Petition for Writ of Certiorari — Atlantic Richfield Company, Petitioner v. Asarco LLC
Supreme Court briefFeb 11, 2021
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APPENDIX
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APPENDIX
TABLE OF CONTENTS
Appendix A Opinion in the United States Court of
Appeals for the Ninth Circuit
(September 14, 2020) . . . . . . . . . . App. 1
Appendix B Order in the United States District
Court for the District of Montana
Helena Division
(October 5, 2018) . . . . . . . . . . . . . App. 27
Appendix C Findings of Fact, Conclusions of Law
and Judgment in the United States
District Court for the District of
Montana Helena Division
(June 26, 2018) . . . . . . . . . . . . . . App. 40
Appendix D Opinion in the United States Court of
Appeals for the Ninth Circuit
(August 10, 2017) . . . . . . . . . . . App. 129
Appendix E Order in the United States District
Court for the District of Montana
Helena Division
(August 26, 2014) . . . . . . . . . . . App. 170
Appendix F Order in the United States Court of
Appeals for the Ninth Circuit
(October 18, 2017) . . . . . . . . . . . App. 193
Appendix G 42 U.S.C.S. § 9613 Excerpt . . . App. 194
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Appendix H RCRA Consent Decree East Helena
Plant Lodged Version: January 23,
1998 Excerpts . . . . . . . . . . . . . . App. 200
Appendix I Complaint in the United States
District Court for the District of
Montana Helena Division. . . . . App. 255
App. 1
APPENDIX A
FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
No. 18-35934
D.C. No. 6:12-cv-00053-DLC
[Filed: September 14, 2020]
__________________________________________
ASARCO LLC, a Delaware corporation,
)
Plaintiff-Appellee,
)
)
v.
)
)
ATLANTIC RICHFIELD COMPANY,
)
LLC, a Delaware corporation,
)
Defendant-Appellant,
)
)
and
)
)
BRITISH PETROLEUM, PLC, a United
)
Kingdom Corporation; AMERICAN
)
CHEMET CORPORATION, a Montana
)
Corporation,
)
Defendants.
)
__________________________________________)
OPINION
App. 2
Appeal from the United States District Court
for the District of Montana
Dana L. Christensen, District Judge, Presiding
Argued and Submitted April 27, 2020
Seattle, Washington
Filed September 14, 2020
Before: M. Margaret McKeown, N. Randy Smith, and
Jacqueline H. Nguyen, Circuit Judges.
Opinion by Judge Nguyen
__________________________________________________
SUMMARY*
__________________________________________________
Environmental Law
The panel affirmed in part and vacated in part the
district court’s judgment, after a bench trial, in favor of
the plaintiff in a contribution action under
the Comprehensive Environmental Response,
Compensation, and Liability Act.
Plaintiff ASARCO LLC entered into a consent
decree with the Environmental Protection Agency to
clean up environmental contamination at several sites,
including a Superfund Site in East Helena, Montana.
Asarco, former operator of a lead smelting facility, then
brought a CERCLA contribution action against Atlantic
Richfield Co., successor in interest to the operator of a
zinc fuming plant The district court found that Asarco
*
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
App. 3
had incurred $111.4 million in necessary response costs
for the cleanup of the Site and that Atlantic Richfield
was responsible for 25% of that sum.
Vacating and remanding in part, the panel held that
the district court erred in its determination of the
necessary response costs incurred by Asarco.
Specifically, the district court erred when it counted
the full settlement amount, including about $50 million
of funds that had not been, and might never be, spent
on the Site cleanup, as response costs subject to
contribution at this stage of the Site cleanup. The panel
remanded for further consideration of what response
costs were sufficiently concrete and non-speculative
such that they would be eligible for contribution under
CERCLA.
Affirming in part, the panel held that the district
court did not err in allocating responsibility for 25% of
the response costs to Atlantic Richfield. The panel held
that the district court properly exercised its discretion
in its consideration of appropriate equitable factors and
did not clearly err in its factual findings supporting its
allocation decision.
__________________________________________________
COUNSEL
Shannon Wells Stevenson (argued), Benjamin B.
Strawn, and Kellen N. Wittkop, Davis Graham &
Stubbs LLP, Denver, Colorado; Elisabeth S. Theodore
and Stephen K. Wirth, Arnold & Porter Kaye Scholer
LLP, Washington, D.C.; for Defendant-Appellant.
App. 4
Gregory Evans (argued), McGuireWoods LLP, Los
Angeles, California; Benjamin L. Hatch,
McGuireWoods LLP, Washington, D.C.; Kris A.
McLean, Kris A. McLean Law Firm PLLC, Missoula,
Montana; Rachel H. Parkin, Milodragovich Dale &
Steinbrenner P.C., Missoula, Montana; for
Plaintiff-Appellee.
__________________________________________________
OPINION
NGUYEN, Circuit Judge:
In June 2009, ASARCO LLC (“Asarco”) agreed to
settle with the government and enter into a consent
decree to clean up environmental contamination at
several sites, including a Superfund Site in East
Helena, Montana (the “Site”). Asarco then brought a
contribution action under the Comprehensive
Environmental Response, Compensation, and Liability
Act of 1980 (“CERCLA”), 42 U.S.C. §§ 9601–9675,
against Atlantic Richfield Company, LLC (“Atlantic
Richfield”). Following a bench trial, the district court
entered judgment in favor of Asarco, finding that
Asarco had incurred $111.4 million in necessary
response costs for the cleanup of the Site and that
Atlantic Richfield was responsible for twenty-five
percent of that sum. Atlantic Richfield appealed. We
have jurisdiction pursuant to 28 U.S.C. § 1291. We hold
that the district court erred in its determination of the
necessary response costs incurred by Asarco, but the
court did not err in allocating twenty-five percent
liability to Atlantic Richfield. We therefore vacate and
remand in part, and affirm in part.
App. 5
I. BACKGROUND
A. Operations at the Site
Asarco and its predecessors owned and operated a
lead smelting facility at the Site from 1888 to 2001.
Asarco’s lead smelting facility was the largest
operation at the Site. This operation recovered lead and
other metals by smelting a variety of foreign and
domestic concentrates, ores, fluxes, and other
non-ferrous, metalbearing materials and byproducts.
Those materials contained arsenic concentrations as
high as 190,000 parts per million (“ppm”). The smelting
operation produced slag as a waste product, which
contained small residual quantities of metals and
arsenic. It is undisputed that Asarco “released
significant amounts of arsenic into the environment”
from its smelting facility.
Atlantic Richfield is the successor in interest to
Anaconda, which leased a portion of the Site from
Asarco to construct and operate a zinc fuming plant.
Using a blast furnace fueled with coal, Anaconda
reprocessed slag that it purchased from Asarco to
recover zinc. Anaconda used and produced several
arsenic-bearing materials in its fuming operation,
albeit with a lower arsenic concentration than Asarco’s
primary materials. Anaconda operated the zinc fuming
plant from 1927 to 1972, at which point it sold the
plant to Asarco. Asarco then operated the zinc fuming
plant for another decade.
B. EPA Involvement and Remediation
In 1984, the Environmental Protection Agency
(“EPA”) added the Site to the CERCLA National
App. 6
Priorities List, targeting it for environmental
remediation. The primary environmental concern at
the Site was arsenic contamination of the groundwater.
In the years that followed, Asarco entered into a series
of agreements with the EPA to begin the process of
remediation.
In 1990, Asarco and the EPA finalized a settlement
agreement and consent decree in CERCLA litigation
concerning the contamination of the process ponds at
the Site. Pursuant to the consent decree, Asarco agreed
to undertake a cleanup of the process ponds, which it
substantially completed by 1997.
In 1998, Asarco and the EPA entered into another
settlement agreement and consent decree, this time
resolving claims brought by the EPA under the
Resource Conservation and Recovery Act and the Clean
Water Act. The settlement did not raise any claims
under CERCLA.
On August 9, 2005, Asarco filed a Chapter 11
bankruptcy petition. In connection with the bankruptcy
proceedings, the United States, the State of Montana,
and the State of Montana Department of
Environmental Quality all filed proofs of claim for
Asarco’s projected liability under CERCLA. Asarco, the
United States, and the State of Montana reached two
complementary settlement agreements and consent
decrees in February and June 2009, resolving Asarco’s
outstanding environmental liabilities at several
Montana sites, including the Site at issue in this case.
The June 2009 consent decree established a
custodial trust for the affected sites, and the Montana
App. 7
Environmental Trust Group (“METG”) was appointed
as the custodial trustee for the East Helena Site. The
June 2009 consent decree also designated the EPA as
the lead agency for the Site, placing it in charge of
selecting, approving, and authorizing all work
performed and funds expended by METG. Pursuant to
the June 2009 consent decree, Asarco paid
approximately $111.4 million1 for cleanup of the East
Helena Site—accounting for comprehensive damage
done to the Site by all responsible parties. That sum
included: (a) $99.294 million into the East Helena
Custodial Trust Cleanup Account for a groundwater
remedy;2 (b) $6,403,743 toward the establishment of
the Custodial Trust and the funding of the Custodial
Administrative Account to be used for trust
administration expenses; (c) $706,000 to the U.S.
Department of the Interior for natural resource
restoration and future oversight costs for the Site; and
(d) $5 million to the State of Montana for compensatory
natural resource damages at the Site.
METG has begun its remediation work at the Site.
So far, it has fully implemented three interim
measures to curb the spread of contaminants and
further environmental degradation at the Site. METG
also has implemented institutional controls for the Site
and the surrounding areas, designed to prevent
1
In total, Asarco paid $1.8 billion to settle environmental claims
related to hazardous waste in the bankruptcy proceedings.
2
This figure was based on estimates for a pump-and-treat system
recommended by the State of Montana’s experts, William Bucher
and Ann Maest.
App. 8
property owners from using their domestic water wells
to avoid contact with contaminated groundwater.
METG proposes one additional future project: capping
the portion of the slag pile at the Site that consists of
unfumed slag. METG has not instated and does not
plan to install a pump-and-treat system.
As of the most recent accounting available, METG
had spent a little less than half of the trust funds at its
disposal, leaving it with approximately $50 million for
further remediation efforts. Atlantic Richfield’s expert
estimated the ongoing costs for operations and
maintenance at $9.2 million, and METG estimated the
cost of covering the unfumed slag at $3.7 million.
Adding those sums to the dollar amount already
expended by METG, the total cleanup cost for the Site
would approximate $61.4 million. Asarco contends that
Atlantic Richfield’s expert vastly understates how
costly the cleanup would be. Asarco’s expert opined
that METG’s proposed remedies would be insufficient
to address the groundwater contamination and that
more substantial remediation work would be necessary.
C. Procedural History
In 2012, Asarco brought this contribution action
against Atlantic Richfield under CERCLA §§ 107 and
113. The district court granted summary judgment in
favor of Atlantic Richfield, finding the action barred by
the statute of limitations. Asarco appealed, and we
concluded that Asarco’s contribution claim was, in fact,
timely. See Asarco LLC v. Atlantic Richfield Co., 866
F.3d 1108 (9th Cir. 2017). We vacated the district
court’s summary judgment order and remanded for
further proceedings before the trial judge. Id.
App. 9
On remand, the district court conducted an
eight-day bench trial, weighted heavily toward expert
testimony. Following trial, the district court issued
detailed findings of fact and conclusions of law and
entered judgment in favor of Asarco. The court found
that Asarco had expended $111,403,743 in necessary
response costs for cleanup of the Site3 and that Atlantic
Richfield was liable for twenty-five percent of those
costs, i.e., $27,850,936. The court also granted an
additional $1 million award to Asarco, based on its
findings as to Atlantic Richfield’s failure to cooperate
with the authorities and its misrepresentations to the
EPA and to Asarco.4 Atlantic Richfield moved to alter
or amend the judgment, but the district court denied
the motion. This appeal timely followed.
II. ANALYSIS
A. The District Court Erred by Including
Speculative Future Costs in its Tabulation of
Necessary Response Costs Eligible for
Contribution Under CERCLA.
Atlantic Richfield argues that the district court
erred in finding that Asarco incurred $111.4 million in
necessary response costs for the environmental cleanup
of the Site, because that sum improperly included
(i) costs that had not yet been, and might never be,
incurred; and (ii) costs that were not necessary to
3
This figure is the amount paid by Asarco in connection with the
June 2009 consent decree.
4
Atlantic Richfield does not challenge on appeal the imposition of
this additional $1 million award.
App. 10
protect human health and the environment. Atlantic
Richfield contends those costs are unrecoverable under
CERCLA, and that the response costs eligible for
contribution should be limited to the $61.4 million that
it represents have been incurred so far to remediate the
Site.
We review for clear error the district court’s
findings of fact following a bench trial, and we review
de novo its conclusions of law and mixed questions of
law and fact. OneBeacon Ins. Co. v. Haas Indus., Inc.,
634 F.3d 1092, 1096 (9th Cir. 2011). We hold that the
district court erred when it counted the full settlement
amount—including about $50 million of funds that had
not been, and might never be, spent on the Site
cleanup—as response costs subject to contribution at
this stage of the Site cleanup. We therefore vacate and
remand for further consideration of what response
costs are sufficiently concrete and non-speculative such
that they would be eligible for contribution under
CERCLA.
The parties agree on the initial premise that,
pursuant to the CERCLA contribution regime, Asarco
is entitled to recover an allocated proportion of the
“necessary costs of response incurred . . . consistent
with the national contingency plan.” 42 U.S.C.
§ 9607(a)(4)(B). From that point, their positions
diverge.
Atlantic Richfield contends that those funds not yet
spent or earmarked for specific, imminent work cannot
qualify as costs “incurred.” It relies on cases that
prohibit recovery under CERCLA for future response
costs or the award of speculative damages unmoored to
App. 11
concrete expenses. See Stanton Rd. Assocs. v. Lohrey
Enters., 984 F.2d 1015, 1021–22 (9th Cir. 1993); In re
Dant & Russell, Inc., 951 F.2d 246, 249–50 (9th Cir.
1991). Atlantic Richfield asserts that METG no longer
expects to implement the costly pump-and-treat
remedy, instead planning to carry out cheaper remedial
actions that would leave a large portion of the
settlement funds untouched. It also cites to a reversion
provision in the settlement agreement, whereby
unused settlement funds would be redirected to
remediate other sites for which Atlantic Richfield has
no liability.
Asarco responds that the costs for which it seeks
contribution were actually “incurred.” It argues that
the entire sum paid in settlement, $111.4 million, was
intended to fund the environmental cleanup of the Site,
as evidenced by the fact that the reversion provision
does not allow the return of any funds to Asarco’s
hands. Based on its irrevocable payment, Asarco says
it “incurred” those response costs within the meaning
of the statute. Asarco attempts to distinguish the cases
cited by Atlantic Richfield, noting that they occurred in
different contexts and lacked the same type of firm
monetary commitment that Asarco undertook here.
And Asarco points to cases from other circuits allowing
recovery of future costs, arguing that precluding
recovery for such costs could undermine CERCLA’s
policy objective of incentivizing settlements and early,
accountable cleanup. See RSR Corp. v. Commercial
Metals Co., 496 F.3d 552, 558–60 (6th Cir. 2007); Am.
Cyanamid Co. v. Capuano, 381 F.3d 6, 26–27 (1st Cir.
2004); Action Mfg., Co. v. Simon Wrecking Co., 287 Fed.
App’x 171, 174–76 (3d Cir. 2008); PCS Nitrogen, Inc. v.
App. 12
Ross Dev. Corp., 104 F. Supp. 3d 729, 744 (D.S.C.
2015).
On this factual record, Atlantic Richfield has the
better argument. We have held that the full dollar
value of a settlement agreement to discharge CERCLA
liability is not automatically subject to contribution.
AmeriPride Servs. Inc. v. Texas E. Overseas Inc., 782
F.3d 474, 490 (9th Cir. 2015) (“[I]f a party who was
liable under § 9607(a) entered into a settlement
agreement to discharge its CERCLA liability to a third
party, it can seek contribution under § 9613(f)(1) only
for the settlement costs that were for necessary
response costs incurred consistent with the NCP.”). In
many cases, the full settlement amount may equate
with the necessary response costs incurred—but that
is not inherently so. Thus, funding a settlement
obligation, on its own, does not automatically render
the entire sum compensable in a contribution action,
even if that payment is irrevocable. A party seeking
contribution must still show that the settlement
amount represents “necessary response costs incurred
consistent with the NCP.” Id. Although the meaning of
“incur” is sufficiently broad that it does not require that
an expense already be paid, it is also not so broad that
it encompasses future expenses that are mere
potentialities. See Trimble v. Asarco, Inc., 232 F.3d 946,
958 (8th Cir. 2000) (“We do not dispute plaintiffs’ point
that a party may be found to have ‘incurred’ a cost
without having actually paid for it[;] . . . a finding that
a cost has been ‘incurred’ may be based upon an
existing legal obligation. However, the mere possibility,
even the certainty, that an obligation to pay will arise
in the future does not establish that a cost has been
App. 13
incurred, but rather establishes that a cost may be
incurred, or will be incurred.”), abrogated on other
grounds by Exxon Mobil Corp. v. Allapattah Servs.,
Inc., 545 U.S. 546 (2005); see also Chubb Custom Ins.
Co. v. Space Sys./Loral, Inc., 710 F.3d 946, 961 (9th
Cir. 2013) (explaining that courts apply the ordinary
meaning of the term “incur” in the CERCLA context,
“which is ‘[t]o acquire or come into,’ ‘[t]o become liable
or subject to as a result of one’s action,’ to ‘bring upon
oneself’” (quoting Am. Heritage Dictionary (4th ed.
2000)) (alterations in original)).
Reinforcing our focus on non-speculative costs
actually incurred, our circuit historically has refused to
award future response costs. Stanton Rd., 984 F.2d at
1021–22 (holding that “CERCLA prohibits awards of
future response costs” and finding error in the district
court’s order requiring defendants to place $1.1 million
in escrow for future cleanup costs); Dant & Russell, 951
F.2d at 249–50 (explaining that response costs not yet
incurred cannot be recovered under CERCLA, and
highlighting that “[s]ection 9607(a)(4)(B) permits an
action for response costs ‘incurred’—not ‘to be
incurred’”). Likewise, we have found “no suggestion in
the statute that Congress intended CERCLA to create
a general federal right of contribution for damages and
response costs that are not otherwise cognizable under
the statute.” AmeriPride, 782 F.3d at 490 (quoting Cty.
