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Asarco, LLC v. Union Pac. R.R. Co.

United States Court of Appeals, Ninth Circuit

August 27, 2014

ASARCO, LLC, Plaintiff-Appellant,
v.
UNION PACIFIC RAILROAD COMPANY, a Utah corporation; UNION PACIFIC CORPORATION, Defendants-Appellees,

Argued and Submitted July 10, 2014 Seattle, Washington

As Corrected August 27, 2014.

Page 1000

[Copyrighted Material Omitted]

Page 1001

Appeal from the United States District Court for the District of Idaho. D.C. No. 2:12-cv-00283-EJL. Edward J. Lodge, District Judge, Presiding.

SUMMARY[**]

Environmental Law

The panel reversed the dismissal of a mining company's action under § 113(f) of the Comprehensive Environmental Response, Compensation, and Liability Act, seeking a share of cleanup costs paid for environmental harm at the Coeur d'Alene Superfund Site.

The panel held that the mining company's claim was not barred by CERCLA's three-year statute of limitations for claims seeking contribution after entry of a judicially approved settlement. The panel held that even though the first amended complaint included allegations that were expressly disclaimed in the original complaint, it related back to the date of the original complaint under Fed.R.Civ.P. 15(c)(1)(B) because it arose out of the same conduct, transaction, or occurrence as that set forth in the original complaint. The panel held that the original complaint was timely because Rule 6(a)'s general rule for counting time, excluding the day of the event that triggered the period, applied.

The panel held that the mining company's claim was not unambiguously barred by a prior agreement that settled the defendant's claims against the mining company at the same site. The panel concluded that a " mutual release" provision in the parties' settlement agreement did not unambiguously release the claim in this case.

Gregory Evans (argued) and Laura G. Brys, Integer Law Corporation, Los Angeles, California; Linda R. Larson, Russell C. Prugh, and Meline G. MacCurdy, Marten Law PLLC, Seattle, Washington, for Plaintiff-Appellant.

Carolyn McIntosh (argued) and Maxine Martin, Patton Boggs LLP, Denver, Colorado; Ausey H. Robnett III, Paine Hamblen LLP, Coeur d'Alene, Idaho; Gail L. Wurtzler, Davis Graham & Stubbs LLP, Denver, Colorado, for Defendants-Appellees.

Before: A. Wallace Tashima and Mary H. Murguia, Circuit Judges, and Cormac J. Carney, District Judge.[*]

OPINION

Page 1002

CARNEY, District Judge.

ASARCO, LLC (" Asarco" ) appeals the district court's dismissal of its contribution action brought under § 113(f) of the Comprehensive Environmental Response, Compensation, and Liability Act (" CERCLA" ), 42 U.S.C. § § 9601-9675. Asarco seeks to recover from Union Pacific Railroad Co. and Union Pacific Corp. (together, " Union Pacific" ) a share of $482 million in cleanup costs Asarco paid for environmental harm at the Coeur d'Alene Superfund Site in Northern Idaho. The district court dismissed the action under Federal Rule of Civil Procedure 12(b)(6), concluding that although Asarco's claim was timely, it was barred by a 2008 settlement agreement between the parties that settled Union Pacific's claims against Asarco at the same site. We conclude that Asarco's claim was timely, but that the parties' 2008 settlement agreement did not unambiguously release Asarco's claim here. We therefore reverse the district court's judgment dismissing the case under Rule 12(b)(6).

Background

Asarco and Union Pacific both participated in nearly a century of mining operations in the Coeur d'Alene River watershed, a 1,500-square-mile area located in Idaho's northern panhandle. Asarco operated over 20 mines in the Coeur d'Alene site, and Union Pacific built rail lines and transported ore and other materials for the region's mining and smelting facilities. In 1983, the Environmental Protection Agency (" EPA" ) listed the Coeur d'Alene site on the CERCLA National Priorities List. Since then the site has undergone over 30 years of cleanup efforts by the EPA, the State of Idaho, and potentially responsible parties, including Asarco and Union Pacific.

In the 1990s, the United States, the State of Idaho, and the Coeur d'Alene Tribe each filed various claims against Asarco and other mining companies for response costs and natural resource damages at the Coeur d'Alene site. These actions were consolidated in 2003 and, after a 78-day trial, Judge Lodge of the United States District Court for the District of Idaho issued an order apportioning liability based on the volume of mining waste released into the basin's waterways. Asarco was found at least 22 percent responsible. Coeur d' Alene Tribe v. Asarco, Inc., 280 F.Supp.2d 1094, 1121 (D. Idaho 2003).

In 2005, before the damages portion of the consolidated case was concluded, Asarco filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code. Through bankruptcy, Asarco sought to resolve approximately $6.5 billion in environmental liabilities at 53 sites throughout the country. Union Pacific and the United States both filed proofs of claim.

Union Pacific's proofs of claim sought a general unsecured claim for payment of freight charges and response costs at numerous sites, including $52 million in CERCLA response costs Union Pacific had paid at the Coeur d'Alene site. In 2008, the parties entered into a settlement agreement (the " UP Settlement" ), which resolved " all the claims by UP or claims which UP could have filed against ASARCO," and allowed Union Pacific a general unsecured claim of about $4 million. Upon the parties' joint motion, the bankruptcy court approved the settlement.

The UP Settlement contains a " mutual release" provision, which states in relevant part:

Page 1003

ASARCO agrees . . . to hereby release, remise, and discharge UP . . . from any and all damages, losses, expenses, costs, liabilities, claims, demands, suits, causes of action, and complaints, of any kind, character or description, in law or in equity, whether known or unknown, arising out of or in any way connected with . . . Remaining Sites Costs. (Emphasis added.)

The UP Settlement defines " Remaining Sites Costs" to mean " costs of response under CERCLA incurred by UP at the Remaining Sites," including the Coeur d'Alene ...


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