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

A © FILED

No. 06-1188 MAY 0 2 2007

OFFICE OF THE CLERK

Bn The SUPREME COURT, U.S.

Supreme Court of the Gnited States

%

TECK COMINCO METALS LTD.,

Petit. oner,

v.

JOSEPH A. PAKOOTAS, DONALD R. MICHEL,

and the STATE OF WASHINGTON,

Respondents.

+

On Petition For Writ Of Certiorari

To The United States Court Of Appeals

For The Ninth Circuit

¢

BRIEF OF AMICI CURIAE THE CANADIAN

CHAMBER OF COMMERCE AND THE MINING

ASSOCIATION OF CANADA IN SUPPORT OF

PETITION FOR WRIT OF CERTIORARI

+

AKIN GUMP STRAUSS HAUER & FELD LLP

REX S. HEINKE

Counsel of Record

SETH M.M. STODDER

2029 Century Park East, Suite 2400

Los Angeles, California 90067-3012

Telephone: 310-229-1000

Facsimile: 310-229-1001

Attorneys for Amici Curiae,

The Canadian Chamber of Commerce

and The Mining Association of Canada

COCKLE LAW BRIEF PRINTING CO. (800) 225-6964

OR CALL COLLECT (402) 342-2831

i

TABLE OF CONTENTS

Page

INTEREST OF AMICI CURIAE ............:ccccssecceesceeees 1

REASONS WHY THE PETITION SHOULD BE

rice liiusesrsedveneseneseeceeverivoreveeneres 5

iid chicenenesrsetiecorctetrereerevecovescorvasoons 12

TABLE OF AUTHORITIES

Page

CASES

EEOC v. Arabian Am. Oil Co. (Aramco), 499 U.S.

eG TD isi cieluiidbaheniscsisnnignditndealiapubictinabadadiddiecinatmaaaseubidiions 11

Subafilms, Ltd. v. MGM-Pathe Communications

Co., 24 F.3d 1068 (Stis Cir. 1996)......ccccccesssrscerscosevevevesess 11

STATUTES AND TREATIES

Boundary Waters Treaty of 1909.00.00... cecceeceeees 4,6,7

Great Lakes Water Quality Agreement of 1978.............. 6,8

El FE TOE Ce TI cen necicnicttetictavnnnctineesnciomanoctonss 6, 8

NAFTA “Side Agreement” on Environmental

I ccc vcinsivseininieceaistaiblilatisiiadinagpisdiiitbiacaicecntulaideiistiuicrtbiateas 7

U.S. Comprehensive Environmental Response,

Compensation and Liability Act (“CERCLA”)....... 2,9, 10

U.S.-Mexico Integrated Border Environmental Plan ........ 8

U.S.-Mexico Water Treaty of 1944.0.........cccccesecesseeeeeeeeeeeeees 6

OTHER AUTHORITIES

Austen L. Parrish, Trail Smelter Déja Vu:

Extraterritoriality, International Environmental

Law, and the Search for Solutions to Canadian-

U.S. Transboundary Water Pollution Disputes, 85

aaa Say Gs SE Ei sintlonbccintinnteninentsiantnbenseannen passim

Border 2012: U.S.-Mexico Environmental Program,

http://www.epa.gov/usmexicobordag. siteelaiesnleaiiaeiiibiaaiaii 9

David R. Boyd, Unnatural Law: Rethinking

Canadian Environmental Law and Policy 229

(Ree ee vrstetsdennensivesivateionnnincnanhesseninnbedonsishaeciiabniaiasnaeamaiiigions 9

ill

TABLE OF AUTHORITIES — Continued

Dow Jones Int’] News, Washington State Tribe Sues

Canada Smelter Over Pollution, Jul. 22, 2004............... 2

Jameson Tweedie, Transboundary Environmental

Impact Assessment Under the North American

Free Trade Agreement, 63 WASH. & LEE L. REV.

