. Meyer ,
the landowner was more involved in the activities leading to contamination than Georgia-Pacific was in this case. For example, the landowner in
Weyerhaeuser
“understood that the chemicals used were not benign and also accepted a certain amount of mess as intrinsic to the wood treatment process.” 771 F.Supp. at 1424 . The landowner also received benefits from the contractual relationship, beyond rental fees; the landowner and lessee had an ongoing business relationship related to the activity that ultimately caused the environmental damage; and the landowner approved of the property’s condition when the lease ended despite observing chemical stains on the ground. In addition, the lessee in
Weyerhaeuser
was found not to be negligent. By contrast, Georgia-Pacific has presented uncontested evidence that its
*869
lessee, NL, knew about environmental problems when it discontinued its mining activities, developed a plan for remedying the waste, and then failed to implement the remedial plan.
{See
Docket Entry No. 189, Exs. 29-43). In
R.W. Meyer ,
the landowner had built a defective sewer line that contributed to the contamination and the district court observed that the landowner had not assisted or cooperated with EPA officials during the investigation and cleanup. 932 F.2d at 571 .
Although the facts in this case are distinguishable from those in
Weyerhaeuser
and
R.W. Meyer ,
the record does show that Georgia-Pacific knew about the mining activities on its property, executed leases specifically allowing for the disposal of mining wastes on that property, and received lease payments.
23
Georgia-Pacific received benefits from facilitating NL’s activities on its land.
24
However, Halliburton has not presented any evidence showing that Georgia-Pacific knew that the dis
*870
posal of mining wastes would cause an environmental problem.
25
*871
A PRP need not be completely blameless to be allocated zero responsibility. Instead, under section 113(f), the court is required to consider any appropriate equitable factors. The mining activities at the Site were terminated in 1977. Halliburton has presented no evidence showing that at the time of the leases and related mining activities, disposing of mining wastes was known to cause environmental damage. Nor is there evidence that the disposal was contrary to prevailing practices.
Cf. Weyerhaeuser,
771 F.Supp. at 1424 n. 7 (“[T]he containment methods used by Koppers, though maybe insufficient in these environmentally conscious times, were in accordance with common practices in those earlier times.”). In addition, Halliburton has not presented evidence that Georgia-Pacific played a role in the mining activities that led to the contamination and necessitated the environmental cleanup.
When a PRP contributes only minimally to the contamination at issue, it may be appropriate to allocate zero response costs to that party. Georgia-Pacific argues that courts have allocated zero responsibility for
de minimis
polluters, and there is no evidence that Georgia-Pacific conducted activities that led to the Site contamination.
For example, in
Acushnet,
the First Circuit held, based on section 113(f), that “a defendant may avoid joint and several liability for response costs in a contribution action ... if it demonstrates that its share of hazardous waste deposited at the site constitutes no more than background amounts of such substances in the environment and cannot concentrate with other wastes to produce higher amounts.” 191 F.3d at 77 . The court “caution[ed], however, that not every
de minimis
polluter will elude liability in this way. As always, an equitable determination must be justified by the record.”
Id.
at 78 . The court explained that “there is nothing to suggest that Congress intended to impose far-reaching liability on every party who is responsible for only trace levels of waste. Several courts, albeit taking different paths to a similar result, have rejected the notion that CERCLA liability ‘attaches upon release of
any
quantity of a hazardous substance.’ ”
Id.
(quoting
Licciardi v. Murphy Oil USA,
111 F.3d 396 , 398 (5th Cir.1997)).
26
The court concluded that
*872
“[t]he ultimate failure of a contribution claim because someone did only a negligible amount of harm does not impede enforcement by the EPA or frustrate any of CERCLA’s objectives.”
Id.
at 79. The court affirmed summary judgment in favor of one of the defendants because “even if NETT may be said to have caused plaintiffs to incur response costs, plaintiffs have failed to rebut NETT’s evidence showing that it should bear no more than a
de minimis
share of the remediation expenditures under § 9613(f).”
Id.
The court also affirmed the trial court’s grant of judgment as a matter of law in favor of the remaining defendants.
