In an opinion and order released last week, the MDL court in In re Gold King Mine Release denied response contractors’ motions to dismiss. No. 1:18-md-02824-WJ, 2019 WL 1282997 (D. N.M. March 20, 2019) (slip opn.). The 2015 Gold King Mine release sent over three million gallons of contaminated wastewater into rivers in Colorado, New Mexico, and Utah. In the wake of the spill, the State of New Mexico, the State of Utah, the Navajo Nation, and multiple individual plaintiffs filed suit against the mine’s owner, the federal government, EPA, and EPA response contractors, Weston Solutions, Inc. and Environmental Restoration, LLCC (the “Response Contractors”). The court’s opinion, which allows the majority of plaintiffs’ CERCLA and tort claims to move forward, comes on the heels of a similar order denying the Federal Government’s motions to dismiss. See In re Gold King Mine Release, No. 1:18-md-02824-WJ, 2019 WL 999016 (D. N.M. Feb. 28, 2019) (slip opn.). Our blog post discussing that earlier opinion and order can be found here.

Challenges to CERCLA Claims

The Response Contractors argued that the court should dismiss plaintiffs’ CERCLA claims because plaintiffs had not alleged that the defendants are liable as operators, arrangers, or transporters. 2019 WL 1282997 at *2–4. The district court rejected that argument, and quoting multiple paragraphs from plaintiffs’ Amended Complaints, concluded that they adequately alleged operator, arranger, and transporter liability. Id.

The Response Contractors also argued, in the alternative, that § 119 of CERCLA shields them from liability for damages arising from a response action. Id. at *4. Section 119 states that “response action contractors” are not liable for damages arising from a release, unless the damages are caused by the contractor’s negligence. See id. (quoting 42 U.S.C. § 9619(a)(1), (2)). The contractors creatively argued that the Amended Complaints do not allege “that the release was caused by the negligent acts of Weston or ER” and instead, refer only to the “EPA crew,” “EPA On site Team,” and “Contractor Defendants.” Id. Unpersuaded, the court held that the allegations referring to “Contractor Defendants” are sufficient to give the contractors notice of the negligence claims against them, and those negligence claims mean that § 119 does not warrant dismissal at this stage. Id. at *5.

Challenges to State Law Claims

Next, the Response Contractors argued that the court should dismiss the plaintiffs’ state law claims for negligence, gross negligence, and trespass and nuisance. The district court rejected those arguments as well.

First, the district court rejected the contractors’ argument that the court lacked subject matter jurisdiction under § 113(h) of CERCLA. Id. at *1 (quoting 42 U.S.C. § 9613(h), which states that “[n]o Federal court shall have jurisdiction . . . under State law . . . to review any challenges to removal or remedial action”). The court found that there was an issue of fact about whether EPA’s response action extended to the contamination in Utah and New Mexico, and decided that jurisdictional discovery on the issue was needed before it could conclude that it lacked jurisdiction. Id.

Second, the court rejected the Response Contractors’ argument that CERCLA preempts plaintiffs’ state law claims. Id. at *2. The contractors argued that CERCLA’s savings clause does not permit liability for “lawful removal actions,” and that it bars state law claims seeking the same recovery as allowed by CERCLA. Id. The court concluded that CERCLA’s savings clause does not completely preempt liability for response contractors, and that the court could not dismiss the claims “solely because a plaintiff seeks excessive or otherwise inappropriate relief.” Id. (quoting EEOC v. CollegeAmerica Denver, Inc., 869 F.3d 1171, 1175 (10th Cir. 2017)).

Third, the court held the government contractor defense does not warrant dismissing the action because “the defense does not appear plainly on the face of the Amended Complaints.” Id. at *5 (citing Fernandez v. Clean House, LLC, 883 F.3c 1296, 1299 (10th Cir. 2018), which holds that it is “proper to dismiss a claim on the pleadings based on an affirmative defense . . . only when the complaint itself admits all the elements of the affirmative defense by alleging the factual basis for those elements”).

Fourth, the court rejected the contractors’ argument that plaintiffs’ failed to state claims under Colorado law for negligence, gross negligence, and trespass and nuisance, finding that the plaintiffs sufficiently alleged those causes of action in the Amended Complaints. Id. at *6–8.

Finally, the court rejected the Response Contractors’ argument that the plaintiffs’ damages are barred by the statute of limitations. Id. at *8.

Minor Victories for the Contractors

In a small win for the Response Contractors, the court denied an argument raised by one plaintiffs’ group that New Mexico law governs their tort law claims. Id. at *9–10. Quoting the Supreme Court’s opinion in International Paper Co. v. Ouellette, the Court explained that “when a court considers a state-law claim concerning interstate water pollution that is subject to the [Clean Water Act], the court must apply the law of the State in which the point source is located.” Id. at *9. In this case, the “point source” is the Gold King Mine in Colorado, so Colorado law governs the plaintiffs’ tort claims.

The court also granted the Response Contractors’ motion to strike claims for joint and several liability brought by New Mexico and the Navajo Nation. In its analysis, the court noted that a district judge previously assigned to the case had dismissed the claims for joint and several liability and that plaintiffs had not raised new arguments opposing the most recent motion. Id.; see also New Mexico ex. rel. N.M. Env’t Dep’t. v. EPA, 310 F. Supp. 3d 1230, 1270 (D. N.M. 2018) (striking claims for joint and several liability in cases brought by New Mexico and the Navajo Nation against Environmental Resource LLC). The MDL court mentions the previous court’s order only in this section of the opinion, but that order also addressed some of the response contractors’ other arguments, including CERCLA preemption and the government contractor defense. See generally New Mexico, 310 F. Supp. 3d 1230. The MDL court agreed with the previous courts’ order on those other issues as well, but it chose to provide an independent analysis, likely because the current motion involves new parties and targets different complaints. The previous order was issued before the cases were consolidated by the MDL Panel and before the plaintiffs amended their complaints. Id. at 1238.

Conclusion

In sum, the plaintiffs’ CERCLA and tort law claims against the Response Contractors will move forward into discovery, along with the claims brought against the Federal Defendants. Colorado law governs the state law claims, and the claim for joint and several liability is out.