State of Utah v. Environmental Restoration, LLC et al
Filing
597
MEMORANDUM OPINION AND ORDER by Chief District Judge William P. Johnson granting (962 in 1:18-md-02824-WJ, 529 in 1:18-cv-00319-WJ, 252 in 1:18-cv-00744-WJ-KK) MOTION for Judgment on Partial Findings on Statute of Repose Grounds and Statement of Undisputed Material Facts,denying as moot (253 in 1:18-cv-00744-WJ-KK, 530 in 1:18-cv-00319-WJ, 963 in 1:18-md-02824-WJ) MOTION for Judgment on Partial Findings on Nuisance Claims and Statement of Material Facts. Associated Cases: 1:18-md-02824-WJ, 1:18-cv-00319-WJ, 1:18-cv-00744-WJ-KK (vv)
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. 18-cv-319-WJ
No. 18-cv-744-WJ
MEMORANDUM OPINION AND ORDER
GRANTING SUNNYSIDE GOLD CORPORATION'S
MOTION FOR PARTIAL SUMMARY JUDGMENT
ON STATUTE OF REPOSE GROUNDS
THIS MATTER comes before the Court on Defendant Sunnyside Gold Corporation's
Motion for Partial Summary Judgment on Statue of Repose Grounds, Doc. 962, filed December
17, 2020 ("Motion") and Defendant Sunnyside Gold Corporation's Motion for Partial Summary
Judgment on Nuisance Claims, Doc. 963, filed December 17, 2020.
Scope of Order
Sunnyside Gold Corporation ("SGC") moves for a partial summary judgment order that
SGC is not liable on the State of Utah's and the Allen Plaintiffs' tort claims against SGC to the
extent such tort claims are predicated on SGC's design and construction of American Tunnel
Bulkheads1 Nos. 1, 2 and 3, on the grounds that such claims are barred by Colorado's six-year
statute of repose. This Order relates only to the Allen Plaintiffs' tort claims against Sunnyside Gold
Corporation. It does not pertain to the State of Utah's tort claims because SGC and Utah entered
into a final settlement agreement and agreed to withdraw SGC's Motion for Partial Summary
Judgment on Statute of Repose Grounds as to Utah. See Doc. 1139, filed March 15, 2021.
Serial Motions for Summary Judgment
1
Bulkheads are permanent concrete fixtures, reinforced with rebar, approximately 10 feet thick, which are installed
in mine tunnels to block the flow of water through the tunnel. See SJC letter to Colo. Division of Minerals and
Geology, dated February 8, 2001, Doc. 962-10, filed December 17, 2020.
The Allen Plaintiff's state that SGC filed four motions for partial summary judgment and
assert that the Court should strike those motions because SGC failed to articulate a reason why
four motions are necessary. See Response at 11. The Allen Plaintiff's also state that if SGC had
combined the partial summary judgment motions, the briefing would have exceeded the District
Court's page limits set forth in the Local Rules. The Court denies the Allen Plaintiffs' request to
either strike the motions or to require SGC to consolidate motions to comport with page limits.
There are many parties with different claims and defenses, each having different legal and factual
issues. The separate motions for partial summary judgment filed by SGC in this particular complex
multidistrict case will help expedite the resolution of issues in this case. Extended page limits
likely would be required, and granted, if SGC had filed one motion addressing the four issues.
Background
SGC states that the Allen Plaintiffs' tort claims against SGC "are predicated on SGC's
design and construction of several engineered concrete bulkheads" in the American Tunnel which
"were used to isolate the Sunnyside Mine and restore the natural hydrology of the region." Motion
at 1-2. The bulkheads were completed by December 2002. See Motion at 2.
According to Plaintiffs, one consequence of SGC's bulkhead construction was
water backing up into the Gold King Mine. On August 5, 2015, more than a decade
after SGC completed construction of the relevant bulkheads, EPA and its contactors
released over 3,000,000 gallons of water from the Gold King Level 7 adit2 and
allegedly caused Plaintiffs' damages.
