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United States v. Iron Mountain Mines, Inc.

Citation: 28 ELR 21133
(10/28/1997)

The court holds that the United States is not liable under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) for any response costs associated with the remediation of a California mine's acid mine drainage (AMD). The mine owner claimed that U.S. ownership of a water project, a mine, and 12 parcels of land in the vicinity of the mine owner's property made the government liable for a portion of the response costs. The court first holds that the mine owner failed to make a showing that the alleged releases from the government's water project and mine caused the mine owner to incur response costs that were necessary and consistent with the national contingency plan (NCP). The response costs the mine owner has incurred to date in complying with U.S. Environmental Protection Agency (EPA) Administrative Orders address only releases from the mine owner's property not releases from the government's water project, mine, or any other potential source of pollution. The court rejects the mine owner's argument that because the EPA-measured compliance point for the mine is in a river basin, all contributors to pollution in the river basin are responsible for the mine's cleanup. All the response costs incurred to date address AMD from the mine alone, and the measures adopted by EPA address the mine's AMD before it is potentially mixed with other sources of AMD or metals' pollution. The court also rejects the mine owner's argument that it incurred a second category of response costs when it conducted investigation and monitoring of the river basin, because the mine owner cannot demonstrate that the monitoring and investigation were necessary to the mine's cleanup.

The court next holds that the mine owner failed to show that releases of hazardous substances emanated from 10 government-owned parcels and caused response costs that were necessary and consistent with the NCP. The court then holds that the United States avoids liability for releases from two parcels of government-owned land under CERCLA's third-party defense. While AMD may have been created on and released from two government parcels, any conduct in permitting mining to occur is too remote from the generation of the AMD to find that U.S. conduct was a cause of the releases. Neither is U.S. failure to regulate mining so as to prevent environmental contamination the legal cause of the AMD at the mine.

The court then rejects the mine owner's argument that land transfers made under the Mining Law of 1872 in connection with the mine constituted a contractual relationship that bars U.S. assertion of the third-party defense. The Mining Law of 1872 was not a contract between the United States and the mine owner's predecessor for the mining of the mine let alone for the generation of AMD. Similarly, the court rejects the mine owner's argument that the United States should be barred from asserting the third-party defense due to contracts the United States entered with the mine owner's predecessor during World War II. A corporation distinct from the federal government entered into contracts with the mine owner's predecessor in its own name, not on behalf of the United States. Finally, the court rejects the mine owner's argument that the United States did not exercise due care or take the precautions necessary to permit it to assert the third-party defense. Given the extent of U.S. holdings and its lack of actual control over mining operations, it would be unreasonable to expect the United States to have discovered that AMD was being released from two small government-owned parcels. Once the full extent of the AMD problem at the mine became known, the United States ordered that remedial measures aimed at stopping the release of AMD from the mine be taken. Under the circumstances, U.S. actions were a reasonable response to the AMD contamination at the mine.

[Prior decisions in this litigation are published at 23 ELR 20651 and 20661, 25 ELR 21275, 27 ELR 20924, and 28 ELR 21055, 21059, 21064, and 21130.]

Counsel for Plaintiff
David B. Glazer, Martin F. McDermott
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Counsel for Defendants
Paul B. Galvani, James W. Matthews
Ropes & Gray
One International Pl., Boston MA 02110
(617) 951-7000