FMC Corporation v. Shoshone-Bannock Tribes

Filing 95

MEMORANDUM DECISION AND ORDER granting 64 the Tribes' Motion to Enforce Judgment under Montana's first exception; granting in part and denying in part 65 Motion to Enforce Judgment under Montana's second exception; gr anting in part and denying in part 66 Motion for Summary Judgment on due process and to Enforce Judgment; denying 67 FMC's Motion for Declaratory 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 (cjs)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO
FMC CORPORATION
Plaintiff,

Case No. 4:14-CV-489-BLW

v.

MEMORANDUM DECISION AND
ORDER

SHOSHONE-BANNOCK TRIBES,
Defendant.

INTRODUCTION
In several pending motions, the Tribes and FMC ask the Court to determine
whether the Tribes may enforce a Judgment imposed by the Tribal Appellate Court. That
Judgment imposes an annual permit fee of $1.5 million. The Court heard oral argument
on the motions and took them under advisement. For the reasons explained below, the
Court finds that the Tribes had jurisdiction over FMC to impose the permit fees, and will
grant the Tribes’ motion to enforce the Tribal Court Judgment.
SUMMARY
For over 50 years, FMC operated a phosphorus production plant on 1,450 acres of
property FMC owned in fee in Pocatello, Idaho, lying mostly within the ShoshoneBannock Fort Hall Reservation. FMC’s operations produced 22 million tons of waste
products stored on the Reservation in 23 ponds. This waste is radioactive, carcinogenic,
and poisonous. It will persist for decades, generations even, and is so toxic that there is
no safe method to move it off-site.
Memorandum Decision & Order – page 1

The waste’s extreme hazards led the Environmental Protection Agency (EPA) to
declare the site a CERCLA Superfund clean-up site and to charge FMC with violating the
Resource Conservation and Recovery Act (RCRA). The EPA designed and implemented
a program to contain the waste.
To avoid litigation over the RCRA charges, FMC negotiated with the EPA over a
Consent Decree. As a condition of agreeing to that Consent Decree, the EPA insisted
that FMC obtain Tribal permits for work FMC would do under the Consent Decree on the
Reservation. The Tribes, however, were demanding $100 million for those permits,
although they would drop the fee to $1.5 million a year if FMC consented to Tribal
jurisdiction. To get the lower permit fee, and to satisfy the EPA’s condition that they
obtain Tribal permits, FMC consented to Tribal jurisdiction.
FMC challenged those permit fees in Tribal courts by producing evidence that the
stored waste had caused no harm and the EPA’s containment program foreclosed any
need to impose substantial fees. The Tribes produced evidence that the waste was
severely toxic, would remain so for generations, and could not be moved off-site. After
hearing this evidence, the Tribal Appellate Court issued a Judgment against FMC
requiring them to pay an annual fee of $1.5 million.
The parties brought this action to resolve the issue whether the Tribes could
enforce that Judgment. The Court finds that the Tribes have jurisdiction over FMC. The
source of the jurisdiction is based on FMC’s consent, discussed above, and the
catastrophic threat FMC’s waste poses to Tribal governance, cultural traditions, and
health and welfare.
Memorandum Decision & Order – page 2

Having identified the source of the Tribes’ jurisdiction over FMC, the Court turns
next to the scope of that jurisdiction. To the extent that Tribal jurisdiction is based on
FMC’s consensual relationship with the Tribe to pay $1.5 million annually to store
hazardous waste within the Reservation, the Tribes have jurisdiction to impose the $1.5
million annual fee for as long as the waste is stored there. The Tribal Appellate Court
relied on this ground of jurisdiction to impose its Judgment, and the Court finds that the
Judgment must be enforced on that ground.
To the extent that Tribal jurisdiction is based on the catastrophic threat FMC’s
waste poses to the Tribes, the amount of the annual permit fee must be closely tied to the
threat. Here, the Tribal Appellate Court never identified the measures necessary to
protect against the threat and their cost. Instead of using that calculation to arrive at the
$1.5 million figure, the Tribal Appellate Court simply carried over that amount from the
consensual relationship agreement between FMC and the Tribes. Using an agreed-upon
figure is fine when the basis of jurisdiction is a consensual relationship, but when
jurisdiction is based instead on a catastrophic threat, the amount of the Judgment must
bear some relationship to the Tribes’ need to protect against the threat. Because there is
no such relationship in this record, the Court cannot enforce the Judgment on the basis of
the catastrophic threat basis for Tribal jurisdiction. Nevertheless, the Court will enforce
the Judgment because, as discussed above, it was properly entered under the consensual
relationship basis for Tribal jurisdiction.

Memorandum Decision & Order – page 3

FACTUAL BACKGROUND
History of the FMC Plant Cleanup
From 1949 to 2001, FMC and its predecessors operated an elemental phosphorus
production plant on 1,450 acres of property FMC owned in fee in Pocatello, Idaho, lying
mostly within the exterior boundaries of the Shoshone-Bannock Fort Hall Reservation.
FMC historically stored the waste from its plant in ponds on that property. FMC has
estimated that about 22 million tons of waste is contained in the 23 waste storage ponds
on FMC’s property. The waste includes hazardous materials such as arsenic, and
radioactive materials that emit gamma radiation which exceeds the human health safety
standards set by the Environmental Protection Agency (EPA). In 1990, the EPA declared
the FMC plant a superfund clean-up site under CERCLA, and in 1997 charged FMC with
violating RCRA, a law regulating the disposal of hazardous and non-hazardous solid
wastes.
To resolve these RCRA charges outside of litigation, FMC began negotiation over
the terms of a Consent Decree with the EPA. As a condition of any agreement, the EPA
required that FMC obtain necessary permits for the clean-up work from the Tribes. The
proposed Consent Decree would require construction of new waste storage ponds and a
treatment facility on FMC’s property within the Reservation boundaries, and so the
Tribes were demanding that FMC obtain Tribal permits for this work. Because the EPA
was insistent on FMC obtaining the necessary Tribal permits, FMC “was justifiably
concerned that an unresolved dispute between FMC and the Tribes would jeopardize the
likelihood of successfully completing FMC’s Consent Decree negotiations with the
Memorandum Decision & Order – page 4