ee EE ciakcactnhcchiandaieatinnsgicuieiisintndilenibiclinbmiodinrancetin 5

Joel A. Gallob, Birth of the North American Trans-

boundary Environmental Plaintiffs: Transboundary

Pollution and the 1979 Draft Treaty for Equal

Access and Remedy, 15 Harv. ENVTL. L. REv. 85

Surv icinetetetshrebasaichnchebessmicb dca lacs oiled test giailiaiiateininein 6

John Knox, Federal, State and Provincial Interplay

Regarding Cross-Border Environmental Pollution,

ee AT ie Las TI CS ire renavicsserecccncesvseensvansnencenssees 5

L.H. Legault, The Roles of Law and Diplomacy in

Dispute Resolution: The IJC as a Possible Model,

ae CET ae Bs Ee Ce csctstennsatsinpiiicnsionvienens 7,8

Peter M. Emerson, et al., Managing Air Quality in

the Paso Del Norte Region, in Environmental

Management on North America’s’ Borders

(Richard Kiy & John D. Wirth eds., 1998).................... 8

Randall S. Abate, Dawn of a New Era in the

Extraterritorial Application of U.S. Environmental

Statutes: A Proposal for an Integrated Judicial

Standard Based on the Continuum of Context, 31

COLUM. J. EMVEL. Li ST (BGO) .ccscovscsosccssevcossecsecscssese 6, 10

Randolph E. Schmid, Asian Air Pollution Generates

Stronger Storms Over Pacific, USA Today, Mar. 6,

SONU cieuiliidiondbisihs liek Gntdnciinasbisd cisuuansnibadisadedmiadeeniiebesiiicunianesiiiees 3

iv

TABLE OF AUTHORITIES - Continued

Rebecca Jannol et al., Migration Policy Institute,

U.S.-Canada-Mexico Fact Sheet on Trade and

NE CD ar ekdiiscitsinterineetsciniteneunabennnnnnitna 5

U.S. General Accounting Office, Mexico’s Maquiladora

Decline Affects U.S.-Mexico Border Communities

and Trade; Recovery Depends in Part on Mexico’s

PE, FORE TNE s tinvictntnsntesssensiiainaaatininaia 5

INTEREST OF AMICI CURIAE

The Canadian Chamber of Commerce (“CCC”) and the

Mining Association of Canada (“MAC”) submit this joint

amici curiae brief in support of the Petition for Writ of

Certiorari filed by Petitioner Teck Cominco Metals, Ltd.

(“Teck Cominco”).’

Since 1925, the CCC has been Canada’s largest

business association, with approximately 170,000 mem-

bers doing business in all parts of Canada. The CCC

closely follows U.S.-Canada relations and all transborder

issues, because of the integrated nature of the North

American economy, and because many of its members have

operations in both countries, and own or operate facilities

located near the U.S.-Canada border.

The MAC represents Canadian mining companies

engaged in mineral exploration, mining, smelting, refin-

ing, and semi-fabrication. As with the CCC, many of the

MAC’s members own or operate facilities located near the

J.S.-Canada border, or adjacent to cross-boundary bodies

of water.

Trans-border environmental matters, like the one

here, raise serious concerns. However, the issue is not

whether such questions need to be dealt with (they do), but

how to do so. Amici submit there is a long history of the

U.S. and Canada and the U.S. and Mexico dealing with

such situations by inter-governmental agreements and not

’ Letters reflecting the written consent of the parties to the filing of

this brief have been filed with the Clerk of the Court.

Counsel for the other parties did not author this brief in whole or in

part. No person or entity, other than the CCC and the MAC, made a

monetary contribution to the preparation and submission of this brief.

by private litigation like this case. Absent any indication of

Congressional intent to sweep aside this century-old way

of dealing with trans-border environmental concerns (and

there is none), the Ninth Circuit erred in doing so.

The CCC and MAC support Teck Cominco’s Petition

because the Ninth Circuit’s extraordinary opinion reaches

a troubling result affecting any U.S. or Canadian business

operating in the U.S.-Canada border region. Under its

logic, Canadian businesses will be vulnerable to suit by

private litigants under the U.S. Comprehensive Environ-

mental Response, Compensation and Liability Act (“CER-

CLA”) — even if those Canadian businesses operate entirely

in Canada, and in full compliance with Canadian envi-

ronmental and regulatory legal requirements. This is truly

unprecedented, because it is the “first case ever” to reach

such a result. Austen L. Parrish, Trail Smelter Déja Vu:

Extraterritoriality, International Environmental Law, and

the Search for Solutions to Canadian-U.S. Transboundary

Water Pollution Disputes, 85 B.U. L. REV. 363, 367 (2005)

(citing Washington State Tribe Sues Canada Smelter Over

Pollution, Dow Jones Int’! News, Jul. 22, 2004)).

