Chevron Mining v. United States , 863 F.3d 1261 ( 2017 )

FILED
United States Court of Appeals
Tenth Circuit
July 19, 2017
PUBLISH Elisabeth A. Shumaker
Clerk of Court
UNITED STATES COURT OF APPEALS
TENTH CIRCUIT
CHEVRON MINING INC.,
Plaintiff - Appellant,
v. No. 15-2209
UNITED STATES OF AMERICA,
UNITED STATES DEPARTMENT
OF THE INTERIOR, and UNITED
STATES DEPARTMENT OF
AGRICULTURE,
Defendants - Appellees.
---------------
AMERICAN EXPLORATION &
MINING ASSOCIATION,
COLORADO MINING
ASSOCIATION, and STATE OF
MONTANA,
Amici Curiae.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
(D.C. NO. 1:13-CV-00328-MCA-KK)
Peter D. Keisler, Sidley Austin LLP (Jennifer G. Anderson, Alex C. Walker, and
Jeremy K. Harrison, Modrall, Sperling, Roehl, Harris & Sisk, P.A., Albuquerque,
New Mexico, R. Timothy McCrum, Kirsten L. Nathanson, and Sherrie A.
Armstrong, Crowell & Moring LLP, Washington, D.C., and Quin M. Sorenson
and Christopher A. Eiswerth, Sidley Austin LLP, Washington, D.C., with him on
the briefs), Washington, D.C., for Appellant.
Katherine J. Barton, Environment & Natural Resources Division, United States
Department of Justice (John C. Cruden, Assistant Attorney General, Simi Bhat,
Justin D. Heminger, Dustin J. Maghamfar, John E. Sullivan, and Evelyn S. Ying,
Environment & Natural Resources Division, United States Department of Justice,
and of Counsel: Joan Marsan, Office of the Solicitor, United States Department of
the Interior, and Kirk Minckler, Office of the General Counsel, United States
Department of Agriculture, with her on the brief), Washington, D.C. for
Appellees.
Gina Cannan and Steven J. Lechner, Mountain States Legal Foundation,
Lakewood, Colorado, on the brief for Amici Curiae American Exploration &
Mining Association and Colorado Mining Association.
Timothy C. Fox, Montana Attorney General, Alan Joscelyn, Chief Deputy
Attorney General, and Dale Schowengerdt, Solicitor General, Office of the
Montana Attorney General, Helena, Montana, on the brief for Amicus Curiae
State of Montana.
Before TYMKOVICH, Chief Judge, BALDOCK, and BRISCOE, Circuit
Judges.
TYMKOVICH, Chief Judge.
Under the federal environmental laws, the owner of property contaminated
with hazardous substances or a person who arranges for the disposal of hazardous
substances may be strictly liable for subsequent clean-up costs. In this case, the
United States owned national forest lands in New Mexico that were mined over
several generations by Chevron Mining Inc. The question we must resolve is
whether the United States is a “potentially responsible party” (PRP), see, e.g., 42
U.S.C. § 9620(e)(6), for the environmental contamination located on that land.
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We conclude that under the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (CERCLA), 42 U.S.C. §§ 9601–75, the
United States is an “owner,” and, therefore, a PRP, because it is strictly liable for
its equitable portion of the costs necessary to remediate the contamination arising
from mining activity on federal land. We also conclude in this case that the
United States cannot be held liable as an “arranger” of hazardous substance
disposal because it did not own or possess the substances in question.
Exercising jurisdiction pursuant to 28 U.S.C. § 1291, we therefore reverse
the district court in part and affirm in part, and remand for further proceedings to
determine the United States’s equitable share, if any, 1 of the clean-up costs.
I. Background
Over the last century, Chevron and its corporate predecessors mined
molybdenum at a site near Questa, New Mexico, which we and the parties refer to
as the “Questa Site.” This extensive mining generated significant amounts of
hazardous substances, ultimately triggering costly clean-up requirements. Both
before and after the Environmental Protection Agency (EPA)’s 2011 decision to
place the Questa Site on the National Priorities List (NPL), see 42 U.S.C.
§ 9605(a)(8), Chevron acknowledged its status as a PRP strictly liable for the
1
Because we remand to the district court to address equitable allocation,
see 42 U.S.C. § 9613(f)(1), we take no position on whether a party’s status as a
PRP precludes a determination that its equitable share of response costs is zero.
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hazardous substances contaminating the site. Chevron began remediation
measures 2 pursuant to three administrative orders between it and the EPA. These
measures are ongoing and projected to continue for decades to come, with
anticipated costs exceeding $1 billion. Seeking financial contributions for the
clean-up, Chevron filed suit against the United States asking for a declaration that
the government is also strictly liable as a PRP—both as an “owner” of portions of
the Questa Site and as an “arranger” of hazardous substance disposal, see 42
U.S.C. § 9607(a)—for its equitable share of past, present, and future clean-up
costs. See 42 U.S.C. § 9613(f)(3)(B). 3
The particular mining and disposal activities relevant to this appeal are
summarized below.
2
Whether and what types of costs are necessary and consistent with the
National Contingency Plan (NCP), see 42 U.S.C. § 9605, and the distinctions
between costs incurred as part of “removal actions” and “remedial action[s],” 42
U.S.C. § 9601(23)–(24), is not relevant for purposes of this appeal. We refer
generally to all such clean-up costs incurred or that will be incurred.
3
“A person who has resolved its liability to the United States or a [s]tate
for some or all of a response action or for some or all of the costs of such action
in an administrative or judicially approved settlement may seek contribution from
any person who is not party to a settlement . . . .” Id.; see Cooper Indus., Inc. v.
Aviall Servs., Inc., 543 U.S. 157, 162–68 (2004) (discussing distinctions between
CERCLA’s several causes of action). Through the EPA, the United States is a
party to the administrative orders. However, when Chevron settled with the EPA,
the parties contracted to preserve Chevron’s right to pursue these § 9613(f)(3)(B),
post-settlement contribution claims against the United States.
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A. Mining Activities from 1919–2014
Molybdenum is a valuable mineral used in the production of military-grade
steel and other materials. Molybdenum mining activities on the Questa mining
lands progressed in three stages: (1) initial underground mining and exploration
from 1919 to 1964; (2) open-pit mining from 1964 to 1983; and (3) renewed
underground mining from 1983 to 2014.
1. Initial Underground Mining and Exploration (1919–1964)
In 1919, the R&S Molybdenum Company of Denver opened an
underground mine. The mine covered approximately 400 acres of mostly public
land on which R&S Molybdenum held unpatented mining claims. 4 The
underground mine produced relatively small quantities of molybdenum and
associated waste for several decades before R&S Molybdenum deemed its
reserves exhausted in the 1950s and underground mining operations effectively
ceased.
Meanwhile, Congress passed the Defense Production Act of 1950 (DPA) to
“ensure the vitality of the domestic industrial base” to supply necessary
“materials and services for the national defense.” 50 U.S.C. § 4502(a)(1). To
4
Unpatented mining claims on federal land convey a possessory right to
the claim holder for the extraction and development of underlying mineral
deposits, but the United States retains title to the lands. Patented lands, however,
are owned in title by the claim holder. These lands may include the subsurface
estate, the surface estate, or both. See, e.g., Entek GRB, LLC v. Stull Ranches,
LLC, 763 F.3d 1252, 1253–55 (10th Cir. 2014). The “patent” scheme for mining
claims is discussed in greater detail below.
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facilitate production of such materials, the DPA authorized a new federal agency
within the Department of the Interior, the Defense Mineral Exploration
Administration (DMEA). As part of its efforts to encourage exploration and
development of necessary materials, including molybdenum, the DMEA provided
loans to help finance private companies.
