Free Response to Motion - District Court of Colorado - Colorado

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Case No. 01-CV-02163-PAC-MEH SIERRA CLUB and MINERAL POLICY CENTER, Plaintiffs, v. El PASO GOLD MINES, INC. (a.k.a., EL PASO PROPERTIES, INC.) Defendant. ________________________________________________________________________ PLAINTIFFS' RESPONSE IN OPPOSITION TO DEFENDANT'S MOTION FOR JUDGMENT ON THE BASIS OF THE DOCTRINE OF COLLATERAL ESTOPPEL ________________________________________________________________________

Plaintiffs Sierra Club and Mineral Policy Center (also known as Earthworks) hereby file this Response in Opposition to Defendant's Motion for Judgment on the Basis of the Doctrine of Collateral Estoppel ("motion"). El Paso Gold Mine's ("EPGM") motion should be denied for several reasons: (a) The deadline for filing a summary judgment motion has passed and no request or good cause for an extension has been shown; (b) collateral estoppel does not apply to Rule 702 expert rulings even in related cases as the 10th Circuit has held, (c) the prior case here did not actually, or necessarily, decide the factual points that EPGM now seeks to rely upon, (d) potential reversal on appeal of the prior ruling weighs against application of collateral estoppel, and finally (e) the public interest warrants exception here to any claim of collateral estoppel because application would allow the continued discharge of pollutants into Cripple Creek without a permit. In the alternative, Plaintiffs request that this Court postpone ruling on the

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motion until this Court conducts hearings on the admissibility of expert opinion testimony under Federal Rule of Evidence 702 and renders a ruling. 1. INTRODUCTION AND STANDARD OF REVIEW

EPGM's motion fails to identify the applicable rule under which it is proceeding or the standard of review of its motion. EPGM's motion also fails to recognize that collateral estoppel is an affirmative equitable defense on which EPGM has the burden of proving all factual and legal elements. EPGM's motion appears to be governed by Federal Rule of Civil Procedure 56. Rule 56 authorizes summary adjudication "when there is no genuine dispute as to any material fact and ... the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); see also In re Ribozyme Pharmaceuticals, Inc. Securities, 209 F.Supp.2d 1106, 1109 (D.Colo. 2002)("Ribozyme"). A genuine issue of material fact exists if a reasonable fact finder could rule in the non-movant's favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In ruling on a motion for summary judgment, the court must view the evidence in the light most favorable to the nonmoving party, and it must give that party the benefit of all reasonable inferences to be drawn from the evidence. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). This is also true in the context of a motion for summary judgment on issue preclusion. See, Citizens Legal Environmental Action Network, Inc. v. Premium Standard Farms, Inc., 2000 WL 220464 (W.D.Mo. 2000)("Premium Standard Farms") fn. 3; 50 ERC 1206, 1209, fn 3. "The right to a full and fair opportunity to litigate an issue is, of course, protected by the due process clause of the United States Constitution." Hardy v. Johns-Manville

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Sales Corp., 681 F.2d 334, 338 (5th Cir. 1982). Collateral estoppel should not be applied unless "a right, question, or fact [is] distinctly put in issue and directly determined as a ground of recovery." Id. When factual and legal issues are not specifically resolved, the doctrine of claim preclusion should not be applied. Behunin v. Jefferson County Dept. of Social Serv., 744 F.Supp. 255, 258 (D.Colo. 1990). Courts have rejected preclusion doctrines when factual issues were not specifically resolved. Scroggins v. State of Kansas, 802 F.2d 1289, 1291 (10th Cir. 1986). The defense of issue preclusion by estoppel is an affirmative defense. Premium Standard Farms, 50 ERC at 1209. The party urging estoppel as an affirmative defense carries the burden of proof with respect to factual contentions that underlie the defense. Id. at 1209; Restatement of Judgments Second §27. Since EPGM has the burden of proof, they "must establish every element of its defense by sufficient, competent evidence to set forth a prima facie case." Ribozyme, 209 F.Supp.2d at 1111. EPGM's burden is "lofty". Premium Standard Farms, 50 ERC at 1209. The doctrine of collateral estoppel is based on a court's equitable powers and application of the doctrine is not mandated in the Constitution or by statute. Arapahoe County Public Airport Authority v. F.A.A., 242 F.3d 1213, 1220 (10th Cir. 2001); Sunny Acres Villa, Inc. v. Cooper, 25 P.3d 44, 47 (Colo. 2001). As such, courts are not required to apply res judicata sua sponte. Robi v. Five Platters, Inc., 838 F.2d 318, 322 (9th Cir. 1988) ("Five Platters"). Instead, the court has discretion in applying the doctrine. Id. at 321. Collateral estoppel should not be mechanically applied by the courts. Instead, "courts and commentators have ...recognized the need for flexibility in the operative principles" of issue preclusion. Restatement of Judgments Second (1982), §26, Title E.