United States.” See FMC Response Brief (Dkt. No. 72) at p. 18. According to FMC,
resolution of the waste permit issue with the Tribes was “of such great importance that
FMC’s negotiating team was led Paul McGrath, FMC’s Senior Vice President and
General Counsel.” Id.
McGrath faced a substantial obstacle – the Tribes were demanding $100 million to
issue the permits. See 002610. Finding himself in a weak bargaining position, FMC’s
negotiator McGrath, “select[ed] the only rational choice for resolving FMC’s dispute
with the Tribes – to negotiate a lower fee.” See FMC Response Brief, (Dkt. No. 72) at p.
18.
The Tribes were willing to negotiate a lower fee but only if FMC consented to
Tribal jurisdiction. FMC described its analysis of the Tribes’ demand: “FMC knew that
contesting the Tribes’ jurisdiction would take years. Although FMC vigorously disagreed
with the Tribes’ assertion of jurisdiction to compel compliance with the claimed permit
requirement, FMC had no realistic alternative but to resolve its dispute with the Tribes in
a manner that would enable continued operation of the Pocatello Plant . . . . Permanent
shutdown of the Pocatello Plant at that time would have caused FMC severe economic
damages.” See FMC’s Statement of Facts (Dkt. No. 67-1) at p. 9.
On August 11, 1997, FMC’s Health Safety & Environmental Manager David
Buttelman filed applications for permits with the Tribes and stated in an accompanying
letter as follows:
Through submittal of the Tribal “Building Permit Application” and the
Tribal “Use Permit Application” for Ponds 17, 18 and 19, FMC
Corporation is consenting to the jurisdiction of the Shoshone-Bannock
Memorandum Decision & Order – page 5

Tribes with regard to the zoning and permitting requirements as specified
in the current Fort Hall Land Use Operative Policy Guidelines.
See Exhibit 57. With FMC having consented to Tribal jurisdiction, the Tribes lowered
their fee to $1.5 million a year to cover hazardous and nonhazardous waste beginning in
1998 and continuing “for every year thereafter . . . .” See Exhibit 61.
FMC responded to that letter on May 26, 1998, by expressing its appreciation for
the Tribes “agreeing to the fixed fee proposal that we discussed, which we understand
will apply during the time these ponds are in operation,” and by stating “we . . . intend to
make the payments of $2.5 million on June 1, 1998, and the $1.5 million on June 1 in the
following years.” See Exhibit 62. The Tribes’ attorney Jeanette Wolfley objected to the
language in this letter implying that the obligation to pay the fee would end with the
closure of Ponds 17, 18 & 19. According to FMC’s Division Manager, Robert Fields,
Wolfly asked McGrath “to acknowledge in writing that the Use Permit and the annual fee
applied broadly to the entire facility.” See Exhibit 66, Fields Affidavit.
Fields testified that “McGrath agreed and sent Ms. Wolfley his letter of June 2,
1998.” Id. In that letter, FMC clarified that the language of the May 26 letter was “too
narrow, and indeed it is our understanding . . . that the $1.5 million annual fee would
continue to be paid for the future even if the use of ponds 17-19 was terminated in the
next several years.” See Exhibit 63.
FMC’s resolution with the Tribes was a major factor in reaching an agreement
with the EPA on the RCRA Consent Decree. Within just a few months of resolving the
permit issues, FMC reached agreement with the EPA on the RCRA Consent Decree. By
Memorandum Decision & Order – page 6

the terms of that Consent Decree, FMC agreed to pay a fine of $11.9 million and to close
and cap the waste ponds in accordance with closure plans developed in coordination with
the EPA – removal or treatment of the waste was deemed too expensive and too
dangerous by the EPA. See Interim Record of Decision Amendment (IRODA) at pp. 1-2.
To do the work necessary to comply with the Consent Decree, FMC was required to
obtain Tribal permits, as set forth in paragraph 8 of the Consent Decree: “Where any
portion of the Work requires a . . . tribal permit or approval, [FMC] shall submit timely
and complete applications and take all other actions necessary to obtain all such permits
or approvals.”
Prior Proceedings in the Federal Courts
The EPA did file an action against FMC but simultaneously presented the Consent
Decree to this Court for approval to settle the lawsuit. The Tribes objected to the
Consent Decree, seeking removal of the waste rather than capping of the ponds. The
Court granted the Tribes motion to intervene, but found that “the capping requirements
are adequately environmentally protective – the record contains no legitimate basis on
which the Court could conclude that capping allows an unreasonable health risk to go
unchecked,” and approved the Consent Decree. See Order (Dkt. No. 27) in U.S. v. FMC,
CV-98-406-BLW.
On appeal, the Ninth Circuit affirmed that decision, holding that “the Tribes have
presented no evidence that capping the ponds poses a threat to human health and the
environment.” See U.S. v. Shoshone-Bannock Tribes, 229 F.3d 1161 at *2 (unpublished
disposition) (9th Cir. 2000). In the proceedings before the Ninth Circuit, FMC argued
Memorandum Decision & Order – page 7

that the Tribes had no right to object to the Consent Decree because the Tribes had
“granted permits to FMC for its construction and use of Ponds 17 and 18 . . . subject to
payment of a $1 million startup fee and a $1.5 million annual permit fee payable to the
Hazardous Waste Program of the Tribes Land Use Department.” See Brief of FMC,
2000 WL 33996531, at *17-18. While not specially citing this argument, the Circuit did
hold that the Tribes had been adequately consulted. Shoshone-Bannock Tribes, 229 F.3d
at *2.
Between 1999 and 2005, FMC completed closure and capping of the RCRA Ponds
pursuant to this Consent Decree and the EPA-approved closure plans. In 2005, FMC
certified final closure of the last of the RCRA Ponds in accordance with EPA-approved
closure plans. See 002371.
FMC paid the annual permit fee of $1.5 million under the 1998 agreement from
1998 to 2001. In December of 2001, FMC ceased all mineral processing operations at
the site. When the fee became due for 2002, FMC objected, arguing its obligation had
ended because (1) the Tribes failed to codify the fee to “ensure that [it] remains the same
in the future”; and (2) the fee only applied to the disposal of waste, not its storage, and
FMC had ceased disposing of waste. FMC refused to pay the $1.5 million fee and
refused to apply for any further permits as it continued with the RCRA clean-up efforts.
After negotiations failed, the Tribes filed a motion in U.S. v. FMC, CV-98-406BLW asking the Court to clarify whether FMC had an obligation to obtain tribal permits
for activities FMC undertook under the RCRA Consent Decree. This Court issued a
decision on March 6, 2006, holding that (1) the Tribes had jurisdiction over FMC under
Memorandum Decision & Order – page 8

