Supplemental Brief — Teck Cominco Metals, Ltd. v. Pakoototas (No. 06-1188)

Ib

Gy) FILED

No. 06-1188 DEC 1 3 2007

OFFICE OF THE CLER

SUPREME COURT, US.

IN THE

Supreme Court of the United States

TECK COMINCO METALS, LTD., a Can. lian corporation,

Petitioner,

Vv.

JOSEPH A. PAKOOTAS, an individual and enrolled member of

the Confederated Tribes of the Colville Reservation; DONALD R.

MICHEL, an individual and enrolled member of the

Confederated Tribes of the Colviile Reservation;

STATE OF WASHINGTON,

Respondents.

On PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE Ninty Circuit

SUPPLEMENTAL BRIEF FOR RESPONDENTS

PAKOOTAS AND MICHEL

RICHARD A. Du Bey

Paut J. DaYToNn*

Lestie C. CLARK |

MICHELLE U. ROSENTHAL

SHORT CRESSMAN & Burcess PLLC

999 Third Avenue, Suite 3000

Seattle, WA 98104

(206) 682-3333

Counsel for Respondents

* Counsel of Record Pakootas and Michel

212750 cr

COUNSEL PRESS

(800) 274-3321 + (800) 359-6859

TABLE OF CONTENTS

Page

TABLE OF CITED AUTHIOREEEESS ccc cccevscces il

SUPPLEMENTAL STATEMENT OF THE CASE ... l

DISCUSRIINS bs oa tha ee ee ReU EP Ew ee cece reece 4

A. Post-Suit Withdrawal Of The UAO In A Non-

CERCLA Agreement Does Not Automatically

Moot Respondents’ Citizen Suit, And

Application Of This Court’s Mootness

Principles Requires Remand To The District

Court For Factual Inquiry. ............... +

B. EPA’s Agreement With TCM Does Not Raise

A Res Judicata Bar To This Suit; Any Claim

To The Contrary Must Be Evaluated By The

District Court On Remand. .............. 7

C. Even If This Court Deems Respondents’

Claims Moot, It Should Not Vacate The Ninth

BB ely 8

CONCLUBIGAY <a eee er MENS S eres ce ccc ees 10

Ti

TABLE OF CITED AUTHORITIES

Page

Cases

Allmerica Fin. Life Ins. & Annuity Co. v. Llewellyn,

139 F.3d 664 (Sth Cir. 1997) 2... cccccccces 7

Arizonans for Official English y. Arizona,

Dae ee TP LEED ad ens beans exe eas 8

Ass'n of Irritated Residents v. Fred Shakeil Dairy,

460 F. Supp. 2d 1185 (E.D. Cal. 2006) ........ 6

City of Mesquite v. Aladdin's Castle, Inc.,

GIS Ca GE 8 oo oes ereteeKee 5,6

Coral Constr. Co. v. King County,

941 F.26 910 (Ge Cie. 1991) 2. nc ccc cccccucss 5

Crowell v. Mader,

O08 TE et EE 0 66.0 oe cbse eee eae 9

Deakins v. Monaghan,

oe Bo ry err meer nue: 9

Ellis v. Gallatin Steel Co.,

390 F.3d 461 (Gth Cir. 2004) 2... ccc cece. 6, 8

EPA v. City of Green Forest,

921 F.2d 1394 (8th Cir. 1990),

cert. denied, 502 U.S. 956 (1991) ............ 8

Federated Dep t Stores, luc. v. Moitie,

Coe Shs SOE 6 Che oc vba eave eeeiaee 8

ill

Cited Authorities

Page

Friends of the Earth, Inc. v. Laidlaw Envt'l

Servs. (TOC), Inc.,

oe Rg ee eee re 5, 6,9

Gwaltney of Smithfield, Ltd. v. Chesapeake

Bay Found., Inc.,

ee ED oo on gaia d kveawkhe beaks 5

Natural Res. Council of Me. v. Int’l Paper Co.,

424 F. Supp. 2d 235 (D. Me. 2006) ........... 6

Steel Co. v. Citizens for a Better Env t,

ee a OE Ska ee ome deehat nests enes 5

U.S. Bancorp Co. v. Bonner Mall P ‘ship,

Ss SE ia bode uw ane hae ok eee x 8,9, 10

United States v. Concentrated Phosphate

Exp. Ass'n,

EEE hus oo eGR hho so bwsw es 6

United States v. Munsingwear, Inc.,

Pe BOGE OEE picks ee tien vecnsesdeees 8,9, 10

Univ. of Texas v. Camenisch,

Pe Ar SENG 6 cosa nedeve be eendedeees 9

Walling v. James V. Reuter, Inc.,

BS rr ee rr re 8

iv

Cited Authorities

Page

Statutes

ee a PEED ios dito seskaset eves vaens 3

ee Sees IED Si es owes vee ewn ere cuawes 3

eae os oa wo oe eee a

