USA v. Atlantic Richfield, et al
Filing
1158
OPINION AND ORDER: Montana Standard's Motion 1130 is DENIED. Signed by Judge Sam E Haddon on 12/7/2016. (HEG)
IN THE UNITED STATES DISTRICT COURT
FILtED
FOR THE DISTRICT OF MONTANA
DEC S: 2015
BUTTE DIVISION
Clerk, U.S. District Court
District Of Montana
Helena
UNITED STATES OF AMERICA,
Plaintiff,
No. CV-89-39-BU-SEH
VS.
OPINION AND ORDER
ATLANTIC RICHFIELD
COMPANY,
Defendant.
Background
On September 20, 2016, Lee Enterprises, Inc. d/b/a Montana Standard and
Silver Bow Creek Headwaters Coalition ("Montana Standard") filed Applicant
Intervenors' Motion to Intervene ("Motion"). 1 Both the United States and Atlantic
Richfield Company ("ARCO") filed response briefs in opposition. 2 Montana
1
2
Doc. 1130.
Doc. 1139 (ARCO); Doc. 1140 (United States).
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Standard filed a reply. 3 On November 29, 2016, the Court conducted a hearing on
the Motion. The matter is fully submitted.
This 27 year-old CERCLA4 action, which involves the largest CERCLA site
in the United States, arose from environmental damage which resulted from a
century of mining and smelting operations by the Anaconda Copper Mining
Company, to which ARCO is successor. The locations at which much of the
environmental damage occurred were located primarily in and around Butte and
Anaconda, Montana. However, some of the damage sites extend over one-hundred
miles downstream from Butte/Anaconda along the Clark Fork River to the former
Milltown Dam site. Numerous discrete sites known as "operable units" were
established during the pendency of the litigation to manage the monumental task
of remedying the detrimental effects of the extensive and prolonged mining
operations.
The parties reached, and the Court approved, a landmark agreement known
as the Streamside Tailings Operable Unit Consent Decree ("SSTOU") 5 in 1999,
following ten years of discovery and motion practice undertaken and carried out
3
Doc. 1143.
4
Comprehensive Environmental Response, Compensation, and Liability Act of I 980, 42
u.s.c. §§ 9601-9675.
5
Doc. 934.
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by the parties. The SSTOU identified six site-groups requiring environmental
remediation. A binding schedule for settling any disputes over the final six sitegroups was established. The parties have since reached agreement on, and the
Court has entered consent decrees for three of the site-groups and for the Butte
Mining Flooding ("Berkeley Pit") Site in a fourth site-group. Three site-groups
remain pending. The several consent decrees are the result of years of negotiation
carried out among the United States, ARCO, the State of Montana, Butte-Silver
Bow County, and numerous other private and government entities.
On May 31, 2002, the United States moved the Court to maintain
confidentiality of all settlement negotiations. 6 It sought "to protect the
confidentiality, not only of deliberations and documents exchanged between the
United States and ARCO, but also the confidentiality of documents exchanged and
deliberations between either of the Parties and the Third-Party Participants 7 in
settlement negotiations conducted under the SSTOU Framework." 8 The motion
asserted that while all settlement negotiations up to the filing of the motion were
6
Doc. 1037.
7
Id at 3 ("Third-Party Participants" included "the State of Montana, the Confederated
Salish and Kootenai Tribes, and, depending on the particular site [subject to] the negotiations,
certain other third-parties that the U.S. Environmental Protection Agency has identified as
potentially responsible parties under Section I 07 of [CERCLA].")
'Id at 4.
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confidential, assurance that confidentiality would continue throughout the
remaining negotiations was sought. The motion was unopposed by ARCO.
On August 28, 2002, the Court issued its Order to Keep Settlement
Communications Confidential ("Confidentiality Order"). 9 The order was amended
on December 29, 2003, to include the language underlined below:
All settlement discussions among and between the Parties and
any [Third-Party Participants] in settlement negotiations conducted
pursuant to the [SSTOU], as well as all documents prepared for
settlement purposes or exchanged by the participants in such
negotiations, shall be kept confidential both during and after the
negotiations and not disclosed to third persons. 10
The State ofMontana; 11 Northwestern Energy, LLC; 12 City and County of
Butte-Silver Bow ("Butte-Silver Bow"); 13 and Anaconda Deer Lodge County 14 all
consented to be bound by the Confidentiality Order.
