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

FILED

(4) MAY 2 - 2007

OFFICE OF THE CLERK

No. 06-1188 L-SUPREME COURT, U.S.

IN THE

Supreme Court of the United States

TECK COMINCO METALS, LTD.,

Petitioner,

Vv.

JOSEPH A. PAKOOTAS, DONALD R. MICHEL, AND STATE OF

WASHINGTON,

Respondents.

On Petition For A Writ Of Certiorari

To The United States Court of Appeals

For The Ninth Circuit

BRIEF OF THE GOVERNMENT OF CANADA

AS AMICUS CURIAE IN SUPPORT OF PETITIONER

Dean Sherratt Margaret K. Pfeiffer

Of Counsel Counsel of Record

Department of Foreign Affairs Erin Chlopak

and International Trade SULLIVAN & CROMWELL LLP

Lester B. Pearson Building 1701 Pennsylvania Avenue, NW

Floor: C7 - Room: 266 Washington, DC 20006

125 Sussex Drive Telephone: (202) 956-7500

Ottawa, Ontario Canada Fax: (202) 293-6330

Telephone: (613) 992-6486

Fax: (613) 992-6483

Counsel for Amicus Curiae the Government of Canada

Fe at ected nak Bent Acacias et Alyn

TABLE OF CONTENTS

Page

ET PRMD PUG TIRE BLEED crorcesesesnvecsvovecerscnsersssesssoserscones TT

THE INTEREST OF AMICUS CURIAE THE

Sear vy eee OF CANADA. .........cccccrssscsssrsserssseseseseees 2

RPINPRES © CIE PAIRGIUIMEINE ...cccceccssocesseresvesenseversessseesees 4

ala sussdsevneavesceveeveesyveseevsevereeessesees 7

}. THE COURT OF APPEALS ERRED IN FAILING

TO RECOGNIZE THAT TRANSBOUNDARY

ENVIRONMENTAL ISSUES SHOULD BE

RESOLVED THROUGH STATE-TO-STATE

BILATERAL COOPERATION AND NOT

THROUGH PRIVATE LITIGATION. .................. 7

II. THE COURT OF APPEALS ERRED BY

PRESUMING THE APPLICATION OF

CERCLA WITHOUT CONSIDERING THE

PRINCIPLE OF COMITY OF NATIONG........... 10

A. The Principle of Comity of Nations. .......... 10

B. The Ninth Circuit Ignored Comity In

Concluding That CERCLA Could Be

Applied to Petitioner In This Case. ........... 11

C. Principles of Comity Are Violated By the

Ninth Circuit’s Holding That CERCLA Could

Be Applied To Foreign Companies Operating

Solely Outside the United States............... 13

LE EE OE 14

il

TABLE OF AUTHORITIES

Page(s)

UNITED STATES CASES

Carson Harbor Vill., Ltd. v. Unocal Corp.,

SO Ce ORF COU GI. BOE Picerssnseceszenssnsnsncsemicsnvarecens 4

F. Hoffman-La Roche Ltd. v. Empagran S.A.,

ele Se ee ihiiintidrcctaanniaecentealiaiianinde 12, 13

Hilton v. Guyot,

Fe Gh BR Cer E ceitcetctescceencnianctvansenonsvalats 10, 11

Pakootas v. Teck Cominco Metals, Ltd.,

452.F.3d 1066 (Sth Cir. 2006)..............-cescescesees passim

Societe Nationale Industrielle Aerospatiale v.

