Free Reply to Response to Motion - District Court of Colorado - Colorado

Case 1:01-cv-02163-BNB-MEH

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 01-PC-2163 (MEH) SIERRA CLUB and MINERAL POLICY CENTER, Plaintiffs, vs. EL PASO PROPERTIES, INC., Defendant. ______________________________________________________________________________ DEFENDANT'S REPLY IN SUPPORT OF ITS MOTION FOR JUDGMENT ON THE BASIS OF THE DOCTRINE OF COLLATERAL ESTOPPEL ______________________________________________________________________________ Defendant El Paso Properties, Inc. ("El Paso") respectfully files this Reply in Support of its Motion for Judgment on the Basis of the Doctrine of Collateral Estoppel. I. Introduction Plaintiffs argue that El Paso's Motion should be denied because (a) the deadline for filing dispositive motions has passed and no good cause for an extension has been shown; (b) the prior case did not "actually or necessarily" decide the factual points that El Paso relies upon in its motion; (c) collateral estoppel should not apply to Rule 702 expert rulings; (d) the potential for the prior ruling to be reversed on appeal should discourage application of collateral estoppel; and (e) the public interest weighs against application of collateral estoppel. The Court should enter judgment for El Paso on the basis of collateral estoppel because: (a) El Paso's Motion complied with the only motions deadline set after the case was remanded; (b) Sierra Club v. Cripple Creek & Victor Gold Mining Co, et al., Civil Action No. 00-MK-2325

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("CC&V case") indeed "actually and necessarily" decided the factual issues El Paso relies on in its motion; (c) the Court should apply collateral estoppel to the CC&V Court's Rule 702 expert findings; (d) potential appeal of the CC&V case does not preclude the application of collateral estoppel; and (e) the public interest warrants the application of collateral estoppel. II. Argument A. El Paso's Motion was timely After remand, this Court established a motions deadline of May 1, 2006. December 2, 2005 Minute Order at 1. Although the Court's Order refers to motions regarding evidence and experts, El Paso understood the Order to apply to any motions contemplated by the parties on remand. Following the District Court's April 13, 2006 ruling in the CC&V case this Court extended the motions deadline to June 30, 2006. April 27, 2006 Minute Order at 1. El Paso filed its Motion for Judgment on June 30, 2006 pursuant to the motions deadline set by this Court. El Paso did not learn that Plaintiffs believed CC&V was liable for the El Paso shaft discharge until 2005. El Paso could not have filed its Motion before the CC&V Court issued its ruling dismissing Plaintiffs' claims on April 13, 2006.

B. The CC&V Court held that the Plaintiffs failed to prove a discharge of pollutants from the El Paso shaft into Cripple Creek El Paso did not argue that the CC&V Court ruled that "1) there is no hydrological connection between the El Paso shaft and Cripple Creek via the Roosevelt Tunnel and, 2) that
DEFENDANT 'S R EPLY IN SUPPORT OF ITS M OTION FOR J UDGMENT ON THE BASIS OF THE DOCTRINE OF C OLLATERAL E STOPPEL Sierra Club, et al. v. El Paso Properties, Inc. (Civil Action No. 01-PC-2163) (MEH) Page 2

