USA v. Pioneer Natural Resources Company et al

Filing 213

ORDER Entering Consent Decree. Granting 210 The United States' Unopposed Motion to Enter Consent Decree. Entered by Judge William J. Martinez on 6/29/2021.(afran)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge William J. Martínez
Civil Action No. 17-cv-0168-WJM-NYW
UNITED STATES OF AMERICA,
Plaintiff/Counterclaim Defendant,
v.
PIONEER NATURAL RESOURCES COMPANY, and
PIONEER NATURAL RESOURCES USA, INC.,
Defendants/Counterclaim Plaintiffs.

ORDER ENTERING CONSENT DECREE

Before the Court is the United States’ Unopposed Motion to Enter Consent
Decree (“Motion”). (ECF No. 210.) For the reasons discussed below, the Court will
grant the Motion and approve and enter the proposed Consent Decree (ECF No. 2021).
I. BACKGROUND
A.

Factual Background
The Court previously set forth the basic Site history in an Order granting the

United States’ early motion for partial summary judgment on corporate successor
liability. See United States v. Pioneer Nat. Res. Co., 309 F. Supp. 3d 923 (D. Colo.
2018); (ECF No. 88). The Court presumes familiarity with that Order. 1
B.

Procedural History
The United States filed this action against Defendants on January 19, 2017, to
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The Court also incorporates any abbreviations as set forth in that Order.

recover costs incurred in connection with response actions at OU1 only. (ECF No. 1 ¶
53.) Defendants filed a counterclaim against the United States, alleging that the United
States is a potentially responsible party (“PRP”) under the Comprehensive
Environmental Response, Compensation, and Liability Act (“CERCLA”), 42 U.S.C. §
9605, and therefore responsible for response costs. (ECF Nos. 61, 62; see also ECF
Nos. 114 and 115.) In May 2017, the United States filed an early partial motion for
summary judgment on the liability of Defendants as successors in interest to prior site
operators, which the Court granted. (ECF Nos. 46 and 88.) The Parties have stipulated
that each is a covered person under CERCLA § 107(a). (ECF No. 151.)
On February 28, 2019, after the Parties had briefed their motions for partial
summary judgment, the Court granted a joint motion to stay the litigation pending
settlement negotiations (ECF Nos. 168 and 170) and extended the stay as the
settlement negotiations progressed (ECF Nos. 178, 181, 183, and 185).
On November 25, 2019, the United States lodged a proposed Consent Decree
with the Court (ECF No. 188) and after public comment, the United States moved for
entry of the proposed Consent Decree (ECF No. 193). On April 7, 2020, the Court
denied entry of the proposed Consent Decree and lifted the previous stay of litigation.
(ECF No. 194.)
On September 9, 2020, the United States again lodged with the Court a
proposed Consent Decree that fully resolves the claims and counterclaims in this
matter. (ECF Nos. 202 and 202-1.) On September 15, 2020, the Federal Register
Notice was published (see 85 Fed. Reg. 57251 (Sept. 15, 2020)). The United States
provided a 30-day public comment period. The United States received two public

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comments—one in support of entry of the proposed Consent Decree from the State of
Colorado (ECF No. 210-5) and one objecting to entry from the City of Creede (ECF No.
210-6). On November 17, 2020, the United States filed its Motion, and Defendants filed
a response in support of the Motion thereafter. (ECF Nos. 210 and 211.)
II. STANDARD OF REVIEW
A court may either approve or deny a consent decree as a whole, and may not
change the terms of the parties’ agreement. United States v. Colorado, 937 F.2d 505,
509–10 (10th Cir. 1991). In reviewing a consent decree, the district court “must ensure
that the agreement is not illegal, a product of collusion, or against the public interest.
The court also has the duty to decide whether the decree is fair, adequate, and
reasonable before it is approved.” Id. at 509. Review of the decree “should be guided
by the general principle that settlements are encouraged.” United States v. North
Carolina, 180 F.3d 574, 581 (4th Cir. 1999); see also United States v. Cannons Eng’g
Corp., 899 F.2d 79, 84 (1st Cir. 1990).
This presumption in favor of settlement “is particularly strong where a consent
decree has been negotiated by the Department of Justice on behalf of a federal
administrative agency like EPA which enjoys substantial expertise in the environmental
field.” United States v. Akzo Coatings of Am., Inc., 949 F.2d 1409, 1436 (6th Cir.1991).
Under these circumstances, “broad deference should be afforded to EPA’s expertise,”
United States v. District of Columbia, 933 F. Supp. 42, 47 (D.D.C. 1996), and the
“district court must refrain from second-guessing the executive branch,” Cannons Eng’g
Corp., 899 F.2d at 84; see also Colorado v. United States, 2013 WL 6858759, at *2 (D.
Colo. Dec. 30, 2013) (“[A]lthough a district may not simply rubber stamp a consent

