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Atlantic Richfield Co. v. Montana Second Judicial District Court

Supreme Court of Montana

December 29, 2017

ATLANTIC RICHFIELD COMPANY, Petitioner,
v.
MONTANA SECOND JUDICIAL DISTRICT COURT, SILVER BOW COUNTY, THE HON. KATHERINE M. BIDEGARAY, Respondent,

         Petition for Writ of Supervisory Control District Court of the Second Judicial District, In and for the County of Silver Bow, Cause No. DV-08-173BN Honorable Katherine M. Bidegaray, Presiding Judge

          For Petitioner: Jonathan W. Rauchway (argued), Shannon Wells Stevenson, James R. Henderson, Davis Graham & Stubbs LLP, Denver, Colorado John P. Davis, Patrick M. Sullivan, Poore, Roth & Robinson, P.C., Butte, Montana

          For Plaintiff Gregory Christian, et al.: Monte D. Beck, Justice P. Stalpes (argued), Beck, Amsden & Stalpes, PLLC, Bozeman, Montana J. David Slovak, Mark M. Kovacich, Ross Johnson, Lewis, Slovak, Kovacich & Snipes, PC, Great Falls, Montana

          For Amicus Curiae: John C. Cruden, Matthew R. Oakes (argued), Assistant Attorneys General, United States Department of Justice, Washington D.C.

          Domenic A. Cossi (argued), Western Justice Associates, PLLC, Bozeman, Montana (Attorney for Amicus Curiae Montana Trial Lawyers Association)

          Roger Sullivan, McGarvey, Neberling, Sullivan & Lacey, Kalispell, Montana (Attorneys for Montana Environmental Information Center)

          Kurt G. Alme, United States Attorney, Victoria Francis, Assistant United Stated Attorney, District of Montana, Billings, Montana (Attorneys for Amicus Curiae United States of America)

          Elizabeth A. Brennan, Brennan Law & Mediation, PLLC, Missoula, Montana (Attorneys for Amicus Curiae Clark Fork Coalition)

          OPINION AND ORDER

          James Jeremiah Shea Justice

         ¶1 Petitioner Atlantic Richfield Company ("ARCO") petitioned this Court for a writ of supervisory control, seeking reversal of five orders of the Second Judicial District Court in Silver Bow County in the matter of Christian, et al. v. Atlantic Richfield Co. Relevant to the issue before us, the action in the District Court concerns a claim for restoration damages brought by property owners in and around the town of Opportunity, Montana (hereafter referred to as "Property Owners"). We accepted supervisory control of this case for the limited purpose of considering the District Court's August 30, 2016 Order Denying ARCO's Motion for Summary Judgment on Property Owners' Claim for Restoration Damages as Barred by CERCLA and Granting Property Owners' Motion for Summary Judgment on ARCO's CERCLA Preemption Affirmative Defenses (11th-13th). We restate the issues as follows:

Issue One: Whether the Property Owners' claim constitutes a challenge to EPA's selected remedy, and thus does not comply with CERCLA's timing of review provision.
Issue Two: Whether the Property Owners are "Potentially Responsible Parties, " and thus cannot proceed with their chosen restoration activities without EPA approval.
Issue Three: Whether the Property Owners' claim otherwise conflicts with CERCLA, and is thus preempted.

         PROCEDURAL AND FACTUAL BACKGROUND

         ¶2 The Anaconda Smelter, originally constructed by the Anaconda Copper Mining Company, processed copper ore from Butte for nearly one hundred years before shutting down in 1980. Also in 1980, Congress passed the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA"), 42 U.S.C. § 9601, et seq. Also known as "Superfund, " the purpose of CERCLA is to foster the cleanup of sites contaminated by hazardous waste, and to protect human health and the environment. In 1983, the Environmental Protection Agency ("EPA") designated the area impacted by the Anaconda Smelter, now owned by ARCO, as a Superfund site. In 1984, EPA issued an administrative order requiring ARCO to begin a remedial investigation at the Smelter Site. In 1998, EPA selected a remedy pursuant to CERCLA that detailed ARCO's cleanup responsibilities moving forward.

         ¶3 As part of ARCO's cleanup responsibility, EPA required ARCO to remediate residential yards within the Smelter Site harboring levels of arsenic exceeding 250 parts per million in soil, and to remediate all wells used for drinking water with levels of arsenic in excess of ten parts per billion. The Property Owners, a group of ninety-eight landowners located within the bounds of the Smelter Site, sought the opinion of outside experts to determine what actions would be necessary to fully restore their properties to pre-contamination levels. The experts recommended the Property Owners remove the top two feet of soil from affected properties and install permeable walls to remove arsenic from the groundwater. Both remedies required restoration work in excess of what the EPA required of ARCO in its selected remedy.

         ¶4 The Property Owners filed this action in 2008, claiming common law trespass, nuisance, and strict liability against ARCO, and seeking restoration damages. Any recovered restoration damages are to be placed in a trust account and distributed only for the purpose of conducting restoration work.

