Opposition Brief — Atlantic Richfield Co. v. Beck

Supreme Court brief1996

Ask Donna

What actually matters in this document.

Text

\a) Supreme Court, U.S.

No. 95-1387 2

eo” oo oe

aan MAR 29 1996

Supreme Conrt of the Stetes :

October Term, 1995

ATLANTIC RICHFIELD COMPANY, a Delaware Corporation,

Petitioner,

vs.

WEST SIDE DITCH COMPANY, a Montana Corporation;

CITY OF DEER LODGE; RONALD KELLY; JERRY

RUTLEDGE; CHARLES BECK; RICHARD FORSON;

GEORGE REISTAD; THE MONTANA DEPARTMENT OF

FISH, WILDLIFE AND PARKS, UNITED STATES

ENVIRONMENTAL IROTECTION AGENCY; THOMAS A.

BECK; MELVIN R. BECK; ROBERT EVANS,

Respondents.

On Petition for Wit of Certiorari to the United States

Court of Appeals for the Ninth Circuit

RESPONDENTS’ BRIEF IN OPPOSITION

RUSS McELYEA | JOHN E. BLOOMQUIST

Counsel of Record '” DONEY, CROWLEY, ~

MOORE, O'CONNELL BLOOMQUIST AND

& REFLING, P.C. METROPOULOS, P.C.

Attorneys for Respondais West Attorneys for Respondents

Side Ditch Company, Cty of Deer Thomas A. Beck, Melvin

Lodge, Ronald Kelly, Jrry Rutledge, R. Beck and Robert Evans

Charles Beck, Richard ‘orson and P.O. Box 1185

George Reistad Helena, MT 59624-1185

P.O. Box 1288 (406) 443-7018

Bozeman, MT 5977+1288

(406) 587-5511

‘io (00) 3 APPEAL + (800) 5 APPEAL + (800) BRIEF 21 N

~ Va

QUESTIONS PRESENTED

1. Whether this Court should review the doctrine of

complete federal pre-emption, when the issue of pre-emption was

not raised by the Petitioner on appeal, and was no: discussed by

the appellate court in its opinion.

2. Whether the Respondents’ state law-based claims for

monetary damages constitute a “challenge,” or an effort to

“review” an EPA order within the meaning of CERCLA

§ 9613(h), when the EPA has concluded that Respondents’ claims

are nota “challenge” or an effort to “review” its cleanup orders.

PARTIES TO THE PROCEEDINGS

The list of parties described in Petitioner’s brief is correct.

As required by Supreme Court Rule 29.6, Respondent West

Side Ditch Company states that it does not have a parent company,

or any subsidiaries or affiliates.

TABLE OF CONTENTS

Page

IND cc idawkbs de dvedscccedveadcenes i

Pe GNI av cece ccccswesccccbonese ii

PE Guncabaduec Cacetedveserscececes iii

EE Cibclodcdotcerberbescececacveses iii

nc chveeteeseseecewreceoeowees l

iy ES Suéev's ce cccnviededvcvece l

ee I vecccee cs cvecesescoccess 4

1. Federal District Court Proceedings ....... 4

2. Ninth Circuit Proceedings .............. 5

Reasons for Denyingthe Writ ................000. 6

ae PPPPPTTTITITILITT TTT 7

II. Challenges Under 42 U.S.C. §9613(h)........ 20

GROIN doc 6 Sec cb eccecccacéessescccccccccces 27

TABLE OF CITATIONS

Cases Cited:

Aaron v. National Union Fire Ins. Co. of Pittsburgh, 876

EE DEED sé codeccoccensccccocecs 10

Contents

Page

Atchison v. Peterson, 87 U.S. 507 (1874) ............ 3

Avco Corp. v. Aero Lodge No. 735, 390 U.S. 557 (1968) . 19

Bartholet v. Reishauer A.G. (Zurick), 953 F.2d 1073 (7th

Fe Re res Ste ee erry i)

Caterpillar Inc. v. Williams, 482 U.S.386(1987) .....

Pe PP Pe ST et ee 8,11, 12,14, 15, 19,23

Deford v. Soo Line R. Co., 867 F.2d 1080 (8th Cir. 1989),

cert. denied, 492 U.S.927(1989) ................ 13,14

Exxon Corp. v. Eagerton, 462 U.S. 176(1983) ........ 24

Florida Lime & Avocado Growers, Inc. v. Paul, 373 U.S.

SRG HED cnccccccs déndbbséedbekssa ckebeebes< 24

Fort Halifax Packing Co. v. Coyne, 482 U.S. 1 (1987) .. 9

Franchise Tax Board v. Construction Laborers Vacation

Trust, 463 U.S. 1, 88 L. Ed. 2d 420, 103 S. Ct. 2841

| Pee ores ee ee Pe ee ee 8,23

Gully v. First National Bank, 299 U.S. 109,81 L. Ed. 2d 70,

SEG GENE. oc ndscesces pe ree nr ee 12

International Paper Co. v. Oullette, 479 U.S.41 (1987) . 25,26

Lingle v. Norge, 486 U.S.399, 100 L. Ed. 2d 410, 108 S.Ct.

BOTT GREED 60 csi. on 00 cn ciccudcsdecasdbbeneseate 24

Contents

Page

Mayor and Council v. Klockner & Klockner, 811 F. Supp.

PPV PTT rrTerrrerieririe ee 23

Merrell Dow Pharmaceuticals, Inc. v. Thompson, 478

U.S. 804, 92 L. Ed. 2d 650, 106 S. Ct. 3229(1986) .. 9,23

Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 63 (1987)

(ib Sa euhesanetarendodetstientacceewnas 9,10, 19,20

Quigley v. Birdseye, 11 Mont. 439, 28 P.741 (1892) ... 3

Railway Labor Executives Ass'n v. Pittsburgh & Lake Erie

R. Co., 858 F.2d 936 (3d Cir. 1988) ............... 14

Reardon v. United States, 947 F.2d 1509 (ist Cir. 1991) ... 20,21

Rice v. Panchal, 65 F.3d 637 (7th Cir. 1995) .......... 9,13

See the Fairv. Kohler Dye & Speciality Company, 228 U.S.

22, 57 L. Ed. 716,33 S.Ct.410(1913) ............ 11

Textile Workers v. Lincoln Mills, 353 U.S. 448, 1 L.Ed. 2d

De oe oe ateaieree ees 19

Union Pacific R. v. Sheehan, 439 U.S.89,94L. Ed. 24354,

SP ED ‘néncccedscesesscosocececsees 13

United States v. New Mexico, 438 U.S. 696, 98 S. Ct. 3012,

TP ia, SCD: gnicng cecesacabesbeses ec 18

United States v. State of Colorado, 990 F.2d 1565 (10th

Cir. 1993), cert. denied, 114S. Ct. 922 (1994) ...... 21

Contents

Page

Voluntary Purchasing Groups, Inc. v. Reilly, 889 F.2d 1380

CHUNG IO 4 vende dewsds cdccucses ast 21

Warner v. Ford Motor Company, 46 F.3d 531 (6th Cir.

ROE i Apaea nddn eh de ond dad bebe eee ae 10, 11

Statutes Cited:

NEUE, CI, PSO NUEE “oc ccc ccncucthecsceweses 2

Mont. Code Ann. § 85-2-102(2)(a) ..............0-- 2

NOG. CORRE. Bere sé cccswiccvcodcsevcecs 2

EG EE ae dibatdobachss caduceus shbaeweres 7

EE osc bdvisnsaRsnctendncteakaseowe 16

ae Tk ee re Peres Py Orr er 8

BUS.C.§ 1491 2.0... cece cece e cece cece etme eeee ..4 |

Fa OO. nb. sciesdcccvevaedndbhéutnaes 10

PU ED ash 6s cde seidvcdcsciveecse¥eus ee 18

PPS. ec kotddcuedss cdecbenénvenss 10

EE osarecesesensddesveddecamelee 15

SOMERS csc ccccscsescctvebhesdetve deltesi 4

vii

Contents

Page

er IE nods atb ess cc deceesectvecnces passim

PEE) cndaieas fe0nte<danvseces 11,12, 18

Ge ie ENED 6 nes coccccesenes 11,12, 13,14, 15,19, 20

i etal c aoe eens beeds bie tek ees ceen « 17

i iets Coad ne ww b ie 6s SARA eke be ae on 17

Cac casero sk eka bb0ser ee os bees 18

Rule Cited:

iC CD MD on. cc omeccccoeevevinens 6

Other Authorities Cited:

Cong. Rec. H29735 (Oct. 8, 1986) .........ccccccees 16

Cong. Rec. $14915 (Oct. 3, 1986) ................6. (16

132 Cong. Rec. $14928 (daily ed. Oct. 3, 1986) ....... 21

Cong. Rec. $284441 (daily ed. Oct.3,1986) ......... 16

H.R. Rep. No. 253(1), 99th Cong., 2d Sess. 266 (1985)

uh -o obo aau Luk bates cece kaa ad eek sees 4 20

viii

Contents

Page

APPENDIX

Appendix A — Opinion of the United States Court of

Appeals for the Ninth Circuit Filed August 17, 1995 . la

Appendix B — Complaint Dated December3,1990 ... 10a

_ Appendix C— Amended Complaint Dated May 24, 1991

nate d0s0etauN tahoe bao nh ceaea sense ane 18a

Appendix D— Complaint Dated April 29, 1992 ....... 26a

Appendix E— Relevant Statutes ................... 34a

STATEMENT OF THE CASE

The doctrine of complete pre-emption was not raised by the

Petitioner during the appeals process in the Ninth Circuit, and

was not discussed in the Ninth Circuit’s opinion. Petitioner’s

assertion that this case presents a “significant and recurring issue

under the doctrine of complete pre-emption” is incorrect.

The Ninth Circuit ruled that under 42 U.S.C. § 9613(h),

Respondents’ state law-based water law and tort claims are not

a “challenge” toa “removal or remedial action” or an attempt “to

review any order” issued by the United States Environmental

Protection Agency (EPA). Petitioners ask that the Ninth Circuit's

ruling be overturned.

A. Factual Background

West Side Ditch Company is a Montana Corpocation

organized to provide irrigation water to ranchers along the Clark

Fork River. The individual plaintiffs in these two actions are

shareholders of the corporation or persons entitled to receive

water from the Clark Fork River.’

ARCO operates a series of tailings ponds (Warm Springs

Ponds) located above Respondents’ diversions on the Clark Fork

River. In 1985 ARCO sold its historic water rights in the Warm

Springs Ponds, thereby depriving itself of any further right to the

use of water out of the Clark Fork River. After selling its rights,

ARCO continued diverting water from the Clark Fork River and

its tributaries illegally, which diminished flows in the Clark Fork

River at the Respondents’ headgates, and caused damage to their

crops.

1. The plaintiffs will be referred to collectively as West Side water users.

After several unsuccessful requests that ARCO cease its

illegal diversions, West Side filed suit in December of 1990 in

state district court. The West Side water users alleged thatARCO

had interfered with their water rights resulting in crop losses and

economic damages. Respondents’ Appendix B, pp. 14a, 15a,

17a; Appendix D, pp. 31a, 32a, 33a.

West Side’s request for monetary damages is based on

statutory and common law principles which form the prior

appropriation doctrine. Among these principles is arequirement

that:

a person may not appropriate water or

commence construction of diversion,

impoundment, withdrawal, or distribution

works therefor except by applying for and

receiving a permit from the department.

Mont. Code Ann. § 85-2-302.

The term “appropriate” means to divert, impound or

withdraw (including by stock for stockwater) a quantity of water.

Mont. Code Ann. § 85-2-102. Water may only be “appropriated”

for a “beneficial use.” Mont. Code Ann. § 85-2-301. A

“beneficial use” is defined as:

a use of water for the benefit of the

appropriator, other persons, or the public,

including but not limited to agricultural

(including stockwater), domestic, fish and

wildlife, industrial, irrigation, mining,

municipal, power, and recreational uses.