Line Inv. Co. v. Tinney, 933 F.2d 1508, 1517 (10th Cir.
1991)). Therefore, we conclude that speculative,
potential future response costs are not recoverable in a
CERCLA contribution action, even if the party seeking
contribution has already made an outlay for such costs
pursuant to a settlement. Instead, a declaratory
App. 14
judgment, whereby liability for future response costs
would be allocated at a set percentage across
responsible parties, is the proper mechanism for
recouping future response costs in the CERCLA
regime.5 See Boeing Co. v. Cascade Corp., 207 F.3d
1177, 1191 (9th Cir. 2000) (holding that declaratory
judgments are appropriate not only in the context of
cost recovery actions brought under 42 U.S.C. § 9607,
but also in CERCLA contribution actions brought
under 42 U.S.C. § 9613).
Here, based on the most recent accounting as of
trial, METG had spent only about $48.5 million of its
allocated funds, leaving it with another $50 million for
further cleanup efforts. Although the settlement figure
was based on the estimated cost of a pump-and-treat
remedy,6 METG does not plan to implement a
pump-and-treat remedy at this time. It considers a
pump-and-treat remedy too costly, potentially
ineffective, and risky in that it could affect the stability
of the arsenic-contaminated groundwater plume.
Instead, METG’s proposed final remedies are
meaningfully less costly—quoted to bring the full
cleanup costs for the Site to about $61.4 million.
5
We also do not intend to foreclose a settling party from seeking
contribution for costs not yet incurred in a future action, once
those costs have been incurred within the meaning of CERCLA, to
the extent otherwise permitted by law.
6
The settlement does not require that any particular remedial
measure be taken to clean up the Site. Therefore, the settlement
does not specifically mandate a pump-and-treat remedy, even
though it was priced with such a remedy in mind.
App. 15
Asarco challenges METG’s assessment and
proffered the expert testimony of Margaret Staub, who
emphasized that the original settlement contemplated
implementation of a pump-and-treat system at the
Site. Staub opined that the measures proposed by
METG likely would not restore the groundwater to
acceptable levels, and that, while she could not say
definitively what the final remedy would be,
“something at some point is going to have to be done.”
But Staub’s opinion, upon which the district court
relied, does not provide sufficiently concrete evidence
that the entire sum would likely be expended to
remediate the Site. Not only is Staub’s opinion steeped
in speculation to begin with, but there is a vast logical
leap from the broad conclusion that “something”
further will need to be done to remediate the Site, to
the specific quantification of the necessary response
costs for the Site at $111.4 million or greater.
In short, Asarco relies on conjecture rather than
firmly-grounded facts and figures. As noted, METG has
not paid for or assumed an obligation to pay for a
pump-and-treat remedy, nor has it earmarked any
funds for that purpose. At this stage, any such response
costs remain speculative. Further adding to the
uncertainty surrounding total response costs, the
settlement contains a reversion provision that redirects
any unused Site cleanup funds to other causes,
including the other contaminated properties subject to
the broader settlement. Although Asarco is liable for
the cleanup of all the covered properties, Atlantic
Richfield is not.
App. 16
Asarco’s argument, which the district court adopted,
strays from CERCLA’s legal framework. The district
court explained:
The Court . . . concludes that unless and until
the groundwater is restored to achieve
[maximum contaminant levels] and drinking
water standards, something more substantial
will need to be done. Whether there remain[]
sufficient funds in the trust to accomplish this
task, and whether a pump and treat system is
the ultimate solution, are not the controlling
questions. Regardless of the answer to those two
questions, and notwithstanding Atlantic
Richfield’s arguments to the contrary, the Court
is convinced that the balance of the approximate
$50 million in the trust will most likely be
expended to achieve the mandated remediation
results.
Working from that premise, the court found the full
$111.4 million settlement amount to be necessary
response costs eligible for contribution. While we do not
question the district court’s finding that further
remedial action may be necessary in the future, its
forecast was not adequately tethered to any concrete
evidence in the record.
If, as the district court concludes, “something more
substantial will need to be done,” a party in Asarco’s
position ultimately can recover the corresponding
response costs from its fellow responsible parties. But
until further information is known about the nature
and costs of that “something more,” those future costs
are not eligible for contribution. In the meantime, the
App. 17
contribution-seeker can pursue (i) contribution for
those necessary response costs that have been incurred
to date, and (ii) a declaratory judgment to establish
liability and a contribution allocation for those costs
that have not been incurred yet, but may be incurred in
the future.
We emphasize, however, that our holding is a
narrow one. We are presented with a cash-out
bankruptcy settlement, reached as part of a global
settlement of liability for several contaminated sites,
with a reversion provision that diverts unused funds to
other sites for which only one of the parties is
responsible. We likewise face the unusual scenario in
which the projected costs of the remediation process, as
well as the proposed means of remediation, have
fluctuated dramatically since the time the settlement
was reached; significantly, one of the core facets of the
initial remediation plan, a pump-and-treat remedy,
now appears extremely unlikely to come to fruition. On
this record, Asarco has failed to adequately support its
asserted response costs.
Finally, to the extent the parties disagree about
whether the costs of a pump-and-treat system (or other
yet-to-be-incurred costs) would be “necessary,” we need
not resolve the parties’ dispute. Because such costs
have not been incurred, they cannot be awarded even
if they satisfy the remaining requirements for
contribution eligibility. For these reasons, we vacate
the district court’s finding that the full $111.4 million
settlement amount was eligible for contribution and
remand for further consideration of what necessary
App. 18
response costs were actually incurred within the
meaning of CERCLA.
B. The District Court Did Not Err in Allocating
Responsibility for Twenty-Five Percent of the
Response Costs to Atlantic Richfield.
Atlantic Richfield argues that the district court
inflated its liability far beyond its actual environmental
impact and ascribed to it a share of the response costs
that bore little relation to the evidence presented at
trial. Specifically, Atlantic Richfield contends that the
district court failed to take account of the volume and
toxicity of the waste each party handled; failed to
explain adequately what factors it considered in
reaching its allocation; and arrived at an allocation
that meaningfully outpaced the level of contamination
it could have caused. We disagree, and we hold that the
district court did not err in devising an equitable
allocation of liability for the Site cleanup.
In a contribution action, CERCLA empowers a
district court to “allocate response costs among liable
parties using such equitable factors as the court
determines are appropriate.” 42 U.S.C. § 9613(f)(1). On
appeal, we then “review for an abuse of discretion the
equitable factors that a district court considers in
allocating CERCLA costs and review for clear error the
allocation according to the selected factors.” TDY
Holdings, LLC v. United States, 885 F.3d 1142,
1146–47 (9th Cir. 2018).
As an initial matter, we conclude that the district
court properly exercised its discretion by anchoring its
App. 19
analysis around the so-called “Gore factors.”7 See id. at
1147 (approving of the use of the Gore factors in
CERCLA costs allocation); United States v. Burlington
N. & Santa Fe Ry. Co., 520 F.3d 918, 940 n.26 (9th Cir.
2008) (same), rev’d on other grounds, 556 U.S. 599
(2009). The district court also acted well within its
discretion in its broader efforts to tabulate the parties’
historical responsibility for the contamination, its
choice to ground that assessment in the expert
testimony offered by the parties, and its concern with
the duration of each party’s operations at the Site.8 Nor
was it improper for the court to determine that it could
not and need not allocate response costs to a
mathematical certainty, and that it could apply general
principles of fairness and equity in deciding whether to
7
The Gore factors are: (i) the ability of the parties to demonstrate
that their contribution to a discharge, release, or disposal of a
hazardous waste can be distinguished; (ii) the amount of the
hazardous waste involved; (iii) the degree of toxicity of the
hazardous waste involved; (iv) the degree of involvement by the
parties in the generation, transportation, treatment, storage, or
disposal of the hazardous waste; (v) 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
(vi) the degree of cooperation by the parties with federal, state, or
local officials to prevent any harm to public health or the
environment. See TDY Holdings, 885 F.3d at 1146 n.1.
8
We are not persuaded by Atlantic Richfield’s argument that the
comparative duration of the parties’ operations is “irrelevant” to an
appropriate allocation. The number of years a polluter operates
can be tied to the amount of pollution it generates and its overall
responsibility for contamination. Atlantic Richfield contends that
other factors would be superior, but that does not render the
district court’s approach to be an abuse of discretion.
App. 20
err on the side of over- or under-compensation. The
district court was not required to adopt the particular
set of factors, or the weighting among them, for which
Atlantic Richfield advocated. Because we find no abuse
of discretion at this step of the analysis, the propriety
of the district court’s allocation decision turns on
whether it committed clear error in its allocation of
Atlantic Richfield’s responsibility. See TDY Holdings,
885 F.3d at 1146–47.
We conclude that the district court did not clearly
err in its factual findings supporting its allocation
decision. The district court, in a ninety-five page order,
made extensive findings about the historical use and
contamination of the Site by Asarco and Atlantic
Richfield. It described in detail each party’s operations
at the Site; their respective uses and releases of
arsenic, to the extent knowable from the historical
records; their efforts, and failures, to prevent
environmental contamination; and their interactions
with the government concerning accountability and
remediation. Although the district court’s discussion of
the nexus between its factual findings and the Gore
factors could have been clearer at times, the court’s
findings and overarching analysis were sufficiently
robust that we do not find reversible error on that basis
here.
The first Gore factor inquires into the ability of the
parties to demonstrate that their contribution to a
discharge, release, or disposal of a hazardous waste can
be distinguished. Id. at 1146 n.1. The district court
explained that the “sparse historical record”
complicated the task of distinguishing the parties’
App. 21
contributions, noting a lack of clarity as to “the precise
nature and amount of pollutants” historically emitted
by each operator. It noted that the deficiencies in
the record were partially attributable to Atlantic
Richfield’s longstanding denial of responsibility for
contamination at the Site. Nonetheless, the court found
that the record generally “revealed enough information
to understand the history of operations . . . at the Site,”
coupled with the aid of expert testimony, such that it
could make a rough assessment of the parties’
respective contributions.
The second and third Gore factors ask how much
hazardous waste was involved, as well as the degree of
toxicity of that waste. Id. The fourth Gore factor
considers the degree of involvement by the parties in
the generation, transportation, treatment, storage, or
disposal of the hazardous waste. Id. To this end, the
district court made detailed findings about the
historical operations of Asarco and Atlantic Richfield,
including the manners in which each used and released
arsenic at the Site. It recognized, as do both parties,
that “the majority of the groundwater contamination
METG is remediating at the Site was caused by
Asarco’s operations.” But the court noted that both
parties used vast quantities of arsenic-laden materials
in their everyday operations and generated substantial
amounts of arsenic-laden byproducts. Although the
court could not quantify all of Atlantic Richfield’s past
releases, given the large gaps in the historical record,
it noted that Atlantic Richfield released so much toxic
fly ash and coal dust that it received complaints from
the City of Helena. The court likewise made findings as
to the relative toxicity of arsenic in the various
App. 22
materials used by Asarco and Atlantic Richfield, to the
extent those toxicities could be ascertained.
The fifth Gore factor assesses the degree of care
exercised by the parties with respect to the hazardous
waste concerned. Id. The district court reviewed the
precautions taken by both Asarco and Atlantic
Richfield to protect against environmental
contamination, as well as the failures of certain
preventive measures taken by each party—such as
leakages in the protective infrastructure and the
careless handling of contaminated wash-down water.
The court further noted Asarco’s adoption of relatively
intensive preventive measures toward the later years
of its operation, including replacing Thornock Lake
with a massive steel holding tank, as well as broader
remediation efforts beginning in the 1990s.
The sixth Gore factor evaluates the degree of
cooperation by the parties with federal, state, or local
officials to prevent any harm to public health or the
environment. Id. As to this factor, the court explained
that Atlantic Richfield had repeatedly evaded
responsibility for any environmental contamination at
the Site, flagrantly misled the EPA regarding its
releases at the Site, and made ongoing
misrepresentations throughout the course of the
litigation. Atlantic Richfield contends the district
court’s misrepresentation findings are “irrelevant” to
its appeal of the twenty-five percent allocation because
the court separately awarded a $1 million uncertainty
premium pursuant to the sixth Gore factor. However,
it is not inconsistent for the district court to award an
uncertainty premium based on the egregiousness of its
App. 23
findings as to the sixth Gore factor, and also separately
to consider Atlantic Richfield’s non-cooperation when
weighing the equities in the context of reaching its
baseline allocation.
In addition to its core factual findings, the district
court considered the expert testimony proffered by the
parties in arriving at its allocation. Asarco’s expert
proposed three alternative liability allocation
strategies, which apportioned Atlantic Richfield’s
responsibility at twenty-five percent to forty-one
percent depending on the method. Atlantic Richfield’s
expert focused on challenging Atlantic Richfield’s
liability altogether and opined that Atlantic Richfield
should have zero responsibility for the Site cleanup.
The court reviewed the testimony of the parties’
dueling experts, discussing the merits and
shortcomings of each. The court found the opinions of
Asarco’s expert, Andy Davis, “to be compelling and
persuasive,” adding that he “was the only witness at
trial who was qualified by education, training,
experience, and the work he performed in this case, to
quantify the contribution of arsenic made by
Anaconda’s 45 years of operation at the Site.” By
contrast, the court found that Atlantic Richfield’s
expert, Brian Hansen, focused too much on Asarco’s
operations and tried so hard to minimize Anaconda’s
role that he failed to provide a useful quantification of
its contamination. The court further found that Hansen
failed to account for several material historical
documents, and “le[ft] the majority of expert Davis’s
opinions largely unchallenged.”
App. 24
The district court favored Davis’s most conservative
allocation, which ascribed twenty-five percent of the
total liability to Atlantic Richfield. It rejected Asarco’s
higher proposed allocations, as well as Atlantic
Richfield’s proposed zero percent allocation.9 Davis’s
conservative allocation, i.e., “Strategy III,” assigned
equal responsibility to Asarco and Atlantic Richfield for
discharges into the north plume and the Thornock
Pond and Lake area plume, adjusted for the respective
time periods the parties operated in each region, and
then adjusted for the square footage of the
contaminated groundwater in each area. The court
found this strategy appealing, because it accounted for
the parties’ differential time periods of ownership—
notably, a factor that favored Atlantic Richfield due to
its comparatively short-lived operations at the Site.
Particularly given the failure of Atlantic Richfield’s
expert to proffer a well-supported, sensible alternative
9
The district court also rejected three alternative allocations
suggested by Atlantic Richfield in its proposed amended post-trial
findings of fact and conclusions of law. Atlantic Richfield contests
the court’s cursory rejection of those alternatives. However,
Atlantic Richfield devoted nearly all of its energy at trial—and all
of its expert testimony—to challenging any attribution of
responsibility to Atlantic Richfield, so it provided minimal support
for these alternative allocations. Although the court’s rejection was
terse, it was sufficient under the circumstances—especially when
coupled with the district court’s explanation of the allocation it did
choose.
App. 25
allocation, the district court reasonably resorted to the
most conservative of Asarco’s proposed allocations.10
The district court acknowledged that all the
allocation strategies presented were imperfect and
explained that it would compensate for the
mathematical uncertainties by considering “such
equitable factors as the court determines are
appropriate,” per the framework of CERCLA. 42 U.S.C.
§ 9613(f)(1). Ultimately, the court used the Gore
factors—as well as the general equitable principle that
the cooperating, settling party should receive the
benefit of the doubt—to support its decision to adopt an
allocation that erred on the side of over-compensation
rather than under-compensation for the contamination
emitted by Atlantic Richfield. Because these equitable
factors weighed in Asarco’s favor, and the court found
Davis’s “Strategy III” to be the most compelling of the
proffered allocation strategies, it decided to stand by a
twenty-five percent allocation of responsibility to
Atlantic Richfield. Because the district court assessed
the record evidence and underlying equities with
sufficient rigor and care, we affirm.11
10
Moreover, that allocation aligned with the overarching theme of
the court’s factual findings, i.e., that Asarco bore responsibility for
the vast majority of the Site’s contamination, but Atlantic Richfield
was more than a de minimis polluter.
11
Atlantic Richfield further argues that a twenty-five percent
allocation exceeds its realistic share of the Site contamination. But
the district court was not required to allocate response costs
precisely along the lines of the parties’ emissions. Because
consideration of “equitable factors” is permissible, it is immaterial
if the court did not apportion response costs perfectly in line with
App. 26
Finally, Atlantic Richfield argues that the district
court’s decision provided an insufficient articulation of
the reasoning behind its allocation. We conclude that
the court below made a sufficient record to inform our
review. The court’s ninety-five page decision is
expansive and detailed, and it thoughtfully grapples
with a challenging case. A decision need not be
articulated with perfection to meet the standards we
have set forth in our case law. See Traxler v.
Multnomah County, 596 F.3d 1007, 1016 (9th Cir.
2016) (explaining that the district court must articulate
its reasoning in a manner sufficient to permit
meaningful appellate review, and remanding where the
record “d[id] not permit [the court] to infer a
rationale”). For these reasons, we affirm the district
court’s allocation decision.
Each party shall bear its own costs.
AFFIRMED IN PART, VACATED IN PART,
AND REMANDED.
emissions—especially where no party has been able to quantify
those emissions with precision.
App. 27
APPENDIX B
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
HELENA DIVISION
CV 12-53-H-DLC
[Filed: October 5, 2018]
__________________________________________
ASARCO LLC, a Delaware corporation,
)
)
Plaintiff,
)
)
v.
)
)
ATLANTIC RICHFIELD COMPANY,
)
a Delaware Corporation,
)
)
Defendant.