Id.
at 80. With respect to one of those defendants, the court explained:
Plaintiffs’ evidence at trial tended to show that AFC was responsible for hazardous waste at Sullivan’s Ledge on a scale “thousands of times less than the remaining contribution of others”; that, in terms of sheer mass, the two cubic yards of solid waste attributable to AFC constituted an insignificant amount of pollution when compared to over one million cubic yards of waste found at Sullivan’s Ledge; that the remediation plan was largely driven by the presence of hazardous substances other than copper and zinc; and that the materials attributable to AFC [were] not as toxic as the other substances discovered at the site.... Taking at face value plaintiffs’ own estimates of the costs of remediation, AFC’s share of response costs, in the most generous formulation, would amount to no more than 1/500,000 of $50 million!,] amounting to less than $100.
Acushnet,
191 F.3d at 80-81 .
Similarly, in
Kalamazoo,
the court held: The district court’s decision not to allocate any costs for the [Remedial Investigation and Feasibility Study] to Rockwell was based upon its finding that the KRSG was responsible for more than 99.9% of the PCBs in the River. Although the KRSG challenges this finding, ..., it fails to show that the district court abused its discretion in looking to the relative quantities of PCBs released by the parties in allocating costs for the RI/FS.
Kalamazoo,
274 F.3d at 1049.
The cases allocating zero responsibility to
de minimis
polluters do not resolve the issue presented here. In those cases, the courts attributed zero responsibility to the
de minimis
polluters because, beyond
*873
their slight contribution to the contamination, the polluters had no other reason to be held liable for the cleanup costs. In some cases, the
de minimis
polluter had never owned the property at the site at issue.
27
In another case, the
de minimis
polluter had owned the property only after all but an inconsequential amount of contamination had occurred.
28
While Georgia-Pacific may not have been actively involved in the activities that led to the contamination, it owned property at the Site during the mining activities that led to the contamination, and it leased the property for the purpose of facilitating those mining activities. Georgia-Pacific has not pointed to cases holding that a party that owned land during the disposal of the hazardous waste causing the contamination should be allocated zero responsibility because it did not actively participate in the activity causing the contamination.
29
Nor
*874
has Georgia-Pacific cited cases allocating zero responsibility when the landowner specifically leased its property for purposes of allowing the lessee to perform the activities that caused the contamination.
30
Cf. Metro. Water Reclamation Dist. of Greater Chicago v. Lake River Corp.,
365 F.Supp.2d 913, 917 (N.D.Ill.2005) (finding — in the context of analyzing whether the party was an “innocent landowner” permitted to seek direct recovery against other PRPs under section 107(a) rather than section 113(f)(1) — that the landowner had “entered into a long-term lease with a party it knew intended to keep and process chemical materials,” and that the case was “clearly distinct from cases where a plaintiff had little or no warning that the property could have been or was being contaminated” because while the landowner “did not itself contaminate the property, it did drastically increase the risk of contamination by leasing the property to Lake River”).
The decision in
Bedford Affiliates v. Sills,
156 F.3d 416 (2d Cir.1998),
overruled on other grounds by W.R. Grace & Co.Conn. v. Zotos Int’l, Inc.,
559 F.3d 85, 90 (2d Cir.2009), involved facts more analogous to those presented here. In
Bedford Affiliates ,
the property owner leased property to a lessee that built a retail dry cleaning store and then sublet the property. 156 F.3d at 420 . The dry cleaning operations contaminated the property, but the sublessee did not disclose the spills and leaks, and the landowner did not learn of the contamination until years later.
Id.
After learning about the contamination, the landowner sent letters to the primary lessee demanding that the problem be fixed.
Id.
at 421 . The lessee did not do so, but the landowner did not terminate the lease until a year and a half after the first letter was sent.
Id.
The landowner ultimately remediated the site and sued the lessee and one of the sublessees for, among other claims, cost recovery under section 107(a) and for contribution under section 113(f)(1).
Id.
at 421-22 . The trial court found the polluting sublessee at fault and allocated him 95% of the response costs.
Id.
at 422 . The court also allocated 5% to the landowner.
Bedford Affiliates,
156 F.3d at 422 . The landowner appealed. The Second Circuit upheld the allocation, stating:
[W]e find no abuse of discretion in the district court’s decision to hold Bedford responsible for five percent of the contamination. Bedford faces CERCLA liability as a result of its status as a landowner throughout Sills’ [s] tenancy — the period of contamination.
See
CERCLA § 107(a)(2), 42 U.S.C. § 9607 (a)(2). Moreover, Bedford [the landowner] is not truly blameless for the Site’s contaminated state. Upon learning that the Site was contaminated in 1990, plaintiff waited almost three years to hire [an environmental contractor] and contact a government agency to begin cleanup. While this inaction is not tantamount to pollution, it serves as an
*875
independent basis for imposing some liability on Bedford. Had it acted quicker, the contamination might have been less.
