USA, et al v. CO Organic Chem Co, et al
ORDER Denying 56 NDSC Industrial Park, LLCs Consent Decree Order Motion, by Judge Wiley Y. Daniel on 3/29/2016.(evana, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No.
UNITED STATES OF AMERICA AND
STATE OF COLORADO
COLORADO & EASTERN RAILROAD COMPANY;
NDSC INDUSTRIAL PARK, LLC,
THOMAS Z. MARS;
DENVER ROCK ISLAND RAILROAD; and
UNION PACIFIC RAILROAD COMPANY,
INTRODUCTION AND BACKGROUND
This matter is before the Court on NDSC Industrial Park, LLC’s Consent Decree
Order Motion (ECF No. 56), filed on September 10, 2015. The motion is fully briefed.
The matter originates out of a Consent Decree Order that was issued by this Court on
September 9, 1999, between the Plaintiffs and Defendant Colorado & Eastern Railroad
Company (“CERC”) which, pursuant to section 9607 of the Comprehensive
Environmental Response Compensation and Liability Act (“CERCLA”), set forth terms
and conditions for the payment of environmental remediation costs to clean up CERC’s
property in Adams County, Colorado. The Consent Decree authorized the sale of
CERC’s property through auction, and defined the process of assigning the proceeds
from those sales to cover remediation costs owed to Plaintiffs. As part of that process,
the Consent Decree established a requirement that any conveyances by CERC of its
property must be approved by Plaintiff United States.
The Consent Decree identified CERC’s property as including the OU1/5 Property
and the OU3/6 Property. Two acres within CERC’s property were conveyed to Mars in
2001 through a quitclaim deed from CERC. Plaintiff United States acknowledges that
this conveyance was made without its authorization, but has stated that it has no intention
of bringing any action against CERC, and that neither its interests nor the consideration
that it received under the Consent Decree have been impacted by this conveyance. See
Joint Submission by Pl.s, ECF No. 52, p. 4.
NDSC Industrial Park LLC (“NDSC”) placed a winning bid on seven acres of the
OU1/5 Property, and subsequently proceeded with the purchase despite knowing that
two of the seven acres had already been conveyed to Mars. Id. at 3. NDSC then filed a
state court claim to quiet title on the two-acre portion previously conveyed to Mars. In
state court, NDSC alleged a violation of this Court’s Consent Decree as a basis for its
claim, arguing that CERC failed to secure the required authorization from Plaintiff United
States prior to the conveyance. The state court declined to rule on NDSC’s claim,
holding that this Court has sole jurisdiction in interpreting and enforcing the Consent
Decree that it issued.
Accordingly, NDSC filed a motion to intervene in this matter, based on the alleged
unauthorized conveyance of its property pursuant to the terms of the Consent Decree,
and asked the Court to invalidate and void the 2001 deed between CERC and Mars. On
August 19, 2015, this Court granted NDSC’s motion to intervene in this matter, but
instructed NDSC to file a separate motion regarding the terms of the Consent Decree “in
order to obtain the Court’s consideration.” Order, ECF No. 53, p. 8. The Court
specifically allowed intervention based only on NDSC’s alleged interest in the property
which is defined in the Consent Decree in this matter. Although the Court found NDSC’s
alleged property interest sufficient to permit intervention, it also noted that “the evidence
before me may not conclusively entitle NDSC to enforce the Consent Decree.” Id. at 6.
Thus, NDSC was ordered to submit the present motion to consider that question. In
NDSC’s motion, it clarifies its position, noting that it “has narrowed the preliminary relief it
seeks.” Mot., ECF No. 56, p. 3, n.2. NDSC now seeks “a determination that [CERC]
violated the Consent Decree Order” and states its intention to subsequently seek further
relief in the form of “an order to show cause regarding the violations and interference with
the Court’s order.” Id. Specifically, NDSC asks the Court to “interpret the terms of its
Consent Decree Order and hold that [CERC] violated the order when it made an
unauthorized conveyance to Mr. Mars, [hold that] [CERC] lacked legal authority to make
the conveyance, and [hold that] the conveyance of the subject property made without the
approval of the United States violates the Consent Decree Order and is therefore invalid
and void.” Id. at 9.