United States District Court,

he Ree ,2 : SRRRRRROEE ERE terrence acento 10

UNITED STATES STATUTES

The Comprehensive Environmental Response,

Compensation, and Liability Act,

A else PR i tcsactnlanessteer tctaekelacakesencnsupsncanesions |

ill

Page(s)

CANADIAN CASES

Amchem Prods. Inc. v. British Columbi. Workers’

Comp. Bd.,

Be Ns FINE scessentcsicknsebenicsicerceacbosideetes 11

De Savoye v. Morguard Investments Ltd.,

DA. BOTT COR, TOR rrccencscevcsvevercesecvsscetsies 10-11

Pro Swing Inc. v. Elta Golf Inc.,

2006 A.C.W.S.J. 157 (Can. 2006) «00... eeeeeees il

Spar Aerospace Ltd. v. Am. Mobile Satellite Corp.,

GA Be CR BED oviesecsecrtcstovseresvinserivcaceis 10, 11

TREATIES

Agreement on Air Quality, Mar. 13, 1991, U.S.-Can.,

pp ty: 2, fs ae REE DID 9

Agreement Concerning the Transboundary

Movement of Hazardous Waste, Oct. 28, 1986,

U.S.-Can., T.LA.S. No. 11,099, CTS 1986/39.....0000002. 8

Agreement on Great Lakes Water Quality, Apr. 15,

1972, U.S.-Can., 23 U.S.T. 301, CTS 1972/12............... 8

Convention for the Protection of Migratory Birds,

Aug. 16, 1916, U.S.-Gr. Brit. (for Canada), 39

NF See I icetics ves setter aipenndictin tasnneun need dbrinsipmnes 9

IV

Page(s)

Memorandum of Agreement on Shellfish Sanitation,

Mar. 4, 1948, U.S.-Can., T.1.A.S. No. 1747, CTS

Se iyhiciy ncsssbasivcabdaha phase cnanapeaabaanibeianbabiadebiinias 9

Treaty Relating to Boundary Waters Between the

United States and Canada, Jan. 11, 1909, U.S.-

Gr. Eit., 36 Slat. ZO6E; CUS SIZ vvcesisccssensescrscoses 2-3, 7,9

Treaty Relating to Cooperative Development of the

Water Resources of the Columbia River Basin,

Jan. 17, 1961, U.S.-CAN., 15 U.S.T. 1555, CTS

PO heh criin sacceirsaiticideiies epltbeccintidini ith taseatenuaschlabiealocsniadl 8

MISCELLANEOUS

EDWIN M. BORCHARD, THE DIPLOMATIC PROTECTION OF

CATLIN FOI CFE icscecotnncvcsisicesioncetscrsccepnesconiors 14

Canada-United States Joint Inland Pollution Contingency

Fe, FUE Bs FF CN coc ciotbcstctnehcnsinivrntianccsons 8-9

Austen L. Parrish, Trail Smelter Deja Vu: Extraterritoriality,

International Environmental Law, and the Search for

Solutions to Canadian-U.S. Transboundary Water

Pollution Disputes, 85 B.U. L. REV. 363 (2005)......... 7-8

RESTATEMENT (THIRD) OF FOREIGN RELATIONS

LAW OF THE UNITED STATES (1987)................000 12, 13

Tratl Smelter Arbitration, (U.S. v. Can.),

3 R.L.A.A. 1905 (1938-1941),

reprinted in 35 Am. J. Int'l L. 684 (1941)... 7

IN THE

Supreme Court of the United States

TECK COMINCO METALS, LTD.,

Petitioner,

Vv.

JOSEPH A. PAKOOTAS, DONALD R. MICHEL, AND STATE OF

WASHINGTON,

Respondents.

On Petition For A Writ Of Certiorari

To The United States Court of Appeals

For The Ninth Circuit

This Brief amicus curiae,' submitted in support of Petitioner

Teck Cominco Metals, Ltd. (“Petitioner”) with the written

consent of both Petitioner and Respondents Pakootas, Michel

and the State of Washington, addresses the first question

presented by Petitioner.2 Canada views the Ninth Circuit’s

holding that the Comprehensive Environmental Response,

Compensation, and Liability Act (CERCLA), 42 U.S.C.

§ 9607, can be applied and enforced unilaterally to extend

liability to a Canadian company for the ultimate

1 No counsel for a party authored this Brief in whole or in part. No

person other than the amicus curiae made a monetary contribution to the

preparation or submission of this Brief.

2 The second question raised in the Petition for Certiorari appears to

present purely a matter of United States law, which Canada believes to be

more appropriately for the parties to address.