See
H.R.Rep. No. 99-253(111), at 19 (1985),
reprinted in
1986 U.S.C.C.A.N. 3038, 3042 (permitting courts to consider the degree of care exercised by the parties when apportioning liability).
Id.
at 430 .
31
In the present case, Halliburton has not presented evidence showing that Georgia-Pacific knew of the contamination and did nothing. But the record does show that Georgia-Pacific leased property at the Site specifically to allow mining and disposing of mine spoils and tailings. CERCLA does not require that the direct polluter be responsible for all response costs.
See Beazer East,
412 F.3d at 446-47 (“[T]he ‘polluter pays’ principle has no canonical or transcendent importance under § 9613(f)(1); it is certainly not the ‘primary policy’ of contribution claims, as implied by the District Court. It is simply one of many factors that may or may not bear on a given equitable allocation determination.”) (citing
Kerr-McGee,
14 F.3d at 326).
Before considering the indemnity provisions in the relevant leases, the equitable factors addressing comparative fault do not clearly establish, as a matter of law, that Georgia-Pacific should be allocated zero responsibility. While Georgia-Pacific’s involvement appears to be small in comparison to those parties who were directly responsible for polluting the Site, it is not
de minimis
and does not support summary judgment of zero liability.
*876
d. The Contractual Intent to Allocate Responsibility
i. The Parties’ Contentions
Georgia-Pacific also argues that the broad indemnity clauses in the relevant leases protect it from liability for any claims arising out of the mining and waste disposal activities on the leased properties, and that the clauses are an additional equitable factor weighing in favor of allocating zero responsibility to Georgia-Pacific. (Docket Entry No. 208 at 23). Georgia-Pacific acknowledges that NL made lease payments and paid fixed per-ton royalties for barite produced on one tract, but argues that the rule that royalty owners do not bear the expenses associated with mineral extraction was “already implicit in the mineral leases executed by Malvern Lumber and Georgia-Pacific, [and] was explicitly confirmed by the indemnity terms of those leases.”
(Id.).
Georgia-Pacific asserts that “[t]he parties’ intent was to allocate to NL all liability for mining-related activities on land leased from Georgia-Pacific.”
(Id.).
In response, Halliburton points to the following contracts between Georgia-Pacific and NL relating to the Site that had no indemnity provisions: (1) a prospecting agreement and option for lease between Malvern Lumber and National Lead Company, dated January 2, 1947, (Docket Entry No. 218, Ex. P);
32
(2) an agreement dated April 24, 1946, in which Malvern Lumber granted an easement to NL,
(id.,
Ex. Q); and (3) an agreement, dated June 24, 1947, in which Malvern Lumber granted a railroad right-of-way to NL,
(id.,
Ex. S). Halliburton argues that the Mining Lease’s indemnity provision was limited to claims for premises liability and that “[e]ven those lease agreements that arguably contain broad indemnity language indicate that (with perhaps one exception) the duty to indemnify terminated with the expiration or termination of the lease agreement.”
(Id.
at 10-11 (citing
id.,
Ex. L at 1, 3 (“providing that ‘this lease shall be and remain in full force and effect for a period of Twenty-Five years’ and upon cancellation ‘shall be
null and void
except as to rentals then due and unpaid’ ”) (emphasis added by Halliburton);
id.,
Ex. 0 at 4 (“providing that upon termination
‘Lessee shall not be liable or obligated to Lessor by reason of any of the terms, provisions, covenants, or agreements herein ...
provided, however, that nothing herein contained shall release Lessee from the payment of any rental that may then be due’ ”) (emphasis added by Halliburton);
id.,
Ex. T at 3 (“providing that upon termination ‘Lessee shall not be liable or obligated to Lessor by reason of any of the terms, provisions, covenants, agreements
*877
herein; ... provided ... that
nothing herein shall deprive Lessor of any right of action it may have hereunder against the Lessee’”)
(emphasis added by Halliburton))).
33
Halliburton argues that the leases do not establish that NL is obligated to indemnify Georgia-Pacific for response costs or that the parties intended to allocate responsibility for such costs to NL. (Docket Entry No. 218 at 11). In the alternative, Halliburton argues that the parties’ conflicting contract interpretations presents a genuine issue of material fact that precludes summary judgment.
(Id.).
