Burley et al v. Burlington Northern and Santa Fe Railway Company et al

Filing 164

FINDINGS AND RECOMMENDATIONS: IT IS RECOMMENDED that BNSF's 118 Partial MOTION to Dismiss for Lack of Jurisdiction Based on Pre-Enforcement Review be DENIED. Objections to F&R due by 1/4/2010. Signed by Magistrate Carolyn S Ostby on 12/18/2009. (NOB)

I N THE UNITED STATES DISTRICT COURT F O R THE DISTRICT OF MONTANA B I L L I N G S DIVISION D A V E BURLEY and JEANNIE BURLEY, Plaintiffs, vs. B U R L I N G T O N NORTHERN & S A N T A FE RAILWAY C O M P A N Y , a foreign corporation, f/k /a BURLINGTON NORTHERN R A I L R O A D COMPANY, a D e la w a r e Corporation, Defendants. D I A N A AND KENNETH M E R ID E T H , Plaintiffs, vs. B U R L I N G T O N NORTHERN & S A N T A FE RAILWAY C O M P A N Y , a foreign corporation, f/k /a BURLINGTON NORTHERN R A I L R O A D COMPANY, a D e la w a r e Corporation, Defendants. F I N D I N G S AND R E C O M M E N D A T I O N OF U N I T E D STATES M A G I S T R A T E JUDGE ON BNSF's M O T I O N TO DISMISS FOR LACK O F JURISDICTION BASED ON P R E - E N F O R C E M E N T REVIEW C V -0 7 -1 4 7 -B L G -R F C -C S O

C V -0 8 -3 0 -B L G -R F C -C S O

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D A N A NELSON, Plaintiff, vs. B U R L I N G T O N NORTHERN & S A N T A FE RAILWAY C O M P A N Y , a foreign corporation, f/k /a BURLINGTON NORTHERN R A I L R O A D COMPANY, a D e la w a r e Corporation, Defendants.

CV-07-148-BLG-RFC-CSO

Plaintiffs initiated these actions alleging that Defendants B u r lin g t o n Northern & Santa Fe Railway Company and Burlington N o r t h e r n Railroad Company ("BNSF") contaminated Plaintiffs' property in Livingston, Montana. Plaintiffs allege that BNSF's operations at its fo r m e r Livingston rail yard ("Livingston site") released diesel, oil, and o t h e r hydrocarbons into the environment that ultimately contaminated t h e groundwater, soil, and air on the Plaintiffs' property.1 Id. They seek c o m p e n s a t o r y , punitive, and restoration damages.

See Burley v. BNSF, CV 07-147-BLG-RFC-CSO ("Burley"), Am. C m p lt . (Court Doc. 19) at ¶¶ 9-15; Meredith v. BNSF, CV 08-30-BLGR F C -C S O ("Meredith"), Am. Cmplt. (Court Doc. 19) at ¶¶ 9-15; and N e ls o n v. BNSF, CV 07-148-BLG-RFC-CSO ("Nelson"), Am. Cmplt. (C o u rt Doc. 16) at ¶¶ 9-15.
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B N S F moves for partial dismissal under Rules 12(b)(1) and 1 2 (h )(3 ).2 BNSF also requests a hearing on the motion. For the reasons d is c u s s e d below, the Court recommends that BNSF's motion be denied. Also, the Court concludes that a hearing is not necessary for resolution o f the instant motions because BNSF has been given the opportunity t h r o u g h briefing to present its arguments.3 Thus, the Court denies B N S F 's request for a hearing. I. BACKGROUND T h e Court and parties are familiar these matters' factual and p r o c e d u r a l backgrounds. Also, the background of each case is detailed in it s record. Thus, the Court will not repeat the background here except a s necessary to explain this ruling.