In 1957, R&S Molybdenum’s successor-in-interest, the Molybdenum
Corporation of America (Molycorp), entered into such a loan agreement with the
DMEA. Molycorp and the DMEA executed an Exploration Project Contract,
under which the federal government agreed to provide a loan covering up to
$255,250 (i.e., half the estimated exploration costs) in exchange for Molycorp’s
agreement to conduct strategic exploratory mining on the Questa mining lands.
Under the contract, all work was subject to government approval. App., Vol. 1, at
100 (“The location, direction, inclination, extent, and methods of sampling the
work under the contract are subject to Government approval.”). Molycorp also
agreed to repay the loan in the form of production royalties, provide monthly
progress reports, and consult with and inform the government on all phases of the
work as it progressed. At this point, Molycorp held twenty-one mining claims
near Questa, all but two of which were unpatented.
Pursuant to the DMEA exploration contract, Molycorp conducted extensive
exploration from 1957 to 1960 and eventually discovered a molybdenum ore
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deposit estimated to be 260 million tons in size. The Department of the Interior
certified the discovery in 1960 and Molycorp began mining preparations.
2. Open-Pit Mining (1964–1983)
In 1964, Molycorp opened an open-pit mine to extract molybdenum from
the ore deposit. The mine was a success and, at full capacity, produced more than
four million tons of molybdenum annually (while simultaneously generating
significant amounts of waste). By 1966, Molycorp fully repaid the government’s
loan under the DMEA contract via royalties from mineral production and sales.
Molycorp expanded its mining activities to adjacent lands (not covered by the
initial federal contract) on which it held mostly unpatented mining claims.
3. Renewed Underground Mining (1983–2014)
In 1983, Molycorp ceased open-pit mining operations and opened a new
underground mine. Union Oil Company of California acquired the mine and, in
2005, Chevron acquired Union Oil. After several years with little or no mineral
production, Chevron closed the underground mine in 2014.
B. Waste and Associated Disposal
The mining activities produced corresponding amounts of waste containing
hazardous substances, now subject to CERCLA remediation. Approximately 150
thousand tons of waste rock were generated from the early underground mining
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operations, 328 million tons of waste rock and 75 million tons of “tailings” 5 from
the open-pit mining, and 25 million tons of tailings from the renewed
underground mining.
The substantial amount of waste generated by these mining activities was
not unexpected. When Molycorp first discovered the molybdenum ore deposit in
1960, for example, government engineers produced a “Final Geological and
Engineering Report” estimating over 99% of the material extracted from the 260
million ton ore deposit would need to be discarded as waste. See App., Vol. 3, at
681–84. Nonetheless, the federal government actively encouraged—and, indeed,
funded—Molycorp’s mining activities at this site.
Hazardous substance disposal from the mines can be divided into two
categories: (1) waste rock disposal; and (2) mine tailings disposal.
1. Waste Rock Disposal
Chevron and its corporate predecessors disposed of over 328 million tons
of waste rock on land surrounding the open-pit mine. Although Molycorp
initially held only unpatented mining claims on the these lands, it eventually
acquired fee title to 2,258 acres of national forest land around the perimeter of its
open-pit mine (referred to as “the selected lands”) from the United States. 6 In
5
Mine tailings are fine grains of mining rock and water generated during
the milling process as molybdenum is separated from the mined ore.
6
The parties dispute whether Molycorp could have patented its claims on
(continued...)
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exchange for the selected lands, Molycorp traded to the United States
approximately 246 acres of private land usable for public recreation, hunting, or
other forest purposes. This land exchange was finalized in 1974.
2. Mine Tailings Disposal
Chevron and its corporate predecessors also disposed of over 100 million
tons of mine tailings by transporting the tailings via pipelines to one of two
different “tailings ponds” 7 approximately nine miles away from the open-pit mine.
Of the two tailings ponds, the first was located on approximately 627 acres of
land acquired from the Bureau of Land Management (BLM) in 1966. The second
pond was located on 439 acres of land acquired from the State of New Mexico in
1968. Between 1965 and 1973, Molycorp sought and received several “special
use” land authorization permits from the Forest Service for multiple tailings
pipelines, which crossed over 4.27 miles of national forest lands to reach the two
tailings ponds.
6
(...continued)
the selected lands. Chevron contends the selected lands were nonmineral in
character and thus unpatentable, while the government suggests Molycorp could
have patented the claims. Resolution of this dispute is ultimately irrelevant,
however, because regardless of whether Molycorp could have acquired title by
patenting the claims, it is undisputed that Molycorp in fact acquired title through
the land exchange. As we explain, this land exchange highlights both the
government’s ownership (and active exercise of such) over relevant portions of
the Questa mining lands during the time of hazardous substance disposal and also
evinces the government’s assistance in arranging such disposal.
7
Tailings ponds are confined areas to hold mine tailings.
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II. Analysis
Chevron seeks recognition of the United States as a PRP, both as an
“owner” and “arranger,” liable for its equitable portion of costs to remediate the
hazardous substances located at the Questa Site. These are questions of law that
we review de novo in light of the factual record presented in the parties’ cross-
motions for summary judgment, a record which is not in dispute and our review
of which is also de novo. See Universal Underwriters Ins. Co. v. Winton, 818
F.3d 1103, 1105 (10th Cir. 2016); Fed. R. Civ. P. 56(a). For the reasons set forth
below, we conclude the United States is a PRP as an owner, but not as an
arranger.
We start with the relevant statutory background.
A. Statutory Background: CERCLA and the General Mining Act of 1872
1. CERCLA
CERCLA was designed “to promote the ‘timely cleanup of hazardous waste
sites’ and to ensure that the costs of such cleanup efforts were borne by those
responsible for the contamination.” Burlington N. & Santa Fe Ry. v. United
States, 556 U.S. 599, 602 (2009) (citation omitted). “The remedy that Congress
felt it needed in CERCLA is sweeping: everyone who is potentially responsible
for hazardous-waste contamination may be forced to contribute to the costs of
cleanup.” United States v. Bestfoods, 524 U.S. 51, 56 n.1 (1998) (citation
omitted). “[B]ecause CERCLA is remedial legislation, it should be construed
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liberally to carry out its purpose.” Atl. Richfield Co. v. Am. Airlines, Inc., 98 F.3d
564, 570 (10th Cir. 1996).
Proving that a defendant is liable in a contribution action under
§ 9613(f)(3)(B) “is dependent on the establishment of a prima facie case of
liability under [§ 9607(a)].” Morrison Enters. v. McShares, Inc., 302 F.3d 1127,
1132 (10th Cir. 2002) (alteration in original) (citation omitted). To do so, “a
plaintiff must prove [that] (1) the site is a facility, (2) [the] defendant is a [PRP],
(3) the release or threatened release of a hazardous substance has occurred, and
(4) the release or threatened release caused the plaintiff to incur necessary
response costs consistent with the” NCP. Young v. United States, 394 F.3d 858,
862 (10th Cir. 2005); see Morrison, 302 F.3d at 1135–36 (similarly identifying
these elements, but recognizing that the fourth is comprised of three sub-
elements). It is undisputed that the Questa Site has released or threatened to
release hazardous substances, and that Chevron has incurred necessary response
costs consistent with the NCP, pursuant to the administrative orders between
Chevron and the EPA. In this case, therefore, only the definition of the relevant
facility and the United States’s status as a PRP as regards that facility bear on
whether it is liable to contribute an equitably allocated amount toward Chevron’s
incurred and future response costs. We first address the relevant facility and then
devote the balance of our analysis to whether the United States is a PRP.