Georgia-Pacific argues that there is no need to analyze the legal applicability and enforceability of the indemnity clauses. Instead, Georgia-Pacific relies on the clauses to show the parties’ intent to allocate liability, as part of the equitable allocation analysis. Georgia-Pacific cites
Beazer East
and
Ketr-McGee
to support its argument that the enforceability of the indemnity provisions is irrelevant. In
Kerr-McGee,
the court noted:
Since the district court did not believe the indemnification agreement applied to the cleanup costs at issue, the court ignored the agreement when allocating responsibility for cleanup costs. This was an error. Although contractual arrangements between parties are not necessarily determinative of statutory liability, Lefton’s intent to indemnify Kerr-McGee should be considered in the allocation of cleanup costs.
14 F.3d at 326. The
Kerr-McGee
court “ultimately concluded that the indemnification provision
did
cover CERCLA liability, so no equitable allocation proceeding was required.”
Beazer East,
412 F.3d at 447 n. 20 (citing
Kerr-McGee,
14 F.3d at 327-28). The
Beazer East
court emphasized that equitable allocation based on intent to indemnify is separate from the legal determination as to enforceability of an indemnity provision:
Beazer I
dealt with the
legal
interpretation of Paragraph 4(c). As a matter of
equity,
however, the intent of the parties, which is manifested by their actions and in the written agreement, can be taken into account-no matter what our
legal
conclusion was in
Beazer I. Beazer I
does not tip the
equitable
scales one way or the other. In
Beazer I,
we determined that the 1974 agreement was governed by Alabama law, 34 F.3d at [206,] 211-15 [ (3d Cir.1994) ], and that indemnification agreements are enforceable under Alabama law only if they contain “a plain and unambiguous expression of intent to cover the cost of liability in question.”
Id.
at 216. Applying this standard, we concluded that “nothing in this agreement demonstrates a clear and unambiguous intent to transfer all CERCLA liability to [KCI].”
Id.
at 219. The Magistrate Judge correctly reasoned that
Beazer I
reached no conclusion regarding the parties’ actual intent; only that, as a matter of Alabama law, the contract did not contain a sufficiently clear expression that KCI would indemnify MEAD against all environmental liability associated with the site.
See id.
Thus, the Magistrate Judge concluded that “there is no inherent inconsistency in the ruling made on appeal and a decision by this court that, as a matter of equity, the parties’ intentions concerning indemnity, to the extent they can be divined from
*878
both the document and any other evidence offered by the parties, should be considered in equitable allocation.”
Id.
at 447 (footnote omitted).
Georgia-Pacific asserts that although it “believes that it would be entitled to summary judgment on the basis of the indemnity clause, it has not (yet) moved for that relief.”
34
(Docket Entry No. 222 at 10). Instead Georgia-Pacific argues that the parties’ intent to allocate liability is important in the equitable allocation analysis.
(Id.).
ii. Analysis
The analysis of the lease indemnity provisions is limited to determining whether the parties intended NL to indemnify Georgia-Pacific for environmental claims and, if so, how that affects the equitable allocation of response costs.
35
The indemnity provision associated with the principal Mining Lease covers “any claims ... arising out of or resulting from any injury, loss or damage to persons or property in, on or about the demised premises.”
36
(Docket Entry No. 189, Ex. 18 at 3).
37
*879
The indemnity provisions in the Mining Lease, the Waste Disposal Leases, the Tailings Pond Lease, and the Settling Pond Lease were agreed to before CERCLA’s enactment. But some courts have found that an indemnity provision predating CERCLA can apply to CERCLA liability.
See, e.g., SmithKline Beecham Corp. v. Rohm & Haas Co.,
89 F.3d 154, 159 (3d Cir.1996) (“[A]n agreement can require one party to indemnify another against CERCLA response costs even if it was executed before the enactment of CERCLA.”) (citation omitted);
Kerr-McGee,
14 F.3d at 327 (“That the indemnity provision was agreed to prior to CERCLA’s enactment should not, however, have affected the district court’s reading of the agreement.”);
Olin Corp. v. Consol. Aluminum Corp.,
5 F.3d 10 , 15-16 (2d Cir.1993) (“Notwithstanding the fact that CERCLA did not exist at the time these contracts were executed, we hold that as to the Hannibal site, these contractual provisions are sufficiently broad to encompass CERCLA liability.”);
but see Chrysler Corp. v. Ford Motor Co.,
972 F.Supp. 1097, 1108-10 (E.D.Mich.1997) (concluding, in the context of a pre-CERCLA merger in which the surviving company contractually assumed existing (but not future-arising) liabilities, whether absolute or contingent, that CERCLA liability was not included, and disagreeing with and distinguishing cases that “have held that a broad preCERCLA assumption of contingent liabilities can include CERCLA”).