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pollutants from the El Paso shaft do not flow to the portal into Cripple Creek." Plaintiffs' Response at 9. Rather, El Paso's Motion relies upon the District Court's finding that Plaintiffs failed to prove an unpermited discharge of pollutants from the El Paso shaft into Cripple Creek via the Roosevelt Tunnel, and thus had failed to prove an unpermited discharge violation of the Clean Water Act. Defendant's Motion at 5-9. In the CC&V ruling, the District Court stated: The Sierra Club repeatedly argues that it is not required to 'prove the origin of the pollutants in order to establish liability.' This argument begs the question. With regard to a non-permit claim, the Sierra Club must establish that there was a discharge of a pollutant into the water ­ the mere presence of identified chemicals in the water does not constitute a violation of the Clean Water Act because such chemicals could be there naturally. . . Sierra Club has presented no evidence as to whether, what or the degree to which the chemicals or other substances reported in test results are naturally found in the water. April 13, 2006, Memorandum Opinion and Order at 41. The CC&V Court also found that "[n]o direct evidence was presented which identifies the source of the water that is discharged at the portal, or to the extent it comes from a number of sources, what chemical constituents are contributed by each source." Id. at 23-24. Based on these findings, the District Court held that "the Court has no evidence from which it can determine whether any pollutant had been added or discharged into the water. As a consequence, the Sierra Club has not proven that there has been a violation of Clean Water Act." Id. at 41. Plaintiffs' legal theory in both this case and the CC&V case is based on the proposition that zinc and manganese originating from or flowing through the El Paso shaft are discharged through the Roosevelt Tunnel portal into Cripple Creek. The only difference between Plaintiffs'
DEFENDANT 'S R EPLY IN SUPPORT OF ITS M OTION FOR J UDGMENT ON THE BASIS OF THE DOCTRINE OF C OLLATERAL E STOPPEL Sierra Club, et al. v. El Paso Properties, Inc. (Civil Action No. 01-PC-2163) (MEH) Page 3

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liability theories lies in the nexus to the El Paso shaft. Plaintiffs claim that CC&V is liable because the shaft lies within the mine permit boundary; whereas Plaintiffs claim El Paso is liable because it owns the real property under which the shaft is located. This distinction in legal theories is inconsequential, as is the fact that El Paso has endorsed different expert witnesses than CC&V, because after trial, the District Court found as a matter of fact that Plaintiffs failed to carry their burden of proving that pollutants from the El Paso shaft are discharged into Cripple Creek. This finding is fundamental to the District Court's conclusion of law that Plaintiffs failed to prove a Clean Water Act violation. C. This Court can perform its gatekeeper function while applying collateral estoppel in this case The Court will not abdicate its gatekeeper role by applying collateral estoppel to the District Court's Rule 702 rulings in the CC&V case. In this circuit courts have discretion in how they perform their gatekeeper function with regard to expert testimony, but cannot forgo their gatekeeper function altogether. Dodge v. Cotter, 328 F.3d 1212, 1228 (10th Cir. 2003). This Court can perform its gatekeeper function by reviewing the Rule 702 proceedings and rulings in the CC&V case to determine that Plaintiffs' expert opinions regarding the Roosevelt Tunnel in both cases are identical. Such review will also demonstrate the validity of challenges to those opinions in both cases and the rationale for the CC&V Court's ruling that those challenges are valid. D. Collateral estoppel should apply despite the potential for appeal of the CC&V case

DEFENDANT 'S R EPLY IN SUPPORT OF ITS M OTION FOR J UDGMENT ON THE BASIS OF THE DOCTRINE OF C OLLATERAL E STOPPEL Sierra Club, et al. v. El Paso Properties, Inc. (Civil Action No. 01-PC-2163) (MEH) Page 4

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The potential for an appeal is no reason for this Court to refrain from applying collateral estoppel. As of the date of this Reply, the CC&V case has not been appealed. Moreover, the law in this Circuit is that "the pendency of an appeal does not prevent application of the collateral estoppel doctrine unless the appeal involves a full trial de novo." Ruyle v. Contintental Oil Co., 44 F.3d 837, 846 (10th Cir. 1994); see also 18A Wright, Miller & Cooper, Federal Practice & Procedure: Jurisdiction 2d § 4433 (2002) ("a final judgment retains all of its res judicata consequences pending decision of the appeal, apart from the virtually nonexistent situation in which the 'appeal' actually involves a full trial de novo"). Appeal of the CC&V case, if it occurs, will not involve a trial de novo. The CC&V Court's findings of fact will not be set aside unless they are clearly erroneous. FED.R.CIV.P. 52 (a); Vitkus v. Beatrice Company, 127 F.3d 936, 942 (10th Cir. 1997). Moreover, the District Court's factual findings in the CC&V case are consistent with those of Administrative Law Judge Mathew Norwood1, the joint Environmental Protection Agency/Colorado Department of Public Health and Environment memorandum regarding the

1

Judge Norwood found after trial that "[t]he Colorado Water Quality Control Division has failed to prove that the zinc and manganese in the water coming from the Roosevelt Tunnel portal has its origin in the El Paso Mine." See Sierra Club v. El Paso Gold Mines, Inc., 421 F.3d 1133, 1142 (10th Cir. 2005).

