Reply Brief — Atlantic Richfield Company, Petitioner v. Gregory A. Christian, et al.

Supreme Court briefJul 18, 2018

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No. 17-1498

IN T H E

Supreme Court of the United States

ATLANTIC RICHFIELD COMPANY,

Petitioner,

GREGORY A. CHRISTIAN, ET AL.,

Respondents.

On Petition for a Writ of Certiorari

to the Supreme Court of Montana

REPLY BRIEF FOR PETITIONER

JONATHAN W. RAUCHWAY

SHANNON W. STEVENSON

DAVIS GRAHAM &

STUBBS LLP

1550 17th St., Suite 500

Denver, CO 80202

(303) 892-9400

LISA S. BLATT

Counsel of Record

ROBERT J. KATERBERG

ELISABETH S. THEODORE

ANDREW T. TUTT

STEPHEN K. WIRTH

ARNOLD & PORTER

KAYE SCHOLER LLP

601 Mass. Ave., NW

Washington, DC 20001

(202) 942-5000

lisa.blatt@arnoldporter.com

TABLE OF CONTENTS

Page

Table of Authorities .................................................... ii

Reply Brief ...................................................................1

This Court Has Jurisdiction ...............................1

II. The Court Should Decide These Important

Questions Now.....................................................2

III. The Decision Creates Three Splits .....................4

A. The Conflict Over a CERCLA “Challenge” ...4

B. The Conflict Over the Definition of “PRP” ....8

C. The Conflict Over CERCLA Preemption .... 10

Conclusion ................................................................. 12

TABLE OF AUTHORITIES

Page(s)

ARCO Envtl. Remediation, L.L.C. v. Department

of Health & Envtl. Quality,

213 F.3d 1108 (9th Cir. 2000) .............................. 4, 5

Bandini Petroleum Co. v. Superior Court,

284 U.S. 8 (1931)....................................................... 2

Bartlett v. Honeywell Int’l Inc.,

2018 WL 2383534 (2d Cir. May 25, 2018) ............. 11

Beck v. Atlantic Richfield Co.,

62 F.3d 1240 (9th Cir. 1995) .................................... 5

Cox Broadcasting Corp. v. Cohn,

420 U.S. 469 (1975)................................................... 2

Fisher v. District Court of Sixteenth Judicial

Dist.,

424 U.S. 382 (1976)............................................... 1, 2

Fort Ord Toxics Project, Inc. v. California E.P.A.,

189 F.3d 828 (9th Cir. 1999) .................................... 6

Geier v. American Honda Motor Co.,

529 U.S. 861 (2000)................................................. 11

Kennerly v. District Court of Ninth Judicial Dist.,

400 U.S. 423 (1971)............................................... 1, 2

Litgo N.J. Inc. v. Commissioner N.J. Dep’t of

Envtl. Prot.,

725 F.3d 369 (3d Cir. 2013) ...................................... 9

Manor Care, Inc. v. Yaskin,

950 F.2d 122 (3d Cir. 1991) .................................... 10

New Mexico v. General Electric Co.,

467 F.3d 1223 (10th Cir. 2006)................................. 6

Niagara Mohawk Power Corp. v. Chevron U.S.A.,

Inc.,

596 F.3d 112 (2d Cir. 2010) ...................................... 9

Cases

iii

Cases—Continued

Page(s)

Pakootas v. Teck Cominco Metals, Ltd.,

646 F.3d 1214 (9th Cir. 2011) .................................. 5

Rumpke of Ind., Inc. v. Cummins Engine Co.,

107 F.3d 1235 (7th Cir. 1997) .................................. 9

United States v. Atlantic Research Corp.,

551 U.S. 128 (2007).............................................. 8, 9

Statutes

28 U.S.C.

§ 1257 ........................................................................ 1