Mont. Code Ann. § 85-2-102(2)(a).

Of primary importance to West Side is the rule that senior

water rights have priority over junior water rights, and that junior

water users who divert water out of priority are liable for the

damages caused by theirdiversion. Atchison v. Peterson, 87 U.S.

507 (1874); Quigley v. Birdseye, 11 Mont. 439, 28 P. 741 (1892).

After removal to federal court, ARCO moved to dismiss

West Side’s claims, asserting that it was acting pursuant to orders

issued by the EPA and that 42 U.S.C. § 9613(h) required

dismissal of any claim which was avhallenge to cieanup efforts

in the basin. ARCO further argued that West Side’s complaint

actually stated a claim for inverse condemnation against the

United States because ARCO’s diversion of water was made

pursuant to orders issued by the EPA.

The EPA had little sympathy for ARCO’s assertion that it

was entitled to harm downstream water users under the auspices

of CERCLA. In orders issued after West Side’s action was filed,

the EPA required ARCO to follow Montana water law as part of

its cleanup efforts, and recognized the right of an injured water

user to proceed against ARCO for damages under state tort law.

This intent is driven home by the Administrative Order for

Remedial Design/Remedial Action issued on June 17, 1993:

Nothing in this Unilateral Administrative

Order shall alter any obligation Respondent

may have under state law to provide

compensation or payment for the use of

water.

Appendix Ex. G; CR 148, Exhibit C, Administrative Order for

Remedial Design/Remedial Action, page 26.

An October 16, 1991 letter from the EPA Superfund Branch

Chief stated that:

to protect water rights as stated in Montana’s

codes and administrative rules... ARCOis

required to assure that water rights are not

adversely affected by its action.

Appendix Ex. K; CR 148, Exhibit F.

ARCO failed to obtain water rights necessary for diversion

and usage of water in the Clark Fork Basin, and continued to

make out-of-priority diversions of water which depleted the

supply of water available to West Side water users. See generally

Appendix Ex. L; CR 162.

The EPA has never authorized out-of-priority diversions by

ARCO. Nevertheless, ARCO has diverted water repeatedly,

even though it owns no water rights senior to those held by West

Side water users. The West Side water users have been

significantly damaged by these out-of-priority diversions.

B. Proceedings Below

1. Federal District Court Proceedings

In December 1993, the United States District Court

dismissed the injunctive relief portion of the West Side Ditch

Company complaint on the grounds that 42 U.S.C. § 9613

precluded any challenges to an EPA cleanup activity.

Petitioner’s Appendix D, p. 16a. The district court also dismissed

West Side’s claims for monetary damages on the grounds that the

complaint alleged a taking of water rights and that such an action

would only lie against the United States under the Tucker Act, 28

U.S.C. § 1491. Petitioner’s Appendix D, p. 17a.

West Side Ditch Company etal., and Beck etal. appealed the

dismissal of their monetary damages claims to the Ninth Circuit

——

court of appeals. West Side Ditch Company did not appeal the

dismissal of its request for injunctive relief.

2. Ninth Circuit Proceedings

The Ninth Circuit Court of Appeals reversed the district

court’s decision to dismiss the plaintiffs’ compensatory and

punitive damages claims. Respondents’ Appendix A, pp. 8a, 9a.

The court found that the plaintiffs had “expressly allege[d} a

cause of action based purely on state law.” Respondents’

Appendix A, p. 7a. Based on this finding, the court concluded

that the plaintiffs had not stated a claim for inverse

condemnation against the United States. Respondents’

Appendix A, pp. 8a, 9a.

The appellate court also ruled that “Plaintif*s’ damage claim

does not ‘challenge’ the CERCLA cleanup pian and is thus

unaffected by CERCLA’s provision limiting such challenges.”

Respondents’ Appendix A, p. 8a. The appellate court observed

that if the plaintiffs prevail on their state law compensatory

damages claims, “the remedy would be financial compensation

for lostcrops and lost profits. Such aremedy would not interfere

with ARCO’s implementation of the cleanup.” /d. at 8a, 9a.

The Petitioner asserts that the appeals court “overlooked the

text of Section 9613(h) ... and did not consider the

consequences [that its decision] might have for the analysis of

federal subject matter jurisdiction.” Petitioners’ Brief at 12.

Contrary to Petitioner’s assertion, the appellate court cited

§ 9613(h) directly as support for its conclusion that “Plaintiffs’

damage claim does not ‘challenge’ the CERCLA cleanup plan.”

Id.

Next, the Petitioner contends that the appellate court did not

recognize that § 9613(h) “withdraws jurisdiction to review any

challenges to removal or remedial action.” Petitioner’s Brief at

12. Again, this statement iaischaracterizes the appellate court’s

action. The court expressly found that the Respondents’ claims

were not a “challenge” within the meaning of 42 U.S.C.

§ 9613(h), thereby obviating the need for a discussion of

jurisdiction.

Respondents do not contest the Ninth Circuit’s order

dismissing its request for injunctive relief.

REASONS FOR DENYING THE WRIT

The issue of federal pre-emption was not raised by the

Petitioner on appeal in the Ninth Circuit, and no discussion of

pre-emption occurred in the appellate court’s decision. Even

assuming that other circuit courts have applied the doctrine of

pre-emption erratically, a meaningful analysis of pre-emption

cannot occur in this case.

Petitioner also argues that this case raises an issue regarding

what claims constitute challenges to response actions under

§ 9613(h). Such an inquiry is necessarily factual. “[A] petition

for a writ of certiorari is rarely granted when the asserted error

consists of erroneous factual findings or the misapplication of a

properly stated rule of law.” Rules of the Supreme Court, Rule

10(c). If this Court decides to make a factual inquiry, it should be

aware of the EPA’s repeated pronouncements that the

Respondents’ complaint is not a “challenge” to EPA cleanup

efforts, and the Ninth Circuit court’s finding that no “challenge”

exists because “ARCO could comply with the [EPA's] order by

buying storage water or senior water rights from others.”

Respondents’ Appendix A, p. 8a, n. 6.

The EPA does not share Petitioner’s belief that “the Ninth

Circuit’s decision has enormous consequences for the effective

administration and enforcement of CERCLA.” Petitioner’s

Brief at 14. The EPA has supported the Respondents’ right to

bring claims for monetary damages against the Petitioner at each

step of this litigation. If the Respondents’ claims for monetary

damages were likely to have the “enormous consequences”

suggested by the Petitioner, then the EPA would have opposed

those claims from the outset. The EPA’s support of the

Respondents’ state law claims sharply contradicts the

Petitioner’s assertion that this case has nationwide implications

for the Superfund program.

PRE-EMPTION

1. The Petitioner argues that this Court should grant

certiorari in acase which does not discuss pre-emption, inorder —

to resolve conflicts relating to pre-emption allegedly existing in

other courts of appeal. None of the cases cited by the Petitioner

discuss application of the complete pre-emption doctrine to

CERCLA.

Petitioner’s bid for certiorari is based on a footnote in the

Ninth Circuit’s opinion which states that “plaintiff may avoid

federal court by relying exclusively on state law even if

defendant asserts a federal defense.” Respondents’ AppendixA,

p. 8a,n.7. The Petitioner contends that this brief reference to the

well pleaded complaint rule justifies a comprehensive review of

the pre-emption doctrine.

Federal courts acquire jurisdiction under Article III of the

Constitution, and under 28 U.S.C. § 1331, which provides“that

the district court shall have. . . jurisdiction over all civil actions

arising under the Constitution, laws, or treaties of the United

States.” Civil actions which are brought in state court, but which

“arise under” federal law, “may be removed by the defendant. . .

to the district court of the United States.” 28 U.S.C. § 1441.

Thus, “only state court actions that originally could have been

filed in federal court may be removed to federal court.”

Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987).

The test used to differentiate between state court actions that

involve federal questions, and those that do not, is the well

pleaded complaintrule. The well pleaded complaint rule “makes

the plaintiff the master of the claim; he or she may avoid federal

jurisdiction by exclusive reliance on state law.” Caterpillar, 482

U.S. at 392. “Asa practical matter,” the well pleaded complaint

rule “severely limits the number of cases in which state law

‘creates the cause of action’ that may be initiated in or removed

to federal district court, thereby avoiding more or less

automatically a number of potentially serious federal/state

conflicts.” Franchise Tax Board v. Construction Laborers

Vacation Trust, 463 U.S. 1, 8, 88 L. Ed. 2d 420, 103 S. Ct. 2841

(1983)

The existence of federal issues in a state law-based case does

not indicate that federal courts have jurisdiction over a dispute.

“It is now settled law that a case may not be removed to federal

court on the basis of a federal defense, including the defense of

pre-emption, even if the defense is anticipated in the plaintiffs’

complaint, and even if both parties concede that the federal

defense is the only question truly at issue.” Caterpillar Inc. v.

Williams, 482 U.S. at 393 (emphasis supplied in the original).

An infrequently employed corollary of the well pleaded

complaint rule is the doctrine of complete pre-emption, which

holds that federal courts have jurisdiction in circumstances

where the pre-emptive force of a federal statute “is so powerful

as to displace entirely any state cause of action.” Franchise Tax

Board at 23. Such pre-emption occurs when Congress has “so

completely pre-empt[ed] a particular area, that any civil

complaint raising this select group of claims is necessarily

federal in character.” Metropolitan Life Ins. Co. v. Taylor, 481

U.S. 63, 64 (1987).

This Court has applied the complete pre-emption doctrine

with caution. “We have consistently emphasized that, in

exploring the outer reaches of section 1331, determinations

about federal jurisdiction require sensitive judgments about

Congressional intent, judicial power, and the federal system.”

Merrell Dow Pharmaceui:cals, Inc. v. Thompson, 478 U.S. 804,

811,92L. Ed. 2d 650, 106 S. Ct. 3229 (1986). Such decisions are

necessarily “close. . . in the absence of explicit direction from

Congress.” Metropolitan Life Ins. Co. v. Taylor, 481 U.S. at63.

“Pre-emption should not be lightly inferred.” Lingle v. Norge,

486 U.S. 399, 413 (1988), citing Fort Halifax Packing Co. v.

Coyne, 482 U.S. 1,21 (1987).

2. Although the doctrine of complete pre-emption was not

discussed in the Ninth Circuit, Petitioner contends that this case

merits issuance of a writ of certiorari to discuss application of the

complete pre-emption doctrine. The cases cited by Petitioner to

support this contention do not discuss CERCLA.

The Petitioner compares Rice v. Panchal, 65 F.3d 637 (7th

Cir. 1995), acase involving ERISA, with the decisions of other

circuit courts involving ERISA, as evidence that the doctrine of

pre-emption is being applied unevenly. Like other circuits, the

court in Rice v. Panchal noted that “the foundation for removal

is the creation of federal law to replace state law.” 65 F.3d at 641,

citing Bartholet v. ReishauerA. G. (Zurich), 953 F.2d 1073, 1075

(7th Cir. 1992). Petitioner contends that Rice v. Panchal is

unique because it holds that complete federal pre-emption of

state law can occur even though federal substantive law does not

precisely mirror the state law it replaces. This concept is hardly

novel, given that the same rationale was used in Metropolitan

Life Ins. Co. v. Taylor, 481 U.S. 58 (1987), where this Court held

that plaintiffs’ common-law contract and tort claims were pre-

empted by § 502 of the Employee Retirement Income Security

Act(ERISA), 29 U.S.C. § 1001 et seq., even though § 502 did not

supply the plaintiffs with an identical cause of action.