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decree, it must defer heavily to the parties’ agreement and the EPA’s expertise”
(internal quotation marks omitted)). Moreover, because the consent decree represents
a settlement, not a judgment after trial on the merits, a district court may take into
account “reasonable discounts for litigation risks, time savings, and the like that may be
justified.” United States v. Davis, 261 F.3d 1, 26 (1st Cir. 2001) (citation omitted).
III. ANALYSIS
Under the proposed Consent Decree, Defendants agree to pay $5.775 million to
EPA within thirty days after entry of the Consent Decree by the Court. (ECF No. 202-1
¶ 4.) The United States, on behalf of the Departments of the Interior and Agriculture
(“Settling Federal Agencies”) as potentially responsible parties with alleged liability
stemming from past or current federal ownership of portions of land underlying the Site,
agrees to pay $425,000 to EPA, as soon as reasonably practicable. (Id. ¶ 8(a).) In
exchange, the Parties agree to certain covenants not to sue. (Id. ¶¶ 15–16, 19–20.) In
addition, EPA reserves its rights against the Settling Federal Agencies relating to future
response actions at OU2. (Id. ¶ 18.)
The 2020 Consent Decree also provides additional discussion concerning the
operational history at the Site and greater mining complex, alleged Site activities
conducted by the Predecessor Entities, the Parties’ respective positions on potential
liability at OU1 and OU2, the inner mine workings and hydrological connections related
to OU2, Site investigations and response actions, and funding sources for future
response activities at the Site. (Id. § 1.)
The Court, having carefully evaluated the Motion, Defendants’ response filed in
support of the Motion, public comments submitted by the State of Colorado and City of

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Creede regarding the proposed Consent Decree, and the proposed Consent Decree
itself, concludes that the Consent Decree is fair, adequate, and reasonable, and is not
illegal, a product of collusion, or against the public interest.
A.

The Consent Decree Is Procedurally Fair and Not a Product of Collusion
The Court finds that the negotiations were candid and in good faith; the proposed

Consent Decree is fair and not a product of collusion. 2 As represented by the United
States in its Motion, the agreement reflected in the proposed Consent Decree was
reached after six years of arm’s-length negotiations, including mediation, where
historical documentation and other information related to the Parties’ opposing positions
on OU1 and OU2 liability was exchanged. (See ECF No. 210.) The Parties were each
advised by experienced counsel and assisted by technical advisors with substantial Site
knowledge, as well as third-party consultants and expert witnesses. (Id.) Lastly,
extensive litigation was conducted prior to reaching resolution, including discovery
concerning OU1 and briefing of motions for summary judgment. (Id.)
B.

The Consent Decree Is Substantively Fair, Adequate, and Reasonable
The Court also finds that the proposed Consent Decree is substantively fair,

reasonable, and equitable because it reflects the Parties’ careful and informed
assessment of the merits of each other’s claims, each party’s relative contribution to the
harm at the Site, including at OU2, and the costs associated with further litigating this
case. 3 The Parties have asserted substantially different positions during contested
2

In considering the fairness of a consent decree, the court should “consider the extent of
discovery that has taken place, [ ] stage of the proceedings, [ ] want of collusion in the
settlement and the experience of plaintiffs’ counsel.” North Carolina, 180 F. 3d at 581.
3