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Issue Preclusion. Even when the elements of collateral estoppel are present, courts have discretion in applying the doctrine. Arapahoe County, 242 F.3d at 1220. In fact, the Restatement of Judgments Second recognizes that application of the doctrine of issue preclusion should perhaps "vary with the subject matter." Restatement of Judgments Second §26. Moreover, the issues in the prior proceeding must have been "actually and necessarily decided" in that proceeding. AG Services of America, Inc., v. Nielsen, 235 F.3d 559, 560 n.1 (10th Cir. 2000); Bebo Const. Co. v. Mattox & O'Brien, P.C., 990 P.2d 78, 86-87 (Colo. 1999). The Colorado Attorney General has also taken the position that issue preclusion "should be applied with caution and that public policy disfavors it". Mid-Continent Resources, Inc. v. Looby, 877 P.2d 1385, 1390 (Colo. App. 1994). A court should also not mechanically apply the doctrine of collateral estoppel with regard to Daubert rulings of another court. Dodge v. Cotter, 328 F.3d 1212, 1230 (10th Cir. 2003). This is true even if the cases are related and expert witnesses are the same in both proceedings. Id. As EPGM acknowledges in its Motion, in determining whether collateral estoppel applies, a court must examine the record of a prior proceeding, taking into account the evidence and other relevant matters and the inquiry must be set in a practical frame and viewed with an eye to all of the circumstances of the proceeding. Sealfon v. United States, 332 U.S. 575, 579 (1948). (See #177, pp. 4-5). Finally, in applying the doctrine of claim preclusion, federal courts and Colorado courts have adopted or applied the Restatement (Second) of Judgments. B-S Steel of Kansas, Inc., v. Texas Industries, Inc., 439 F.3d 653, 662 (10th Cir. 2006); Umberfield v.

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School District No. 11, 522 P.2d 730, 732 (Colo. 1974). There are numerous exceptions to the doctrine of collateral estoppel, including a public interest exception. United States v. Mendoza, 464 U.S. 154, 163 (1984)(otherwise broad application of collateral estoppel outweighed by government's public interest concerns in development of law); Duvall v. Attorney General, 436 F.3d 382, 391 (3rd Cir. 2006)(collateral estoppel would not be applied to preclude deportation of alien who committed to commit crimes in U.S.). In Colorado, when considerations of the "public need" are involved, consideration of claims "should never be foreclosed" by issue preclusion. Whelden v. Board of County Commissioners, 782 P.2d 853, 856 (Colo.App. 1989). For the reasons discussed below, EPGM has not presented facts proving that this case should be dismissed based on the doctrine of collateral estoppel. Further, EPGM has failed to prove that they are entitled to a judgment as a matter of law. As such, EPGM's motion should be denied in its entirety. 2. PROCEDURAL STATUS OF THIS CASE AND THE CC&V CASE

The deadline for filing motions for summary judgment in this case was September 20, 2002. EPGM has not sought leave from this Court to file a late summary judgment motion. To the contrary, Plaintiffs have filed a motion with this Court requesting leave to conduct an inspection of the interior of the Roosevelt Tunnel, which if allowed, Plaintiffs will attempt to enter the tunnel and collect additional data on water flow and water quality inside the Roosevelt Tunnel from at least the El Paso shaft to the portal and into Cripple Creek. Both parties have also filed motions challenging expert opinions under Federal Rule of Evidence 702 and EPGM has requested a hearing on such motions.

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In the CC&V case, the date for appealing the CC&V trial court ruling has been stayed pending a determination on a motion for attorney fees filed by the CC&V defendants. 3. ARGUMENT

EPGM has requested that this Court to apply the doctrine of collateral estoppel to both the Federal Rule of Evidence 702 rulings and the trial ruling in the CC&V case. For the reasons stated below, the doctrine of collateral estoppel should not be applied to either ruling in this case. A. EPGM's motion is not timely nor did they seek leave of the court. The deadline for filing summary judgment motions was September 20, 2002. EPGM has not sought leave from this Court to file its summary judgment motion. It is too late in the proceeding to be moving for summary judgment without leave of the Court. Lozaya v. Garrou Construction, Inc., 2006 WL 1028869 (D.Colo. 2006)(late motion for summary judgment cannot be granted where no "good cause" for delay, such as oversight, inadvertence or excusable neglect, is asserted by party filing motion). As such, EPGM's motion should be denied.1