References to rules herein are to the Federal Rules of Civil P r o c e d u r e unless otherwise indicated.
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R u le 12(i) provides that a defense under Rule 12(b)(1) made by m o t io n "must be heard and decided before trial unless the court orders a d e f e r r a l until trial." Generally, however, a movant is not entitled to o r a l argument or a hearing on the motion. Rather, whether to permit a r g u m e n t or a hearing is within the court's discretion. See Greene v. W C I Holdings Corp., 136 F.3d 313, 316 (2d Cir. 1998) ("Every circuit to c o n s id e r the issue has determined that the `hearing' requirements of R u le 12 . . . do not mean that an oral hearing is necessary, but only r e q u ir e that the party be given the opportunity to present its views to t h e court") (citing cases); see also Pueschel v. U.S., 369 F.3d 345, 354 ( 4 th Cir. 2004).
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II.

P A R T I E S ' ARGUMENTS B N S F argues that Plaintiffs' claims for restoration damages must

b e dismissed because the Court lacks subject matter jurisdiction. BNSF's Br. in Support of Partial Mtn. to Dismiss (Court Doc. 119) at 4.4 I n support of its motion, BNSF argues as follows: B N S F presently is conducting remedial cleanup at the Livingston s i t e under a modified partial consent decree ("Decree") entered in State o f Montana v. BNSF Railway Company, CV-88-141-H-DWM-RKS. The D e c r e e charged Montana's Department of Environmental Quality (" D E Q " ) with selecting a remedy for the site, as contemplated in M o n t a n a 's Comprehensive Environmental Cleanup and Responsibility A c t ("CECRA"), MCA §§ 75-10-701, et seq. DEQ selected the remedy in 2001. T h e remedy is now being implemented under the Decree, a DEQ is s u e d record of decision ("ROD"), and a DEQ statement of work (" S O W " ). "[U]nder DEQ's direction, [BNSF] is legally bound by the D e c r e e to implement the authorized remedy, which set specific clean-up

Page numbers herein refer to the number reflected on the Court's e le c t r o n ic filing system.
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le v e ls . " Plaintiffs, through their restoration damages claims, seek "to im p le m e n t a wholly distinct remedy at the same location." Id. T h e Court lacks subject matter jurisdiction to hear these claims b e c a u s e : (1) the Decree and DEQ-issued SOW are "orders" under Section 7 1 1 (b ) of CECRA, Montana's remediation implementation statute; (2) P la in tiffs ' claims for restoration damages improperly "challenge the c le a n u p currently ongoing pursuant to the Decree and DEQ order r e q u ir in g BNSF to take remedial action"; (3) CECRA allows a court to r e v ie w an order issued under Section 711 of CECRA only under the lim it e d situations set forth in MCA § 75-10-711(6); (4) none of the S e c t io n 711(6) situations under which a court may review a Section 711 o r d e r apply to Plaintiffs' restoration demands here; (5) Section 711 of C E C R A is patterned after Section 113(h) of the federal Comprehensive E n v ir o n m e n ta l Response, Compensation, and Liability Act of 1980 (" C E R C L A " ), which prohibits review of orders relating to remedial action s o that sites are cleaned up swiftly without the burden of collateral la w s u it s ; and (6) Plaintiffs' restoration damages demands improperly s e e k review of CECRA Section 711 orders. Court Doc. 119 at 5-12.

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P la in t iffs respond that the Court should deny BNSF's motion for t h r e e principal reasons. Pltfs' Br. in Opposition to BNSF's Mtn. to D is m is s (Court Doc. 138) at 5. First, they argue, BNSF's motion is fo r e clo s e d by the Montana Supreme Court's decision in Sunburst Sch. D is t . No. 2 v. Texaco, Inc., 165 P.3d 1079, 1092 (Mont. 2007), which held t h a t no conflict exists between CECRA and common law restoration d a m a g e s claims such as the ones they assert here. Id. at 5-6. S e c o n d , Plaintiffs argue, a request to review a Section 711 order is n o t before the Court in this case. They are not asking this Court or any o t h e r court to review or modify provisions of the existing Decree or any a c tio n s taken by the DEQ under CECRA. Instead, Plaintiffs argue, they a r e seeking "restoration damages . . . available to them to restore their p r o p e r t ie s under Sunburst." Id. at 7-8. The Decree itself, they argue, recognizes individuals' rights to bring their own actions against BNSF a n d the Decree also does not release BNSF from liability for im p le m e n ta tio n of the selected remedy. Id. T h ir d , Plaintiffs argue that no inconsistency exists between their r e s t o r a tio n damages claims and CECRA. In support of this proposition, t h e y argue that: (1) the presently-underway remediation plan "is in a