the first Montana exception (see Montana v. U.S., 450 U.S. 544, 565-66 (1981)), (2)
FMC was required to apply for Tribal permits based on FMC’s agreement to submit to
tribal jurisdiction in ¶8 of the RCRA Consent Decree, (3) the Tribes were intended thirdparty beneficiaries of the Consent Decree and therefore had a right to enforce its terms;
and (4) FMC was required to exhaust tribal remedies over any challenges to the Tribal
permit decisions. See U.S. v. FMC, 2006 WL 544505 (D.Idaho 2006).
On appeal, the Ninth Circuit only addressed the third finding and reversed it,
holding that the Tribes were merely incidental beneficiaries of the Consent Decree
without standing to enforce its provisions. U.S. v. FMC, 531 F.3d 813 (9th Cir. 2008).
The Circuit vacated this Court’s decision and remanded the case with instructions to
dismiss the action. Id. at 824. At the conclusion of its decision, the Circuit noted that
FMC had “began the process of applying for tribal permits, which is the main relief that
the Tribes have sought in this action” and that FMC’s counsel during oral argument
“represented to the court that FMC understands that it has the obligation to continue, and
will continue, with the current tribal proceedings to their conclusion.” Id. at 824.
Initial Proceedings Before the Tribal Courts
FMC’s application was granted by the Tribes’ Land Use Policy Commission
(LUPC) on the condition that FMC either resume paying the $1.5 million fee or pay a
much higher fee based on the weight of the material stored in the ponds. FMC appealed
that decision to the Fort Hall Business Council (FHBC), which affirmed the LUPC
decision. FMC appealed the FHBC decision to the Shoshone-Bannock Tribal Court.

Memorandum Decision & Order – page 9

The Tribal Court issued two decisions. The first, issued on November 13, 2007,
held that FMC was subject to Tribal jurisdiction, and the decision also dismissed the
Tribes’ breach of contract and air quality permit counterclaims. The second, issued on
May 21, 2008, held that (1) FMC was required to obtain a Tribal Building Permit, but the
Tribes could not impose a $3000 fee for that permit; (2) FMC was not required to obtain
a special use permit; (3) the 1998 Agreement between the parties had not been
incorporated into a tribal ordinance; and (4) the Tribes could not impose the $1.5 million
permit fee because it had not been approved by the Secretary of the Interior under the
Tribal Constitution.
The Tribes appealed that decision to the Tribal Appellate Court, and FMC crossappealed. The three-judge panel for the Tribal Appellate Court consisted of Judges
Gabourie, Pearson, and Silak. About three months before reaching any decision, but
while the case was pending before them, Judge Gabourie and Pearson spoke at a
conference on tribal courts held at the University of Idaho College of Law. The
conference, held on March 23, 2012, was attended by attorneys and members of the
public, and was videotaped.
In their remarks, both Judges asserted that it was important for Tribes to obtain as
much jurisdiction and sovereignty as possible, and explained how tribal appellate judges
could issue decisions to achieve this goal for tribes. They criticized many of the principal
United States Supreme Court decisions regarding tribal jurisdiction, labeling the Montana
decision as “murderous to Indian tribes.” See 006580. They were similarly critical of
other Supreme Court decisions. Judge Gabourie told the audience that the tribal
Memorandum Decision & Order – page 10

“appellate courts have got to step in” and “be sure to protect the tribe.” 006599. They
explained that the way to avoid “bad decisions” was for the tribal appellate courts to
ensure that the record would support any decision on appeal through the federal courts.
Id.
Judge Gabourie also made comments about the pollution left behind by companies
who operated within reservation boundaries:
You know, there’s one area, too, there are tribes that have had mining and
other operations going on, on the reservation, you know, and then the
mining company or whatever, manufacturing company, disappears. They
leave, you know. They’ve – they’ve either dug everything they could, and
the then ground is disturbed, sometimes polluted beyond repair. And you
sit as a – as an appellate court justice, and you’re starting to read the cases
that come down from the tribal court. And you’re saying to yourself, you
know, We know that the – there’s pollution, that the food that they’re
eating is polluted, the water’s polluted, but nobody proved it. And while
John Jones said that it is polluted, you know, John Jones don’t count. But
the tribal courts have got to realize that you need expert witnesses. You
need chemists and whatever to get out of testifying. It may cost a little,
but so the appellate court is in a position of remanding that case back and
say “do it.”
See 006598.
Judge Pearson made similar comments:
If you’re a law student and you’re going to practice law, as well as if
you’re a judge and you’re going to be hearing cases, you know where –
companies come on the reservations and do business for X number of
years and they dirty up your groundwater and your other things, and they
they go out of business. And they leave you just sitting. And you need to
know what you can do as you’re sitting as a judge with those cases
coming toward you.
See 006605-06.

Memorandum Decision & Order – page 11

About three months later, on June 26, 2012, Judges Gabourie, Pearson, and Silak
issued an opinion holding that (1) the Tribes have jurisdiction under the first Montana
exception to require FMC to obtain a waste storage permit and pay the annual fee; (2)
Tribal ordinances (the Land Use Policy Ordinance and the Hazardous Waste
Management Act (HWMA)) independently authorized the imposition of the waste
storage permit fee on FMC; (3) the Tribal Court erred in dismissing the Tribes’ air
quality and breach of contract counterclaims without permitting discovery, and in failing
to consider whether the Tribes have jurisdiction over FMC under the second Montana
exception.
In April of 2013, Judges Gabourie and Pearson were replaced on the panel with
Judges McDermott and Herzog. Judge Silak – a former Justice of the Idaho Supreme
Court – remained on the panel. Shortly thereafter, on May 6, 2013, FMC filed a brief
with the Tribal Appellate Court, asking it to reconsider the rulings of the prior panel, and
arguing that if the new panel agreed with those rulings, it should then conclude the
proceedings; but that if the new panel did not agree with those rulings, it should vacate
the rulings of the prior panel and proceed anew. FMC supported this request by asserting
that it “ha[d] obtained new evidence regarding public statements made by two of the
judges [Judges Gabourie and Pearson] from the prior appellate panel” at the conference
held on March 23, 2012, which FMC claimed showed that those judges were biased.
On May 28, 2013, the new panel reconsidered and reaffirmed the prior panel’s
determinations. The new panel also decided to hold an evidentiary hearing to resolve