)
__________________________________________)
ORDER
On June 26, 2018, following a bench trial, the Court
entered judgment in favor of Plaintiff ASARCO, LLC
(“Asarco”), and against Defendant Atlantic Richfield
Company (“Atlantic Richfield”). (Docs. 269, 270.) At
issue here are three matters: (1) Atlantic Richfield’s
motion to alter or amend the judgment (Doc. 277);
(2) the prejudgment interest rate to be applied to the
judgment in this case; and (3) the appropriateness of
App. 28
awarding Asarco’s costs and attorneys’ fees. The Court
considers each in turn.
I.
Motion to Alter or Amend
Atlantic Richfield asks the Court to reduce the total
amount of money allocated in the judgment from
$111,403,743 to $61,400,000. (Doc. 277.) If the Court
were to accept this position, Atlantic Richfield’s total
liability would decrease by approximately $13 million.
The Court has “considerable discretion in granting
or denying [a Rule 59(e)] motion.” McDowell v.
Calderon, 197 F.3d 1253, 1255 n.1 (9th Cir. 1999). “A
motion for reconsideration under Rule 59(e) ‘should not
be granted, absent highly unusual circumstances,
unless the district court is presented with newly
discovered evidence, committed clear error, or . . . there
is an intervening change in the controlling law.”’ Id.
(quoting 389 Orange St. Partners v. Arnold, 179 F.3d
656, 665 (9th Cir. 1999)). Atlantic Richfield argues that
the 59(e) standard is met here because the Court
committed manifest errors of law and fact in
determining the amount of the allocable judgment.
Atlantic Richfield contends that reconsideration is
appropriate because $50 million allocated in the
judgment may not ultimately be spent to clean up the
East Helena site. It claims that: (1) “Asarco failed to
prove that the Unspent Funds are necessary costs of
response”; (2) Asarco’s failure to bring a declaratory
judgment action is dispositive of Asarco’s entitlement
to funds that will be spent in the future; and (3) Asarco
and the Court have misread the relevant case law.
Although, as a preliminary matter, the Court disagrees
App. 29
that Atlantic Richfield’s arguments rise to Rule 59(e)’s
standard, it nonetheless addresses the merits of the
motion. Ultimately, the Court remains convinced that
the $111,403,743 is allocable as necessary to remedy
“an actual and real threat to human health or the
environment.” Carson Harbor Vill., Ltd. v. Unocal
Corp., 270 F.3d 863, 871 (9th Cir. 2001).
The Court found that Asarco met its burden of
showing that the full amount of the allocable judgment
comprises necessary response costs. (Doc. 269 FOF1 at
¶ 78.) When it found for Asarco following trial, the
Court thoroughly considered and rejected the same
argument that Atlantic Richfield presents now in its
motion to alter and amend the judgment.
As part of a 2009 consent decree, Asarco paid the
full amount of the allocable judgment, over $111.4
million, to address the environmental impacts caused
by all parties at the East Helena Site. (Doc. 269 at FOF
¶ 51.) Atlantic Richfield concedes that $61.4 million
has been properly claimed. Following an exhaustive
bench trial, the Court found that the remaining $50
million–which, again, Asarco has already paid–will be
spent to remedy the lingering significant
environmental damage caused by Asarco and other
parties, including Atlantic Richfield, at the East
Helena Site. (Doc. 269 at FOF ¶¶ 60-79.) Put simply,
there is still far too much arsenic in the water in East
Helena. Tellingly, even after $61.4 million in cleanup
costs, current institutional controls are focused on
1
“FOF” refers to the Court’s numbered Findings of Fact, and
“COL” refers to the Court’s Conclusions of Law.
App. 30
preventing people from using their wells. (Doc. 269 at
FOF ¶ 72.)
The Court considered the facts presented at trial
and expressly rejected the testimony of Atlantic
Richfield’s expert that final costs of cleanup should be
limited to $61.4 million. (Doc. 269 at FOF ¶¶ 75, 7778.) The Court determined that “unless and until the
groundwater is restored to achieve MCLs and drinking
water standards, something more substantial will need
to be done.” (Doc. 269 at FOF ¶ 78.) Accordingly, the
Court found that “the balance of the approximate $50
million . . . will most likely be expended to achieve the
mandated remediation results.” (Id.)
Atlantic Richfield’s other arguments in favor of Rule
59(e) reconsideration are also unavailing. Although
Asarco likely could have brought a declaratory
judgment action, here there is a sum certain that
Asarco has already paid and that is earmarked for
cleanup at the East Helena site. Again, the Court found
that all of the money Asarco paid will most likely be
spent to reduce the arsenic in the groundwater to safe
levels. (And, in fact, $111 million may not be enough.)
As Atlantic Richfield itself posits, the issue is whether
the money spent by Asarco consists solely of “necessary
costs of response.” 42 U.S.C. § 9607(a)(4)(B); see
AmeriPride Servs., Inc. v. Tex. E. Overseas, Inc., 782
F.3d 474, 490 (9th Cir. 2015).
The Court is similarly unmoved by Atlantic
Richfield’s argument that Asarco and the Court
misinterpret the relevant caselaw. Neither party has
pointed to binding precedent addressing the precise
circumstances presented here, and neither party needs
App. 31
to. Consistent with all the cases cited by both parties,
the question, again, is simply whether $111,403,743
comprises only costs necessary to remedy “an actual
and real threat to human health or the environment.”
Carson Harbor Vill., 270 F.3d at 871. That question
has been asked and answered, and the Court is
unconvinced that it erred as either a matter of law or
fact.
II.
Pre-judgment interest
In its Findings of Fact and Conclusions of Law, the
Court ordered the parties to “meet and confer about the
appropriate prejudgment interest calculation in this
case using the interest rate calculation provided in 26
U.S.C. § 9507(d)(3)(C).” (Doc. 269 at 95 n.71.) The
parties agree that, under the Superfund rate set forth
in § 9507(d)(3)(C), Atlantic Richfield would owe Asarco
$1,314,681.88 in prejudgment interest. Nonetheless,
they dispute whether the Superfund rate appropriately
applies. The Court determines that it does.
42 U.S.C. § 9507(d)(3)(C) provides that the
prejudgment interest rate “shall be the same rate as is
specified for interest on investments of the Hazardous
Substance Superfund . . . .” 42 U.S.C. § 9507(a)(4).
“Because § 9613(f) incorporates the liability provisions
of § 9607, the court is not free to exercise its discretion
in determining the methodology for calculating
prejudgment interest” in a contribution action brought
under the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (“CERCLA”).
AmeriPride, 782 F.3d 474, 490-91 (9th Cir. 2015).
App. 32
Asarco argues that the time value of its money is
higher than that of the government’s money. Thus, it
contends, the Court should apply a higher interest rate
than applies to the Superfund. Asarco presents no
reasoned precedent in support of its position, which
appears to be wholly foreclosed by AmeriPride, if not by
statute. Thus, the Court determines that the
Superfund rate properly applies and orders Atlantic
Richfield to pay $1,314,681.88 in prejudgment interest.
III.
Costs and Fees
In its Findings of Fact and Conclusions of Law, the
Court concluded that Asarco was entitled to its costs
and reasonable attorneys’ fees incurred in identifying
Atlantic Richfield as a potentially responsible party.
(Doc. 269 at COL ¶¶ 71-77.) It accordingly ordered
Asarco to submit its claim for attorneys’ fees and costs
along with supporting documentation. Upon review of
the materials presented by the parties, the Court
determines that Asarco has not met its burden of
showing its entitlement to attorneys’ fees and that
most of the submitted costs are not reimbursable.
A. Attorneys’ Fees
As a general rule, attorneys’ fees are not recoverable
in a CERCLA contribution action. Key Tronic Corp. v.
United States, 511 U.S. 809, 819 (1994). However, the
Supreme Court has carved out a narrow exception for
“work that is closely tied to the actual cleanup,”
including “work performed in identifying other
[potentially responsible parties (‘PRPs’)].” Id. at 820. In
consideration of the significant misrepresentations
made to governmental authorities by Atlantic Richfield
App. 33
and its predecessor, the Anaconda Cooper Mining
Company, the Court reasoned that some of Asarco’s
attorneys’ fees were necessary to overcome those
misrepresentations and to identify Atlantic Richfield as
a potentially responsible party. However, upon review
of Asarco’s claim for attorneys’ fees and supporting
documentation, the Court has no choice but to conclude
that Asarco is not entitled to an award of attorneys’
fees.
To support its claim for $4,721,023.56 in attorneys’
fees, Asarco proffered a 6-paragraph declaration
stating that these fees “were reasonable and necessary
to identify Atlantic Richfield as a PRP at the Site and
to refute Atlantic Richfield and Anaconda’s untrue
representations to federal and state regulators.” (Doc.
274-1 at ¶ 5.) Asarco’s request is inadequate for two
reasons. First, it is impossible for Atlantic Richfield
and the Court to determine whether these fees are
“reasonable” because Asarco has not given even the
most basic information regarding hourly rates charged
by its attorneys and services performed. Second, it is
similarly unclear whether these fees meet the Key
Tronic exception, as there is no indication of when the
work was performed and what that work was.
Asarco may be entitled only to those fees that are
properly characterized as necessary response costs. Key
Tronic Corp., 511 U.S. at 819. While “[l]itigation costs
may indeed be a part of recovering funds that are
needed to advance the cleanup[,] . . . the ability to
recover litigation-related attorney’s fees does not
necessarily advance the pace of cleanup because it may
encourage ambitious litigation.” Fireman’s Fund Ins.
App. 34
Co. v. City of Lodi, 302 F.3d 928, 953 (9th Cir. 2002).
Accordingly, under Key Tronic, “the key inquiry for
courts to examine carefully is the exact type of legal
services covered by the fee.” Sealy Conn., Inc. v. Litton
Indus., Inc., 93 F. Supp. 2d 177, 190 (D. Conn. 2000).
The Court needs more than a declaration from counsel
to perform this necessary inquiry.
Asarco cites to three cases for the proposition that
the Court’s wide discretion authorizes an award of fees
solely on the basis of a conclusory declaration from
counsel. (Doc. 281 at 4-5 (citing Gluck v. Am. Protection
Indus., Inc., 619 F.2d 30, 32-33 (9th Cir. 1980); Mesa
Petroleum Co. v. Coniglio, 629 F.2d 1022, 1030 (5th Cir.
1980); National Ass’n for Mental Health, Inc. v.
Weinberger, 68 F.R.D. 387, 393 (D.D.C. 1975), rev’d on
other grounds, 561 F.2d 1021 (D.C. Cir. 1977).)
However, the Court does not have discretion to award
fees unless they fall under the Key Tronic exception,
and it cannot make that determination absent a
sufficient showing of proof.
Moreover, even assuming that the Court had the
discretion to award $4.6 million in fees without further
information, the Court would decline to exercise that
discretion in this instance. Atlantic Richfield has not
had an opportunity to review and respond to the details
of Asarco’s request, and the Court cannot verify either
the reasonableness of the award or Asarco’s threshold
entitlement to it. Indeed, Asarco states in its reply brief
that it incurred these fees “to identify, understand and
pursue Atlantic Richfield as a PRP in this case.” Doc.
281 at 3. Key Tronic does not allow litigation fees–fees
incurred in “understand[ing] and pursu[ing]” a party
App. 35
opponent. Thus, the Court will not award attorneys’
fees to Asarco.
B. Costs
Also at issue is Asarco’s entitlement to costs totaling
$924,808.49. As with the requested fees, Asarco has not
shown that the costs requested meet the Key Tronic
exception, although it has at least provided
itemizations of costs. Because the Court cannot
conclude that the narrow exception set forth in Key
Tronic is met here, the Court may award only those
costs outlined in 28 U.S.C. § 1920.
The bulk of Asarco’s request is $817,075.63 in what
it classifies as “other costs,” primarily expert fees paid
to Andy Davis. The Court placed great weight on
Davis’s testimony and reports, determining that “the
work of expert Davis in this case represents the only
truly comprehensive analysis to date of the
contribution that was made by Anaconda’s historical
operations at the Site to groundwater contamination.”
(Doc. 269 at FOF ¶ 181.) Although the Court remains
certain of both the importance of Davis’s work and the
reprehensibility of Atlantic Richfield’s and Anaconda’s
conduct, the Court cannot award Davis’s fees absent a
showing that they constitute a necessary response cost.
Rather, Davis’s expert costs were incurred after the
Amended Complaint naming Atlantic Richfield was
filed. Ostensibly, then, Davis’s services were a means
of proving Atlantic Richfield’s apportionable liability
rather than identifying Atlantic Richfield as potentially
responsible party. Asarco classifies all of Davis’s costs
as “expert work to identify [Atlantic Richfield] as a
App. 36
PRP & refute false representations,” (Doc. 275-5 at 24), but, as discussed above, something more is needed
to verify the accuracy of Asarco’s claim. Because the
Court simply cannot find the Key Tronic exception
satisfied on the basis of Asarco’s legal argument and
offer of proof, it cannot award Davis’s expert fees under
Key Tronic. See, e.g., Gussack Realty Co. v. Xerox Corp.,
224 F.3d 85, 92 (2nd Cir. 2000) (denying expert fees
when “Plaintiffs were able to and did identify Xerox as
a potentially responsible party without the expenditure
of any of the requested consultation services”). Nor can
it do so under 28 U.S.C. § 1920, which does not
authorize compensation for expert services. Because
the remainder of Asarco’s request for “other costs” is
similarly flawed, the Court cannot award $817,075.63
in “other costs.”
Atlantic Richfield also objects to Asarco’s request
for: (1) pro hac vice fees, (2) transcript fees, (3) fees and
disbursements for printing, (4) witness fees, and
(5) fees for exemplification and copies. The Court
briefly considers each category in turn.
(1)
Pro hac vice fees are not recoverable under
§ 1920, and the Court accordingly will not
award $1,760 requested. Kalitta Air LLC v.
Cent. Tex. Airborne Sys. Inc., 741 F.3d 955,
958 (9th Cir. 2013).
(2)
Transcript fees are recoverable only if they
are “necessarily obtained for use in the case.”
28 U.S.C. § 1920(2). The Local Rules
presume that transcripts are necessary if
used “at trial, after trial, or in supporting or
opposing a motion for summary judgment.”
App. 37
L.R. 54.1(b)(1)(B)(ii). Neither party’s
argument has altered that presumption.
Accordingly, the Court will disallow costs
associated with the transcripts and videos
that were not used in trial, after trial, or in
Asarco’s summary judgment briefing, which
are those of: Christopher Pfahl ($688.25),
Andy Davis ($934.20), Margaret Staub
($466.65), Paul Rosasco ($783.87), Brian
Hansen ($3,583.95 + $1,594.20), Monte
Brothers ($3,420.00 + $2,247.45), Thomas
Voltaggio ($1,988.00 + $1,223.50), Jon Nickel
($968.00), and Thomas Aldrich ($1,102.95).
The Court therefore will subtract $19,001.20
from Asarco’s request.
(3)
Asarco seeks $11,308.32 in printing costs,
including $2,992.88 in office equipment
rental. “Reasonable costs of reproducing
exhibits on the moving party’s will-offer
exhibit list are allowed. Otherwise the
moving party must establish the reasonable
necessity of reproducing the exhibit.” L.R.
54.1(b)(3). Asarco did not itemize its printing
costs in a manner that allows Atlantic
Richfield and the Court to analyze the
appropriateness of every printing fee
incurred. However, recognizing that it was
reasonably necessary for Asarco to reproduce
a great number of exhibits for trial purposes,
the Court determines that 25% of the
claimed printing costs incurred were
reasonably necessary for trial purposes.
Therefore, the Court subtracts $2,992.88 for
App. 38
equipment rental and $6,236.58 for printing
costs wrongfully claimed.
(4)
Asarco seeks $9,082.07 in witness fees.
“Costs and fees for witnesses paid under 28
U.S.C. § 1821 are allowed for each day a
witness testifies at trial. Otherwise, the
moving party must establish the witness’s
presence was required.” L.R. 54.1(b)(2). The
Court determines that Asarco did not
establish the necessity of multiple days of
witness fees for several witnesses and
accordingly subtracts $2,233.00.
(5)
Asarco seeks $38,780.93 for exemplification
and copies. “Fees for exemplification and
copying are permitted only for the physical
preparation and duplication of documents,
not for the intellectual effort involved in their
production.” Zuill v. Shanahan, 80 F.3d
1366, 1371 (9th Cir. 1996) (internal quotation
marks and citation omitted). Thus, the Court
subtracts $38,314.93 in consultants’ fees
improperly claimed.
All total, the Court determines that Asarco is not
entitled to $887,614.22 of the requested costs.
Accordingly, IT IS ORDERED that:
(1)
Atlantic Richfield’s motion to alter or amend
judgment (Doc. 277) is DENIED;
(2)
Atlantic Richfield shall pay to Asarco
$1,314,681.88 in prejudgment interest; and
App. 39
(3)
Atlantic Richfield shall pay to Asarco
$37,194.27 in costs.
DATED this 5th day of October, 2018.
/s/ Dana L. Christensen
Dana L. Christensen, Chief Judge
United States District Court
App. 40
APPENDIX C
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
HELENA DIVISION
CV 12-53-H-DLC
[Filed: June 26, 2018]
__________________________________________
ASARCO LLC, a Delaware corporation,
)
)
Plaintiff,
)
)
vs.
)
)
ATLANTIC RICHFIELD COMPANY, a
)
Delaware corporation,
)
)
Defendant.
)
__________________________________________)
FINDINGS OF FACT, CONCLUSIONS OF LAW
AND JUDGMENT
INTRODUCTION
This is a civil action for contribution brought by
Plaintiff ASARCO LLC (“Asarco”) pursuant to
the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended
(“CERCLA”), 42 U.S.C. § 9613, against Defendant
Atlantic Richfield Company (“Atlantic Richfield” or
“ARCO”) for costs and damages incurred by Asarco at
App. 41
a location in East Helena Montana, known as the East
Helena Site, a National Priorities List or “Superfund”
site (“East Helena Site” or “Site”). The parties are both
citizens of the State of Delaware. This Court has
subject matter jurisdiction based upon the existence of
a federal question, 28 U.S.C. § 1331. Personal
jurisdiction is not contested. Venue is proper in this
Court as the events occurred in East Helena, Montana.