2

consequences of its actions in Canada as failing to consider

three relevant and important international law issues: long-

standing diplomatic practice and treaties between Canada

and the United States, comity of nations and the related

international law norm of national treatment. Because

Canada believes its views on a matter of significant concern

to the Government of Canada and its citizens would

materially assist this Court in deciding the Petition, Canada

respectfully submits this Brief, addressing these issues and

their application to this and similar cases.

THE INTEREST OF AMICUS CURIAE

THE GOVERNMENT OF CANADA

Canada is the sovereign state in which Petitioner is

domiciled and which, together with the province of British

Columbia, is responsible for regulating the conduct of

Petitioner. Canada therefore has an interest in ensuring that

the present dispute is dealt with through a process consistent

with the established approach to Canadian-U.S.

transboundary environmental concerns, which have long

been addressed through bilateral cooperation. As sovereign,

Canada also has a strong interest in seeing that principles of

international law and comity are respected in the resolution

of transboundary disputes.

Specifically, the Canadian Government has a

compelling interest in preserving the viability of diplomatic

mechanisms for resolving disputes with the United States

that implicate boundary issues. These mechanisms include a

valid treaty to which Canada and the United States are

parties and other internationally recognized procedures

available to both countries. In this case, where there are

well-established diplomatic procedures and precedents for

resolving issues of transboundary water pollution, including

through bilateral negotiations or pursuant to the Treaty

Reiating to Boundary Waters Between the United States and

Canada, Jan. 11, 1909, U.S.-Gr. Brit., 36 Stat. 2448, CUS

312 (the “Boundary Waters Treaty”), the issue raised by the

Petition presents a matter of recurring and_ special

importance to the Government of Canada.°

Regardless of the particular method of non-judicial

resolution, Canada has a vital sovereign interest in having

this dispute settled through diplomatic measures, rather than

by unilateral adjudication in the domestic courts of the

United States.4 The Government of Canada also has a strong

3 As noted in the Petition for Certiorari, in June 2006, Petitioner and the

United States Environmental Protection Agency (“EPA”) reached a

settlement outside the framework of CERCLA. Petition for Certiorari at

5. The settlement, which was the culmination of years of concerted

diplomatic efforts by Canada and the United States, resulted in EPA’s

withdrawal of its Unilateral Administrative Order against Petitioner (the

“UAO”) and the agreement that an affiliate of Petitioner based in the

United States would conduct a comprehensive study of the

environmental effects of the pollutants discharged from the Canadian

smelter at issue in this case. App. to Pet. Cert. 120a. Despite the extra-

judicial resolution of the dispute between EPA and Petitioner, outside the

context of CERCLA, plaintiffs in this case continue to seek injunctive

relief to enforce the UAO against Petitioner and compelling Petitioner to

take actions to correct its alleged violations of the UAO and CERCLA.

Id. at 118a-119a. See Pakootas v. Teck Cominco Metals, Ltd., 452 F.3d

1066, 1071 n.t0 (9th Cir. 2006). Plaintiffs also seek a declaratory

judgment that Petitioner has violated and continues to violate CERCLA,

civil penalties “to the maximum extent permitted by CERCLA” for each

day that Petitioner allegedly violated the UAO and attorneys’ fees. App.

to Pet. Cert. 118a-119a; see Pakootas, 452 F.3d at 1071 n.10. Canada

continues to have an interest in the bilateral resolution of these

outstanding disputes in accordance with established diplomatic practices

of Canada and the United States in these particular circumstances.

4 Notwithstanding Canada’s strong interest in a bilateral, diplomatic

resolution of this dispute, rather than a unilateral adjudication by private

parties in a United States court, the Government of Canada does not

condone — indeed it disagrees with — Petitioner’s assertions that the Ninth

Circuit’s decision “could provoke retaliatory actions against American

interests by Canada or her courts,” or affect Canada’s policy regarding its

4

interest in preserving its sovereign right to regulate Canadian

persons and companies operating in Canada, without

interference from private lawsuits in U.S. courts.