Motion at 2. SGC contends that the Allen Plaintiffs' tort claims against SGC claims are barred by
Colorado's six-year statute of repose.
Statute of Repose
"An 'adit' is a horizontal passage into a mine." Allen Plaintiffs' Second Amended Complaint at
103, ¶ 322, Doc. 445, filed January 21, 2020.
2
2
Colorado's statute of repose states in relevant part:
(1)(a) Notwithstanding any statutory provision to the contrary, all actions against any
architect, contractor, builder or builder vendor, engineer, or inspector performing or
furnishing the design, planning, supervision, inspection, construction, or observation of
construction of any improvement to real property shall be brought within the time
provided in section 13-80-102 after the claim for relief arises, and not thereafter, but in
no case shall such an action be brought more than six years after the substantial
completion of the improvement to the real property, except as provided in subsection
(2) of this section.
...
(c) Such actions shall include any and all actions in tort, contract, indemnity, or
contribution, or other actions for the recovery of damages for:
(I) Any deficiency in the design, planning, supervision, inspection, construction, or
observation of construction of any improvement to real property; or
(II) Injury to real or personal property caused by any such deficiency; or
(III) Injury to or wrongful death of a person caused by any such deficiency.
...
(3) The limitations provided by this section shall not be asserted as a defense by any
person in actual possession or control, as owner or tenant or in any other capacity, of
such an improvement at the time any deficiency in such an improvement constitutes the
proximate cause of the injury or damage for which it is proposed to bring an action.
Colo. Rev. Stat. § 13-80-104.
SGC asserts that Colorado's statute of repose bars the Allen Plaintiffs' tort claims against
SGC because: (i) the Allen Plaintiffs seek damages for alleged deficiency in the design, planning,
supervision or construction of the bulkheads; (ii) SGC performed the type of work protected by
Colorado's statute of repose; (iii) SGC is the type of entity protected by Colorado's statute of
repose; and (iv) the six-year repose period expired before the Allen Plaintiffs brought their claims
against SGC. See Motion at 11-16.
Disputed Facts
3
The Allen Plaintiffs have not properly disputed many of the facts asserted by SGC. A
response to a motion for summary judgment:
must contain a concise statement of the material facts cited by the movant as to
which the non-movant contends a genuine issue does exist. Each fact in dispute
must be numbered, must refer with particularity to those portions of the record
upon which the non-movant relies, and must state the number of the movant's
fact that s disputed. All material facts set forth in the Memorandum [in support of
the motion for summary judgment] will be deemed undisputed unless specifically
controverted.
D.N.M.LR-Civ. 56.1(b) (emphasis added). The Allen Plaintiffs only refer with particularity to
portions of the record for three of the facts they dispute. See Response at 4-5, ¶¶ 6, 15, 16.
Deficiency in Bulkheads
The Allen Plaintiffs argue that the statute of repose does not apply because there is no
deficiency in the construction of the bulkheads stating:
Colo. Rev. Stat. Ann. § provides:
(1)(a) ... all actions against any ... builder ... performing or furnishing
the design, planning, supervision, inspection, construction, or
observation of construction of any improvement to real property
shall ... [not] be brought more than six years after the substantial
completion of the improvement to the real property
...
(c) Such actions shall include any and all actions in tort, contract,
indemnity, or contribution, or other actions for the recovery of
damages for:
(I) Any deficiency in the design, planning, supervision, inspection,
construction, or observation of construction of any improvement to
real property; or
(II) Injury to real or personal property caused by any such
deficiency;
(Emphasis added). The highlighted language shows that for the statute to apply,
there must be a deficiency in the construction of any improvement to real property.
If there is no deficiency, the statute does not apply.
Response at 12-13, Doc. 1087, filed February 5, 2021. The Allen Plaintiffs misconstrue the statute
of repose which clearly states it applies where there is a "deficiency in the design, planning ... of
4
any improvement to real property."