D. Mont. L. R. 1.2(c)(4), 3.2(b).
The Court held a bench trial from May 29, 2018 to
June 7, 2018. Asarco was represented by Kris McLean,
Gregory Evans, and Rachel H. Parkin. Atlantic
Richfield was represented by Randy J. Cox, Kenzo
Kawanabe, and Benjamin B. Strawn. Approximately
160 exhibits were admitted and the subject of
testimony by 12 witnesses, including 3 expert
witnesses.1 Having carefully reviewed the evidence, the
applicable law, and the testimony and arguments of the
parties as presented at trial and in their written
submissions, the Court makes the following findings of
fact and conclusions of law pursuant to Federal Rule of
Civil Procedure 52.
1
The testimony of Asarco witness Antonio Toccafondo was
presented by a perpetuation deposition. The parties hi-lited the
transcript portions of this deposition for the Court’s reading. The
Court read these excerpts after hours outside the presence of
counsel.
App. 42
FINDINGS OF FACT
I.
THE
PARTIES
AND
HISTORICAL
OPERATIONS AT THE EAST HELENA
SITE
1. Plaintiff Asarco is a limited liability company
organized under the laws of the State of Delaware.
2. Asarco is the successor in interest to the
American Smelting and Refining Company. Asarco is
the resulting corporate entity that emerged from the
Chapter 11 bankruptcy reorganization of the American
Smelting and Refining Company in 2009.
3. Asarco and its predecessors owned a lead
smelting facility at the Site, which was in operation
from approximately 1888 until 2001. Asarco brought
various ores, concentrates, and other materials to the
site for smelting, which contained as much as 19%
arsenic (190,000 parts per million or “ppm”). It is
undisputed by Asarco that its lead smelting facility was
the largest operation at the site, and that its operations
caused significant groundwater contamination. Asarco
continued to own and manage the Site until it emerged
from bankruptcy in 2009.
4. Defendant Atlantic Richfield is a Delaware
corporation. Atlantic Richfield is the successor-ininterest to Anaconda, formerly named Anaconda
Copper Mining Company. Atlantic Richfield was also
referred to as ARCO throughout the proceedings in this
case.
5. On March 1, 1927, Asarco and Anaconda entered
into an Option Agreement whereby Anaconda agreed to
App. 43
purchase blast furnace slag produced by Asarco’s lead
smelting operation, which Anaconda intended to
process at the Site for the recovery of zinc fume.
6. On December 20, 1927, Asarco and Anaconda
entered into a Lease Agreement whereby Anaconda
leased a tract of land at the Site for the purposes of
constructing and operating a zinc fuming plant for the
recovery of zinc from the slag it purchased from Asarco.
7. Pursuant to these two Agreements, Anaconda
constructed and operated a zinc fuming plant on land
leased from Asarco at the site for 45 years, from 1927
to 1972. Anaconda’s zinc fuming operation was directly
adjacent to Asarco’s lead smelting operation.
8. Anaconda had two sources of slag at the site. One
source was molten slag which Anaconda conveyed from
Asarco’s lead smelter to its zinc fuming facility. The
second source was hardened, cold slag stockpiled on the
Site which Anaconda mined and transported to its zinc
fuming facility. Both sources of slag were then fumed
by Anaconda in its facility for the purposes of recovery
and sale of zinc. Anaconda placed this molten and cold
slag into its zinc fuming blast furnace, which heated
the slag to approximately 2,000 degrees Fahrenheit,
resulting in zinc fume. The molten and mined cold slag
which was transported, purchased and utilized by
Anaconda contained arsenic.
9. Anaconda used coal to fuel the blast furnace. Coal
contains 0.0006% (6 ppm) arsenic. The coal was
delivered to the facility by railcar. The coal arrived in
relatively small pieces and first needed to be dried
before it was used in the furnace. This process was
App. 44
accomplished through the use of a coal or kiln dryer.
The kiln dryer utilized a horizontal turning heater that
served to drive off the moisture in the coal. The dried
coal was then passed from the kiln dryer to a
pulverizer, which involved a milling process that
reduced the coal into fine pieces so that it could be
conveyed by high pressure air to the blast furnace.
10. As a protective measure, the blast furnace was
completely surrounded with water jackets. Cooling
water was pumped through the water jackets under
pressure to route the water around the furnace. In the
furnace, coal and air were injected into the molten slag
material, and as that oxygen made contact with the
zinc, it created zinc oxide dust, which was then
conveyed through a series of cooling flues into a large
building referred to as the bag house.
11. Once in the bag house, the zinc oxide dust was
collected on a row of large woolen bags. The remaining
air and particulates which were not collected on the
woolen bags were then released through vents in the
bag house into the atmosphere outside the bag house.
The woolen bags would be shaken to dislodge the
material into a series of augers, which would then
convey the white zinc oxide material to a series of other
augers and eventually into open-top railcars, and later
to close-top railcars.
12. Anaconda’s zinc fuming plant operated 24 hours
a day, 7 days a week, 355 days per year.
13. Anaconda sold the zinc fuming operation to
Asarco in 1972. Asarco then operated the zinc fuming
App. 45
plant for 10 more years, until 1982, at which time it
ceased operations.
14. Two other entities operated at the Site.
American Chemet Corporation (“ACC”), at various
points in time, conducted operations at the Site,
including a zinc oxide plant and a zinc fuming process,
and produced a number of products, including roasted
zinc dross, talc and copper oxides. Burlington Northern
Santa Fe (“BNSF”) operated railway lines on and near
the Site. BNSF and its predecessors transported ores
and other feed materials from mines and other
facilities to Asarco’s lead smelter beginning in 1888.
II.
THE SITE AND CLEANUP EFFORT
15. The Site is located in Lewis and Clark County in
the State of Montana. The Site is south of the City of
East Helena, and separated by US Highway 12. The
majority of the Site is at a higher elevation than the
City of East Helena. Prickly Pear Creek is a naturally
occurring stream that originates at a higher elevation
south of the Site, and travels in a northerly direction
along the eastern and northern boundaries of the Site,
under US Highway 12, through a portion of the City of
East Helena, and ultimately into Lake Helena.
16. In 1984, EPA added the Site to the National
Priorities List of sites under CERCLA that require
environmental remediation pursuant to federal law.
17. The groundwater underneath the Site is
contaminated with arsenic and selenium. Arsenic is the
primary contaminant of concern. Although passing
mention of selenium was made during the course of the
trial, neither party offered any testimony, expert or
App. 46
otherwise, or evidence regarding the presence or
absence of selenium in the groundwater, the source or
sources of any selenium contamination, what costs are
associated with the selenium contamination, or who
should bear responsibility for any such costs. Thus, the
focus of this order is the same as the focus at trial,
arsenic contamination in the groundwater.
18. Atlantic Richfield does not dispute that
Anaconda’s operations may have caused some
contamination at the site, but it does dispute that
Anaconda’s operations are the source of the arsenic
found in the polluted groundwater under the Site that
is the subject of the cleanup. In fact, as will be
explained later in these findings of fact, Anaconda and
its successor, Atlantic Richfield, have historically been
consistent and steadfast in denying any contribution of
arsenic to the groundwater from its operations at the
Site. In contrast, Asarco has never denied that its
operations at the Site contributed to the presence of
arsenic in the groundwater, which is evidenced by the
forthcoming approach it has taken with the State of
Montana and the Environmental Protection Agency
during the cleanup process. Thus, based on these
diametrically opposed positions, it is no surprise that
the focus of the cleanup effort has been on the Site
activities of Asarco, and not Anaconda/Atlantic
Richfield.
19. Asarco’s acceptance of responsibility at the Site
was manifested through three CERCLA consent
decrees and one Resource Conservation and Recovery
Act (“RCRA”) consent decree, which are described in
more detail below.
App. 47
A. The 1990 CERCLA Consent Decree
20. In 1990, the district court approved and entered
a Settlement and Consent Decree between Asarco and
EPA regarding the Site, which resolved claims EPA
brought against Asarco under CERCLA § 106 and
§ 107. The 1990 CERCLA Consent Decree concerned
only specific Site features, which were the process
water ponds and process water management systems,
some of which were associated with only Asarco’s
operations, and some of which were associated with the
operations of both Asarco and Anaconda (collectively,
the “Process Ponds”).
21. Specifically, Asarco was required to implement
certain remedial measures selected in the Record of
Decision (“ROD”) for the Process Ponds, which EPA
had issued on November 22, 1989.
22. The 1990 CERCLA Consent Decree covered four
Process Ponds: (1) Lower Lake; (2) the speiss
granulating pond and pit; (3) the acid plant water
treatment facility; and (4) former Thornock Pond or
Lake, and the associated process water management
systems. The operations of both Asarco and Anaconda
delivered wastewater to Thornock Pond or Lake and
Lower Lake. The speiss granulating pond and pit and
the acid plant water treatment facility were used solely
by Asarco.
23. Asarco was required to carry out the remedial
measures selected by EPA for the Process Ponds, in
accordance with the 1990 CERCLA Consent Decree
and Process Ponds ROD.
App. 48
24. Asarco completed substantially all of the
cleanup activities required under the 1990 CERCLA
Consent Decree by 1997.
B. The 1998 RCRA Consent Decree
25. Prior to 1998, Asarco and EPA engaged in
negotiations to resolve operational compliance issues at
Asarco facilities nationwide in a cooperative manner,
including at Asarco’s facilities in East Helena.
26. In 1998, Asarco and EPA entered into another
Settlement and Consent Decree relating to Asarco’s
facilities in East Helena (the “RCRA Decree”), which
resolved claims EPA brought against Asarco under
RCRA and the Clean Water Act, but did not include the
settlement of any claims under CERCLA.
27. Under the RCRA Decree, jurisdiction over the
cleanup at Asarco’s facilities was transferred from
EPA’s CERCLA program to its RCRA program.
28. The only portion of the cleanup that was not
transferred from the CERCLA program to the RCRA
program was the cleanup of certain off-Site
contaminated residential soils (e.g., yards, roads,
parks) and other undeveloped lands in the City of East
Helena, which were referred to as Operable Unit 2
(“OU2”).
C. Asarco’s Bankruptcy and the February
and June 2009 CERCLA Consent
Decrees
29. On August 9, 2005, Asarco filed a bankruptcy
petition under Chapter 11 of the United States
App. 49
Bankruptcy Code in the Bankruptcy Court for the
Southern District of Texas (the “bankruptcy court”).
30. In the bankruptcy, numerous governmental
entities filed proofs of claim regarding Asarco’s
outstanding environmental liabilities, including the
United States and State of Montana Department of
Environmental Quality, alleging joint and several
liability under CERCLA (“proofs of claim”). The proofs
of claim made various allegations and provided
placeholder claim demands, which were later
supplemented by expert reports. The allegations were
not restricted solely to Asarco owned properties, and
included claims for contamination to off-Site properties
not owned by Asarco.
31. In its initial proof of claim, the United States
made a claim against Asarco for “response costs and
costs of assessment of injuries to natural resources
under the Comprehensive Environmental Response,
Compensation, and Liability Act (‘CERCLA’), 42.
U.S.C. §§ 9601-9675, incurred by the United States . . .”
at sites including the East Helena Superfund Site.
32. The United States filed its Supplemental Proof
of Claim against Asarco for “response costs incurred
and to be incurred by the United States under
the Comprehensive Environmental Response,
Compensation and Liability Act (“CERCLA”), 42 U.S.C.
§§ 9601-9675 at various sites,” including the East
Helena Superfund Site.
33. The State of Montana Department of
Environmental Quality filed a Proof of Claim alleging
that “Asarco is liable under CERCLA . . . for all
App. 50
remediation expense” with respect to the East Helena
Superfund Site. Furthermore, the Department claimed
future remediation expense, including “a protective
contingent claim” “[t]o the extent Debtor does not
undertake remedial action as required under CERCLA
or RCRA and as directed by the United States, the
Department cost match would be an estimated
$14,300,000 in future remediation, operation, and
maintenance expense. Pursuant to CERCLA, the
Department would be entitled to recover $14,300,000
from Debtor.”
34. In addition to the United States’ claim and the
Montana Department of Environmental Quality’s claim
for the East Helena Site, the State of Montana also
submitted a Proof of Claim against Asarco in the
bankruptcy proceedings for CERCLA Natural Resource
Damages for an estimated $20 million.
35. Asarco understood that these Proofs of Claim
were CERCLA claims asserted “for future response
costs and injuries to natural resources going forward
. . . response costs for groundwater contamination.”
Asarco further understood that because the
governmental claims were CERCLA claims, that
“Asarco could be held responsible for all of the cleanup
costs, 100 percent, regardless of if there were other
PRPs on the site.”2
36. In support of the various claims, the State of
Montana submitted the expert reports of William H.
Bucher, P.E., and Ann Maest, Ph.D., which established
2
PRP is the acronym for potentially responsible party.
App. 51
that a $99 million pump-and-treat system was
necessary to remediate the off-site groundwater plume
underlying the City of East Helena.
37. Ann Maest, Ph.D., a geologist and geochemist,
served as an expert witness on behalf of the State of
Montana during approval proceedings related to the
CERCLA Decree and attested that since 2000, the
focus of the cleanup has been on restoration of
groundwater, with arsenic being the primary
contaminant.
38. On February 6, 2009, a Settlement and Consent
Decree between Asarco, the United States, and the
State of Montana was entered by the bankruptcy court
which resolved Asarco’s liabilities under CERCLA with
respect to OU2 (the off-Site residential soils and
undeveloped lands), but did not address contaminated
groundwater. Pursuant to this February 2009 CERCLA
Consent Decree, Asarco was required to pay
$13,209,783 to fund the remaining cleanup of OU2.
Again, this Decree covered only OU2, and expressly
stated it did not apply to any other aspect of the East
Helena Site, including groundwater.
39. Asarco, the United States, and the State of
Montana reached a second Settlement and Consent
Decree (the “June 2009 CERCLA Consent Decree”)
which resolved all of Asarco’s outstanding
environmental liabilities at several sites in Montana,
including the remaining liabilities under CERCLA at
the East Helena Site.
40. The June 2009 CERCLA Consent Decree
recognizes the previously entered February 2009
App. 52
CERCLA Decree, which it refers to as the “Separately
Settled East Helena Matters.” The June 2009 CERCLA
Consent Decree does not incorporate or cover the work
required under the February 2009 CERCLA Decree.
41. Asarco’s Director of Environmental Services,
Donald Robbins, submitted a declaration in support of
Asarco’s motion in the bankruptcy proceedings for an
order approving the June 2009 CERCLA Consent
Decree, and stated in his declaration that the two
major variable factors remaining at East Helena were
“the size of the groundwater plume; and the scope of
the remedy.”
42. Notice of this CERCLA Decree was published in
the Federal Register, and the EPA received public
comments.
43. On June 5, 2009, the CERCLA Consent Decree
and Settlement between Asarco, the United States, and
the State of Montana was entered by the bankruptcy
court. The June 2009 CERCLA Consent Decree
resolved all Asarco’s outstanding environmental
liabilities at several sites in Montana, which
collectively were referred to as the “Montana
Designated Properties.” The Montana Designated
Properties included the East Helena Site.
44. The June 2009 CERCLA Consent Decree
established a Custodial Trust for the Montana
Designated Properties. The Custodial Trust was to be
established on the effective date of Asarco’s Plan of
Reorganization, as approved by the bankruptcy court.
45. The Montana Environmental Trust Group
(“METG”) was appointed as the Custodial Trustee for
App. 53
the East Helena Site to administer the Custodial Trust
and Custodial Trust Accounts.
46. Asarco was required to “transfer all of their
right, interest in, and title to” the Montana Designated
Properties to the Custodial Trust.
47. The June 2009 CERCLA Decree established
separate “Custodial Trust Cleanup Accounts” for each
of the Montana Designated Properties. The purpose of
the Cleanup Accounts was to provide funding for future
“Environmental Actions” with respect to each Montana
Designated Property.
48. “Environmental Actions” is defined as “all
environmental activities related to the Montana
Designated Properties, including but not limited to
response or remedial actions, removal actions,
corrective action, closure, or post-closure care, natural
resource restoration, reclamation, investigations,
studies, remediation, interim actions, final actions,
emergency actions, water treatment, implementation
of engineered structures and controls, obtaining and
maintaining reasonable financial assurance,
monitoring, repair and replacement of engineered
structures, monitoring equipment and controls,
operation and maintenance, and implementation,
operation and maintenance of institutional controls,
coordination and integration of reuse and remedial
efforts and initiatives (including, without limitation,
multi-stakeholder communications), and, if
appropriate, long-term stewardship and perpetual
custodial care activities . . .” in addition to “. . . any and
all environmental activities related to the Designated
Properties...and activities related to releases of
App. 54
hazardous substances, hazardous waste, or hazardous
constituents from any portion of the Montana
Designated Properties, including all areas affected by
natural migration of such hazardous substances,
hazardous waste, or hazardous constituents from the
Montana Designated Properties.”
49. The June 2009 CERCLA Consent Decree
designated EPA as the “Lead Agency” for the East
Helena Site in charge of selecting, approving, and
authorizing all work performed and funds expended
from the Custodial Trust Cleanup Account for the East
Helena Site by METG.
50. Under the June 2009 CERCLA Consent Decree,
Asarco was required to pay a total of $138,300,000 to
fund all of the Custodial Trust Cleanup Accounts for
the Montana Designated Properties.
51. Asarco paid approximately $111.4 million to
address environmental impacts caused by all parties,
including Anaconda, at the East Helena Site. This
includes the following payments:
a. $99.294 million into the East Helena
Custodial Trust Cleanup Account for a
groundwater remedy to clean up the off-site
groundwater at the East Helena Site, which
was based upon the estimates for a pump
and treat remedy advanced by the State of
Montana’s experts, William H. Bucher, P.E.,
and Ann Maest, Ph.D.
b. $8.9 million to “establish the Custodial Trust
and to fund the Custodial Administrative
Account for the purposes of administration of
App. 55
the Custodial Trust,” of which the
proportionate share for the East Helena Site
would be $6,403,743.
c. $706,000 to fund United States Department
of the Interior natural resource restoration
and future oversight costs for the East
Helena Site.
d. $5 million to the State of Montana for the
East Helena Site in compensatory natural
resource damages (“NRD”).
