PLACER MINING CO. v. USA
Filing
140
ORDER and OPINION denying 114 Motion for Summary Judgment and 120 Cross-Motion for Summary Judgment. Signed by Senior Judge Eric G. Bruggink. (mc5) Copy to parties.
In the United States Court of Federal Claims
No. 01-27
(Filed: May 25, 2011)
**********************
PLACER MINING CO., INC.,
d/b/a THE NEW BUNKER HILL
MINING CO.,
Plaintiff,
v.
Fifth Amendment taking;
CERCLA remediation; mining;
Lucas; background principles of
state law; nuisance; property
access; distinguishing tort from
taking
THE UNITED STATES,
Defendant.
**********************
Paul S. Harter, Phoenix, AZ, for plaintiff.
John S. Most, United States Department of Justice, Environment and
Natural Resources Division, Washington, D.C., with whom was Ignacia S.
Moreno, Assistant Attorney General, for defendant.
_________
OPINION
_________
BRUGGINK, Judge.
Plaintiff seeks compensation under the Fifth Amendment of the United
States Constitution for the alleged taking of its property. Currently before the
court are defendant’s motion for summary judgment and plaintiff’s crossmotion for partial summary judgment, both pursuant to Rule 56 of the Rules
of the United States Court of Federal Claims (“RCFC”). The motions are fully
briefed and we heard oral argument on April 4, 2011. For the reasons
explained below, we deny both motions.
1
FACTUAL BACKGROUND 1
This case concerns a mining operation in a mountainous region of
northern Idaho. Placer Mining Co., Inc. (“Placer Mining”) purchased this
operation in 1991, nearly a century after the mine commenced operations.
Opened in 1886, the Bunker Hill Mine was, in its heyday, one of the world’s
largest sources of silver, zinc, and lead, eventually expanding more than a mile
below ground and including 30 levels and 150 miles of tunnels. Throughout
the early decades of the mine’s operation, and prior to Placer Mining’s
ownership, mine waste was dumped in and around local water sources and was
ultimately spread throughout the floor of the nearby valley where the towns of
Wardner and Kellogg, Idaho, are located. Over the years, the contamination
worsened as the mine operation expanded to ore processing and related
industrial enterprises, including smelting operations, two sulfuric acid plants,
a phosphoric acid plant, and a fertilizer plant.
During the 1960s and 1970s, concern grew over the health and
environmental impact of the contamination buildup and increasing emissions.
In 1974 and 1975, the State of Idaho and the federal Environmental Protection
Agency (“EPA”) conducted studies documenting the serious health risks posed
by lead contamination in the area, particularly for children living in the vicinity
of the smelter. A subsequent study in 1982 revealed reduced, though still high,
levels of lead in the area.
In 1983, pursuant to the Comprehensive Environmental Response,
Compensation, and Liability Act (“CERCLA”), 42 U.S.C. §§ 9601 et seq., the
EPA placed the Bunker Hill Mine on the National Priorities List, which
identifies serious hazardous material threats that, while not immediately lifethreatening, need long-term remedial response actions. The following year,
the EPA and state authorities began studies to determine appropriate long-term
remedies for the Bunker Hill site. In the interim, the EPA and the state, in
conjunction with past and then-current mine owners, undertook several
shorter-term removal actions. As part of these efforts, the EPA issued several
Unilateral Administrative Orders between 1989 and 1991, requiring the mine
owners to cease certain actions and to undertake others believed to prevent or
curtail the release of hazardous substances.
1
The facts, which are uncontroverted unless otherwise noted, are taken
from plaintiff’s response to defendant’s requests for admissions and from
plaintiff’s counter-statement of facts filed in support of its cross-motion.