Aaron v. National Union Fire Ins. Co. of Pittsburgh, 876

F.2d 1157 (Sth Cir. 1989), also contradicts Petitioners’ theory

that the circuits are in disarray. In Aaron, the court found that

complete federal pre-emption did not exist because plaintiffs

could not have pleaded a cause of action under the Longshore and

Harbor Workers Compensation Act, 33 U.S.C. § 900 et seq. that

wouid have replaced otherwise available state causes of action.

Nowhere in Aaron is there any statement that complete federal

pre-emption depends on the existence of a federal cause of action

identical to the state cause of action it is replacing.

The standard used in Aaron was whether Congress intended

to “completely pre-empt a field of state law.” Aaron at 1161.

The Aaron court was careful to distinguish between

ordinary pre-emption, which occurs when federal law simply

bars a state claim without supplying an alternate remedy, and

complete federal pre-emption, which occurs when federal law

completely bars the state claim and supplies an alternate,

although not necessarily identical, federal remedy. Aaron at

1 165.

The difference between ordinary and complete pre-emption

was also emphasized in Warner v. Ford Motor Company, 46 F.3d

531 (6th Cir. 1995), another case under ERISA. The Warner

court noted that “ ordinary pre-emption” and the complete pre-

emption giving rise to removal jurisdiction are two distinct

concepts. “The fact that... a plaintiff’s claims are pre-empted

seas

Ss nt 1 ASN a SIN Rr BU Sh IED PSone S90,

be Sere « ARM cee alg BS INARA! Wel aber

does not establish that they are removable to federal court.” /d.

at 535 citing Caterpillar, Inc. v. Williams, 482 U.S. 386, 398, 96

L. Ed. 2d 318, 107 S. Ct. 2425, 2432 (1987).

3. Petitioner argues that the Ninth Circuit could have held

that § 9659(a)(1) of CERCLA “provides a federal cause of action

vindicating the very interests that [the Respondents’ ] state law

claims seek to protect.” Petitioner’s Brief at 15. The Ninth

Circuit could not have reached this conclusion because the

Respondents’, as masters of their complaint, did not ask for relief

under § 9659(a)(1).

The Petitioner attempts to characterize this lawsuit as a

§ 9659(a)(1) action by inserting new facts and legal theories into

the complaint. This approach got short shrift in Caterpillar when

the defendant “impermissibly attempt[ed] to create the

prerequisites to removal by ignoring the set of facts ...

presented by respondents, along with their legal characterization

of those facts, and arguing that there are different facts which

Respondents might have alleged that would have constituted a

federal claim.” 482 U.S. at 397.

The Petitioner’s “attempt to justify removal on the basis of

facts not alleged in the Complaint” should be rejected now, as it

was in Caterpillar, id.

The Court’s approach in Caterpillar is not new, for it has

long been established that the well pleaded complaint rule

“makes the plaintiff the master of the claim; he or she may avoid

federal jurisdiction by exclusive reliance on state law.”

Caterpillar at 392, citing See the Fair v. Kohler Dye & Speciality

Company, 228 U.S. 22, 25, 57 L. Ed. 716, 33 S. Ct. 410 (1913).

The savings clause contained in 42 U.S.C. § 9659(h)

protects the Respondents’ right to assert a state law cause of

action. Respondents’ decision not to base their complaint on

federal law does not create federal pre-emption.’

The Petitioner also argues that Congress intended to pre-

empt state law by enacting § 9659(h), which provides that “this

chapter does not affect or otherwise impair the rights of any

person under federal, state, or common law, except with respect

to the timing of review as provided in § 9613(h) of this title. .. .”

The plain meaning of § 9659(h) is that Congress did not wish to

disturb the wide array of federal, state, and common law claims

which exist outside of CERCLA.

The only linsitation contained in § 9659(h) is areference to

the timing of review provisions contained in § 9613(h). ARCO

contends that these timing of review provisions replace state

statutory and common law causes of actions with a federal cause

of action, thereby causing complete pre-emption. In making this

contention, Petitioner confuses the timing of review provisions

of § 9613(h) with the doctrine of complete pre-emption.

Complete federal pre-emption occurs when Congress seeks

to dominate a particular area of law. See Caterpillar, 482 U.S. at

386. Ordinary pre-emption occurs when federal law simply bars

a state claim without replacing it with an alternate federal

remedy. “A state court action does not ‘arise under’ an act of

Congress ... even though expressly ‘prohibited thereby.’ ”

Gully v. First National Bank, 299 U.S. 109, 116,81 L.Ed.2d70,

57S. Ct. 96 (1936). Although state law claims which “challenge”

a CERCLA cleanup are barred by the timing of review provisions

of § 9613(h), this is not the same as asserting that Congress

2. Although Petitioners contend that § 9659(a)(1) would satisfy the

complete pre- emption test adopted by the Third, Fifth, and Sixth Circuits, it

does not supply any evidence which indicates that Congress, by adopting

§ 9659(a)(1) intended to completely pre-empt state tort law.

enacted § 9613(h) to dominate the field of state tort law, thereby

giving rise to complete federal pre-emption and subjecting such

claims to federal removal jurisdiction.

The Petitioner erroneously contends that § 9659(h) would

have satisfied the pre-emption standard articulated in Rice v.

Panchal and Deford v. Soo Line. In Rice v. Panchal, the court

emphasized that “the foundation for removal is the creation of

federal law to replace state law.” Rice at 641 citing Bartholet at

1075. The Rice court asked whether Congress wanted “federal

courts to create a federal common law.” Jd. Because § 9613(h)

does not create a new federal cause of action, it does not fall

within the scope of the complete pre-emption analysis used in

Rice v. Panchal.

Similarly, Petitioner contends that the Court in Deford v. Soo

Line R. Co., 867 F.2d 1080 (8th Cir. 1989), would have found that

pre-emption existed in § 9659(h). Petitioner’s Brief at 16. The

Deford court held that complete federal pre-emption occurs only

when Congress “so pervasively occup[ies] the field.. that a

competing state law claim necessarily invokes federal law.” /d.

1084, 1085. The issue in Deford was complete pre-emption of

state law claims by the Railway Labor Act (RLA). According to

the Deford court, the “statutory grievance procedures under the

RLA are the mandatory and exclusive federal remedy for

resolving minor disputes. Congress considered it essential to

keep these so-called minor disputes within the National Railroad

Adjustment Board and out of the courts.” Id. at 1085, citing

Union Pacific R. v. Sheehan, 439 U.S. 89,94 L. Ed. 24354, 99S.

Ct. 399, 402-58 (1978) (emphasis supplied in original). The

striking evidence of congressional intent to pre-empt state law

expressed in the RLA is not present in § 9613(h).

4. Petitioner also argues that certiorari should issue

because of an alleged disagreement between the Third and

Eighth Circuits about Congressional intent regarding the

Railway Labor Act. Petitioner implies that the Third Circuit

court in Railway Labor Executives Ass'n v. Pittsburgh & Lake

Erie R. Co., 858 F.2d 936 (3d Cir. 1988) used a different standard

of analysis than the Eighth Circuit court in Deford v. Soo Line R.

Co., 867 F.2d 1086 (8th Cir.), cert. denied, 492 U.S. 927 (1989).

The Petitioner argues that the Third Circuit’s test required

“affirmative evidence in the [federal statute] or its legislative

history that Congress intended state claims of this kind to be

removable,” Petitioner’s Brief at 17 citing Railway Labor, 858

F.2d at 942, whereas, the Eighth Circuit somehow expanded this

test by inquiring about “the history and purpose of the statute”

and by comparing the RLA to “analogous statutes with complete

pre-emptive powers.” Petitioner’s Brief at 17, citing Deford,

867 F.2d at 1086. In making this distinction, the Petitioner

overlooks Railway Labor’s careful comparison of the RLA with

§ 502(a) of ERISA. Although the Railway Labor and Deford

courts ultimately reached different conclusions on the same

issue, they used the same methods of analysis.

Granting certiorari in the instant case will not help resolve

an alleged problem of congressional intent regarding the

Railway Labor Act.

Petitioner contends, that by enacting § 9659(h), Congress

intended for state law claims to be removable to federal court.

Analysis of the Petitioner’s argument necessarily begins witha

review of the statute itself. Caterpillar, Inc. v. Williams, 482 U.S.

386, 96 L. Ed. 24318, 107 S. Ct. 2425 (1987). Section 9659(h)

reads:

This chapter does not affect or otherwise

impair the rights of any person under federal,

state, or common law, except with respect to

the timing of review as provided in 9613(h)

The question to be answered is whether the pre-emptive

force of § 9659(h) “is so ‘extraordinary’ that it ‘converts an

ordinary state common-law complaint into one stating a federal

claim’... .” Caterpillar, 482 U.S. at 493.

Section 9659(h) is a savings clause which consists of two

parts. The plain language of the first part expressly preserves the

right of “any person” to pursue a “Federal, State, or common

law” cause of action.

The second portion of § 9659(h) references the timing of

review provisions contained in § 9613(h). The timing of review

constraints contained in § 9613(h) also fall into two categories.

The first includes “challenges to removal or remedial action([s]”;

while the second addresses actions brought “to review any order

issued under § 9606(a) of’ CERCLA.

Petitioner contends that the “federal, state, orcommon law”

causes of action which Congress sought to protect under

§ 9659(h) are completely pre-empted by the language of

§ 9613(h), thereby making all federal, state, or common law

claims removable to federal court.

The plain language of § 9613(h) suggests a different result.

By its terms, § 9613(h) seeks only to preclude state law based

claims which “challenge” removal or remedial actions, or

“review” orders issued by the EPA under § 9606(a). State law-

based claims which do not fiteither category remain unaffected.

Congressional intent to pre-empt may be gleaned from

legislative history if a statute is ambiguous. Although § 9613(h)

is clear, Petitioner engages in an extensive discussion of

legislative history in an effort to demonstrate pre-emptive intent.

Contrary to Petitioner’s assertion that § 9613(h) blocks all

claims, Congress enacted § 9613(h) to:

ensure that Government and private cleanup

resources will be directed toward mitigation,

not litigation. The section is designed to

preclude piecemeal review and excessive

delay of cleanup.

Comments of Senator Thurmond, Cong. Rec. S28441 (daily ed.

Oct. 3, 1986).

Congress wanted to protect EPA from litigation brought to

review EPA’s cleanup proposals, or to challenge the EPA’s

remedy selection. Actions which do not distract EPA from its

cleanup objectives are outside the scope of § 9613(h).

Representative Glickman’s comments about the first

paragraph of § 9613(h) are also noteworthy. “The [rjeference [to

28 U.S.C. 1332] was made to ensure that actions in State court

under State law can continue to be brought in Federal court if

diversity jurisdiction exists.” Cong. Rec. H29735 (Oct. 8, 1986)

(Rep. Glickman). These comments show an express intent to

allow state law causes of action to be brought in federal court if

diversity jurisdiction exists. By implication, Congress also

intended that state law causes of action could be filed in state

court if diversity jurisdiction does not exist, or if the plaintiff

selected a state court forum.

Finally, the Congressional Record contains an explicit

statement that the Superfund statute was not intended to pre-

empt other law. “The Comprehensive Environmental Response

Compensation and Liability Act [CERCLA] does not provide for

pre-emption of any legally applicable requirement established

under any other Federal or State law.” Cong. Rec. $14915 (Oct.

3, 1986). This comment is consistent with the EPA’s

pronouncements concerning the remedy available to the

Respondents in the instant case.

ital an ees

pA NDB ln AOD tI td Lg eNE tte Nilottelth

Plaintiffs’ claims for relief seek a declaration

of water rights, consequential damages, and

punitive damages. To the extent that these

claims do not challenge or seek to block the

response action at the Warm Springs ponds

operable unit, they do not appear to implicate

CERCLA. [I]fin fact, Plaintiffs’ water rights

have been impaired, CERCLA does not bara

remedy unless that remedy would involve

review of the propriety of or possible

injunction against, the performance of an

ongoing CERCLA response action.