Colo. Rev. Stat. § 13-80-104 (emphasis added); see
Homestake Enterprises, Inc. v. Oliver, 817 P.2d 979, 983 (Colo. 1991) (en banc) ("We believe,
however, that the legislature intended that [the statute of repose] define 'defect' to include a wide
range of acts or events: that section states that a claim for relief limited by the statute 'shall include
any and all actions in tort ... for any deficiency in the design, planning, supervision, inspection,
construction, or observation of construction of any improvement to real property'") (emphasis
added).
Basis for Tort Liability
The Allen Plaintiffs dispute that their tort claims are "'predicated on SGC's planning and
construction of bulkheads,'" stating that their tort claims are "predicated on SGC's knowing
creation of a dangerous condition." Response at 3, ¶ 1. The Allen Plaintiffs state that they "are
not alleging that the Bulkheads malfunctioned or were deficiently installed; they are alleging that
SGC's decision to install the Bulkheads is the root cause of the hazardous conditions that
culminated in the August 5, 2015 blowout at the Gold King Mine." Response at 14. SGC's alleged
negligence in deciding to install the bulkheads is within the scope of the statute of repose, because
the decision was a part of "the design, planning ... " of an improvement to real property.
Type of Entity Covered
The Allen Plaintiffs dispute that SGC is the type of entity covered by the statute of repose.
Response at 16. The Allen Plaintiffs state that "[n]othing in the statute extends liability coverage
to entities such as SGC, a mining company," but do not cite any legal authority to show that SGC
is not the type of entity covered by the statute. Response at 17. SGC is the type of entity covered
by the statute of repose. The statute of repose applies to a "builder or ... engineer ... performing or
furnishing the design, planning, supervision, inspection, construction, or observation of
5
construction of any improvement to real property." Colo. Rev. Stat. § 13-80-104(1)(a). It is
undisputed that "SGC planned, supervised, constructed, and inspected the Bulkheads." Motion at
4, ¶ 9; Response at 4, ¶ 9 (admitting that SGC constructed the Bulkheads).
Type of Activity Covered
The Allen Plaintiffs argue that installation of the bulkheads is not the type of activity
covered by the statute of repose because "the Bulkheads are not 'improvements to real property' as
that term is used in" the statute of repose because "the intention of SGC was not to increase the
value of the land for others in exchange for payment, it was to, among other things, cut off its
reclamation responsibilities and to recover its $5 million dollar [sic] bond." Response at 16-17
(quoting Warembourg v. Excel Elec., Inc., 471 P.3d 1213, 1234 (Colo. App. 2020) ("The principal
factor to be considered in making a determination of whether an activity constitutes an
improvement to real property is the intention of the owner")). The Allen Plaintiffs fail to point
out that Warembourg also states that "[A] permanent fixture ... must be construed as an
improvement to real property." Warembourg v. Excel Elec., Inc., 471 P.3d 1234 (quoting Enright
v. City of Colorado Springs, 716 P.2d 148, 150 (Colo. App. 1985)). The bulkheads are permanent
fixtures because they were installed with the goal "to end perpetual water treatment." Response
at 8, ¶ 14. Elsewhere in their Response, the Allen Plaintiffs state: "There is no question that the
Bulkheads were an 'improvement to real property' under the statute." Response at 19.
The Allen Plaintiffs also argue that:
there is a fact issue as to whether Bulkhead No. 1 was installed on SGC property.
Colo. Rev. Stat. § 13-80-104(3) states that the statue of repose "shall not be asserted
as a defense by any person in actual possession or control, as owner or tenant or in
any other capacity, of such an improvement at the time any deficiency in such an
improvement constitutes the proximate cause of the injury or damage for which it
is proposed to bring the action." Thus, a fact issue exists to preclude summary
judgment on this issue.