2
In 1991 and 1992, based on the results of the long-range studies, the
EPA and Idaho selected long-term remedies for the contaminated areas. One
of these involved Milo Creek, a mountainous stream which, during times of
heavy rain or runoff, could carry rocks, sediment, and contaminated materials
down into the valley below. Of particular import, the creek flows through an
area known as the Reed Landing, a structure of uncertain vintage constructed
by previous mine owners. The landing consists of a 100-foot timber wall
behind which rock and other material was filled,2 providing a relatively large
and level area in otherwise steeply sloped terrain. The landing provides the
only flat staging and storage location as well as access to portals into the
mine’s workings. When the landing was constructed, buried within it was a
tunnel-like culvert designed to convey the waters of Milo Creek down through
the landing’s fill material and out into the natural creek bed downstream. The
remedy proposed by EPA was for Milo Creek, including the portions above,
on, and below the landing, to be channelized and lined, i.e., for the existing
creek bed to be replaced with a concrete channel, thus minimizing the creek
water’s contact with contaminated material.
In May of 1997, before the various long-term remedies were
implemented, the region suffered a catastrophic flood. This flood was
precipitated by record winter snowfall, which was preserved by a cool spring
that ended in a sudden warm spell and torrential rains. The resulting flood
carried contaminated materials downstream into the neighboring towns where
the water quickly overwhelmed the system of channels, pipes, and culverts that
normally conveyed it. Compounding the problem, the water system’s large
metal debris screens, known as grizzlies, became clogged, forcing flood waters
out of their usual channels and into surrounding areas. Dozens of homes and
several miles of streets were damaged, and the towns were inundated with
flood waters carrying lead-contamination sediment.
In the wake of this flood, the President issued a disaster declaration,
initiating a FEMA response. In conjunction with FEMA, the Idaho Bureau of
Disaster Services designed a solution for the Milo Creek, which it
implemented. The EPA, however, was concerned that this solution was
insufficient to handle a “100-year event” such as the recent flood.
Accordingly, the EPA issued a Unilateral Administrative Order requiring
2
The parties disagree whether the fill material was contaminated mine
waste or merely blasted rock and other benign material.
3
Placer Mining to provide unrestricted access to its property. Placer Mining
acquiesced under protest.
The EPA proceeded to demolish both the timber wall supporting the
Reed Landing and the ore loading chutes located on the landing and, after
allowing the landing to stabilize, rerouted the existing road. The EPA also
replaced the creek bed of Milo Creek with an open concrete channel
approximately 2,300 feet long, about 200 feet of which crosses the surface of
the Reed Landing. The concrete channel is eight feet wide, although the actual
footprint of the channel, including the sidewalls is eleven feet wide. Along
each side of the channel is a fence about four feet tall, designed to prevent
people or animals from falling into the creek channel. Spanning the channel,
which effectively bisects the landing, is a 20-foot-wide bridge designed to
allow access across the creek and to the mine. At some point during this
process of demolition and construction, and for reasons disputed, the Reed
Portal, the sole access point to some of the mine’s underground workings,
collapsed.
Placer Mining filed suit here in 2001, claiming a taking of its property
arising from several causes of action. There followed extensive settlement
attempts and a lengthy stay of proceedings during which Placer Mining
attempted to negotiate a sale of the property to a third party. In March of 2010,
Placer Mining indicated its intent to pursue only three of its claims: (1) the
access claim, i.e., that the concrete channel denies effective use of the landing
and access to parts of the mine, (2) a claim that the EPA physically took
approximately 40,000 tons of stockpiled ore stored on the landing, and (3) that
the EPA’s work caused the collapse of the Reed Portal.
The government has moved for partial summary judgment on the first
and third causes of action.3 As to the access claim, the government argues that
the remedial construction was not a taking since Placer Mining had no right to
maintain its property in a manner causing a public health hazzard. As to the
collapse of the Reed Portal, the government argues that this claim—which the
complaint mistakenly refers to as the Russell Portal—was never plead and is
thus barred by the statute of limitations and that, in any event, the claim sounds
in tort and is thus not property before this court. Placer Mining responded and
cross-moved for partial summary judgment as to both claims.
3
The second claim, the taking of the stockpiled ore, is not addressed by
the pending motions.