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s t a t e of flux" and there exists no final remediation plan that would c o n flic t with the remedies Plaintiffs seek, id. at 8-9; (2) standards for the D E Q remediation under CECRA are different from those mandated by la w for restoration, which difference demonstrates Plaintiffs' claims for r e s t o r a tio n damages are not the same as DEQ's remediation efforts, id. a t 10-11; (3) BNSF has presented no evidence that Plaintiffs' restoration p la n s are "wildly different" from DEQ's remediation plan as BNSF a r g u e s , nor will Plaintiffs' restoration plans interfere with DEQ's r e m e d ia tio n plan, id. at 11; (4) BNSF has made a restoration assessment b u t will not disclose it to Plaintiffs, so "[i]t can only be presumed the p la n would be consistent with the Plaintiffs' plan[,]" id. at 12-13; (5) B N S F cannot show that DEQ would not approve Plaintiffs' restoration p la n , which further demonstrates that Plaintiffs' plan is not in conflict w it h DEQ's remediation plan, id. at 13-14; and (6) the federal CERCLA c a s e s upon which BNSF relies are not applicable where the Sunburst d e cis io n controls, id. at 14. B N S F replies that Plaintiffs' reliance on Sunburst is misplaced. BNSF's Reply (Court Doc. 154) at 3. In Sunburst, BNSF argues, "the d e f e n d a n t argued that a DEQ-led CECRA cleanup forever preempted

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p riv a te plaintiffs from asserting a claim for restoration damages" and t h e supreme court rejected that argument. Id. The Sunburst decision d id not address, however, Section 711(6)'s pre-enforcement review bar. Thus, BNSF argues, Sunburst does not control here. Id. Also, in sum, B N S F argues that Plaintiffs' restoration damages demands improperly s e e k to review DEQ's Section 711 orders before completion of the c le a n u p currently underway, id. at 4-7. III. S T A N D A R D OF REVIEW I n considering a Rule 12(b)(1) motion to dismiss, the Court is m in d fu l that the party asserting federal court jurisdiction bears the b u r d e n of establishing that such jurisdiction exists. Kokkonen v. G u a r d ia n Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). "A motion to d is m is s for lack of subject matter jurisdiction may either attack the a lle g a t io n s of the complaint or may . . .'" attack the existence of subject m a t t e r jurisdiction as a matter of fact. Thornhill Publishing Co. v. G e n e r a l Tel. & Elect., 594 F.2d 730, 733 (9 th Cir. 1979). I n instances such as this, in which BNSF is challenging the fact of t h e Court's subject matter jurisdiction with respect to restoration d a m a g e s demands, BNSF "can attack the substance of a complaint's

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ju r is d ic tio n a l allegations despite their formal sufficiency, and in doing so r e ly on affidavits or any other evidence properly before the court." St. C la ir v. City of Chico, 880 F.2d 199, 201 (9 th Cir. 1989). In factual c h a lle n g e s to subject matter jurisdiction, "[n]o presumptive truthfulness a t t a c h e s to plaintiff's allegations, and the existence of disputed material fa ct s will not preclude the trial court from evaluating for itself the m e r it s of jurisdictional claims." Thornhill, 594 F.2d at 733 (citation o m it t e d ) . Nevertheless, where the jurisdictional and substantive issues " a re so intertwined that the question of jurisdiction is dependent on the r e s o lu t io n of factual issues going to the merits, the jurisdictional d e t e rm in a t io n should await a determination of the relevant facts on e ith e r a motion going to the merits or at trial." Augustine v. United S t a t e s , 704 F.2d 1074, 1077 (9 th Cir. 1983). IV . D IS C U S S IO N T h e primary issue before the Court, as framed by BNSF, is w h e t h e r CECRA's Section 711(6) divests this Court of jurisdiction over P la in t if fs ' restoration damages demands because the statute "protects t h e implementation of a cleanup from lawsuits that might interfere with t h e cleanup effort." Court Doc. 154 at 2. For the reasons that follow, the