42 U.S.C.

§ 9607(a) ................................................................ 8, 9

§ 9607(b) .................................................................... 9

§ 9613(h) .................................................................4-8

§ 9622(e)(6) ............................................................ 8, 9

Other Authorities

Shapiro et al., Supreme Court Practice (10th

ed. 2013) ................................................................... 2

REPLY BRIEF

The decision below authorizes juries to undo

carefully crafted environmental remediation plans

that EPA has been overseeing for decades under a

DPNQMFY GFEFSBM TDIFNF "UMBOUJD 3JDImFME BOE UIF

HPWFSONFOU JEFOUJmFE OP GFXFS UIBO three separate

federal-law bars to suits interfering with CERCLA

cleanups. But the Montana Supreme Court blew

past all that, without even acknowledging the government’s view that the suit was barred and would

harm the environment. Plaintiffs do not dispute that

the question whether restoration-damages suits may

go forward is monumentally important. The govFSONFOUWJFXTUIJTDBTFBTTPTJHOJmDBOUUIBUJUmMFE

an uninvited brief in state trial court. Three amicus

briefs, from ten local and national organizations, detail the havoc this decision is now wreaking. The

court’s radical rewriting of CERCLA is obstructing

massive EPA-ordered cleanups across the state. The

case presents a clean vehicle to resolve questions of

paramount, recurring importance, and the Court

should not delay review.

This Court Has Jurisdiction

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28 U.S.C. § 1257. This matter arose on a “Writ of Supervisory Control”—an “ORIGINAL PROCEEDING”

in the Montana Supreme Court, App. 1a—and the

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“writ of supervisory control issued by the Montana

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[§ 1257] jurisdiction” and “not equivalent to an [interlocutory] appeal.” Fisher v. District Court of Sixteenth Judicial Dist., 424 U.S. 382, 385 n.7 (1976)

(per curiam); see Kennerly v. District Court of Ninth

Judicial Dist., 400 U.S. 423, 424 (1971) (per curiam).

Fisher and Kennerly apply the settled, centuriesold principle that state-high-court decisions resolving

FYUSBPSEJOBSZXSJUTBSFmOBMKVEHNFOUTBandini Petroleum Co. v. Superior Court, 284 U.S. 8, 14 (1931)

(citing cases dating to 1829). Any “state court judgment” that “conclusively determine[s] the right of the

BQQMJDBOU UP UIF XSJU TPVHIUw JT mOBM VOEFS f 1257.

Shapiro et al., Supreme Court Practice § 3.8, at 17172 (10th ed. 2013).

Even absent this controlling precedent declaring

the decision below non-interlocutory, the Court would

still have jurisdiction under the fourth exception of

Cox Broadcasting Corp. v. Cohn, 420 U.S. 469 (1975).

A suit for restoration damages is a distinct claim under Montana law, App. 5a-6a; reversal of the state

court’s judgment would dispose of it, Cox, 420 U.S. at

482. And failure to intercede would seriously erode

federal policy, id. at 482-83, for the reasons discussed, Pet. 30-36.

II. The Court Should Decide These Important

Questions Now

The petition describes the many harms that the

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decision permits juries to second-guess EPA at Superfund sites across Montana and exposes ongoing

remediations to interference and delay. Pet. 30-32.

It jeopardizes the environment and residents’ health.

Pet. 32-33. It upsets longstanding reliance interests

and injects massive uncertainty into critical negotiations. Pet. 33. It threatens to impose immense, unforeseeable costs on private companies working

alongside EPA to remediate the nation’s most hazardous waste sites. Pet. 34-36. It obstructs ongoing

efforts to negotiate consent decrees in Anaconda and

elsewhere in Montana. Pet. 34-36.