4
DISCUSSION
We have jurisdiction under the Tucker Act, which gives this court
exclusive jurisdiction over Fifth Amendment takings claims against the United
States for amounts greater than $10,000. See 28 U.S.C. § 1491 (2006); Morris
v. United States, 392 F.3d 1372, 1375 (Fed. Cir. 2004) (citing Palm Beach
Isles Assocs. v. United States, 208 F.3d 1374, 1383 n.10 (Fed. Cir. 2000)
(“[T]he Tucker Act provides the Court of Federal Claims exclusive jurisdiction
over takings claims for amounts greater than $10,000.”)).
Placer Mining does not, and cannot here, challenge the propriety of the
remediation effort. See Rith Energy,Inc. v. United States, 270 F.3d 1347, 1352
(Fed. Cir. 2001) (“[I]n a takings case we assume that the underlying
governmental action was lawful.”); Americopters, LLC v. United States, 95
Fed. Cl. 224, 229 (2010). Rather, it must assume the legitimacy of the
government’s action and allege, on that basis, that the agency’s actions caused
a taking in violation of the Fifth Amendment. The Fifth Amendment states in
pertinent part that private property shall not “be taken for public use, without
just compensation.” U.S. Const. amend V. A property owner may recover the
value of property taken by the government even where there was no formal
exercise of the power of eminent domain. Moden v. United States, 404 F.3d
1335, 1342 (Fed. Cir. 2005) (citing United States v. Clarke, 445 U.S. 253, 257
(1980)).
Compensable takings include both physical takings, in which the
government physically invades or appropriates private property, and regulatory
takings, in which government regulations unduly burden private property to the
point of diminishing its utility or value. See Yee v. City of Escondido, 503 U.S.
519, 522-23 (1992); Huntleigh USA Corp. v. United States, 525 F.3d 1370,
1378 (Fed. Cir. 2008). Here, Placer Mining alleges a physical taking. See
Stearns Co., Ltd. v. United States, 396 F.3d 1354, 1357 (Fed. Cir. 2005)
(citations and internal quotation marks omitted) (“A physical taking occurs
when the government itself occupies the property or requires the landowner to
submit to physical occupation of its land.”).
Summary judgment is appropriate only if the record indicates there is
no genuine issue of material fact and that the moving party is entitled to
judgment as a matter of law. RCFC 56(c); Moden, 404 F.3d at 1342. Whether
a compensable taking has occurred is a “question of law based on factual
underpinnings.” Ridge Line, Inc. v. United States, 346, F.3d 1346, 1352 (Fed.
Cir. 2003). “[D]ue to the fact-intensive nature of takings cases, summary
5
judgment should not be granted precipitously.” Moden, 404 F.3d at 1342
(citing Yuba Goldfields, Inc. v. United States, 723 F.2d 884, 887 (Fed. Cir.
1983)). Although the inquiry is “essentially ad hoc [and] factual,” it “is not
standardless.” Loretto v. Teleprompter Manhatten CATV Corp., 458 U.S. 419,
426 (1982).
I.
The Access Claim
Placer Mining’s first claim is that the concrete channel and the allegedly
insufficient bridge crossing it restrict use of the landing and, more importantly,
effectively deny access to the mine entrances on the other side of Milo Creek.
The government concedes it constructed the complained-of structure but
argues that Placer Mining has not been deprived of any compensable property
interest. Specifically, the government argues that a landowner has no right to
maintain property in a condition that is a nuisance or hazzard and that the
subsequent government abatement of the nuisance is not a taking. The
government’s argument misses the gravamen of plaintiff’s complaint.
There is no question that the Fifth Amendment “protects interests in real
property, such as the Owners’ interests in the land and buildings.” Chancellor
Manor v. United States, 331 F.3d 891, 902 (Fed. Cir. 2003) (citing Lucas v.