On June 7, 2016, Montana Standard's counsel sent letters to both the
Montana Department of Environmental Quality ("MDEQ") and Butte-Silver
9
Doc. 1042.
IO
Doc. 1052 at 1-2.
11
Doc. 1038.
12
Doc. 1041.
13
Doc. 1064.
14
Doc. 1141.
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Bow, 15 asserting that the Montana Standard had the right, under Montana freedom
of information laws, 16 to information related to MDEQ and Butte-Silver Bow's
involvement in the settlement negotiations over the Butte Priority Soils Operable
Unit ("BPSOU")-one of the three pending, unsettled site-groups established by
the SSTOU. Specifically, it demanded:
Reasonable opportunity to review, inspect and copy all documents
and information in MDEQ's[Butte-Silver Bow's] possession, custody,
or control related to BPSOU and the above-describe consent decree
negotiations; and
That all further meetings related to the BPSOU consent decree
negotiations be opened to the public, and the minutes and/or other
recordings of past meetings in which MDEQ[Butte-Silver Bow] took
part be made available for public review, inspection and copying. 17
MDEQ and Butte-Silver Bow denied the demand on grounds the Confidentiality
Order prohibited the disclosure of such information. 18 Permissive intervention in
this action is now sought for the limited purpose of challenging the Confidentiality
Order.
15
Doc.1131-1at1-4.
16
Mont. Const. art. II,§§ 8, 9; Mont. Code Ann. §§ 2-3-201-21; Mont. Code Ann.§§
2-6-1001-20.
17
Doc. 1131-1 at I.
18
Id. at 5, 10-11.
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Discussion
Permissive intervention is governed by Fed. R. Civ. P. 24(b):
(1) In General. On timely motion, the court may permit anyone to
intervene who:
(A) is given a conditional right to intervene by a federal statute;
or
(B) has a claim or defense that shares with the main action a
common question of law or fact
(3) Delay or Prejudice. In exercising its discretion, the court must
consider whether the intervention will unduly delay or prejudice the
adjudication of the original parties' rights.
Untimeliness is fatal to a motion to intervene. Upon such a finding, the
Court need not address any of the remaining elements of Rule 24(b). 19
The Court of Appeals for the Ninth Circuit ("Ninth Circuit") set forth three
factors for determining timeliness in League of United Latin American Citizens v.
Wilson: "the stage of the proceedings, the prejudice to existing parties, and the
length of and reason for the delay(.]" 20 "In considering these factors, however, we
must bear in mind that any substantial lapse of time weighs heavily against
19
United States. v. State of Wash., 86 F.3d 1499, 1503 (9th Cir. 1996).
20
131F.3d1297, 1308 (9th Cir. 1997).
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intervention. "'21 In San Jose Mercury N~s, Inc. v. US. District Court, Northern
District (San Jose) the Ninth Circuit established that the timeliness clock starts to
run "when the intervenor first became aware that its interests would no longer be
adequately protected by the parties." 22
I.
The Motion is Untimely, was Filed 13 Years after the
Confidentiality Order, Will Prejudice the Parties, and Provides no
Justification for Delay in Seeking Intervention
The portion of this case relating to the BPSOU has been stayed pending
entry of a final consent decree. Since 1999, the parties and several Third-Party
Participants have been and continue to be engaged in prolonged, confidential
negotiations under the SSTOU framework. Settlement agreements resolving
extensive, complex, technical disputes have been reached for several of the six
site-groups, while others, including the BPSOU, remain under negotiation.
Both the United States and ARCO argue that prejudice to the parties from
disclosure would be significant, asserting: (1) "[a]ll parties involved have
exchanged documents setting forth positions and arguments that would otherwise
have been saved for trial, and have taken positions, exposed weaknesses and
shared ideas in manners which, quite frankly, would not have happened without
21
Id at 1302 (quoting State a/Wash., 86 F.3d at 1503).
