Nu-West Mining, Inc. et al v. USA

Filing 102

MEMORANDUM DECISION AND ORDER denying 90 Motion for Partial Summary Judgment. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by cjm)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO

NU-WEST MINING INC., NU-WEST
INDUSTRIES, INC.,
Plaintiffs,

NO. 4:CV-09-431-BLW
MEMORANDUM DECISION AND
ORDER

v.
UNITED STATES OF AMERICA,
Defendant.

INTRODUCTION
The Court has before it plaintiff Nu-West’s motion for partial summary judgment
regarding the Government’s claim for attorney fees. The motion is fully briefed and at
issue. For the reasons explained below, the Court will deny the motion.
LITIGATION BACKGROUND
In its complaint, plaintiff Nu-West seeks to impose on the Government the costs of
cleaning up selenium contamination at four mine sites in the Caribou-Targhee National
Forest. This Court granted partial summary judgment to Nu-West, holding that the
Government is a potentially liable party (PRP) under CERCLA. See Memorandum
Decision and Order (Dkt. 84).

Memorandum Decision and Order - page 1

The Government has filed a counterclaim alleging that Nu-West should be held
liable for those same costs, and seeking attorney fees. In the motion now before the
Court, Nu-West asks the Court to interpret CERCLA to restrict the Government’s right to
attorney fees because it has been found to be a PRP. Nu-West’s motion presents a pure
question of law requiring an interpretation of CERCLA.
ANALYSIS
CERCLA authorizes the Government to recover from PRPs its enforcement costs,
including its reasonable attorney fees. U.S. v. Chapman, 146 F.3d 1166 (9th Cir. 1998).
Private parties, including PRPs seeking contribution from other PRPs, can also recover
attorney fees, but on a more limited basis: They can recover fees only if they are a
“necessary” cost of response. Key Tronic Corp. v. U.S., 511 US 809, 820 (1994). That
means that they cannot recover fees incurred in pursuing litigation, but can recover fees
incurred that are “closely tied to the actual cleanup” of the site, and that “significantly
benefitted the entire cleanup effort and served a statutory purpose apart from the
reallocation of costs.” Id. Nu-West argues that because the Government is also a PRP in
this case, it has no more right to attorney fees than a private party.
The holdings of Chapman and Key Tronic rely on the language of CERCLA,
specifically § 9607. Subsection (a)(4)(A) of § 9607 governs the Government’s right of
Memorandum Decision and Order - page 2

recovery, while subsection (a)(4)(B) governs a private party’s right of recovery.
The Government’s right to recovery, under subsection (a)(4)(A), includes “all
costs of removal or remedial action . . . not inconsistent with the national contingency
plan.” See 42 U.S.C. § 9607(a)(4)(A). A private party’s right to recover is stated in
somewhat different language, and includes “any other necessary costs of response . . .
consistent with the national contingency plan.” See 42 U.S.C. § 9607(a)(4)(B).
While these two provisions use different wording, they appear at first glance to be
quite similar. The Government can recover the costs of “removal or remedial action”
while a private party can recover the costs of “response.” Indeed, CERCLA defines all
three terms – removal, remedial and response – to include “enforcement activities related
thereto.” See 42 U.S.C. § 9601(25). And if both the Government and private parties are
entitled to recover the costs they incurred in “enforcement activities,” both would seem to
be entitled to attorney fees since attorneys play a central role in any enforcement activity.
But when a private party made that very claim, it was rejected by a majority of the
Supreme Court. Key Tronic, 511 U.S. at 819. In that case, a private party PRP sued its
fellow PRPs under CERCLA and sought contribution for clean-up expenses, including
attorney fees, arguing that its fees were part of its “enforcement activity.” The majority
opinion in Key Tronic disagreed, holding that it would “stretch the plain terms of the
Memorandum Decision and Order - page 3