Memorandum Decision & Order – page 12

whether the second Montana exception applied, and granted the parties a period of
discovery on that issue.
Tribal Appellate Court Evidentiary Hearing
An evidentiary hearing was held from April 1 through April 15, 2014, with the
Tribes and FMC presenting witness testimony, documentary evidence, and legal
arguments regarding the second Montana exception. To summarize, the Tribes’ evidence
showed the serious toxicity of the stored waste and the uncertainty over its geographic
scope, while FMC’s evidence highlighted the EPA’s containment program, and showed
that the agency’s extensive testing and monitoring revealed no actual physical harm to
humans and no measurable contamination of air or water to this point.
For example, the Tribes’ evidence identified components of FMC’s stored waste,
including the following: (1) elemental phosphorus that leaked into the subsurface soil
during production; (2) elemental phosphorus and chemical byproducts from the
phosphorus production process suspended in contaminated water that are contained in
ponds on the site; (3) phosphine gas produced by elemental phosphorus; (4) contaminated
rail cars buried at the site that were used in the transport of elemental phosphorus; (5)
contaminated groundwater containing arsenic and phosphorus that seeped into the
groundwater from other sources of contamination on the site; and (6) millions of tons of
slag that contains radioactive materials which emit gamma radiation in excess of EPA’s
human health safety standards.
Testimony showed that the elemental phosphorus contained in the soil and
containment ponds is reactive, meaning that it will burst into flames when exposed to
Memorandum Decision & Order – page 13

oxygen. This reaction also produces numerous chemical byproducts, which react to form
phosphoric acid aerosols. The phosphorus itself is toxic when ingested, inhaled or
absorbed, and will remain reactive for thousands of years. When exposed to water,
elemental phosphorus produces phosphine gas, which is harmful and even deadly to
humans at certain levels; indeed, it is the active ingredient in some poisons.
The Idaho Department of Health and Welfare evaluated an EPA air sample and
notified the EPA that phosphine gas being released from a pond on FMC’ s property was
an urgent public health hazard to the health of people breathing the air in the proximity of
Pond 15S, and that breathing the air for just a few seconds could cause measurable harm
and could be lethal. The EPA responded to that notice and remedied the situation.
The EPA estimates that there are as much as 16,000 tons of elemental phosphorus
in the ground, contaminating approximately 780,000 cubic yards of soil weighing
approximately 1 million tons. But the EPA described as “significant unknowns” the
“horizontal and vertical gradients in the concentrations of elemental phosphorous, the
total mass of elemental phosphorous, and the form of elemental phosphorous in the soil.”
See 008543.
The Tribes’ evidence showed that in 1964, FMC buried approximately twenty-one
tanker rail cars on the FMC site. The tankers contained elemental phosphorus sludge,
and instead of requiring workers to undertake the dangerous work of cleaning up this
toxic material, FMC simply buried the rail cars, covering them with clay and then with
radioactive slag. The evidence indicates the tankers contained from 200 to 2,000 tons of
elemental phosphorus sludge, 10-25% of which remained in each of the tankers at the
Memorandum Decision & Order – page 14

time they were buried. The level of corrosion of the tankers is unknown and it is possible
that they either have or will corrode to the point of leakage from phosphoric acid
produced by the phosphorus. EPA decided that the area where the tankers were buried
should be capped and that no efforts to remove the tankers should be undertaken, but it is
undisputed that no remedial action to address this threat has been implemented.
Arsenic and phosphorus from the site are continuously flowing in the groundwater
from FMC’s land through seeps and springs directly into the Portneuf River and Fort Hall
Bottoms. This negatively affects the ecosystem and subsistence fishing, hunting and
gathering by tribal members at the River, as well as the Tribes’ ability to use this
important resource as it has been historically used for cultural practices, including the
Sundance. The EPA’s Interim Amendment to the Record of Decision for the EMF
Superfund Site FMC Operable Unit Pocatello Idaho (2012) (“IRODA”) calls for a
decades-long regime of ground water monitoring and treatment to minimize risks.
However, such intervention programs are in the design phase only, and have not yet been
implemented. Uncontroverted evidence at trial showed that Tribal members’ ability to
take part in tribal cultural practices on the River has been compromised by FMC's
contributions to contamination of the River. Although FMC tried to show that none of
the groundwater seeping into the Portneuf is above EPA levels of concern, Rob
Hartman's testimony did show that groundwater extraction systems have not been put
into place at the FMC site, and that arsenic and phosphorus are actually traveling to the
Portneuf River.

Memorandum Decision & Order – page 15

Although the EPA has been involved at this site since 1990, remedial actions
chosen by the EPA have not been implemented. Many of EPA’s proposed remedial
actions are still in design phase only, and the threat at the site remains today. EPA’s
IRODA is itself only an interim measure, and according to the IRODA, a final Record of
Decision will not be available for five to ten years. In any event, EPA’s plans are
containment plans, which would keep the threatening hazardous wastes on fee land for
the indefinite future.
FMC, on the other hand, presented evidence that EPA’s containment program
includes: (a) installation of engineered evapotranspiration (“ET”) soil barrier caps over
areas on site that are potential sources of groundwater contamination; (b) installation of
engineered “gamma” soil barrier caps at areas on site containing slag fill and ore; (c)
installation of a groundwater extraction and treatment system that will capture and
contain all contaminated groundwater at the FMC Property fence line, and treat the
extracted groundwater; and (d) long-term monitoring and maintenance of the soil caps
and groundwater extraction and treatment system.
In addition, FMC produced evidence that between 1977 and 2000, independent
epidemiologists from the University of Minnesota conducted multiple epidemiological
human health studies of FMC’s Pocatello Plant workers. Those studies establish that
long-term exposure to the contaminants at the FMC Property did not cause any adverse
health impacts to those workers whose exposures would be many times that of
community members outside the Plant boundaries. See 262733; 262766; 262897.
Similarly, in 2006, researchers from the Oregon Health & Science University and the
Memorandum Decision & Order – page 16