South Carolina Coastal Council, 505 U.S. 1003, 1016 n.7 (1992)). As already
noted, Placer Mining is alleging a physical taking, which usually entails a
simpler analysis than a regulatory taking. As a general matter, all physical
takings are compensable, “no matter how minute the intrusion, and no matter
how weighty the public purpose behind it.” Lucas, 505 U.S. at 1015; see
Loretto, 458 U.S. 419.4 In other words, “physical takings constitute per se
takings and impose a ‘categorical duty’ on the government to compensate the
owner.” CRV Enter. Inc. v. United States, 626 F.3d 1241 (Fed. Cir. 2010)
(citing Tahoe-Sierra Pres. Council v. Tahoe Reg’l Planning Agency, 535 U.S.
302, 322-23 (2002)).
4
In contrast, when considering an alleged regulatory taking, “a court
must typically conduct a complex factual assessment to determine whether
compensation is owed to the property holder,” Bass Enter. Prod. Co. v. United
States, 381 F.3d 1360, 1365 (2004) (citations omitted), and will apply a
categorical rule of compensation only when the regulation causes a permanent
deprivation of all productive or economically beneficial use of the property,
id. (citing Lucas, 505 U.S. at 1017).
6
Here, the government concedes it came onto plaintiff’s land but argues
that the categorical rule requiring compensation for physical invasion is
subject to exception. This argument—that Placer Mining has not been
deprived of any property interest because a landowner has no right to maintain
a nuisance on his property—is based on a rule derived from regulatory takings
cases, particularly Lucas v. South Carolina Coastal Council, 505 U.S. 1003
(1992). Though the government assumes that this rule is properly applied
here, we note that the rule’s applicability to physical takings is far from settled.
In John R. Sand & Gravel Co. v. United States, this court confronted
facts quite similar to those here: mining operations that prompted CERCLA
remediation efforts and led to a subsequent takings suit. 60 Fed. Cl. 230
(2004). In its argument to the trial court, the government presented a defense
markedly similar to that proffered here, namely that because there was no right
to maintain a nuisance, no property interest had been taken. The court
carefully and thoroughly considered the arguments, concluding that “the
background principles exception can apply to physical takings cases.” Id. at
239. On appeal, the Federal Circuit reversed and remanded for dismissal
based on plaintiff’s failure to file within the limitations period. The Federal
Circuit expressly declined to consider “whether background principles of
nuisance and property law, as articulated in Lucas, apply in physical takings.”
John R. Sand & Gravel Co. v. United States, 457 F.3d 1345, 1360 (Fed. Cir.
2006). Thus, the question of Lucas’ applicability to physical takings is still an
open one.5
Regardless of whether the nuisance exception applies to physical
takings, the government’s reliance on this argument fails to squarely meet
plaintiff’s complaint. The nuisance exception might justify the government’s
entry onto plaintiff’s land and all necessary remediation efforts, including
construction of a concrete channel. Placer Mining, however, is not challenging
the remediation work itself but is alleging that the concrete channel and the
allegedly inadequate bridge over it have effectively denied its access to the
5
Hendler v. United States, a case briefed by neither party here, is
merely persuasive when it states that “the nuisance exception applies equally
to physical taking and regulatory taking analysis.” 36 Fed. Cl. 574, 586
(1996). See West Coast Gen. Corp. v. Dalton, 39 F.3d 312, 315 (citations
omitted) (“Court of Federal Claims decisions, while persuasive, do not set
binding precedent for separate and distinct cases in that court.”).
7
mine. We believe that this claim, which is distinct from the abatement itself,
is not amenable to summary judgment.
As already discussed, we employ a two-step analysis when considering
an alleged taking. Am. Pelagic Fishing Co., L. P. v. United States, 379 F.3d
1363, 1372 (Fed. Cir. 2004). The first step is to examine what was allegedly
taken and determine if plaintiff has a cognizable property interest in it. Id. In
determining whether a cognizable property interest exists, we look for “crucial
indicia of a property right,” such as the ability to sell, assign, transfer, or
exclude. Conti v. United States, 291 F.3d 1334, 1342 (Fed. Cir. 2002). In
addition, the court will determine whether the use “was part of the owner’s
title to begin with, i.e., whether the land use interest was a ‘stick in the bundle
of property rights’ acquired by the owner.” M & J Coal Co. v. United States,
47 F.3d 1148, 1154 (Fed. Cir. 1995) (citing Lucas, 505 U.S. at. 1027). The
second step is to determine whether that interest was taken.