phrase ‘enforcement activities’ too far to construe it as encompassing the kind of private
cost recovery action at issue in this case.” Id. While expressly declining to decide
whether the Government would be entitled to attorney fees under the term “enforcement
activities,” Key Tronic implied in dicta that it agreed with district courts that allowed fees
to the Government under that phrase. Id. at 817-18. The Supreme Court has not had
occasion to directly address the Government’s right to attorney fees under CERCLA since
Key Tronic.
However, five years after Key Tronic, the Ninth Circuit did address the issue in
Chapman. There, the Circuit noted Key Tronic’s dicta implying that the Government
could get fees under the “enforcement activities” language. Chapman, 146 F.3d at 1174.
But purely as a matter of interpretation, what language in CERCLA warranted giving the
Government more rights to attorney fees than a private party? The Circuit answered that
question by citing § 9604(b). That provision applies only to the Government and allows
it to “undertake such planning, legal, fiscal, . . . and other studies or investigations . . . to
plan and direct response actions, to recover the costs thereof, and to enforce the
provisions of this chapter.” See 42 U.S.C. § 9604(b) (emphasis added).
Reading this provision together with § 9607(a)(4)(A), Chapman concluded that
the Government is entitled to attorney fees for its enforcement activities. Id. at 1175. In
Memorandum Decision and Order - page 4

the present case, the Government has represented that it will only be seeking the attorney
fees and legal costs it incurred in enforcement activities.1
Nu-West argues, however, that once the Government becomes a PRP – as in this
case – it becomes subject to the attorney fee restrictions placed on private parties. In
essence, Nu-West argues that the Government loses its status as a governmental entity
when it becomes a PRP and so loses the entitlement to attorney fees it enjoyed as a
governmental entity.
Nu-West cites no language in CERCLA supporting its reading of the statute, and
there is none. It would have been easy for Congress to draft § 9607(a)(4)(A) so that it
only applied when the Government was not a PRP, but no such language appears. That
absence is not an invitation to add such language. Indeed, the preface to § 9607 evinces
an intent by Congress to preclude any limitations on the Government’s right of recovery
that are not expressly set forth in that statute: “Notwithstanding any other provision or
rule of law, and subject only to the defenses set forth in subsection (b) of this section
. . . .” Given that § 9607 contains no express language stripping the Government of its
rights when it becomes a PRP, this prefatory language precludes the Court from reading
1

The Court simply repeats the Government’s representation without expressing any opinion
thereon. There is no petition for attorney fees before the Court and thus it is premature to evaluate the
Government’s representation.
Memorandum Decision and Order - page 5

such a limitation into the statute.
Nu-West points to a contrary statement in Fireman’s Fund Ins. Co. v. City of Lodi,
302 F.3d 928 (9th Cir. 2002). That decision, after noting that Chapman conferred on
governmental entities the advantage of being able to recover attorney fees, stated that a
governmental entity “that is also a PRP should not be able to avail itself of this
advantage.” Id. at 953.
Standing alone, that statement would seem to settle the issue in Nu-West’s favor.
But on closer examination, the statement is not determinative here. In Fireman’s Fund,
the City of Lodi passed local legislation – referred to as MERLO – modeled on CERCLA.
It authorized the City to investigate and remediate toxic waste sites and to hold PRPs
liable. Most importantly, for the purposes of the present case, MERLO allowed the City
to recover all the attorney fees it incurred in the process of abating the toxic dangers.
The City passed MERLO in response to its discovery that its groundwater was
contaminated by a toxic chemical. The City sued various PRPs under MERLO to impose
on them the costs of remediation, and also sought its attorney fees under MERLO. The
PRPs responded that CERCLA preempted the field and rendered MERLO inapplicable.
The Circuit held that CERCLA did not preempt the field, but only preempted those
provisions of MERLO with which it conflicted. For example, the Circuit held that
Memorandum Decision and Order - page 6