22
187 F.3d I 096, 110 I (9th Cir. 1999).
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the guaranty of confidentiality;"23 (2) retroactively removing the veil of
confidentiality after over 13 years of good faith negotiations have been carried out
is directly counter to the settled expectations of all parties involved; and (3) such
settlement negotiations may end entirely should they be thrust into the public eye.
Settlement negotiations arguably have already been chilled by the possibility of
public disclosure.
The challenge to the Confidentiality Order on its face is essentially without
merit. To require the United States and ARCO to expend further time and money
defending the order is itself prejudicial. The parties unquestionably would be
prejudiced were the Motion to be granted.
The Motion before the Court is itself approximately 13 years late. The
original Confidentiality Order was entered on August 28, 2002. The amended
Confidentiality Order was entered on December 29, 2003. Both filings since entry
have been matters of public record. Moreover, the State of Montana and ButteSilver Bow publicly filed consents to be bound by the Confidentiality Order back
in 2003 and 2004. The public filings of the orders in 2002 and 2003 gave notice to
the world, including the Montana Standard, of the orders' existence and content as
of the date of the filings. Anyone seeking to challenge the actions of government
23
Doc. I 139 at 20.
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has the obligation to be informed of matters of public record. Ignorance of this
Court's actions, undertaken as they were in open court and documented by public
record, cannot be argued to toll the timeliness clock.
Montana Standard did in fact know of the Confidentiality Order by at least
March 22, 2003, when it published an article that commented on the confidential
nature of the BPSOU settlement negotiations. 24 However, it simply sat by and did
nothing in response to the Confidentiality Order and Butte-Silver Bow's consent
to be bound for almost 13 years. It cannot now be heard to complain. The delay of
approximately 13 years alone is fatal to the Motion.
Montana Standard did not offer a single justifiable reason for the 13-year
delay in either of its briefs, although, at the hearing of November 29, 2016, it did
assert that it and the general public were losing confidence in the federal
government generally and the EPA specifically and were beginning to doubt the
EPA is protecting the interest of the people of Butte in adequately cleaning up the
remaining site-groups. However, no proof was presented as to what events, if any,
precipitated such claimed doubts. Nothing before the Court supports the
conclusion that the United States has betrayed the public's interest in
environmental remediation. Montana Standard's nebulous stated reason for delay
24
Doc. 1140, Exhibit A at 3-4.
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cannot warrant the starting of a new timeliness clock.
Instead of making legitimate factual arguments supporting its position,
Montana Standard cites to circuit case law permitting intervention after some
delay, even a delay ofyears. 25 However, none of the cases cited even comes close
to approving a 13-year delay. The longest delay found in any case to be justified
was only four years. 26
The Montana Standard also argues, citing Pansy v. Borough of
Stroudsburg, 27 "[t]he timeliness requirement is relaxed when challenging a
protective order because 'the public and third parties may often have no way of
knowing at the time a confidentiality order is granted what relevance the ... case
has to their interests. "'28 There, the court addressed and decided the issue of
whether a third-party could intervene to challenge a confidentiality order over a
settlement agreement years after a case was settled and dismissed. In allowing
intervention, the court applied a relaxed timeliness standard, reasoning that the
parties would experience little prejudice because the underlying suit was long ago
25
Doc. 1131at11-12.
26
See Mokhiber v. Davis, 537 A.2d 1100 (D.C. Cir. 1988).
27
23 F.3d 772 (3rd Cir. 1994).
28
Doc. 1131at12 (quoting Pansy, 23 F.3d at 780).
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resolved on the merits. 29 The same "little prejudice" has no application to the
matter before the Court.