Canada confines itself to arguments based in

international law and does not address United States law,

except where helpful to elucidate international law

principles.

SUMMARY OF ARGUMENT

The Ninth Circuit erred in failing to consider the

existing framework for diplomatic resolution of the issues

raised by the private plaintiffs in this suit, as well as

fundamental principles of comity and _ customary

international law respecting non-interference by one

sovereign with the internal affairs of another sovereign, and

equitable principles of equal treatment of nationals and non-

residents. The court of appeals refused to consicer these

important legal norms even though it admitted that ‘neither

a logician nor a grammarian will find comfort in the world of

CERCLA,’” Pakootas, 452 F.3d at 1079-80 (quoting Carson

Harbor Vill., Ltd. v. Unocal Corp., 270 F.3d 863, 883 (9th

Cir. 2001)), and that certain provisions of the statute contain

language that “is by no means clear” — which, indeed, “does

not make literal or grammatical sense as written.” /d. at

1080. Thus, the Court of Appeals held that CERCLA

applied in this case to a Canadian company that conducts all

of its operations in Canada, even thought it acknowledged

that the text of the statute “does not indicate whether foreign

corporations are covered,” indeed, that “CERCLA is silent

military presence in Afghanistan, which were made without the

knowledge or sanction of the Government of Canada and reflect a

complete misunderstanding of Canadian governmental policy and

process. Petition for Certiorari, at 21, 22.

about who is covered by the Act.” Jd. at 1076, 1077

(emphasis in original). The Ninth Circuit admittedly broke

new ground regarding the applicability of CERCLA without

once giving weight, or even thought, to precedent for

deciding similar disputes diplomatically or to principles of

comity and customary international law.

Given the facts, and the novelty of the legal issues

raised by this case and the Ninth Circuit’s decision, Canada’s

preferred approach is to have the present transboundary

environmental dispute resolved completely and _ finally

through established diplomatic channels, not through a

private lawsuit in the courts of the United States. The United

States likewise has determined not to proceed by litigation;

EPA and Petitioner have reached an extra-judicial resolution

of the dispute, outside the framework of CERCLA. See

supra note 3; Petition for Certiorart, at 5.

A government-to-government resolution of the

pending disputes, as proposed by Canada in this Brief and in

its prior amicus curiae submission to the Ninth Circuit, has

the advantage of promoting comity by enabling a balance to

be achieved between, on the one hand, Canada’s interests in

maintaining water quality in Canada and preserving its

sovereign right to regulate Petitioner’s operations in Canada,

and, on the other hand, the United States’s interest in water

quality within its own sovereign territory. Government-to-

government resolution would also help to ensure avoidance

of future conflicts and inconsistencies in the application of

the two countries’ laws by substituting cooperation for

unilateral action. A cooperative approach will also have the

benefit of giving companies operating on both sides of the

border confidence that they will not be risking liability under

the unfamiliar laws of the neighboring country. The result of

the Ninth Circuit’s decision interpreting CERCLA in such a

way that the statute can be pronounced to be non-

extraterritorial is that companies located along the border

6

remain vulnerable to the risks and burdens of both

sovereigns’ regulations, which may be in conflict.

Canada recognizes the possibility that some cases

involving transboundary pollution may appropriately be

resolved in the domestic courts of Canada or the United

States. This is not such a case, however, as the settlement

between Petitioner and EPA emphasizes. See supra note 3;

Petition for Certiorari, at 5. Resolution through private

litigation is both unnecessary and, in this case, incompatible

with the basic principle of comity of nations, as recognized

and applied by Canadian and United States courts for

centuries.

Leaving complete resolution of the underlying

transborder issues to diplomatic or treaty mechanisms would

have the additional benefit of furthering comity by avoiding

application of CERCLA to Petitioner in circumstances that

offend the international law norm of national treatment.

Accordingly, this Court should grant the Petition for

a Writ of Certtorari and reverse the decision of the Ninth

Circuit, so that the issues in this case can be resolved

completely and finally between the two affected sovereigns,

or at least, be resolved in a way consistent with international

legal norms and considerations of comity.