DEFENDANT 'S R EPLY IN SUPPORT OF ITS M OTION FOR J UDGMENT ON THE BASIS OF THE DOCTRINE OF C OLLATERAL E STOPPEL Sierra Club, et al. v. El Paso Properties, Inc. (Civil Action No. 01-PC-2163) (MEH) Page 5

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Roosevelt Tunnel2, and the Tenth Circuit Court of Appeals opinion reversing and remanding this case3, and thus are unlikely to be reversed. E. The public interest weighs in favor of applying collateral estoppel in this case Applying collateral estoppel in this case will not harm the environment. Instead applying collateral estoppel will serve the public interest by conserving judicial resources and avoiding inconsistent outcomes based on conflicting factual findings. Resolving this case through collateral estoppel will not harm public health, safety, or the environment. The Roosevelt Tunnel discharges into Stream Segment 21 of the Upper Arkansas River Basin, described as the "Mainstem of Cripple Creek from the source to the confluence with Fourmile Creek." This stream segment is not listed as a water-quality-limited segment on Colorado's Section 303(d) list. See Exhibit 1. In fact, this segment is not even listed on Colorado's Regulation # 94 Monitoring Evaluation List as a water body for which there is reason to suspect water quality problems. See Exhibit 2. As stated in the June 28, 2002 "Rationale for Permit Denial, Roosevelt Tunnel LLC, Teller County, "the Water Quality Control Division ("WQCD") conducted "[a]n analysis of the metals concentration to determine the exceedances of water quality standards in cripple creek" and determined "there are exceedances of the water quality table value standards in this segment
2

This memorandum written just a few months before Plaintiffs filed this case concluded that "more work needs to be done before the responsible parties can be identified." See Exhibit 1 to Response to Plaintiffs' Motion for Leave to Conduct Inspection of Interior of Roosevelt Tunnel at 1.

DEFENDANT 'S R EPLY IN SUPPORT OF ITS M OTION FOR J UDGMENT ON THE BASIS OF THE DOCTRINE OF C OLLATERAL E STOPPEL Sierra Club, et al. v. El Paso Properties, Inc. (Civil Action No. 01-PC-2163) (MEH) Page 6

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for manganese and copper above the Roosevelt Tunnel" and "all other parameters are currently meeting the table value standards. Below the Tunnel all other parameters are meeting the table value standards." See Exhibit 1 to Plaintiffs' Response in Opposition to Defendant's Motion for Judgment on the Basis of the Doctrine of Collateral Estoppel. Thus the WQCD's rational demonstrates that the flows from the Roosevelt Tunnel portal are not causing an exceedance of water quality table value standards for Cripple Creek. In its February 10, 2003 Memorandum Opinion and Order, this Court stated "plaintiffs have failed to prove any actual harm to the environment" caused by the discharge from the Roosevelt Tunnel. Id. at 19. In the three and a half years since this Court's ruling there has been no evidence presented to demonstrate that the discharge from the Roosevelt Tunnel portal harms the environment. Thus, the flow from the Roosevelt Tunnel portal does not pose the environmental threat suggested by Plaintiffs.4 The public policy of conserving judicial resources favors deciding this case based on collateral estoppel. One goal of collateral estoppel is to conserve judicial resources. Montana v. United States, 440 U.S. 147, 153-54 (1979). This case is currently scheduled for a two week trial commencing on October 30, 2006. This Court will also need to hold Rule 702 hearings to resolve challenges to the parties' experts. If this Court does not apply collateral estoppel in this case, the parties will waste considerable time and resources re-litigating factual matters that have been decided by the District Court. If the Court does grant El Paso's Motion for Judgment then
3