The decision below “threatens to lay waste to

years of EPA work” by permitting plaintiffs “simultaneously to extend, to complicate, and to foil the

cleanup process.” WLF Br. 9, 20. Now “any interestFE QBSUZw JT iGSFF UP mMF B MBXTVJU GPS SFTUPSBUJPO

damages to conduct the remedial actions EPA rejected.” Chamber Br. 18. For industry stakeholders,

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work with federal regulators, to compromise and

agree to settlements, … and to participate in ongoing

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Br. 22. The potential costs are crippling. The decision could force companies to foot the bill for an endMFTT TFU PG DPOnJDUJOH SFNFEJFT JNQPTFE CZ NVMUJQMF

juries. WLF Br. 21.

Plaintiffs dispute none of this. Their only response is to speculate that a jury might reject their

claims. Opp. 39. But that misses the point. Regardless of what happens at trial in this case, the legal

precedent the court set will control all future cases.

“[I]n Montana it is now open season for attacking

CERCLA cleanup plans.” WLF Br. 21. Plaintiffs’

counsel are mustering plaintiffs for new suits. Pet.

35. EPA is actively remediating 17 Superfund sites

in Montana alone. Pet. 34-36. Each is now at risk of

the interference, delay, environmental harm, and upTFU SFMJBODF UIBU"UMBOUJD 3JDImFME GBDFT BU UIF"OB

conda Smelter site. And there is no end in sight.

Even if the jury disagrees with plaintiffs here, different plaintiffs could sue tomorrow.

Waiting for trial here will only exacerbate these

problems. While companies cooperating with EPA

wait for plaintiffs to try to convince juries to adopt

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crucial consent decrees will go unsigned; and vital

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interests CERCLA promotes are utterly incompatible

with the decision below and with plaintiffs’ cynical

suggestion that this Court postpone review for years.

Plaintiffs twice assert incorrectly (at 17, 39) that

the same trial on their other claims will occur

whether the Court grants certiorari or not. Trial

would surely be stayed if the petition is granted.

And it is doubtful plaintiffs would proceed at all if

this Court reverses; restoration is the only non-deminimis claim. Five of plaintiffs’ six disclosed experts will speak to restoration; plaintiffs failed in response to interrogatories to quantify any other damages. Plaintiffs referred to restoration as “the big

one” below. 6/20/2016 Tr. 69, 139.

Plaintiffs argue (at 40) that this Court should

await resolution of factual issues at trial, but tellingly do not say what factual determination is necessary

for this Court to decide the questions presented.

This petition presents purely legal questions, which

is why the state supreme court ruled on the existing

record.

III. The Decision Creates Three Splits

A. 5IF$POnJDU0WFSB$&3$-"i$IBMMFOHFw

In each federal circuit to have addressed the issue—including Montana’s home circuit—plaintiffs’

restoration-damages claim would constitute a

§ 113(h) “challenge.” Plaintiffs emphasize (or invent)

trivial factual distinctions in individual cases. But

the bottom line is that Montana courts now have a

materially different legal standard than any other

court.

1. In the Ninth Circuit, a suit “challenge[s]” an

EPA cleanup “if it is related to the goals of the cleanup.” ARCO Envtl. Remediation, L.L.C. v. Department

of Health & Envtl. Quality, 213 F.3d 1108, 1115 (9th

Cir. 2000). Plaintiffs ignore this language. They do

not dispute that their restoration-damages suit is related to the goals of the cleanup. That alone is reason to grant. As plaintiffs also acknowledge, the

Ninth Circuit deems suits “challenges” where plaintiffs seek to force responsible parties at Superfund

sites to comply with requirements “EPA had expressly chosen not to enforce,” Opp. 20; Pakootas v. Teck

Cominco Metals, Ltd., 646 F.3d 1214, 1220 (9th Cir.

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26; ARCO, 213 F.3d at 1115. That is all true here.

Pet. 16-17. The dissent, applying Ninth Circuit precedent, readily found a challenge. App. 23a-24a.

Plaintiffs attempt (at 19-20) to distinguish these

cases by repeating the same immaterial or erroneous

distinctions recited by the court below and refuted in

the petition. Pet. 18, 25. Each distinction is irrelevant to the legal standard the Ninth Circuit applies.

