Any statement about the breadth of liability imposed by CERCLA, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, almost always seems to be an understatement. CERCLA makes the owner of property contaminated with hazardous substances or a person who arranges for the disposal of hazardous substances strictly liable for subsequent clean-up costs. Such owners or operators become a “potentially responsible party” (PRP) liable for remediating the contamination. The statutory liability is broad, and the EPA has argued assiduously over the years to extend liability as far as possible. Thus, it is fitting for the federal government, and specifically the U.S. Forest Service, to be deemed a PRP for contamination on previously mined land under a recent decision of the U.S. Court of Appeals for the Tenth Circuit.
Chevron Mining Inc., a subsidiary of the multinational oil company, became the owner of the Questa Mining site in New Mexico in 2005 when it acquired Union Oil. By that time, mining for molybdenum by both underground and surface methods, had occurred since 1919. During the 20 years between 1964 and 1983 when open-pit mining was conducted, the mining company disposed of more than 320 million tons of waste rock. It also deposited more than 100 million tons of mine tailings produced from ore beneficiation into two tailings ponds. Throughout the history of the mine, these activities were performed with the authorization of both the Forest Service and the Bureau of Land Management on public lands in the vicinity of the mine. Virtually no mining occurred from an underground operation in the decade that Chevron owned the mine before its closure in 2015.
When EPA delineated the Questa mine site as subject to CERCLA, it was shocked – SHOCKED – to learn that Chevron sought to hold the federal agencies which owned the land and had acted historically to facilitate mining as a PRP responsible for contributing to the cleanup. Its liability arose primarily because the lands on which the waste rock and tailings were deposited were unpatented lands under the General Mining Law of 1872 and therefore, the United States never relinquished title to those lands (“It is undisputed that the United States held legal title to relevant portions of the Questa mining lands at the time of significant hazardous substance disposal”). “Nevertheless, the government argues ‘bare legal title’ is insufficient to trigger owner liability. Instead, it contends the unique nature of unpatented mining claims on federal lands requires an exception to CERCLA’s ownership liability provision.” Op. at 22. The Tenth Circuit refused to exempt the federal land agencies from liability, concluding “that, at a minimum, the term owner covers fee title holders for purposes of CERCLA liability, irrespective of any additional indicia of ownership. To find otherwise would be inconsistent with CERCLA’s statutory scheme and an ordinary application of its terms.” Op. at 27.
Although the appellate court found the federal agencies liable as PRPs required to participate in the remediation of the property, it remanded the case to the district court to determine what its allocated share of liability should be.
The decision will have limited application outside of the Western United States where public lands predominate. Nevertheless, it serves as a powerful reminder that even the passive ownership of land is sufficient to impose CERCLA liability.
The case is Chevron Mining Inc. v. United States, U.S. Court of Appeals for the Tenth Circuit (No. 15-2209) July 19, 2017.
This article was authored by Blair M. Gardner, Jackson Kelly PLLC.