ee Sees EE) ch kes Sho cc ds eee eeusyews 4

CR Se eee ee re er ha

42 U.S.C. § SS see Gk conse oa vanes ‘2

i EE ek is a sa su ab eeesbhanees 2

Rules

ES ois cn wie'e's a's oe tae. wkd ea dw ee 3

Federal Rule of Civil Procedure 12(b)(1) ........ a

Federal Rule of Civil Procedure 12(b)(2) ........ 2

Federal Rule of Civil Procedure 12(b)(6) ........ 2

et es ir dG Va oeieiy hs vik Se Aen Sa ro l

]

Respondents, Joseph Pakootas and D.R. Michel, concur

with the view of the United States that the current posture of

this case “counsels strongly against this Court’s review.” Brief

for the United States as Amicus Curiae (“Brief of the United

States”) at 6. Respondents submit this brief pursuant to S.Ct.

Rule 15.8 for the sole purpose of commenting on the mootness

and vacatur issues discussed in the Brief of the United States.

A suggestion of mootness at this stage is anomalous because

petitioner, Teck Cominco Metals, Ltd. (“TCM”’), has not claimed

that its agreement with the Environmental Protection Agency

(“EPA”) moots this appeal. Instead, TCM advised the court of

appeals that “claims for civil penalties under CERCLA ‘for each

day’ of violation of the Unilateral Administrative Order are not

moot... [and] claims for attorneys’ fees in trying this lawsuit

are not moot... .”' As nocourt has analyzed TCM’s agreement

with EPA or considered its effect on this citizen suit, any

mootness concerns should be considered by the district court

after remand. The petition for Writ of Certiorari should be

denied.

SUPPLEMENTAL STATEMENT OF THE CASE

Respondents’ complaint sought declaratory and injunctive

relief under CERCLA based on TCM’s failure to comply with

the unilateral administrative order (““UAO”) issued by EPA on

December 11, 2003. Pet. App. 6a, 105a-12a. Their complaint

also sought an order requiring the payment of civil penalties to

the maximum extent permitted by CERCLA “for each day during

which the violation of the UAO continues,” pursuant to

42 U.S.C. § 9659(c) and recovery of attorneys’ fees pursuant to

42 U.S.C. § 9659(f). Pet. App. 11 1a.

' Petitioner’s Request for Judicial Notice, Ninth Circuit Court

of Appeals (“Pet. C.A. Request for Judicial Notice”) <http://

www.law.washington.edu/ Directory/docs/Robinson-Dorn/Trail

Smelter> at 5.

2

Neither the United States nor TCM has argued that

respondents lacked standing to sue or that they failed to meet

the requirements for a citizen suit stated in 42 U.S.C. § 9659.

As the United States recognizes and TCM does not dispute,

TCM did not comply with the UAO. Brief of the United States

at 3, Pet. App. 5. TCM has never complied with the UAO.

Instead, it moved to dismiss respondents’ complaint alleging

lack of subject matter and personal jurisdiction and failure to

state a claim, pursuant to Federal Rules of Civil Procedure

12(b)(1), (2) and (6). Pet. App. 30a. After the district court

denied that motion, Pet. App. 29a-59a, and oral argument on its

appeal, TCM negotiated an agreement with EPA. Pet. App. 9a

n.10. Respondents are not parties to that agreement and it does

not purport to release the claims that respondents allege in their

citizen suit.? Instead, it provides for implementation of a

remedial investigation and feasibility study (RI/FS) patterned

on the UAO, but which explicitly disclaims compliance with

an “administrative or judicial order issued pursuant to the

provisions of CERCLA ...”* Pet. C.A. Request for Judicial

Notice, Ex. 2, at 1, 3 (June 2, 2006).