CR 101 at 17 and 18 (emphasis added). Respondents’ damages

claims do not go to the propriety of, nor do they seek injunction

against, any response action.

Petitioner supplies a number of citations to the

Congressional Record which it contends demonstrate intent to

completely pre-empt state water and tort laws.’ Careful review

3. There is a long history of federal deference to state water law. The

Mining Act of 1866, 14 Stat. 251 (1866), 43 U.S.C. § 661 (1 870), states that

“Whenever, by priority of possession, rights to the use of water for mining,

agriculture, manufacturing, or other purposes have vested and accrued, and

the same are recognized and acknowledged by the local customs, laws, and the

decisions of the court, the possessors and owners of such vested rights shall be

maintained and protected in the same.” Section 9, 14 Stat. 253. See also, the

Desert Land Act of 1877. 19 Stat. 377 (1877), as amended, 43 U.S.C. § 321

(1970). The Reclamation Act of 1902 provides that “(Nothing in this Act shall

be construed as effecting to intended to effect or to in any way interfere with

the laws of any state or territory relating to the control, appropriation, use or

distribution of water used in irrigation, or any vested right acquired thereunder

.. -” 32 Stat. 390.

The Wallop Amendment to the Clean Water Act unequivocally

reaffirmed congressional deference to state water law:

(Cont'd)

of these citations shows that they are limited to actions which

seek pre-enforcement review of response actions, or

administrative orders. Such actions necessarily require the EPA

to expend its resources on litigation. Because the instant case

does not seek review of EPA orders, and does not name EPA as a

party, it does not fall within the body of claims which Congress

wanted to forestall by enacting § 9613(h).

5. The Petitioner argues that the Ninth Circuit's decision

conflicts with this Court’s decisions regarding the complete pre-

emption doctrine because claims which fall within the scope of

§ 9659(a)(1) are pre-empted. Because, the Respondents did not

file an action under § 9659(a)(1), adiscussion of the pre-emptive

force of this statute is irrelevant.

Next, Petitioner argues that the Ninth Circuit's failure to

(Cont'd)

It is the policy of Congress that the authority of each

state to allocate quantities of water within its

jurisdiction shall not be superseded, abrogated, or

otherwise impaired by this chapter. It is the further

policy of Congress that nothing in this chapter shall be

construed to supersede or abrogate rights to quantities

of water which have been established by any state.

Clean Water Act, Section 101(g), 33 U.S.C. Section 125(g).

Federal deference to state water law is so extensive that Congress has

waived its sovereign immunity and submitted to adjudication of federal water

rights in state court. The McCarran Amendment allows the United States to be

joined as a party in state adjudication efforts. 43 U.S.C. § 666.

In summary, “where Congress has expressly addressed the question of

whether federal entities must abide by state water law, it has almost invariably

deferred to the state law.” United States v. New Mexico, 438 U.S. 696, 702, 98

S. Ct. 3012, 57 L. Ed. 2d 1052, 1058 (1978).

find complete federal pre-emption under § 9659(h) conflicts

with this Court’s decision in Avco Corp. v. Aero Lodge No. 735,

390 U.S. 557 (1968); Caterpillar, Inc. v. Williams, 482 U.S. 386

and Metropolitan Ins. Co. v. Taylor, 481 U.S. 58 (1987).

Petitioner's Brief at 20.

Although Petitioner does not explain how the Ninth

Circuit’s decision violated this Court’s rulings in Avco and

Caterpillar, areview of these cases suggests that the Petitioner's

argument is without substance. In order for § 9659(h) to pre-

empt state law, its pre-emptive force must be “so ‘extraordinary’

that it ‘converts an ordinary state common law complaint into

one stating a federal claim.’ ” Caterpillar, 482 U.S. at 393.

Section 9659(h) explicitly preserves all state law causes of

action except those time barred by § 9613(h). At most, § 9613(h)

simply halts certain categories of potential state claims (i.e.

challenges and reviews of § 106 Orders by EPA). “[T}he fact that

a defendant might ultimately prove that a plaintiff's claims are

pre-empted ... does not establish that they are removable to

federal court.” Caterpillar, 42 U.S. 398.

In Avco Corp. v. Aero Lodge, 390 U.S. 557, 20L. Ed. 2d 126,

88 S. Ct. 1235 (1968), this Court held that “the Labor

Management Relations Act expressly furnishes some

substantive law” to replace the Tennessee law which formed the

basis of the original act. Avco Corp. at 558, citing Textile Workers

v. Lincoln Mills, 353 U.S. 448, 456-457, 1 L. Ed. 2d 972 at 980,

77S. Ct. 912. Because § 9613(h) does not provide substantive

federal law to replace the state law it purports to pre-empt,

complete federal pre-emption does not exist.

Finally, Petitioner argues that the Ninth Circuit’s decision

conflicts with this Court’s ruling in Metropolitan Life Ins. Co. v.

Taylor. Specifically, Petitioner asserts that there is enough

evidence of congressional intent to conclude that § 9613(h) pre-

empts all state law causes of action. In Taylor, this Court held that

“explicit direction from Congress” was necessary to conclude

that complete federal pre-emption exists. 481 U.S. at 63.

The plain language of § 9659(h) evidences congressional

intent to avoid pre-emption of state law claims, not to replace

them with a new body of federal common law.

Il.

CHALLENGES UNDER 42 U.S.C. § 9613(h)

1. Petitioner argues that the circuits are divided regarding

what claims constitute “challenges to [a] removal or remedial

action” under 42 U.S.C. § 9613(h). Petitioner contends that the

Ninth and Tenth Circuits require a showing that the proposed

action result in a delay of the cleanup before a challenge can be

deemed to occur, while the First and Fifth Circuits have

articulated a standard which does not require delay.

Congress enacted § 9613(h) to “prevent private responsible

parties from filing dilatory, interim lawsuits which have the

effect of slowing down or preventing the EPA’s cleanup

activities.” H.R. Rep. No. 253(I), 99th Cong., 2d Sess. 266

(1985).

Petitioner cites Reardon v. United States, 947 F.2d 1509,

1514, (1st Cir. 1991), for the proposition that delay was not a

component of the first circuit’s challenge analysis under

§ 9613(h). Reardon involved a landowner’s effort to remcve a

lien placed upon his property by the EPA. After deciding that

placement of the lien was an enforcement activity within the

meaning of CERCLA, the Reardon court concluded that

challenges “to the merits of particular liens” conflicted with

congressional intent “that cleanup of substances that endanger

eee. Tee

public health would be delayed if EPA were forced to litigate

each detail of its removal and remedial plans before

implementing them.” 947 F.2d 1513. The Reardon decision

hinged ona belief that pre-enforcemsnt review, even if it did not

specifically ask for a delay, would divert EPA’s resources from

cleanup to litigation, thereby slowing down the cleanup. The

First Circuit’s analysis was no different from that of the Ninth

Circuit’s in this case, and the Tenth Circuit in United States v.

State of Colorado, 990 F.2d 1565 ( 10th Cir. 1993), cert. denied,

114 S. Ct. 922 (1994). Ultimately, delay is an essential

component of the standard by which potential challenges are

measured, even if the overt purpose of the action is not to cause

delay.

Petitioner next argues that Voluntary Purchasing Groups,

Inc. v. Reilly, 889 F.2d 1380 (Sth Cir. 1989) conflicts with

decisions of the Ninth and Tenth Circuits because it does not

require that delay occur for an underlying action to beachallenge

under § 9613(h). The plaintiff in Voluntary Purchasing asked for

a declaratory judgment regarding its liability for EPA response

actions. The action was filed after the EPA sent the plaintiff a

number of letters indicating it was liable for cleanup costs.

Although a declaratory judgment action would not have directly

delayed the cleanup, the court held that such review was

prohibited by § 9613(h) because the statute was “designed to

preclude piecemeal review and excessive delay of cleanup.” 889

F.2d at 1390, citing 132 Cong. Rec. $14928 (daily ed. Oct. 3,

1986). The court concluded that “if PRPs were allowed to file

suits for declaratory judgment prior to cost recovery suits being

filed by the EPA, much of the EPA’s time and resources couldend

up being allocated to litigation in this area.” Id. Piecemeal

litigation of such lawsuits would distract the EPA from its

primary mission, which is to clean up hazardous wastes.

Exhaustion of EPA resources through piecemeal litigation

is not an issue in the instant case because EPA will not be

involved in Respondents’ state law action against ARCO. The

EPA has noted in the instant case that:

the assertion of state law damages claims

against ARCO for its own conduct does not

defeat Congressional intent. The protection

of water rights does not conflict with the

Congressional objective to protect the public

health and welfare in the environment

through enactment of CERCLA ... if

performance of a CERCLA response action

requires prevention of injury to waterrights,

then placing the cost of injury prevention on

responsible parties does not conflict with

CERCLA.

CR 101 at 18.

Petitioner contends that “had the Ninth Circuit applied the

tests of [the First and Fifth Circuits] it would have concluded that

respondents’ claims ‘challenge’ the response action EPA has

selected.” Petitioner’s Brief at 23. Petitioner’s assertion is

untrue. Respondents’ surviving claims articulate only state court

causes of action, and do not require judicial review of response

actions selected by the EPA.

2. Petitioner next argues that certiorari is appropriate

because the Ninth Circuit stated that “although determination of

whether ARCO’s diversions were ‘wrongful’. . . may require

examination of the EPA’s orders, resolution of the damage claim

would not involve altering the terms of the cleanup order.”

Respondents’ Appendix A, p. 8a. Petitioner contends that this

view conflicts with the second element of § 9613(h) which

precludes “review of ‘any order issued under § 9606(a)’ of this

title.” Petitioner’s Brief at 13. Petitioner’s contention is nothing

more than an argument that a federal defense to state law claims

creates pre-emption, a notion that has been repeatedly rejected

by this court. Franchise Tax Board, 463 U.S. at 13; Merrell Dow,

478 U.S. at 808.

Even if reference to the EPA’s orders is necessary to resolve

Respondents’ state law claims, such reference is not tantamount

to the “review” prohibited by § 9613(h). This Court has

previously held that a breach of contract action did not “arise

under” § 301 of the Labor Management Relations Act, where

resolution of the plaintiffs’ claims was “not substantially

dependent upon interpretation of [a] collective bargaining

agreement.” Caterpillar, 482 U.S. 386 at 395. Similar results

were reached in Mayor and Council v. Klockner & Klockner, 811

F. Supp. 1039, 1055 (D.N.J. 1993) where the court concluded

that “even if ‘review’ of the EPA’s actions were eventually

necessary to determine whether an .. action could proceed

against the defendants, this would not be achallenge to the EPA’s

activities as such, but rather a determination of whether a private

action could proceed against the defendants.” The Court in

Franchise Tax Board noted that:

[E]ven under section 301 of the [LRMA] we

have never intimated that an action merely

relating to a contract within the coverage of

section 301 arises exclusively under that

section. For instance, a state battery suit

arising out of a violent strike would not arise

under section 301 simply because the strike

may have been a violation of an employer

union contract.

463 U.S. at29 n. 28.

Under the Petitioners’ view of § 9613(h), all state law tort

claims would be pre-empted. A plaintiff injured by a negligently

operated cement truck delivering concrete to a Superfund site

would be obligated to file her complaint in federal court, where

it would be summarily dismissed. Such a result was never

intended by Congress.

Petitioner argues that Respondents’ state law damages

claims are a challenge to the cleanup within the meaning of

§ 9613(h). In its briefing on this issue before the district court,

the EPA noted that “compliance with requirements of both

CERCLAand state water law is notimpossible. . . Infact, ARCO

does not claim that compliance with both CERCLA and Montana

water law is impossible.” CR 101 at 16. The Ninth Circuit found

that “ARCO could comply with the [EPA’s] order by buying

storage water or senior water rights from others.” Respondent’s

Appendix A, p. 8a. The Ninth Circuit’s decision is consistent

with this Court’s ruling that “[S]tate law is pre-empted to the

extent that it actually conflicts with federal law. Such aconflict

arises when “compliance with both federal and state regulations

is aphysical impossibility.” Exxon Corp. v. Eagerton, 462 U.S.

