State of New Mexico v. United States Environmental Protection Agency

Filing 488

MEMORANDUM OPINION AND ORDER GRANTING UNITED STATES MOTION FOR JUDGMENT ON THE PLEADINGS ON SUNNYSIDE GOLDS DUE POCESS COUNTERCLAIM by Chief District Judge William P. Johnson. IT IS ORDERED that United States Motion for Judgment on the Pleadings on Sunnyside Golds Due Process Counter Claim 345 is GRANTED Associated Cases: 1:18-md-02824-WJ, 1:16-cv-00465-WJ-LF, 1:18-cv-00319-WJ (meq)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
IN RE: GOLD KING MINE RELEASE
IN SAN JUAN COUNTY, COLORADO,
ON AUGUST 5, 2015
This Document Relates to:

No. 1:18-md-02824-WJ

No. 1:16-cv-00465-WJ-LF
No. 1:18-cv-00931-WJ

MEMORANDUM OPINION AND ORDER
GRANTING UNITED STATES’ MOTION FOR JUDGMENT ON THE PLEADINGS
ON SUNNYSIDE GOLD’S DUE POCESS COUNTERCLAIM
THIS MATTER comes before the Court on Defendant United States’ Motion for
Judgment on the Pleadings on Sunnyside Gold’s Due Process Counter Claim, Doc. 345, filed
October 22, 2019.
Procedural Background
Defendant Sunnyside Gold Corporation (“Sunnyside”) filed a counterclaim for “Violation
of [Sunnyside’s] Due Process Rights Against United States” in the cases filed by the State of New
Mexico and the Navajo Nation. See Doc. 375 at 31, filed July 22, 2019; Doc. 376 at 31, filed July
22, 2019.
Sunnyside alleges that the EPA issued an administrative order directing Sunnyside to
conduct work in the Bonita Peak Mining District [BPMD] and Sunnyside expended considerable
costs to comply with EPA’s order. Sunnyside also contends that because EPA is a Defendant in
the Gold King Mine litigation, and because EPA is the administrator of the BPMD Superfund site,
EPA has a conflict of interest and issued the administrative order “to divert attention away from
EPA and toward” Sunnyside.
Sunnyside concludes that “EPA’s conduct wrongfully deprives [Sunnyside] of its property
without due process,” and asks the Court to declare that the United States’ issuance of the

administrative order violates Sunnyside’s due process rights pursuant to the Fifth Amendment, to
order that EPA be removed as the lead agency at the BPMD, and to declare those portions of
CERCLA’s statutory and regulatory scheme that allow EPA to administer a Superfund site where
EPA has a conflict of interest unconstitutional as applied in this situation.
The United States contends that Sunnyside’s due process counterclaim is jurisdictionally
barred by 42 U.S.C. § 9613(h) and that Sunnyside fails to state procedural and substantive due
process claims.

Because the Court concludes that Sunnyside fails to state procedural and

substantive due process claims, the Court need not address the jurisdictional bar arguments.
Procedural Due Process
“A procedural-due-process claim requires (1) a constitutionally cognizable liberty or
property interest, (2) a deprivation of this interest, and (3) a lack of constitutionally adequate notice
and a hearing …. To determine whether a plaintiff has been deprived of procedural due process,
courts ask two questions: (1) Did the plaintiff possess a protected property or liberty interest to
which due process protections apply? And if so, (2) was the plaintiff afforded an appropriate level
of process?” Martin Marietta Materials, Inc. v. Kansa Dept. of Transp., 810 F.3d 1161, 1172
(10th Cir. 2016).
Sunnyside argues that it has four protected property interests: (1) loss of property value by
having its property placed on EPA’s National Priority List; (2) financial costs of remediating a
Superfund Site; (3) Sunnyside’s “good name, reputation, honor and integrity;” and (iv)
“protections afforded by the Federal Rules of Civil Procedure.” Sunnyside’s Response at 14-15,
Doc. 388 filed November 25, 2019.
The Court denies Sunnyside’s procedural due process claims based on loss of property
value by having its property placed on EPA’s National Priority List and damage to Sunnyside’s