ARGUMENT

THE COURT OF APPEALS ERRED IN FAILING TO

RECOGNIZE THAT TRANSBOUNDARY

ENVIRONMENTAL ISSUES SHOULD BE

RESOLVED THROUGH STATE-TO-STATE

BILATERAL COOPERATION AND NOT

THROUGH PRIVATE LITIGATION.

Traditicnally, Canada and the United States have

worked cooperatively to solve transboundary environmental

issues through bilateral negotiations or pursuant to the

Boundary Waters Treaty, which plainly applies in this case.9

The Treaty created the International Joint Commission (the

“1JC”’), which has had a long, successful history of operation.

See, e.g., Trail Smelter Arbitration, (U.S. v. Can.), 3 R.L.A.A.

1905 (1938-1941), reprinted in 35 Am. J. Int'l L. 684

(1941).6

5 Article LX of the Boundary Waters Treaty provides that Canada and

the United States “agree that . . . matters of difference arising between

them involving the rights, obligations, or interests of either in relation to

the other or to the inhabitants of the other, along the common frontier

between the United States and the Dominion of Canada, shall be referred

from time to time to the International Joint Commission for examination

and report, whenever either the Government of the United States or the

Government of the Dominion of Canada shall request that such questions

or matters of difference be so referred.” Boundary Waters Treaty, art.

IX, Jan. 11, 1909, U.S.-Gr. Brit., 36 Stat. 2448, CUS 312 (emphasis

added). It is common practice for the countries to submit a joint

reference to the International Joint Commission to encourage acceptance

by both parties of the Commission’s recommendations.

6 The Trail Smelter Arbitration, in which the JC managed an air

pollution dispute between Canada and the United States, is widely

regarded as a highly successful, seminal decision in international law.

See Austen L. Parrish, Trail Smelter Deja Vu: Extraterritoriality,

8

The Ninth Circuit gave a nod to the past success of

extra-judicial resolution of transboundary environmental

disputes concerning air pollution between Canada and the

United States, through arbitration, with respect to the

specific source of pollution complained of in this case — the

Trail Smelter located and operating in Trail, British

Columbia. See Pakootas, 452 F.3d at 1069 n.5. The Ninth

Circuit nevertheless rejected Canada’s suggestion (in a brief

amicus curiae) that a diplomatic, non-judicial resolution

should be pursued in this case, rather than extending the

reach of CERCLA. In doing so, the court not only ignored

the fact that the IJC was created for the specific purpose of

resolving disputes such as the one underlying this case, but

also that the JC has, over time, maintained consistent

credibility with Canada and the United States. See, e.g.,

Parrish, supra, at 417-18 & n.289.7

Indeed, the longstanding practice of the two countries

has been to deal through diplomatic means’ with

environmental issues of mutual concern. The ongoing

Canadian-United States cooperation regarding environmental

issues is evidenced by the 1972 Agreement on Great Lakes

Water Quality, Apr. 15, 1972, U.S.-Can., 23 U.S.T. 301,

CTS 1972/12. Canada and the United States have also

entered into the Agreement Concerning the Transboundary

Movement of Hazardous Waste, Oct. 28, 1986, Can.-U:S.,

T.LA.S. No. 11,099, CTS 1986/39, and the Canada-United

International Environmental Law, and the Search for Solutions to

Canadian-U.S. Transboundary Water Pollution Disputes, 85 B.U. L.

Rev. 363, 420 & n.306 (2005) (quoting Alfred Rubin as stating that

“{e]very discussion of the general international law relating to pollution

starts, and must end, with a mention of the Trail Smelter Arbitration’).

7 Canada and the United States have also entered into a Treaty Relating

to Cooperative Development of the Water Resources of the Columbia

River Basin, Jan. 17, 1961, U.S.-Can., 15 U.S.T. 1555, CTS 1964/2,

Article XVI of which provides for resolution of disputes by reference by

either sovereign to the JC.