CERCLA authorizes the President to designate certain facilities for
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remediation by placement on the NPL. 42 U.S.C. § 9605. And CERCLA defines
“facility” broadly to include not only “any building, structure, installation,
equipment, pipe or pipeline . . . , well, pit, pond, lagoon, impoundment, ditch,
landfill, storage container, motor vehicle, rolling stock, or aircraft,” but also “any
site or area where a hazardous substance has been deposited, stored, disposed of,
or placed, or otherwise come to be located.” 42 U.S.C. § 9601(9).
Under this “broad and detailed definition,” Bestfoods, 524 U.S. at 56,
moreover, for purposes of establishing liability (as opposed to equitable
allocation), a person is liable if that person meets CERCLA’s definition of a PRP
with respect to even a “portion of the total facility.” See Burlington N. & Santa
Fe Ry., 556 U.S. at 618. In assessing whether the United States is liable here,
therefore, we treat the entire EPA-delineated Questa Site as a single facility, even
though it also might be conceptualized as numerous distinct parcels of land, sites,
or areas, and the contaminated natural formations and objects on or in them. See
42 U.S.C. § 9601(9). The Questa Site includes “the mine and waste rock disposal
area,” “the tailings disposal area,” App., Vol. 4, at 908, “as well as all other areas
where any hazardous substance, pollutant, or contaminant from [Chevron’s]
mining, milling, and tailings disposal operations has come to be located.” App.,
Vol. 2, at 249. The Questa Site thus encompasses all of the surface estates that
are central to the dispute over whether the United States was an owner of the site.
Turning to whether the United States is a PRP, and regardless of whether a
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facility lands on the NPL, CERCLA holds “covered persons”—i.e., persons 8 liable
for a release or threatened release of hazardous substances from the
facility—strictly liable for remedial action and other necessary response costs. 42
U.S.C. § 9607(a)(4). There are four types of covered persons: (1) owners; (2)
operators; (3) arrangers; and (4) transporters. 42 U.S.C. § 9607(a). These
categories of covered persons, the “potentially responsible parties,” are broad.
See United States v. Atl. Research Corp., 551 U.S. 128, 134 & n.2 (2007)
(“CERCLA § 107(a) lists four broad categories of persons as PRPs, by definition
liable to other persons for various costs.”); Pub. Serv. Co. of Colo. v. Gates
Rubber Co., 175 F.3d 1177, 1181 & n.6 (10th Cir. 1999) (“The categories of PRPs
broadly include current and former owners and operators of a facility or vessel
involved in hazardous substance disposal and persons who arranged for or
accepted hazardous substances for disposal or transportation.”). Only the first
and third categories of covered persons—owners and arrangers—are at issue in
this appeal. Each is discussed in greater length below.
“CERCLA liability may be inferred from the totality of the circumstances;
it need not be proven by direct evidence.” Tosco Corp. v. Koch Indus., Inc., 216
8
The term “person” includes “an individual, firm, corporation, association,
partnership, consortium, joint venture, commercial entity, United States
Government, [s]tate, municipality, commission, political subdivision of a [s]tate,
or any interstate body.” 42 U.S.C. § 9601(21).
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F.3d 886, 892 (10th Cir. 2000). This is particularly true for cases involving older
hazardous substance disposal, “as eyewitness testimony or other direct evidence
concerning specific waste disposal practices . . . during the 1940s—well before
the enactment of environmental laws—is rarely available.” Id. “[C]ircumstantial
evidence showing disposals of hazardous waste occurred at the [facility] during [a
party]’s ownership or operation” of that facility is sufficient, if credited by the
factfinder, to trigger liability. Id. Such otherwise-covered persons may avoid
liability only if they qualify for one of CERCLA’s enumerated defenses, e.g.,
those set forth in 42 U.S.C. § 9607(b), none of which is asserted here. Moreover,
again, the factual record is not in dispute, allowing us to definitively resolve
whether the United States is a PRP as a matter of law.
Finally, under the contribution provision of CERCLA at issue here,
§ 9613(f)(3)(B), all PRPs are jointly liable, and the court “may allocate response
costs among liable parties using such equitable factors as the court determines are
appropriate.” 42 U.S.C. § 9613(f)(1); see Burlington N. & Santa Fe Ry., 556 U.S.
at 613–15 (discussing CERCLA’s various costs-shifting frameworks). CERCLA
subjects the United States to this statutory scheme “in the same manner and to the
same extent, both procedurally and substantively, as any nongovernmental entity,
including liability under section 9607. . . .” 42 U.S.C. § 9620(a)(1); see, e.g., 42
U.S.C. § 9620(e)(6) (permitting the EPA to settle with another PRP to remediate a
“Federal facility,” giving rise to a contribution claim against the United States).
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2. The General Mining Act of 1872
Chevron’s claims arose from its right to exploit mineral deposits under the
public lands of the United States. Under the General Mining Act of 1872, “all
valuable mineral deposits in lands belonging to the United States, both surveyed
and unsurveyed, shall be free and open to exploration and purchase, and the lands
in which they are found to occupation and purchase, by citizens of the United
States.” 30 U.S.C. § 22. In essence, the Act “provides that citizens may enter
and explore the public domain, and search for minerals; if they discover ‘valuable
mineral deposits,’ they may obtain title to the land on which such deposits are
located.” Andrus v. Shell Oil Co., 446 U.S. 657, 658 (1980).
Locators of mining claims, “so long as they comply with the laws of the
United States, and with [s]tate, territorial, and local regulations . . . , shall have
the exclusive right of possession and enjoyment of all the surface included within
the lines of their locations.” 30 U.S.C. § 26.
A mining claim is a parcel of land containing precious metal in its soil
or rock. A location is the act of appropriating such parcel, according
to certain established rules. It usually consists in placing on the
ground, in a conspicuous position, a notice setting forth the name of the
locator, the fact that it is taken or located, with the requisite description
of the extent and boundaries of the parcel, according to the local
customs, or, since the statute of 1872, according to the provisions of
that act.
Smelting Co. v. Kemp, 104 U.S. 636, 649 (1881). Under the General Mining Act
of 1872, citizens may take steps to “locate” their mining claims by, at a minimum:
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(1) distinctly marking the location on the ground so that its boundaries can be
readily traced; (2) recording and submitting the name or names of the locators,
the date of the location, and such a description of the claim or claims located by
reference to some natural object or permanent monument as will identify the
claim; and (3) maintaining the claim by annually performing at least $100 worth
of labor or improvements, or paying a claim maintenance fee. See 30 U.S.C.
§§ 28, 28f.
Citizens may also seek to convert their general, “unpatented” mining claims
into “patented” claims by following the process set forth in 30 U.S.C. § 29. The
holder of an unpatented claim has superior rights as against third parties but not
as against the United States, which retains paramount title. See United States v.
Etcheverry, 230 F.2d 193, 195 (10th Cir. 1956) (“[T]he mere location of a mining
claim gives to the locator only the right to explore for and mine minerals, and to
purchase the land if there has been a compliance with the provisions of the
statute. As against third parties, the locator or his assigns have exclusive right to
use the surface of this land, but as against the United States, his right is
conditional and inchoate.” (citing Shiver v. United States, 159 U.S. 491 (1895))).