176, 182 (1983), citing in part Florida Lime & Avocado Growers,

Inc. v. Paul, 373 U.S. 132, 142-143 (1963).

It is impossible for Respondents’ complaint to be a

challenge, when the law which forms the basis of the complaint

is consistent with the law which EPA has ordered ARCO to obey.

Moreover, Petitioner’s claim to an impossibility defense

requires a factual inquiry,‘ which is not the same as an inquiry

into jurisdiction. Lingle v. Norge, 486 U.S.399, 407, 100 L. Ed.

2d 410, 108 S. Ct. 1877, 1883 (1988).

4. “All the cases involving dismissal under § 113(h) involve actions

brought against the EPA which the plaintiff sought to enjoin or otherwise

challenge a remedy pursued by the EPA.” Mayor and Council v. Klockner &

Klockner, 811 F. Supp. 1039, 1055 (D.N.J. 1993).

3. Petitioner next contends that making it subject to state

law claims for compensatory and punitive damages would

conflict with this Court’s decision in /nternational Paper Co. v.

Oullette, 479 U.S. 41 (1987). Petitioner’s theory is that

successful prosecution of such claims would force it to “change

its methods of doing business,” presumably by putting a halt to

its illegal activities. Petitioner’s Brief at 24 (citing Oulette, 479

U.S. at 495).

The EPA does not agree with this view. Inits briefing before

the district court in this case, the EPA wrote that congressional

requirements,

to protect the public health and environment

do not shield a regulated person from liability

under state law intended to achieve different

goals.

CR 101 at 17. This issue requires no further discussion.

Petitioner also asserts that International Paper Co. v.

Oullette enunciates a per se ban on compensatory and punitive

damages suits against polluters. Petitioner’s Brief at 24.

International Paper involved a lawsuit by Delaware plaintiffs

against a New York defendant which was releasing pollution into

water that flowed into Delaware. Although, the defendant had

previously obtained a discharge permit under New York law, the

plaintiffs brought suit in Delaware asserting compensatory and

punitive damages claims under Delaware law. This Court held

that the Delaware plaintiffs needed to base their compensatory

and punitive damages claims on New York law, because the

polluter’s discharge permit had been issued under New York law.

Central to the Court’s analysis was aconcern about the conflicts

inherent in using Delaware law to review a New York discharge

permit. “Application of an affected state’s law toan out-of-state

source... would undermine the important goals of efficiency

and predictability in the [New York] permit system.” 479 U.S. at

496. Contrary to the Petitioner’s assertions, the plaintiffs were

not stopped “from bringing a nuisance claim pursuant to the law

of the source state” and were allowed to continue their action in

Delaware courts. Id. at 499. This Court did not hold that

compensatory and punitive damages claims should be

prohibited because they might force a change in a polluter’s

conduct.

CONCLUSION

The Petitioner’s request for a writ of certiorari should be

denied.

Respectfully submitted,

RUSS McELYEA

Counsel of Record

MOORE, O’ CONNELL

& REFLING, P.C.

Attorneys for Respondents

West Side Ditch Company,

City of Deer Lodge, Ronald

Kelly, Jerry Rutledge, Charles

Beck, Richard Forson and

George Reistad

P.O. Box 1288

Bozeman, MT 59771-1288

(406) 587-5511

JOHN E. BLOOMQUIST

DONEY, CROWLEY,

BLOOMQUIST AND

METROPOULOS, P.C.

Attorneys for Respondents

Thomas A. Beck, Melvin

R. Beck and Robert Evans

P.O. Box 1185

Helena, MT 59624-1185

(406) 443-7018

APPENDIX A — OPINION OF THE UNITED STATES

COURT OF APPEALS FOR THE NINTH CIRCUIT

FILED AUGUST 17, 1995

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

THomas A. Beck; MELvIn R.

Beck; Rospert Evans,

Plaintiffs-Appellants, No. 94-35487

2 / D.C.No.

ATLANTIC RICHFIELD CoMPANY, a CV-92-00036-PGH

Delaware Corporation; and THe

MONTANA DEPARTMENT OF FisH,

WILDLIFE AND Parks,

Defendants-Appellees.

THOMAS A. Beck; MELVIN R.

Beck; Rosert Evans, No. 94-35551

Plaintiffs-Appellees, ' D.C. No.

v. CV-92-00036-PGH

ATLANTIC RICHFIELD ComMPANY, OPINION

Defendant-Appellant.

PULA: So ET IN Lie dite

Appendix A

West Sipe Drrcw Company, a

Montana Corporation; Crry oF

Deer LopceE; RONALD KELLY;

JerRY RUTLEDGE; CHARLES BECK;

RICHARD Forson; GEORGE REISTAD,

Plaintiffs-Appellants,

Unrtep STATES ENVIRONMENTAL

PROTECTION AGENCY,

Intervenor-Appellee,

Vv.

ATLANTIC RICHFIELD CoMPANY, a

Delaware corporation; MONTANA

DEPARTMENT OF FisH, WILDLIFE AND

PARKS,

Defendants-Appellees.

West Siwe Drrcu Company, a

Montana Corporation; Crry oF

Deer LopGE; RoNALD KELLY;

JERRY RUTLEDGE; CHARLES BECK;

RICHARD Forson; GEORGE REISTAD,

Plaintiffs-Appellees,

Vv.

ATLANTIC RICHFIELD CoMPANY, 4

Delaware corporation,

Defendant-Appellant.

No. 94-35539

D.C. No.

CV-91-00002-PGH

No. 94-35552

D.C. No.

CV-91-00002-PGH

Appeal from the United States District Court

for the District of Montana

Paul G. Hatfield, District Judge, Presiding

June 6.

Argeet and Submitted

, 1995—Seattle, Washington

Appendix A

Filed August 17, 1995

Before: James R. Browning, Eugene A. Wright,

and Thomas G. Nelson, Circuit Judges.

Per Curiam

SUMMARY

Real Estate/Environmental Law/

Litigation and Procedure (Civil)

The court of appeals vacated a judgment of the district

court and remanded with directions to remand to state court.

The court held that a downstream water user may bring a

damages claim based purely on state law against a corporation

that is diverting water from a river pursuant to a federal envi-

ronmental cleanup order.

The corporate predecessor of appellee Atlantic Richfield

Company (ARCO) discharged mining wastes into the Clark

River in Montana for many years. The Environmental Protec-

tion Agency (EPA) ordered ARCO to clean up the resulting

contamination pursuant the Comprehensive Environmental

Response, Compensation, and Liability Act (CERCLA). The

cleanup required ARCO to divert river water to tailing ponds,

where the waste could settle. The cleaner water was released

back into the river. The EPA’s order specified that ARCO

was not to cause any injury to vested water rights, and that the

order did not alter any obligation ARCO had to pay for use

of the water.

otis agit ie’

Ome re ‘

Appellant Thomas Beck and other downstream water users

sued ARCO in state court, alleging that the company illegally

and negligently appropriated water from the river in deroga-

tion of their senior water rights. They sought damages for

Appendix A

crop loss, lost profits, and property devaluation. One down-

stream user, West Side Ditch Company, also sought injunc-

tive relief. ARCO removed the matter to federal district court

and moved to dismiss.

The district court granted the motion, holding that Beck’s

claim against ARCO for damages constituted a claim against

the federal government for inverse condemnation, over which

the Court of Federal Claims had exclusive jurisdiction. The

district court, alternatively, held that, to the extent Beck

alleged that ARCO violated the EPA’s order by injuring his

water rights, his claim constituted a “challenge” to the

cleanup and was, therefore, barred by CERCLA. Beck

appealed.

[1] That Beck might have a takings claim against the gov-

emment for ARCO’s diversion of the water in conformity

with the EPA’s order did not preclude him from bringing a

claim based pureiy on state law for diversion other than in

conformity with the order.

[2] Beck’s damage claim did not “challenge” the CERCLA

cleanup plan and was, thus, unaffected by 42 U.S.C.

§ 9613(h), which limits such challenges. Although determina-

tion of whether ARCO’s diversions were “wrongful” may

require the district court to examine the EPA’s orders, resolu-

tion of the damage claim would not involve altering the

cleanup order’s terms or interfere with ARCO’s implementa-

tion of the cleanup.

[3] The district court did not have jurisdiction over West

Side’s claim for injunctive relief because the claim constituted

a “challenge” to the CERCLA cleanup plan, over which the

court would not have jurisdiction until the cleanup was com-

pleted.

Appendix A

COUNSEL

Russ McElyea, Moore, O’Connell & Refling, Bozeman, Mon-

tana, for plaintiffs-appellants West Side Ditch Company et al.;

John E. Bloomquist, Dillon, Montana, for plaintiffs-appellants

Beck et al.

John P. Davis, Poore, Roth & Robinson, P.C., Butte, Mon-

tana, for defendant-appellee ARCO.

Robert L. Klarquist, David C. Shilton, Department of Justice,

Washington, D.C., for intervenor-appellee EPA.

OPINION

PER CURIAM:

A group of water users along the Clark Fork River in south-

eastern Montana’ appeal the dismissal without prejudice of

their claim under Montana law against Atlantic Richfield

Company (“ARCO”) for compensatory damages for diversion

of water from the River. ARCO cross-appeals because the dis-

missal was without prejudice. We reverse the dismissal and

order the district court to remand the case to state court.

ARCO’s corporate predecessor discharged mining wastes

into the Clark Fork River for many years. The United States

Environmental Protection Agency (“EPA”) ordered ARCO to

clean up the resulting contamination pursuant to the Compre-

hensive Environmental Response, Compensation, and Liabil-

‘The plaintiffs are Thomas A. Beck, Melvin R. Beck, and Robert Evans

(“Beck”) and West Side Ditch Company, City of Deer Lodge, Ronald

Kelly, Jerry Rutledge, Charles Beck, Richard Forson, and George Reistad

(“West Side”).

Appendix A

ity Act (“CERCLA”), 42 U.S.C. § 9601 et seg. To implement

the cleanup, the EPA ordered ARCO to divert the water into

tailing ponds where the waste could settle to the bottom,

allowing cleaner water to flow back into the River. The order

specified that ARCO was not to cause any injury to vested

water rights, and that the order did not alter any obligation

ARCO might have to pay for use of the water.

Plaintiffs contend the diversion diminished the amount of

water available to downstream users. They filed suit in state

court alleging ARCO illegally and negligently appropriated

water from the River in derogation of their senior water

rights, and seeking compensatory damages for crop loss, lost

profits, and property devaluation. West Side also sought an

injunction.» ARCO removed to federal court and moved to

dismiss.

*The order provided:

To ensure that implementation of the remedy does not cause

injury to vested water rights . . . [ARCO] shall comply with all

applicable provisions of the laws of the State of Montana...

before undertaking any remedial action which involves the inter-

cepuion, withdrawal, diversion, storage, capture, possession, or

control of any ground water or surface water. Nothing in this

Order, however, shall alter any obligation [ARCO] may have

under state law to provide compensation or payment for the use

of water. ;

*The EPA intervened in the West Side case because the request to

enjoin the diversions implicated federal interests under CERCLA, but sup-

ported plaintiffs’ right to pursue state law damage claims against ARCO.

The district court held West Side’s request to enjoin the diversions

“challenged” the CERCLA cleanup and was therefore barred by the

“timing of review” statute, 42 U.S.C. § 9613(h). West Side does not

appeal that ruling.