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C o u r t concludes that Section 711(6) does not divest the Court of subject m a tt e r jurisdiction over Plaintiffs' restoration damages demands and, t h e r e fo r e , recommends that BNSF's motion be denied. S e c t io n 711(6), which BNSF argues is a "pre-enforcement review b a r ," provides: (6 ) A court has jurisdiction to review an order issued under 7 5 -1 0 -7 0 7 or this section only in the following actions: (a ) a n action under 75-10-715 to recover r e m e d ia l action costs or penalties or for c o n tr ib u t io n ; a n action to enforce an order issued under 7 5 -1 0 -7 0 7 or this section; a n action to recover a civil penalty for v io la t io n of or failure to comply with an o r d e r issued under 75-10-707 or this section; or a n action by a person to whom an order has b e e n issued to determine the validity of the o r d e r , only if the person has been in c o m p lia n c e and continues in compliance with t h e order pending a decision of the court.

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M C A § 75-10-711(6). T h e Montana Supreme Court has not expressly addressed Section 7 1 1 (6 ). In this Court's opinion, however, the supreme court in Sunburst s p o k e of CECRA's relationship to common law claims in terms s u ffic ie n tly expansive to encompass the question at hand.

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I n Sunburst, a school district and approximately ninety adjoining p riv a te property owners sued Texaco for damages after benzene m ig ra t e d onto their properties from Texaco's nearby refinery. 165 P.3d a t 1083. Plaintiffs prevailed at trial. Texaco appealed. Id. T h e supreme court addressed, among other issues: "Whether the C o m p r e h e n s iv e Environmental Cleanup and Responsibility Act (C E C R A ) preempts a common law action for restoration damages." Id. Texaco argued that a restoration damages award "would interfere with C E C R A 's delegation to DEQ to determine the standard for cleanup and t o determine any plan for remediation." Id. at 1090 (citing MCA § 75-107 2 1 ). The supreme court began its analysis by generally reciting a p p lic a b le Montana law: T h e common law applies in Montana whenever it does not c o n flic t with a statute. A presumption exists against s ta t u t o r y preemption of common law claims. A statute does n o t take away common law claims except to the extent that t h e statute expressly or by necessary implication declares. I d . at 1091 (citations omitted). T h e supreme court first addressed whether CECRA expressly p r e e m p t s common law claims. In noting that "CECRA does not

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e x p lic it ly prohibit common law claims[,]" the supreme court declined to " a d d to CECRA a prohibition against common law claims that seek to r e c o v e r restoration damages where the legislature has declined to do so." Id. T h e supreme court next addressed Texaco's contention that C E C R A preempts common law claims "by necessary implication[.]" Id. In rejecting this contention, the supreme court noted its agreement with t h e proposition that "CECRA's focus on cost effectiveness and limits on h e a lt h -b a s e d standards differ from the factors to be considered in a s s e s s in g damages under the common law." Id. at 1092. The supreme c o u rt concluded by holding: N o th in g in CECRA preempts a common law claim that seeks t o recover restoration damages to remediate contamination b e y o n d that statute's health-based standards. We conclude t h a t no conflict exists between DEQ's supervisory role under C E C R A and restoration damages awarded under the common la w . We further conclude that nothing in CECRA precludes a c o m m o n law claim by necessary implication. Id . T h e Court concludes that Sunburst controls here. The Montana S u p r e m e Court's explicit determination that "[n]othing in CECRA p r e e m p t s a common law claim that seeks to recover restoration damages