38
The case
*880
law describes the factors a court is to consider in determining whether an indemnity provision includes CERCLA liability. In
Blackstone Valley Electric Co. v. Stone & Webster, Inc.,
867 F.Supp. 73 (D.Mass.1994), the court found the following factors relevant under Massachusetts law:
whether any language dealt with CERCLA-type liabilities, whether the scope of the contractual language permitted an inference regarding assumption of future-arising liabilities, whether the agreement predated or post-dated CERCLA’s enactment, whether clean up issues were addressed in the parties’ negotiations, whether the parties knew of the presence of hazardous wastes on the site, and whether any separate consideration was paid for the release of liability.
Id.
at 78 (quoting
John Boyd Co. v. Boston Gas Co.,
Civ. A. No. 89-675-T, 1992 WL 212231 , at *3 (D.Mass. Aug.18, 1992) (internal quotation marks omitted),
aff'd,
992 F.2d 401 (1st Cir.1993));
accord United States v. Hardy,
916 F.Supp. 1385, 1389 (W.D.Ky.1996) (quoting
Blackstone,
867 F.Supp. at 78 ). Another court has explained that “[a] pre-CERCLA indemnification provision covers response costs if it is either ‘specific enough to include CERCLA liability or general enough to include any and all environmental liability ....’”
SmithKline Beecham,
89 F.3d at 159 (quoting
Beazer East, Inc. v. Mead Corp.,
34 F.3d 206, 211 (3d Cir.1994)). “The key is whether there is language limiting the indemnity and whether the language shows an intent to allocate all possible liabilities among the parties. If there is limiting language, the clause does not cover CERCLA.”
Am. Nat’l Bank & Trust Co. of Chicago as Trustee for Ill. Land Trust No. 120658-01 v. Harcros Chems., Inc.,
No. 95 C 3750, 1997 WL 281295 , at *16 (N.D.Ill. May 20, 1997) (citing
Elf Atochem N. Am. v. United States,
866 F.Supp. 868, 870-71 (E.D.Pa.1994)).
The indemnity provision in the Mining Lease does not specifically include CERCLA liability. But the breadth of the indemnity provision is important. The question is whether the parties intended to encompass future environmental liability arising from NL’s activities on the leased property.
39
Although the issue is not whether the indemnity provisions apply to
*881
this case or are enforceable, but what the parties intended as to allocation, it is helpful to look at cases examining whether indemnity provisions covered CERCLA liability, even if those cases were focused on the legal' issue of whether an indemnity provision covered a CERCLA claim rather than equitable allocation under section 113(f). On the present record, the indemnity provision in the Mining Lease does not appear to be as broad as some other indemnity clauses — many of which were agreed to before CERCLA’s enactment— that have been held to encompass CERCLA claims in contexts other than equitable allocation.
40
*882
In
Harcros Chemicals,
for example, the court considered whether two lease indemnity provisions covered CERCLA claims. The first provision stated:
Lessee shall and does hereby indemnify and agree to save and hold harmless lessor against and from any and all loss, liability, claims, damages, costs and expenses of suit, interest, fines and penalties which Lessor may suffer or incur arising out of Lessee’s failure to comply with [all present and future] laws, rules, orders, ordinances, regulations or zoning regulations....
Harcros Chems.,
1997 WL 281295 , at *16 (quotation marks omitted). The court held that “[t]his provision contains no limiting language, but contemplates
all
present and future laws,” and found the provision “broad enough to cover CERCLA liability.”
Id.
The court then examined a second indemnity provision containing some similarities to the provision in the Mining Lease in the present case. The court concluded that this second provision was neither “broad [n]or specific enough to include indemnity for CERCLA liability.”
Id.
Under this second indemnity provision, the lessee agreed to “indemnify lessor and lessor’s beneficiaries, if lessor is an Illinois Land Trust,” as follows:
from and against all liabilities, obligations, claims, damages, penalties, causes of action, costs and expenses ... imposed upon or incurred by or asserted against Lessor by reason of (a)
any accident, injury to or death of persons or loss of or damage to property occurring on or about the demised premises or any part thereof
or the adjoining properties, sidewalks, curbs, streets or ways; (b) any failure on the part of Lessee to perform or comply with any of the terms of this Lease; or (c) performance of any labor or services or the furnishings of any material or other property in respect of the demised premises or any part thereof.