Pet. 15-17. Plaintiffs say Pakootas involved CERCLA

citizens’ suits, Opp. 19, but Pakootas itself recognizes

that § 113(h)’s jurisdictional bar covers all challenges, whether “made in citizen suits [or] under nonCERCLA statutes.” 646 F.3d at 1220. And Pakootas

held that a “demand [was] still a challenge” even

though no injunctive relief was sought. Id. at 1221.

#FDL W "UMBOUJD 3JDImFME $P, 62 F.3d 1240 (9th

$JS QFS DVSJBN DPOmSNT UIF DPOnJDU Beck

approved compensatory damages for “crop loss, lost

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EBNBHFT "UMBOUJD 3JDImFME BHSFFT f 113(h) permits.

Pet. 9. But Beck held that § 113(h) did bar other

claims that, like those here, sought to alter EPA’s

cleanup. 62 F.3d at 1242-44 & n.3.

The Montana Supreme Court’s reading of “chalMFOHFwJTFRVBMMZPVUPGTUFQXJUIUIFmWFGFEFSBMDJS

cuits that pronounce a “challenge” any suit that “calls

into question” or “impacts” EPA’s cleanup or contests

“what measures actually are necessary.” Pet. 17.

Plaintiffs attempt to distinguish the cases factually,

but they cannot dispute that their suit is a “challenge” under the legal standards these courts announced. Opp. 21-22. As for New Mexico v. General

Electric Co., 467 F.3d 1223 (10th Cir. 2006), the

cleanup here is also “ongoing.” Opp. 22-23. EPA says

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2025.” Pet. 9; App. 62a.1

2. On the merits, plaintiffs focus everywhere but

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contend that § 113(h) does not apply to state-law

claims, or at least “ARAR” claims or diversity jurisdiction cases. Opp. 23-24. But this is neither an

“ARAR” nor a diversity suit, and regardless the

Ninth Circuit has rejected as “nonsensical” the notion that § 113(h) exempts state laws. Fort Ord Toxics Project, Inc. v. California E.P.A., 189 F.3d 828, 831

(9th Cir. 1999). Plaintiffs next contend that § 113(h)

applies only in federal court, but the Ninth Circuit

squarely rejects that view too. App. 9a; Pet. 24.

Plaintiffs argue (at 24-25) that § 113(h) bars

challenges only until “EPA’s efforts are complete.”

But again, EPA’s remediation of the Anaconda Smelter site is not “complete.” App. 62a. Plaintiffs also

suggest that they will not begin their remediation

until after EPA pulls up stakes. Opp. 25. But

§ 113(h) bars challenges to (i.e., litigation about) EPA

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EPA’s remedy before the remedy is complete. Pet. 25.

Atlantic Richfield argued below that plaintiffs’ cases were not

on-point, not that no case besides New Mexico was. Cf. Opp. 22.

3. There are no vehicle problems. The Court

cannot await cases arising from federal court (Opp.

27); future cases will be brought in state court to

evade Ninth Circuit precedent barring these claims.

This case is cert-worthy precisely because the Montana Supreme Court held that state-law restorationdamages claims are not § 113(h) challenges even

where they require remedies EPA rejected, under a

standard that DPOnJDUT with every relevant federal

appellate decision. The Court’s only opportunity to

rein in the Montana high court is through a statelaw case from state court.

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cuit split on whether § 113(h) applies in state court

(Opp. 26-27) because the court below did not decide

the question; it held that the lawsuit was not a challenge. App. 9a-15a. But the existence of the split

merely underscores the present confusion concerning

§ 113(h), an extremely important and oft-litigated

provision of CERCLA, Pet. 17, 30, and the split thus

bolsters the case for review. Plaintiffs are free to argue their reading of § 113 on the merits before this

Court.