It is also far too late in the day for EPGM to amend its answer to assert the affirmative defense of collateral estoppel, which must be pleaded under F.R.C.P. 8(c). Colorado Visionary Academy v. Medtronic, Inc., 194 F.R.D. 684, 687 (D.Colo. 2000); Joseph Manufacturing Co., Inc., v. Olympic Fire Corp., 986 F.2d 416, 419-20 (10th Cir. 1993)(where potential collateral estoppel defense was apparent earlier from parallel proceedings, waiting until one judgment became final to assert collateral estoppel defense was not adequate excuse for late raising of this issue). While EPGM appears to have asserted that Plaintiffs are judicially estopped from claiming EPGM is liable for the Roosevelt Tunnel discharge because Plaintiffs also sought to hold the CC&V Defendants liable for the same discharge, EPGM has not specifically plead collateral estoppel based on issues actually and necessarily determined by the court in the CC&V case.

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B. Collateral estoppel should not be applied to the CC&V Rule 702 Rulings. In the CC&V case, the court entered orders under FRE 702 prohibiting Plaintiffs' expert witnesses Dr. Ann Maest and Ken Klco from offering expert opinions at trial. By separate motion [#178], EPGM asks that this Court abdicate its gatekeeping function and instead mechanically apply the doctrine of collateral estoppel thus prohibiting this Court from ever assessing the bases for the expert opinions in this case. For the following reasons, EPGM's collateral estoppel argument should be denied as it pertains to the CC&V Rule 702 rulings. i. The Court has a duty to perform its gatekeeper function in this case While district courts have discretion in how they conduct the gatekeeper function, they do not have the discretion to avoid performing the gatekeeper function altogether. Dodge, 328 F.3d at 1223. Applying the doctrine of collateral estoppel to Rule 702 rulings "impacts both the reliability of verdicts and due process rights" of the parties Id. at 1230, ftn. 1. Moreover, since the CC&V Rule 702 rulings limited Plaintiffs' presentation of expert opinions and evidence at trial, the Rule 702 rulings likewise impacted the CC&V trial ruling. If this Court applies the doctrine of collateral estoppel to either the CC&V Rule 702 rulings or to the CC&V trial ruling, this case would become "inextricably linked" to the CC&V case. Id. at 1230. Thus, the result of any appeal in the CC&V case may also impact this case. Given that the deadline to appeal the CC&V Rule 702 rulings and trial ruling has not passed, this Court should deny EPGM's request to apply the doctrine of collateral estoppel and instead proceed with the trial schedule established by the Court.

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ii.

The expert witness and expert opinions are not identical in the two cases.

The doctrine of collateral estoppel should not be applied because the expert witnesses and opinions in the CC&V case are not identical and thus the issues to be presented at trial may not be identical. For example, pursuant to FRCP 26(a)(2), CC&V identified Adrian Brown as a rebuttal expert witness who submitted an expert report addressing expert opinions of Dr. Ann Maest, Ken Klco, and Robert Burm. Mr. Brown has not been identified by EPGM as an expert witness or rebuttal expert witness in this case. In contrast, EPGM identified Robert Brogden as their expert witness. Mr. Brogden's educational background and areas of expertise are different from Mr. Brown. Moreover, the opinions contained in Mr. Brogden's expert report and rebuttal expert report are also different from those offered by Adrian Brown. The Tenth Circuit Court of Appeals has already recognized in this case that Plaintiffs' and Defendant's "experts agree that at least some of the water from the El Paso shaft are discharging at the portal." Sierra Club v. El Paso Gold Mines, Inc., 421 F.3d 1133, 1149 (10th Cir. 2005). This issue has been litigated, appealed, and should be considered the law of this case. See EEOC v. Int'l Longshoremen's Assoc., 623 F.2d 1054, 1058 (5th Cir. 1980) cert denied 451 U.S. 917, 101 S.Ct.1997 (1981); U.S. v. Robinson, 690 F.2d 869, 872 (11th Cir. 1982); U.S. v. Burns 662 F.2d 1378, 1384 (11th Cir. 1981). Thus the sole issue at trial is whether "pollutants coming from the shaft ever discharge at the portal." Id. Neither Mr. Brogden's expert report nor his rebuttal expert report specifically rebut the opinions of Plaintiffs' expert witnesses in this case that the El Paso shaft is a source of the pollutants discharged at the Roosevelt Tunnel portal, nor