Id.
(emphasis added) (quotation marks omitted). The court concluded that “[t]his provision specifically limits the types of situations in which indemnity may be found and thus is not broad enough to cover CERCLA liability.”
Id.
(citations omitted);
see also Blackstone Valley Elec.,
867 F.Supp. at 78 (holding that an indemnification agreement that predated CERCLA’s enactment and did not mention “ ‘CERCLA-type’ ” liabilities, coupled with a lack of evidence that the parties considered cleanup issues, as well as affidavits by both parties suggesting that the agreements were signed without contemplating possible environmental liabilities, did not cover CERCLA liability). The
Harcros Chemicals
court concluded that this second indemnity provision also was “not specific enough to include CERCLA liability because the three situations which are listed make no reference to environmental or related liability.”
41
Harcros Chems.,
1997
*883
WL 281295, at *17 (citation omitted);
see also BP Amoco Chem. Co. v. Sun Oil Co.,
166 F.Supp.2d 984, 995-96 (D.Del.2001) (warranty clauses agreed to before CERCLA’s enactment, which did not refer to environmental liability or state that the warrantor would assume future liabilities that might arise out of the transaction, did not cover CERCLA liability),
reconsideration granted in part on other grounds,
200 F.Supp.2d 429 (D.Del.2002).
42
The case law does not support Georgia-Pacific’s argument that the indemnity provision associated with the Mining Lease shows an intent that Georgia-Pacific be indemnified for future environmental liabilities, such that it would be inequitable to allocate any response costs to Georgia-Pacific. Unlike some of the very broad provisions that have been held to encompass CERCLA liability in contexts other than equitable allocation, on the present record it is not clear that the indemnity provision in the Mining Lease covers environmental clean-up. The provision states that indemnity applies to claims “arising
*884
out of or resulting from any injury, loss or damage to persons or property in, on or about the demised premises.” The indemnity provision in the Mining Lease does not refer to environmental liability. Georgia-Pacific has not submitted evidence showing that the parties contemplated including future environmental liability in this indemnity provision.
43
Because Halliburton has asserted that mining conducted under this Mining Lease contributed to the Site contamination, the lack of evidence that the parties intended NL to indemnify Georgia-Pacific for claims such as the CERCLA claims here weighs against allocating zero responsibility to Georgia-Pacific at this stage.
44
The present record does not support finding the indemnity provisions to be a strong equitable factor for allocating zero responsibility to Georgia-Pacific.
See CMC Heartland Partners,
1994 WL 498357 , at *19 (“For the purpose of this motion [for summary judgment], [the nonmovant] only had to come forward with some evidence that, if believed, would permit the court to allocate some fraction of the costs of remediation to [the movant].”). The evidence that the mining activities were the main cause of the Site contamination and the lack of evidence that the parties intended the indemnity provision in the Mining Lease to cover environmental claims weigh against allocating zero response costs to Georgia-Pacific at this stage.
It is worth emphasizing that the only decision is that the parties’ intent, as evidenced in the indemnity provisions, does not tip the balance of equities in favor of allocating zero response costs to Georgia-Pacific. The legal questions of whether the indemnity agreements are enforceable, or whether those agreements on their own would relieve Georgia-Pacific of all response costs, are not addressed.
e. The Lessee’s Duty to Clean Up the Leased Premises
i. The Parties’ Contentions
Georgia-Pacific also argues that Arkansas law obligates a lessee to clean up pollution on leased premises after the lease terminates, relying on
Bonds v. Sanchez-O'Brien Oil & Gas Co.,
289 Ark. 582 , 715 S.W.2d 444 (1986). In response, Halliburton asserts that the “implied duty to restore the land surface has not been extended by Arkansas courts to mining operations, and it cannot logically be applied where, as here, the express terms of the lease agreements contemplate the permanent alteration of the land surface through excavation and the disposal of mine wastes.” (Docket Entry No. 218 at 12 n. 5). Georgia-Pacific contends that Halliburton’s argument “that Arkansas oil and gas law does not apply to a mining lease is sufficiently specious to require no detailed reply.” (Docket Entry No. 222 at 10 n. 2).
*885
ii. Analysis
In
Bonds ,
the court held that under an oil and gas lease, the lessee had to clean up abandoned sites. The court reasoned that allowing the lessee to use the land without cleaning up “would constitute an unreasonable surface use, and no rule is more firmly established in oil and gas law than the rule that the lessee is limited to a use of the surface which is reasonable.”