Nor is any further “factual development” (Opp.

27) needed to know this case involves a challenge to

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know the government’s view, which the court below

ignored. The government extensively detailed the

differences between its plan and plaintiffs’ plan, as

did the dissent and the petition. Pet. 6-9, 27-29; App.

36a-38a, 72a-75a. The government did not state at

oral argument that “some aspects” of plaintiffs’ plan

“would not constitute a ‘challenge.’” Opp. 27. It

merely acknowledged that it could not say that every

single feature directly conflicted, because plaintiffs

hadn’t formally submitted the plan for EPA review—

as the Montana Supreme Court has now held they

need not do. But the government has made abundantly clear that the most salient features conflict.

App. 63a-80a; cf. Opp. 27.

Trial will not produce a “better-developed record”

on the government’s views of the § 113(h) question.

Opp. 40; see Opp. 27. Plaintiffs successfully moved to

bar Atlantic Richfield from mentioning EPA or its

views at trial. Order Granting Plaintiffs’ Motion in

Limine (EPA Evidence), Sept. 7, 2016.

B. 5IF$POnJDU0WFSUIF%FmOJUJPOPGi131w

Section 122(e)(6) bars unauthorized cleanup actions by PRPs, Pet. 19, and a PRP is anyone within

the “four categories of PRPs” in CERCLA § 107(a)(1)(4), including current owners of contaminated property within Superfund sites. United States v. Atlantic Research Corp., 551 U.S. 128, 131-32, 134 n.2

(2007). Plaintiffs are unquestionably such current

owners, and in four circuits, they would be barred

from pursuing their proposed remediation. Pet. 1921.

1. Plaintiffs claim that these cases do not “address the application of Section 122(e)(6),” “turn on

an interpretation of the term ‘potentially responsible

party,’” or “involve[] parties … who own property indisputably polluted by another entity, and who would

be shielded from CERCLA liability by the statute of

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relevant, the second is false, and the third is both.

First "UMBOUJD 3JDImFME JEFOUJmFE B TQMJU PWFS

who counts as a PRP because that is an outcomedeterminative question here. It is undisputed that, if

the Montana Supreme Court had deemed plaintiffs

PRPs, then § 122(e)(6) would bar their unauthorized

remediation.

Second, all of the cited cases held that parties

were PRPs because they were Superfund owners or

operators.

Third, the cases hold that property owners are

PRPs even where the property was “polluted by another entity.” Cf. Opp. 28; see Rumpke of Ind., Inc. v.

Cummins Engine Co., 107 F.3d 1235, 1239-42 (7th

Cir. 1997); Niagara Mohawk Power Corp. v. Chevron

U.S.A., Inc., 596 F.3d 112, 120 (2d Cir. 2010); Litgo

N.J. Inc. v. Commissioner N.J. Dep’t of Envtl. Prot.,

725 F.3d 369, 381-82 (3d Cir. 2013). Those holdings

mirror this Court’s holding—which the decision beMPX nPVUFEUIBU iFWFO QBSUJFT OPU SFTQPOTJCMF GPS

contamination” are PRPs. Atlantic Research, 551

U.S. at 136. Plaintiffs proceed as if Atlantic Research

does not exist. And whether an entity has a defense

to liability under § 107(b)’s innocent landowner provision (Opp. 29) is irrelevant to PRP status under

§ 107(a), and certainly does not bear on whether

there is a circuit split.

As for the “statute of limitations,” Opp. 28,

§ 122(e)(6) is not a liability provision and has no

statute of limitations, Pet. 26-27. Nor does § 107(a),

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ters for reasons other than liability, as § 122(e)(6)

shows: even landowners with defenses to liability

may not initiate EPA-unauthorized cleanups. In any

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PRP status 15 years or more after cleanup began and

necessarily reject the notion that PRP status is timelimited. Pet. 20-21.