Issuance of a patent transfers title in the underlying public land from the United
States to the patent holder. See, e.g., Iron Silver Mining Co. v. Campbell, 135
U.S. 286, 301 (1890) (“[W]hen the government has issued and delivered its patent
for lands of the United States, the control of the department over the title to such
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land has ceased.”); Smelting Co., 104 U.S. at 640–41 (1881) (“The execution and
record of the patent are the final acts of the officers of the government for the
transfer of its title, and as they can be lawfully performed only after certain steps
have been taken, that instrument . . . not merely operates to pass the title, but is in
the nature of an official declaration by that branch of government to which the
alienation of the public lands, under the law, is intrusted, that all the requirements
preliminary to its issue have been complied with.”).
Nonmineral lands, however, may only be patented if the property is less
than five acres and is included in a patent application for land with valuable
minerals (subject to the same survey and notice requirements set forth in 30
U.S.C. § 29). See 30 U.S.C. § 42.
Given the legal background, this case requires us to harmonize liability
provisions under CERCLA with the rights created by the General Mining Act of
1872 to determine whether the United States is a PRP and therefore required to
equitably contribute toward cleaning up hazardous substances from mining
operations on or under such land. We address owner liability first, and then turn
to arranger liability.
B. “Owner” Liability
Chevron seeks recognition of the United States as an “owner” strictly liable
for hazardous substances on the Questa mining lands. As we explain, we agree
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that the United States qualifies as a PRP because it owned portions of the land
comprising the Questa Site. See Burlington N. & Santa Fe Ry., 556 U.S. at 618.
Owner liability attaches to “any person owning” the contaminated facility.
See 42 U.S.C. § 9601(20)(A); Bestfoods, 524 U.S. at 68 (explaining that the PRP
inquiry “rests on the relationship between” the defendant and the “facility itself”);
Morrison, 302 F.3d at 1133 (“Because liability is strict,” a plaintiff “need not
show that the defendant caused the release of hazardous wastes that required
response actions.”). Both current and past owners are subject to owner
liability—it reaches “any person who at the time of disposal of any hazardous
substance owned . . . any facility at which such hazardous substances were
disposed of[.]” 42 U.S.C. § 9607(a).
The ordinary or natural meaning of “owner” includes, at a minimum, a
legal title holder. See Own, Black’s Law Dictionary (10th ed. 2014) (“To
rightfully have or possess as property; to have legal title to.”); Owner, Black’s
Law Dictionary (10th ed. 2014) (“Someone who has the right to possess, use, and
convey something; a person in whom one or more interests are vested. An owner
may have complete property in the thing or may have parted with some interests
in it (as by granting an easement or making a lease).”).
Dictionaries published around the time of CERCLA’s enactment in 1980
affirm this natural meaning. See Ownership, American Heritage Dictionary (2d.
ed. 1982) (“The state or fact of being an owner. . . . Legal right to the possession
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of a thing.”); Owner, Oxford American Dictionary (1st ed. 1980) (“[A] person
who owns something as his property.”); Own, Black’s Law Dictionary (5th ed.
1979) (“To have good legal title; to hold as property; to have a legal or rightful
title to; to have; to possess.”); Owner, Black’s Law Dictionary (5th ed. 1979)
(“The person in whom is vested the ownership, dominion, or title of property;
proprietor. He who has dominion of a thing, . . . which he has a right to enjoy
and do with as he pleases, even to spoil or destroy it, as far as the law permits,
unless he be prevented by some agreement or covenant which restraints his
right. . . . The primary meaning of the word as applied to land is one who owns
the fee and who has the right to dispose of the property, but the term also includes
one having a possessory right to land or the person occupying or cultivating it.”).
For purposes of CERCLA, then, an owner includes the legal title holder of
contaminated land. 9 This broad liability is limited by only a handful of
enumerated exceptions, which, again, the United States does not assert here. 10
9
As the government points out, the statutory language is circular, in effect,
a “tautology,” because it defines an owner as an owner. See Bestfoods, 524 U.S.
at 56. That may be true but as we discuss below, in context, the language still
yields its ordinary meaning—an owner includes the title holder. To the extent a
statutory definition is, by itself, circular or “useless[ ],” we are left “to do the best
we can to give the term its ‘ordinary or natural meaning.’” See id. at 66.
10
See, e.g., 42 U.S.C. §§ 9601(20)(A) (person holding indicia of
ownership primarily to protect his security interest), 9601(20)(D) (a unit of state
or local government that acquired ownership or control involuntarily by virtue of
its function as sovereign—e.g., through bankruptcy, tax delinquency, or
abandonment), 9601(20)(E)(i) (lender holding indicia of ownership primarily to
(continued...)
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If the statutory term were not clear enough, the Supreme Court has
admonished that “the law of CERCLA liability” incorporates “traditional
standards and expectations,” that a “CERCLA-specific rule of . . . liability . . .
does not arise from congressional silence,” and, rather, that “CERCLA’s silence
is dispositive.” Bestfoods, 524 U.S. at 70. “It is ‘a cardinal principle of statutory
construction’ that ‘a statute ought, upon the whole, to be so construed that, if it
can be prevented, no clause, sentence, or word shall be superfluous, void, or
insignificant.’” TRW Inc. v. Andrews, 534 U.S. 19, 31 (2001) (citation omitted).
Under this “rudimentary canon of statutory construction that [ ] superfluities are
to be avoided,” Lockheed Martin Corp. v. Admin. Review Bd., 717 F.3d 1121,
1130 (10th Cir. 2013), we turn to contextual clues about the meaning of the term
“owner.” Other CERCLA provisions shed light on this inquiry. For example,
among minimum standards for responding to a hazardous substance release,
CERCLA requires “a method for and assignment of responsibility for reporting
the existence of such facilities which may be located on federally owned or
controlled properties and any releases of hazardous substances from such
facilities.” 42 U.S.C. § 9605(a)(6) (emphasis added).
10
(...continued)
protect his security interest), 9601(20)(E)(ii) (lender that did not participate in
management prior to foreclosure), 9607 (owners of contiguous real property who
establish certain conditions by a preponderance of the evidence), 9624 (owners of
equipment unless they caused the release or are otherwise liable).
-20-
The distinction between federally owned and federally controlled properties
indicates that ownership and control are independent inquiries—the United States
may own a facility without controlling that facility. Cf. 42 U.S.C. § 9620(a)(1)
(“[T]he United States . . . shall be subject to, and comply with, this chapter in the
same manner and to the same extent, both procedurally and substantively, as any
nongovernmental entity, including liability under section 9607 of this title.”).
CERCLA also provides, at the request of a state, that the President “generally
shall defer” final listing of an eligible site on the NPL if the President determines
certain conditions have been satisfied. See 42 U.S.C. § 9605(h)(1). But the
President “may decline to defer, or elect to discontinue a deferral” if the President
determines “deferral would not be appropriate because the [s]tate, as an owner or
operator or a significant contributor of hazardous substances to the facility, is a
potentially responsible party.” 42 U.S.C. § 9605(h)(4)(A) (emphasis added).
Differentiating among owners, operators, and significant contributors
demonstrates that a person may be considered an owner for purposes of CERCLA
liability, see Bestfoods, 524 U.S. at 56 n.1, without having contributed in any way
to the hazardous substances. See Atl. Research Corp., 551 U.S. at 136
(“[CERCLA] defines PRPs so broadly as to sweep in virtually all persons likely
to incur cleanup costs. . . . [E]ven parties not responsible for contamination may
fall within the broad definitions of PRPs in [§ 9607(a)].”). Likewise, CERCLA
contains provisions for expedited final settlement with PRPs in certain
-21-
circumstances. See 42 U.S.C. § 9622(g)(1). Expedited final settlement may be
appropriate when the PRP “(i) is the owner of the real property on or in which the
facility is located; (ii) did not conduct or permit the generation, transportation,
storage, treatment, or disposal of any hazardous substance at the facility; and (3)
did not contribute to the release or threat of release of a hazardous substance at
the facility through any action or omission.” 42 U.S.C. § 9622(g)(1)(B)
(emphasis added). These three, distinct, enumerated requirements indicate that
they are separate—i.e., an owner of real property on or in which the facility is
located does not have to have conducted, permitted, or contributed to the
production of hazardous substances in order to be considered an owner for
purposes of CERCLA liability. Interpreting these provisions to mean otherwise
would render portions of the statute superfluous, void, or insignificant.