Unlike Pansy, where intervenors sought access to a settlement agreement in
a settled and dismissed case, Montana Standard here is challenging the
Confidentiality Order, which concerns ongoing settlement negotiations in a case
yet to be tried, settled, or dismissed. As discussed supra, and unlike Pansy, the
parties here would be prejudiced should their settlement negotiations become
public. Moreover, the several settlement agreements already reached in this case
are, in strict adherence with CERCLA, matters of public record. The several
resolved SSTOU site-group consent decrees are available for inspection by any
member of the public. Pansy simply has no application to this case where
settlement negotiations are ongoing and a resolution on the merits is pending.
Montana Standard has failed to show that any of the timeliness factors
weigh in its favor. Without justification, it waited 13 years to challenge the
Confidentiality Order. Such a delay weighs heavily against intervention and, in
this instance, is fatal to the intervention application. Furthermore, it now seeks, at
the expense of prejudicing the parties and Third-Party Participants, to insert itself
into ongoing confidential settlement negotiations, which have thus far been
29
Pansy, 23 F .3d at 779-80.
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effective at resolving highly complicated disputes. The Motion is untimely. The
remaining Rule 24(b) elements need not be addressed.
II.
The Challenge Would Fail on the Merits Because the
Confidentiality Order was Properly Entered Under This Court's
Article III Powers
At its core, the challenge to the Confidentiality Order is grounded in the
proposition that the Court failed to articulate "good cause" under Fed. R. Civ. P.
26(c) for entering the order. Rule 26(c)'s plain language, however, makes clear
that it governs protective orders over discovery. What is now sought is not
discovery. The parties are not engaged in discovery. In fact, the BPSOU litigation
is stayed pending settlement negotiations.
Montana Standard has not cited to, nor has the Court found, any Ninth
Circuit case approving an extension of Rule 26(c)'s good cause requirement
beyond the plain language of the rule. The case at bar concerns active, ongoing
negotiations, not a finalized settlement agreement as in Pansy. This Court finds no
basis to extend the reach of Rule 26(c) as urged. Until the Ninth Circuit directs
otherwise, no justification exists for expanding Rule 26(c)'s good cause
requirement to the Confidentiality Order at issue.
The combined efforts of counsel and the Court have yielded but one case
with reasoning directly applicable to the issue before the Court: United States v.
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Glens Falls Newspapers, Jnc. 30 There, the court noted "that fostering settlement is
an important Article III function of the federal district courts." 31 Indeed, as in Glen
Falls, this Court has a duty to ensure parties are afforded the opportunity to
engage in frank, open discussion "so that litigation may be settled promptly and
fairly so as to avoid the uncertainty, expense and delay inherent in a trial." 32
Moreover, the resolution of this prodigious case will greatly benefit the public by
address and remediation of the negative effects of a legacy of mining and
smelting. "The trial court must protect the public interest, as well as the interests
of the parties, by encouraging the most fair and efficient resolution." 33 This case,
in particular, requires that the parties be given a fair opportunity to settle.
The Confidentiality Order was entered under the inherent Article III powers
of this Court to facilitate a resolution of this and all cases before it. Ample good
cause exists to keep the settlement negotiations confidential. Both parties assert
that confidentiality has been and continues to be pivotal in reaching agreements on
the six SSTOU site-groups. Both parties doubt the remaining site-groups could be
30
160 F .3d 853 (2nd Cir. 1998).
31
Id at 856.
32
Id.
33
Id at 857.
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resolved amicably should their negotiations be thrust into the public eye. It is
obvious the public has a strong interest in the efficient resolution of this case.
Forcing the parties into further protracted litigation would without doubt delay
resolution for years.
CERCLA mandates that the public be afforded an opportunity to participate
in and comment upon proposed resolutions before they are entered by the Court. 34
Once resolution is reached, Montana Standard and any other interested person may
read, comment on, and attend a public meeting regarding any proposed BPSOU
consent decree. It will have ample opportunity to be publicly heard.
The challenge to the Confidentiality Order is without merit. Intervention
will not be permitted.
ORDERED:
Montana Standard's Motion35 is DENIED.
DATED this
74ay of December, 2016.
~u~~
United States District Judge
34
See 42 U.S.C. § 9617.
35
Doc. 1130.
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