“MERLO is preempted to the extent that it protects Lodi from contribution claims by
other PRPs [because] CERCLA permits a PRP who incurs response costs to being suit to
recover those costs from any other PRP.” Id. at 946.
The Circuit then focused its preemption analysis on the City’s claim that MERLO
authorized recovery of its attorney fees from the PRPs, and specifically whether
MERLO’s attorney fee provision conflicted with CERCLA. The Circuit discussed how
Key Tronic and Chapman interpreted CERCLA to grant an advantage to governmental
agencies to recover attorney fees, an advantage not conferred on private parties. Id. at
953. The Circuit then stated as follows:
We need not decide if a city is [a governmental entity under CERCLA] for
purposes of recovering its attorney fees under CERCLA, because, in any case,
a city that is also a PRP should not be able to avail itself of this advantage. If
the district court finds that Lodi is indeed a PRP, it may not legislate for itself
a litigation advantage by granting itself the right to collect attorney's fees. If,
on the other hand, Lodi proves not to be a PRP, we see no reason why Lodi
may not provide for recovery of attorney's fees for itself under its municipal
liability scheme.
Id. As the decision continues, it becomes apparent that the City is seeking litigation fees,
not enforcement costs. The Circuit describes the attorney fees at issue as follows:
Lodi has expended significant attorney's fees in an attempt to escape liability
through the enactment and defense of its municipal ordinance. These efforts,
so far as we can tell, have not advanced the cleanup of the Lodi Site. Litigation
costs may indeed be a part of recovering funds that are needed to advance the
Memorandum Decision and Order - page 7

cleanup. However, the ability to recover litigation-related attorney's fees does
not necessarily advance the pace of cleanup because it may encourage
ambitious litigation.
Id.2 Under CERCLA, no party – governmental or private – is entitled to litigation costs.
Thus, by authorizing the City to recover litigation fees, MERLO conflicted with
CERCLA and was preempted. The holding in Fireman’s Fund is that a city cannot
legislate for itself rights in litigation over hazardous waste remediation that conflict with
CERCLA.
The holding in Fireman’s Fund is not determinative or even applicable here. This
case presents no preemption issue. At most, Fireman’s Fund stands for the proposition
that a governmental entity cannot recover litigation costs. As the Court stated above, it is
too early to determine whether the fees and costs sought by the Government are litigation
costs or the costs of enforcement activities. The single issue here is whether a
governmental entity is stripped of its right to recover attorney fees when it becomes a
2

Additional evidence that the City was asking for litigation costs comes from the Circuit’s use
of the term “attorney fees” to describe what the City was seeking. The Circuit seemed to assume that
“attorney fees” meant litigation costs. At least, that is the only way to explain the following sentence in
the decision: “Non-State litigants are, on the other hand, confined to recovery of ‘necessary costs,’ which
do not include attorney’s fees.” Id. at 953. The Circuit must have been using the term “attorney’s fees”
to mean litigation costs, because otherwise the sentence is clearly wrong under Key Tronic, decided
almost a decade before Fireman’s Fund. Under Key Tronic, as discussed above, a private party can
recover attorney fees albeit under more limited circumstances. The only way the sentence makes sense is
if the Circuit used the term “attorney’s fees” to mean litigation costs.
Memorandum Decision and Order - page 8

PRP. Beyond a single conclusory sentence in dicta, Fireman’s Fund contains no analysis
of that issue. Adopting Nu-West’s argument would require the Court to insert its own
language of limitation in § 9607(a)(4)(A), and the Court refuses to legislate in that
manner. Accordingly, Nu-West’s motion for summary judgment is denied.
ORDER
In accordance with the Memorandum Decision set forth above,
NOW THEREFORE IT IS HEREBY ORDERED, that Nu-West’s motion for
partial summary judgment (docket no. 90) is DENIED.

DATED: June 30, 2011

Honorable B. Lynn Winmill
Chief U. S. District Judge

Memorandum Decision and Order - page 9