9

States Joint Inland Pollution Contingency Plan, July 25,

1994, U.S.-Can.,8 to address spills and other environmental

emergencies along the Canada-United States border. Canada

and the United States each implemented the Convention for

the Protection of Migratory Birds, Aug. 16, 1916, U.S.-Gr.

Brit. (for Canada), 39 Stat. 1702, CUS 465, and the

Agreement on Air Quality, Mar. 13, 1991, U.S.-Can., 30

I.L.M. 676, CTS 1991/3.9 Both countries are also parties to

the Memorandum of Agreement on Shellfish Sanitation,

Mar. 4, 1948, U.S.-Can., T.1.A.S. No. 1747, CTS 1948/10.

These treaties, and a long history of bilateral

cooperation, underscore the unique potency of non-judicial

resolution of the issues before this Court. Moreover, the

Boundary Waters Treaty directly addresses the issues raised

by plaintiffs in this case. As noted previously, Article IX of

the Treaty provides that “whenever” either sovereign

requests that “questions or matters of difference” regarding

their common boundary be referred to the IC for

examination and report, such questions or matters “shall be

[so] referred.” Boundary Waters Treaty, art. IX, Jan. 11,

1909, U.S.-Gr. Brit., 36 Stat. 2448, CUS 312. In the spirit of

bilateral cooperation, all references to date have been joint.

In these circumstances, the Ninth Circuit’s ruling that

this case may proceed under CERCLA, in United States

courts, in derogation of the procedures that both Canada and

the United States have endorsed in the past, and which

Canada proposed in this instance, clearly disregarded the

fundamental rules of comity.

8 Available at http://yosemite.epa.gov/oswer/ceppoweb.nsf/vw

ResourcesByFilename/jcpcan.pdf/$File/jcpcan.pdf (fast visited April 30,

2007).

9 Since its creation, the UC’s jurisdiction has included air emissions,

which can also have a damaging effect on boundary and transboundary

waters. The Agreement on Air Quality has enabled action on acid-rain

causing emissions by both countries and on ground level ozone (smog).

10

II.

THE COURT OF APPEALS ERRED BY PRESUMING

THE APPLICATION OF CERCLA WITHOUT

CONSIDERING THE PRINCIPLE OF COMITY OF

NATIONS.

A. The Principle of Comity of Nations.

The United States Supreme Court has acknowledged

the importance of comity of nations since the earliest days of

its jurisprudence. The formulation of comity that is perhaps

most pertinent in this case is that articulated by the Court in

Societe Nationale Industrielle Aerospatiale v. United States

District Court, 482 U.S. 522, 544 n.27 (1987), describing

comity as “the spirit of cooperation in which a domestic

tribunal approaches the resolution of cases touching the laws

and interests of other sovereign states.” While comity ts not

“a matter of absolute obligation” that courts must always

follow, it is equally not a matter “of mere courtesy and good

will.” Hilton v. Guyot, 159 U.S. 113, 163-64 (1895). It is,

rather, “the recognition which one nation allows within its

territory to the legislative, executive or judicial acts of

another nation.” /d.

Principles of comity are also firmly established in

Canadian jurisprudence. Indeed, as the Supreme Court of

Canada has observed, “[t]he notion of comity has retained its

vitality in the jurisprudence of Canadian courts.” Spar

Aerospace Ltd. v. Am. Mobile Satellite Corp., 4 S.C.R. 205,

219 (Can. 2002).

The Supreme Court of Canada has repeatedly defined

comity in terms that echo decisions of this Court. In De

Savoye v. Morguard Investments Ltd., 3 S.C.R. 1077, 1096

(Can. 1990), the Supreme Court recognized that “‘[c]omity’

y

1]

in the legal sense, is neither a matter of absolute obligation,

on the one hand, nor of mere courtesy and good will, upon

the other.” Jd. Rather, because it is founded on “the

recognition which one nation allows within its territory to the

legislative, executive or judicial acts of another nation,

having due regard both to international duty and

convenience, and to the rights of its own citizens or of other

persons who are under the protection of its laws,” comity

cannot legally be disregarded. /d. (citing Hilton, 159 U.S. at

163-64). See also Pro Swing Inc. v. Elta Golf Inc., 2006

A.C.W.S.J. 157, at **26 (Can. 2006) (invoking the definition

of comity developed by the United States Supreme Court in

Hilton, 159 U.S. at 163-64); Spar Aerospace, 4S.C.R. at 219

(same).