Here, plaintiff claims an interest in “access” to the mine workings, a
claim we think better articulated as an interest in the unfettered ability to use,
enjoy, and dispose of its property. Placer Mining argues, and the government
concedes, that it is not barred by law from conducting commercial mining
operations on its property. Although there is no legal impediment to further
mining, Placer Mining claims that the concrete channel and bridge constitute
a practical, physical barrier preventing large-scale mining development of the
property.
A landowner clearly has a right to use and possess its property in the
ways it sees fit, so long as those uses are not injurious to the public. Loretto,
458 U.S. at 435 (quoting United States v. General Motors Corp., 323 U.S. 373,
378 (1945)) (“Property rights in a physical thing have been described as the
rights ‘to possess, use and dispose of it.’”); M&J Coal, 47 F.3d at 1154
(recognizing mine owner’s right to mine but conditioning right on not
endangering public health and safety). “Although deprivation of the right to
use and obtain a profit from property is not, in every case, independently
sufficient to establish a taking, it is clearly relevant.” Loretto, 458 U.S. at 436
(internal citation omitted). Here, the government has not alleged that, if
plaintiff were operating a nuisance, it could only have been abated by the
channelization and the particular bridge actually built. Accordingly, we
believe it is clear that Placer Mining has a property interest in the use of its
property as a commercial mining operation—a use which has at no time been
prohibited and which is not an inherent nuisance—which is distinct from the
8
conditions that prompted the CERCLA remediation work and is not
susceptible to the government’s nuisance defense.6
Having identified the property interest at stake, we must determine if
it was taken. Here, there are factual issues as to whether the government’s
physical invasion has taken plaintiff’s interest in the use of its property by
eliminating all feasible access to the property. For example, the parties
disagree whether the bridge spanning the concrete channel is adequate to
support the use envisioned by plaintiff. The government argues the bridge
currently in place is sufficient to support vehicles up to the size of a 12-cubicyard dump truck, claiming this is sufficient for future mining operations.
Plaintiff argues that the bridge is insufficient to support the far larger vehicles
and equipment it claims are standard to modern mining operations. In
addition, it is unclear if other routes of ingress to the mine workings are a
feasible alternative. Thus this issue is not amenable to resolution by summary
judgment.
II.
The Reed Portal Claim
The third claim that plaintiff intends to pursue in this litigation, and the
final one subject to the pending cross-motions, is based on the collapse of the
Reed Portal. As an initial matter, the government argues that this claim was
not plead in the complaint and is now barred by the statute of limitations.
Placer Mining responds that the complaint simply misidentified the Reed
Portal, referring mistakenly to the Russell Portal, and argues that throughout
the course of this litigation the parties have clearly understood that it is the
Reed Portal that is the subject of the claim here. We do not agree with the
government that this claim is irretrievably barred by statute of limitations;
rather, plaintiff could resolve this issue by the simple expedient of amending
the complaint, see RCFC 15(b)(2), which would relate back to the date of the
complaint, as this claim arises from same transaction or occurrence. RCFC
6
The outcome is the same if we frame the issue, as plaintiff does, as a
denial of access. “Government action that cuts off or denies ‘all feasible
routes’ of access to a plaintiff’s property can constitute a taking.” McGuire v.
United States, 97 Fed. Cl.425, 439 (2011) (citing Laney v. United States, 661
F.2d 145, 149 (Ct. Cl. 1981)); see also Foster v. United States, 607 F.2d 943
(Ct. Cl. 1979); Sacramento Grazing Ass’n, Inc. v. United States, 96 Fed. Cl.
175, 194 (2010) (citing Foster, 607 F.2d at 949-50) (“[A] physical taking
occurs if the Government denies an owner all access to a property interest.”).