Northwest Portland Area Indian Health Board conducted an independent human health
study of the Tribal community. See 289037. The Tribes participated in the design and
implementation of that study. See 289038. That study failed to find adverse health
impacts to Tribal members that could be attributed to contamination at the FMC Property.
See 289053.
FMC presented evidence from the EPA that contamination at the FMC site has not
affected water quality off-site. The EPA concluded that: (a) no off-site drinking water
wells are contaminated from any substances emanating from the FMC Property (008022);
(b) sampling conducted in 2012 and 2013 establishes that the off-site groundwater meets
federal drinking water quality criteria (008027); (c) the Simplot plant is the source of
95% of total arsenic and more than 95% of the total phosphorus mass loading to EMF
Superfund Site-impacted groundwater flowing into the Portneuf River (id.); (d) since
2001, Simplot is the sole source of fluoride emissions (007984); (e) measurements of the
radioactivity establish that radium-226 levels are not a risk to human health or the
environment (008069); and (f) Tribal members have not been exposed to phosphine gas,
as shown by approximately 40,000 measurements of phosphine gas emissions taken since
2008 that show no detections of phosphine (0.00 parts per million) at the FMC property
fence line (008151).
The Agency for Toxic Substances and Disease Registry (“ATSDR”) evaluated air
quality impacts from the site in 2006 after the shutdown of the FMC Pocatello Plant. See
285232. The ATSDR found that the Superfund Site currently presents no public health
hazard. See 285240.
Memorandum Decision & Order – page 17

To summarize, neither side directly contradicted the other. The Tribes’ evidence
established without rebuttal that the waste is radioactive, carcinogenic, poisonous, and
likely to remain toxic – and on the site – for decades. FMC’s evidence established
without rebuttal that despite the toxicity of the waste, no measurable harm had yet
occurred to humans or water quality, and the EPA’s containment program would prevent
any future harm.
Analyzing this evidence, the Tribal Appellate Court ultimately concluded that
FMC’s storage of millions of tons of toxic waste posed a serious threat, and has a direct
effect on, “the political integrity, the economic security, or the health or welfare of the
[Tribes].” See 008552. Consequently, the Court held that Montana’s second exception
applied, and that the Tribes had jurisdiction to require FMC to obtain permits for the
remediation work.
Based on this ruling, the Appellate Court issued a Final Judgment against FMC,
dated May 16, 2014, finding FMC liable for a permit fee of $1.5 million a year. The
Judgment charges FMC with $19,500,000 in permit fees for the years 2002 up through
the date of the Judgment in 2014, $928,220.50 in attorneys’ fees, and $91,097.91 in costs,
for a total of $20,519,318.41. Both sides agree that the Judgment imposes the $1.5
million fee in perpetuity with no ending date established.
FMC responded to this Judgment by filing this lawsuit in November 2014,
requesting that this Court deny enforcement of the Judgment issued by the Tribal
Appellate Court. The Tribes counterclaimed for an Order allowing them to enforce the
Judgment.
Memorandum Decision & Order – page 18

LEGAL STANDARDS
The recognition and enforcement of tribal judgments in federal court rests upon
principles of comity, which is “neither a matter of absolute obligation, on the one hand,
nor of mere courtesy and good will, upon the other.” Wilson v. Marchington, 127 F.3d
805, 809 (9th Cir. 1997) (quoting Hilton v. Guyot, 159 U.S. 113, 163–64 (1895)). As a
general policy, “[c]omity should be withheld only when its acceptance would be contrary
or prejudicial to the interest of the nation called upon to give it effect.” Id. At its core,
comity involves a balancing of interests. “[I]t is the recognition which one nation allows
within its territory to the legislative, executive, or judicial acts of another nation, having
due regard both to international duty and convenience, and to the rights of its own
citizens, or of other persons who are under the protection of its laws.” Id. at 810. Wilson
holds that “comity still affords the best general analytical framework for recognizing
tribal judgments.”
As a “general principle, federal courts should recognize and enforce tribal
judgments.” Id. However, federal courts must neither recognize nor enforce tribal
judgments if: (1) the tribal court did not have both personal and subject matter
jurisdiction; or (2) the defendant was not afforded due process of law. Id. In addition, a
federal court may, in its discretion, decline to recognize and enforce a tribal judgment on
equitable grounds, including the following circumstances: (1) the judgment was obtained
by fraud; (2) the judgment conflicts with another final judgment that is entitled to
recognition; (3) the judgment is inconsistent with the parties’ contractual choice of
forum; or (4) recognition of the judgment, or the cause of action upon which it is based,
Memorandum Decision & Order – page 19

is against the public policy of the United States or the forum state in which recognition of
the judgment is sought. Id. “Unless the district court finds the tribal court lacked
jurisdiction or withholds comity for some other valid reason, it must enforce the tribal
court judgment without reconsidering issues decided by the tribal court.” AT&T Corp. v.
Coeur d’Alene Tribe, 295 F.3d 899, 903-04 (9th Cir. 2002).
FMC has challenged the Tribal Judgment on jurisdictional and due process
grounds. The Court reviews the Tribal Courts’ legal rulings de novo. See FMC v.
Shoshone-Bannock Tribes, 905 F.2d 1311 (9th Cir. 1990) (holding that in reviewing
Tribal court judgments, “[f]ederal legal questions should therefore be reviewed de novo).
The Tribes have the burden of proving jurisdiction, while FMC has the burden of proving
a lack of due process. See generally Bank Melli Iran v. Pahlavi, 58 F.3d 1406, 1408 (9th
Cir.1995).1
The Court will turn first to the jurisdictional challenge.
ANALYSIS
First Montana Exception
The pending motions raise the issue whether the Tribes had jurisdiction to impose
a $1.5 million fine on FMC for actions taken on land owned in fee by FMC within
Reservation boundaries. In Montana v. U.S, 450 U.S. 544 (1981), the Supreme Court