As the Supreme Court of Canada explained in

Morguard, 3 S.C.R. at 1097, “[t]he ultimate justification for

according some degree of recognition” to the laws of other

nations “is that if in our highly complex and interrelated

world each community exhausted every possibility of

insisting on its parochial interests, injustice would result and

the normal patterns of life would be disrupted.” (Internal

citations omitted). See also Amchem Prods. Inc. v. British

Columbia Workers’ Comp. Bd., | S.C.R. 897, 913-14 (Can.

1993).

B. The Ninth Circuit Ignored Comity In

Concluding That CERCLA Could Be Applied

to Petitioner In This Case.

The Ninth Circuit’s disregard of these well-

established principles was particularly improper in this case.

The court of appeals expressly acknowledged that the text of

CERCLA is far from clear, in noting specifically that the

statute lacks any indication that Congress intended it to be

applied to foreign corporations. Pakootas, 452 F.3d at 1076,

12

1077, 1079-80. For that reason, the court chose to interpret

CERCLA in a manner that ostensibly made its application

non-extraterritorial.

Regardless of its nomenclature, the Ninth Circuit’s

decision nevertheless subjects Canadian companies, such as

Petitioner, to conflicting regulatory schemes and infringes

Canada’s strong sovereign interest in regulating its own

corporate citizens. Yet, it is well settled that “this Court

ordinarily construes ambiguous statutes to avoid

unreasonable interference with the sovereign authority of

other nations.” F. Hoffman-La Roche Ltd. v. Empagran S.A.,

542 U.S. 155, 164 (2004).

Indeed, it is a well-established tenet of comity that

where “one construction of a United States statute would

bring it in conflict with the law of another state that has a

clearly greater interest, . . or would subject a person to

conflicting commands, . . . while another construction would

avoid such a conflict, the latter construction is clearly

preferred, if fairly possible.” RESTATEMENT (THIRD) OF

FOREIGN RELATIONS LAW OF THE UNITED STATES § 403 cmt.

g (1987) (hereinafter “RESTATEMENT”’). As this Court has

explained,

This rule of statutory construction cautions

courts to assume that legislators take

account of the legitimate sovereign interests

of other nations when they write American

laws. It thereby helps the potentially

conflicting laws of different nations work

together in harmony-a harmony particularly

needed in today’s highly interdependent

commervial world.

Empagran, 542 US. at 164-65.

Even if the application of CERCLA in this case was

not “extraterritorial,” there can be no question that its

extension to Petitioner amounts to the application of a U.S.

13

regulation to a foreign entity domiciled and operating

exclusively in a foreign jurisdiction. Yet, the Ninth Circuit

did not even acknowledge, let alone analyze, the relevant

factors for determining whether a state may reasonably

prescribe laws with respect “to a person or activity having

connections with another state,” such as Petitioner in this

case. See RESTATEMENT § 403(1). Those factors include the

existence of justified expectations that might be protected or

hurt by the regulation, the extent to which the regulation is

consistent with the traditions of the international system, the

extent to which another state may have an interest in

regulating the activity and the likelihood of conflict with

regulation by another state. /d. § 403(2).

In this case, where the Ninth Circuit expressly found

that the statute was unclear and did not evince any

congressional intent to extend it to foreign corporations, the

court’s disregard of these fundamental principles of comity

was improper, for had it “take[n] account of the legitimate

sovereign interests” of Canada, as it ought, it may well have

reached a different result. Empagran, 542 US. at 164.

C. Principles of Comity Are Violated By the

Ninth Circuit’s Holding That CERCLA Could

Be Applied To Foreign Companies Operating

Solely Outside the United States.