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“good name, reputation, honor and integrity.” “[S]tigma alone is insufficient to invoke due process
protections.” General Electric Co. v. Jackson, 610 F.3d 110, 121 (D.C. Cir. 2010) (citing Paul v.
Davis, 424 U.S. 693, 704-06 (1976)). Davis’s stigma-plus rule is “satisfied only where plaintiffs
show, in addition to reputational harm, that (1) the government has deprived them of some benefit
to which they have a legal right … or (2) the government-imposed stigma is so severe that it
‘broadly precludes’ plaintiffs from pursuing a ‘chosen trade or business.’” General Electric Co.
v. Jackson, 610 F.3d at 121 (stating “we have applied the stigma-plus framework to property
claims, requiring plaintiffs to show that alleged reputational harm completely destroys the value of
their property”) (emphasis in original). Sunnyside has not alleged that having its property placed
on EPA’s National Priority List completely destroyed the value of the property. Nor has Sunnyside
alleged that the damage to Sunnyside’s “good name” and “reputation” have deprived Sunnyside
of any benefit to which Sunnyside has a legal right.
The Court denies Sunnyside’s procedural due process claim based on the financial costs of
remediating a Superfund site because there is an appropriate level of process available to
Sunnyside. EPA issued the administrative order directing Sunnyside to conduct work in the Bonita
Peak

Mining

District

pursuant

to

42 U.S.C. § 9606(a).

The

provision

following

42 U.S.C. § 9606(a) allows the party that is subject to a § 9606(a) administrative order to obtain a
pre-deprivation hearing by refusing to comply with EPA’s administrative order and forcing EPA
to sue in federal court. See 42 U.S.C. § 9606(b)(1); General Electric Co. v. Jackson, 610 F.3d at
117-119 (concluding that CERCLA’s administrative order procedure satisfies due process).
Alternatively, a party that is subject to a § 9606(a) administrative order could comply with EPA’s
administrative order, as Sunnyside has done, petition for reimbursement, and if all or part of the

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petition is refused, file an action in federal court seeking reimbursement.

See

42 U.S.C. § 9606(b)(2)(A-B).
The Court denies Sunnyside’s procedural due process claim based on “protections afforded
by the Federal Rules of Civil Procedure.” Sunnyside argues that the “Federal Rules have been
written, revised, and revised again to ensure that litigation proceeds fairly.” Doc. 388 at 15.
However, Sunnyside’s Due Process Counterclaim does not allege that Sunnyside was deprived of
protections afforded by the Federal Rules of Civil Procedure. See Doc’s 375 at 31-36, 376 at 3136. Instead, Sunnyside argues, without explanation, that the Court entered its Initial Case
Management Order in June 2018 and “EPA has purposefully abused its powers under CERCLA
to circumvent the protections afforded by the Federal Rules and in contravention of this Court’s
scheduling orders in an improper effort to gain an advantage in this litigation and has thereby
deprived [Sunnyside] of a constitutionally protected interest.” Doc. 388 at 15-16.
Substantive Due Process
“A violation of substantive due process may arise … from … official conduct that deprives
a person of life, liberty, or property in a manner so arbitrary as to shock the judicial conscience.”
Lindsey v. Hyler, 918 F.3d 1109, 1115 (10th Cir. 2019). “‘Arbitrary’ actions are those performed
capriciously or at one’s pleasure and without good reason.” Browder v. City of Albuquerque, 787
F.3d 1076, 1080 (10th Cir. 2015). “Substantive due process prohibits only the most egregious
official conduct … Even most intentionally inflicted injuries caused by misuse of government
authority will not meet this standard.” Koessel v. Sublette County Sheriff’s Dept., 717 F.3d 736,
750 (10th Cir. 2013).
Sunnyside’s Counterclaim fails to state a claim for a violation of substantive due process
because the allegations in the Counterclaim do not indicate that EPA deprived Sunnyside of a

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protected property interest in a manner so arbitrary as to shock the judicial conscience.
Sunnyside’s Counterclaim states that: (i) Sunnyside acquired the Sunnyside Mine and was
involved in mining operations; (ii) EPA is the Lead Agency for the Bonita Peak Mining District
and issued an administrative order directing Sunnyside to conduct work in the Bonita Peak Mining
District. See Doc. 376 at 21-26. Sunnyside alleges that EPA improperly issued the administrative
order because: (i) EPA has a conflict of interest: (ii) EPA is trying to divert attention away from
EPA and towards Sunnyside; and (iii) the administrative order is not intended to protect human
health, safety or the environment. See Doc. 376 at 31-36. Those allegations, even if true, are not
so egregious as to shock the judicial conscience.
IT IS ORDERED that United States’ Motion for Judgment on the Pleadings on Sunnyside
Gold’s Due Process Counter Claim, Doc. 345, filed October 22, 2019, is GRANTED.

________________________________________
CHIEF UNITED STATES DISTRICT JUDGE

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