? CERCLA authorizes the United States to intervene in this citizen

suit, 42 U.S.C. § 9659(g), but it has never done so. Nor did it file suit

against TCM or negotiate a judicial order requiring TCM to comply

with the UAO or otherwise comply with CERCLA.

> The settlement agreement is structured like a CERCLA order

but stripped of its CERCLA grounding. Settlement Agreement at 1-29.

A comparison of the settlement agreement’s Statement of Work (SOW)

with the original UAO’s SOW reveals that the settlement agreement

includes similar components as the UAO. /d., Ex. A at 1-49 (June 2,

2006) (Statement of Work for Remedial Investigation and Feasibility

Studies Upper Columbia River Site); Petitioner’s Memorandum in

Support of Motion to Dismiss, with Exhibits, Ex. A at 58-77 <http://

www.law.washington.edu/ Directory/docs/Robinson-Dorn/ Trail

Smelter>.

3

As a part of its agreement, EPA agreed to withdraw the

UAO and covenanted “not to sue or to take administrative action

against TCM and TCAI* pursuant to Sections 106 and 107(a)

of CERCLA, ... for non-compliance with the Unilateral

Administrative Order. ...”° /d. at 22, 55. This promise was

expressly conditioned on “the satisfactory performance by TCAI

and TCM of their obligations under” the agreement. /d. The

settlement agreement did not purport to release any claims for

past non-compliance with the UAO and it did not purport to

terminate the pending citizen suit. Nor did EPA promise to

take any action to accomplish termination of the pending citizen

suit. Indeed, the agreement expressly rejected its application to

the rights of third parties. /d. at 26, 474.

As TCM concededly did not comply with the UAO, and it

did not reach agreement with the EPA until 892 days after suit

was filed, daily penalties for non-compliance with the UAO

could be awarded under 42 U.S.C. § 9659(c). At the maximum

tate of $27,500 per day, 42 U.S.C. § 9606(b)(1) and 40 CFR

19.4, TCM is potentially liable for penalties totaling

$24,530,000. If penalties are awarded by the district court for

non-compliance with the UAO, respondents will seek recovery

of their attorneys’ fees and costs as authorized by 42 U.S.C.

§ 9659(f).

* TCAI is Teck Cominco American Incorporated, an affiliate of

TCM.

* Any compromise of a unilateral administrative order to conduct

an RI/FS under CERCLA is subject to 42 U.S.C. § 9622(d)(3) and is to

be implemented by administrative order or decree in the district court.

EPA did not follow these procedures, evidently concluding that it was

not resolving any claims under CERCLA.

4

After it reached agreement with the EPA, TCM did not ask

the district court or the appellate court to dismiss this citizen

suit on mootness grounds. Instead, TCM asked the Ninth Circuit

to take judicial notice of the settlement agreement and

represented that the appeal was not moot. Pet. C.A. Request

for Judicial Notice, Pet. App. 9a, n.10. It claimed that the

settlement agreement mooted the injunctive and declaratory

relief claims but stated its understanding that its agreement with

EPA did not moot the statutory penalties and attorneys’ fees

claims. /d.

DISCUSSION

A. Post-Suit Withdrawal Of The UAO In A Non-CERCLA

Agreement Does Not Automatically Moot Respondents’

Citizen Suit, And Application Of This Court’s Mootness

Principles Requires Remand To The District Court For

Factual Inquiry.

CERCLA authorizes respondents to commence a civil

action against TCM based on its violation of an “order which

has become effective” at the time of suit. 42 U.S.C. § 9659(a)(1).

Such right to commence suit is conditioned on notice pursuant

to subpart (d)(1) and the absence of diligent prosecution by the

government as provided in subpart (d)(2). As TCM’s non-

compliance is conceded and diligent prosecution is not alleged,

respondents not only had standing to sue when they filed, TCM

had no colorable defenses except the arguments it made—the

court lacked subject matter and personal jurisdiction and

CERCLA did not apply to an entity located in and operating in

Canada.