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PRP is not a “state-law issue.” Opp. 33. If plaintiffs

are PRPs, then federal law precludes their state-law

restoration-damages claim. Plaintiffs cite no state-

law authority for their notion that Montana law

might permit them to receive a restoration-damages

award now on the possibility that their currently unlawful proposal might later be approved by EPA and

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nition of a PRP as dispositive, and its conclusion

rested entirely on federal law.

C. 5IF$POnJDU0WFS$&3$-"1SFFNQUJPO

1. Plaintiffs do not dispute that, if the decision

below held that CERCLA’s savings clauses preclude

ordinary conflict preemption, that holding splits with

the Seventh, Ninth, and Tenth Circuits, and would

merit this Court’s review. Pet. 21-23. Plaintiffs instead argue that the Montana Supreme Court did

not so hold. Opp. 34-35. But they cannot rewrite the

decision. The court cited the mere existence of the

CERCLA savings clause as the sole reason to reject

two of Atlantic Richfield’s conflict preemption arguments. Pet. 23; App. 17a-18a. Plaintiffs say that the

court invoked the saving clauses to reject a “categorical rule,” Opp. 34, but the “rule” proposed by Atlantic

Richfield was ordinary conflict preemption: where

plaintiffs’ remedy conflicts with EPA’s chosen remedy—e.g., by imposing “alternative standards”—it is

preempted. App. 17a. The new cases plaintiffs cite

(Opp. 35) simply hold that CERCLA does not

preempt state remediation actions in the absence of

an EPA-ordered plan. Likewise, Manor Care, Inc. v.

Yaskin held that CERCLA preserves “complementary state remedies,” i.e., it does not preempt “the

field,” but “[o]f course” ordinary conflict preemption

applied. 950 F.2d 122, 126-27 (3d Cir. 1991).

Plaintiffs seize on the Montana court’s assertion

that the restoration-damages claim here “does not

prevent the EPA from accomplishing its goals.” App.

17a. EPA disagrees, App. 77a-78a—but more importantly, the court offered that response to only one

of Atlantic Richfield’s preemption points. The court’s

view that savings clauses negate conflict preemption

was its only response to the others.

2. On the merits, conflict preemption is clear as

day. Pet. 27-29. That Atlantic Richfield could “pay[]

damages” to plaintiffs while still complying with

EPA’s plan does not defeat preemption (Opp. 36); if it

did, no tort suit would ever be preempted. The question is whether the state-law duty that gives rise to

monetary liability—e.g., a duty to build plaintiffs’

proposed trench—conflicts with federal law. Geier v.

American Honda Motor Co., 529 U.S. 861, 881-82

(2000). Plaintiffs claim that the summary judgment

record lacked evidence of conflict, Opp. 36, but ignore

the extensive contrary record evidence, Pet. 6-9, 2729; App. 36a-38a, 71a-75a.2

Since the filing of the petition, the Second Circuit

has confirmed that CERCLA “preempts the residents’ attempts to impose state tort law liability on

[the defendant] for not going above and beyond a[n

EPA-selected] testing regime.” Bartlett v. Honeywell

Int’l Inc., 2018 WL 2383534, at *5 (2d Cir. May 25,

2018) (summary order). That is what plaintiffs seek

to do here. App. 4a; Treasure State Br. 17. In federal court, this claim would be preempted, and this

Court should not allow the Montana state courts to

shield litigants who seek to evade and obstruct federal law.

The court squarely addressed preemption; there are no

preservation issues. Cf. Opp. 9, 12, 36-37.

CONCLUSION

Inviting the views of the United States is unnecessary; the case is plainly cert-worthy and the government’s brief below states its position on all three

questions. A six-month delay for an invited brief exQPTFT"UMBOUJD 3JDImFME UP B XBTUFGVM USJBM BOE QBS

ties across Montana to months more of crippling uncertainty. The Court should grant certiorari now.

Respectfully submitted,