The Government of Canada has protested the en-

forcement of U.S. environmental laws on Canadian busi-

nesses operating lawfully and solely in Canada, because

such enforcement violates Canadian sovereignty. See

Government of Canada’s Amicus Curiae Brief in Support

of Appellant and for Reversal of the Order of the District

Court. As stated in its Ninth Circuit amicus brief, “[t]he

Government of Canada has a strong interest in preserving

from interference, by private litigation in United States

courts, its sovereign right to regulate Canadian persons

and companies operating in Canada.” /d. at 3-4. It has also

warned that allowing this litigation to proceed would

a

likely result in retaliatory litigation against U.S. busi-

nesses operating in the United States for violations of

Canadian environmental laws. ER at 72. These prospects

cause grave concern to all Canadian and U.S. businesses

operating on either side of the U.S.-Canada border, includ-

ing amici’s members.

However, the Ninth Circuit’s broad ruling does not

apply only to Canadian businesses. Its logic applies just as

easily to businesses located in Mexico — such as the thou-

sands of companies operating near the U.S. border under

the Mexican government’s “Maquiladora” program —- or

even to businesses operating outside North America, if

their facilities cause any effects in the United States, such

as through global air pollution flows. See, e.g., Randolph E.

Schmid, Asian Air Pollution Generates Stronger Storms

Over Pacific, USA Today, Mar. 6, 2007 (reporting on

National Academy of Sciences study, finding that air

pollution in Asia generates “climactically significant”

storms in the North Pacific). Indeed, it is difficult to see

how the Ninth Circuit’s decision could be limited. Using

the Ninth Circuit’s approach, any business lawfully

operating anywhere in the world could theoretically come

within CERCLA’s reach, if pollution emitted from that

business had environmental effects in the United States.

Subjecting economic activity occurring wholly in other

countries to the vagaries of U.S. court litigation without

any showing that Congress intended this — and there is no

evidence of such intent here — could significantly impact

the conduct of business. It would insert legal unpredict-

ability into normal business arrangements, undermine

business and regulatory certainty, and force companies

operating solely and lawfully in their home countries also

4

to consider whether they might be ensnared in USS,

_ litigation under U.S. law.

Such a rule would also interfere with the ability of

countries such as the United States, Canada, and Mexico

to structure their foreign and economic policies through

government-to-government agreements. These _ three

countries ~ all parties to the North American Free Trade

Agreement (“NAFTA”) — have, for a century, relied on

mechanisms for airing, managing or resolving trans-

border environmental issues on a _ government-to-

government basis, e.g., the Boundary Waters Treaty of

1909 and the International Joint Commission, or the

NAFTA Commission on Environmental Cooperation.

These mechanisms have been repeatedly and successfully

used by these governments to deal with trans-border

environmental disputes and issues, rather than relying on

lawsuits by private litigants that serve the litigants’

private interests. These agreements and approaches have

provided certainty to the business community in each

country.

Nevertheless, the Ninth Circuit brushed this history

of North American inter-governmental cooperation aside —

indeed, essentially ignored it — and has created an alarm-

ing scenario where private litigation will become the

primary means of resolving trans-border environmental

disputes. This is the wrong result — especially when

Congress has never indicated it wants this outcome. Given

the vital importance of this issue and the unprecedented

nature of the Ninth Circuit’s opinion, amici support Teck

Cominco’s Petition for a Writ of Certiorari, and urge the

Court to grant it.

5

REASONS WHY THE

PETITION SHOULD BE GRANTED

“North America constitutes a vast and interconnected

system - physically, ecologically, and economically.”

Jameson Tweedie, 7ransboundary Environmental Impact

Assessment Under the North American Free Trade Agree-

ment, 63 WASH. & LEE L. REV. 849, 857 (2006). Indeed,

almost 90% of Canada’s population lives within 100 miles

of the U.S. border. Parrish, supra, at 385 (citing Rebecca

Jannol et al, Migration Policy Institute, U.S.-Canada-

Mexico Fact Sheet on Trade and Migration 1, 1 (2003)).

Thus, most Canadian economic activity takes place within

that 100 mile border region.