52. Pursuant to the June 2009 CERCLA Consent
Decree, Asarco received contribution protection and a
covenant not to sue under CERCLA. Thus, Asarco’s
“outstanding obligations” were “fully resolved” under
CERCLA.
53. In the June 2009 CERCLA Consent Decree,
Asarco expressly reserved all claims past or future
against third parties “for any matter arising at or
relating in any manner to the Montana Sites and/or
claims addressed herein.”
54. Asarco’s Seventh Amended Plan of
Reorganization reserved Asarco’s rights and interests
in CERCLA contribution actions not discharged or
settled in bankruptcy.
55. On December 9, 2009, Asarco’s Seventh
Amended Plan of Reorganization became effective,
enabling disbursal of funds for environmental
settlements, including funds for the East Helena
settlements.
App. 56
56. Notwithstanding the fact that the initial proofs
of claim exceeded the amount paid by Asarco, Asarco
nevertheless fully funded the agreed upon settlement
amount in the June 2009 CERCLA Consent Decree at
one hundred cents on the dollar.
57. Asarco paid $1.8 billion to settle all allowed
environmental claims related to hazardous waste in the
bankruptcy proceedings.
58. Atlantic Richfield did not contribute to Asarco’s
settlement with the United States and the State of
Montana regarding the East Helena Site, and has paid
nothing to clean-up the East Helena Site despite
Anaconda’s operation of the zinc fuming facility for 45
years.
59. Asarco admitted that BNSF shared some
responsibility for its contamination at the Site. In the
bankruptcy proceeding, Asarco listed BNSF as a PRP
that Asarco could sue after bankruptcy. There was no
evidence presented at trial regarding the contribution
that BNSF’s operations made, if any, to the arsenic in
the groundwater at the Site. Regardless, in 2011,
Asarco conclusively resolved any contribution from
BNSF at the East Helena Site in a multi-site
settlement agreement, in which BNSF paid Asarco a
total of $675,000 as follows: $625,000 for
environmental costs associated with the Tri States
Lawsuit and $50,000 for all other claims and
environmental costs, at over 40 sites including East
Helena. In exchange for this consideration, Asarco
App. 57
released BNSF from contribution liability for numerous
sites, including East Helena.3
D. The Montana Environmental Trust
Group and East Helena Site Remedial
Work
60. METG administers and uses the trust account
to fund environmental actions at the Site. Asarco made
the payments described above in December, 2009, and
METG assumed responsibility for the remediation
work at the Site, under the direction of the EPA as the
Lead Agency, in consultation with the State of
Montana.
61. On January 17, 2012, the district court issued
the 2012 First Modification to Consent Decree (“2012
Modification”), which, among other things, amended
the 1998 RCRA Consent Decree to substitute METG for
Asarco.
62. The 2012 Modification deleted certain
requirements that Asarco was initially required to
perform under the 1998 RCRA Consent Decree,
including a supplemental environmental project and
stipulated penalties. METG is no longer required to
perform such obligations under the 1998 RCRA
Consent Decree, as carried forward by the 2012
Modification.
3
American Chemet Corporation was named as a Defendant in this
recovery action. Asarco subsequently moved to dismiss ACC as a
Defendant on March 27, 2014 (Doc. 127), and the Court ordered
ACC’s dismissal on March 31, 2014. (Doc. 128.) The details of the
settlement between Asarco and ACC are unknown to the Court.
App. 58
63. The 2012 Modification lists the exclusive
purposes of the Custodial Trust–one is “to manage
and/or fund implementation of future investigation and
cleanup activities approved by EPA with respect to the
Asarco Properties and contaminated groundwater.”
64. The 2012 Modification also consolidates all of
Asarco’s remaining obligations at the East Helena Site,
including remediation of the groundwater, under the
1990 CERCLA Consent Decree, the OU2 ROD, and the
MDEQ AOC with the remaining obligations of the 1998
RCRA Consent Decree.4
65. The 2012 Modification provides that “[b]ased
upon new information and/or changed circumstances,
EPA may determine or the Trustee of the Custodial
Trust may propose that certain tasks, including
investigatory work, engineering evaluations, or
procedure/methodology modifications, are necessary in
addition to or in lieu of the tasks included in any EPAapproved work plan.”5
66. Under the 2012 Modification, METG is not
limited to only doing work at the Site under the preexisting Consent Decrees, and has a number of duties
at the East Helena Site, including:
“. . . own the ASARCO Properties, carry out
administrative and property management functions
related to them, manage and invest funds
4
ROD is the acronym for Record of Decision, and AOC is the
acronym for Administrative Order of Consent.
5
Ex. 25 at 25-0033 (¶¶ 50-54).
App. 59
transferred by ASARCO to the Trustee of the
Custodial Trust under the Plan of Reorganization,
manage and/or fund implementation of future
investigation and cleanup activities approved by
EPA with respect to the ASARCO Properties and
contaminated groundwater, and ultimately to sell,
transfer or otherwise dispose and/or provide for the
long-term stewardship of all or part of the ASARCO
Properties, if possible, and engage in activities
related thereto consistent with the fiduciary
obligations of the Trustee of the Custodial Trust all
for the benefit of the Governments;”6
67. Since 2009, METG has used a portion of the
$99.294 million Asarco paid into the trust to fund a
series of environmental actions intended to address
and remediate contaminated water at the Site. METG’s
Site activities are the focus of any potential allocation
responsibility because it is the work being funded by
Asarco. Asarco does not seek reimbursement for any
remediation work it performed at the Site performed
prior to July 2009.
68. METG’s environmental actions to date consist of
three projects referred to as interim measures (“IMs”).
The general purpose of the IMs in this case “is to
prevent and minimize the spread of hazardous waste
and hazardous constituents while long term corrective
measures were being evaluated.”7 EPA approved
6
Ex. 25 at 25-0012 (Recitals).
7
Ex. 976-0037.
App. 60
METG’s planned IMs in 2012 and, since that time, all
three IMs have been fully implemented.
69. The three IMs are summarized as follows:
a. The first IM, referred to as the South Plant
Hydraulic Control IM, was implemented to
reduce migration of inorganic contaminants
in groundwater by changing the
hydrogeologic conditions at the southern end
of the Site, including lowering the
groundwater table, which also reduced the
velocity at which groundwater moves under
and away from the site. This IM has included
dewatering of Upper and Lower Lakes,
realignment of Prickly Pear Creek by moving
it eastward, removal of the Wilson Ditch
Diversion Dam and the Smelter Dam to
eliminate water impoundment, and removal
of reservoir sediments.
b. The second IM, referred to as the Source
Removal IM, was implemented to reduce the
mass loading of contaminants to
groundwater by reducing the volume of soil
with high concentrations of inorganic
contaminants that were subject to
infiltration or flow-through leaching to
groundwater. This was accomplished by
excavating the most highly contaminated
soils at the Site to prevent those soils from
serving as an ongoing source of arsenic
contamination to groundwater. This IM also
removed sediments from Lower Lake and
from the Upper Lake marsh area.
App. 61
c. The third IM, referred to as the ET Cover
System IM, involved the construction by
METG of a new cover of soil and vegetation
over the majority of the Site with the
exception of the slag pile and the former
Upper and Lower Lake areas, and was
implemented to further reduce the potential
for inorganic soil contaminants to leach to
groundwater by eliminating or reducing the
amount of infiltration through contaminated
materials. This IM provides for a clean
surface for runoff, and is designed to
eliminate human and wildlife exposure to
potentially contaminated soils, and prevent
windblown or storm water induced migration
of potentially contaminated soils. The ET
Cover System encompasses a 57 acre area of
the facility, which includes the area where
Anaconda’s zinc fuming plant and its process
water circuits were located.
70. While remediation work has been done under
the 1998 RCRA Consent Decree and the 2012
Modification, the work is supervised by EPA and has
been done consistent with and pursuant to CERCLA
standards, and as such the work is in substantial
compliance with the National Contingency Plan.
71. In addition to the three completed IMs described
above, METG proposes, as future remediation work, to
cap the portion of the slag pile at the Site that consists
of unfumed slag, which is slag that was not processed
a second time for metals recovery in Anaconda’s zinc
App. 62
fuming process, due to the potential for the unfumed
slag to leach arsenic to groundwater.
72. METG, working with local authorities, has
established a set of institutional controls for the Site
and surrounding areas. These institutional controls
will not reduce the arsenic in the groundwater, but
instead are intended to prevent property owners from
using their domestic water wells in an effort to prevent
contact with contaminated groundwater.
73. The EPA has determined that the remedial work
done to address source areas contributing to ground
water contamination “are expected to be protective of
human health and the environment upon completion”
and that “[i]n the interim, remedial activities
completed to date have adequately addressed all
exposure pathways that could result in unacceptable
risk . . . .”
74. Though METG’s remedial efforts have been
focused on groundwater cleanup, that work has not
been completed yet, and METG’s own consultant has
noted that the offsite arsenic plume will not achieve
MCLs (maximum contaminant levels) or achieve
drinking water standards within the next thirty years,
a fact confirmed by both Asarco’s and Atlantic
Richfield’s experts.
75. Based on the most recent accounting as of
September 30, 2017, METG has spent approximately
half of the trust funds, leaving METG with
approximately $50 million for remaining cleanup and
App. 63
groundwater remediation.8 METG has recommended
that the final remedies at the Site consist of the three
IMs, a speiss-dross slurry wall built by Asarco, the
cover for the unfumed portion of the slag pile, and the
previously described institutional controls. Atlantic
Richfield’s expert, Brian Hansen (“Hansen”) has
estimated that the ongoing costs for operations and
maintenance is $9.2 million, and METG has estimated
the cost of covering the unfumed slag at $3.7 million.
Thus, expert Hansen estimates that the final costs
subject to the CERCLA claim total $61,447,991. Expert
Hansen also predicts, without any basis, that EPA is
likely to adopt and approve METG’s proposed final
remedies.9
76. Atlantic Richfield contends that METG has
ruled out a pump-and-treat remedy, as not being cost
effective. METG also contends that a pump-and-treat
system would be technically ineffective and could affect
the stability of the arsenic-contaminated groundwater
plume, which extends from the Site in a northwesterly
direction into the City of East Helena.
77. Asarco’s expert, Margaret W. Staub (“Staub”),
disagrees with expert Hansen. Her disagreement is
based on the simple fact that the three IMs employed
8
9
Ex. 922.
Expert Hansen relies on a 2-page EPA Fact Sheet (Ex. 925) in
support of his opinion that EPA approval will be forthcoming. This
Fact Sheet is nothing more than a cursory summary of METG’s
efforts to date, and concludes with the statement: “Groundwater
remedy performance will be monitored for many years.” The Fact
Sheet is silent on the issue of EPA approval.
App. 64
by METG, in combination with the final remedies
described in paragraph 71 and 72 above, will not
address the elevated levels of arsenic and selenium
that exist in the groundwater plume that is migrating
under the City of East Helena, and will not restore this
groundwater to background levels or achieve MCLs and
drinking water standards within the next thirty years
as described in paragraph 74 above. Thus, expert Staub
reasons that the recommendation made years ago by
State of Montana experts Maest and Bucher (see
paragraph 51.a. above) that a pump-and-treat system
would be necessary to address arsenic and selenium
contamination in the off-site groundwater, will be the
most likely final remedial outcome.
78. Staub’s opinion is bolstered by the fact that this
was the remedy contemplated at the time of the
bankruptcy settlement and associated consent decrees,
and contemplated by the 2012 Modification, which
authorizes the EPA to modify and enlarge the Site
remediation work being performed by METG (see
paragraph 65 above). The Court adopts Staub’s
reasoning and concludes that unless and until the
groundwater is restored to achieve MCLs and drinking
water standards, something more substantial will need
to be done. Whether there remains sufficient funds in
the trust to accomplish this task, and whether a pump
and treat system is the ultimate solution, are not the
controlling questions. Regardless of the answer to those
two questions, and notwithstanding Atlantic Richfield’s
arguments to the contrary, the Court is convinced that
the balance of the approximate $50 million in the trust
will most likely be expended to achieve the mandated
remediation results.
App. 65
79. The Court now turns to an analysis of the
relative contributions of arsenic to the groundwater
caused by the respective operations of Asarco and
Anaconda which are the subject of the clean-up costs
incurred by Asarco pursuant to the June 2009
CERCLA Consent Decree.10
III.
ASARCO’S CONTRIBUTION OF ARSENIC
TO THE GROUNDWATER
80. Asarco concedes, and it was uncontroverted at
trial, that the majority of the groundwater
contamination METG is remediating at the Site was
caused by Asarco’s operations. Notwithstanding this
concession by Asarco, Atlantic Richfield’s case in chief
10
It is important to recognize that until the advent of federal and
state environmental laws in the early 1970s, mining and smelter
operations such as those involved in this case were largely
unregulated with the exception of regulations designed to
generally protect worker safety and address air pollution. In
hindsight, compared to today’s standards, the amount of pollution
generated by these types of facilities is difficult to fathom.
Pollutants were discharged to the air, groundwater, and naturally
occurring rivers, streams and lakes with little regard for the longterm consequences. The Court makes this observation to provide
context for the sparse historical record that exists in this case,
which does not include, prior to the 1970s and 1980s, very much in
the way of detailed information that would allow a fact finder to
determine the precise nature and amount of pollutants that were
released to the environment by Asarco’s and Anaconda’s
operations. Nevertheless, the Court is satisfied that discovery in
this case has revealed enough information to understand the
history of the operations of Asarco and Anaconda at the Site. And,
of greater importance, since the 1980s the Site has been the
subject of extensive environmental study and analysis, allowing us
to understand how these operations impacted the groundwater.
App. 66
was largely dedicated to proving the nature and extent
of Asarco’s pollution, and in the process, minimizing
Anaconda’s contribution of pollution.
81. Asarco’s lead smelter operation at the Site
recovered lead and other metals by smelting a variety
of foreign and domestic concentrates, ores, fluxes and
other non-ferrous, metal-bearing materials and
byproducts, referred to as feed stocks or feed materials.
Although Asarco’s smelting operation changed over
time, the components of its operation included: (a) raw
materials storage and handling; (b) a sintering plant;
(c) an acid plant; (d) a blast furnace; (e) a dross plant;
(f) a speiss handling area; and (g) a slag dump. In
addition, Asarco’s lead smelter operation utilized large
quantities of water, which were circulated through the
component operations utilizing several surface water
features, such as pits, ponds and ditches, and
underground water pipeline circuits.
82. In the early years of its operations, Asarco
smelted arsenic-bearing ores using an open roasting
process. These operations produced arsenic
contamination in various locations at the Site.
83. The smelter feed stocks were delivered to the
Site via railcar or truck. For a period of time, these feed
stocks were stored in two primary locations: the Upper
Ore Storage Area and the Lower Ore Storage Area. The
ores Asarco smelted contained as much as 19%
(190,000 ppm) arsenic. These materials were stored in
uncovered piles on concrete slabs or on the bare
ground, and were exposed to the elements, which
includes wind, rain and snow. Asarco also regularly
App. 67
performed high pressure washdowns throughout its
facilities, utilizing contaminated process waters.
84. Later, Asarco modified its process by building
furnaces. The first steps in Asarco’s handling process
involved sampling, crushing, blending, mixing, and
proportioning crude ore materials to prepare them for
the smelting process. Some of these materials were
then sent directly to the blast furnace for smelting, but
the majority of the feed materials were sent to the
sintering plant, where the materials were pulverized
and roasted on grates. This process reduced the sulfur
content in the materials, creating a product known as
sinter. The sinter, like the feed materials themselves,
contained arsenic. The gas and dust produced in the
sintering plant was either captured in a series of
hooding systems and vented to the atmosphere, or, in
more recent times, sent to Asarco’s acid plant. The
gases were converted to sulfuric acid, a marketable
product, which was captured, stored in tanks and
eventually shipped offsite. This process generated an
arsenic-bearing sludge that was dried on a pad located
near Lower Lake. The acid plant was a source of
groundwater contamination.
85. After the sinter was conveyed to the blast
furnace, it was mixed with coke–a form of coal used for
fuel–as well as other materials, such as scrap metal.
Asarco charged this mixture to its blast furnace and
heated it to a temperature of approximately 2000
degrees Fahrenheit, which created lead bullion and
slag. The lead bullion was then transferred from the
blast furnace in 5-ton lead pots to the dross plant for
further processing. Some spillage occurred from the 5-
App. 68
ton pots. This spilled material contained arsenic,
selenium, lead, and other constituents. At the dross
plant, the molten lead was cooled, which caused a
copper-bearing material known as dross to float to the
surface. Asarco then cooked the dross in a
reverberatory furnace to form copper-bearing materials
known as matte and speiss. The speiss contained as
much as 17% arsenic (170,000 ppm).
86. The lead smelting operation generated large
volumes of waste slag, which was deposited at the slag
dump located on the east-northeast portion of the Site.
As previously indicated, from 1927 until 1982, some of
the slag was processed at Anaconda’s, and later
Asarco’s, zinc fuming plant located at the Site.
87. Managing arsenic was a constant problem for
Asarco. There was an imbalance of arsenic at the site,
that is, because of the processes employed by Asarco,
there was more arsenic coming in to the Site than was
going out.
88. Asarco used large amounts of process waters
and four main process water ponds in its lead smelting
operations: (1) Lower Lake; (2) the speiss granulating
pond and pit; (3) the acid plant water treatment
facility; and (4) Thornock Pond or Lake. The process
ponds were connected to the lead smelting operations
by an underground piping network known as the
process water circuit.
89. The speiss granulating pond and pit are
considered to be the most significant source of arsenic
contamination to the groundwater at the Site because
App. 69
they were connected to Asarco’s process waters circuit
and to Lower Lake.