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t o remediate contamination beyond the statute's health-based s t a n d a r d s " is determinative of the motion at hand. In expressly holding t h a t nothing in CECRA preempts a claim under Montana common law fo r restoration damages, the supreme court foreclosed BNSF's argument t h a t the statute divests this Court of subject matter jurisdiction over P la in t if fs ' claims for restoration damages. Although BNSF argues that Sunburst did not address specifically Section 711(6), this Court cannot ig n o r e the supreme court's broadly sweeping pronouncement where ju ris d ic t io n here is based on diversity and this Court must follow the s u b s t a n t iv e law of Montana. Erie Ry. Co. v. Tompkins, 304 U.S. 64, 78 (1 9 3 8 ). The Court has reviewed the federal cases cited by BNSF which h a v e held that section 113(h) of CERCLA, 42 U.S.C. § 9613(h), withholds fe d e r a l jurisdiction to review citizen suits and other actions that c h a lle n g e ongoing CERCLA cleanup actions. See, e.g., McClellan E c o lo g ic a l Seepage Situation v. Perry, 47 F.3d 325, 331 (9th Cir. 2009). If CERCLA applied here, the outcome perhaps would be different. But b e c a u s e CECRA controls, and the Montana Supreme Court has declared t h a t "[n]othing in CECRA preempts a common law claim that seeks to

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r e c o v e r restoration damages," the Court here need not refer to decisions u n d e r CERCLA for guidance. T w o additional factors bolster the Court's conclusion. First, P la in t iffs maintain that they do not seek "review" of DEQ's remediation p la n or any Section 711(6) order as BNSF argues. Rather, relevant to t h e motion at hand, Plaintiffs argue that they seek only "compensatory r e s t o r a t io n damages" to the extent that they are available under Sunburst. Court Doc. 138 at 7. On the current record, the factual p a r a m e t e r s of any planned or intended property remediation or r e s t o r a t io n are not sufficiently established to permit a ruling, as a m a t te r of law, that Section 711(6) operates to divest this Court of subject m a t t e r jurisdiction. Dismissal of Plaintiffs' restoration damages claims fo r the Court's lack of jurisdiction, therefore, would be premature and in a p p r o p ria te . For this reason, too, BNSF's motion should be denied. S e c o n d , the record also does not support the notion that DEQ's role a t the Livingston site is as determinative of this Court's subject matter ju r is d ic t io n as BNSF urges here. As Judge Strong observed in his April 3 0 , 2008, Findings and Recommendation in State of Montana v. BNSF R a ilw a y Company,:

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T h e Montana DEQ . . . plays a pivotal role here. It sued to o b ta in and must oversee the cleanup. Yet the DEQ sees no n e c e s s a ry conflict between this Court's jurisdiction and the I n te r v e n o r s ' restoration damages action in state court. The C o u r t as well does not see any direct current or necessary f u t u r e conflict. C V -8 8 -1 4 1 -H -D W M -R K S , Court Doc. 137 at 9 (attached as Ex. 1 to Pltfs' B r . (Court Doc. 138-1 at 9)).5 T h is previous determination further supports the Court's c o n clu s io n herein. Having concluded that BNSF's motion fails for the r e a s o n s stated, the Court does not address the parties' other arguments. V. C O N C L U S IO N B a s e d on the foregoing, IT IS RECOMMENDED that BNSF's m o t io n s for partial dismissal under Rules 12(b)(1) and 12(h)(3) (in CV 0 7 -1 4 7 -B L G -R F C -C S O , Court Doc. 118; in CV 08-30-BLG-RFC-CSO, C o u rt Doc. 93; and in CV 07-148-BLG-RFC-CSO, Court Doc. 90) be D E N IE D . A ls o , I T IS ORDERED that the Clerk shall serve a copy of these F in d in g s and Recommendation of United States Magistrate Judge upon t h e parties. The parties are advised that, under to 28 U.S.C. § 636, any Judge Molloy adopted in full Judge Strong's Findings and R e c o m m e n d a t io n s in an Order filed July 8, 2008. CV-88-141-H-DWMR K S , Court Doc. 140 at 2.
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o b je c t io n s must be filed with the Clerk of Court and copies served on o p p o s in g counsel within fourteen (14) days after receipt hereof, or o b je c t io n is waived. D A T E D this 18th day of December, 2009. /s / Carolyn S. Ostby U n it e d States Magistrate Judge

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