The plaintiffs also named the Montana Department of Fish, Wildlife,

and Parks (“the Department”) as a defendant based on the Department's

alleged diversion of water into wildlife ponds. The district court’s order

does not mention the Deparment and the Department did not appear in

this appeal.

Appendix A

The district court held plaintiffs’ claim against ARCO for

damages constituted a claim against the United States for

inverse condemnation over which the Court of Federal Claims

had exclusive jurisdiction.‘ Altematively, the district court

held that, to the extent plaintiffs alleged ARCO had violated

the EPA’s order by injuring plaintiffs’ water rights, plaintiffs’

claim constituted a “challenge” to the cleanup and was there-

fore barred by CERCLA’s “timing of review” provision, 42

U.S.C. § 9613(h).

We conclude from our examination of the complaint that

plaintiffs do not assert a claim for inverse condemnation, nor

a “challenge” to the cleanup effort. Rather, plaintiffs seek to

recover damages under Montana law for violation of their

water rights, a claim over which the district court lacks juris-

diction.

Il.

[1] Plaintiffs do not allege a takings claim. They expressly

allege a cause of action based purely on state law. Even if

“It]he facts stated also [might] have sustained a [takings]

claim . . . had [the plaintiffs] elected that remedy, . . . [they]

did not do so, and [they] cannot be compelled to do so.”

Koratron Co. v. Deering Milliken, Inc., 418 F.2d 1314,

“The parties dispute whether the district court dismissed the damage

claims for failure to state a claim, which was converted into a summary

judgment by the consideration of materials outside the complaint, or for

lack of subject matter jurisdiction. We conclude the district court dis-

missed the damage claims for lack of subject matter jurisdiction. The dis-

trict court determined the Court of Federal Claims had jurisdiction over

the damage claims under the Tucker Act, which is a jurisdictional statute.

United States v. Testan, 424 US. 392, 398 (1976). The court offered to

transfer the damage claims to the Court of Federal Claims pursuant to 28

U.S.C. § 1631, which allows a transfer when the “court finds that there is

a want of jurisdiction.” See Rowe v. United States, 633 F.2d 799, 800-02

(9th Cir. 1980) (treating issue of whether complaint should be read as rais-

ing a Tucker Act claim as a question of jurisdiction).

Appendix A

1317-18 (9th Cir. 1969). Contrary to the district court's

assumption, the fact that plaintiffs might have a takings claim

against the United States for diversion of water by ARCO in

conformity with the terms of the EPA’s order would not in

itself preclude plaintiffs from having a state law claim against

ARCO for diversion other than in conformity with the EPA’s

order.* Cf. Myers v. United States, 323 F.2d 580, 583 (9th Cir.

1963).

[2] Plaintiffs’ damage claim does not “challenge” the

CERCLA cleanup plan and is thus unaffected by CERCLA’s

provision limiting such challenges. 42 U.S.C. §9613(h).

Although determination of whether ARCO’s diversions were

“wrongful,” Tucker, 250 P. at 15, may require examination of

the EPA’s orders,” resolution of the damage claim would not

involve altering the terms of the cleanup order. If the plain-

tiffs prevail, the remedy would be financial compensation for

“Our decision is consistent with FE. Trotter, Inc. v. Watkins, 869 F.2d

1312 (9th Cir. 1989). There, we held “{tJhe availability of a Tucker Act

remedy [for inverse condemnation] is presumed on a showing that the

challenged action was authorized and for a public use.” Jd. at 1317. How-

ever, the availability of a Tucker Act remedy is not at issue here; instead,

we are called upon to determine whether the plaintiffs alleged such a cause

of action.

*Lf it were impossible to divert water into the ponds without injuring the

plaintiffs’ water rights, we might agree with the district court that the

“inescapable conclusion” was that the EPA had authorized ARCO to take

those rights. But because the plaintiffs own the right to use a certain

amount of water for a beneficial use, not the corpus of the water itself,

Tucker v. Missoula Light & Water Co., 250 P. 11, 15 (Mont. 1926),

ARCO could comply with the order by buying storage water or senior

water rights from uthers.

We express no opinion on the merits of the plaintiffs’ state law claims

against ARCO or their potential claims against the United States.

"Although ARCO may defend itself by asserting that it acted within the

EPA's orders, that is a question of fact, not of jurisdiction. See Myers, 323

F.2d at 583; of. Ethridge v. Harbor House Restaurant, 861 F.2d 1389,

1394-95 (9th Cir. 1988) (plaintiff may avoid federal court by relying

exclusively on state law even if defendant asserts a federal defense).

Appendix A

lost crops and lost profits. Jd. at 18. Such a remedy would not

interfere with ARCO’s implementation of the cleanup.* Cf.

McClellan Ecological Seepage Situation v. Perry, 47 F.3d

325, 331 (9th Cir. 1995), petition for cert. filed, 63 U.S.L.W.

3819 (U.S. May 1, 1995) (No. 94-1807).

[3] Because plaintiffs’ damage claim is based entirely on

state law, the district court lacks jurisdiction unless it has

jurisdiction because of West Side’s claim for injunctive relief.

Although the district court dismissed this claim, and West

Side Ditch does not appeal that dismissal, we consider all of

the claims asserted in the complaint to determine whether the

district court has jurisdiction. Harrell v. 20th Century Ins.

Co., 934 F.2d 203, 205 (9th Cir. 1991). We conclude that the

district court does not have jurisdiction over West Side’s

claim for injunctive relief because that claim constitutes a

“challenge” to the CERCLA cleanup effort over which the

district court would not have jurisdiction until the cleanup

was completed. 42 U.S.C. § 9613(h); see McClellan, 47 F.3d

at 328-30.

Because plaintiffs’ claims are based solely on state law, and

inclusion of the Montana Department of Fish, Wildlife, and

Parks as a defendant destroys diversity, 28 U.S.C. § 1332, the

district court lacks jurisdiction.°

VACATED AND REMANDED WITH DIRECTIONS

TO REMAND TO STATE COURT.

*Moreover, a citizen suit under 42 U.S.C. § 9659(aX(1) is not the plain-

tiffs’ sole remedy against ARCO; CERCLA preserves the plaintiffs’ right

to pursue state law remedies. 42 U.S.C. §§ 9652(d), 9659(h); see Stanton

Road Assoc. v. Lohrey Enter., 984 F.2d 1015, 1021-22 (9th Cir. 1993).

*Our disposition renders ARCO’s cross-appeal moot.

10a

APPENDIX B — COMPLAINT DATED

DECEMBER 3, 1990

RUSS McELYEA

Moore, O’Connell, Refling & Manos

Attorneys at Law

P.O. Box 1288

Bozeman, MT 59771-1288

(406) 587-5511

Attorneys for Plaintiff

MONTANA THIRD JUDICIAL DISTRICT COURT,

DEER LODGE COUNTY

NO.

WEST SIDE DITCH COMPANY, a Montana corporation,

Plaintiff,

-VS-

ATLANTIC RICHFIELD COMPANY, a Delaware corporation,

and THE MONTANA DEPARTMENT OF FISH, WILDLIFE

AND PARKS,

Defendants.

COMPLAINT

COMES NOW the Plaintiff, West Side Ditch Company, by

and through the undersigned counsel and complains and alleges

against Defendants as follows:

lla

Appendix B

Plaintiff, West Side Ditch Company, is a Montana

corporation with its principal place of business in Deer Lodge

County, Montana.

II.

Defendant, Atlantic Richfield Company, is a Delaware

corporation authorized to do business in the State of Montana,

and. conducts business in Deer Lodge County, Montana.

Il.

Defendant, Montana Department of Fish, Wildlife and

Parks, is an arm of Montana State Government.

IV.

On June 28, 1889, Plaintiff’s predecessor in interest

constructed the West Side Ditch tapping the stream and diverting

the waters from the Clark Fork of the Columbia River, claiming

by Notice of Appropriation, 65 c.f.s. of water for use on

Plaintiff’s claimed place of use consisting of 3,470 acres located

in Sections 5, 7, 8, 16, 17, 18, 19, 20, 21, and 29 of Township 7

North, Range 9 West, and Sections 29 and 32 of Township 8

North, Range 9 West, all in Deer Lodge County, Montana. The

point of diversion for this water right is located in the SE 1/4SE

1/4, Section 20, Township 6 North, Range 9 West, where a

headgate and weir supplies what is commonly known as the West

Side Ditch.

12a

Appendix B

OnApril 21, 1982, Plaintiff filed Claim No. 76G-W-09205 1

claiming 65 cubic feet per second (c.f.s.) of the waters of the

Clark Fork of the Columbia River, also known as the Deer Lodge

River.

VI.

The entire flow of Claim No. 76G-W-092051 is necessary to

irrigate Plaintiff’s claimed place of use. Plaintiff’s land will not

be productive without irrigation .

VII.

The Clark Fork of the Columbia River flows through tailing

ponds controlled by ARCO, located in Sections 19, 30, and 31 of

Township 5 North, Range 9 West, and Sections 25 and 36 of

Township 5 North, Range 10 West.

VIII.

The Mill-Willow Bypass is a ditch that was constructed

prior to 1950 to divert the waters of Mill Creek and Willow Creek

in the NE 1/4 of Section 11, Township 4 North, Range 10 West.

The Mill-Willow Bypass carries waters from Mill and Willow

Creeks around the tailing ponds mentioned in paragraph VII .

Water flowing through the Mill-Willow Bypass ultimately

contributes substantially to the flows of the Deer Lodge or Clark

Fork River.

13a

Appendix B

IX.

On or about June 1, 1990, the Defendant, or Defendants,

and/or their agents, began diverting water from the Mill- Willow

Bypass into the tailing ponds described in paragraph VII. The

diversion undertaken by the Defendants is upstream of the

headgates used by the West Side Ditch Company.

The Defendants’ diversion and use of Mill-Willow Bypass

water has severely depleted the supply of water in the Clark Fork

of the Columbia River at Plaintiff’s point of diversion described

in paragraph IV above.

XI.

Defendants’ diversions from the Mill-Willow Bypass,

coupled with construction activities in the area, have

substantially altered historic patterns of flow in the Clark Fork

of the Columbia River.

XI.

The Defendant ARCO’s negligent diversion of water from

the stream materially interferes with the Plaintiff’s water rights,

in that the flow of the Clark Fork of the Columbia River at the

Plaintiff’s headgate has been severely reduced. Defendants’

interference with the Plaintiff’s flow of water has occurred

continuously since July 1, 1990.

l4a

Appendix B

XIII.

Plaintiffhas contacted Defendant ARCO and requested that

it stop diversions from the Mill-Willow Bypass. Defendant

ARCO deliberately and willfully refused to stop its unlawful

diversions of waters flowing into the Mill-Willow Bypass.

XIV.

Due to the decreased flow of the Clark Fork, and resulting

depletion of water in the West Side Ditch, Plaintiff, West Side

Ditch Company, has experienced significant reduction in crop

production upon its claimed place of use described in Paragraph

IV above, resulting in crop loss, damages from loss of profits,

and expenditures for the replacement of damaged and low yield

crops.

XV.

Plaintiffs have repeatedly informed Defendant ARCO that

its activities were causing injury to Plaintiffs.

XVI.

The Defendant, Atlantic Richfield Company, is not the

owner of any claim for existing water rights from the sources of

Silver Bow Creek, Mill Creek, Willow Creek, or the Clark Fork

of the Columbia River.

XVII.

Plaintiff’s right to use the water of the Clark Fork of the

Columbia River and its tributaries, is paramount to any claim of

the Defendants.

15a

Appendix B

XVIII.

Mont. Code Ann. § 85-2-302 (1989) requires that “a person

may not appropriate water or commence construction of

diversion, impoundment, withdrawal, or distribution works

therefore except by applying for and receiving a permit from the

Department [of Natural Resources and Conservation]. The

application shall be made on a form prescribed by the

Department.”

XIX.