1

Pahlavi discusses but does not resolve the burden of proof on due process issues.
But the discussion in that case clearly leans toward finding that the party claiming a lack
of due process has the burden of proving that defense. Id. at 1409 (quoting with approval
a leading federal court treatise so finding, and commenting that “a strong argument can
be made that a claimed lack of due process should be treated as a defense”).
Memorandum Decision & Order – page 20

held that with two exceptions, the “inherent sovereign powers of an Indian tribe do not
extend to the activities of nonmembers of the tribe” on privately-owned fee lands within a
reservation. Id. at 565. The Tribes have the burden of proving that one of the two
exceptions apply here. Plains Commerce Bank v. Long Family Land & Cattle Co., 554
U.S. 316, 330 (2008).
The first exception provides that “a tribe may regulate through taxation,
licensing, or other means, the activities of non-members who enter into consensual
relationships with the tribe or its members, through commercial dealing, contracts,
leases, or other arrangements.” Id. at 565-66. In a decision issued 16 years after
Montana, the Supreme Court described the scope of the first exception by explaining that
what the Court “had in mind” was contained in a list of cases cited in Montana, including
Morris v. Hitchcock, 194 U.S. 384 (1904), a case upholding a tribal permit tax on
nonmember-owned livestock within boundaries of a reservation. Strate v. A-1
Contractors, 520 U.S. 438, 457 (1997).
In the Morris case, the Chickasaw Nation required that any non-member grazing
cattle on Reservation land must obtain a permit and pay a permit tax of 25 cents per head.
Cattle owners who had contracts with individual Chickasaw Nation members to graze
cattle on their land failed to pay the permit tax and were threatened with seizure of their
cattle. The cattle owners responded by filing suit, claiming the Chickasaw Nation had no
jurisdiction to impose the tax on non-Tribal members. The Supreme Court in Morris
upheld the right of the Chickasaw Nation to impose the tax. More than ninety years later,
the Supreme Court in Strate confirmed the correctness of that ruling by pointing to the
Memorandum Decision & Order – page 21

consensual relationship between the cattle owners and individual members of the
Chickasaw Nation as satisfying the consensual relationship prong of Montana.
The same type of consensual relationship exists here. In the series of letters
discussed above, FMC agreed to obtain a Tribal permit to do the work necessary to
comply with the Consent Decree. FMC then affirmed its consensual relationship with the
Tribes by signing the Consent Decree, which required FMC to obtain Tribal permits.
FMC then cited its consensual relationship with the Tribes to this Court and the Ninth
Circuit as part of its argument that the Decree should be approved.
FMC complains that this agreement was a product of duress, but the Tribes only
took advantage of their bargaining leverage, a long-standing practice in the sharpelbowed corporate world in which FMC does business every day. FMC had a strong
desire to obtain a Consent Decree from the EPA, but the EPA was insisting that FMC
obtain Tribal permits. The Tribes, recognizing their superior bargaining position, used
that leverage to extract a high price for the permits. FMC paid the price because the
Tribal permit was a key component to obtaining the Consent Decree, which in turn was
worth the price of the Tribal permit. This was a simple business deal, not the product of
illegal duress or coercion. FMC cites no case law holding that Montana’s exception does
not apply when the consensual relationship is formed begrudgingly or by one party taking
advantage of bargaining leverage.
FMC argues at length that it never agreed to submit to Tribal jurisdiction. This
argument is a red herring. As Montana, Strate and Morris make clear, it is the
consensual relationship that triggers Tribal jurisdiction, regardless of whether a separate
Memorandum Decision & Order – page 22

agreement to submit to jurisdiction exists. Even if a party like FMC could preserve an
objection to jurisdiction at the same time it entered into a consensual relationship – a
theory without legal support in FMC’s briefing – FMC never made that objection before
entering into the consensual relationship. Finally, even if the red herring argument is
pursued, the exchange of letters discussed above shows that FMC agreed to submit to
Tribal Court jurisdiction to obtain the permit they so badly wanted and needed.
For all of these reasons, the Court finds that the Tribal Courts had jurisdiction
under Montana’s first exception to resolve disputes over the Tribal permit FMC agreed to
obtain authorizing it to dispose and store hazardous waste within Reservation boundaries.
Second Montana Exception
Tribal jurisdiction exists under the second Montana exception when “the conduct
of non-Indians on fee lands within its reservation . . . threatens or has some direct effect
on the political integrity, the economic security, or the health or welfare of the tribe.”
Montana, 450 U.S. at 566. For a tribe to have authority over nonmember conduct, “[t]he
conduct must do more than injure the tribe, it must ‘imperil the subsistence’ of the tribal
community.” Plains Commerce Bank v. Long Family Land & Cattle Co., Inc., 554 U.S.
316, 341 (2008). Thus, “Montana’s second exception does not entitle the tribe to
complain or obtain relief against every use of fee land that has some adverse effect on the
tribe.” Evans v. Shoshone-Bannock Land Use Policy Comm’n, 736 F.3d 1298, 1306 (9th
Cir. 2013). Rather, the challenged conduct must be so severe as to “fairly be called
catastrophic for tribal self-government.” Plains Commerce, 554 U.S. at 341 (internal

Memorandum Decision & Order – page 23

quotation and citation omitted). The fine imposed by the Tribal Judgment must be
“necessary to avert catastrophe.” Evans, supra at 1306 n.8. (9th Cir. 2013).
Here, the EPA has taken substantial steps to contain the toxic waste and prevent
harm. But the threat remains: The EPA itself found in 2013 that the toxic waste “may
constitute an imminent and substantial endangerment to public health or welfare or the
environment.” See 2013 Unilateral Administrative Order for Remedial Design and
Remedial Action No. CERLCA-10-2013-0116 (June 10, 2013). Because the EPA intends
to leave the waste on the site indefinitely, and because the waste’s toxicity has such a
long life – decades, if not longer – there is a real risk that no matter how well its
containment system is designed, the system may fail.
That risk becomes much less abstract when the containment system’s ability to
contain three lethal gases – phosphine, hydrogen cyanide, and hydrogen sulfide – is
examined. According to the EPA, each of these gases is “immediately dangerous to life
and health” at different concentrations. See EPA Unilateral Administrative Order for
Removal Action at ¶¶ 20-23. In 1999, the EPA ordered FMC to close and cap pond 16S,
located entirely within Reservation boundaries, and in 2005 FMC certified that it had
capped and closed the pond in accordance with the EPA-approved closure plan. Id. at
¶ 12 at 332332. But a year later, in 2006, monitoring revealed that dangerous levels of
phosphine gas, hydrogen cyanide gas, and hydrogen sulfide gas were “being generated
within the cap at pond 16S.” Id. at ¶ 19. In addition, air samples showed that hydrogen
sulfide gas had escaped from the pond and was being carried downwind. Id. In a later
report, the EPA found that in 2005, 2006, 2007, and 2009, levels of phosphine gas in the
Memorandum Decision & Order – page 24