It is undisputed that the United States held legal title to relevant portions of
the Questa mining lands at the time of significant hazardous substance disposal.
See, e.g., App., Vol. 2, at 422 (“Prior to approving the 1974 Land Exchange,
United States employees knew that [Chevron] had disposed of waste rock on the
Selected Lands covered by [Chevron’s] unpatented mining claims . . . .”).
Nevertheless, the government argues “bare legal title” is insufficient to trigger
owner liability. Instead, it contends the unique nature of unpatented mining
claims on federal lands requires an exception to CERCLA’s ownership liability
provision. But see 42 U.S.C. § 9620(a)(1) (holding “the United States” liable “to
-22-
the same extent, both procedurally and substantively, as any nongovernmental
entity, including” as regards “liability under” 42 U.S.C. § 9607(a)(2)’s “owner or
operator” provision).
Although CERLCA contains neither an expressed nor an implied exception
to owner liability for holders of “bare legal title,” the government urges us to
adopt such an exception based on United States v. Friedland, 152 F. Supp. 2d
1234 (D. Colo. 2001). In Friedland, the district court held the United States, as
“bare legal title holder to unpatented mining claims,” did not qualify as an
“owner” for purposes of CERCLA liability. See 152 F. Supp. 2d at 1242–46. In
reaching this conclusion, however, Friedland found that, because CERCLA
defines owner “tautologically . . . as ‘any person . . . owning a facility,’”
“CERCLA’s text [ ] offers virtually no guidance in interpreting the extent of
owner liability.” Id. at 1242 (quoting 42 U.S.C. § 9601(20)(A)). And Friedland
agreed with the Second Circuit’s finding in Commander Oil that “the term
‘owner’ has no natural meaning” and “limited inherent content.” See Friedland,
152 F. Supp. 2d at 1242 (citing Commander Oil Corp. v. Barlo Equip. Corp., 215
F.3d 321, 327–28 (2d Cir. 2001)). To fill this void, the district court adopted an
“indicia of ownership” analysis which required examining “the relationship
between the United States, as owner of bare legal title of the unpatented mining
claim/property, and those entities utilizing the property subject to the unpatented
mining claim,” to discern “whether the United States possessed indicia of
-23-
ownership sufficient to merit the appellation ‘owner’ for purposes of CERCLA.”
Id. at 1244. Conducting this analysis, Friedland found “the United States [was]
not an ‘owner’ in the fullest sense of the term,” so it was “inappropriate to deem
the United States an ‘owner’ for purposes of CERCLA liability.” Id. at 1246.
The government urges us to adopt Friedland’s indicia of ownership test.
But we find it neither persuasive in principle nor in application. First, as we
explained above, this analysis has no basis in the statute. In fact, CERCLA’s
statutory context, which supports broad application of owner liability subject only
to certain, specifically enumerated exceptions belies a supra-statutory gloss.
Moreover, Congress included the phrase “indicia of ownership” when crafting
some of its few exceptions to broad owner liability. See, e.g., 42 U.S.C.
§§ 9601(20)(A) (person holding indicia of ownership primarily to protect his
security interest), 9601(20)(E)(i) (lender holding indicia of ownership primarily
to protect his security interest). If Congress sought to require indicia of
ownership by all would-be “owners,” it could have done so. The indicia of
ownership test also runs perilously close to collapsing the “owner” and “operator”
categories by requiring owners to exercise some threshold level of indicia of
ownership beyond their rights as title holder. See Atl. Research, 551 U.S. at 136
(noting that even “‘innocent private parties,” e.g., “a landowner whose land has
been contaminated by another,” are within the ambit of this “strict liability
statute” (absent a statutorily-enumerated defense), because “even parties not
-24-
responsible for contamination may fall within the broad definitions of PRPs”
(citation omitted)).
Second, at least some of Friedland’s reasoning conflicts with, and is thus
undermined by, binding Supreme Court precedent. While Friedland contends
“the United States is not allowed to exclude individuals from [land subject to
unpatented mining claims] and may only regulate mining activities in the national
forests in order to protect surface resources,” see 152 F. Supp. 2d at 1246, the
Supreme Court has repeatedly emphasized Congress’s broad, plenary Property
Clause 11 powers over national forest land, including lands subject to unpatented
mining claims. See, e.g., Cal. Coastal Comm’n v. Granite Rock Co., 480 U.S.
572, 581 (1987) (“[T]he Property Clause gives Congress plenary power to
legislate the use of the federal land on which [a mining company] holds its
unpatented mining claim.”). 12 Even if it is true, as the government argues, that
11
U.S. Const. art. IV, § 3, cl. 2 (“The Congress shall have Power to
dispose of and make all needful Rules and Regulations respecting the Territory or
other Property belonging to the United States . . . .”).
12
See also, e.g., United States v. Locke, 471 U.S. 84, 104 (1985)
(“Although owners of unpatented mining claims hold fully recognized possessory
interests in their claims, we have recognized that these interests are a ‘unique
form of property.’ The United States, as owner of the underlying fee title to the
public domain, maintains broad powers over the terms and conditions upon which
the public lands can be used, leased, and acquired. . . . Claimants thus must take
their interests with the knowledge that the Government retains substantial
regulatory power over those interests.” (citation omitted)); Best v. Humboldt
Placer Mining Co., 371 U.S. 334, 336 (1963) (“Respondents’ mining claims are
unpatented, the title to the lands in controversy still being in the United
(continued...)
-25-
Chevron and its corporate predecessors “had exclusive use and possession of the
[Questa mining lands] for mining purposes, without any interference or control by
the United States,” Aple. Br. at 21, the government’s choice not to exercise its
Property Clause powers does not invalidate their existence. There is no dispute
that the United States held fee title to relevant portions of the Questa mining
lands during the time of hazardous substance disposal, part of the area that today
comprises the Questa Site. We do not doubt that it could have exercised greater
powers, regulatory or otherwise, over the lands if it wanted to do so. 13
12
(...continued)
States. . . . [T]he Department has been granted plenary authority over the
administration of public lands, including mineral lands; and it has been given
broad authority to issue regulations concerning them.”); Belk v. Meagher, 104
U.S. 279, 283–84 (1881) (“Congress has seen fit to make the possession of that
part of the public lands which is valuable for minerals separable from the fee, and
to provide for the existence of an exclusive right to the possession, while the
paramount title to the land remains in the United States. . . . The right of location
upon the mineral lands of the United States is a privilege granted by Congress,
but it can only be exercised within the limits prescribed by the grant.”).
13
Under the Property Clause, Congress always retains—at least over the
“lands of the United States”—the powers “to control their occupancy and use, to
protect them from trespass and injury, and to prescribe the conditions upon which
others may obtain rights in them.” Utah Power & Light Co. v. United States, 243
U.S. 389, 405 (1917). This “power over the public land . . . entrusted to Congress
is without limitations.” Alabama v. Texas, 347 U.S. 272, 273 (1954); see also
United States v. Bd. of Cty. Comm’rs of Cty. of Otero, 843 F.3d 1208, 1212 (10th
Cir. 2016) (“[T]he Property Clause gives the federal government plenary power,
including legislative and police power, over federal property.”). And, as we have
explained, the Supreme Court has made clear that while holders of unpatented
mining claims have substantial property interests in their claims, Congress’s
broad, plenary Property Clause powers continue to reach the underlying federal
land.