Bonds,
715 S.W.2d at 446 . “[T]he duty to restore the surface, as nearly as practicable, to the same condition as it was before drilling is implied in the lease agreement.”
Id.
Bonds
was based on the rule that in an oil and gas lease, the lessee is limited to a “reasonable” use of the surface land in conducting the drilling permitted under the lease. Bonds may not provide a basis to find an implied duty to clean up surface land in the present case. The leases at issue here were not solely for excavating underground natural resources. The leases permitted such activities as:
[pjrospecting, developing, mining, digging, taking and checking samples, excavating, extracting and otherwise producing and removing therefrom any and all mineral substances of whatsoever nature, together with the right of ingress and egress to and from said lands, and the right to build ore and refuse dumps, run water mains, tracks and pipe fuel, and to build suitable plants for proper milling and treating of ores, together with the right to free use of such water as may be found or developed on or under said lands for processing and treating such ores as may be found, (and the rights to impound such water)
45
and the free use of roads and rights of way for removing and transporting any of said ores or mineral substances and equipment incident to the mining, removal and transportation of same....
(Docket Entry No. 189, Ex. 10 at 1). The leases also permitted “disposal of refuse and waste from Lessee’s mining operations ...,” (see
id.,
Ex. 19 at 1;
id.,
Ex. 21 at 1); “disposal of mill tailings and waste from Lessee’s mining and milling operations ...,”
(id.,
Ex. 28 at 1); and “backing up waters and settling mine waters and waste from Lessee’s mining operations ...,”
(see id.,
Ex. 24 at 1). Unlike the lessee in
Bonds ,
the lessee in the present case had the right to use the leased premises, including the surface, for activities far beyond drilling for underground minerals. The implied duty under Arkansas law to clean up the surface on termination of an oil and gas lease is not a strong equitable factor favoring allocating zero response costs to Georgia-Pacific.
f. Halliburton’s Arguments in the Arbitration
Finally, Georgia-Pacific contends that this court should consider statements by Halliburton’s experts in the arbitration that they would allocate no response costs to Georgia-Pacific. Dr. Daniel Stephens testified in the arbitration that allocation should be based on the relative volume of spoils and tailings the party generated. (Docket Entry No. 208 at 23; Docket Entry No. 189, Ex. 51 at 11-12). In response to a question from the Tremont Parties’ counsel about whether Georgia-Pacific would be allocated zero responsibility under this allocation theory, Stephens testified: “[A]ssuming Georgia-Pacific didn’t have anything to do with the site involving vegetation or any other activity out there, they probably wouldn’t be given an allocation share in a model such as I developed.”
*886
(Id.,
Ex. 55 at 1098). The arbitration panel adopted the allocation approach advocated by Stephens.
(Id.,
Ex. 9 at 8 (“Based on the expert testimony, the Panel believes that Dr. Stephens[’s] July 5, 2007 report reflects the proper basis for allocation.”)). Georgia-Pacific also points out that in the arbitration, Halliburton’s counsel argued that allocation based on the volume of mining waste generated was appropriate.
(See id.,
Ex. 54 at 1-2 (“Because it bears a close relationship to the degree of environmental harm caused by each party and provides a good measure of the costs attributable to each party’s conduct, the relative volume or mass of wastes contributed by parties is the starting point for virtually every allocation of response costs under CERCLA and comparable state-law statutes.”) (footnote omitted);
id.,
Ex. 56 at 3 (“[T]he relative volume or mass of wastes contributed by parties is the starting point for virtually every allocation of response costs under CERCLA and comparable state-law statutes.”)). Georgia-Pacific argues that it would be inequitable to use a different allocation approach in this litigation than that urged by Halliburton and adopted by the panel in the arbitration. (Docket Entry No. 208 at 24).
Halliburton disputes that its experts’ opinions in the arbitration are relevant to allocating the response costs in this litigation. (Docket Entry No. 218 at 9-10). Halliburton points out that its experts were only asked to allocate environmental harm and response costs between the parties to the arbitration.
(Id.
at 10). Halliburton also points out that those parties were the successors to the mine operators that generated the mine wastes.
(Id.).
Halliburton argues that the experts did not opine on allocating response costs to other entities who did not participate in the arbitration and who had a different involvement with the Site.
(Id.).
The arbitration panel did not allocate liability beyond the parties before it.