90. Lower Lake was a man-made process water
pond fed by Prickly Pear Creek. It was unlined, and
approximately 7 acres in surface area, and 11 million
gallons in volume.11
91. The acid plant water treatment facility was used
to settle particulates from the acid plant scrubber
blowdown water, which was recirculated to the
scrubbers or to the sinter plant. The components of the
acid plant treatment facility were a trough, settling
dumpsters and a concrete lined settling pond. The
settling pond was 68 feet long by 35 feet wide and 9
feet deep. Arsenic-bearing fluids migrated to the
groundwater as a result of this treatment process.
92. Thornock Lake was constructed by Asarco in
1971 as a collection and settling pond for lead smelter
process waters and storm water runoff. Thornock Lake
was originally about 70 feet long by 40 feet wide and 8
feet deep, with a capacity of approximately 100,000
gallons. In October 1986, Asarco replaced Thornock
Lake with a 100,000-gallon, 40-foot diameter steel
holding tank. Before Thornock Lake was constructed,
there was a natural depression in the same location
which was used for the same purposes. This was
referred to as Thornock Pond, or Pond 2.
11
In approximately 1990, Asarco replaced Lower Lake as an active
process pond with two 1-million gallon storage tanks. As part of
the remediation process, Lower Lake was subsequently de-watered
and the sediments in the lake have been removed.
App. 70
93. Asarco’s process water circuit was a system of
primarily underground pipes that conveyed water from
Lower Lake to various portions of Asarco’s smelting
process. Prior to 1975, the process water circuit
discharged directly to Prickly Pear Creek. Beginning in
1975, Asarco began discharging its process water into
Lower Lake. Asarco used the process water to wash
down various portions of its waters and to suppress
dust around the plant, including the slag pile. Plant
washdowns occurred on a daily basis. The process
water circuit also included a system of drains that
collected process waters and runoff from various parts
of Asarco’s operation and conveyed that water back into
the circuit. This process water circuit was old and
leaked, releasing process water into the ground below
the smelter. Based on pressure testing of the main
process water circuit pressure lines conducted in March
1988 and March 1989, the Comprehensive Remedial
Investigation and Feasibility Study for the Site
theoretically estimated that as much as 105,000 to 2.2
million gallons leaked from Asarco’s process water
circuit every year.12
94. The use by Asarco of arsenic-bearing materials
and water resulted in contamination to the
groundwater at the Site, again, a fact that Asarco has
not contested in this case. Expert Hansen estimated
that the concentrations of arsenic found in the soils and
sediments at the most contaminated parts of the site
are as follows:
• Speiss pond/pit - 14% arsenic (140,000 ppm)
12
Ex. 797-0180.
App. 71
• Thornock Lake - 12% arsenic (120,000 ppm)
• Lower Lake - 2.25% arsenic (22,500 ppm)
• Acid Plant - 1.16% arsenic (11,600 ppm)
95. Expert Hansen also estimated that the fluids
involved in Asarco’s use of the process ponds contained
the following concentrations of arsenic:
• Speiss pond/pit - 3,733 mg/L
• Acid plant - 2,867 mg/L
• Lower Lake - 200 mg/L
• Process fluids circuit - 60 mg/L
• Thornock Lake - 40 mg/L
96. There is a clear connection between Asarco’s
operations, which used arsenic-bearing materials and
waters, and the arsenic portions of the groundwater
plume mapped by METG. In fact, the majority of the
arsenic found in the groundwater plume can be
attributed to Asarco’s operations, a fact which Asarco
also does not contest. What is contested in this case is
Anaconda’s contribution of arsenic to the groundwater
plume that has been the subject of METG’s
remediation efforts. As will be developed later in these
findings of fact, Atlantic Richfield has steadfastly
maintained for decades that its zinc fuming operation
did not contribute any arsenic contaminants to the
groundwater at the Site. Thus, it comes as no surprise
to the Court that all of the studies and investigations
performed at this Site since the 1980s focus on Asarco’s
operations. However, as explained in the next section
App. 72
of these findings of fact, Anaconda’s zinc fuming
operation also contributed arsenic to the groundwater
plume.
IV.
ANACONDA’S
CONTRIBUTION
ARSENIC TO THE GROUNDWATER
OF
97. Anaconda operated a zinc fuming plant at the
Site for 45 years, from 1927 to 1972. During this period
of time, Anaconda had at least eleven different
discharge points at the East Helena Site where arsenic
releases occurred: (1) zinc dust from the bag house;
(2) zinc dust left on the ground by the flue; (3) the
unlined burning coal area; (4) the unlined slag pile
pond (Pond 3); (5) washdown waters; (6) unlined
Thornock Pond and Lake (Pond 2); (7) unlined Wilson
Ditch; (8) leaks in the pipe transporting process water
from Lower Lake to the furnace; (9) the unlined return
ditch to Lower Lake; (10) leaks from water jackets in
the furnace; and (11) unlined Lower Lake (Pond 1).
A. Zinc Dust Released From the Anaconda
Bag House
98. As previously explained, after the zinc fume
traveled from the blast furnace through the flues, it
was deposited at Anaconda’s bag house, where the zinc
particulates and dust collected on the outside of a long
row of large woolen bags.
99. The bags were routinely shaken so that the zinc
dust would drop off the bags into augers, and then was
deposited into uncovered railcars for shipment.
App. 73
100. Anaconda’s fume bag house had five
trapezoidal vents on the roof, which discharged zinc
fume containing arsenic to the atmosphere.
101. Anaconda’s bag house did not have a stack.
102. Throughout Anaconda’s tenure, bag house dust
was visible on the ground around the bag house, and
along the railroad tracks where fumed zinc was loaded
into open railcars.
103. In an internal Anaconda memorandum
documenting an OSHA visit and exit interview, dated
March 21, 1972, an Anaconda representative, in
summarizing comments made by an OSHA assistant
regional administrator, noted “[t]he fume loading area
still has a lot of material blowing around there,” and
“[i]t still is fairly dusty in the area [around the bag
house] due to the wind and openings.”13
104. In the same memorandum, referring to
comments made by another individual, an additional
source of dust was identified: “One problem there is the
loading of open rail cars . . .”14
105. In 1971, the Montana Department of Health
specifically noted, “the Anaconda Company baghouse
stacks were all putting out a very persistent particulate
discharge–it was blowing toward the west southwest
and was visible for about 3000 feet.”15
13
Ex. 103 at 103-0002.
14
Ex. 103 at 103-0003.
15
Ex. 425.
App. 74
106. In a letter dated June 1, 1970, the Montana
Health Department issued a notice to Anaconda that
the zinc fuming plant emissions violated health
standards, and threatened enforcement proceedings.
The letter was titled “Re: Dust Emissions from E.
Helena Plant,” and was addressed to Maurice
Villeneuve, Superintendent, Anaconda Slag Treating
Plant.16
107. According to Asarco’s expert, Dr. Andy Davis
(“Davis”), Anaconda’s zinc fume bag house dust had a
high arsenic concentration at 3500 milligrams per
kilogram. Expert Davis further testified that
Anaconda’s zinc fume emissions from the bag house
settled on the surrounding soils, as well as in open
ponds (Lower Lake and Thornock Pond and Lake) and
ditches which were filled with process water (Wilson
Ditch and the unlined return ditch), where it would
percolate into the groundwater and thereby contributed
appreciably to arsenic in the groundwater.
B. Zinc Dust Left on the Ground by the
Flue
108. A 1954 aerial photograph of the zinc fuming
plant shows what appears to be zinc fume which was
deposited on the ground around the flue.17
109. According to the testimony of expert Davis, soil
samples from the METG database show 3300 parts per
16
Ex. 109.
17
Exs. 517 and 520.
App. 75
kilogram of arsenic in the soil in the area where the
white dust is shown.
110. Jon Nickel, who began working at the zinc
fuming plant in 1973, one year after Asarco purchased
the zinc plant from Anaconda, testified to the practice
of removing zinc dust from the flue system with the use
of large hoe.
111. According to both experts Hansen and Davis,
Anaconda’s zinc dust contains 3500 milligrams per
kilogram of arsenic.
112. Expert Davis further testified that the arsenic
in this dust would percolate to the groundwater and
increase the groundwater contamination at the Site.
113. METG’s data shows that dissolved arsenic in
the groundwater was measured at 56 mg/L and 22
mg/L in the area close to the flue, which is as much as
three orders of magnitude above the MCL, or
maximum allowable amount of a contaminant in
drinking water.
C. Unlined Burning Coal Area
114. Anaconda’s zinc fuming furnace required a
heat source of approximately 1800 degrees Fahrenheit.
Coal was the exclusive fuel source for the zinc fuming
furnace. Before the coal was introduced into the
furnace, it was pulverized in a grinding facility in order
to create a particulate size that would ignite in the
furnace and create a heat source sufficient to fume the
zinc out of the slag. Anaconda routinely introduced 10
to 15 tons of pulverized coal and 57 tons of slag into the
furnace during each two-hour furnace cycle, and
App. 76
routinely used 140 tons of coal each day in its
operations. Anaconda estimated that they used 45,000
tons of coal per year, totaling 2.025 million tons of coal
over the 45 years of operations
115. From approximately 1927 until sometime in
the early 1960s, Anaconda’s coal fines that collected at
Thornock Pond were reportedly flushed out with a fire
hose and the discharge was carried by gravity flow
through a pipeline to the base of the slag dump.
116. The coal burning area can be seen in the 1954
aerial photograph at the top left of the slag pile.18
117. In a letter dated July 31, 1958 from the
superintendent of the zinc fuming plant to another
Anaconda employee, a photograph of this area is
provided, with the following written description:
In the coal drying process, extremely fine
particles of coal dust that passes through the
dust collecting system of the dryer are sprayed
with water and collected as a coal-water mixture
which flows to a settling pond outside the dryer
building. About twice each week, this pond is
flushed out with a fire hose and the discharge is
carried by gravity flow though a pipe line to the
base of the slag dump. This picture shows in the
distance the outlet of the pipe and the
accumulation of coal extending from the outlet to
the bottom of a dirt dike in the foreground. This
coal may be 5 to 6 feet deep in places and is
gradually covered by the approaching slag
18
Demonstrative Ex. 520.
App. 77
dump. Coal is burning where the slag has
reached the coal and also in the foreground
along the base of the dirt dike.19
118. As indicated in the previous paragraph, the
coal fines collected at the toe of the slag pile were
combustible, and after catching fire would have
generated coal ash or fly ash.
119. An Anaconda map designated this area as the
“burning coal area.”20
120. Anaconda knew of and acknowledged that
“underneath the top layer of fine ash is burning coal”
and that “this burning coal is a bad problem.”21
121. In addition, in an undated “Emission Inventory
Questionnaire”, prepared by Anaconda for the Montana
State Department of Health, Anaconda noted that it
collected 234 tons of fly ash from their plant per month,
which was “Mixed with slag and disposed on Dump.”22
122. The combustion of the coal fines in this area
generated readily-leachable coal ash in the vicinity of
open settling ponds such as Thornock Pond and Lake
and open ditches like Wilson Ditch and the return ditch
to Lower Lake.
19
Ex. 410 at 410-0003.
20
Ex. 755.
21
Ex. 410 at 410-0001, -0005; see also Ex. 104; Ex. 105 at 105-0002
(¶ 11).
22
Ex. 106 at 106-0009.
App. 78
123. Expert Davis testified that the burning coal
area was a contributing source to the arsenic plume.23
124. The plume map relied on by expert Hansen
shows a light yellow (1 mg/L) plume of arsenic
originating from the burning coal area.24 Expert
Hansen admitted during cross-examination at trial
that fly ash is a federally regulated substance because
of its toxicity.
125. Atlantic Richfield’s designated corporate
representative at trial, Richard Krablin (“Krablin”),
admitted that Anaconda burned coal, creating fly ash
which mobilizes the arsenic in the coal into a gas.
126. Anaconda released so much coal dust and
burning coal on a regular basis that they were asked by
the City Attorney for the City of East Helena to correct
the emissions in a letter dated July 11, 1947. The City
Attorney wrote that at a meeting of the city council,
petitions were presented containing the signatures of
numerous residents of the City of East Helena
“requesting that some action be taken to eliminate and
abate the condition created by coal smoke and dust
issuing from your plant.” He went on to state that “this
dust and smoke settles upon houses and other property
in the city, even penetrating into the interior of
buildings.”25
23
Demonstrative Exs. 516; 488 at 488-0037 and 488-0043; 488037-A.
24
Demonstrative Ex. 895 at 895-0020.
25
Ex. 435.
App. 79
D. Unlined Slag Pile Pond (Pond 3)
127. In the mid-1960s, Anaconda re-routed the coal
fines it had previously been dumping into an unlined
pond area, and began pumping the fines from the coal
house to the top of the slag pile, which they called Pond
3, as depicted in a schematic sketch admitted and
referenced at trial.26
128. This re-routed coal dust slurry was pumped to
Pond 3, located at the top of the slag pile.
129. Anaconda employee A.B. Kane, who was the
zinc fuming plant superintendent, wrote in a
Memorandum dated August 12, 1962 that “[f]or the last
12 days we have successfully pumped the coal dust
slurry to the top of the slag dump where it disappears
into the slag. We have had to move the end of the pipe
once during this time, when the voids in the slag dump
filled up with coal.”27
130. Anaconda continued pumping this effluent to
Pond 3 until it sold the fuming plant in 1972.
131. Expert Davis testified that this documented
discharge of coal slurry and fly ash to the slag pile
impacted groundwater with arsenic and other metals.
E. Washdowns
132. Anaconda introduced approximately 50 tons of
molten slag into its blast furnace per cycle, and added
26
Ex. 82.
27
Ex. 243.
App. 80
cold slag to bring each furnace charge to approximately
57 tons. A furnace cycle was completed approximately
every two hours, and visible effluent was released into
the atmosphere during the hot slag charging cycle.
Because the hot metals and slag accumulated in the
ladles and furnace, they would have to be removed
through regular tapping cycles. The furnace was
tapped approximately ten times per day.
133. During the process of introducing the slag into
the furnace, and especially during tapping cycles,
emissions and slag debris were deposited throughout
the furnace house. Anaconda did not employ a hood or
retention system.
134. So much effluent was released from the
tapping and charging of the furnace, that the Montana
Department of Health issued a Notice of Violation and
ordered Anaconda to take corrective action to reduce
air emission contaminants.28
135. Anaconda routinely pressure-washed the
furnace building, including the walls, floors, furnace,
and cooling flues, to remove the dust and debris that
resulted from the tapping and charging of the furnace.
136. This washdown process occurred at least three
times per day. No attempt was made to capture this
washdown water. Anaconda simply washed the dust
and debris out the furnace door where it was deposited
into the soils and leached into the groundwater.
28
Ex. 111 to the Deposition of Antonio Toccafondo.
App. 81
137. According to expert Davis, these washdown
waste waters contained very high levels of arsenic, and
would have migrated to Thornock Pond (Pond 2)
because it was near the furnace and the lowest
topographical point on the zinc plant property. This
latter point was confirmed by Atlantic Richfield’s
designated representative, Richard Krablin.
138. Expert Davis testified that Anaconda’s
uncontrolled and daily releases of washdown water
from the furnace contributed appreciably to arsenic in
the groundwater at East Helena.
F. Thornock Pond and Lake (Pond 2)
139. It was uncontroverted that the area
surrounding and including unlined Thornock Pond is a
topographic low, so runoff water from washdowns
emanating from the zinc fuming plant would settle in
this area.
140. As previously stated, washdown waters were
not controlled in any way.
141. Expert Davis testified that washdown water
containing coal dust, fume dust and/or slag from the
furnace with readily leachable arsenic and other metals
migrated to and settled in Thornock Pond (Pond 2).
142. Expert Davis also testified that Thornock Pond
received and stored water from the Anaconda
circulating cooling system, and coal slurry from the
coal pulverizer, and similar to the washdown water, the
arsenic in the zinc plant’s cooling water percolated to
and contaminated area groundwater.
App. 82
143. Anaconda pumped coal dust slurry from the
coal dryer building to Thornock Pond, further
contaminating Thornock Pond.
144. It is the opinion of expert Davis that Anaconda
discharged significant amounts of coal dust slimes and
coal slurry as well as contaminated process waters
containing arsenic and selenium into the unlined
Thornock Pond (Pond 2), and that these releases are a
major contributing source to the arsenic groundwater
plumes at the Site.
145. As previously indicated, Thornock Pond has
been identified as a key contributor to the arsenic
groundwater contamination at the Site.
G. Wilson Ditch
146. Wilson Ditch was initially used to transport
cooling water from Thornock Pond to Prickly Pear
Creek, and was a natural gravity drainage creek.
147. Arsenic-laden process waters would drain from
Thornock Pond into a flue that connected to a natural
ditch identified on the 1930 Sanborn maps as Wilson
Ditch.29 According to the same maps, Wilson Ditch then
drained to Prickly Pear Creek.30
148. An Anaconda plant sketch, believed to be dated
September 9, 1970, also shows zinc fuming plant
process water being discharged to Pond 2 (Thornock
29
Ex. 461-0004 and 461-0005.
30
Ex. 461-0004 and 461-0005..
App. 83
Pond) and then out through Wilson Ditch to Prickly
Pear Creek.31
149. Expert Davis testified that Anaconda’s process
water transported through the unlined Wilson Ditch
contributed to the groundwater contamination in the
area.
150. A letter from the Army Corps of Engineers to
Anaconda dated July 29, 1971, stated that Anaconda’s
facility was identified as the source of a discharge or
deposit of refuse matter into Prickly Pear Creek.32
H. Leaking Cooling Circuit Pipe
151. Anaconda pumped 2,000 gallons of water per
minute through its cooling water circuit up to 1964.
152. In 1964, Anaconda installed a new pump and
began pumping 5,000 gallons per minute of water
through its cooling water circuit, which continued at
this rate until the end of Anaconda’s operations in
1972.
153. The cooling water circuit leaked. Anaconda
documents indicate that approximately 60 million
gallons of cooling circuit water was lost each year
“through evaporation, leakage and general use where
it is not returnable.”33
31
Ex. 441.
32
Ex. 107.
33
Exs. 88, 447.
App. 84
154. Anaconda used a 12-inch, 600-foot steel pipe
and pump system to convey cooling water from Lower
Lake up to the zinc fuming plant.