-26-
Finally, we find the government’s argument undermines the understanding
of what a CERCLA “facility” is. CERCLA defines “facility” to broadly include
“any site or area” (i.e., land) “where a hazardous substance has been deposited,
stored, disposed of, or placed, or otherwise come to be located.” 42 U.S.C.
§ 9601(9). Its statutory coverage is expressly not limited to a “facility” in the
more traditional, narrow sense—e.g., “any building, structure, installation,
equipment, pipe or pipeline . . . , well, pit, pond, lagoon, impoundment, ditch,
landfill, storage container, motor vehicle, rolling stock, or aircraft.” Id. An
owner of any land contaminated with hazardous substances thus qualifies as an
owner of a “facility,” even if that person does not own any of the mining
equipment or structures. In contrast to this clear statutory command, the
government asks us to define “the facility” solely “with respect to Chevron’s
mining activities,” and not with respect to the land, such that “any non-mining use
rights held by the United States within the boundaries of Chevron’s mining claims
are not part of the ‘bundle of sticks’ that is material to determining whether the
United States is an ‘owner’ of the Questa Mine ‘facility.’” Aple. Br. at 42.
We conclude that, at a minimum, the term “owner” covers fee title holders
for purposes of CERCLA liability, irrespective of any additional indicia of
ownership. To find otherwise would be inconsistent with CERCLA’s statutory
scheme and an ordinary application of its terms. Of course, a “bare legal title”
holder may in fact be liable for only a small, or perhaps no, share of remediation
-27-
costs as a matter of equity. But a liberal construction of CERCLA’s liability
scheme requires any consideration of the extent and kind of an owner’s
involvement in hazardous substance production and disposal be made at the
second stage of the CERCLA liability inquiry (i.e., allocation under 42 U.S.C.
§ 9613(f)(1)), rather than the first (i.e., precluding “owner” liability entirely).
This position is consistent with Supreme Court precedent and case law from other
circuits. 14 See Atl. Research, 551 U.S. at 136 (explaining that “even parties not
responsible for contamination may fall within the broad definition of PRPs,” e.g.,
owners).
14
For example, the Fourth Circuit has addressed, and rejected, the
argument that a person who merely “held legal title to the property for only a
short period of time” was not an “owner” for purposes of CERCLA liability. See
Nurad, Inc. v. William E. Hooper & Sons Co., 966 F.2d 837, 844 (4th Cir. 1992).
In holding the short-term title holder liable as an owner, the court noted that “the
word ‘owned’ is [not] a word that admits of varying degrees. Such equitable
considerations as the duration of ownership may well be relevant at a later stage
of the proceedings when the district court allocates response costs among liable
parties, but we reject any suggestion that a short-term owner is somehow not an
owner for purposes of § 9607(a)(2).” Id. (citation omitted); see also, e.g., Los
Angeles v. San Pedro Boat Works, 635 F.3d 440, 444, 448–52 (9th Cir. 2011)
(acknowledging “Congress’s intent to hold liable the passive fee title owner of
real property,” declining to apply Commander Oil’s “nebulous and flexible”
framework, and, in holding owner liability improper as applied to holders of
revocable permits for specific use of real property, contrasting the status of
persons holding “less-than fee-title possessory interests in real property, conveyed
by the holder of fee title” with persons holding “absolute title ownership to real
property” (i.e., quintessential “owners”) (emphasis added)); Canadyne-Ga. Corp.
v. NationsBank, N.A. (S.), 183 F.3d 1268, 1273–74 (11th Cir. 1999) (finding
“legal title” sufficient to trigger owner liability).
-28-
In any event, the government engaged in much more than mere passive
ownership here. The United States actively exercised its ownership when, for
example, it sold portions of its land, including the 2,258 acres of land for waste
rock disposal around the perimeter of the open-pit mine and the 627 acres of land
for use as a tailings pond, to Molycorp in exchange for valuable consideration.
Alienability is a key tenant of ownership—it is a “fundamental maxim of property
law that the owner of a property interest may dispose of all or part of that interest
as he sees fit.” Phillips v. Wash. Legal Found., 524 U.S. 156, 167 (1998).
In addition, the government actively encouraged mining activities on its
lands when it passed the DPA and provided the initial loan to Molycorp,
Chevron’s corporate predecessor, to fund their molybdenum exploration and
mining. For decades after that, the United States knew that Chevron was
depositing millions of tons of waste rock and tailings on the surface estates, land
over which the United States still held, at minimum, ownership via legal title.
Regardless of whether contracting out mining activities might, or might not,
shield a party from operator liability, it cannot shield a landowner—here, the
legal titleholder—from owner liability (although it might reduce the party’s
equitable share at the allocation stage). And the government repeatedly exercised
its plenary regulatory authority over the lands when it approved several special
use permits for Molycorp’s tailings pipelines. These actions all indicate the
government’s continued oversight and involvement in operations on the Questa
-29-
mining lands that produced substantial amounts of hazardous substances. Though
such efforts are not at all required for ownership liability, see, e.g., Atl. Research,
551 U.S. at 136, that the United States undertook them here buttresses our
conclusion that it was an owner.
Accordingly, we conclude the United States was an owner of portions of
the Questa Site during the relevant period when hazardous substances came to be
located there. As a matter of law, therefore, the United States is a PRP with
respect to the Questa Site and is strictly liable to contribute its equitably allocated
share of Chevron’s response costs, pursuant to § 9613(f)(3)(B).
C. “Arranger” Liability
In addition to liability as an “owner” of contaminated property, Chevron
asks us to find the United States liable as an “arranger” of hazardous substance
disposal at the Questa Site. Though we have already determined the United
States qualifies as an owner and is therefore a PRP, we must address this separate
theory of recovery under § 9613(f)(3)(B) because it may affect the determination
of the United State’s equitable allocation of the response costs. As we explain,
however, we conclude that the United States is not liable as an arranger under
CERCLA because it neither owned nor possessed the hazardous substances
disposed of.
Arranger liability under CERCLA attaches to,
-30-
any person who by contract, agreement, or otherwise arranged for
disposal or treatment, or arranged with a transporter for transport for
disposal or treatment, of hazardous substances owned or possessed by
such person, by any other party or entity, at any facility or incineration
vessel owned or operated by another party or entity and containing such
hazardous substances.
42 U.S.C. § 9607(a)(3). In other words, to be held liable under CERCLA as an
arranger, we require a party to satisfy three conditions: (1) the party must be a
“person” as defined in CERCLA; (2) the party must “own” or “possess” the
hazardous substance prior to the disposal; and (3) the party must, “by contract,
agreement or otherwise,” arrange for the transport or disposal of such hazardous
substances. Raytheon Constructors, Inc. v. Asarco Inc., 368 F.3d 1214, 1219
(10th Cir. 2003). Because the United States at best satisfies only two of these
three conditions—the first and the third—we hold that arranger liability does not
apply.
To begin with, the United States is a “person” as defined in CERCLA, thus
satisfying the first condition. See 42 U.S.C. § 9601(21) (“The term ‘person’
means . . . United States Government . . . .”); 42 U.S.C. § 9620(a)(1) (“Each
department, agency, and instrumentality of the United States (including the
executive, legislative, and judicial branches of government) shall be subject to,
and comply with, this chapter in the same manner and to the same extent, both
procedurally and substantively, as any nongovernmental entity, including liability
under section 9607 of this title.”).