         ¶5 In 2013, ARCO moved for summary judgment on the grounds that CERCLA barred the Property Owners' claims. The District Court did not address ARCO's CERCLA preemption issue because it dismissed the Property Owners' case on the basis that their claims were barred by the statute of limitations. The Property Owners appealed and we affirmed in part, reversed in part, and remanded the case to the District Court for further proceedings. Christian v. Atl. Richfield Co., 2015 MT 255, ¶ 79, 380 Mont. 495, 358 P.3d 131. On remand, the District Court denied all of ARCO's contested motions for summary judgment. Among the orders denied was ARCO's Motion for Summary Judgment on the Property Owners' Claim for Restoration Damages as Barred by CERCLA. ARCO petitioned this Court for a writ of supervisory control, asking us to vacate four of the District Court's orders denying summary judgment and one order on a motion in limine. On October 5, 2016, we issued an order granting the writ for the limited purpose of considering the District Court's 2016 Order Denying ARCO's Motion for Summary Judgment on Property Owners' Claim for Restoration Damages as Barred by CERCLA and Granting Property Owners' Motion for Summary Judgment on ARCO's CERCLA Preemption Affirmative Defenses (11th-13th).

         ¶6 The Property Owners bring several claims against ARCO: (1) injury to and loss of use and enjoyment of real and personal property; (2) loss of the value of real property; (3) incidental and consequential damages, including relocation expenses and loss of rental income and/or value; (4) annoyance, inconvenience, and discomfort over the loss and prospective loss of property value; and (5) expenses for and cost of investigation and restoration of real property. ARCO concedes that the Property Owners may move forward on their first four claims, but contend that the claim for restoration damages is preempted by CERCLA.

         STANDARD OF REVIEW

         ¶7 We review de novo a district court's grant or denial of summary judgment, applying the same criteria of M. R. Civ. P. 56 as a district court. Pilgeram v. GreenPoint Mortg. Funding, Inc., 2013 MT 354, ¶ 9, 373 Mont. 1, 313 P.3d 839. Under Rule 56(c), judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Roe v. City of Missoula, 2009 MT 417, ¶ 14, 354 Mont. 1, 221 P.3d 1200 (citation omitted).

         DISCUSSION

         ¶8 In Sunburst School Dist. No. 2 v. Texaco, 2007 MT 183, ¶ 34, 338 Mont. 259, 165 P.3d 1079, we held: "If a plaintiff wants to use the damaged property, instead of selling it, restoration of the property constitutes the only remedy that affords a plaintiff full compensation." To recover restoration damages, a plaintiff must show (1) the injury to the property is reasonably abatable, and (2) the plaintiff has "reasons personal" for seeking restoration damages. Lampi v. Speed, 2011 MT 231, ¶ 29, 362 Mont. 122, 261 P.3d 1000 (citing Sunburst, ¶¶ 31-39). In Sunburst, the plaintiffs sought restoration damages from Texaco to restore their properties to the condition the properties would have been in absent a benzene leak from a Texaco gasoline refinery. Sunburst, ¶ 38. Texaco argued that the plaintiffs' common law claim for restoration damages was preempted by Montana's Comprehensive Environmental Cleanup and Responsibility Act (CECRA), a state statute similar in purpose and scope to CERCLA. Sunburst, ¶ 55. We further noted in Sunburst that "[a] presumption exists against statutory preemption of common law claims. A statute does not take away common law claims except to the extent that the statute expressly or by necessary implication declares." Sunburst, ¶ 51 (internal citations omitted). Accordingly, we held: "[N]o conflict exists between DEQ's supervisory role under CECRA and restoration damages awarded under the common law. We further conclude that nothing in CECRA precludes a common law claim by necessary implication." Sunburst, ¶ 59.

         ¶9 ARCO argues that the Property Owners may not bring their state law claim for restoration damages because the claim conflicts with various provisions of CERCLA, and thus are preempted. Preemption is established expressly, through the unambiguous language of Congress in statute, or impliedly through the doctrines of field preemption or conflict preemption. Oneok, Inc. v. Learjet, Inc., ___ U.S. ___, 135 S.Ct. 1591, 1594-95 (2015). Field preemption exists if Congress intended the relevant federal law to entirely occupy the field. California v. ARC Am. Corp., 490 U.S. 93, 100, 109 S.Ct. 1661, 1665 (1989). There is no field preemption in this case, as CERCLA expressly allows for complementary state laws, including common law, through a series of savings clauses:

Nothing in [CERCLA] shall affect or modify in any way the obligations or liabilities of any person under other Federal or State law, including common law, with respect to releases of hazardous substances or other pollutants or contaminants. . . .

42 U.S.C. § 9652(d).

Nothing in [CERCLA] shall be construed or interpreted as preempting any State from imposing any additional liability or requirements with respect to the release of hazardous substances within such State.

42 U.S.C. § 9614(a).

         ¶10 ARCO advances three arguments regarding how it contends CERCLA bars the Property Owners' claim for restoration damages: (1) Property Owners' restoration damages claim constitutes a direct challenge to EPA's selected remedy and CERCLA's timing of review provision, 42 U.S.C. § 9613(h) ("CERCLA § 113(h)"), prevents this Court from hearing challenges to an EPA remedy; (2) the Property Owners are "potentially responsible parties" under CERCLA, and as such may not perform any restoration activities without EPA approval; and (3) the Property ...


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