155. In a February 1, 1965 internal Anaconda
Memorandum, A. B. Kane, superintendent of the zinc
fuming plant, noted that Anaconda planned to replace
this pipe in the next year after discovering the pipe
metal had become thin and was leaking in multiple
locations: “A new 12'' water line will be installed to
replace the 600' line that was put in when the plant
was built. We have found several leaks in the present
line and detected the metal is getting thin.”.34
156. Anaconda’s cooling water intake from the
pump at the base of this pipe was measured as
containing arsenic at 0.1933 ppm, which is also noted
as being above the public health service drinking water
standards in 1970.35
157. In addition, in a December 21, 1961 letter from
A. B. Kane, Anaconda noted that the cooling water
pump that had been used to pump water from Lower
Lake to the plant since 1927 had holes in it: “The
pumps were installed in 1927 when this plant was built
and had been used in Anaconda before that. They are
60 years old and quite worn out. Just recently we had
one of these pumps repaired and discovered that the
34
Ex. 99.
35
Ex. 422 at 422-0001.
App. 85
impeller had holes worn in it and the rings between the
impeller and the casing were worn.”36
158. It is the opinion of expert Davis that
Anaconda’s process water, which leaked from this
supply pipe, contained arsenic and migrated to the
groundwater at the Site.
I. The Unlined Return Ditch to Lower
Lake
159. Anaconda constructed and used a second
unlined ditch to return its cooling water from the zinc
fuming furnace to Lower Lake.
160. The water was pumped from the furnace area
in a pipe for a distance of approximately 50 feet, and
then was delivered back to Lower Lake through an
open ditch via gravity flow. The location of this return
ditch from the zinc fuming plant to Lower Lake was
marked on aerial photographs admitted at trial.37 The
return water was warmer in temperature than the
inflow water. Thus, as the marked aerial photographs
indicate, the return water was delivered to a different
location in Lower Lake than the intake cooling water
pipe and pumphouse.
161. Anaconda measured the flow in this ditch and
reported that water was pumped through this unlined
36
Ex. 92.
37
Ex. 451A; Ex. 451C.
App. 86
ditch at a rate of 3,200 gallons per minute as of
December 31, 1961. 38
162. Anaconda continuously used this unlined ditch
throughout its 45 years of operation.
163. Expert Davis testified that the return water
contained arsenic and percolated through the base of
this ditch during transit and ultimately reported to the
groundwater.
164. A sample taken from a well at the top of this
ditch marked as sample ZP-01 is noted as showing
“moderately high levels of arsenic and metals. Total
and dissolved arsenic range from a high of 42 mg/L and
16 mg/L, respectively.”39
165. The sample is also noted as being “contained in
an unlined ditch, and infiltrates into the ground prior
to discharge to Lower Lake.”40
166. Expert Hansen testified that the dissolved
arsenic level is the amount of arsenic that would
infiltrate through the soils and end up in the
groundwater.
J. Furnace Leaks From Water Jackets
167. Anaconda’s blast furnace was cooled by water
jackets, and the flue transporting materials from the
furnace to the bag house included a section of water
38
Ex. 92.
39
Ex. 415 at 415-0079 and 415-0195.
40
Ex. 415 at 415-0194.
App. 87
jackets located above the tapping platform, which led
from the furnace outlet into a brick section, where
water sprays were used to further cool the gases.
Anaconda pumped approximately 2,000 gallons of
water per minute from Lower Lake to cool its furnace
and flue jackets.
168. The exterior of Anaconda’s water jackets for
the fuming furnace and flues had ruptures and leaks
during its years of operation. In fact, in a September
12, 1966 letter, Anaconda reported, “. . . we were
plagued with many forced shutdowns because of water
jacket leaks, cooling water pump trouble and coal valve
failures.”41
169. In addition, Anaconda used open troughs as
part of their cooling loop at the top of the furnace
where cooling water was exposed to metals in the slag
and emissions in the air. The water in these open
troughs would have encountered spillage or emissions
from the smelting slag and contain arsenic from those
materials.
170. In an April 24, 1952 letter from the State of
Montana Industrial Accident Board to Anaconda, it
was noted in regards to the furnace that “[t]here was a
leak in the water wall that was allowing the cooling
water to enter the slag. This was causing boiling and
splattering of the slag as it was tapped from the
furnace.” This same letter noted that the area around
the coal dock and dryer was “extremely dusty and can
41
Ex. 100.
App. 88
stand to have a good deal of work done on it to make it
into a modern installation.”42
171. It is the opinion of expert Davis that
Anaconda’s cooling water came into contact with
arsenic and other metals through this process, and
when the cooling water leaked, it ran through unlined
ponds and ditches and migrated to groundwater
contributing appreciably to the arsenic contamination
of groundwater at the Site.
K. Lower Lake (Pond 1)
172. Lower Lake was unlined during Anaconda’s
operations.
173. Anaconda used Lower Lake water and
discharged its used cooling water back into Lower Lake
throughout all 45 years of its operations.
174. Lower Lake is a primary source of one of the
two major arsenic groundwater plumes at the Site.
175. Anaconda pumped an average of 1.15 million
gallons of cooling water per year to and from Lower
Lake.
176. Through this process, Lower Lake received
releases of arsenic and other metals from Anaconda’s
cooling water, which had come into contact with those
metals at various points in the cooling circuit as
described above.
42
Ex. 436 at 436-0001 (¶ 3).
App. 89
177. Expert Davis testified that Lower Lake
produced the hydraulic head that drove groundwater
and affiliated contamination to the north under the
slag pile and to the northwest under the City of East
Helena, and was a major contributing factor to the
arsenic plume in this area.
178. Based on the foregoing findings of fact, the
Court has determined that the operations of
Anaconda’s zinc fuming plant contributed arsenic to
the groundwater to an extent that a percentage of
allocation should be assigned to Atlantic Richfield for
the costs incurred by Asarco pursuant to the June 2009
CERCLA Consent Decree and Settlement.
V.
TESTIMONY OF THE EXPERTS
179. Before proceeding to the subject of allocation,
the Court will summarize the opinions of the two
primary experts in this case, and the manner in which
these opinions factor into the Court’s analysis.
180. As previously indicated, Asarco’s primary
expert is Dr. Andy Davis. Dr. Davis has a B.S. Degree
in Applied Biology from Liverpool Polytechnic, a M.S.
Degree in Environmental Sciences (Geochemistry) from
the University of Virginia, and a Ph.D. Degree in
Geology (Geochemistry) from the University of
Colorado. Atlantic Richfield’s primary expert is Brian
G. Hansen. Mr. Hansen has a B.S. Degree in Geology
from Fort Lewis College, and a M.E. Degree in
Geological Engineering from the Colorado School of
Mines. Both experts performed a considerable amount
of work in preparing their opinions in this case, and, of
interest, both experts have previously performed
App. 90
consulting work for the other party. Both have
extensive experience in addressing issues similar to
those involved in this matter, and both experts were
credible. However, their respective approaches to the
case differed in significant respects.
A. The Opinions of Dr. Davis
181. In general, expert Davis looked at the relative
contributions of both Asarco and Anaconda to the
groundwater contamination at the Site, and
determined what he believed to be three different
allocation strategies. Notwithstanding the fact that
years of environmental studies have been conducted at
this Site, many under the direction of the
Environmental Protection Agency, it is the Court’s
belief that the work of expert Davis in this case
represents the only truly comprehensive analysis to
date of the contribution that was made by Anaconda’s
historical operations at the Site to groundwater
contamination. His opinions were based upon a
thorough review of all the documents produced in
discovery, and the actual history of Anaconda’s
operations. Many of these documents, some of which
are described in Section IV above, were never provided
by Anaconda or Atlantic Richfield to the state and
federal regulators. Davis carefully analyzed and
mapped the arsenic plume as it is currently believed to
be configured, and for purposes of Anaconda’s
contribution of contaminants to the groundwater,
delineated two plumes, which he describes as the
App. 91
Northwest Plume (consisting of 3,530,000 sq. ft.) and
the North Plume (consisting of 5,660,000 sq. ft.). 43
182. Based on his analysis, Davis proposes the
following three allocation strategies for the Court’s
consideration, which are generally based on the
geographic areas (measured in square feet) of the
North and Northwest Plumes, as detailed in the
immediately preceding paragraph:44
Strategy
Allocation (%)
Anaconda/
Atlantic
Richfield
Asarco
I
34
66
II
41
59
III
25
75
183. Strategy I assumes that a pump-and-treat
system would be employed to address the arsenic
plume. Thus, five wells would be required at the
property boundary, one in the northwest plume and
four to capture the north plume. Davis assigns
responsibility to Anaconda or Atlantic Richfield for 50%
of the north plume, or 1,420,000 sq.ft., relating to
contributions from Lower Lake, and an additional
370,000 sq. ft., or 20% of the northwest plume for the
43
Demonstrative Exs. 488-0037, 488-0037A, 488-00037B, 48800038 and 488-00043.
44
Demonstrative Ex. 519.
App. 92
Thornock Pond and Lake area contributions, for a total
of 1,790,000 sq. ft. Out of the total 5,230,000 sq.ft. at
the Site, this results in a total allocation of 34% to
Anaconda or Atlantic Richfield, and 66% to Asarco.
Strategy I does not include any adjustment for the time
periods of ownership of the respective parties, and does
not consider any potential offsite remediation that may
be required by EPA.
184. Strategy II allocates equal responsibility for
discharges without consideration for the periods of
ownership over the entire plume area as opposed to the
site-specific contamination utilized in Strategy I. Under
this scenario, Davis assigns to Atlantic Richfield 50%
of the north plume, or 2,830,000 sq. ft., and 50% of the
Thornock Pond and Lake area plume, or 930,000 sq. ft.,
for a total of 3,760,000 sq. ft. This results in a total
allocation of 41% to Anaconda or Atlantic Richfield,
and 59% to Asarco.
185. Strategy III is similar to Strategy II, but
includes consideration of the respective periods of
ownership of the parties. Anaconda discharged arseniccontaminated water into Lower Lake for 45 years, from
1927 to 1972. Based on this period of use, Davis
attributes 30% percent, or 1,730,000 sq. ft. of the north
plume to Atlantic Richfield, corresponding to a 19%
allocation. Because the Thornock Pond and Lake area
was used by both Asarco and Atlantic Richfield, for 21
years, from 1951 to 1972, Davis concludes that Atlantic
Richfield is responsible for 19%, or 660,000 sq.ft., of the
northwest plume. In total, Atlantic Richfield is
responsible for 2,390,00 sq. ft., or in aggregate, 25% of
App. 93
the total plume. This results in a total allocation of 25%
to Anaconda or Atlantic Richfield, and 75% to Asarco.
186. Davis recommends Strategy II, because it is
uncertain whether EPA will require some form of
groundwater remediation at the Site, which is an
assumption in Strategy I. Davis disfavors Strategy III
because he thinks it underestimates Anaconda’s
releases of arsenic to the groundwater. In any event,
Davis argues that all three of these allocation
strategies are conservative and favor Atlantic Richfield,
because the focus of these three strategies is only on
the contamination from Lower Lake and the Thomock
Pond and Lake area, and excludes other sources of
groundwater contamination caused by Anaconda’s
operations detailed in Section IV above.
B. The Opinions of Mr. Hansen
187. Expert Hansen employed a different approach
in analyzing this case. Although he concedes that
Anaconda’s zinc fuming operations generated arsenicbearing contaminants, he concludes that METG’s
remediation efforts are directed to remediating only
Asarco’s contribution to the contaminated
groundwater, and that the remediation efforts made
before the June 2009 CERCLA Consent Decree and
Settlement addressed and alleviated any contribution
of arsenic made by Anaconda at the Site.
188. Hansen focuses on the operations of Asarco,
and endeavors to distinguish them from those of
Anaconda, thereby minimizing Anaconda’s
responsibility. For example, Hansen argues that it is
not scientifically possible for the concentrations of
App. 94
arsenic in the materials involved in Anaconda’s
operation, being coal and zinc fume, to have caused the
levels of contamination observed at the Site. Hansen
specifically refers to coal, the fuel used in the zinc
fuming operation, which has a concentration of 6 ppm
of arsenic, and zinc fume, which has a concentration of
3,500 ppm of arsenic, and concludes that these sources
of arsenic could not be the cause of the contamination
of 120,000 ppm of arsenic found in the sediments
underlying the Thornock Pond and Lake area. The logic
of this approach is superficially compelling, but ignores
the multiple sources of arsenic-bearing contaminants
that Anaconda contributed to this Site over the 45
years of its operations. In fact, it was clear to the Court
during expert Hansen’s cross-examination, that he had
failed to consider many of the historical documents
referenced in Section IV above that document
Anaconda’s discharge of arsenic to the atmosphere and
groundwater, including the extensive use by Anaconda
in its operations of arsenic-laden waters from Lower
Lake for 45 years.
189. Regardless, expert Hansen concludes that the
allocation percentage to be assigned to Atlantic
Richfield is zero.
VI.
ALLOCATION
190. One could characterize the conflicting opinions
of these two experts as leaving the Court with an “all
or nothing” scenario. However, as explained in
paragraphs 14, 45, 47 and 50 of the Conclusions of Law
section of this order, mathematical certainty in
determining the percentage of allocation is rarely
possible, with the court having broad discretion in
App. 95
allocating response costs among liable parties using
such equitable factors as the court deems appropriate
under the circumstances of the case. These equitable
factors will be addressed later in this order.
191. The Court has carefully considered all of the
evidence in this case, paying particular attention to the
opinion testimony of the two experts summarized in
Section V above. As between experts Hansen and
Davis, the Court finds the opinions of expert Davis to
be compelling and persuasive. Regarding the three
allocation strategies proposed by Davis, the Court
adopts Strategy III as the appropriate method of
allocation, for the simple reason that it is the only
strategy that includes the time periods of ownership,
which the Court determines to be one of the important
factors to be considered in determining allocation. It is
not enough to consider only Asarco’s contribution of
arsenic to this site, as urged by Atlantic Richfield.
Expert Davis was the only witness at trial who was
qualified by education, training, experience, and the
work he performed in this case, to quantify the
contribution of arsenic made by Anaconda’s 45 years of
operation at the Site. Atlantic Richfield’s strategy of
incessantly focusing on Asarco’s operations, while
ignoring or minimizing Anaconda’s operations, leaves
the majority of expert Davis’s opinions largely
unchallenged.45
45
To be fair, Atlantic Richfield does propose three alternative
allocation approaches in its proposed amended post-trial findings
of fact and conclusions of law (Doc. 267, ¶ 54). The Court has
App. 96
192. Therefore, the Court determines that Atlantic
Richfield’s equitable share of the response costs paid by
Asarco under the June 2009 CERCLA Consent Decree
and Settlement is 25%. The amount of the response
costs subject to this 25% allocation is addressed in the
Conclusions of Law, Section II below.
VII.
A NA C ONDA
MISLED
THE
E PA
REGARDING ITS RELEASES AT THE SITE
193. From 1987 to 1990, Anaconda received four
letters from the EPA either requesting information in
the form of a 104(e) letter, or putting Atlantic Richfield
on special notice of its liability for response costs under
CERCLA as a PRP at the Site.46
194. Mr. Krablin assisted Anaconda in responding
to the EPA’s CERCLA 104(e) requests. Although Mr.
Krablin is no longer employed by Atlantic Richfield, he
was present throughout the trial and seated at counsel
table as Atlantic Richfield’s corporate representative,
and during the time period in question, Krablin’s title
was an environmental engineer. Krablin was at the
Site only once during his entire career with Anaconda,
in 1971. He also testified twice during the trial, once in
Asarco’s case in chief, and later during Atlantic
Richfield’s case in chief. During cross-examination by
Asarco’s counsel, Krablin was at times evasive and his
answers were frequently non-responsive. The Court
considered the three options proposed by Atlantic Richfield in this
single paragraph in reaching its conclusion regarding the
appropriate percentage of allocation.
46
Exs. 184; 185; 408; and 419.
App. 97
was required on occasion to admonish Krablin to
directly answer questions. Krablin was also the
corporate representative who attested to Atlantic
Richfield’s discovery responses in this case.
195. On March 12, 1987, Anaconda received its first
letter from the EPA which requested information
pursuant to Section 104(e) of CERCLA, 42 U.S.C.
§ 6901(e).47
196. The March 12, 1987 letter sought, among other
things, the following information from Anaconda: “A
narrative explaining the facility’s operation throughout
your period of ownership/operation. Please document
all chemical constituents used in your treatment
process and disposal methods practiced for any wastes
or by-products. This should include copies of all
existing documents relating to the subjects listed
above.”48
197. In response, Anaconda failed to provide
documents to the EPA relating to Anaconda’s disposal
methods that were responsive to this request,
including: (a) a document describing particulate
discharge from the baghouse (Ex. 425); (b) a letter from
the U.S. Army Corps of Engineers regarding
Anaconda’s illegal discharges of waste to Prickly Pear
Creek (Ex. 107); (c) an internal Anaconda Company
Memorandum regarding emissions of coal dust (Ex.
173); (d) an internal Anaconda document that indicated
that Anaconda lost 60 million gallons of arsenic47
Ex. 184.
48
Ex. 184 at 184-0002.
App. 98
containing water through evaporation, leakage and
general use (Ex. 447); and (e) an internal Anaconda
Company document regarding leaks from the furnace
(Ex. 103).49
198. Anaconda also failed to disclose any
communications between Anaconda and the State of
Montana health officials regarding emissions of
pollution from the Anaconda zinc fuming facility, which
were responsive to the 104(e) letter.
199. The March 12, 1982, the 104(e) request also
asked Anaconda to identify the names of employees
who were interviewed for purposes of responding to the
request.50 In response, Anaconda stated that it did not
interview any of its former employees to find
information responsive to the May 12, 1987, 104(e)
request.51
200. On February 8, 1990, the EPA sent Anaconda
a follow-up 104(e) request which stated that “EPA is
trying to construct a data base of materials and
processes pertaining to the industrial activities that
took place and are taking place at the site. For the data
base to be complete and accurate, EPA needs complete
records of your industrial operations at East Helena.”