-31-
As to the third condition, it is true that the United States helped arrange for
the transport or disposal of waste rock and tailings at the Questa Site. And it is
undisputed those materials contained or were themselves hazardous substances
within the meaning of CERCLA. See 42 U.S.C. § 9601(14). But as the Supreme
Court has explained, not all involvement in the disposal process triggers arranger
liability. While it is “plain from the language of the statute that CERCLA
liability would attach under § 9607(a)(3) if an entity were to enter into a
transaction for the sole purpose of discarding a used and no longer useful
hazardous substance,” it is equally clear that, at the other extreme, “an entity
could not be held liable as an arranger merely for selling a new and useful
product if the purchaser of that product later, and unbeknownst to the seller,
disposed of the product in a way that led to contamination.” Burlington N. &
Santa Fe Ry., 556 U.S. at 609–10. “Less clear is the liability attaching to the
many permutations of ‘arrangements’ that fall between these two extremes.” Id.
at 610.
In such cases, “whether an entity is an arranger requires a fact-intensive
inquiry that looks beyond the parties’ characterization of the transaction . . . and
seeks to discern whether the arrangement was one Congress intended to fall
within the scope of CERCLA’s strict-liability provisions.” Id. The Supreme
Court has interpreted this inquiry to require more than “knowledge alone”; an
arranger must have taken “intentional steps to dispose of a hazardous substance.”
-32-
See id. at 611–12; see also Martin K. Eby Constr. Co. v. OneBeacon Ins., 777
F.3d 1132, 1140 (10th Cir. 2015) (citing this rule in a state-law insurance case).
Chevron contends that sufficiently intentional steps have been taken to
satisfy this requirement. It points to language from Burlington Northern that
explains “to qualify as an arranger,” a party must have entered into an
arrangement “with the intention that at least a portion of the product be disposed
of during the transfer process by one or more of the methods described in
§ 6903(3),” Burlington N. & Santa Fe Ry., 556 U.S. at 612, i.e., by discharge,
deposit, injection, dumping, spilling, leaking, or placing it into or on any land or
water, 42 U.S.C. § 6903(3).
According to Chevron, the undisputed facts demonstrate the federal
government intentionally arranged for the disposal of hazardous substances on
and from the Questa mining lands. First, the United States sold the selected lands
to Molycorp with the knowledge that the lands were intended to be used as a
disposal area. Molycorp initially proposed to use a canyon across the Red River
as its primary waste-disposal site. Although a Forest Service report indicated that
the Red River proposal was going to be the “least expensive means of
dispos[al], . . . the impact on the environment and ecology of Red River Canyon
would be tremendous” and the proposal was thus “vigorously opposed by the
Forest Service and ecologist groups.” App., Vol. 1, at 167. As an alternative,
then, Molycorp began negotiations with the Forest Service in 1969 to facilitate a
-33-
transaction in which Molycorp would give the United States “246.65 acres of land
which it own[ed] in Taos County” in exchange for “2,258 acres of National Forest
land” adjacent to the open-pit mine. Id. at 163. The Forest Service shared
Molycorp’s intent to use the selected lands as a disposal area and believed this
use would benefit the United States. See id. at 164 (“The selected lands will be
the final area of disposal for a part of the nonmineral overburden.”); id. at 166
(acknowledging that “the mine is supplying a needed mineral resource to the
Nation” and noting “several indirect benefits from the disposal of the overburden
material”).
Second, the United States sold an additional 627 acres of land to Molycorp
with the intent that the lands be used as a tailings pond to dispose of mine
tailings. A BLM land report analyzing the proposed sale identified the lands as
“non-mineral in character” and “greatly needed as a tailings pond,” explaining the
government’s understanding that Molycorp’s “molybdenum mine is located nine
miles to the east and tailings would be piped from the mine to the pond.” Id. at
183–84. The BLM ultimately found that the sale would be “in the public interest”
and, “[c]onsidering the urgent need of the applicant for the subject tract and its
suitability for the proposed use as well as the resulting economic benefit to the
general area from the expanded mining operation, the highest and best use is that
of a tailings pond.” Id. 183, 186.
-34-
Finally, the United States routinely approved special use land authorization
permits for pipelines crossing over national forest lands with the specific intent
that Molycorp would use the pipelines to transport tailings from the mine site to
the disposal ponds. For example, a 1965 government Impact Report referred to
the pipeline as a “proposed tailings line” and acknowledged specific risks
associated with this particular use, including “the potential of the line breaking
and spilling slurry into the river, which might result in local fish kill prior to
repair of the line.” Id. at 204–05. The report nonetheless concluded “[t]he over-
all impact of this project . . . is beneficial,” id. at 205, and indicated an express
preference for Molycorp’s pipeline plan. It did so to avoid “[t]he alternative of a
mountain of tailings in the canyon around Sulfer Gulch,” which would be
“intolerable but legal.” See id. at 205. And the government had no doubt that
subsequent special use permits would likewise allow construction of pipelines to
transport mine tailings. A 1973 letter to Molycorp approved “a fourth tailings
line adjacent to [its] existing tailings pipeline.” Id. at 208.
These government actions may well constitute sufficiently “intentional
steps” to satisfy the third condition of arranger liability. The collective effect of
the United States’s actions—including the sale of the selected lands for a waste
disposal site, sale of the land for the second tailings pond, and approval of the
tailings pipelines—was not only to ensure the likelihood of hazardous substance
disposal but also to facilitate it.
-35-
But that is not the end of our analysis. Arranger liability under CERCLA
applies only to a person who arranges for disposal “of hazardous substances
owned or possessed by such person.” 42 U.S.C. § 9607(a)(3) (emphasis added).
As we said in Raytheon, to be held liable under CERCLA as an arranger, “the
party . . . must ‘own’ or ‘possess’ the hazardous substance at issue.” 368 F.3d at
1219. Chevron suggests we revisit the ownership/possession requirement in its
entirety. But, “[a]bsent en banc consideration, we generally ‘cannot overturn the
decision of another panel of this court,’” unless an intervening Supreme Court
decision “is ‘contrary’ to or ‘invalidates our previous analysis.’” See United
States v. Brooks, 751 F.3d 1204, 1209 (10th Cir. 2014) (citations omitted). And
although Chevron implies the Supreme Court’s decision in Burlington Northern
invalidated our explanation of CERCLA’s ownership requirement set forth in
Raytheon, we are not persuaded. Beyond reproducing the statutory text,
Burlington Northern does not even mention the ownership requirement in
CERCLA’s arranger liability provision, let alone call it into question. See 556
U.S. at 611–12 (addressing whether a manufacturer that sold chemicals to
distributors was an arranger).
Our position is consistent with several cases from other circuits. For
example, the First Circuit recognized that the statutory phrase in § 9607(a)(3) “by
any other party or entity” could ostensibly be read to modify “the preceding
words ‘owned or possessed by such person,’ which would make liable any person
-36-
who arranged for the disposal of a hazardous substance ‘owned or possessed by
such person [or] by any other party or entity.’” Am. Cyanamid Co. v. Capuano,
381 F.3d 6, 23–24 (1st Cir. 2004) (brackets in original). But the court proceeded
to explain the “sentence structure of § 9607(a)(3) makes it clear” that the correct
interpretation is to read “by any other party or entity” to modify “the words
‘disposal or treatment,’ which would make the sentence read ‘any person who . . .
arranged for disposal or treatment . . . by any other party or entity’” and leave the
ownership/possession requirement intact. Id. at 24 (ellipses in original).