9
15(c)(1)(B). Such amendment would not prejudice the government, which has
had sufficient notice of the true nature of plaintiff’s claim.
A more significant issue, however, is the government’s argument that
this claim alleges a tort rather than a taking and thus we have no jurisdiction
over it. Distinguishing between torts and takings can be a difficult exercise,
in part because “‘[i]nverse condemnation law is tied to, and parallels, tort
law.’” Ridge Line v. United States, 346 F.3d 1346, 1355 (Fed. Cir. 2003)
(quoting 9 Nichols on Eminent Domain § 34.03[1] (Patrick J. Rohan & Melvin
A. Reskin eds., 3d ed. 1980 & Supp. 2002)). The Federal Circuit has
articulated a two-part test for distinguishing takings from torts:
First, a property loss compensable as a taking only results when
the government intends to invade a protected property interest
or the asserted invasion is the “direct, natural, or probable result
of an authorized activity and not the incidental or consequential
injury inflicted by the action.” Second, the nature and magnitude
of the government action must be considered. Even where the
effects of the government action are predictable, to constitute a
taking, an invasion must appropriate a benefit to the government
at the expense of the property owner, or at least preempt the
owners right to enjoy his property for an extended period of
time, rather than merely inflict an injury that reduces its value.
Id. at 1355-56 (internal citations omitted); see also Moden, 404 F.3d at 1342.
Here, neither party alleges that the government intended to collapse the
portal. Thus, as to the first step, the issue becomes whether the collapse was
a direct, natural, or probable result of the authorized and intended actions
taking place on the nearby Reed Landing. The Federal Circuit has clarified
that an outcome is a direct, natural, or probable result when it is “the
foreseeable and predictable result” of the authorized act. Moden, 404 F.3d at
1343. We cannot say as a matter of law, based on the pleadings, whether the
collapse of the Reed Portal was a foreseeable and predictable result of the
EPA’s nearby activities—which included removing a 100-foot timber wall
supporting the landing, allowing the landing’s fill material to settle, and
engaging in road construction and heavy concrete work—or if the collapse was
the result of negligence or a failure of care.
Nor can we rule as a matter of law that plaintiff has failed to satisfy the
test’s second prong. Although plaintiff has not alleged any benefit accruing
10
to the government as a result of the collapsed portal, it has alleged that the
collapse has preempted use of its property for an extended time. Placer
Mining’s argument is not that the collapse has merely reduced the value of the
mine, but that it has effectively denied entry into and use of the mine for the
past decade. See Ridge Line, 346 F.3d 1355-56. The government seems to
recognize the scope of the allegation in its request for admissions, which states
“that the Bunker Hill Mine is inaccessible through the Reed Portal because of
a collapse in the tunnel leading to the mine from that portal.” Def. Mot. for
Summ. J. Ex. 3 at 2 (emphasis added). In addition, we note that the parties
dispute the facts surrounding the timing, cause, and extent of the collapse. In
sum, we cannot say as a matter of law that the collapse of the Reed Portal is
a tort over which we have no jurisdiction. Accordingly, we must deny the
government’s motion.
III.
Other arguments
In its reply brief, plaintiff raises a new argument in support of its crossmotion for summary judgment. We address it but briefly, finding no merit to
it. Specifically, Placer Mining argues that in correspondence with the EPA in
1999, the agency’s assistant regional counsel conceded that compensation was
due, stating that “EPA does not intend to take Mr. Hopper’s property without
fair compensation, but it is yet to be determined what compensation, if any, is
due.” Pl.’s Reply at 5 (emphasis added). As an initial matter, we note that the
alleged concession does not promise payment and explicitly states that it is
unclear if any compensation is due. In any event, the outcome of the pending
cross-motions is a matter of law and is not affected by an agency employee’s
unratified comment.
CONCLUSION
For the reasons stated above, we deny both parties’ motions for
summary judgment. The parties are directed to confer and propose to
chambers by June 10, 2011, a schedule for further proceedings in this matter.
s/ Eric G. Bruggink
Eric G. Bruggink
Judge
11
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