The United States now suggests that its withdrawal of the

UAO after TCM’s non-compliance and unsuccessful challenge

to the application of CERCLA, deprives respondents of a case

or controversy because “petitioner is no longer violating [the

order].” Brief of the United States at 8-9. This argument is not

anchored in the text of CERCLA and does not distinguish

5

between a claim that has been potentially limited by subsequent

developments and one that is no longer “live.”® Withdrawal of

the UAO may limit the district court’s power to grant an

injunction enforcing it, but does not, of itself, eliminate the

court’s power to order statutory penalties for the period of non-

compliance. City of Mesquite v. Aladdin's Castle, Inc.,455 U.S.

283, 289 (1982). TCM recognized this when it told the Ninth

Circuit that neither the penalties claim nor the attorneys’ fees

claim was moot. The United States cites no authority suggesting

that the district court lacks jurisdiction to award penaities based

on non-compliance with an order that was subsequently

withdrawn; thus, it is not self-evident, as the United States has

implied, that respondents’ claims are moot.’

® The United States discussed standing principles from Steel Co.

v. Citizens for a Better Envt, 523 U.S. 83 (1998), and Gwalmey of

Smithfield, Ltd. v. Chesapeake Bay Found., Inc., 484 U.S. 49 (1987).

Brief of the United States at 8-10. Standing is not controverted here,

and standing jurisprudence does not answer whether certain forms of

relief remain available for post-filing violations. See Friends of the Earth,

Inc. v. Laidlaw Enyt’l Servs. (TOC), lic., 528 U.S. 167, 186-92 (2000)

(distinguishing standing and mootness in voluntary compliance cases).

? As the United States agrees that there has been no voluntary

compliance with the UAO by TCM that might have squarely placed

these issues under Laidlaw, this Court’s landmark voluntary compliance

opinion, Brief of the United States at 10, there is a question of the

applicable mootness standard to apply. The United States assumes that

Laidlaw applies, reasoning backward from the proposition that in a

voluntary compliance case penalties must deter future violations to

conclude that claims for penalties can also be mooted in non-voluntary

compliance cases. Reliance on Laidlaw $ voluntary compliance analysis

does not help in the instant case where TCM adamantly refused to

comply with the order in question.

Contrary to the United States’ assumption that the Laidlaw standard

applies, withdrawal of the UAO, like repeal of a statute, does not deny

the Court jurisdiction to decide whether relief should issue. Coral Constr

Co. v. King County, 941 F.2d 910, 927 (9th Cir. 1991) (citation omitted).

When mootness is alleged in such circumstances, the court retains the

power to decide the legality of the practice and whether relief should

issue. Mesquite, 455 U.S. at 289.

6

Rather, the undeveloped status of the complex factual record

giving rise to mootness allegations is best suited for resolution

at the trial court. See, e.g., Laidlaw, 528 U.S. at 193-94

(remanding because the facts informing the mootness question

“have not been aired in the lower courts; they remain open for

consideration on remand”); Mesquite, 455 U.S. at 289 n.10 (it

was a matter for the trial judge whether likelihood of further

violations was sufficiently remote to make injunctive relief

unnecessary); United States v. Concentrated Phosphate Exp.

Ass’n, 393 U.S. 199 (1968) (same).* This is so because the

alleged mooting event is not simply the withdrawal of the UAO,

as the United States suggests. Brief of the United States at 10.

Instead, the potentially mooting event is the agreement between

TCM and EPA, a 29-page document setting out the structure of

a CERCLA-like RI/FS, relied upon by EPA as the basis for

withdrawing the UAO. Settlement Agreement at 1-29. The

United States has not cited authority suggesting that non-judicial

action terminates a validly filed citizen suit.? But, even if the

agreement to withdraw the UAO operates to moot injunctive

relief, the district court must determine how, if at all, the

settlement agreement applies to the remaining claims for

® The lower courts also recognize that the determination of whether

a citizen suit’s claims for civil penalties have become moot is a highly

factual inquiry. See, e.g., Ass'n of Irritated Residents v. Fred Shakel

Dairy, 460 F. Supp. 2d 1185, 1192 (E.D. Cal. 2006) (In a Clean Air Act

case, the effect of compliance-and closure of a facility on civil penalties

claims in a citizen suit was a “disputed factual matter”); Natural Res.