As of September 28, 1990, Defendant ARCO had not

applied for a permit from the Montana Department of Natural

Resources and Conservation for usage of the waters of Mill

Creek, Willow Creek, or Silver Bow Creek.

XX.

Mont. Code Ann. § 85-2-402 (1989) states “an appropriator

may not make a change in an appropriation right except as

permitted under this section and with the approval of the

Department [of Natural Resources and Conservation] or if

applicable of the Legislature.”

XXI.

Defendant ARCO has not applied for a change in

appropriation right from the Montana Department of Natural

Resources and Conservation as of September 28, 1990.

l6a

Appendix B

XXII.

Defendants’ impoundment of surface waters from the Mill-

Willow Bypass results in less water being available for

Plaintiff’s diversion described in Paragraph IV above.

XXIII.

Mont. Code Ann. § 85-2-406(2) authorizes the petition for

relief in district court of any person whose rights are affected by

a controversy over the distribution of water from a source in

which existing rights have not been determined .

Plaintiff has no adequate remedy at law;

WHEREFORE, Plaintiff prays:

1. Plaintiff’s right to the waters described in its claims be

declared paramount to any claims of the Defendants.

2. Defendants ARCO and the Montana Department of Fish,

Wildlife and Parks be enjoined from diverting the waters of the

Mill-Willow Bypass or engaging in any activity which interferes

with Plaintiff’s right to waters of the Clark Fork of the Columbia

River.

3. That Defendants ARCO and the Montana Department of

Fish, Wildlife and Parks be required to release all waters illegally

impounded and stored by its dams or diversions.

4. For Plaintiff’s costs of suit in this action and reasonable

attorney fees .

17a

Appendix B

5. For damages from Defendant ARCO arising from crop

loss sustained as aresult of Defendants’ improper and unlawful

diversion and depletion of the waters of Silver Bow, Mill, and

Willow Creeks and the Deer Lodge River.

6. Forsuch further relief as the Court may deem proper and

just.

DATED this 3 day of December, 1990.

MOORE, O’ CONNELL, REFLING

& MANOS

BY:s/ Russ McElyea

RUSS McELYEA

18a

APPENDIX C — AMENDED COMPLAINT DATED

MAY 24, 1991

RUSS McELYEA

Moore, O’ Connell, Refling & Manos

Attorneys at Law

P.O . Box 1288

Bozeman, MT 59771-1288

(406) 587-5511

Attorneys for Plaintiff

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MONTANA

BUTTE DIVISION

NO. CV-91-2-BU-PGH

WEST SIDE DITCH COMPANY, a Montana corporation, CITY

OF DEER LODGE, RONALD KELLY, JERRY RUTLEDGE

CHARLES BECK, RICHARD FORSON, GEORGE REISTAD,

and NATIONAL PARK SERVICE

Plaintiffs,

-VS-

ATLANTIC RICHFIELD COMPANY, a Delaware corporation,

and THE MONTANA DEPARTMENT OF FISH, WILDLIFE

AND PARKS,

Defendants .

AMENDED COMPLAINT

COMES NOW the Plaintiff, West Side Ditch Company, by

and through the undersigned counsel and complains and alleges

against Defendants as follows:

19a

Appendix C

Plaintiff, West Side Ditch Company, is a Montana

corporation with its principal place of business in Deer Lodge

County, Montana. The City of Deer Lodge, Ronald Kelly, Jerry

Rutledge, Charles Beck, Richard Forson, George Reistad, and

the National Park Service, operators of the Grant Kohrs National

Historic Site are shareholders in the West Side Ditch Company.

Il.

Defendant, Atlantic Richfield Company, (ARCO) is a

Delaware corporation authorized to do business in the State of

Montana, and conducts business in Deer Lodge County,

Montana.

Ill.

Defendant, Montana Department of Fish, Wildlife and

Parks, is an arm of Montana State Government.

IV.

On June 28, 1889, Plaintiff’s predecessor in interest

constructed the West Side Ditch tapping the stream and diverting

the waters from the Clark Fork of the Columbia River, claiming

by Notice of Appropriation, 65 c.f.s. of water for use on

Plaintiff ’s claimed place of use consisting of 3,470 acres located

in Sections 5, 7, 8, 16, 17, 18, 19, 20, 21, and 29 of Township 7

North, Range 9 West, and Sections 29 and 32 of Township 8

North, Range 9 West, all in Deer Lodge County, Montana. The

point of diversion for this water right is located in the SE 1/4SE

1/4, Section 20, Township 6 North, Range 9 West, where a

20a

Appendix C

headgate and weir supplies what is commonly known as the West

Side Ditch.

On April 21, 1982, Plaintiff West Side Ditch Company filed

Claim No. 76G-W-092051 with the Montana Department of

Natural Resources and Conservation claiming 65 cubic feet per

second (c.f.s.) of the waters of the Clark Fork of the Columbia

River, also known as the Deer Lodge River.

VI.

The entire flow of Claim No. 76G-W-09205 1 is necessary to

irrigate the Plaintiff’s claimed places of use. Plaintiff’s land will

not be productive without irrigation.

VIl.

The Clark Fork of the Columbia River flows through tailing

ponds controlled by ARCO and wildlife ponds controlled by

Fish, Wildlife and Parks, located in Sections 19, 30, and 31 of

Township 5 North, Range 9 West, and Sections 25 and 36 of

Township 5 North, Range 10 West.

VITt.

The Mill-Willow Bypass is a ditch that was constructed

prior to 1950 to divert the waters of Mill Creek and Willow Creek

in the NE 1/4 of Section 11, Township 4 North, Range 10 West.

The Mill-Willow Bypass carries waters from Mill and Willow

Creeks around the ponds mentioned in paragraph VII. Water

flowing through the Mill-Willow Bypass ultimately contributes

substantially to the flows of the Deer Lodge or Clark Fork River.

siesta

ie eiies

21a

Appendix C

IX.

On or about June 1, 1990, the Defendant, or Defendants,

and/or their agents, began diverting water from the Mill- Willow

Bypass into the tailing ponds described in paragraph VII . The

diversion undertaken by the Defendants is upstream from the

headgates used by the West Side Ditch Company. Defendant

ARCO or its predecessors have also diverted the waters of Silver

Bow Creek into the ponds identified by paragraph VII.

The Defendants’ diversion and use of the Mill-Willow

Bypass, Silver Bow Creek, Mill Creek, Willow Creek, and other

sources has severely depleted the supply of water in the Clark

Fork of the Columbia River at Plaintiff’s point of diversion

described in paragraph IV above.

XI.

Defendants’ diversions, coupled with their construction

activities in the area, have substantially altered historic patterns

of flow in the Clark Fork of the Columbia River.

XIl.

The Defendant’s negligent diversion of water from streams

in the Deer Lodge River Basin materially interferes with the

Plaintiff’s water rights, in that the flow of the Clark Fork of the

Columbia River at the Plaintiff’s headgate has been severely

reduced.

22a

Appendix C

XIII.

Plaintiffs have contacted Defendant ARCO and requested

that it stop diversions from the Mill- Willow Bypass. Defendant

ARCO deliberately and willfully refused to stop its unlawful

diversions of waters flowing into the Mill-Willow Bypass.

XIV.

Due to the decreased flow of the Clark Fork, and resulting

depletion of water in the West Side Ditch, the Plaintiffs have

experienced significant reduction in crop production upon their

properties described in Paragraph IV above, resulting in crop

loss, damages from loss of profits, and expenditures for the

replacement of damaged and low yield crops. In addition,

shareholders in the West Side Ditch Company have experienced

a decrease in the value of their shares in the West Side Ditch

Company, and have seen a consequent decline in the value of

both their shares and their real property as a result of the

Defendant’s actions.

XV.

Plaintiffs have repeatedly informed Defendant ARCO that

its activities were causing injury to Plaintiffs.

XVI.

The Defendant, Atlantic Richfield Company, is not the

owner of any claim for existing water rights from the sources of

Silver Bow Creek, Mill Creek, Willow Creek, or the Clark Fork

of the Columbia River.

23a

Appendix C

XVII.

Plaintiff’s right to use the water of the Clark Fork of the

Columbia River and its tributaries, is paramount to any claim of

the Defendants.

XVIII.

Mont. Code Ann. § 85-2-302 (1989) requires that “a person

may not appropriate water or commence construction of

diversion, impoundment, withdrawal, or distribution works

therefore except by applying for and receiving a permit from the

Department [of Natural Resources and Conservation]. The

application shall be made on a form prescribed by the

Department.”

XIX.

As of September 28, 1990, Defendant ARCO had not

applied for a permit from the Montana Department of Natural

Resources and Conservation for usage of the waters of Mill

Creek, Willow Creek, or Silver Bow Creek.

XX.

Mont. Code Ann. § 85-2-402 (1989) states “an appropriator

may not make a change in an appropriation right except as

permitted under this section and with the approval of the

Department [of Natural Resources and Conservation] or if

applicable of the Legislature. ”

24a

Appendix C

XXI.

Defendant ARCO has not applied for a change in

appropriation right from the Montana Department of Natural

Resources and Conservation as of September 28, 1990.

XXII.

Defendants’ impoundment of surface waters from the Mill-

Willow Bypass, Silver Bow Creek, Mill Creek, Willow Creek,

and other sources in the Deer Lodge River Basin results in less

water being available for Plaintiff’s diversion described in

Paragraph IV above.

XXIII.

Mont. Code Ann. § 85-2-406(2) authorizes the petition for

relief in district court of any person whose rights are affected by

a controversy over the distribution of water from a source in

which existing rights have not been determined.

Plaintiff has no adequate remedy at law;

WHEREFORE, Plaintiffs pray:

1. Plaintiff’s right to the waters described in its claims be

declared paramount to any claims of the Defendants.

2. Defendants ARCO and the Montana Department of Fish,

Wildlife and Parks be en joined from diverting, impounding,

withdrawing, or using for any purpose waters from any stream or

tributary in the Clark Fork Basin upstream of the Plaintiffs’ point

of diversion for which Defendants do not have water rights or

25a

Appendix C

engaging in any activity which interferes with Plaintiff's right to

waters of the Clark Fork of the Columbia River.

3. That Defendants ARCO and the Montana Department of

Fish, Wildlife and Parks be required to release all waters illegally

impounded and stored by its dams or diversions.

4. ForPlaintiff’s costs of suit inthis action and reasonable

attorney fees.

5. For damages from Defendant ARCO arising from crop

loss, property devaluation and other damages sustained as a

result of Defendants’ improper and unlawful diversion and

depletion of the waters of Silver Bow, Mill, and Willow Creeks

and other sources in the Deer Lodge Basin.

6. For punitive damages arising from Defendant ARCO’s

willful, wanton, and reckless disregard for the rights and

interests of the Plaintiffs.

7. Forsuch further relief as the Court may deen. proper and

just.

DATED this 24 day of May, 1991.

MOORE, O’CONNELL, REFLING

& MANOS

BY: /s/

RUSS McELYEA

26a

APPENDIX D — COMPLAINT DATED APRIL 29, 1992

JOHN E. BLOOMQUIST

Attorney at Law

P.O. Box 1418

Dillon, MT 59725

Telephone: (406) 683-4301

FAX: (406) 683-4304

Attorney for Plaintiffs

THOMAS A. BECK, MELVIN R. BECK and ROBERT EVANS

IN THE THIRD JUDICIAL DISTRICT COURT

FOR THE STATE OF MONTANA, POWELL COUNTY

Cause No. CV-92-51

THOMAS A. BECK, MELVIN R. BECK and ROBERTEVANS,

Plaintiffs,

ATLANTIC RICHFIELD COMPANY, a Delaware corporation,

and THE MONTANA DEPARTMENT OF FISH, WILDLIFE

AND PARKS,

Defendants.

COMPLAINT

COMES NOW the above-named Plaintiffs, Thomas A.