surrounding air were high enough to require workers in the area to either delay work or
leave the area for their safety. See EPA Unilateral Administrative Order for Removal
Action at ¶¶ 17-23 at 5707-09.
It is true that these releases were discovered and stopped, and that there is no
evidence that anyone was harmed. At the same time, however, these EPA reports
demonstrate that the waste sites are not reservoirs of passive liquid that can be contained
with a simple dam. Instead, these sites are generating lethal gases that accumulate under
pressure beneath the pond covers. In other words, they pose a constant and deadly threat
to the Tribes, a real risk of catastrophic consequences should containment fail. And
despite the best efforts of the EPA, there have been releases of these lethal gases. Indeed
the EPA itself has concluded in 2010 that “[c]oncentrations of phosphine, hydrogen
cyanide and hydrogen sulfide gas accumulating within the Pond 16S cap and being
released may present an imminent and substantial endangerment to human health and the
environment.” Id. at 19 (emphasis added). In even broader terms, the EPA concluded in
2013 that the waste sites “may constitute an imminent and substantial endangerment to
public health or welfare or the environment.” See EPA Unilateral Administrative Order
for Remedial Design and Remedial Action (June 10, 2013).
The Tribal Appellate Court heard testimony from a former EPA official who
worked at the agency for 36 years, David Reisman, who concluded that these lethal gases
were escaping from the waste sites and that the EPA’s monitoring procedures were not
sufficient to detect all the releases. See Trial Transcript, Vol II at 331-33. It is no
wonder that the Tribal Appellate Court concluded that “[n]o evidence has been offered to
Memorandum Decision & Order – page 25

rebut the conclusion that if any of the containment efforts fail for any reason, escape of
the toxic waste or any of its by-products at certain levels could prove catastrophic to the
tribe, its members, its environment, its health, safety and welfare.” See 8547.
This dangerous threat can only be contained, not removed or treated. The EPA
has concluded there is “no technologies that could reliably, safely, and effectively be
utilized to excavate and treat the elemental phosphorus-contaminated wastes” at the site.
See 2012 Interim Record of Decision Amendment at p. 78. Removal would involve
excavating 780,000 yards of contaminated soil, much of it “at a significant depth (up to
85 feet bgs [below ground surface]) and unevenly distributed throughout the soil
column.” Id. The EPA concluded that safe treatment and removal was not
technologically feasible, but even if it was, it would cost $4.7 billion, an amount one
hundred times greater than the cost of containment ($47 million). Id. at pp. 65, 83-84.
And so there it sits. For how long? The EPA calculated its cost – the $47 million
figure – by estimating that containment must continue for at least 30 years. Id. at p. 65
(also estimating that treating all the waste would take up to 44 years).
In Evans, the Circuit held that Tribes failed to show that a catastrophic risk was
posed by the construction of a single-family house that might cause groundwater
contamination, and that the Tribes therefore lacked jurisdiction over the home builder
under the second Montana exception. Evans, 736 F.3d at 1306. By comparison, the
threat in this case is many levels of magnitude greater than the threat in Evans. FMC’s
waste is radioactive, carcinogenic, poisonous, and massive in size. It is so toxic that there
is no safe way to remove it, ensuring that it will remain on the Reservation for decades.
Memorandum Decision & Order – page 26

While the EPA’s containment program is extensive, it has not prevented lethal phosphine
gas from escaping. Moreover, the EPA cannot say how deep and widespread the deadly
plume of phosphorus extends underground, beyond estimating that it already extends 85
feet below the surface.
Under the standard discussed in Evans, the record shows conclusively that a
failure by the EPA to contain the massive amount of highly toxic FMC waste would be
catastrophic for the health and welfare of the Tribes. This is the type of threat that falls
within Montana’s second exception.
Due Process
Having found that the Tribal Appellate Court had jurisdiction to resolve disputes
over FMC’s hazardous waste permits, the Court turns next to FMC’s argument that it was
denied due process in the Tribal Courts. The governing legal standard was set forth in
Marchington, 127 F.3d at 811:
Due process, as that term is employed in comity, . . . [requires] that there
has been opportunity for a full and fair trial before an impartial tribunal that
conducts the trial upon regular proceedings after proper service or
voluntary appearance of the defendant, and that there is no showing of
prejudice in the tribal court or in the system of governing laws.
FMC argues that the Tribal Appellate Court was not impartial, citing the statements
made by Judges Gabourie and Pearson, discussed above, showing that they were biased
in favor of the Tribes. But FMC asked the Tribal Appellate Court to reconsider the ruling
by those Judges, and that was done by a new panel that did not include either Judge
Gabourie or Judge Pearson. So even if the prior panel was biased, a new panel was

Memorandum Decision & Order – page 27

convened that independently came to the same conclusion, removing any due process
concern.
That new panel was comprised of a former Justice on the Idaho Supreme Court
(Judge Cathy Silak), a retired Idaho District Court Judge (Judge Peter McDermott), and a
practicing attorney (Vern Herzog Jr.). After that decision was rendered, John Traylor
replaced Cathy Silak on the panel that resolved the issue of the second Montana
exception following an evidentiary hearing. Judge Traylor is a licensed attorney, was a
former Trial Court Administrator for both the Tribal Courts and the Ada County State
Courts in Idaho, and served as Director of Planning and Zoning for Ada County. He
currently does private consulting work.
Each of these Judges has had a long and distinguished career in Idaho. There is no
evidence whatsoever that they were biased in favor of the Tribes or against FMC. There
is also no evidence that these Judges were stooges for the Tribal Council. The Judges all
have careers that are independent of any reliance on the Tribal Council, and there is
nothing in the record suggesting that the Council had any influence over them.
After examining the entire record, the Court finds that FMC received a full and
fair trial before an impartial Tribal Appellate Court, and can find no prejudice there or in
the Tribal laws.
Comity Analysis
From the discussion above, the Tribes had jurisdiction under both the first and
second Montana exceptions to resolve disputes over the permits issued to FMC allowing
it to store toxic wastes within the Reservation boundaries. The next issue to resolve is
Memorandum Decision & Order – page 28