6
Response at 17-18. The Court disagrees. In his Affidavit, Larry Perino, who was SGC's Senior
Planning Engineer, Superintendent of Technical Services, and Reclamation Manager, stated:
"SGC did not own the land on which Bulkhead No. 1 was located" and "SGC did now own the
property on which the American Tunnel Bulkhead No. 1 was located, own any interest in American
Tunnel Bulkhead No. 1, or otherwise possess or control American Tunnel Bulkhead No. 1 at any
time following permanent closure of the American Tunnel Bulkhead No. 1." Doc. 962-1 at 3,
¶¶ 15, 17. The Allen Plaintiffs contend a factual issue exists because in his deposition, Mr. Perino
agreed that Bulkhead 1 "was as close to SGC's property line as could be placed." See Doc. 10871. The statement in Mr. Perino's deposition, that Bulkhead 1 "was as close to SGC's property line
as could be placed," does not demonstrate a genuine issue of material fact with Mr. Perino's
Affidavit, which states that "SGC did not own the land on which Bulkhead was located," because
the deposition statement does not indicate that Bulkhead No.1 was on land owned by SGC. See
Pioneer Centres Holding Co. Employee Stock Ownership Plan and Trust v. Alerus Financial, N.A.,
858 F.3d 1324, 1334 (10th Cir. 2017) ("The district court must draw all reasonable inferences in
favor of the nonmoving party. But an inference is unreasonable if it requires a degree of speculation
and conjecture that renders [the factfinder's] findings a guess or mere possibility").
Opportunity to Prevent Blowout
The Allen Plaintiffs argue that:
the issues caused by the Bulkheads were discovered in a reasonable amount of time.
Four years after construction of the Bulkheads was completed, SGC was urged to
re-open the Bulkheads to prevent further flooding of the Gold King Mine and to
avoid a potential blowout. The dangerous condition created by the Bulkheads was
realized well within the timeframe established under the statute of repose, but SGC
refused to intervene. SGC should not be shielded from liability for refusing to act.
...
the relevant inquiry is whether SGC had the opportunity to remedy the issues
caused by the Bulkheads—it did. The fact that other entities owned the land on
which the Bulkheads were constructed is not dispositive here because SGC was
7
offered the opportunity to venture onto those lands to open the Bulkheads to prevent
a blowout.
Response at 18-20 (citations omitted).
The Allen Plaintiffs' argument is meritless. The statute of repose states "in no case shall
such an action be brought more than six years after the substantial completion of the improvement
to the real property." Colo. Rev. Stat. § 13-80-104(1)(a). The "Allen Plaintiffs agree that
construction [of the bulkheads] was completed in 2003." Response at 18. The statute of repose
thus bars tort actions brought after 2009. The Allen Plaintiffs do not cite any legal authority
demonstrating an exception to the statute of repose's six-year limit for bringing claims.
Sunnyside Gold Corporation's Motion for Summary Judgment on Nuisance Claims
SGC also filed a motion for a partial summary judgment dismissing the Allen Plaintiff's
nuisance claims against SGC on the ground that the nuisance claims are preempted by the Clean
Water Act and cannot be considered a nuisance under Colorado law. Because it is dismissing the
Allen Plaintiffs' tort claims against SGC on statute of repose grounds, the Court denies SGC's
Motion for partial summary judgment on the Allen Plaintiffs' nuisance claims as moot.
IT IS ORDERED that:
(i)
Defendant Sunnyside Gold Corporation's Motion for Partial Summary Judgment
on Statue of Repose Grounds, Doc. 962, filed December 17, 2020, is GRANTED.
(ii)
Defendant Sunnyside Gold Corporation's Motion for Partial Summary Judgment
on Nuisance Claims, Doc. 963, filed December 17, 2020, is DENIED as moot.
________________________________________
WILLIAM P. JOHNSON
CHIEF UNITED STATES DISTRICT JUDGE
8
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?