Beck, Melvin R. Beck and Robert Evans, by and through the

undersigned counsel and complains and alleges against the

above-named Defendants as follows:

27a

Appendix D

GENERAL ALLEGATIONS

1. Plaintiffs are and at all times relevant to this complaint,

were residents of Deer Lodge, Montana.

2. Defendant, Atlantic Richfield Company, (ARCO) is a

Delaware corporation authorized to do business in the State of

Montana, and conducts business in Deer Lodge County and

Powell County, Montana.

3. Defendant, Montana Department of Fish, Wildlife and

Parks (DFWP), is an agency of Montana State Government

located in Helena, Montana.

4. Plaintiffs’ and their predecessors in interest have

appropriated and utilized the waters from the Clark Fork River,

for irrigation purposes. The Plaintiffs have beneficially used the

waters of the Clark Fork River in Section 29, Township 07 North,

Range 09 West, and Section 32 of Township 07 North, Range 09

West, all in Powell County, Montana. The point of diversion for

this water right is located in the SW 1/4 SE 1/4 NW 1/4 Sec. 33,

Township 07 North, Range 09 West.

5. On December 18, 1981, Plaintiffs or their predecessors

in interest filed Claim No. 76G-W-100077-00 with the Montana

Department of Natural Resources and Conservation claiming

15.00 c.f.s. of the waters of the Clark Fork River, also known as

the Deer Lodge River. The 15.00 c.f.s. has been historically

utilized by the Plaintiffs and their predecessors for irrigation

purposes since September 28, 1966.

6. The entire flow of Claim No. 76G-W-100077-00 is

necessary to adequately irrigate the Plaintiffs’ claimed places of

use. Plaintiffs’ land will not be productive without irrigation.

28a

Appendix D

7. The Clark Fork River flows in the vicinity of certain

tailings ponds controlled by ARCO and wildlife ponds

controlled by Fish, Wildlife and Parks, located in Sections 19,

30, and 31 of Township 5 North, Range 9 West, and Sections 25

and 36 of Township 5 North, Range 10 West.

8. The Mill-Willow Bypass is a ditch that was constructed

prior to 1950 to divert the waters of Mill Creek and Willow Creek

in the NE 1/4 of Section 11, Township 4 North, Range 10 West.

The Mill-Willow Bypass carries waters from Mill and Willow

Creeks, tributaries of the Clark Fork River, around the ponds

mentioned in Paragraph 7. Water flowing through the Mill-

Willow Bypass ultimately contributes substantially to the flows

of the Deer Lodge or Clark Fork River.

9. On or about June 1, 1990, the Defendants, and/or their

agents began diverting water from Mill- Willow Bypass into the

tailing ponds described in Paragraph 7. The diversion

undertaken by the Defendants is upstream from the diversion

used by the Plaintiffs. Defendant ARCO, orits agents, have also

diverted the waters of Silver Bow Creek into the ponds identified

by Paragraph 7.

10. The Defendants, ARCO and DFWP are not the owners

of any claim for existing water rights from the sources of Silver

Bow Creek, Mill Creek, Willow Creek, or the Clark Fork River.

11. The Defendants ARCO and DFWP have not applied for

a water rights permit from the Montana Department of Natural

Resources and Conservation (DNRC) for usage of the waters of

Mill Creek, Willow Creek, Silver Bow Creek, or the Clark Fork

River. Likewise, the Defendants ARCO and DFWP have not

received a water rights permit from the DNRC to divert any

waters of said sources.

cis

co ap iat a rane

“e

29a

Appendix D

12. Defendants ARCO and DFWP have not applied for a

change in appropriation right with the Montana Department of

Natural Resources and Conservation (DNRC). Likewise, no

change in any appropriation right has been approved by the

DNRC.

COUNTI

13. Plaintiffs reallege each and every one of the allegations

contained in the preceding paragraphs.

14. The Defendants’ illegal diversions and use of the Mill-

Willow Bypass, Silver Bow Creek, Mill Creek, Willow Creek,

and other sources contrary to Montana law, have severely

depleted the supply of water in the Clark Fork River at Plaintiffs’

point of diversion described in Paragraph 4 above.

15. Defendants’ illegal diversions in the area have

substantially altered historic patterns of flow in the Clark Fork

River. As a result of said illegal diversions, the Plaintiffs have

been deprived of water available at Plaintiffs’ point of diversion

described in Paragraph 4 above.

16. The Defendants’ diversion of water from streams in the

Clark Fork Basin materially and substantially interferes with the

Plaintiffs’ water rights, in that the flow of the Clark Fork River at

the Plaintiffs’ points of diversion have been severely reduced

and depleted.

17. Due to the decreased flow of the Clark Fork, and

resulting depletion of water available at their diversion points,

the Plaintiffs have experienced significant reduction in crop

production upon their properties described in Paragraph 4 above,

30a

Appendix D

resulting in crop loss, damages from loss of profits, and

expenditures for the replacement of damaged and low yield

crops. In addition, the Plaintiffs have experienced a decrease in

the value of their real property as a result of the Defendants’

actions.

18. As aresult of Defendants’ illegal use of water from

streams in the Clark Fork River Basin, the Plaintiffs have

suffered damages.

COUNT Il

19. Plaintiffs reallege each and every one of the allegations

contained in the preceding paragraphs.

20. The Defendants’ negligent diversions and use of the

Mill-Willow Bypass, Silver Bow Creek, Mill Creek, Willow

Creek, and other sources contrary to Montana law, have severely

depleted the supply of water in the Clark Fork River at Plaintiffs’

point of diversion described in Paragraph 4 above.

21. Defendants’ negligent diversions in the area have

substantially altered historic patterns of flow in the Clark Fork

River. As aresult of said negligent diversions, the Plaintiffs have

been deprived of water available at Plaintiffs’ point of diversion

described in Paragraph 4 above.

22. The Defendants’ negligent diversion of water from

streams in the Clark Fork Basin materially and substantially

interferes with the Plaintiffs’ water rights, in that the flow of the

Clark Fork River at the Plaintiffs’ points of diversion have been

severely reduced and depleted.

3la

Appendix D

23. Due to the decreased flow of the Clark Fork, and

resulting depletion of water available at their diversion points,

the Plaintiffs have experienced significant reduction in crop

production upon their properties described in Paragraph 4 above,

resulting in crop loss, damages from loss of profits, and

expenditures for the replacement of damaged and low yield

crops. In addition, the Plaintiffs have experienced a decrease in

the value of their real property as a result of the Defendants’

negligent actions.

24. Asaresult of Defendants’ negligent use of water from

streams in the Clark Fork River Basin, the Plaintiffs have

suffered damages .

COUNT III

25. Plaintiffs reallege each and every one of the allegations

contained in the preceding paragrapbs.

26. Defendant ARCO has been repeatedly contacted and

requested that it stop diversions from the Mill-Willow Bypass.

Defendant ARCO deliberately and willfully refused to stop its

unlawful diversions of waters flowing into the Mill-Willow

Bypass.

27. Defendant ARCO has been repeatedly informed that its

activities were Causing injury to water users on the Clark Fork

River.

28. Despite the above-mentioned efforts, the Defendants

have continued to illegally divert the surface waters from the

Mill-Willow Bypass, Silver Bow Creek, Mill Creek, Willow

Creek, and other sources in the Clark Fork River Basin which has

32a

Appendix D

resulted in less water being available for Plaintiffs’ diversion

described in Paragraph 4 above.

29. As a result of the Defendants wanton, willful and

reckless conduct in illegally diverting waters in the Clark Fork

River Basin, the Plaintiffs have been injured and Plaintiffs are

entitled to punitive damages.

COUNTIV

30. Plaintiffs reallege each and every one of the allegations

contained in the preceding paragraphs.

31. Plaintiffs’ right to use the water of the Clark Fork River

and its tributaries is superior to any claimed use by the

Defendants.

32. Montana law authorizes this action for relief in district

_ court of any person whose rights are affected by a controversy

over the distribution of water, and state law authorizes damages

for the allegations contained in this complaint.

WHEREFORE, Plaintiffs pray for relief as follows:

1. For monetary damages from Defendants ARCO and

DFWP arising from crop loss, property devaluation and other

damages sustained as a result of Defendants’ illegal, negligent

and unlawful diversion and repletion of waters of Silver Bow,

Mill, and Willow Creeks and other sources in the Clark Fork

River Basin. Such damages shall be shown and determined at

trial.

2. Forpunitive damages arising from Defendants’ willful,

wanton, and reckless disregard for the rights and interest of the

Plaintiffs.

33a

Appendix D

3. For Plaintiffs’ costs of suit in this action and reasonable

attorney’s fees.

4. Forsuch furtherrelief as the Court may deem proper and

just.

Dated this 29th day of April, 1992.

Bys/ John E. Bloomquist

John E. Bloomquist, Esq.

Attorney for Plaintiffs

Thomas Beck, Melvin Beck and Robert

Evans

Plaintiffs hereby demand a jury trial to try the cause.

By s/ John E. Bloomquist

John E. Bloomquist, Esq.

Attorney for Plaintiffs

Thomas Beck, Melvin Beck and Robert

Evans

34a

APPENDIX E — RELEVANT STATUTES

42 U.S.C.A. § 9613 (1995) Civil proceedings

(b) Jurisdiction; venue

Except as provided in subsections (a) and (h) of this section,

the United States district courts shall have exclusive original

jurisdiction over all controversies arising under this chapter,

without regard to the citizenship of the parties or the amount in

controversy. Venue shall lie in any district in which the release or

damages occurred, or in which the defendant resides, may be

found, orhas his principal office. For the purposes of this section,

the Fund shall reside in the District of Columbia.

(h) Timing of review

No Federal court shall have jurisdiction under Federal law

other than under section 1332 of Title 28 (relating to diversity of

citizenship jurisdiction) or under State law which is applicable

or relevant and appropriate under section 9621 of this title

(relating to cleanup standards) to review any challenges to

removal or remedial action selected under section 9604 of this

title, or to review any order issued under 9606(a) of this title, in

any action except one of the following:

(1) An action under section 9607 of this title to recover

response costs or damages or for contribution.

(2) An action to enforce an order issued under section

9606(a) of this title or to recover a penalty for violation of such

order.

(3) Anaction forreimbursement under section 9606(b)(2)

of this title.

ae meta te eres dit LSE ee Rae elaine a eee

35a

Appendix E

(4) An action under section 9659 of this title (relating to

citizens suits) alleging that the removal or remedial action taken

under section 9604 of this title or secured under section 9606 of

this title was in violation of any requirement of this chapter. Such

an action may not be brought with regard to a removal where a

remedial action is to be undertaken at the site.

Te eee ee betcha i fli sires she pak seta hae fe oe >

er ls win Mle Aud a alsa iON RA ae ss Se

(5) Anaction under section 9606 of this title in which the

United States has moved to compel a remedial action.

42 U.S.C.A. § 9659 (1995) Citizens suits

4 (a) Authority to bring civil actions

Except as provided in subsections (d) and (e) of this section

and in section 9613(h) of this title (relating to timing of judicial

review), any person may commence a civil action on his own

behalf —

(1) against any person (including the United States and

any other governmental instrumentality or agency, to the

extent permitted by the eleventh amendment to the

Constitution) who is alleged to be in violation of any

standard, regulation, condition, requirement, or order which

has become effective pursuant to this chapter (including any

provision of an agreement under section 9620 of this title,

relating to Federal facilities);....

(h) Other rights

i This chapter does not affect or otherwise impair the rights of

| any person under Federal, State, or common law, except with

respect to the timing of review as provided in section 9613(h) of

aE Aaa had per

36a

Appendix E

this title or as otherwise provided in section 9658 of this title

(relating to actions under State law).

SALERRO ERE ENAMEL IIS OR EN NT OL ee eye on NET!

“3

Pod

% ~

bcos

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.