The Ninth Circuit’s decision offends comity for the

additional reason that, as discussed in Petitioner’s opening

brief to the Ninth Circuit, CERCLA’s provisions pertaining

to “federally permitted releases” allow United States

companies charged with violations of CERCLA to rely on

United States environmental permits as exemptions to

liability under CERCLA, but = such permits and

corresponding exemptions are not available to non-residents

14

such as Petitioner. Nor do Canadian environmental permits

provide any basis for an exemption from CERCLA liability.

The application of CERCLA to Teck Cominco is thus

inequitable and also inconsistent with the international law

principle of national treatment. See EDWIN M. BORCHARD,

THE DIPLOMATIC PROTECTION OF CITIZENS ABROAD 101

(1915) (Foreign governments’ willingness to permit local

courts in other states to exercise jurisdiction over their

citizens is predicated, inter alia, upon “[t]he existence of

regular courts and of laws assuring to the alien the

administration of civilized justice, on terms of equality with

nationals.”).

This inequitable treatment of Canadian companies

may be exacerbated by CERCLA’s adoption of the principle

of jotnt and several liability; United States entities

contributing to pollution at a site may be able to assert a

“federally permitted release” exemption not available to a

non-resident, leaving the foreign entity to face sole or

disproportionate liability despite others’ contributions to the

pollution. Such an application of CERCLA would also harm

Canada’s interests by discouraging Canadian businesses

from engaging in economic activity where that activity is

located close to the border, regardless of their compliance

with Canadian environmental law. Given the industrial

presence on both sides of the border, the Ninth Circuit’s

approach would represent a radical shift in the pattern of

reasonable accommodation by each country for the other’s

industries operating in proximity to the border.

CONCLUSION

In this case, the Ninth Circuit construed an

admittedly ambiguous statute that is “silent about who is

covered by the Act” to apply to a Canadian corporation

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based on the eventual coming to rest in the United States of

by-products of that corporation’s operations in Canada. In

finding that, notwithstanding the statute’s silence, CERCLA

can be applied to and enforced against Petitioner in this case,

the court ignored the established practice of Canada and the

United States of resolving transboundary environmental

disputes such as the one presented here through established

diplomatic channels. The court also improperly eschewed

any consideration of the principles of comity of nations and

customary international law, including rules respecting non-

interference with the internal affairs of another sovereign,

and equitable principles of equal treatment of nationals and

non-residents.

Although it may be appropriate in some

circumstances to address transboundary pollution through

litigation in the domestic courts of Canada or the United

States, unilateral adjudication is neither necessary nor

appropriate in this case. Indeed, although plaintiffs continue

to press their private claims against Petitioner, EPA is no

longer seeking enforcement of its UAO against Petitioner,

having arrived at a settlement outside the context of

CERCLA and this lawsuit. This settlement emphasizes that,

in this case, allowing the underlying transborder issues to be

fully resolved through diplomatic or treaty mechanisms —

consistent with the past practice of Canada and the United

States — would also preserve comity between the two

countries and free both Canadian and U.S. companies with

border operations from risks of liability under the unfamiliar,

foreign laws of the neighboring country.

Accordingly, the Government of Canada respectfully

submits that the Petition for a Writ of Certiorari should be

granted and the decision of the Ninth Circuit should be

reversed so that the issues can be resolved completely and

finally between the two affected sovereigns, or, at least, be

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resolved in a way consistent with international legal norms

and considerations of comity.

Dated: Washington, D.C.

May 2, 2007

Respectfully submitted.

Dean Sherratt Margaret K. Pfeiffer

Of Counsel Counsel of Record

Department of Foreign Affairs Erin Chlopak

and International Trade SULLIVAN & CROMWELL LLP

Lester B. Pearson Building 1701 Pennsylvania Avenue, NW

Floor: C7 - Room: 266 Washington, DC 20006

125 Sussex Drive Telephone: (202) 956-7500

Ottawa, Ontario Canada Fax: (202) 293-6330

Telephone: (613) 992-6486

Fax: (613) 992-6483

Counsel for Amicus Curiae the Government of Canada