NDSC states that it only seeks the Court’s interpretation of the Consent Decree in
its motion. However, based on the relief sought in the motion asking the Court to void
the conveyance to Mars, NDSC actually asks the Court to enforce the Decree against
CERC. The parties do not dispute that the Court retains jurisdiction to enforce its
judgments, including consent decrees. The threshold issue is whether NDSC has
standing to request the enforcement of the Consent Decree.
“Any party, whether original or intervening, that seeks relief from a federal court
must have standing to pursue its claims.” City of Colo. Springs v. Climax Molybdenum
Co., 587 F.3d 1071, 1078 (10th Cir. 2009), citing Dillard v. Chilton Ctny. Comm’n, 495
F.3d 1324, 1330 (11th Cir. 2007) (per curiam). “[B]ecause standing implicates a court’s
jurisdiction, it requires a court itself to raise and address standing before reaching the
merits of the case before it.” Friends of the Earth, Inc. v. Laidlaw Environmental Servs.,
528 U.S. 167, 180 (2000).
“The federal courts are under an independent obligation to
examine their own jurisdiction, and standing ‘is perhaps the most important of the
jurisdictional doctrines.’” City of Colo. Springs, 587 F.3d at 1078-79, citing FW/PBS, Inc.
v. City of Dallas, 493 U.S. 215, 231 (1990).
NDSC is not a party to the Consent Decree because the Consent Decree defines
the “parties” as the United States on behalf of the EPA, the State of Colorado, and CERC.
In order to enforce a consent decree by an entity that was not a party to the consent
decree, there must be a case or controversy pending between the original parties. See
City of Colo. Springs, 587 F.3d at 1078 (holding that “within litigation over which a district
court has retained jurisdiction after entering a final decree, a proposed intervenor may not
establish piggyback standing where the existing parties in the suit are not seeking judicial
resolution of an active dispute among them.”). NDSC argues that it “is not required to
demonstrate a controversy between the original parties because it has its own Article III
standing.” Reply, ECF No. 69, p. 1. However, I do not find that NDSC has its own
Article III standing in this matter – it has simply filed a motion in a terminated action.
There is no pending case or controversy before the Court between the parties to the
Notably, “on many occasions the Supreme Court has noted that an intervenor may
not have standing, but has not specifically resolved that issue, so long as another party to
the litigation had sufficient standing to assert the claim at issue.” San Juan Cnty. v.
United States, 503 F.3d 1163, 1171-72 (10th Cir. 2007), citing McConnell v. Fed. Election
Comm'n, 540 U.S. 93 (2003); Arizonans for Official English v. Arizona, 520 U.S. 43
(1997); Diamond, 476 U.S. at 64. In these cases, intervenors have been permitted to
“piggyback” on another party’s standing when there was a current case or controversy at
issue. See, e.g., Diamond, 476 U.S. at 58, 61 (the intervenor, who was the only party to
the litigation pursuing an appeal, did not have standing to pursue the appeal on his own,
but he would have standing if the original defendant had also sought review, and that
without the presence of the original defendant in the appeal action, “there is no case for
Diamond to join.”); McConnell, 540 U.S. at 233 (holding that because an original
defendant had standing, it was unnecessary to address the standing of the intervenor
whose position was identical to the original defendant’s); Arizonans, 520 U.S. at 66
(noting that the pertinent question in determining an intervenor’s standing lies in whether
the originating plaintiff still had a case to pursue); see also Dillard v. Baldwin Cnty.
Comm’rs, 225 F.3d 1271 (11th Cir. 2000) (holding that a party seeking to intervene into an
already existing justiciable controversy need not demonstrate standing as long as the
original parties have established standing before the court); Ruiz v. Estelle, 161 F.3d 814
(5th Cir. 1998) (holding that under Article III, intervenors need not possess standing if the
intervention is into a “subsisting and continuing Article III case or controversy and the
ultimate relief sought by the intervenors is also being sought by at least one subsisting
party with standing to do so.”); United States Postal Serv. v. Brennan, 579 F.2d 188 (2d
Cir. 1978) (noting that because there was already a case or controversy between the
existing parties to litigation, the standing requirement was not imposed on the intervenor).
Therefore, even under the analysis of NDSC’s piggybacking on the standing of existing
parties, NDSC cannot prevail because there is no current case or controversy pending
before the Court on the part of the original parties.