whether the annual permit fee is so prejudicial or unfair to FMC that it cannot be
enforced under the comity analysis in Marchington.
The scope of the Tribes jurisdiction depends on its source. If the source is the
second Montana exception, the permit fee must have some relationship to the Tribe’s
obligation to protect the health and safety of Tribal members. Here, the EPA is
undertaking a substantial role in protecting the Tribes. From the discussion above, the
EPA’s containment program is not fail-safe, and the Tribes are reasonable in their desire
to provide an additional level of protection to supplement the EPA’s program. Having
jurisdiction under the second Montana exception, the Tribes are authorized to assess a
permit fee that has some nexus to the costs of supplementing the EPA’s program to fully
protect the health and safety of Tribal members. Yet the Tribes have never explained
why an annual fee of $1.5 million is necessary to provide that supplemental protection.
For example, what are the monitoring or containment costs that the Tribes expect to incur
to shore up the weak points in the EPA’s program? There may be legitimate reasons
justifying the Judgment amount, but they have never been explained, and FMC has never
had an opportunity to address them. Under Marchington’s comity analysis, it would be
unfairly prejudicial to enforce the permit fee imposed by the Tribal Appellate Court
under the second Montana exception.
This conclusion changes when the Judgment is examined under the first Montana
exception. Under Montana’s first exception, Tribal jurisdiction is based on the
consensual relationship between FMC and the Tribes. FMC agreed to obtain a use permit
under the Amendments to Chapter V of the Fort Hall Land Use Operative Policy
Memorandum Decision & Order – page 29

Guidelines, and pay a $1.5 million annual fee for that permit. What was FMC consenting
to under those regulations? FMC agreed to obtain a permit to “store” hazardous waste
“which may remain at the site for a perpetual period of time.” See Chapter V § 91(1)(A)(xiii). Moreover, as discussed above, FMC agreed that its obligation would
extend beyond three identified ponds and encompass all wastes at the plant.
Thus, FMC agreed to pay the annual permit fee for as long as it stored the waste
on the site. The EPA has estimated that it will spend $47 million over 30 years to clean
up FMC’s mess. That is just over $1.5 million a year, about the same sum as FMC
agreed to pay, an indication that the $1.5 million sum is neither exorbitant nor unfair.
FMC argues that its obligation to pay the fee should end when it closed its plant,
but there is nothing in the negotiations or series of letters that conditions the annual fee
on the FMC plant being operational. This absence was certainly noticed (or should have
been noticed) by FMC’s attorneys, but FMC never attempted to negotiate any
modifications to add such a condition. FMC was anxious to obtain the permit along with
the Consent Decree, and so the inevitable delays that would result from negotiations over
an expiration date would have been unacceptable to FMC. After all, the Consent Decree
allowed FMC to dump the toxic mess it had created in the EPA’s lap by paying a small
fine of $11.9 million along with a few million dollars in construction commitments. That
was a sweetheart deal and FMC was desperate to grab it. FMC’s arguments that its cadre
of attorneys had no idea that they were agreeing to a permit fee with no expiration date is
ludicrous.

Memorandum Decision & Order – page 30

For all of these reasons, the Judgment passes Marchington’s comity analysis under
Montana’s first exception.
CONCLUSION
Based on the analysis above, the Court makes the following findings as a matter of
law: (1) The Tribes have jurisdiction over FMC under Montana’s first and second
exceptions to impose a requirement that FMC obtain a permit to store waste within the
Reservation and charge a fee for that permit; (2) The Tribal judicial process generally,
and the Tribal Appellate Court Judgment specifically, did not violate FMC’s due process
rights; (3) Under Montana’s first exception, the Tribal Appellate Court properly
exercised its jurisdiction to impose a $1.5 million annual permit fee for as long as the
hazardous waste is stored within the Reservation; (4) Under Montana’s second exception,
the Tribal Appellate Court failed to properly exercise its jurisdiction when it did not
explain why $1.5 million was needed each year to protect against the threat posed by
FMC’s storage of hazardous waste within the Reservation.
Based on these findings, the Court will (1) grant the Tribes’ motion to enforce the
Judgment under Montana’s first exception; (2) grant in part the Tribes’ motion to enforce
the Judgment under Montana’s second exception, finding that the Tribes had jurisdiction
under Montana’s second exception, but refusing to enforce the Judgment on this ground
because the Tribes failed to explain why $1.5 million was needed annually; (3) grant in
part the Tribes’ motion for summary judgment on the due process and enforcement
issues, finding no due process violation, and finding that the Judgment shall be enforced

Memorandum Decision & Order – page 31

under Montana’s first exception but not the second exception; and (4) deny FMC’s
motion for declaratory judgment and an injunction against enforcing the Judgment
ORDER
In accordance with the Memorandum Decision set forth above,
NOW THEREFORE IT IS HEREBY ORDERED that the Tribes’ motion to
enforce the Judgment under Montana’s first exception (docket no. 64) is GRANTED.
IT IS FURTHER ORDERED, that the motion to enforce the Judgment under
Montana’s second exception (docket no. 65) is GRANTED IN PART AND DENIED IN
PART. It is granted to the extent it seeks a ruling that the Tribes had jurisdiction over
FMC under Montana’s second exception to impose an annual permit fee to store
hazardous waste within the Reservation, but is denied to the extent it seeks to enforce the
Judgment of an annual permit fee of $1.5 million, for the reasons discussed above.
IT IS FURTHER ORDERED, that the motion for summary judgment on due
process and to enforce judgment (docket no. 66) is GRANTED IN PART AND DENIED
IN PART. It is granted to the extent it seeks a ruling that there was no due process
violation, that jurisdiction was proper under both Montana exceptions, and that the
Judgment is enforceable under Montana’s first exception, but is denied to the extent it
seeks a ruling that the Judgment is enforceable under Montana’s second exception.
IT IS FURTHER ORDERED, that FMC’s motion for declaratory judgment and
permanent injunction (docket no. 67) is DENIED.
IT IS FURTHER ORDERED, that the Court will issue a separate Judgment as
required by Rule 58(a).
Memorandum Decision & Order – page 32

DATED: September 28, 2017

_________________________
B. Lynn Winmill
Chief Judge
United States District Court

Memorandum Decision & Order – page 33