An enormous amount of economic activity is similarly

concentrated in the U.S.-Mexico border region, which

began developing in 1965 with the institution by the

Mexican government of the “Maquiladora” program — part

of the Mexican government’s larger “Border Industrializa-

tion Program” (“BIP”). U.S. General Accounting Office,

Mexico’s Maquiladora Decline Affects U.S.-Mexico Border

Communities and Trade; Recovery Depends in Part on

Mexico’s Actions, July 2003, at 5. The enactment of NAFTA

in 1994 has only increased the economic integration of the

U.S.-Mexico border communities, and the two countries’

economies.

As a result of economic activities near and across their

respective borders, the United States, Canada, and Mexico

“‘have a lot of trans-boundary environmental problems.’”

Tweedie, supra, at 857 (quoting John Knox, Federal, State

and Provincial Interplay Regarding Cross-Border Environ-

mental Pollution, 27 CAN.-U.S. L.J. 199, 199 (2001)). The

United States and Canada alone “‘share an extensive border

6

that includes some 150 rivers and lakes — a situation that

has “provided ample opportunity for the generation of

international environmental disputes.”’” Parrish, supra,

at 383-84 (quoting Joel A. Gallob, Birth of the North

American Transboundary Environmental Plaintiffs:

Transboundary Pollution and the 1979 Draft Treaty for

Equal Access and Remedy, 15 Harv. ENVTL. L. REV. 85, .

132-33 (1991)). See also generally Randall S. Abate, Dawn

of a New Era in the Extraterritorial Application of U.S.

Environmental Statutes: A Proposal for an Integrated

Judicial Standard Based on the Continuum of Context, 31

CoLuM. J. ENVTL. L. 87, 131-32 (2006) (discussing a

variety of currently brewing transboundary environmental

disputes).

For more than a century, the North American coun-

tries have dealt comprehensively with trans-boundary

environmental issues solely through diplomatic and inter-

governmental means. On issue after issue — from acid

rain, to solid waste, to sewage dumping, to pollution

emanating from the very smelter at issue in this case (the

“Trail Smelter”) - the governments of the United States,

Canada, and Mexico have endeavored to solve disagree-

ments and difficulties collaboratively and cooperatively, in

the common interest of the North American countries.

These diplomatic efforts have included such mechanisms

as the International Boundary Commission (established in

1889) (U.S.-Mexico), the International Waterways Com-

mission (established in 1905) (U.S.-Canada), the Boundary

Waters Treaty of 1909 and its International Joint Commis-

sion (U.S.-Canada), the U.S.-Mexico Water Treaty of 1944,

creating the International Boundary and Water Commission,

the Great Lakes Water Quality Agreement of 1978 (U.S.-

Canada), the La Paz Agreement of 1983 (U.S.-Mexico), the

Border 2012 effort (U.S.-Mexico), and the NAFTA “Side

Agreement” on Environmental Cooperation (U.S.-Mexico-

Canada), which included creation of the NAFTA Commis-

sion on Environmental Cooperation. In short, the fact of

inter-governmental cooperation and joint management on

environmental issues is well established and fully opera-

tional. This has produced far more progress, substantive

results, and business stability than would have a situation

where progress and resolution of issues could only be

made through litigation.

These diplomatic and inter-governmental mechanisms

for regulating, managing or solving trans-boundary

environmental issues have served the North American

countries well. Indeed, the International Joint Commis-

sion (“IJC”) created by the U.S.-Canada Boundary Waters

Treaty of 1909 was instrumental in resolving one of the

most contentious trans-boundary environmental disputes

of the 20th century — a dispute that arose from the very

same smelter at issue in this case. The so-called “Trail

Smelter” proceedings ~— a bi-national dispute adjudicated

under the IJC - which resulted in the Canadian govern-

ment agreeing to compensate U.S. farmers and others for

damages caused by air pollution emanating from the

smelter, and imposing sulfur dioxide fume controls on that

smelter. Parrish, supra, at 420-21 (discussing the Trail

Smelter Arbitration (U.S. v. Can.) 3 R.LA.A. 1905 (1938)

(“Trail Smelter I”), further proceedings 3 R.1.A.A. 1938

(1941) (“Trail Smelter II”)).