Council of Me. v. Int'l Paper Co., 424 F. Supp. 2d 235, 257 (D. Me.

2006) (In a Clean Water Act case, the court noted that at an early stage

of litigation, “without any further information,” it could not determine

whether civil penalties claims had become moot).

° While separate adjudications have terminated citizen suits under

res judicata principles, Ellis v. Gallatin Steel Co., 390 F.3d 461, 472-74

(6th Cir. 2004), respondents are aware of no case in which a citizen

suit, properly filed, has been terminated by non-judicial action. Nothing

in the text of CERCLA authorizes termination of the suit in these

circumstances.

7

penalties and fees—a question on which TCM and the United

States evidently disagree. In addition to determining whether

penalties should be awarded based on pre-withdrawal non-

compliance, analysis of the agreement and its implementation

is necessary to judge whether penalties would influence TCM’s

performance of the settlement agreement (necessary to prevent

rescission of the UAO withdrawal) and deter other non-

compliance with CERCLA."

As part of its mootness argument, the United States suggests

that EPA’s covenant not to sue in the settlement agreement

waived or released respondents’ claim for. penalties stated in

the pending citizen suit. Brief of the United States at 11. EPA

evidently did not intend to waive respondents’ claims as the

settlement agreement expressly excludes impact on the rights

of third parties. Settlement Agreement at 26, 74. That provision

recognizes the fact that respondents were not party to the

agreement and EPA was not purporting to act on their behalf. In

any event, waiver is an affirmative defense that might be alleged

in the district court, not a ground for mootness. See, ¢.g.,

Allmerica Fin. Life Ins. & Annuity Co. v. Llewellyn, 139 F.3d

664, 665-66 (9th Cir. 1997) (recognizing that waiver is an

affirmative defense that must be pleaded in an answer).

B. EPA’s Agreement With TCM Does Not Raise A Res

Judicata Bar To This Suit; Any Claim To The Contrary

Must Be Evaluated By The District Court On Remand.

Within its mootness discussion, the United States briefly

addresses the principles of res judicata, asserting that

res judicata operates to “bar” respondents’ citizen suit claims.

Brief of the United States at 11. Although courts have

occasionally applied res judicata principles to determine the

'0 The deterrence and compliance calculus is complicated by the

fact that TCM did not undertake performance of the RI/FS described in

the settlement agreement. That responsibility was allocated to TCAI,

TCM’s American affiliate.

8

effect of a post-filing settlement, see, e.g., Ellis, 390 F.3d at

472-74, res judicata does not preclude litigation unless the prior

action ended with a “final judgment on the merits” involving

the same parties or their privies. See, e.g., Federated Dept

Stores, Inc. v. Moitie, 452 U.S. 394, 398 (1981).

The two cases cited by the United States to support its view

do not help overcome the absence of judicial resolution here.

Ellis, 390 F.3d 461; EPA v. City of Green Forest, 921 F.2d 1394,

1403-04 (8th Cir. 1990), cert. denied, 502 U.S. 956 (1991). In

both Ellis and Green Forest, the settlement alleged to have

preclusive effect was the result of a judicial process in which

the citizen suit plaintiffs either participated as intervenors or

had an opportunity to comment on the proposed settlement.

Ellis, 390 F.3d at 472-74; Green Forest, 921 F.2d at 1402. In

contrast, here, respondents had no opportunity to participate

directly in the extra-judicial settlement negotiations and no

judgment was entered.

C. Even If This Court Deems Respondents’ Claims Moot,

It Should Not Vacate The Ninth Circuit Opinion.

Vacatur is a doctrine grounded in the principles of equity.

See U.S. Bancorp Co. v. Bonner Mall P ship, 513 U.S. 18, 29

(1994) (“the determination [of whether to vacate] is an equitable

one”). This Court vacates a lower court opinion when mootness

arises in one of two circumstances: when mootness arises by

“happenstance,” United States v. Munsingwear, Inc., 340 U.S.