The Court of Appeals found that that genuine issues of material fact existed regarding the claimed connection between the El Paso shaft and the Roosevelt tunnel "regarding the source of pollutants discharged at the tunnel." 421 F.3d at 1149-1150. DEFENDANT 'S R EPLY IN SUPPORT OF ITS M OTION FOR J UDGMENT ON THE BASIS OF THE DOCTRINE OF C OLLATERAL E STOPPEL Sierra Club, et al. v. El Paso Properties, Inc. (Civil Action No. 01-PC-2163) (MEH) Page 7

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it is likely that any appeals filed by the Plaintiffs in these cases will be heard at the same time, thus further conserving judicial resources. Finally, proceeding to trial will undermine the public policy of avoiding inconsistent outcomes in similar cases. Collateral estoppel fosters reliance on judicial action by minimizing the possibility of inconsistent decisions. Id. If this Court were to find a discharge of pollutants from the El Paso shaft into Cripple Creek based on the same proofs offered by the Plaintiffs in the CC&V case, which have already been ruled insufficient by the District Court, the public's faith in the integrity of the judicial process will be compromised. III. Conclusion El Paso's Motion was timely filed. The factual issues in this case are identical to those already adjudicated in the CC&V case. The CC&V Court's finding that Plaintiffs failed to carry their burden of proving a discharge to navigable waters was necessary to its conclusion that Plaintiffs did not prove a Clean Water Act violation. The Court can fulfill its gatekeeper responsibilities by carefully reviewing the record in the CC&V case and making specific findings of fact that support the application of collateral estoppel to the District Court's Rule 702 findings. Finally, it is in the public interest to resolve this case on collateral estoppel grounds. Accordingly, El Paso respectfully requests that this Court grant its Motion for Judgment on the Basis of the Doctrine of Collateral Estoppel. Respectfully submitted this 30th day of July, 2006.

4

Further support for this argument is found in El Paso's December 4, 2002 Trial Brief Regarding Penalties at 7-12. DEFENDANT 'S R EPLY IN SUPPORT OF ITS M OTION FOR J UDGMENT ON THE BASIS OF THE DOCTRINE OF C OLLATERAL E STOPPEL Sierra Club, et al. v. El Paso Properties, Inc. (Civil Action No. 01-PC-2163) (MEH) Page 8

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_s/ Stephen D. Harris Stephen D. Harris MERRILL, ANDERSON, & HARRIS, LLC 20 Boulder Crescent Colorado Springs, Colorado 80903-3300 (719) 633-4421 (telephone) (719) 633-4759 (facsimile) [email protected] Counsel for El Paso Properties, Inc.

CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing DEFENDANT'S REPLY IN SUPPORT OF ITS MOTION FOR JUDGMENT ON THE BASIS OF COLLATERAL ESTOPPEL was sent with the Clerk of Court using the ECF system which will send notification of such filing to the following: John M. Barth, Esq. Attorney at Law Post Office Box 409 Hygiene, Colorado 80533 Roger Flynn, Esq. Jeffrey C. Parsons, Esq. Post Office Box 349 412 High Street

DEFENDANT 'S R EPLY IN SUPPORT OF ITS M OTION FOR J UDGMENT ON THE BASIS OF THE DOCTRINE OF C OLLATERAL E STOPPEL Sierra Club, et al. v. El Paso Properties, Inc. (Civil Action No. 01-PC-2163) (MEH) Page 9

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[email protected]

Lyons, CO 80540 [email protected] [email protected] s/ Michael J. Gustafson Michael J. Gustafson, Esq.

DEFENDANT 'S R EPLY IN SUPPORT OF ITS M OTION FOR J UDGMENT ON THE BASIS OF THE DOCTRINE OF C OLLATERAL E STOPPEL Sierra Club, et al. v. El Paso Properties, Inc. (Civil Action No. 01-PC-2163) (MEH) Page 10