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does he have the necessary expertise to do so. Since EPGM has not presented expert testimony on this issue, there may not be an identity of issues at trial. This is exactly why EPGM wants this Court to apply the doctrine of collateral estoppel. C. Issue preclusion should not be applied to the CC&V trial ruling because the Court there did not actually decide the factual issues that EPGM claims. In its motion, EPGM argues that the CC&V decision conclusively determined the following "ultimate" issues of fact: 1) there is no hydrological connection between the El Paso shaft and Cripple Creek via the Roosevelt Tunnel" and, 2) that pollutants from the El Paso shaft do not flow to the portal into Cripple Creek. However, the CC&V Court did not specifically make such specific findings on these ultimate issues of fact. Instead, the CC&V court stated that "no direct evidence was presented" by Plaintiffs proving to support a factual finding either way.2 Instead, the Court resolved the case based on its theory that plaintiffs had to show pollutants were caused by human action, and not natural ­ an issue that EPGM has not raised in this case. Since the Court found proof of human action lacking there, it did not need to ultimately decide, and did not decide, the questions of hydrological connection between the El Paso Shaft and Cripple Creek or the El Paso Shaft as the source of the pollutants. It only found "direct evidence" on these points lacking. It did not analyze all

Plaintiffs did present evidence in the CC&V trial on the issues of hydrologic connection and chemical connection between the El Paso shaft and Cripple Creek, however this specific evidence was not extensively discussed or analyzed in the CC&V trial ruling. Plaintiffs presented testimony by Ken Klco and CC&V employee Jeff Pontius ­ both of whom have inspected the Roosevelt Tunnel and testified that flow from the El Paso shaft reaches the portal. The CC&V court also admitted documentary evidence including a videotape of the interior of the Roosevelt Tunnel confirming the hydrological connection between the El Paso shaft and the Roosevelt Tunnel portal. Finally, the CC&V court also admitted numerous water quality sampling results and other documentary and testimony evidence establishing the presence of zinc and manganes along the length of the Roosevelt Tunnel from the El Paso shaft to the portal. Scott Lewis, employee of the CC&V Defendants testified about the "chemical signature" of the pollutant in water from El Paso shaft to the portal.

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of the evidence, direct and otherwise, and reach an ultimate factual finding. In a Clean Water Act case, "circumstantial evidence alone may suffice" to show discharge violations. Concerned Area Residents for the Environment v. Southview Farm, 34 F.3d 114, 120 (2d Cir. 1994). As such, the ultimate issues of fact cited by El Paso were not actually determined and issue preclusion should not be applied. Restatement of Judgments Second §27, j; Alishio v. Department of Social and Health Services, 122 Wash.App. 1, 91 P.3d 893, 896 (2004)("collateral estoppel does not apply where an ambiguous or indefinite decision makes it unclear whether the issue was previously determined"); Appeal of Hooker, 142 N.H. 40, 694 A.2d 984, 987 (1997)(ambiguous statement of court not proper basis for application of collateral estoppel). Thus, EPGM has failed to meet its burden that the issues in this case have been "actually and necessarily decided" and thus its motion should be denied. D. Even if actually decided, the claimed facts on which EPGM seeks collateral estoppel were not necessary to the decision.

Even if Judge Krieger's decision is construed as actually deciding the issue of hydrological connection and the El Paso shaft as the source of pollutants reaching Cripple Creek, those determinations were not necessary to her decision against the plaintiffs, which was based on a failure to show that the pollutants were caused by "human action," and not naturally occurring. The doctrine of collateral estoppel may be applied to future cases only based upon a prior adjudication that is "necessary to the judgment." Murdock v. Ute Indian Tribe, 975 F.2d 683, 687-88 (10th Cir. 1992). "An issue is necessarily adjudicated when a determination on that issue was necessary to a judgment.... This requirement is justified