The inter-governmental structure that resolved the

Trail Smelter dispute is still in existence today, with its

chief mandate being to resolve trans-boundary environ-

mental issues and related disputes between the United

States and Canada. L.H. Legault, The Roles of Law and

8

Diplomacy in Dispute Resolution: The IJC as a Possible

Model, 26 CaAN.-U.S. L.J. 47, 50 (2000) (one of the IJC

commissioners (Legault) noting that “[t]he fundamental

mandate of the Commission, as reflected in the preamble

to the Boundary Waters Treaty, is to prevent and resolve

disputes between Canada and the United States”); see also

id. at 52-53 (noting the IJC “has developed a rich body of

practice in addressing transboundary water and environ-

mental issues assigned to it under the Boundary Waters

Treaty, the Great Lakes Water Quality Agreement [of

1978], and other agreements”); Parrish, supra, at 419

(“Using the IJC as a method for dispute resolution has

been successful”).

Similarly, the United States and Mexico have estab-

lished a structure for resolving their trans-border envi-

ronmental disputes - culminating in the La Paz

Agreement of 1983. Under the Agreement, the govern-

ments of Mexico and the United States agreed to “cooper-

ate in the field of environmental protection in the border

area on the basis of equality, reciprocity and mutual

benefit.” La Paz Agreement, art. 1, Aug. 14, 1983, 35

U.S.T. at 2918. Out of the La Paz structure have grown

other mechanisms for U.S.-Mexico government efforts to

address transboundary pollution, such as the U.S.-Mexico

Integrated Border Environmental Plan, which is a “broad

program of cooperation between the Mexican and U.S.

environmental agencies.” Peter M. Emerson, et al., Man-

aging Air Quality in the Paso Del Norte Region, in Enui-

ronmental Management on North America’s Borders, 137

(Richard Kiy & John D. Wirth eds., 1998). Another has

been the more recent effort under the rubric of the Border

2012: U.S.-Mexico Environmental Program, a further

effort of the two countries’ environmental agencies to

increase governmental and stakeholder cooperation in

addressing transboundary environmental issues. See

Border 2012: U.S.-Mexico Environmental Program, http://

www.epa.gov/usmexicoborder.

Surprisingly, the Ninth Circuit’s decision completely

ignores these agreements and mechanisms to resolve

cross-border environmental issues. Its decision does not

even mention the Boundary Waters Treaty, the Interna-

tional Joint Commission, the Trail Smelter proceedings, or

any of the mechanisms the United States and Canada

have utilized over the last 100 years to resolve trans-

boundary environmental disputes.

The Ninth Circuit’s decision is fundamentally at odds

with the principles that have guided Canada and the U.S.

on environmental matters to date. The Ninth Circuit’s

decision does not even acknowledge the Canadian govern-

ment’s strong objections to the litigation, and the troubling

concept that U.S. environmental laws could be applied to

Canadian businesses operating solely and lawfully in

Canada.’ The Ninth Circuit decision inexplicably ignores

* Indeed, “Canada sets its own environmental agenda, sets its own

environmental standards, has its own body of laws that applies to both

the regulation of operators like [Teck Cominco] and any remedial

obligations associated with those operations|.j” Parrish, supra, at 407.

Under the Ninth Circuit’s ruling, “Canadian environmental policy - to

the extent that it imposes a different standard or a different method of

regulation - would be undermined as Canadian companies would feel

compelled to follow U.S. laws.” Jd. at 406. And Canada’s environmental

approaches are indeed different — as many U.S. laws (including CERCLA,

the Clean Air Act, the Clean Water Act, and others) have no nationwide

Canadian analogues. David R. Boyd, Unnatural Law: Rethinking Cana-

dian Environmental Law and Policy 229 (2003). Moreover, as a general

rule, “Canada’s Constitution places more power in provincial hands than

the U.S. Constitution gives to the states” — and provinces similarly do not

(Continued on following page)

12

results never intended by Congress — a disruption of: the

joint management of trans-border environmental issues;

bilateral relations among U.S., Canada, and Mexico;

certainty and stability in the economic and business

climate; and timely and cooperative efforts to improve

North America’s environment for all citizens.

At the top of this brief, we noted that the issue is not

whether trans-border environmental issues need to be

dealt with (they do), but how to do so. The how will not be

advanced if the Ninth Circuit’s decision is allowed to

stand.

CONCLUSION

For the foregoing reasons, the Court should grant

Teck Cominco’s Petition for a Writ of Certiorari.

Respectfully submitted,

Dated: May 2, 2007 AKIN GUMP STRAUSS HAUER

& FELD LLP

REx S. HEINKE

Counsel of Record

SETH M.M. STODDER

Attorneys for Amici Curiae

The Canadian Chamber of

Commerce and The Mining

Association of Canada