Alternatively, NDSC argues that it has standing to enforce the Consent Decree
because it is an intended beneficiary of the Decree. The Tenth Circuit has held that a
party who is an intended beneficiary of a consent decree may pursue relief in an action to
enforce the decree. See Johnson v. City of Tulsa, 489 F.3d 1089, 1110 (10th Cir. 2007);
see also Floyd v. Ortiz, 300 F.3d 1223, 1226 (10th Cir. 2002). The Court must consider
the language of the Consent Decree to determine if the parties intended for NDSC to be a
NDSC argues that it is an intended beneficiary because the Decree “was intended
to benefit and protect subsequent purchasers of land, such as NDSC.” Motion, ECF No.
56, p. 4. NDSC refers to the portion of the Decree that mandates that CERC obtain
approval from the United States prior to any conveyance of CERC’s land. NDSC argues
that this requirement was put in place “to benefit and protect purchasers from the type of
unauthorized conveyance and interference that took place here.” Id. at 5. I do not
agree. Requiring CERC to obtain approval from the United States was put in place to
protect the United States’ interests, not those of unnamed potential future buyers. At the
time the Decree was issued, the United States’ had an interest in CERC’s properties
which were named in the Decree, and the Decree was written to ensure a full
reimbursement of the response costs incurred by Plaintiffs in connection with the release
of toxic substances on the properties. The intent of the provision requiring authorization
of any conveyance by CERC was to ensure that all proceeds from the sale of these
properties appropriately went to Plaintiffs. No intent can be inferred from the language in
the Decree that this provision was contemplated by the parties, agreed upon, and signed
by the parties in order to protect future buyers.
Further, the Consent Decree contains a paragraph that discusses the rights of
nonparties which disclaims any intent to grant rights to third parties: “[n]othing in this
Consent Decree shall be construed to create any rights in, or grant any cause of action to,
any person not a Party to this Consent Decree.” Consent Decree, ECF No. 56-2, ¶ 20.
Based on a plain reading of this paragraph, the parties intended to preclude any cause of
action brought by nonparties. NDSC points to the section heading for this provision,
which is entitled “Effect of Settlement/Contribution Protection” and argues that the
provision was intended to refer only to contribution rights, not to third party rights in
general. However, I read this section to generally preclude any cause of action by a
nonparty in paragraph 20, and specifically to preclude contribution actions against CERC
in the subsequent paragraphs.
Paragraph 20 clearly expresses the parties’ intent that
third parties cannot enforce the Consent Decree. No inference can be drawn in NDSC’s
favor as a nonparty seeking enforcement of the Consent Decree, and accordingly, NDSC
lacks standing to enforce it.
Other courts have arrived at the same conclusion in relation to similar provisions of
consent decrees. See, e.g., U.S. v. FMC Corp., 531 F.3d 813 (9th Cir. 2008); Consol.
Edison, Inc. v. Ne. Utils., 426 F.3d 524 (2d Cir. 2005); McKesson HBOC, Inc. v. N.Y. State
Common Ret. Fund, Inc., 339 F.3d 1087 (9th Cir. 2003); Pure Country, Inc. v. Sigma Chi
Fraternity, 312 F.3d 952 (8th Cir. 2002) (“In order for a third party to be able to enforce a
consent decree, the third party must, at a minimum, show that the parties to the consent
decree not only intended to confer a benefit upon that third party, but also intended to give
that third party a legally binding and enforceable right to that benefit.”).
Finally, NDSC cites to 42 U.S.C. §9659(a)(1) for the proposition that it has
standing under CERCLA’s citizen suit provision to enforce the Consent Decree in this
matter. However, section 9659(a)(1) states in pertinent part, “any person may
commence a civil action on his own behalf . . . against any person . . . who is alleged to be
in violation of any . . . requirement, or order which has become effective pursuant to
[Chapter 103 of CERCLA].” NDSC has not commenced any civil action here. Instead,
it has only filed a motion asking the Court to enforce a Consent Decree to which it is not a
party. Therefore, section 9659 is inapplicable here.
On September 10, 2015, NDSC filed a motion entitled “NDSC Industrial Park
LLC’s Consent Decree Order Motion.” Based on the foregoing, the relief sought in the
Motion cannot be granted because NDSC lacks standing to assert the requested relief.
Accordingly, it is
ORDERED that NDSC Industrial Park, LLC’s Consent Decree Order Motion (ECF
No. 56) is DENIED.
Dated: March 29, 2016
BY THE COURT:
s/ Wiley Y. Daniel
WILEY Y. DANIEL,
SENIOR UNITED STATES DISTRICT JUDGE
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