In evaluating substantive fairness and reasonableness, a court considers whether the
consent decree sufficiently compensates the public for the cost of remedial measures and
reflects the relative strength of the parties’ litigating positions. United States v. Telluride Co.,

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litigation, including different positions concerning the environmental harm and
apportionment of liability. (See ECF Nos. 153, 157, and 159.) The record also includes
substantive discussion on the relative strength of the parties’ differing positions and
various litigation risks related to OU1 and OU2 response cost liability. (See ECF Nos.
210 and 211.) Under these particular circumstances, the United States reasonably
determined that the settlement adequately compensates the public—particularly when
weighed against the costs and time of litigation.
C.

The Consent Decree Is Not Illegal or Against the Public Interest
The Court finds that the proposed Consent Decree is not illegal or against the

public interest. The Consent Decree was entered into pursuant to statutory authority
delegated to officials at the U.S. Department of Justice, U.S. Environmental Protection
Agency, and U.S. Forest Service.
Further, the proposed Consent Decree is consistent with the underlying policies
and purposes of CERCLA and allows resources to be put towards ongoing cleanup
efforts rather than transaction and litigation costs. 4 In addition, the public was given
proper notice and alerted that the proposed decree resolved alleged Site-wide liability.
See 85 Fed. Reg. 57251 (Sept. 15, 2020); (ECF No. 210). During the public comment
period, two comments were received: one in support of entry of the proposed Consent
Decree from the State of Colorado (ECF No. 210-5) and one objecting to entry from the

849 F. Supp. 1400, 1402 (D. Colo. 1994). Substantive fairness overlaps with the requirement
that the decree be equitable, and in assessing these equities, a court should also consider
whether the proposed settlement is reasonable in light of the circumstances of the case. See
Colorado, 2013 WL 6858759, at *2.
4

See Cannons Eng’g Corp., 899 F.2d at 90–91 (CERCLA’s primary objectives include
prompt cleanup of hazardous waste and ensuring that the costs of remedying the harm are
borne by responsible parties).

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City of Creede (ECF No. 210-6). Among other things, the City of Creede’s comments
raise concerns about an alleged lack of information in support of the proposed Consent
Decree and the inclusion of OU2 in the settlement. The United States represents that
after careful consideration of the points raised in Creede’s comment, the comment did
not disclose facts or considerations that indicate the Consent Decree is inappropriate,
improper, or inadequate. 5 (ECF No. 210.) The United States also addressed the
substance of Creede’s concerns in the Motion (see id.), of which this Court finds to be
satisfactory.
Finally, in its April 7, 2021 Order, this Court also expressed interest in several
pieces of additional information relating to the public interest (see ECF No. 194 at 15),
all of which the United States satisfactorily addressed in its Motion and supports the
settlement reached.
IV. CONCLUSION
For the reasons set forth above, the Court finds the proposed Consent Decree
lodged with the Court on September 9, 2020 (ECF No. 202-1) is fair, adequate, and
reasonable, and is not illegal, a product of collusion, or against the public interest.
Accordingly, the Court ORDERS as follows:
1. The United States’ Unopposed Motion to Enter Consent Decree (ECF No.
210) is GRANTED;
2. The proposed Consent Decree (ECF No. 202-1) is APPROVED and will be
signed by the Court. The Consent Decree shall be entered as a final
5

“This is not an inane exercise . . . [T]he manifested willingness of the EPA to thoroughly
consider all oral and written comments made with regard to the proposed decree is a key
indicator of whether the decree was negotiated in good faith and is fair.” Telluride, 849 F. Supp.
at 1404–05 (internal quotation marks omitted).

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judgment on the Court’s docket, and deemed entered as of the date of this
Order;
3. The Clerk of Court shall close this case, provided however, that nothing
herein shall affect the terms of the Consent Decree entered this day and that
the Court retains jurisdiction to enforce the terms of the Consent Decree as
entered.

Dated this 29th day of June, 2021.
BY THE COURT:

______________________
William J. Martinez
United States District Judge

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