That request also sought “any records . . . of annual
49
All of the documents referenced in this section were in
Anaconda’s files and available for production to the EPA.
50
Ex. 184.
51
Ex. 407 at 407-0003.
App. 99
primary and fugitive emissions” from Anaconda’s
operations or the “best estimates” of such emissions.52
201. Anaconda responded to that letter on March
15, 1990. In that response, Anaconda falsely claimed
that: “Generally, annual emission records were not
available for the period of Anaconda Company’s
operations of the zinc fuming plant.”53
202. Anaconda had in its possession documents that
indicated Anaconda lost 60 million gallons of arseniccontaining water through evaporation, leakage and
general use annually, which were responsive to the
February 8, 1990 request, but Anaconda did not
disclose those documents to the EPA.
203. On February 23, 1990, the EPA sent Anaconda
a Special Notice Letter pursuant to CERCLA Section
122, 42 U.S.C, § 9622, which formally demanded that
Anaconda reimburse the EPA for all costs it incurred in
connection with response actions at the East Helena
Site.54
204. On April 25, 1990, Atlantic Richfield responded
to the Special Notice Letter. In that response, Atlantic
Richfield made the following misrepresentation:
“Cooling water was pumped from Lower Lake through
a closed transport piping system to non-contact cooling
52
Ex. 408 at 408-0001 and 408-0003.
53
Ex. 459 at 459-0003.
54
Ex.185.
App. 100
cells in the furnace and then discharged back to the
Lower Lake through a closed piping system.”55
205. Atlantic Richfield knew, at the time it sent its
April 25, 1990 letter, that the cooling water pumped
from Lower Lake was not discharged back to Lower
Lake through a closed piping system but was instead
discharged through an open and unlined ditch.
206. Atlantic Richfield never contacted the EPA to
correct this false statement.
207. On April 26, 1990, Atlantic Richfield sent the
EPA another letter containing two affidavits, one by
former Anaconda employee Walter H. Unger and
another by former Anaconda employee A.B. (Bert)
Kane, who was the former zinc plant superintendent.56
208. The Unger Affidavit contained the following
false and misleading statement: “The system was
designed so that no cooling water would escape from
the closed-loop system and so that no material would
be discharged into the cooling water. The heated water
was then returned to Lower Lake. The system was
designed such that the water that was being returned
to Lower Lake from the cooling system would contain
only those materials that were in the water when it
was removed from Lower Lake.”57
55
Ex. 113 at 113-0031.
56
Ex. 156.
57
Id. at Ex. 156-0003.
App. 101
209. The Kane Affidavit contained the following
false and misleading statement: “The water was kept
in its own piping system and was designed so that no
cooling water would escape from the system and so that
no material would be discharged into the cooling
water.”58 These two affidavits were the subject of
extensive testimony at trial. Krablin reviewed these
affidavits before they were submitted to the EPA.
During his cross-examination at trial, Krablin labored
to parse the words in these affidavits by attempting to
explain, on multiple occasions, that these affidavits
referred to the cooling system within the zinc fuming
plant itself, and did not refer to the overall cooling
water system, which involved the pumping of arseniccontaminated water from Lower Lake to the furnace
area, and the return of arsenic-laden process water
from the furnace area back to Lower Lake through a
lengthy, open, unlined ditch. In viewing these two
affidavits, and listening to the testimony of Krablin,
the Court has concluded that the intent of these
affidavits was to mislead the EPA into believing that
there was no loss of process water in connection with
Anaconda’s operations. As previously explained, the
process water came from, and returned to Lower Lake.
The pumps associated with this process leaked, the
pipeline from Lower Lake to the zinc fuming plant
furnace leaked, and the return open, unlined ditch to
Lower Lake obviously leaked water. This water
contained high levels of arsenic, and serves as one of
the primary sources of groundwater contamination
caused by Anaconda’s operations.
58
Id. at Ex. 156-0004.
App. 102
210. The Court was further confused and perplexed
by Krablin’s testimony on this subject when he
attempted to explain his conflicting answers regarding
the import of these two affidavits by contending that he
did not appreciate the distinction between an affidavit
and a declaration. In any event, during crossexamination, Krablin ultimately admitted that if
Unger and/or Kane represented in their affidavits that
it was a closed piping system, those representations
would have been false.
211. On May 15, 1990, the EPA sent a letter to
Atlantic Richfield explaining that it determined that
“ARCO is a potentially responsible party for the
Process Ponds Operable Unit at the East Helena
Site.”59
212. The May 15, 1990 letter from the EPA also
concluded that there were “elevated concentrations of
heavy metals in water being discharged from the zinc
fuming plant into Lower Lake.”60
213. On May 21, 1990, Atlantic Richfield responded
to the EPA and made the following misleading claim:
“Even assuming that the non-contact discharge water
contained elevated concentrations of metals, no
evidence exists that these metals were added by the
non-contact cooling water system. Rather, the
concentrations of metals discharged in the non-contact
59
Ex. 419 and 419-0002.
60
Ex. 419 at 419-0001.
App. 103
cooling water were the same as those in the withdrawal
from Lower Lake.”61
214. Anaconda and Atlantic Richfield made multiple
false and misleading statements to the EPA regarding
its discharges to and its use of cooling water from
Lower Lake.62
215. Based on Atlantic Richfield’s deliberate failure
to tell the EPA the truth about its operations, EPA
looked solely to Asarco to conduct remedial action at
the Site.63
216. Additionally, based on Atlantic Richfield’s
misrepresentations during the subsequent clean-up
investigations and issuance of environmental reports,
the EPA and later METG, focused on Asarco’s
operations, and overlooked the contributions of
Anaconda’s zinc fuming facility. This focus on Asarco’s
operations, and not Anaconda’s, to determine the
sources of contamination to the groundwater was
exacerbated by the fact that the zinc fuming facility
ceased operations in 1982. The subsequent
environmental investigations and reports were thus
focused on the only operational facility at the Site,
which was Asarco’s.
217. Atlantic Richfield also repeated those false
statements when responding to discovery in this case.
61
Ex. 186 at 186-0008.
62
Exs. 113 & 156.
63
Ex. 35 at 35-0019.
App. 104
In its December 23, 2013 response to Asarco’s Request
for Admission Number 5, Atlantic Richfield stated the
following: “the zinc fuming plant utilized a closed-loop,
non-contact cooling water system to control the
temperature of the furnace and reduce the temperature
of zinc oxides and other gases before entry to the
baghouse . . . . The cooling water system did not result
in contaminant loading to Lower Lake.”64
218. At the time Atlantic Richfield provided its
response to Asarco’s Request for Admission Number 5,
Atlantic Richfield had documents in its possession that
showed that Anaconda returned cooling water to Lower
Lake via an open ditch, not a closed-loop, non-contact
cooling water system.
219. Within days following the deposition of Richard
Krablin, Atlantic Richfield amended its response to
Asarco’s Request for Admission Number 5, as well as
other discovery responses by stating the following:
“certain information provided in deposition testimony
indicates that the closed-loop, non-contact cooling
water system described in Atlantic Richfield’s Previous
Responses was modified after construction, but prior to
December 21, 1961 to return cooling water from the
zinc fuming plant to Lower Lake via an open ditch
rather than a closed pipe.”65
220. The foregoing misrepresentations by Anaconda
constitute a lack of cooperation on the part of Anaconda
with the EPA, warranting consideration by the Court
64
Ex. 482 at 482-0006.
65
Ex. 487 at 487-0002 – 487-0003.
App. 105
of an uncertainty premium or error factor under the
sixth Gore Factor, which will be addressed in the
following Conclusions of Law.
CONCLUSIONS OF LAW
1. This Court has subject matter jurisdiction based
upon the exisence of a federal question, 28 U.S.C.
§ 1331, and Section 113(b) of CERCLA, 42 U.S.C
§ 9613(b).
2. CERCLA § 113(f) allows “[a] person who has
resolved its liability to the United States . . . for some
or all of a response action or for some or all of the costs
of such action in an administrative or judicially
approved settlement” to seek contribution from other
potentially responsible persons. 42 U.S.C.
§ 9613(f)(3)(B).
3. CERCLA has two primary policy goals: (1) to
encourage the “expeditious and efficient cleanup of
hazardous waste sites,” and (2) to ensure that those
responsible for hazardous waste contamination pay for
the cleanup. Asarco LLC v. Atl. Richfield Co., 866 F.3d
1108, 1115 (9th Cir. 2017). In keeping with these policy
goals, CERCLA § 113 provides for reimbursement of
costs incurred by a party that overpaid for its share of
the cleanup. Id. at 1115.
4. In analyzing the merits of a contribution claim
under § 113(f) of CERCLA, courts must conduct a twopart inquiry: “First, the court must determine whether
the defendant is ‘liable’ under CERCLA § 107(a);
Second, the court must allocate response costs among
liable parties in an equitable manner.” United States v.
Kramer, 644 F. Supp. 2d 479, 488-89 (D.N.J. 2008)
App. 106
(quoting Goodrich Corp. v. Town of Middlesbury, 311
F.3d 154, 168 (2d Cir. 2002)).
5. The burden of proof in a CERCLA case is a
preponderance of the evidence. Georgia-Pacific
Consumer Products LP v. NCR Corp., 980 F. Supp. 2d
821, 829 (W.D. Mich. 2013).
I.
ATLANTIC RICHFIELD’S
UNDER CERCLA § 107(a)
LIABILITY
6. In order to establish a prima facie case for
liability under CERCLA § 107(a), the plaintiff must
prove the following four elements:
a. The site on which the hazardous substances are
contained is a “facility” under CERCLA’s
definition of that term, Section 101(9), 42 U.S.C.
§ 9601(9);
b. A “release” or “threatened release” of any
“hazardous substance” from the facility has
occurred, Section 107(a), 42 U.S.C. § 9607(a)(4);
c. Such “release” or “threatened release” has
caused the plaintiff to incur response costs that
were “necessary” and “consistent with the
national contingency plan,” Section 107(a), 42
U.S.C. §§ 9607(a)(4) and (a)(4)(B); and
d. The defendant is within one of four classes of
“persons” subject to the liability provisions of
Section 107(a).
City of Colton v. Am. Promotional Events, Inc.-West,
614 F.3d 998, 1002-1003 (9th Cir. 2010).
App. 107
A. Anaconda’s Zinc Fuming Plant is a
“Facility” Under CERCLA
7. Under Section 101(9) of CERCLA, the term
“facility” means:
(A) any building, structure, installation,
equipment, pipe or pipeline (including any pipe
into a sewer or publicly owned treatment works),
well, pit, pond, lagoon, impoundment, ditch,
landfill, storage container, motor vehicle, rolling
stock, or aircraft, or (B) any site or area where a
hazardous substance has been deposited, stored,
disposed of, or placed, or otherwise come to be
located; but does not include any consumer
product in consumer use or any vessel.
8. The East Helena Superfund Site, including
Anaconda’s zinc fuming furnace, flues, bag house,
water pipes, process ponds, and other appurtenances,
is a “facility” within the meaning of Section 101(9) of
CERCLA, 42 U.S.C. § 9601(9).
B. Anaconda “Released” a “Hazardous
Substance” at the Site
9. A “release” means, in pertinent part, “any
spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching,
dumping, or disposing into the environment . . .”
Section 101 (22) of CERCLA, 42 U.S.C. § 9601(22).
10. A “hazardous substance” is defined under
CERCLA to include arsenic. Section 101(14) of
CERCLA, 42 U.S.C. § 9601(14); 49 C.F.R. § 172.101,
App. A.
App. 108
11. Anaconda is responsible for disposals or
“releases” within the meaning of Section 101(22) of
CERCLA, 42 U.S.C. § 9601(22), into the environment
at or from the East Helena Site.
12. “Hazardous substances” within the meaning of
Section 101(14) of CERCLA, 42 U.S.C. § 9601(14),
including but not limited to arsenic, were disposed of,
placed, released, or otherwise became located at the
East Helena Site by and because of Anaconda and its
zinc fuming operations.
C. Anaconda’s “Release” at the Site Caused
Asarco to Incur “Necessary” Response
Costs Consistent with the National
Contingency Plan (“NCP”)
13. For a response cost claim, a plaintiff “need not
establish a direct causal connection between the
hazardous substance released by the Defendants and
the incurrence of response costs.” Coeur D’Alene Tribe
v. Asarco Inc., 280 F. Supp. 2d 1094, 1124 (D. Idaho
2003) (citing U.S. v. Alcan Aluminum Corp., 964 F.2d
252 (3rd Cir. 1992)).
14. Once a party is liable, it is required to share the
costs of response regardless of whether it is the sole
cause of those costs. Boeing v. Cascade, 207 F.3d 1177,
1185-1186 (9th Cir. 2000).
15. “A CERCLA contribution plaintiff is not
required to prove its case with ‘mathematical precision’
or ‘scientific certainty;’ rather, it must prove its right to
contribution by a preponderance of the evidence.”
Asarco LLC v. NL Industries, Inc., 106 F. Supp. 3d
1015, 1026 (E.D. Mo. 2015) (citations omitted).
App. 109
16. CERCLA liability may be inferred from the
totality of the circumstances; it need not be proven by
direct documentary evidence. NL Industries, Inc., 106
F. Supp. 3d at 1026; Georgia-Pacific Consumer
Products LP v. NCR Corp., 980 F. Supp. 2d 821, 829
(W.D. Mich. 2013) (citing Tosco Corp. v. Koch Indus.,
Inc., 216 F.3d 886, 892 (10th Cir. 2000)); Alcan., 964
F.2d 252 (holding that “virtually every court that has
considered this question has held that a CERCLA
plaintiff need not establish a direct causal connection
between the defendant’s hazardous substances and the
release or the plaintiffs incurrence of response costs.”)
17. The Court must construe the CERCLA statute
“liberally to avoid frustration of the beneficial
legislative purposes” of protecting and preserving
public health and the environment. NL Industries, Inc.,
106 F. Supp. 3d at 1026 (citing U.S. v. Mallinckrodt,
Inc., 2006 WL 3331220, at *3 (E.D. Mo. Nov. 15, 2006).
18. Asarco produced substantial and convincing
evidence establishing that releases occurred at the
Anaconda zinc fuming furnace and flues, at the
Anaconda bag house, at the Anaconda slag and coal
dumps, through leaking cooling water pipes, and at the
unlined process ponds and ditches utilized by
Anaconda for cooling and wash-down water, including
but not limited to Lower Lake, Thornock Pond and
Lake, and Wilson’s Ditch.
19. Asarco produced substantial and convincing
evidence establishing that these Anaconda releases
resulted in the migration of arsenic into the
groundwater, which directly contributed to the arsenic
plumes that are driving the East Helena Site cleanup.
App. 110
20. Because Asarco has established that there were
several plausible migration pathways via which arsenic
released by the Anaconda zinc fuming operations
migrated into the groundwater and contributed to the
arsenic plume that is driving the East Helena Site
cleanup, Asarco has met its burden on causation.
Atlantic Richfield has not presented any compelling
evidence that disproves Anaconda’s causation.
21. Response costs are considered necessary when
“an actual and real threat to human health or the
environment exist[s].” City of Colton, 614 F.3d at 1003
(citing Carson Harbor Village, Ltd v. Unocal Corp., 270
F.3d 863, 870-71 (9th Cir. 2001) (en banc)).
22. Response costs are considered consistent with
the NCP “if the action, when evaluated as a whole, is in
substantial compliance” with it. City of Colton, 614
F.3d at 1003; 40 C.F.R. § 300.700(c)(3)(i).
23. The NCP “is designed to make the party seeking
response costs choose a cost-effective course of action to
protect public health and the environment.” City of
Colton, 614 F.3d at 1003 (quoting Carson Harbor
Village LTD. v. County of Los Angeles, 433 F.3d 1260,
1265 (9th Cir.2006)).
24. Where costs are incurred pursuant to an
Administrative Order issued by the EPA or a Consent
Order between the plaintiff and the EPA, there is an
irrebuttable presumption that those costs are
consistent with the NCP. 40 C.F.R. § 300.700 (c)(3)(ii);
Central Me. Power Co. v. F.J. O’Connor Co., 838 F.
Supp. 641, 648 (D. Me. 1993); Action Mfg. Co. v. Simon
Wrecking Co., 2008 WL 2880324 (3rd Cir. 2008)
App. 111
(unpublished) (citing Bancamerica Commercial Corp.
v. Mosher Steel of Kansas, Inc., 100 F.3d 792, 796-97
(10th Cir. 1996)).66
25. Costs arising from RCRA compliance can be
recovered in a CERCLA action, and work performed
under a RCRA order or consent decree may still be
consistent with the NCP such that the associated costs
may therefore still be recoverable under CERCLA. U.S.
v. E.I. du Pont de Nemours & Co., 341 F. Supp. 2d 215,
235-37 (W.D.N.Y. 2004);
26. The EPA has stated that “even if a party takes
a cleanup action under an authority other than
CERCLA (e.g., RCRA corrective action), it may have a
right of cost recovery under CERCLA Section 107 if the
action was a necessary response to a release of
hazardous substances, and was performed consistent
with the NCP.” Nat’l Oil and Hazardous Substances
Pollution Contingency Plan, 55 Fed. Reg. 8666-01, 8796
(Mar. 8, 1990).
27. Asarco paid $111.4 million in response costs for
the East Helena Site pursuant to the June 2009
CERCLA Consent Decree, which constitutes a Consent
Order between the Plaintiff and the United States.
28. The response costs incurred by Asarco for the
East Helena Site pursuant to the June 2009 CERCLA
66
This issue was the subject of pretrial briefing by the parties. See
“Defendant Atlantic Richfield Company’s Point Brief Regarding
Asarco’s Burden of Proof on Response Costs” (Doc. 241), and
“Asarco’s Response in Opposition to Defendant Atlantic Richfield
Company’s Point Brief” (Doc. 256).
App. 112
Consent Decree, and the subsequent remediation
measures paid for out of those response costs and
implemented by the METG with the EPA’s oversight,
are necessary and consistent with the Nat
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