(See id.,
Ex. AA at 32 (noting that no evidence was presented regarding the liability of non-parties and questioning the panel’s authority to make any allocation as to nonparties)).
The arguments Halliburton’s experts presented in the arbitration do not weigh strongly in favor of allocating zero response costs to Georgia-Pacific, which was not a party to that proceeding. The fact that Halliburton argued in the arbitration for allocation between it and the Tremont Parties based on the volume of mining waste generated does not make it inequitable to consider allocating some response costs to other entities that were not directly involved in generating mining wastes, such as Georgia-Pacific.
In sum, weighing the equities, this court concludes that fact issues remain as to the proper allocation of response costs to Georgia-Pacific under section 113(f)(1). While Georgia-Pacific’s responsibility is likely to be small in comparison to that of the parties that directly polluted the Site, on the present record, Georgia-Pacific has not shown that it is entitled to judgment allocating it zero responsibility for response costs. Georgia-Pacific’s motion for partial summary judgment that it has zero liability based on equitable considerations is denied.
C. Halliburton’s Unjust Enrichment Claim
1. The Parties’ Contentions
Georgia-Pacific also seeks summary judgment on Halliburton’s unjust enrichment claim. Georgia-Pacific argues that responsibility for response costs are the subject of written leases between NL and Georgia-Pacific. (Docket Entry No. 208 at 24-25). In addition, because Georgia-Pacific no longer owns property at the Site, Georgia-Pacific asserts that it has received no benefit from Halliburton’s
*887
payment of response costs.
(Id.).
In response, Halliburton contends that the leases do not support Georgia-Pacific’s argument that they obligate NL to indemnify Georgia-Pacific for response costs. (Docket Entry No. 218 at 14). As a result, according to Halliburton, the leases are not “ ‘valid, legal, and binding contraet[s]’ that would preclude an unjust enrichment claim.”
(Id.).
Halliburton also argues that even though Georgia-Pacific no longer owns Site property and would not benefit from an increase in the property’s value, Georgia-Pacific was unjustly enriched by avoiding paying response costs for which it shares some responsibility.
(Id.).
2.
Analysis
Georgia-Pacific relies on
Varner v. Peterson Farms,
371 F.3d 1011 (8th Cir.2004), to support the argument that unjust enrichment does not apply if there is a valid and binding contract between the parties. In
Varner,
the plaintiffs had borrowed money from a bank to upgrade real estate for use as a poultry-production facility. 371 F.3d at 1014. After default, the bank filed foreclosure actions.
Id.
at 1015. The plaintiffs filed a federal lawsuit against the bank, a property appraiser, and another party they had contracted with to produce poultry.
Id.
at 1014. The claims included one for unjust enrichment, based on the assertion that the defendants had been unjustly enriched from the poultry production contracts and the loan contracts.
Id.
at 1015. The district. court dismissed the unjust enrichment claim, explaining that “this equitable doctrine did not apply where valid, legal, and binding contracts existed.”
Id.
The Eighth Circuit agreed, explaining that “[o]ne who is free from fault cannot be held to be unjustly enriched merely because one has chosen to exercise a legal or contractual right.”
Id.
at 1018 (citation omitted). The court held that the plaintiffs’ failure to plead that their contracts with the bank or the poultry producer were illegal defeated the unjust enrichment claim.
Varner,
371 F.3d at 1018.
Varner
does not resolve the issue here. In
Varner,
the bank and poultry-producer defendants had valid contracts with the plaintiffs. The plaintiffs’ unjust enrichment claim was based solely on the premise that these defendants were unjustly enriched by those contracts. The plaintiff failed to state a claim for unjust enrichment because the defendants acted under binding legal contracts. In this case, by contrast, Halliburton does not claim that Georgia-Pacific was unjustly enriched as a result of actions taken under the leases between Georgia-Pacific and NL. Instead, Halliburton contends that Georgia-Pacific was unjustly enriched by Halliburton’s payment of cleanup costs for which Georgia-Pacific has some responsibility. Under
Varner,
the fact that there may be a valid, legal, and binding lease from Georgia-Pacific to NL does not prevent Halliburton’s unjust enrichment claim if the claim is not based on that lease. Halliburton does not claim that Georgia-Pacific was unjustly enriched by the lease or lease payments. In addition, Georgia-Pacific has not moved f

[Text truncated at 120,000 characters. The full text is on the page linked above.]

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/2443806. Public record. Not legal advice.