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by the recognition that a previous tribunal may not have taken the care needed to adequately determine an issue that would not affect the disposition of the case." Bebo, 990 P.2d at 86. Thus, under collateral estoppel, "issues that were actually litigated and decided, but were not necessary to the final outcome of the case, are not subject to collateral estoppel in a future case." Id. A finding is not necessarily decided for purposes of collateral estoppel when the previous action would have reached the same outcome regardless of what decision was made on the finding. People ex rel Gallagher v. District Court, 666 P.2d 550, 554 (Colo. 1983)(court's finding that testimony was competent in first proceeding could not be basis for collateral estoppel where testimony was excluded as irrelevant in that proceeding) Tucker v. Turkey Creek Limited Liability Co., 2006 WL 888145 *6, *7 (S.D.Fla. 2006)(applying Colorado law, statements of prior court about impure motives of party were not necessary to decision invalidating property liens filed by party, where outcome would have been the same even if party were negligent). Here, no matter what Judge Krieger found with respect to the hydrological connection between the El Paso Shaft and Cripple Creek, and the El Paso Shaft as the source of the pollutants reaching Cripple Creek, the case would have gone and did go against plaintiffs because she found that the absence of proof that the pollutants were caused by human action, and not natural, required a ruling against the plaintiffs. Thus, even if Judge Krieger's ruling is interpreted as actually deciding the factual issues raised by EPGM, it did not necessarily decide them, and these issues are, therefore, not appropriate for use as collateral estoppel.

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E. The potential for reversal of the dependent judgment prevents issue preclusion. EPGM wants this Court to apply the doctrine of collateral estoppel before Plaintiffs have had the opportunity to appeal the CC&V trial decision ­ the "dependent" judgment. The Restatement of Judgment recognizes the problems with applying the doctrine of collateral estoppel when a party to the dependent judgment has not had an opportunity to appeal that judgment. See, Restatement of Judgments Section, §16 (Judgment based on a Judgment that is subsequently reversed). In the event the CC&V judgment on Roosevelt Tunnel issues is reversed on appeal, any judgment by this Court dismissing this case based on collateral estoppel may likewise be subject to nullification. Thus, it is clear that applying the doctrine of collateral estoppel at this point in time may not minimize litigation ­ instead it may multiply litigation. For these reasons, EPGM's motion should be denied. Alternately, as noted above, this Court could postpone ruling on EPGM's motion until after a decision on the Rule 702 motions. F. The public interest exception should be applied-

The issues in this case center on whether the discharge of pollutants from the Roosevelt Tunnel will remain unregulated. This issue directly impacts issues of public health, safety, and environmental protection. The State has already determined that the pollutants in the discharge from the Roosevelt Tunnel exceed the limits that would be placed in a permit to protect water quality in Cripple Creek. Exhibit 1 hereto. If the Court dismisses this case, EPGM's next step would be to seek a similar dismissal of the state enforcement case under the doctrine of collateral estoppel. Thus, this case has a broader public interest element. As such, the doctrine of issue preclusion should not be applied to

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dismiss this case before judgment. E.g., Duvall, 436 F.3d at 391(collateral estoppel would not be applied to preclude deportation of alien who committed to commit crimes in U.S.). 4. CONCLUSION EPGM's motion for summary judgment is filed too late in the day in this case. EPGM has not met its lofty burden of proving this case should be dismissed under the doctrine of collateral estoppel. EPGM has not proven as a matter of fact that the issues to be raised in this case have actually and necessarily been resolved by the CC&V trial ruling. Moreover, EPGM has not proven, as a matter of law, that it is entitled to a dismissal of this case. Finally, it would be against the public interest under the facts and circumstances to dismiss this case under the doctrine of collateral estoppel, thereby allowing unpermitted pollution to continue unabated. Accordingly, Plaintiffs request that this Court DENY Defendant's Motion for Judgment on the Basis of the Doctrine of Collateral Estoppel. In the alternative, Plaintiffs request that a determination of the Motion be postponed until this Court conducts the hearings under Federal Rule of Evidence 702 and rules on the admissibility of expert opinions. Respecfully submitted by, s/ John Barth___________ John M. Barth #22957 Attorney at Law P.O. Box 409 Hygiene, CO 805333 (303) 744-8868 Roger Flynn, Esq. #21078 Jeffrey C. Parsons, Esq. #30210 WESTERN MINING ACTION PROJECT 2260 Baseline Road, Suite 101A Boulder, CO 80302 (303) 473-9618

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COUNSEL FOR PLAINTIFFS

CERTIFICATE OF SERVICE I do hereby certify that on this 20th day of July 2006, a true and accurate copy of PLAINTIFF'S RESPONSE IN OPPOSITION TO DEFENDANT'S MOTION FOR JUDGMENT ON COLLATERAL ESTOPPEL was filed with the Electronic Case Filing system which is then to serve the same on the following by electronic means: Steve Harris Merrill Anderson & Harris 20 Boulder Crescent Colorado Springs, CO 80903-3300 [email protected] Connie King Law Firm of Connie King, LLC 4711 Constitution Ave. Colorado Springs, CO 80915 [email protected]

s/ John Barth__________ John Barth

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