36, 40 (1950), or when the prevailing party below takes voluntary

action to moot the claim, effectively preventing appeal.

See, e.g., Walling v. James V. Reuter, Inc., 321 U.S. 671, 677

(1944) (vacating lower court opinion was the “just and

appropriate disposition” after prevailing party, a corporate entity,

dissolved before its favorable judgment could be reviewed;

Court vacated and remanded to allow losing party to pursue the

corporate entity’s successors). See also Arizonans for Official

English v. Arizona, 520 U.S. 43, 75 (1997) (“It would certainly

be a strange doctrine that would permit a plaintiff to obtain a

9

favorable judgment, take voluntary action [that] moot[s] the

dispute, and then retain the [benefit of the] judgment”) (agreeing

with the Brief of the State of Arizona) (alterations in original)."'

Neither justification for vacatur applies here, and vacation of

the Ninth Circuit opinion would work directly against the

equitable principles that the vacatur doctrine seeks to protect.

The primary purpose of vacatur is to protect the losing party

from being prejudiced by a decision that might have been

overturned on appeal. See Munsingwear, 340 U.S. at 40. There

is no such concern here where TCM—the losing party on the

issue appealed from the district court —first deliberately entered

into a non-CERCLA settlement agreement without the

participation of respondents, and then urged to the Ninth Circuit

that the settlement agreement had not mooted respondents’

claims for civil penalties and attorneys’ fees. Cf Bonner Mall,

513 U.S. at 28 (criticizing a vacatur theory that would encourage

“the lack of equity of a litigant who has voluntarily abandoned

review’). This Court has expressly established that vacatur is

not appropriate where the appellant has voluntarily mooted the

appeal, including by settlement. Bonner Mall, 513 U.S. at 24.

See also Laidlaw, 528 U.S. at 194 n.6 (even if polluter’s

voluntary compliance mooted the citizen suit, it would be “far

from clear” that vacatur would be the appropriate response).

"' This Court’s opinions in Deakins v. Monaghan, 484 U.S. 193

(1988); Univ. of Texas v. Camenisch, 451 U.S. 390 (1981); and Crowell

v. Mader, 444 U.S. 505 (1980); all inform that when only portions of a

plaintiff's lawsuit have become moot, only the moot portions should be

vacated. These opinions do not provide an additional basis for exercising

the equitable doctrine of vacatur; they merely instruct how much of an

opinion should be vacated when this Court determines that vacatur is

warranted.

12. Nor is Munsingwear'’s concern regarding the foreclosure of

opportunity for review presented here. See Munsingwear, 340 U.S. at

38. No judgment was entered below, and nothing precludes TCM from

again seeking review in this Court should the applicability of EERCLA

to TCM remain an issue in this case after remand.

10

“The denial of vacatur is merely one application of the

principle that ‘[a] suitor’s own conduct in relation to the matter

at hand may disentitle him to the relief he seeks.’” Bonner Mall,

513 U.S. at 25 (denying requested vacatur because the prevailing

party voluntarily mooted the subject of the appeal through

settlement, precluding further review) (citation omitted). Thus,

there is no application here for Munsingwear’s observation that

when mootness arises through happenstance vacatur beneficially

“clears the path for future relitigation of the issues between the

parties.” Munsingwear, 340 U.S. at 40. This Court has

determined that when a party voluntarily moots a claim, the

benefits of preserving the lower court’s opinion outweigh any

potential benefits of relitigating the same issues. Cf Bonner

Mall, 513 U.S. at 27 (“The value of additional intra-circuit debate

seems to us far outweighed by the benefits that flow to litigants

and the public from the resolution of legal questions”) (emphasis

added).

CONCLUSION

The petition for a Writ of Certiorari should be denied.

Respectfully submitted,

RicHARD A. Du Bey

PauL J. Dayton*

Lesuie C. CLARK

MICHELLE U. ROSENTHAL

SHortT CRESSMAN & BurGEss PLLC

999 Third Avenue, Suite 3000

Seattle, WA 98104

(206) 682-3333

* Counsel of Record Counsel for Respondents

Pakootas and Michel