Likewise, the Third Circuit agrees that for arranger liability to attach under
CERCLA, “[p]roof of ownership, or at least possession, of the hazardous
substance is required by the plain language of the statute.” Morton Int’l, Inc. v.
A.E. Staley Mfg. Co., 343 F.3d 669, 678 (3d Cir. 2003); see also, e.g., GenCorp,
Inc. v. Olin Corp., 390 F.3d 433, 445 (6th Cir. 2004) (“CERCLA imposes liability
on any person who ‘arrange[s]’ ‘by contract, agreement or otherwise’ for the
‘disposal or treatment . . . [or] for transport for disposal or treatment’ of
‘hazardous substances’ that is [sic] ‘owned or possessed’ by that person.’”
(emphasis added; brackets and ellipses in original)); Concrete Sales and Servs.,
Inc. v. Blue Bird Body Co., 211 F.3d 1333, 1337 (11th Cir. 2000) (per curiam)
(“In the present case, therefore, the [party seeking imposition of arranger
liability] must produce evidence that would allow a reasonable [factfinder] to
infer from the totality of the circumstances that [the alleged arrangers] arranged
-37-
for [the] disposal of hazardous substances owned or possessed by [the alleged
arrangers].” (emphasis added)); Uniroyal Chem. Co., Inc. v. Deltech Corp., 160
F.3d 238, 243 (5th Cir. 1998) (quoting 42 U.S.C. § 9607(a)(3) as providing
arranger liability for “any person who by contract, agreement, or otherwise
arranged for disposal or treatment, or arranged with a transporter for transport for
disposal or treatment, of hazardous substances owned or possessed by such
person . . . , at any facility” (emphasis added; ellipses in original)); United States
v. TIC Inv. Corp., 68 F.3d 1082, 1086 (8th Cir. 1995) (summarizing 42 U.S.C.
§ 9607(a)(3) as providing arranger liability for “those who arranged for disposal
or treatment, or arranged for transport for disposal or treatment, of hazardous
substances which they owned or possessed” (emphasis added)).
Chevron points to only one case which has rejected the ownership
requirement. See Cadillac Fairview/Cal., Inc. v. United States, 41 F.3d 562 (9th
Cir. 1994). In that case, the Ninth Circuit interpreted CERCLA’s statutory
language to extend arranger liability “to persons ‘otherwise arrang[ing]’ for
disposal or treatment of hazardous substances whether owned by the arranger or
‘by any other party or entity, at any facility or incineration vessel owned or
operated by another party or entity.’” Id. at 565 (emphasis added). In other
words, Cadillac Fairview interpreted arranger liability to attach not only to
hazardous substances owned or possessed by the alleged-arranger but also to such
substances owned or possessed “by any other party or entity.” Id. Even if this
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argument were not foreclosed by our decision in Raytheon, we find it
unpersuasive based on the statute’s plain language.
First of all, the more natural reading of the statutory language is that the
hazardous substances must be owned or possessed by the person arranging for the
disposal or treatment of those substances. In contrast, the clause “by any other
party or entity” does not apply to ownership of the hazardous substances but, as
most courts have held, refers back to the previous clause, “for disposal or
treatment” (i.e., the phrase thus most naturally reads as the arrangement “for
disposal or treatment . . . by any other party or entity, at any facility or
incineration vessel”). This reading makes sure that the party getting paid for
disposal or treatment (and thereby taking possession or ownership of the
hazardous substances) is liable while not insulating from liability the previous
owner who arranged for the disposal or treatment. To read the provision
otherwise would render the “owned or possessed” language entirely superfluous.
Under well-established principles of statutory interpretation, Congress would not
have included an ownership or possession requirement if that requirement could
be met by any party’s or entity’s ownership or possession of the substances. 15
Our correct application of these canons of statutory construction is confirmed by
15
The canon against surplusage indicates that we generally must give
effect to all statutory provisions, so that no part will be inoperative or
superfluous—each phrase must have distinct meaning. See, e.g., Marx v. Gen.
Revenue Corp., 133 S. Ct. 1166, 1178 (2013); TRW Inc., 534 U.S. at 31; Lockheed
Martin Corp., 717 F.3d at 1130–31.
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Cadillac Fairview itself, which is untethered from CERCLA’s text. See 41 F.3d
at 565.
Chevron also cites two cases, in addition to Cadillac Fairview, to support
its claim that other courts have rejected an ownership or possession requirement.
But as Chevron acknowledges, those cases merely “question[] whether it requires
proof of actual ownership, or may be satisfied by other evidence,” without
rejecting the requirement altogether, see Aplt. Reply Br. at 25 n.15. For example,
the Sixth Circuit acknowledged that “to say that [42 U.S.C. § 9607(a)(3)] requires
ownership or possession of the waste does not establish what evidence will satisfy
the requirement or, more particularly, whether constructive ownership or
possession will suffice.” GenCorp, Inc., 390 F.3d at 448. In interpreting the
ownership requirement, GenCorp found it appropriate to “infer that Congress
meant the phrase ‘ownership or possession’ to include constructive ownership or
possession,” and that “GenCorp’s control over the hazardous waste suffice[d] to
establish constructive ownership and possession” sufficient to trigger arranger
liability. See id. at 448–49. Likewise, the Eighth Circuit simply declined to
require rigid “proof of personal ownership or actual physical possession.” United
States v. Ne. Pharm. & Chem. Co., 810 F.2d 726, 743–44 (8th Cir. 1986)
(emphasis added). But it found that the company “had actual ‘control’ over the
. . . hazardous substances,” and that this authority was sufficient to satisfy the
ownership requirement and trigger arranger liability. See id. at 743.
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Raytheon does not discuss whether anything less than actual ownership of
the hazardous substances disposed of may satisfy CERCLA’s requirements for
arranger liability, nor has Chevron made a constructive possession argument.
Chevron briefly notes that “the United States held fee title to lands from which
waste rock was extracted and therefore owned that rock,” but its briefs neither
develop this argument nor apply it to CERCLA. See Aplt. Br. at 56 n.15.
Even if we were to reach this argument, Chevron failed to establish that the
United States owned or possessed the hazardous substances, or the mining waste
containing them. It cites to United States v. McPhilomy, 270 F.3d 1302 (10th Cir.
2001), but that criminal case did not involve valid mining claims and turned on a
very different burden of proof even as to the issues it discussed. In any event,
“the moment th[at] ore becomes detached from the soil in which it is embedded it
becomes personal property, the ownership of which is in the [person] whose
labor, capital, and skill has discovered and developed the mine[,] . . . free from
any lien, claim, or title of the United States . . . .” Forbes v. Gracey, 94 U.S. 762,
765–66 (1876). The United States neither owned nor possessed the waste rock
and tailings extracted from Chevron’s molybdenum mining activities.
In sum, we conclude that the United States is not an “arranger” under
CERCLA with regard to the contamination located at the Questa Site because it
did not own or possess the hazardous substances disposed of.
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III. Conclusion
We conclude that, as a matter of law, the United States is an “owner” under
42 U.S.C. § 9607(a)(2) because it owned portions of the Questa Site at the time
hazardous substances were located there. The United States is not, however, an
“arranger” under 42 U.S.C. § 9607(a)(3) because it did not own or possess the
hazardous substances disposed of. The United States is thus a PRP under
CERCLA (as an owner but not an arranger) and, as a matter of law, liable for an
equitable allocation of Chevron’s past, present, and future necessary response
costs to remediate the Questa Site, pursuant to 42 U.S.C. § 9613(f)(3)(B).
Accordingly, we REVERSE in part and AFFIRM in part the district court’s
judgment and REMAND for further proceedings consistent with this opinion.
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